MERCANTILE BANCORPORATION INC
S-4/A, 1998-05-26
NATIONAL COMMERCIAL BANKS
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<PAGE>   1
   
     As Filed With the Securities and Exchange Commission on May 26, 1998
                                                      Registration No. 333-51329

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM S-4
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                               (Amendment No. 1)
                                ----------------
                         MERCANTILE BANCORPORATION INC.
             (Exact name of registrant as specified in its charter)
    

<TABLE>
<S>                                     <C>                                     <C>       
             MISSOURI                               6712                             43-0951744
   (State or other jurisdiction         (Primary Standard Industrial              (I.R.S. Employer
 of incorporation or organization)      Classification Code Number)             Identification No.)
</TABLE>

                                  P.O. BOX 524
                         ST. LOUIS, MISSOURI 63166-0524
                                 (314) 418-2525
                   (Address, including zip code, and telephone
                         number, including area code, of
                    registrant's principal executive offices)

                              JON W. BILSTROM, ESQ.
                          GENERAL COUNSEL AND SECRETARY
                         MERCANTILE BANCORPORATION INC.
                                  P.O. BOX 524
                         ST. LOUIS, MISSOURI 63166-0524
                                 (314) 418-2525
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                                   COPIES TO:

<TABLE>
<S>                             <C>                        <C>
       EDWARD D. HERLIHY                                              LARRY K. HARRIS
WACHTELL, LIPTON, ROSEN & KATZ                                    SUELTHAUS & WALSH, P.C.
      51 WEST 52ND STREET               AND                7733 FORSYTH BOULEVARD, TWELTH FLOOR
   NEW YORK, NEW YORK 10019                                      ST. LOUIS, MISSOURI 63105
                                --------------------
</TABLE>

         APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after this Registration Statement becomes
effective. If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: |_|
<PAGE>   2
                                ----------------

         THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>   3
 
                                                FIRSTBANK OF ILLINOIS LETTERHEAD
 
   
                                  MAY 22, 1998
    
 
Dear Stockholder:
 
     On behalf of the Board of Directors and management, I cordially invite you
to attend the Annual Meeting of Stockholders of Firstbank of Illinois Co.
("Firstbank") to be held at 3:00 p.m., Central Daylight Savings Time, on Monday,
June 29, 1998, in the main ballroom of the Renaissance Springfield Hotel, 701
East Adams Street, Springfield, Illinois 62701 (the "Annual Meeting").
 
     At this important meeting, you will be asked to consider and vote on a
proposal to approve and adopt an Agreement and Plan of Reorganization, dated
January 30, 1998 (the "Merger Agreement"), providing for the merger (the
"Merger") of Firstbank with and into a wholly owned subsidiary of Mercantile
Bancorporation Inc. ("MBI"). Upon consummation of the Merger, each outstanding
share of Firstbank common stock, other than shares of Firstbank common stock
held by Firstbank, MBI, or any of their respective subsidiaries, will be
converted into 0.8308 shares (the "Exchange Ratio") of MBI common stock.
 
     You will also be asked to consider and vote upon the election of three
directors of Firstbank, each to serve until the Merger is consummated or, in the
event the Merger is not consummated, until the expiration of each of their
three-year terms or until their respective successors are elected and qualified.
 
     Enclosed are the following items relating to the Annual Meeting and the
Merger:
 
          1. Proxy Statement/Prospectus;
 
          2. Proxy card;
 
   
          3. A pre-addressed return envelope to Firstbank, the transfer agent,
     for the proxy card.
    
 
     The Proxy Statement/Prospectus and related proxy materials set forth, or
incorporate by reference, financial data and other important information
relating to Firstbank and MBI and describe the terms and conditions of the
proposed Merger. The Board of Directors urges you to carefully review these
materials before completing the enclosed proxy card or attending the Annual
Meeting.
 
   
     PaineWebber Incorporated, an investment banking firm, has issued its
opinion to your Board of Directors regarding the fairness to the Firstbank
Stockholders, from a financial point of view, of the consideration to be paid by
MBI pursuant to the Merger Agreement as of the date of such opinion. A copy of
the opinion is attached as Annex C to the Proxy Statement/Prospectus.
    
 
     YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE TERMS OF THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY ARE IN THE BEST INTERESTS OF
FIRSTBANK AND ITS STOCKHOLDERS. ACCORDINGLY, THE BOARD OF DIRECTORS OF FIRSTBANK
UNANIMOUSLY RECOMMENDS THAT FIRSTBANK STOCKHOLDERS VOTE "FOR" THE APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT AND "FOR" THE PROPOSED SLATE OF DIRECTORS.
<PAGE>   4
 
   
     It is important that your shares be represented at the Annual Meeting,
whether or not you plan to attend the Annual Meeting in person. PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT TO FIRSTBANK IN THE ENCLOSED
PRE-ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED
STATES. If you later decide to attend the Annual Meeting and vote in person, or
if you wish to revoke your proxy for any reason prior to the vote at the Annual
Meeting, you may do so and your proxy will have no further effect. You may
revoke your proxy by delivering to Firstbank a written notice of revocation
bearing a later date than the proxy, or by executing any later-dated proxy
relating to the same shares, or by attending the Annual Meeting and voting in
person. Attendance at the Annual Meeting will not in itself constitute the
revocation of your proxy.
    
 
     The Board of Directors and management of Firstbank appreciate your
continued support. If you need assistance in completing your proxy card or if
you have any questions about the Proxy Statement/Prospectus, please feel free to
contact Chris R. Zettek at (217) 753-7543.
 
                                          Sincerely,
 
   
                                          /s/ MARK FERGUSON
                                          Chairman of the Board,
                                          President and Chief Executive Officer
    

<PAGE>   5
 
                           FIRSTBANK OF ILLINOIS CO.
                             205 SOUTH FIFTH STREET
                          SPRINGFIELD, ILLINOIS 62701
 
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                   TO BE HELD
                                 JUNE 29, 1998
 
To the Stockholders of Firstbank of Illinois Co.:
 
     Notice is hereby given that the Annual Meeting of Stockholders of Firstbank
of Illinois Co., a Delaware corporation ("Firstbank"), will be held at 3:00
p.m., Central Daylight Savings Time, on Monday, June 29, 1998, in the main
ballroom of the Renaissance Springfield Hotel, 701 East Adams Street,
Springfield, Illinois 67201 (the "Annual Meeting"), for the following purposes:
 
             (1) To consider and vote on a proposal to approve and adopt the
        Agreement and Plan of Reorganization dated January 30, 1998 (the "Merger
        Agreement"), by and among Mercantile Bancorporation Inc., a Missouri
        corporation ("MBI"), Ameribanc, Inc., a Missouri corporation and a
        wholly owned subsidiary of MBI ("Merger Sub"), and Firstbank, pursuant
        to which, among other things, (i) Firstbank will be merged (the
        "Merger") with and into Merger Sub, which will continue the business and
        operations of Firstbank, (ii) each outstanding share of Firstbank common
        stock, par value $1.00 per share ("Firstbank Common Stock"), other than
        shares of Firstbank Common Stock held by Firstbank, MBI, or any of their
        respective subsidiaries (except for shares held in a fiduciary capacity
        or as a result of debts previously contracted), will be converted into
        0.8308 shares (the "Exchange Ratio") of MBI common stock, par value
        $0.01 per share ("MBI Common Stock") and associated preferred share
        purchase rights plus cash in lieu of fractional shares and (iii) all
        rights with respect to Firstbank Common Stock pursuant to stock options
        outstanding at the time of such consummation, whether or not then
        exercisable, shall be converted into and shall become rights with
        respect to MBI Common Stock and the associated preferred share purchase
        rights. The Merger Agreement is attached as Annex A to the accompanying
        Proxy Statement/ Prospectus and is incorporated herein by reference.
 
             (2) To consider and vote upon the election of three directors of
        Firstbank.
 
             (3) To transact such other business as may properly come before the
        Annual Meeting or any adjournment or postponement thereof.
 
     The record date for determining the holders of Firstbank Common Stock
entitled to receive notice of, and to vote at, the Annual Meeting or any
adjournment or postponement thereof has been fixed as of the close of business
on May 15, 1998. Approval by the Firstbank Stockholders of the Merger Agreement
requires the affirmative vote of the holders of at least a majority of the
outstanding shares of Firstbank Common Stock entitled to vote at the Annual
Meeting. The election of directors requires a plurality of the votes of the
shares present in person or represented by proxy and entitled to vote.
 
     Information regarding the Merger and related matters as well as the other
matters to be acted upon at the Annual Meeting is contained in the accompanying
Proxy Statement/Prospectus and the annexes thereto, which are incorporated by
reference herein and form a part of this Notice.
 
     A list of Firstbank Stockholders entitled to vote at the Annual Meeting
will be available for examination at the principal offices of Firstbank, located
at 205 South Fifth Street, Springfield, Illinois, during ordinary business hours
beginning 10 days prior to the Annual Meeting and continuing through the
meeting.
 
     WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTE AT THE ANNUAL
MEETING BY FOLLOWING THE PROCEDURES SET FORTH IN THE ACCOMPANYING PROXY
STATEMENT/PROSPECTUS.
<PAGE>   6
 
     THE BOARD OF DIRECTORS OF FIRSTBANK HAS DETERMINED THAT THE TERMS OF THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY ARE IN THE BEST
INTERESTS OF FIRSTBANK AND ITS STOCKHOLDERS. ACCORDINGLY, THE BOARD OF DIRECTORS
OF FIRSTBANK UNANIMOUSLY RECOMMENDS THAT FIRSTBANK STOCKHOLDERS VOTE "FOR" THE
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND "FOR" THE PROPOSED SLATE OF
DIRECTORS.
 
                                          BY ORDER OF THE BOARD OF DIRECTORS
 
   
                                          /s/ MARK H. FERGUSON
 
                                          Mark H. Ferguson
                                          Chairman of the Board,
                                          President and Chief Executive Officer
    
 
Springfield, Illinois
   
May 22, 1998
    
<PAGE>   7
 
                           FIRSTBANK OF ILLINOIS CO.
                                PROXY STATEMENT
 
                         ------------------------------
 
                         MERCANTILE BANCORPORATION INC.
                                   PROSPECTUS
 
                         ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD ON JUNE 29, 1998
 
     This Proxy Statement/Prospectus relates to up to 13,800,000 shares of
common stock, par value $0.01 per share, of Mercantile Bancorporation Inc., a
Missouri corporation ("MBI") (together with associated preferred share purchase
rights (the "Rights") under MBI's Rights Agreement dated May 23, 1988, between
MBI and Mercantile Bank National Association as rights agent, the "MBI Common
Stock") to be issued to the stockholders of Firstbank of Illinois Co., a
Delaware corporation ("Firstbank"), upon consummation of the proposed merger
(the "Merger") of Firstbank with and into Ameribanc, Inc., a Missouri
corporation and a wholly owned subsidiary of MBI ("Merger Sub"), with Merger Sub
as the surviving corporation. The Merger will be consummated pursuant to the
Agreement and Plan of Reorganization dated January 30, 1998, by and among MBI,
Merger Sub and Firstbank (the "Merger Agreement"), upon the terms and subject to
the conditions thereof. This Proxy Statement/Prospectus also serves as the Proxy
Statement of Firstbank for use in connection with the solicitation of proxies by
the Board of Directors of Firstbank (the "Firstbank Board") to be used at the
Annual Meeting of Stockholders of Firstbank (the "Annual Meeting") at which the
stockholders of Firstbank (the "Firstbank Stockholders") will be asked, among
other things, to approve and adopt the Merger Agreement. The Merger Agreement is
attached as Annex A and is incorporated herein by reference.
 
     Pursuant to the Merger Agreement, MBI will issue up to an aggregate of
13,800,000 shares of MBI Common Stock less the number of shares of MBI Common
Stock issuable upon exercise of Firstbank's stock options outstanding as of the
effective time of the Merger. Upon consummation of the Merger, among other
things, each outstanding share of Firstbank common stock, par value $1.00 per
share ("Firstbank Common Stock"), other than shares of Firstbank Common Stock
held by Firstbank, MBI, or any of their respective subsidiaries (except for
shares held in a fiduciary capacity or as a result of debts previously
contracted), will be converted into 0.8308 shares (the "Exchange Ratio") of MBI
Common Stock. See "THE MERGER--General Description of the Merger". In addition,
upon consummation of the Merger, all options to acquire shares of Firstbank
Common Stock ("Firstbank Stock Options") pursuant to various stock option plans
("Firstbank Stock Plans") outstanding at the time of such consummation, whether
or not then exercisable, will be converted into and shall become rights with
respect to MBI Common Stock. See "THE MERGER--Conversion of Firstbank Common
Stock; Treatment of Firstbank Stock Options". No fractional shares of MBI Common
Stock will be issued in the Merger, but cash will be paid, without interest, in
lieu of such fractional shares. See "THE MERGER--Fractional Shares."
 
   
     MBI Common Stock is listed on The New York Stock Exchange, Inc. (the
"NYSE") under the symbol "MTL." On January 30, 1998, the last full trading day
before public announcement of the Merger, the last sale price per share of MBI
Common Stock as reported on the NYSE Composite Tape was $50.50. On May 21, 1998,
the last sale price per share of MBI Common Stock as reported on the NYSE
Composite Tape was $53.31. Firstbank Common Stock is quoted on the Nasdaq
National Market ("Nasdaq") under the symbol "FBIC." On January 30, 1998, the
last sale price per share of Firstbank Common Stock quoted on Nasdaq was $38.00.
On May 21, 1998, the last sale price per share for Firstbank Common Stock as
quoted on Nasdaq was $43.25. Because the market price of MBI Common Stock is
subject to fluctuation and the Exchange Ratio is fixed, the value of the shares
of MBI Common Stock that Firstbank Stockholders will receive in the Merger may
materially increase or decrease prior to the Merger. See "SUMMARY
INFORMATION--Markets and Market Prices."
    
<PAGE>   8
 
   
     This Proxy Statement/Prospectus, the letter to Firstbank Stockholders, the
Notice of Annual Meeting of Stockholders and the form of proxy are first being
mailed to the Firstbank Stockholders on or about May 28, 1998.
    
 
     THE SECURITIES TO BE ISSUED PURSUANT TO THIS PROXY STATEMENT/ PROSPECTUS
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION") OR ANY STATE SECURITIES COMMISSION NOR HAS THE 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 MBI COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND,
THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.
                         ------------------------------
 
   
          THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS MAY 22, 1998
    
<PAGE>   9
 
                               TABLE OF CONTENTS
 
   
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
AVAILABLE INFORMATION.......................................       1
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE...........       2
CAUTIONARY STATEMENTS FOR PURPOSES OF THE PRIVATE
  SECURITIES LITIGATION REFORM ACT OF 1995..................       3
SUMMARY INFORMATION.........................................       4
  Business of MBI...........................................       4
  Business of Merger Sub....................................       4
  Business of Firstbank.....................................       4
  Annual Meeting of Firstbank Stockholders..................       5
  The Proposed Merger.......................................       5
  Fractional Shares.........................................       6
  Stock Option Agreement....................................       7
  Support Agreements........................................       7
  Recommendation of the Firstbank Board.....................       7
  Opinion of Firstbank's Financial Advisor..................       7
  Interests of Certain Persons in the Merger................       8
  Regulatory Approval.......................................       8
  Waiver and Amendment......................................       8
  Accounting Treatment......................................       8
  Firstbank Stock Options...................................       9
  Federal Income Tax Consequences in General................       9
  Absence of Dissenters' Appraisal Rights...................       9
  Certain Differences in the Rights of Shareholders.........       9
  Markets and Market Prices.................................       9
  Comparative Unaudited Per Share Data......................      11
  Summary Financial Data....................................      13
 
INFORMATION REGARDING ANNUAL MEETING........................      17
 
  General...................................................      17
  Date, Time and Place......................................      17
  Firstbank Record Date; Vote Required......................      17
  Voting and Revocation of Proxies..........................      17
  Solicitation of Proxies...................................      18
            PROPOSAL I--APPROVAL OF THE MERGER AGREEMENT
THE MERGER..................................................      19
  General Description of the Merger.........................      19
  Closing and Effective Time................................      19
  Conversion of Firstbank Common Stock; Treatment of
     Firstbank Stock Options................................      19
  Fractional Shares.........................................      21
  Stock Option Agreement....................................      21
  Support Agreements........................................      22
  Background of the Merger..................................      23
  Reasons for the Merger; Firstbank Board Recommendation....      25
  Opinion of Firstbank's Financial Advisor..................      27
  Interests of Certain Persons in the Merger................      32
  Conditions of the Merger..................................      34
</TABLE>
    
 
                                        i
<PAGE>   10
 
   
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
  Termination of the Merger Agreement.......................      35
  Regulatory Approval.......................................      35
  Business Pending the Merger...............................      36
  Waiver and Amendment......................................      38
  Accounting Treatment......................................      38
  Management and Operations After the Merger................      39
  Employee Benefits.........................................      39
  Absence of Dissenters' Appraisal Rights...................      40
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER.......      41
PRO FORMA FINANCIAL INFORMATION.............................      42
  Comparative Unaudited Per Share Data......................      42
  Pro Forma Combined Consolidated Financial Statements
     (Unaudited)............................................      43
DESCRIPTION OF FIRSTBANK....................................      55
INFORMATION REGARDING MBI STOCK.............................      55
  Description of MBI Common Stock and Attached Preferred
     Share Purchase Rights..................................      55
  Restrictions on Resale of MBI Capital Stock by Affiliates;
     Affiliate Agreements...................................      57
  Comparison of the Rights of Shareholders of MBI and
     Stockholders of Firstbank..............................      58
SUPERVISION AND REGULATION..................................      62
  General...................................................      62
  Certain Transactions with Affiliates......................      62
  Payment of Dividends......................................      62
  Capital Adequacy..........................................      63
  Support of Subsidiary Banks...............................      64
  FIRREA and FDICIA.........................................      64
  Depositor Preference Statute..............................      65
  FDIC Insurance Assessments................................      65
  Interstate Banking and Other Recent Legislation...........      66
 
                 PROPOSAL II--ELECTION OF DIRECTORS
 
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF.............      67
BOARD OF DIRECTORS..........................................      68
  Election of Directors.....................................      68
  Directors Whose Terms Expire in 1999 and 2000.............      68
  Other Information on Directors............................      68
  Meetings and Committees of the Board of Directors.........      69
  Other Nominations for Board of Directors..................      69
EXECUTIVE COMPENSATION......................................      70
  Incentive Compensation Plan...............................      70
  Incentive Stock Option Plan...............................      70
  Report of the Compensation, Benefits and Officer
     Nominating Committee of the Board of Directors.........      72
  Profit-Sharing Thrift Plan................................      72
  Retirement Plan...........................................      73
  Employment Contracts and Termination of Employment and
     Change in Control Arrangements.........................      73
  Directors' Compensation...................................      74
CERTAIN TRANSACTIONS........................................      74
FIRSTBANK PERFORMANCE.......................................      75
</TABLE>
    
 
                                       ii
<PAGE>   11
 
   
<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
INDEPENDENT AUDITORS........................................      76
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.....      76
LEGAL MATTERS...............................................      76
EXPERTS.....................................................      76
OTHER MATTERS...............................................      76
STOCKHOLDER PROPOSALS.......................................      76
</TABLE>
    
 
                                       iii
<PAGE>   12
 
                             AVAILABLE INFORMATION
 
     Each of MBI and Firstbank is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning either MBI or Firstbank can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's Regional Offices in New York (Suite 1300,
Seven World Trade Center, New York, New York 10048) and Chicago (Suite 1400,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661). Copies of
such material can also be obtained by mail from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet web site that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission. The address of the web site is
http://www.sec.gov. MBI Common Stock is listed on the NYSE, and such reports,
proxy statements and other information concerning MBI are available for
inspection and copying at the offices of the NYSE, 20 Broad Street, New York,
New York 10005. Firstbank Common Stock is quoted on Nasdaq, and such reports,
proxy statements and other information concerning Firstbank are available for
inspection and copying at the offices of the National Association of Securities
Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006.
 
     MBI has filed a Registration Statement on Form S-4 (together with all
exhibits and any amendments thereto, the "Registration Statement") covering the
securities offered hereby with the Commission under the Securities Act of 1933,
as amended (the "Securities Act"). As permitted by the rules and regulations of
the Commission, this Proxy Statement/Prospectus omits certain information
contained or incorporated by reference in the Registration Statement. Reference
is hereby made to the Registration Statement for further information with
respect to MBI and the securities offered hereby. Such additional information
may be obtained from the Commission's principal office in Washington, D.C.
Statements contained in this Proxy Statement/Prospectus or in any document
incorporated by reference in this Proxy Statement/Prospectus as to the contents
of any documents provide a fair summary of the contents of such documents
referenced herein or therein but are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement or such other document, each such
statement being qualified in all respects by such reference.
 
                                        1
<PAGE>   13
 
               INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
 
     This Proxy Statement/Prospectus incorporates documents by reference which
are not presented herein or delivered herewith. Copies of these documents
(excluding exhibits unless specifically incorporated by reference herein or in
such documents) are available, without charge, to any person to whom this Proxy
Statement/Prospectus is delivered upon written or oral request to the following:
 
<TABLE>
<CAPTION>
                MBI DOCUMENTS                               FIRSTBANK DOCUMENTS
                -------------                               -------------------
<S>                                            <C>
            JON W. BILSTROM, ESQ.                             CHRIS R. ZETTEK
        GENERAL COUNSEL AND SECRETARY                   EXECUTIVE VICE PRESIDENT AND
        MERCANTILE BANCORPORATION INC.                    CHIEF FINANCIAL OFFICER
                 P.O. BOX 524                            FIRSTBANK OF ILLINOIS CO.
        ST. LOUIS, MISSOURI 63166-0524                     205 SOUTH FIFTH STREET
                (314) 418-2525                          SPRINGFIELD, ILLINOIS 62701
                                                               (217) 753-7543
</TABLE>
 
     IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH DOCUMENTS, A REQUEST MUST BE
RECEIVED NO LATER THAN JUNE 21, 1998.
 
     The following documents filed with the Commission by MBI under the Exchange
Act are incorporated herein by reference (Commission File No. 1-11792):
 
          (i)  MBI's Annual Report on Form 10-K for the year ended December 31,
               1997.
 
   
          (ii) MBI's Quarterly Report on Form 10-Q for the quarter ended March
               31, 1998.
    
 
   
         (iii) The information contained in MBI's Proxy Statement, dated March
               17, 1998, for its Annual Meeting of Shareholders held on April
               23, 1998.
    
 
   
          (iv) The description of MBI Common Stock set forth in Item 1 of MBI's
               Registration Statement on Form 8-A, dated March 5, 1993, and any
               amendment or report filed for the purpose of updating such
               description.
    
 
   
          (v)  The description of the Rights set forth in Item 1 of MBI's
               Registration Statement on Form 8-A, dated March 5, 1993, and any
               amendment or report filed for the purpose of updating such
               description.
    
 
   
          (vi) MBI's current reports on Form 8-K dated as of January 10, 1998
               and January 30, 1998.
    
 
     The following documents filed with the Commission by Firstbank under the
Exchange Act are incorporated herein by reference (Commission File No. 008426):
 
          (i)  Firstbank's Annual Report on Form 10-K for the year ended
               December 31, 1997.
 
   
          (ii) Firstbank's Quarterly Report on Form 10-Q for the quarter ended
               March 31, 1998.
    
 
   
         (iii) The description of Firstbank Common Stock set forth in Item 1 of
               Firstbank's Registration Statement on Form 8-A, dated March 8,
               1977, and any amendment or report filed for the purpose of
               updating such description.
    
 
   
          (iv) Firstbank's current report on Form 8-K dated January 30, 1998, as
               amended.
    
 
     All documents filed with the Commission by MBI and/or Firstbank pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Proxy Statement/Prospectus and prior to the date of the Annual Meeting shall be
deemed to be incorporated by reference herein and made a part hereof from the
date any such document is filed. The information relating to MBI and Firstbank
contained in this Proxy Statement/Prospectus does not purport to be complete and
should be read together with the information in the documents incorporated by
reference herein. Any statement contained herein or in a document incorporated
or deemed to be incorporated herein by reference shall be deemed to be modified
or superseded for all purposes to the extent that a statement contained herein
or in any other subsequently filed document incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
 
                                        2
<PAGE>   14
 
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part hereof.
 
     NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS OR IN THE
DOCUMENTS INCORPORATED BY REFERENCE HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY MBI OR FIRSTBANK. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO EXCHANGE OR SELL, OR A SOLICITATION OF AN OFFER TO EXCHANGE OR BUY, ANY
SECURITIES, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION IN WHICH, OR
FROM ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OF AN
OFFER OR PROXY 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 TO WHICH IT RELATES SHALL IMPLY OR CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF MBI OR FIRSTBANK OR
ANY OF THEIR RESPECTIVE SUBSIDIARIES OR IN THE INFORMATION SET FORTH OR
INCORPORATED BY REFERENCE HEREIN SUBSEQUENT TO THE DATE HEREOF.
 
   
     CAUTIONARY STATEMENTS FOR PURPOSES OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995:
    
 
   
     THIS PROXY STATEMENT/PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS
WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF
MBI FOLLOWING THE CONSUMMATION OF THE MERGER. SUCH FORWARD LOOKING STATEMENTS
APPEAR IN SEVERAL SECTIONS OF THIS PROXY STATEMENT/PROSPECTUS, INCLUDING "THE
MERGER--BACKGROUND OF THE MERGER," "--REASONS FOR THE MERGER; FIRSTBANK BOARD
RECOMMENDATION," "--OPINION OF FIRSTBANK'S FINANCIAL ADVISOR" AND "PRO FORMA
FINANCIAL INFORMATION." ALSO, WHENEVER THE WORDS "BELIEVES," "EXPECTS,"
"ANTICIPATES," "INTENDS," "ESTIMATES," "PLANS" OR SIMILAR WORDS OR EXPRESSIONS
ARE USED, THE STATEMENTS BEING MADE ARE FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT
MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES:
(1) EXPECTED COST SAVINGS FROM THE MERGER CANNOT BE FULLY REALIZED; (2) DEPOSIT
ATTRITION, CUSTOMER LOSS OR REVENUE LOSS FOLLOWING THE MERGER EXCEED
EXPECTATIONS; (3) COMPETITIVE PRESSURE IN THE BANKING INDUSTRY INCREASES
SIGNIFICANTLY; (4) COSTS OR DIFFICULTIES RELATED TO THE INTEGRATION OF THE
BUSINESSES OF MBI AND FIRSTBANK EXCEED EXPECTATIONS; (5) CHANGES IN THE INTEREST
RATE ENVIRONMENT REDUCE MARGINS MORE THAN PLANNED; (6) GENERAL ECONOMIC
CONDITIONS, EITHER NATIONALLY OR REGIONALLY, ARE LESS FAVORABLE THAN EXPECTED,
RESULTING IN, AMONG OTHER THINGS, A DETERIORATION IN CREDIT QUALITY; (7) THE
IMPACT OF REGULATORY CHANGES IS OTHER THAN AS EXPECTED; (8) CHANGES IN BUSINESS
CONDITIONS AND INFLATION; (9) CHANGES IN THE SECURITIES MARKETS; AND (10) COSTS
ASSOCIATED WITH, AND THE ABILITY OF THE COMBINED COMPANY AND/OR ITS CUSTOMERS
AND THIRD PARTY SOFTWARE VENDORS TO SUCCESSFULLY ADDRESS PROBLEMS ARISING FROM
THE "YEAR 2000 ISSUE" (AS DISCUSSED IN MBI'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1997) ARE NOT AS ANTICIPATED. FURTHER INFORMATION ON
OTHER FACTORS WHICH COULD AFFECT THE FINANCIAL RESULTS OF MBI AFTER THE MERGER
IS INCLUDED IN THE COMMISSION FILINGS INCORPORATED BY REFERENCE HEREIN.
    
 
                                        3
<PAGE>   15
 
                              SUMMARY INFORMATION
 
   
     FOLLOWING IS A SUMMARY OF CERTAIN TERMS OF THE MERGER AND RELATED
INFORMATION DISCUSSED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS AND IS NOT
INTENDED TO BE COMPLETE. IT IS QUALIFIED IN ALL RESPECTS BY THE MORE DETAILED
INFORMATION INCLUDED IN THIS PROXY STATEMENT/PROSPECTUS, THE ACCOMPANYING
ANNEXES AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE. AS USED IN THIS
PROXY STATEMENT/PROSPECTUS, THE TERMS "MBI" AND "FIRSTBANK" REFER TO SUCH
CORPORATIONS, RESPECTIVELY, AND, WHERE THE CONTEXT REQUIRES, SUCH CORPORATIONS
AND THEIR RESPECTIVE SUBSIDIARIES ON A CONSOLIDATED BASIS. FIRSTBANK
STOCKHOLDERS ARE URGED TO READ AND CONSIDER CAREFULLY ALL OF THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS AND
THE ANNEXES TO THIS PROXY STATEMENT/PROSPECTUS. ALL INFORMATION CONCERNING MBI
INCLUDED IN THIS PROXY STATEMENT/PROSPECTUS HAS BEEN FURNISHED BY MBI AND ALL
INFORMATION CONCERNING FIRSTBANK INCLUDED IN THIS PROXY STATEMENT/ PROSPECTUS
HAS BEEN FURNISHED BY FIRSTBANK.
    
 
BUSINESS OF MBI
 
   
     MBI, a Missouri corporation, was organized in 1970 and is a registered bank
holding company under the federal Bank Holding Company Act of 1956, as amended
(the "BHCA"). As of February 27, 1998, MBI owned, directly or indirectly, all of
the capital stock (except for directors' qualifying shares) of Mercantile Bank
National Association ("Mercantile Bank") and 18 other commercial banks located
throughout Missouri, Illinois, eastern Kansas and northern and central Arkansas
and Iowa. MBI currently has acquisitions pending with CBT Corporation ("CBT"),
headquartered in Paducah, Kentucky, Financial Services Corporation of the
Midwest ("Financial Services"), headquartered in Rock Island, Illinois, and
First Financial Bancorporation (First Financial), headquartered in Iowa City,
Iowa. MBI's services concentrate in three major lines of business--consumer,
corporate, and trust and investment advisory services. MBI also operates
non-banking subsidiaries that provide related financial services, including
investment management, brokerage services and asset-based lending. As of March
31, 1998, MBI reported, on a consolidated basis, total assets of $31.8 billion,
total deposits of $22.5 billion, total loans and leases of $19.6 billion and
shareholders' equity of $2.5 billion.
    
 
     MBI's principal executive offices are located at One Mercantile Center, St.
Louis, Missouri 63101 and its telephone number is (314) 418-2525.
 
     For additional information, see "--Summary Financial Data," "THE MERGER,"
"INFORMATION REGARDING MBI STOCK," "SUPERVISION AND REGULATION," "PRO FORMA
FINANCIAL INFORMATION" and "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE."
 
BUSINESS OF MERGER SUB
 
   
     Merger Sub, a Missouri corporation which was organized in 1991, is a wholly
owned subsidiary of MBI and a registered bank holding company under the BHCA. At
March 31, 1998, Merger Sub owned all of the capital stock of Mercantile Bank
National Association, and 18 other commercial banks which operate from over 500
locations throughout Missouri, Illinois, eastern Kansas, northern and central
Arkansas and Iowa. Merger Sub, the surviving corporation in the Merger, will
continue to be a subsidiary of MBI.
    
 
     Merger Sub's principal executive offices are located at One Mercantile
Center, St. Louis, Missouri 63101 and its telephone number is (314) 418-2525.
 
BUSINESS OF FIRSTBANK
 
   
     Firstbank, a Delaware corporation, is a registered bank holding company
under the BHCA. As of March 31, 1998, Firstbank owned, directly or indirectly,
all of the outstanding capital stock of eight banks
    
 
                                        4
<PAGE>   16
 
   
operating from 42 locations throughout downstate Illinois and from five offices
in Missouri. Additionally, Firstbank also operates certain non-banking
subsidiaries providing related financial services, including corporate trust,
investment advisory and discount brokerage services. At March 31, 1998,
Firstbank had consolidated assets of $2.28 billion, loans of $1.43 billion,
deposits of $2.00 billion and shareholders' equity of $238 million.
    
 
     Firstbank's principal executive offices are located at 205 South Fifth
Street, Springfield, Illinois 62701 and its telephone number is (217) 753-7543.
 
     For additional information, see "THE MERGER," "DESCRIPTION OF FIRSTBANK,"
"PRO FORMA FINANCIAL INFORMATION" and "INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE."
 
ANNUAL MEETING OF FIRSTBANK STOCKHOLDERS
 
   
     The Annual Meeting will be held at 3:00 p.m., Central Daylight Savings
Time, on Monday, June 29, 1998, in the main ballroom of the Renaissance
Springfield Hotel, 701 East Adams Street, Springfield, Illinois 62701. At the
Annual Meeting, the Firstbank Stockholders will consider and vote upon (i) a
proposal to approve and adopt the Merger Agreement, and (ii) the election of
three directors, and will transact such other business as may properly come
before the Annual Meeting or any adjournment or postponement thereof. Approval
by the Firstbank Stockholders of the Merger Agreement requires the affirmative
vote of the holders of at least a majority of the outstanding shares of
Firstbank Common Stock entitled to vote at the Annual Meeting ("Stockholder
Approval"). The election of directors requires a plurality of the votes of the
shares present in person or by proxy and entitled to vote. Only holders of
record of Firstbank Common Stock at the close of business on May 15, 1998 (the
"Record Date") will be entitled to notice of, and to vote at, the Annual
Meeting. As of the Record Date, there were 15,989,289 shares of Firstbank Common
Stock outstanding held by approximately 2,215 holders of record. See
"INFORMATION REGARDING ANNUAL MEETING."
    
 
   
     As of the Record Date, directors and executive officers of Firstbank and
certain of their affiliates owned beneficially an aggregate of 1,386,316 shares
of Firstbank Common Stock, or approximately 8.7% of the shares entitled to vote
at the Annual Meeting. All of the directors of Firstbank, who as of the Record
Date beneficially owned in the aggregate approximately 7.4% of the outstanding
shares of Firstbank Common Stock, have agreed, pursuant to separately executed
support agreements dated January 30, 1998 (each, a "Support Agreement"), to vote
all shares of Firstbank Common Stock beneficially owned by such person, or over
which such person has voting power or control, to approve the Merger Agreement.
See "INFORMATION REGARDING ANNUAL MEETING" and "THE MERGER--Support Agreements."
    
 
   
     Any Firstbank Stockholder giving a proxy may revoke it at any time prior to
the vote at the Annual Meeting. Firstbank Stockholders wishing to revoke a proxy
prior to the vote may do so by delivering to the stock transfer agent,
Firstbank, at P.O. Box 19264, Springfield, Illinois, 62794-9264 by mail, or 205
South Fifth Street, 9th Floor, Springfield, Illinois 62701 by courier or hand
delivery, a written notice of revocation bearing a later date than the proxy, by
executing any later dated proxy relating to the same shares, or by attending the
Annual Meeting and voting in person. Attendance at the Annual Meeting will not
in itself constitute the revocation of a proxy.
    
 
THE PROPOSED MERGER
 
     General.  Subject to the satisfaction of the terms and conditions set forth
in the Merger Agreement, which are described below, Firstbank will merge with
and into Merger Sub. Upon consummation of the Merger, Firstbank's corporate
existence will cease, with Merger Sub continuing as the surviving corporation.
 
   
     Simultaneously with the effectiveness of the Merger, each outstanding share
of Firstbank Common Stock, other than shares held by Firstbank, MBI or any of
their respective subsidiaries, will be converted into 0.8308 shares (the
"Exchange Ratio") of MBI Common Stock, plus cash in lieu of fractional shares
(the "Merger Consideration"). See "THE MERGER--General Description of the
Merger" "--Conversion of
    
 
                                        5
<PAGE>   17
 
Firstbank Common Stock; Treatment of Firstbank Stock Options," "--Fractional
Shares" and "--Absence of Dissenters' Appraisal Rights."
 
   
     Exchange Procedures.  As soon as practicable after the effective time of
the Merger (the "Effective Time"), MBI will deliver or cause to be delivered to
each holder of record of certificates formerly representing Firstbank Common
Stock ("Certificates") instructions and a letter of transmittal to tender such
Certificates. Upon surrendering Certificates to Harris Trust and Savings Bank,
as exchange agent (the "Exchange Agent") and acceptance thereof, each previous
holder of a Certificate so surrendered and accepted will be entitled to
certificates representing the number of full shares of MBI Common Stock into
which the shares represented by the Certificate so surrendered and accepted
shall have been converted pursuant to the Merger Agreement together with any
distribution theretofore declared and not yet paid with respect to such shares
of MBI Common Stock and a check representing the amount of any cash in lieu of
fractional shares which such holder has the right to receive with respect to the
Certificates surrendered, each without interest.
    
 
   
     After the Effective Time, holders of Certificates shall cease to have
rights with respect to the stock previously represented by such Certificates,
and their sole rights shall be to exchange such Certificates for the
consideration provided for in the Merger Agreement. After the Effective Time,
there shall be no further transfer on the records of Firstbank of Certificates,
and if such Certificates are presented to Firstbank for transfer, they shall be
cancelled against delivery of the Merger Consideration. Mercantile shall not be
obligated to deliver the Merger Consideration to any former holder of Firstbank
Common Stock until such holder surrenders the Certificates as provided in the
Merger Agreement. No dividends declared will be remitted to any person entitled
to receive MBI Common Stock under this Agreement until such person surrenders
the Certificate, at which time such dividends shall be remitted to such person,
without interest and less any taxes that may have been imposed thereon.
    
 
     Conditions.  Consummation of the Merger is subject to certain terms and
conditions, including, among other things, Stockholder Approval and receipt of
all requisite regulatory approvals. See "THE MERGER--Conditions of the Merger"
and "--Regulatory Approval."
 
     Closing and Effective Time.  Unless the parties otherwise agree, the
closing of the Merger (the "Closing") shall take place at 10:00 a.m., local
time, on the date (the "Closing Date") on which the Effective Time of the Merger
occurs, which shall be any such date as MBI shall notify Firstbank in writing
but (i) not earlier than the satisfaction or waiver of all conditions precedent,
including the receipt of Stockholder Approval and all requisite regulatory
approvals, (the "Approval Date") and (ii) not later than the first business day
of the first full calendar month commencing at least five business days after
the Approval Date. The Effective Time will occur, and the Merger will be
consummated and become effective, on the date and at the time on which
appropriate documents in respect of the Merger are filed with the Secretaries of
State of the States of Delaware and Missouri. MBI and Firstbank currently
anticipate that the Effective Time will occur in the third quarter of 1998. See
"THE MERGER--Closing and Effective Time."
 
     Termination.  The Merger Agreement may be terminated at any time prior to
the Effective Time by the mutual consent of the parties or by either party upon
the occurrence of certain events or if the Merger is not consummated by January
27, 1999. See "THE MERGER--Termination of the Merger Agreement."
 
FRACTIONAL SHARES
 
     No fractional shares of MBI Common Stock will be issued to Firstbank
Stockholders in connection with the Merger. Upon consummation of the Merger,
each former holder of Firstbank Common Stock who otherwise would have been
entitled to receive a fraction of a share of MBI Common Stock shall be entitled
to receive cash in lieu thereof, without interest, in an amount equal to the
holder's fractional share interest multiplied by the closing stock price of MBI
Common Stock on the last business day preceding the Effective Time. Cash
received by Firstbank Stockholders in lieu of fractional shares may give rise to
taxable income. See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER."
 
                                        6
<PAGE>   18
 
STOCK OPTION AGREEMENT
 
     In connection with the execution of the Merger Agreement, MBI and Firstbank
entered into the Stock Option Agreement dated January 30, 1998 (the "Stock
Option Agreement") pursuant to which Firstbank has issued MBI an option (the
"Option") to purchase up to 3,134,858 shares of Firstbank Common Stock (or
approximately 19.9% of the outstanding shares of Firstbank Common Stock as of
January 30, 1998, without including any shares subject to the Option) at an
exercise price of $37.75 per share. The Option is exercisable only upon the
occurrence of certain events and provides MBI the right, under certain
circumstances, to require Firstbank to purchase for cash the unexercised portion
of the Option and all shares of Firstbank Common Stock purchased by MBI pursuant
thereto. The Option, which MBI required that Firstbank grant as a condition to
entering into the Merger Agreement, may increase the likelihood of consummation
of the Merger by discouraging competing offers for Firstbank. Certain aspects of
the Stock Option Agreement may discourage persons who may now, or may prior to
the Effective Time, be interested in acquiring all of or a significant interest
in Firstbank from considering or proposing such an acquisition, even if such
persons were prepared to offer to pay consideration to Firstbank Stockholders
with a higher current market price than the Merger Consideration.
 
     The Stock Option Agreement is attached hereto as Annex B to this Proxy
Statement/Prospectus and is incorporated herein by reference. See "THE
MERGER--Stock Option Agreement."
 
SUPPORT AGREEMENTS
 
     Concurrently with the execution of the Merger Agreement, all of the
directors of Firstbank, who as of January 30, 1998, beneficially owned in the
aggregate approximately 7.9% of the outstanding shares of Firstbank Common Stock
(each, a "Supporting Stockholder" and together, the "Supporting Stockholders"),
executed separate Support Agreements with MBI pursuant to which each Supporting
Stockholder agreed, among other things, to vote all shares of Firstbank Common
Stock beneficially owned by the Supporting Stockholder to approve the Merger
Agreement. Each Supporting Stockholder also thereby agreed, among other things,
to not (i) sell, agree to sell, or otherwise transfer or dispose of any shares
of Firstbank Common Stock owned by the Supporting Stockholder, other than
pursuant to the Merger, to an affiliate who agrees to comply with such Support
Agreement, or with MBI's prior written consent, or (ii) directly or indirectly,
solicit, initiate or encourage any inquiries or proposals from, discuss or
negotiate with, or provide any nonpublic information to, any person relating to
any sale of Firstbank, or any of its business, material assets, or capital
stock, or any business combination or similar transaction involving Firstbank
(each such transaction, an "Alternative Transaction"). Each Support Agreement
terminates upon termination of the Merger Agreement in accordance with its
terms. See "THE MERGER--Support Agreements."
 
RECOMMENDATION OF THE FIRSTBANK BOARD
 
     THE FIRSTBANK BOARD HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY. THE FIRSTBANK BOARD BELIEVES THAT THE MERGER IS IN THE
BEST INTERESTS OF FIRSTBANK AND ITS STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT
SUCH STOCKHOLDERS VOTE "FOR" THE MATTERS TO BE VOTED UPON BY SUCH STOCKHOLDERS
IN CONNECTION WITH THE MERGER.
 
     For a discussion of the factors considered by the Firstbank Board in
reaching its conclusion, see "THE MERGER--Reasons for the Merger; Firstbank
Board Recommendation."
 
OPINION OF FIRSTBANK'S FINANCIAL ADVISOR
 
     PaineWebber Incorporated ("PaineWebber"), Firstbank's financial advisor,
delivered its oral opinion to the Firstbank Board on January 29, 1998, which was
confirmed in a written opinion dated January 29, 1998, to the effect that, as of
such date and based upon the procedures and subject to the assumptions made,
matters considered and limitations described therein, the Exchange Ratio is fair
from a financial point of view to the holders of Firstbank Common Stock.
PaineWebber has confirmed its January 29, 1998 opinion by delivery of its
written opinion, dated as of the date of this Proxy Statement/Prospectus, to the
effect that, as of the date
 
                                        7
<PAGE>   19
 
hereof and based upon the procedures and subject to the assumptions made,
matters considered and limitations described therein, the Exchange Ratio is fair
from a financial point of view to the holders of Firstbank Common Stock. See
"THE MERGER--Opinion of Firstbank's Financial Advisor." The full text of the
written opinion of PaineWebber delivered on the date hereof is attached as Annex
C to this Proxy Statement/Prospectus and holders of Firstbank Common Stock are
urged to read carefully the opinion in its entirety.
 
INTERESTS OF CERTAIN PERSONS IN THE MERGER
 
     Certain members of the management of Firstbank have interests in the Merger
in addition to their interests generally as Firstbank Stockholders. For
instance, Mark H. Ferguson has entered into an employment agreement with MBI and
is a party to a severance agreement with Firstbank. In addition, under the
Merger Agreement, MBI has agreed to indemnify the present and past employees,
agents, directors and officers of Firstbank and its subsidiaries for all acts
and omissions occurring at or prior to the Effective Time to the same extent as
such persons were entitled to be indemnified by Firstbank as of the date of the
Merger Agreement. The Merger Agreement also provides that MBI will provide, for
a period of not less than six years after the Effective Time, an insurance and
indemnification policy providing coverage to the directors and officers of
Firstbank that is no less favorable than the coverage provided by MBI to MBI's
directors and officers as of the date of the Merger Agreement.
 
     The Firstbank Board was aware of these interests and considered them, among
other interests and other matters, in approving the Merger Agreement and the
transactions contemplated thereby. See "THE MERGER--Interests of Certain Persons
in the Merger."
 
REGULATORY APPROVAL
 
     The Merger is subject to the prior approval of the Board of Governors of
the Federal Reserve System (the "Federal Reserve Board") under the BHCA. In
reviewing the Merger, the Federal Reserve Board will consider various factors,
including possible anticompetitive effects of the Merger, and will examine the
financial and managerial resources and future prospects of the combined
organization. The Merger may not be consummated until expiration of all
applicable waiting periods. MBI is also required to file a change in control
application with the Illinois Office of Banks and Real Estate.
 
   
     Applications for such approvals have been filed. There can be no assurance
that any necessary regulatory approvals or actions will be received or taken or
as to the timing of such approvals or actions.
    
 
     See "THE MERGER--Conditions of the Merger" and "--Regulatory Approval."
 
WAIVER AND AMENDMENT
 
     Any term, condition or provision of the Merger Agreement may be waived in
writing at any time by the party which is, or whose shareholders are, entitled
to the benefits thereof. The Merger Agreement may be amended by action taken by
or on behalf of the Board of Directors of MBI (the "MBI Board") and the
Firstbank Board at any time before or after Stockholder Approval, including an
amendment to change one or more of the termination provisions set forth therein,
by an instrument in writing signed on behalf of each party; provided that after
Stockholder Approval no such modification may alter or change the amount or kind
of consideration to be received by holders of Firstbank Common Stock in the
Merger.
 
ACCOUNTING TREATMENT
 
     It is intended that for accounting and financial reporting purposes the
Merger will be accounted for as a pooling-of-interests. See "THE
MERGER--Accounting Treatment" and "--Conditions of the Merger."
 
                                        8
<PAGE>   20
 
FIRSTBANK STOCK OPTIONS
 
     At the Effective Time, all rights with respect to Firstbank Stock Options
issued under Firstbank Stock Plans outstanding at the Effective Time, whether or
not then exercisable, will be converted into and become rights with respect to
MBI Common Stock, and MBI will assume each Firstbank Stock Option in accordance
with the terms of the Firstbank Stock Plan under which it was issued and the
stock option agreement by which it is evidenced. See "THE MERGER--Conversion of
Firstbank Common Stock; Treatment of Firstbank Stock Options."
 
     Certain executive officers, including certain executive officers who are
directors, of Firstbank currently hold Firstbank Stock Options which will be
converted into rights with respect to MBI Common Stock as described above.
 
FEDERAL INCOME TAX CONSEQUENCES IN GENERAL
 
   
     The Merger is intended to qualify as a reorganization under Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"). MBI and
Firstbank, respectively, have received opinions of Wachtell, Lipton, Rosen &
Katz, special counsel to MBI, and Suelthaus & Walsh, P.C., special counsel to
Firstbank, each dated as of the date of this Proxy Statement/Prospectus,
substantially to the effect that for U.S. federal income tax purposes, (i) the
Merger will be treated as a "reorganization" within the meaning of Section 368
of the Code (ii) and no gain or loss will be recognized by the Firstbank
Stockholders who receive solely MBI Common Stock in exchange for shares of
Firstbank Common Stock (except with respect to cash received in lieu of
fractional shares of MBI Common Stock). EACH FIRSTBANK STOCKHOLDER IS URGED TO
CONSULT SUCH STOCKHOLDER'S OWN TAX ADVISOR TO DETERMINE THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER TO SUCH STOCKHOLDER. For a more detailed description
of the federal income tax consequences of the Merger, see "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGER."
    
 
ABSENCE OF DISSENTERS' APPRAISAL RIGHTS
 
     Firstbank Stockholders do not have dissenters' appraisal rights in
connection with the Merger. See "THE MERGER--Absence of Dissenters' Appraisal
Rights."
 
CERTAIN DIFFERENCES IN THE RIGHTS OF SHAREHOLDERS
 
     The rights of Firstbank Stockholders are currently governed by the Delaware
Law and Firstbank's Certificate of Incorporation and By-Laws. Upon consummation
of the Merger, Firstbank Stockholders who receive MBI Common Stock in the Merger
will become shareholders of MBI, and their rights will be governed by the
Missouri General and Business Corporation Law (the "Missouri Law") and MBI's
Restated Articles of Incorporation and By-Laws. See "INFORMATION REGARDING MBI
STOCK--Comparison of the Rights of Shareholders of MBI and Stockholders of
Firstbank."
 
MARKETS AND MARKET PRICES
 
   
     MBI Common Stock is currently listed on the NYSE under the symbol "MTL."
Firstbank Common Stock is currently quoted on Nasdaq under the symbol "FBIC."
The following table sets forth the last sale price per share for MBI Common
Stock reported on the NYSE Composite Transactions Tape and for Firstbank Common
Stock quoted on Nasdaq, each as of January 30, 1998, the last full trading day
preceding public announcement of the Merger, and on May 21, 1998, the most
recent practicable date prior to the mailing of this Proxy Statement/Prospectus.
The table also sets forth the per share equivalent price for Firstbank Common
Stock (calculated by multiplying the last sale price per share of MBI Common
Stock on the date reported by the Exchange Ratio).
    
 
                                        9
<PAGE>   21
 
   
<TABLE>
<CAPTION>
                                                                                 LAST SALE PRICE PER SHARE
                                      LAST SALE PRICE     LAST SALE PRICE PER    OF FIRSTBANK COMMON STOCK
                                     PER SHARE FOR MBI    SHARE FOR FIRSTBANK      ON AN EQUIVALENT PER
              DATE                     COMMON STOCK          COMMON STOCK             SHARE BASIS(A)
              ----                   -----------------    -------------------    -------------------------
<S>                                  <C>                  <C>                    <C>
January 30, 1998.................         $50.50                $38.00                    $41.96
May 21, 1998.....................         $53.31                $43.25                    $44.29
</TABLE>
    
 
- ---------------
 
   
(a) Based upon the Exchange Ratio of 0.8308.
    
 
     Because the market price of MBI Common Stock is subject to fluctuation and
the Exchange Ratio is fixed, the value of the shares of MBI Common Stock that
Firstbank Stockholders will receive in the Merger may materially increase or
decrease prior to the Merger. Stockholders are advised to obtain current market
quotations for MBI Common Stock and Firstbank Common Stock. There can be no
assurance as to the market price of MBI Common Stock or Firstbank Common Stock
before, at, or, in the case of MBI Common Stock, after, the Effective Time.
 
     The following table sets forth for the periods indicated the high and low
last sale prices (as reported on the NYSE Composite Tape or on Nasdaq, as the
case may be) and per share cash dividend declared with respect to MBI Common
Stock and Firstbank Common Stock. MBI sale prices and dividends have been
adjusted for a three-for-two stock split distributed as a dividend on October 1,
1997, and Firstbank sale prices and dividends have been adjusted for
three-for-two stock splits distributed as dividends on April 1, 1995 and
September 1, 1997.
 
   
<TABLE>
<CAPTION>
                                                                       FIRSTBANK COMMON
                                     MBI COMMON STOCK(1)      CASH           STOCK            CASH
                                     -------------------    DIVIDEND   -----------------    DIVIDEND
                                       HIGH       LOW       DECLARED    HIGH       LOW      DECLARED
                                     --------   --------    --------   -------   -------    --------
<S>                                  <C>        <C>         <C>        <C>       <C>        <C>
1995
First Quarter......................  $24.8125   $20.8125    $ 0.220    $ 18.00   $ 17.00    $0.1470
Second Quarter.....................   29.9375    24.0000      0.220      18.50     17.83     0.1470
Third Quarter......................   31.3125    27.7500      0.220      19.17     18.00     0.1470
Fourth Quarter.....................   31.0000    27.6875      0.220      21.00     18.67     0.1470
1996
First Quarter......................  $31.0000   $27.6875    $ 0.273    $ 21.33   $ 20.33    $0.1600
Second Quarter.....................   31.9375    29.0000      0.273      21.00     19.67     0.1600
Third Quarter......................   35.2500    28.9375      0.273      21.50     19.67     0.1600
Fourth Quarter.....................   36.0000    32.6875      0.273      23.17     21.25     0.1600
1997
First Quarter......................  $39.6875   $33.3125    $ 0.287    $ 25.67   $ 22.50    $0.1800
Second Quarter.....................   41.6875    35.0000      0.287      26.50     24.09     0.1800
Third Quarter......................   53.5000    40.5000      0.287      32.75     26.00     0.1800
Fourth Quarter.....................   61.6250    45.5000      0.287      38.00     30.75     0.1800
1998
First Quarter......................  $61.2500   $49.5625    $ 0.310    $ 49.00   $ 35.00    $0.2575
Second Quarter (through May 21)....   57.5000    52.0000      0.310      47.00     42.94     0.2575
</TABLE>
    
 
     MBI will apply for the listing on the NYSE of the shares of MBI Common
Stock to be issued in the Merger.
 
     The MBI Board intends to maintain its present policy of paying quarterly
cash dividends on the MBI Common Stock when justified by the financial condition
of MBI and its subsidiaries. The declaration and amount of future dividends will
depend on circumstances existing at the time, including MBI's earnings,
financial condition and capital requirements as well as regulatory limitations,
note and indenture provisions and such other factors as the MBI Board may deem
relevant. See "INFORMATION REGARDING MBI STOCK--Description of MBI Common Stock
and Attached Preferred Share Purchase Rights--Dividends."
                                       10
<PAGE>   22
 
     Pursuant to the Merger Agreement, Firstbank has agreed that, during the
period from the date of the Merger Agreement to the Effective Time, Firstbank
will not declare, set aside or pay any dividends or other distributions on the
Firstbank Common Stock, except that Firstbank may declare and pay dividends on
the Firstbank Common Stock equal to the product of (i) the Exchange Ratio and
(ii) the amount of the dividends per share declared by the Board of Directors of
MBI; provided further, however, that Firstbank shall not declare or pay a
quarterly dividend for any quarter in which Firstbank stockholders will be
entitled to receive a quarterly dividend on the shares of MBI Common Stock to be
issued in the Merger.
 
COMPARATIVE UNAUDITED PER SHARE DATA
 
     The following table sets forth for the periods indicated selected
historical per share data of MBI and Firstbank and the corresponding pro forma
and pro forma equivalent per share amounts giving effect to the proposed Merger.
The data presented is based upon the consolidated financial statements and
related notes of MBI and the consolidated financial statements and related notes
of Firstbank in this Proxy Statement/Prospectus or in documents prepared by the
respective companies and provided to MBI, and the pro forma combined
consolidated balance sheet and income statements, including the notes thereto,
appearing elsewhere herein. This information should be read in conjunction with
such historical and pro forma financial statements and related notes thereto.
The assumptions used in the preparation of this table appear in the notes to the
pro forma financial information appearing elsewhere in this Proxy
Statement/Prospectus. See "PRO FORMA FINANCIAL INFORMATION."
 
     MBI and Firstbank expect that the combined company will achieve substantial
benefits from the Merger including operating cost savings and revenue
enhancements. However, the unaudited pro forma comparative per share data does
not reflect any direct costs, potential savings or revenue enhancements which
are expected to result from the consolidation of operations of MBI and Firstbank
and therefore does not purport to be indicative of the results of future
operations.
 
     The comparative per share data presented herein is based on and derived
from, and should be read in conjunction with, the historical consolidated
financial statements and the related notes thereto of Firstbank, both of which
are incorporated by reference herein. See "AVAILABLE INFORMATION,"
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" and "PRO FORMA FINANCIAL
INFORMATION--Pro Forma Combined Consolidated Financial Statements (Unaudited)."
Pro forma amounts are not necessarily indicative of results of operations or the
combined financial position that would have resulted had the Merger been
consummated at the beginning of the periods indicated. All adjustments
consisting of only normal recurring adjustments necessary for a fair statement
of results of interim periods have been included.
 
                                       11
<PAGE>   23
 
   
<TABLE>
<CAPTION>
                                                        AS OF OR FOR THE        AS OF OR FOR THE
                                                          THREE MONTHS       YEAR ENDED DECEMBER 31,
                                                             ENDED          -------------------------
                                                         MARCH 31, 1998      1997      1996     1995
                                                       ------------------   -------   ------   ------
<S>                                                    <C>                  <C>       <C>      <C>
Basic Earnings per Share:
  MBI--Historical....................................       $ 0.780         $ 1.680   $2.110   $2.410
  Firstbank--Historical..............................         0.490           1.900    1.800    1.660
  MBI/Firstbank Pro Forma Combined(1)................         0.770           1.740    2.120    2.380
  MBI/Firstbank Equivalent Pro Forma(2)..............         0.640           1.450    1.760    1.980
  MBI/All Entities Pro Forma Combined(3).............         0.760           1.450    2.130    2.380
  MBI/All Entities Equivalent Pro Forma(4)...........         0.630           1.200    1.770    1.980
Diluted Earnings per Share:
  MBI--Historical....................................       $ 0.770         $ 1.650   $2.080   $2.370
  Firstbank--Historical..............................         0.480           1.860    1.780    1.640
  MBI/Firstbank Pro Forma Combined(1)................         0.750           1.700    2.090    2.340
  MBI/Firstbank Equivalent Pro Forma(2)..............         0.620           1.410    1.740    1.940
  MBI/All Entities Pro Forma Combined(3).............         0.750           1.420    2.100    2.340
  MBI/All Entities Equivalent Pro Forma(4)...........         0.620           1.180    1.740    1.940
Cash Dividends per Share:
  MBI--Historical....................................       $ 0.310         $ 1.148   $1.092   $0.880
  Firstbank--Historical..............................         0.258           0.720    0.640    0.588
  MBI/Firstbank Pro Forma Combined(1)................         0.310           1.148    1.092    0.880
  MBI/Firstbank Equivalent Pro Forma(2)..............         0.260           0.950    0.910    0.730
  MBI/All Entities Pro Forma Combined(3).............         0.310           1.148    1.092    0.880
  MBI/All Entities Equivalent Pro Forma(4)...........         0.260           0.950    0.910    0.730
Book Value per Share:
  MBI--Historical....................................       $18.650         $18.470
  Firstbank--Historical..............................        14.960          14.770
  MBI/Firstbank Pro Forma Combined(1)................        18.060          17.830
  MBI/Firstbank Equivalent Pro Forma(2)..............        15.000          14.810
  MBI/All Entities Pro Forma Combined(3).............        18.000          17.770
  MBI/All Entities Equivalent Pro Forma(4)...........        14.950          14.760
</TABLE>
    
 
- ---------------
 
(1) Includes the effect of pro forma adjustments for Firstbank, as appropriate.
     See "PRO FORMA FINANCIAL INFORMATION--Notes to Pro Forma Combined
     Consolidated Financial Statements."
 
(2) Based on the MBI/Firstbank Pro Forma Combined per share amounts multiplied
     by the Exchange Ratio. Further explanation of the assumptions used in the
     preparation of the pro forma combined consolidated financial statement is
     included in the notes to pro forma combined consolidated financial
     statements. See "PRO FORMA FINANCIAL INFORMATION--Notes to Pro Forma
     Combined Consolidated Financial Statements."
 
   
(3) Includes the effects of pro forma adjustments for Firstbank, CBT and
     Roosevelt, as appropriate. Due to the immateriality of the financial
     condition and results of operations of Horizon, HomeCorp, Financial
     Services and First Financial to that of MBI, does not include the effect of
     pro forma adjustments of such companies. The unaudited pro forma
     comparative per share data combines the financial information of MBI with
     the financial information of Firstbank, each as of and for the fiscal years
     ended December 31, 1997, 1996 and 1995. See "PRO FORMA FINANCIAL
     INFORMATION--Notes to Pro Forma Combined Consolidated Financial
     Statements."
    
 
(4) Based on the MBI/All Entities Pro Forma Combined per share amounts
     multiplied by the Exchange Ratio. Further explanation of the assumptions
     used in the preparation of the pro forma combined consolidated financial
     statement is included in the notes to pro forma combined consolidated
     financial statements. See "PRO FORMA FINANCIAL INFORMATION--Notes to Pro
     Forma Combined Consolidated Financial Statements."
 
                                       12
<PAGE>   24
 
SUMMARY FINANCIAL DATA
 
     The following tables set forth for the periods indicated certain summary
historical consolidated financial information for MBI and Firstbank.
 
     The historical balance sheet data and income statement data included in the
summary financial data for the periods indicated are derived from financial
statements of MBI and Firstbank as of and for such periods. These data include
all adjustments which are, in the opinion of the respective managements of MBI
and Firstbank, necessary to present a fair statement of the results of these
periods and all such adjustments are of a normal recurring nature. Results for
interim periods are not necessarily indicative of results for the entire year.
 
     The following information should be read in conjunction with the
consolidated financial statements of MBI and Firstbank, and the related notes
thereto, included in documents incorporated herein by reference and in
conjunction with the unaudited pro forma combined consolidated financial
information, including notes thereto, appearing elsewhere in this Proxy
Statement/Prospectus. See "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE"
and "PRO FORMA FINANCIAL INFORMATION."
 
                                       13
<PAGE>   25
 
                         MERCANTILE BANCORPORATION INC.
 
                             SUMMARY FINANCIAL DATA
   
<TABLE>
<CAPTION>
                                  MBI/
                              ALL ENTITIES
                               PRO FORMA
                                COMBINED
                              CONSOLIDATED
                              AS OF OR FOR
                               THE THREE     AS OF OR FOR THE THREE
                                 MONTHS           MONTHS ENDED
                                 ENDED              MARCH 31,
                               MARCH 31,     -----------------------
                                  1998          1998         1997
                              ------------   ----------   ----------
<S>                           <C>            <C>          <C>
PER SHARE DATA
  Basic earnings per
    share...................    $   0.76      $   0.78     $  0.650
  Diluted earnings per
    share...................        0.75          0.77        0.640
  Dividends declared........        0.31          0.31        0.287
  Book value at period
    end.....................       18.00         18.65       16.500
EARNINGS (THOUSANDS)
  Interest income...........    $591,933      $530,331     $398,462
  Interest expense..........     319,898       290,026      186,501
                                --------      --------     --------
  Net interest income.......     272,035       240,305      211,961
  Provision for possible
    loan losses.............       8,537         6,606       18,443
  Other income..............     136,760       127,193       88,100
  Other expense.............     220,895       196,864      165,595
  Income taxes..............      65,287        60,136       41,028
                                --------      --------     --------
  Net income................    $114,076      $103,892     $ 74,995
                                ========      ========     ========
ENDING BALANCE SHEET
  (MILLIONS)
  Total assets..............    $ 34,652      $ 31,802     $ 22,078
  Earning assets............      31,286        28,530       20,373
  Investment securities.....       9,189         8,378        4,847
  Loans and leases, net of
    unearned income.........      21,540        19,625       15,213
  Deposits..................      24,941        22,528       17,354
  Long-term debt (1)........       2,377         2,343          452
  Shareholders' equity......       2,707         2,483        1,882
  Reserve for possible loan
    losses..................         301           264          231
SELECTED RATIOS
  Return on average
    assets..................        1.34%         1.35%        1.38%
  Return on average
    equity..................       16.16         16.57        15.63
  Net interest rate margin
    (2).....................        3.58          3.54         4.36
  Equity to assets..........        7.81          7.81         8.52
  Reserve for possible loan
    losses to
    Outstanding loans.......        1.40          1.34         1.52
    Non-performing loans....      231.77        231.39       273.18
  Dividend payout ratio
    (3).....................       41.33         40.26        44.84
 
<CAPTION>
 
                                         AS OF OR FOR THE YEAR ENDED DECEMBER 31,
                              --------------------------------------------------------------
                                 1997         1996         1995         1994         1993
                              ----------   ----------   ----------   ----------   ----------
<S>                           <C>          <C>          <C>          <C>          <C>
PER SHARE DATA
  Basic earnings per
    share...................  $    1.680   $    2.110   $     2.41   $    2.060   $     1.81
  Diluted earnings per
    share...................       1.650        2.080         2.37        2.020         1.77
  Dividends declared........       1.148        1.092         0.88        0.748         0.66
  Book value at period
    end.....................      18.470       16.740        16.29       14.480        13.41
EARNINGS (THOUSANDS)
  Interest income...........  $1,878,194   $1,552,863   $1,516,156   $1,311,928   $1,269,680
  Interest expense..........     957,690      724,910      715,466      521,542      508,469
                              ----------   ----------   ----------   ----------   ----------
  Net interest income.......     920,504      827,953      800,690      790,386      761,211
  Provision for possible
    loan losses.............      79,309       73,015       41,533       48,791       70,584
  Other income..............     378,684      337,480      311,649      272,368      290,380
  Other expense.............     894,780      718,668      640,519      645,011      666,067
  Income taxes..............     120,506      128,535      149,898      135,896      114,768
                              ----------   ----------   ----------   ----------   ----------
  Net income................  $  204,593   $  245,215   $  280,389   $  233,056   $  200,172
                              ==========   ==========   ==========   ==========   ==========
ENDING BALANCE SHEET
  (MILLIONS)
  Total assets..............  $   29,955   $   22,030   $   20,883   $   19,397   $   18,878
  Earning assets............      27,278       20,061       18,997       17,904       17,390
  Investment securities.....       7,546        4,746        4,964        4,895        5,234
  Loans and leases, net of
    unearned income.........      19,200       14,953       13,703       12,764       11,637
  Deposits..................      22,080       17,336       16,172       15,137       15,435
  Long-term debt (1)........       1,469          305          344          351          340
  Shareholders' equity......       2,410        1,946        1,915        1,643        1,510
  Reserve for possible loan
    losses..................         255          230          232          245          233
SELECTED RATIOS
  Return on average
    assets..................        0.79%        1.16%        1.39%        1.22%        1.08%
  Return on average
    equity..................        9.55        12.95        15.64        14.66        14.06
  Net interest rate margin
    (2).....................        3.93         4.34         4.38         4.61         4.58
  Equity to assets..........        8.05         8.83         9.17         8.47         8.00
  Reserve for possible loan
    losses to
    Outstanding loans.......        1.33         1.54         1.70         1.92         2.00
    Non-performing loans....      249.51       318.99       241.79       552.34       289.13
  Dividend payout ratio
    (3).....................       69.58        52.50        37.13        37.03        37.29
</TABLE>
    
 
- ---------------
 
(1) Includes company-obligated mandatorily redeemable preferred securities of
     Mercantile Capital Trust I.
 
   
(2) Taxable-equivalent basis. Includes tax-equivalent adjustments for MBI of
     $3,401,000, $3,857,000, $15,086,000, $16,353,000, $17,758,000, $17,962,000,
     and $18,598,000 for March 31, 1998, March 31,
    
 
                                       14
<PAGE>   26
 
   
     1997, and December 31, 1997, 1996, 1995, 1994 and 1993, respectively, and
     for all entities pro forma combined consolidated for March 31, 1998 of
     $4,182,000. These adjustments are based upon a federal tax rate of 35% for
     all periods.
    
 
(3) Based upon diluted earnings per share.
 
                                       15
<PAGE>   27
 
                           FIRSTBANK OF ILLINOIS CO.
 
                             SUMMARY FINANCIAL DATA
 
   
<TABLE>
<CAPTION>
                                    AS OF OR FOR THE THREE
                                    MONTHS ENDED MARCH 31,                 AS OF OR FOR THE YEAR ENDED DECEMBER 31,
                                  ---------------------------   --------------------------------------------------------------
                                       1998           1997         1997         1996         1995         1994         1993
                                  --------------   ----------   ----------   ----------   ----------   ----------   ----------
<S>                               <C>              <C>          <C>          <C>          <C>          <C>          <C>
PER SHARE DATA
  Basic earnings per share......    $   0.4900     $     0.47   $     1.90   $     1.80   $     1.66   $     1.55   $     1.27
  Diluted earnings per share....        0.4800           0.46         1.86         1.78         1.64         1.53         1.25
  Dividends declared............        0.2575           0.18         0.72         0.64         0.59         0.53         0.48
  Book value at period end......       14.9600          13.60        14.77        13.45        12.31        10.55        10.25
EARNINGS (THOUSANDS)
  Interest income...............    $   41,598     $   36,611   $  157,373   $  140,611   $  134,401   $  124,254   $  124,010
  Interest expense..............        19,527         16,317       71,472       61,005       57,486       45,057       45,406
                                    ----------     ----------   ----------   ----------   ----------   ----------   ----------
  Net interest income...........        22,071         20,294       85,901       79,606       76,915       79,197       78,604
  Provision for possible loan
    losses......................           762            717        2,958        2,868        2,313        2,942        5,535
  Noninterest income............         6,778          5,439       24,618       21,798       20,168       18,902       18,242
  Noninterest expense...........        15,926         13,890       61,121       55,137       54,921       59,426       62,827
  Income taxes..................         4,395          3,941       16,796       15,526       14,107       11,697        9,385
                                    ----------     ----------   ----------   ----------   ----------   ----------   ----------
  Income before cumulative
    effect of change in
    accounting principle........         7,766          7,185       29,644       27,873       25,742       24,034       19,099
  Cumulative effect of change in
    accounting principle........            --             --           --           --           --           --          386
                                    ----------     ----------   ----------   ----------   ----------   ----------   ----------
  Net income....................    $    7,766     $    7,185   $   29,644   $   27,873   $   25,742   $   24,034   $   19,485
                                    ==========     ==========   ==========   ==========   ==========   ==========   ==========
ENDING BALANCE SHEET (THOUSANDS)
  Total assets..................    $2,283,670     $2,047,930   $2,281,818   $2,005,204   $1,863,294   $1,816,902   $1,758,902
  Investment securities.........       651,998        556,467      655,146      478,184      456,919      468,217      443,046
  Loans, net of unearned
    discount....................     1,425,133      1,282,049    1,427,304    1,297,406    1,236,798    1,178,550    1,129,894
  Deposits......................     2,000,539      1,762,291    1,982,046    1,738,263    1,618,269    1,534,990    1,523,700
  Other borrowings..............        18,604         53,912       47,266       39,585       35,496      103,402       60,248
  Shareholders' equity..........       238,489        210,006      232,573      207,636      190,981      163,311      157,925
  Reserve for possible loan
    losses......................        20,285         18,942       19,939       19,103       18,047       18,360       18,252
SELECTED RATIOS
  Return on average assets......          1.39%          1.45%        1.40%        1.46%        1.41%        1.33%        1.11%
  Return on average equity......         13.34          13.97        13.52        14.07        14.47        14.99        12.78
  Net interest margin(1)........          4.30           4.48         4.43         4.57         4.66         4.86         5.03
  Shareholders' equity to
    assets......................         10.44          10.25        10.19        10.35        10.25         8.99         8.98
  Reserve for possible loan
    losses to:
    Outstanding loans...........          1.42           1.48         1.40         1.47         1.46         1.56         1.62
    Nonperforming loans.........        181.64         141.94       174.81       176.81       164.08       257.40       167.16
  Dividend payout ratio(2)......         53.65          39.13        38.71        35.96        35.98        34.64        38.40
</TABLE>
    
 
- ---------------
 
   
(1) Taxable equivalent basis. Includes tax-equivalent adjustments of $195,000,
    $203,000, $761,000, $975,000, $1,231,000 $1,638,000, and $2,113,000 for the
    three months ended March 31, 1998 and 1997, and the years ended December 31,
    1997, 1996, 1995, 1994 and 1993, respectively. These adjustments are based
    upon a federal tax rate of 35% for all periods.
    
 
(2) Based upon diluted earnings per share.
 
                                       16
<PAGE>   28
 
                      INFORMATION REGARDING ANNUAL MEETING
 
GENERAL
 
   
     This Proxy Statement/Prospectus is being furnished to Firstbank
Stockholders as a proxy statement in connection with the solicitation of proxies
by the Firstbank Board for use at the Annual Meeting and any adjournment or
postponement thereof at which the Firstbank Stockholders will consider and vote
on a proposal to approve and adopt the Merger Agreement and a proposal to elect
three directors to the Firstbank Board, and will transact such other business as
may properly come before the Annual Meeting or any adjournment or postponement
thereof. Each copy of this Proxy Statement/Prospectus is accompanied by a Letter
to Firstbank Stockholders, the Notice of Annual Meeting of Stockholders, a proxy
card and a self-addressed return envelope to Firstbank for the proxy card.
    
 
   
     This Proxy Statement/Prospectus is also furnished by MBI to each holder of
Firstbank Common Stock as a prospectus in connection with the issuance by MBI of
shares of MBI Common Stock to Firstbank Stockholders upon the consummation of
the Merger. This Proxy Statement/Prospectus, the letter to Firstbank
Stockholders, the Notice of Annual Meeting of Stockholders and the form of proxy
are first being mailed to Firstbank Stockholders on or about May 28, 1998.
    
 
     THE FIRSTBANK BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, AS WELL AS EACH OF THE
FOREGOING ADDITIONAL ACTIONS.
 
DATE, TIME AND PLACE
 
     The Annual Meeting will be held at 3:00 p.m., Central Daylight Savings
Time, on June 29, 1998, in the main ballroom of the Renaissance Springfield
Hotel, 701 East Adams Street, Springfield, Illinois 62701.
 
FIRSTBANK RECORD DATE; VOTE REQUIRED
 
   
     The Firstbank Board has fixed May 15, 1998 as the Record Date for
determination of Firstbank Stockholders entitled to notice of and to vote at the
Annual Meeting. Accordingly, only holders of record of Firstbank Common Stock at
the close of business on such date will be entitled to notice of, and to vote
at, the Annual Meeting. As of the Record Date, there were 15,989,289 shares of
Firstbank Common Stock outstanding and entitled to vote which were held by
approximately 2,215 holders of record. Each such share is entitled to one vote
on each matter properly brought before the Annual Meeting. The affirmative vote
of the holders of at least a majority of the outstanding shares of Firstbank
Common Stock entitled to vote at the Annual Meeting is required to approve the
Merger Agreement. The election of directors requires a plurality of the votes of
the shares present in person or represented by proxy and entitled to vote.
    
 
VOTING AND REVOCATION OF PROXIES
 
     Shares of Firstbank Common Stock entitled to vote and which are represented
at the Annual Meeting by a properly executed proxy received prior to the vote at
the Annual Meeting will be voted at such Annual Meeting in the manner directed
on the proxy card, unless such proxy is revoked in the manner set forth herein
in advance of such vote. ANY FIRSTBANK STOCKHOLDER RETURNING A BLANK EXECUTED
PROXY CARD WILL BE DEEMED TO HAVE VOTED "FOR" APPROVAL AND ADOPTION OF THE
MERGER AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE MERGER AND THE ELECTION OF THE PROPOSED SLATE OF DIRECTORS.
Failure to return a properly executed proxy card or to vote in person at the
Annual Meeting will have the practical effect of a vote against the Merger
Agreement.
 
     Shares subject to abstentions will be treated as shares that are present at
the Annual Meeting for purposes of determining the presence of a quorum. If a
broker or other nominee holder indicates on the proxy card that it does not have
discretionary authority to vote the shares it holds of record on the proposal,
those shares will be treated as shares that are present at the Annual Meeting
for purposes of determining the
                                       17
<PAGE>   29
 
presence of a quorum but will not be considered as voted for purposes of
determining the approval of stockholders on a particular proposal. Since the
approval of the Merger Agreement requires the affirmative vote of the holders of
at least a majority of the outstanding shares of Firstbank Common Stock entitled
to vote at the Annual Meeting, abstentions and broker non-votes will have the
same effect as votes against the approval of the Merger Agreement. Broker
non-votes and votes withheld will have no effect on the election of directors,
which requires a plurality of the votes of the shares present and entitled to
vote.
 
   
     Any stockholder of Firstbank giving a proxy may revoke it at any time prior
to the vote at the Annual Meeting. Stockholders of Firstbank wishing to revoke a
proxy prior to the vote may do so by delivering to Firstbank, at P.O. Box 19264,
Springfield, Illinois 62794-9264 by mail, or 205 South Fifth Street, 9th Floor,
Springfield, Illinois, 62701 by courier or hand delivery, a written notice of
revocation bearing a later date than the proxy, by execution of any later dated
proxy relating to the same shares, or by attending the Annual Meeting and voting
in person. Attendance at the Annual Meeting will not in itself constitute the
revocation of a proxy.
    
 
   
     The Firstbank Board currently is not aware of any business to be brought
before the Annual Meeting other than that described herein. If, however, other
matters are properly brought before such Annual Meeting, or any adjournment or
postponement thereof, the persons appointed as proxies will have discretionary
authority to vote the shares represented by duly executed proxies in accordance
with their discretion and judgment as to the best interest of Firstbank.
    
 
SOLICITATION OF PROXIES
 
   
     Firstbank will bear its own costs of soliciting proxies. Proxies will
initially be solicited by mail, but directors, officers and selected other
employees of Firstbank may also solicit proxies in person or by telephone,
telegram or other means of communication. Directors, officers and any other
employees of Firstbank who solicit proxies will not be specially compensated for
such services, but may be reimbursed for reasonable out-of-pocket expenses in
connection with such solicitation. Firstbank has retained Morrow & Co. at an
estimated cost of $7,500, plus reimbursement of expenses, to assist in its
solicitation of proxies from brokers, nominees, institutions and individuals.
Brokerage houses, nominees, fiduciaries, and other custodians will be requested
to forward proxy materials to beneficial owners and will be reimbursed for their
reasonable expenses incurred in connection therewith.
    
 
     HOLDERS OF FIRSTBANK COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
 
                                       18
<PAGE>   30
 
                  PROPOSAL I--APPROVAL OF THE MERGER AGREEMENT
 
                                   THE MERGER
 
     THE FOLLOWING SUMMARY OF CERTAIN TERMS AND PROVISIONS OF THE MERGER
AGREEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT,
WHICH IS INCORPORATED HEREIN BY REFERENCE AND IS INCLUDED AS ANNEX A TO THIS
PROXY STATEMENT/PROSPECTUS.
 
GENERAL DESCRIPTION OF THE MERGER
 
     The Merger Agreement provides that Firstbank will merge at the Effective
Time with and into Merger Sub, subject to Stockholder Approval and the
satisfaction or waiver of the other conditions to the Merger. Upon consummation
of the Merger, Firstbank's corporate existence will cease, with Merger Sub
continuing as the surviving corporation.
 
     Simultaneously with the effectiveness of the Merger, each outstanding share
of Firstbank Common Stock, other than shares of Firstbank Common Stock held by
Firstbank, MBI, or any of their respective subsidiaries (other than in a
fiduciary capacity or as a result of debts previously contracted), will be
converted into 0.8308 shares of MBI Common Stock. In addition, at the Effective
Time, all rights with respect to Firstbank Common Stock pursuant to Firstbank
Stock Options under the Firstbank Stock Plans that are outstanding at the
Effective Time, whether or not then exercisable, will be converted into and
become rights with respect to MBI Common Stock, and MBI will assume each
Firstbank Stock Option in accordance with the terms of the Firstbank Stock Plan
under which it was issued and the stock option agreement by which it is
evidenced.
 
     The shares of MBI Common Stock to be issued pursuant to the Merger will be
freely transferable except by certain Firstbank Stockholders who are deemed to
be "affiliates" (as defined herein) of Firstbank. The shares of MBI Common Stock
issued to such affiliates will be restricted in their transferability in
accordance with the rules and regulations promulgated by the Commission and
pursuant to agreements entered into with MBI. See "INFORMATION REGARDING MBI
STOCK--Restrictions on Resale of MBI Common Stock by Affiliates; Affiliate
Agreements."
 
     The amount and nature of the Merger Consideration was established through
arms'-length negotiations between MBI and Firstbank, and reflects the balancing
of a number of countervailing factors. The total amount of the Merger
Consideration reflects a price both parties concluded was appropriate. See
"--Background of the Merger" and "--Reasons for the Merger; Firstbank Board
Recommendation."
 
CLOSING AND EFFECTIVE TIME
 
     Unless the parties otherwise agree, the Closing of the Merger will take
place at 10:00 a.m., local time, on the date on which the Effective Time occurs,
which shall be any such date as MBI notifies Firstbank in writing but not
earlier than the Approval Date, and not later than the first business day of the
first full calendar month commencing at least five business days after the
Approval Date. The Effective Time will occur upon the filing of the appropriate
documents in respect of the Merger with the Secretaries of State of the States
of Delaware and Missouri. MBI and Firstbank currently anticipate that the
Effective Time will occur in the third quarter of 1998.
 
CONVERSION OF FIRSTBANK COMMON STOCK; TREATMENT OF FIRSTBANK STOCK OPTIONS
 
     As soon as practicable after the Effective Time, a letter of transmittal
that MBI will deliver or cause to be delivered to holders of record of
Certificates will instruct such holders as to the actions to be taken by such
holders in order to receive such individual holder's portion of the Merger
Consideration and will explain that risk of loss and title to Certificates will
pass only upon delivery of such Certificates to the Exchange Agent.
 
     FIRSTBANK STOCK CERTIFICATES SHOULD NOT BE RETURNED WITH THE ENCLOSED PROXY
AND SHOULD NOT BE FORWARDED TO THE EXCHANGE AGENT UNLESS
 
                                       19
<PAGE>   31
 
AND UNTIL THE FIRSTBANK STOCKHOLDER RECEIVES A LETTER OF TRANSMITTAL FOLLOWING
THE EFFECTIVE TIME.
 
     Each holder of a Certificate that surrenders such Certificate together with
duly executed transmittal materials to the Exchange Agent will, after the
Effective Time and upon acceptance thereof by the Exchange Agent, be entitled to
a certificate or certificates representing the number of full shares of MBI
Common Stock into which the Certificate so surrendered will have been converted
pursuant to the Merger Agreement and any distribution theretofore declared and
not yet paid with respect to such shares of MBI Common Stock, without interest.
See "--Fractional Shares."
 
     The Exchange Agent will accept Certificates upon compliance with such
reasonable terms and conditions as MBI or the Exchange Agent may impose to
effect an orderly exchange thereof in accordance with customary exchange
practices. Certificates shall be appropriately endorsed or accompanied by such
instruments of transfer as MBI or the Exchange Agent may require. See "General
Description of the Merger."
 
     Each outstanding Certificate will, until duly surrendered to the Exchange
Agent, be deemed to evidence ownership of the Merger Consideration into which
the stock previously represented by such Certificate will have been converted in
the Merger. After the Effective Time, holders of Certificates will cease to have
rights with respect to the stock previously represented by such Certificates,
and their sole rights shall be to exchange such Certificates for the Merger
Consideration provided for in the Merger Agreement. After the Effective Time,
there will be no further transfers on the records of Firstbank of Certificates,
and if such Certificates are presented to Firstbank for transfer they will be
canceled against delivery of the Merger Consideration.
 
     MBI will not be obligated to deliver the Merger Consideration to which any
former holder of Firstbank Common Stock is entitled as a result of the Merger
until such holder surrenders the Certificates as provided in the Merger
Agreement and duly executes and provides transmittal materials. No dividends
declared will be remitted to any person entitled to receive MBI Common Stock
under the Merger Agreement until such person surrenders the Certificate
representing the right to receive such MBI Common Stock and duly executes and
provides transmittal materials at which time such dividends will be remitted to
such person,without interest and less any taxes that may have been imposed
thereon.
 
     Neither the Exchange Agent nor any party to the Merger Agreement nor any
affiliate thereof will be liable to any holder of stock represented by any
Certificate for any Merger Consideration paid to a public official pursuant to
applicable abandoned property, escheat or similar laws. MBI and the Exchange
Agent will be entitled to rely upon the stock transfer books of Firstbank to
establish the identity of those persons entitled to receive Merger
Consideration, which books will be conclusive with respect thereto. In the event
of a dispute with respect to ownership of stock represented by any Certificate,
MBI and the Exchange Agent shall be entitled to deposit any Merger Consideration
represented thereby in escrow with an independent third party and thereafter be
relieved with respect to any claims thereto.
 
     From and after the Effective Time, (i) each Firstbank Stock Option assumed
by MBI will be exercisable solely for shares of MBI Common Stock, (ii) the
number of shares of MBI Common Stock subject to each Firstbank Stock Option will
be equal to the number of shares of Firstbank Common Stock subject to such
Firstbank Stock Option immediately prior to the Effective Time multiplied by the
Exchange Ratio and (iii) the per share exercise price under each Firstbank Stock
Option will be adjusted by dividing the per share exercise price under such
Firstbank Stock Option by the Exchange Ratio and rounding down to the nearest
cent; provided, however, that the terms of each Firstbank Stock Option will, in
accordance with its terms, be subject to further adjustment as appropriate to
reflect any stock split, stock dividend, recapitalization or other similar
transaction subsequent to the Effective Time. It is intended that the foregoing
assumption of stock options be undertaken in a manner that will not constitute a
"modification" (as defined in the Code) of any Firstbank Stock Option that is an
"incentive stock option." Each holder of a Firstbank Stock Option that is
converted into an option with respect to MBI Common Stock should not recognize
gain or loss solely as a result of such conversion. Certain tax consequences
will arise, however, upon the exercise of any such option that is a nonqualified
stock option or the sale or disposition of the shares acquired by exercise of
any such option that is an incentive stock option.
 
                                       20
<PAGE>   32
 
FRACTIONAL SHARES
 
     No fractional shares of MBI Common Stock will be issued to the former
Firstbank Stockholders in connection with the Merger. Each former holder of
Firstbank Common Stock who otherwise would have been entitled to receive a
fraction of a share of MBI Common Stock will receive cash in lieu thereof,
without interest, in an amount equal to the holder's fractional share interest
multiplied by the closing stock price of MBI Common Stock on the NYSE Composite
Tape as reported in The Wall Street Journal (or in the absence thereof, by any
other authoritative source) on the last business day preceding the Effective
Time. No Firstbank Stockholder entitled to receive cash in lieu of fractional
shares will be entitled to dividends, voting rights or any other rights in
respect of such fractional shares. Cash received by Firstbank Stockholders in
lieu of fractional shares may give rise to taxable income. See "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGER."
 
STOCK OPTION AGREEMENT
 
     In connection with the execution of the Merger Agreement, MBI and Firstbank
entered into the Stock Option Agreement pursuant to which Firstbank has issued
to MBI an Option to purchase up to 3,134,858 shares of Firstbank Common Stock
(or approximately 19.9% of the outstanding shares of Firstbank Common Stock as
of the Record Date, without including shares subject to the Option) at an
exercise price of $37.75 per share (the "Purchase Price"). MBI can exercise the
Option (after receipt of the required regulatory approvals) only if it is not
then in material breach of the Merger Agreement and only upon the occurrence of
one of the following events (each, a "Purchase Event"): (i) Firstbank or any of
its Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the
Commission), without having received prior written consent from MBI, shall have
entered into, authorized, recommended, proposed or publicly announced its
intention to enter into, authorize, recommend, or propose, an agreement,
arrangement or understanding with any person (other than MBI or any of its
subsidiaries) to (A) effect a merger or consolidation or similar transaction
involving Firstbank or any of its Significant Subsidiaries, other than internal
mergers, reorganizing actions, consolidations or dissolutions involving only
existing subsidiaries of Firstbank, (B) purchase, lease or otherwise acquire 20%
or more of the assets of Firstbank or any of its Significant Subsidiaries or (C)
purchase or otherwise acquire (including by way of merger, consolidation, share
exchange or similar transaction) Beneficial Ownership (as defined in Rule 13d-3
under the Exchange Act) of securities representing 20% or more of the voting
power of Firstbank or any of its Significant Subsidiaries, provided that the
making of any agreement to divest or the actual divestiture by Firstbank of any
of Firstbank's Missouri-chartered banks shall not constitute such an event; (ii)
any person (other than MBI or any subsidiary of MBI, or any person acting in
concert with MBI, or Firstbank or any subsidiary of Firstbank in a fiduciary
capacity) shall have acquired Beneficial Ownership or the right to acquire
Beneficial Ownership of 20% or more of the voting power of Firstbank; (iii) the
Firstbank Board shall have withdrawn or modified in a manner adverse to MBI the
recommendation of the Firstbank Board with respect to the Merger Agreement,
unless the Firstbank Board reasonably determines not to so recommend based upon
the written opinion of counsel to the effect that to so recommend would
constitute a breach of the Firstbank Board's fiduciary duties under applicable
law, in each case after an Extension Event (as defined below); or (iv) the
holders of Firstbank Common Stock shall not have approved the Merger Agreement
at the Annual Meeting, or such Annual Meeting shall not have been held or shall
have been canceled prior to termination of the Merger Agreement in accordance
with its terms, in each case after an Extension Event. No Extension Event or
Purchase Event has occurred as of the date of this Proxy Statement/Prospectus.
 
     The Option terminates (i) on the earliest to occur of (A) the Effective
Time of the Merger, (B) the termination of the Merger Agreement (1) by mutual
consent of MBI and Firstbank, (2) after January 27, 1999, by a party not then in
material breach of the Merger Agreement, if the Merger Agreement has not been
consummated, (3) by either party if (x) the Federal Reserve Board has denied
approval of the Merger and such denial has become final and nonappealable or (y)
Firstbank Stockholders shall not have approved the Merger Agreement at the
Annual Meeting following a favorable recommendation of the Firstbank Board, (4)
by Firstbank in the event of a material breach by MBI of the Merger Agreement
which is not cured within 30 days of written notice thereof, and (5) by MBI in
the event that after-tax costs, if any, of remedial or other
 
                                       21
<PAGE>   33
 
corrective actions or measures with regard to specified properties exceed
$7,000,000, and (C) two years following the termination of the Merger Agreement
by MBI in the event of a material breach by Firstbank of the Merger Agreement
which is not cured within 30 days of written notice thereof, provided that, with
respect to any of the foregoing, if such termination follows an Extension Event,
the Option will not terminate until 12 months following such termination, or
(ii) if the Option cannot be exercised on such day because of any injunction,
order or similar restraint issued by a court of competent jurisdiction, on the
30th business day after such injunction, order or restraint shall have been
dissolved or when such injunction, order or restraint shall have become
permanent and no longer subject to appeal, as the case may be. Any exercise of
the Option will be subject to compliance with applicable law, including the
BHCA. An "Extension Event" is defined in the Stock Option Agreement as any of:
(i) a Purchase Event of the type specified in clauses (i) and (ii) in the
preceding paragraph; (ii) any person (other than MBI or any of its subsidiaries)
shall have "commenced" (as such term is defined in Rule 14d-2 under the Exchange
Act), or shall have filed a registration statement under the Securities Act with
respect to, a tender offer or exchange offer to purchase shares of Firstbank
Common Stock such that, upon consummation of such offer, such person would have
Beneficial Ownership (as defined in Rule 13d-3 under the Exchange Act) or the
right to acquire Beneficial Ownership of 20% or more of the voting power of
Firstbank; or (iii) any person (other than MBI or any subsidiary of MBI, or
Firstbank or any subsidiary of Firstbank in a fiduciary capacity) shall have
publicly announced (A) an offer described in clause (ii) of this sentence or (B)
a transaction described in clause (i) of this sentence.
 
     The Stock Option Agreement further provides that, to the extent not
terminated pursuant to its terms, from and after the date of a Purchase Event
until 13 months immediately thereafter (the "Repurchase Period"), MBI will be
entitled to require Firstbank (or any successor) to repurchase for cash the
Option from MBI together with all (but not less than all) shares of Firstbank
Common Stock purchased by MBI pursuant thereto, at a price per share equal to
the sum of: (i) the exercise price paid by MBI for any shares of Firstbank
Common Stock acquired pursuant to the Option; (ii) the difference between (A)
the "Market/Tender Offer Price" for shares of Firstbank Common Stock (defined as
the higher of (1) the highest price per share at which a tender or exchange
offer has been made for shares of Firstbank Common Stock or (2) the highest
closing mean of the "bid" and the "ask" price per share of Firstbank Common
Stock reported by Nasdaq for any day within that portion of the Repurchase
Period which precedes the date MBI gives notice of the required repurchase) and
(B) the Purchase Price multiplied by the number of shares of Firstbank Common
Stock with respect to which the Option has not been exercised, but only if the
Market/Tender Offer Price is greater than such exercise price; (iii) the
difference between the Market/Tender Offer Price and the Purchase Price paid by
MBI for any shares of Firstbank Common Stock purchased pursuant to the exercise
of the Option, multiplied by the number of shares so purchased, but only if the
Market/Tender Offer Price is greater than such exercise price; and (iv) MBI's
reasonable out-of-pocket expenses incurred in connection with the transactions
contemplated by the Merger Agreement, including, without limitation, legal,
accounting and investment banking fees.
 
     The Option, which MBI required that Firstbank grant as a condition to MBI's
entering into the Merger Agreement, is intended to increase the likelihood of
consummation of the Merger by discouraging competing offers for Firstbank.
Certain aspects of the Stock Option Agreement may have the effect of
discouraging persons who may now, or prior to the Effective Time, be interested
in acquiring all of or a significant interest in Firstbank from considering or
proposing such an acquisition, even if such person were prepared to offer to pay
consideration to Firstbank Stockholders with a higher current market price than
the Merger Consideration.
 
     The foregoing summary of the material provisions of the Stock Option
Agreement, a copy of which is attached as Annex B to this Proxy
Statement/Prospectus and incorporated herein by reference is qualified in its
entirety by reference to the Stock Option Agreement.
 
SUPPORT AGREEMENTS
 
     Concurrently with the execution of the Merger Agreement, the Supporting
Stockholders, who, as of January 30, 1998, beneficially owned in the aggregate
approximately 7.9% of the outstanding shares of Firstbank Common Stock, executed
separate Support Agreements with MBI pursuant to which each Supporting
Stockholder agreed, among other things: (i) not to sell, agree to sell, or
otherwise transfer or
 
                                       22
<PAGE>   34
 
dispose of any shares of Firstbank Common Stock owned by the Supporting
Stockholder, other than (A) pursuant to the Merger, (B) with MBI's prior written
consent, and (C) Firstbank Common Stock transferred to Firstbank in connection
with the exercise of stock options to the extent that as of the date of such
Support Agreement the related option agreement permits shares of Firstbank
Common Stock to be so used in connection with the exercise of stock options;
(ii) to vote all of the shares of Firstbank Common Stock beneficially owned by
such Supporting Stockholder as of the record date for any meeting of Firstbank
Stockholders called to consider and vote to approve the Merger Agreement and/or
the transactions contemplated thereby in favor of the Merger Agreement; and
(iii) to not, directly or indirectly, solicit, initiate or encourage any
inquiries or proposals from, discuss or negotiate with, or provide any nonpublic
information to, any person relating to an Alternative Transaction. The Support
Agreements provide that no action taken by a Supporting Stockholder in his or
her capacity as a director of Firstbank that does not violate the Merger
Agreement is prohibited by the Support Agreements. Each Support Agreement
terminates upon the earlier of termination of the Merger Agreement or the day
following the Closing Date.
 
   
     Each Supporting Stockholder and the approximate number of shares of
Firstbank Common Stock beneficially owned by such Supporting Stockholder over
which such person had voting power or control (including exercisable options to
purchase such shares) as of January 30, 1998 are as follows:
    
 
   
<TABLE>
<S>                                                             <C>
William B. Hopper...........................................      708,507
Robert L. Sweney............................................      268,576
Mark H. Ferguson............................................      100,610
William T. Grant, Jr. ......................................       71,178
William R. Schnirring.......................................       37,275
P. Richard Ware.............................................       28,520
Leo J. Dondanville, Jr......................................       22,950
Richard E. Zemenick.........................................       12,110
Robert W. Jackson...........................................        9,835
William R. Enlow............................................        6,055
                                                                ---------
All Supporting Stockholders as a Group......................    1,265,615
</TABLE>
    
 
     The foregoing is a summary of the material provisions of the Support
Agreement. See "AVAILABLE INFORMATION."
 
BACKGROUND OF THE MERGER
 
     From time to time, as part of its ongoing strategic planning process,
Firstbank has considered the possibility of a strategic business combination
with a larger institution such as Mercantile as one of a multitude of strategic
alternatives. During the second and third quarters of 1997, management
tentatively concluded that, in light of the challenges that Firstbank faced in
the prevailing environment in the banking and financial services industry, such
a strategic business combination was a more attractive alternative, from a
stockholders' perspective, than it had been in the past.
 
     During the third quarter of 1997, Mark H. Ferguson, Chairman of the Board,
President and Chief Executive Officer of Firstbank, began one-on-one discussions
with individual directors of Firstbank concerning management's ongoing
examination of strategic alternatives. On November 12, 1997, this review was
brought to the full Firstbank Board at a special meeting. The November 12
meeting was attended by special counsel from Suelthaus & Walsh, P.C., of St.
Louis, Missouri, and Mayer, Brown & Platt, of Chicago, Illinois, as well as by
representatives of PaineWebber.
 
     At the November 12 meeting, Mr. Ferguson presented the results of a
management study that analyzed whether Firstbank should remain independent or
pursue a strategic business combination. A number of stockholder value issues
were reviewed at the meeting, including Firstbank's prospects on an independent
basis, its prospects as part of a strategic business combination, and the
relative value of the consideration that could be expected to be received by
Firstbank Stockholders. Mr. Ferguson also reviewed the impact customer,
 
                                       23
<PAGE>   35
 
community, and employee-related issues would have on stockholder value, both
with and without a strategic business combination, as well as the affect such a
combination would have on these constituencies.
 
     Mr. Ferguson reviewed suggested criteria for selecting prospective
partners, including their management ability; their historical performance and
future outlook; their operating style; risk and potential upside with respect to
their currencies; their ability and willingness to pay; and integration issues.
He also reviewed management's overall evaluations of various prospective
partners that had been identified by management based on their likely interest
in a strategic business combination with Firstbank. Mr. Ferguson then called
upon representatives of PaineWebber to provide information to the Board
concerning various financial advisory matters.
 
     The Firstbank Board then discussed the issues raised by management and
PaineWebber to determine the course of action that would be in the best
interests of Firstbank and its stockholders. Included in the discussion was a
comparison of continuing as an independent organization with the strategic
business combination options believed to be available. Several variations of
these two primary alternatives were explored, including, but not limited to,
remaining independent while continuing to make acquisitions of smaller companies
and more aggressively managing Firstbank's capital through the repurchase of
treasury shares, and seeking a business combination with a similarly sized
financial institution. The Firstbank Board also discussed the implications of
the various strategic alternatives on capital levels, future dividends, and the
overall franchise value of Firstbank. Management provided its preliminary
conclusions regarding steps that would be required to be taken to enhance the
earnings of Firstbank under each of the alternatives.
 
     The representatives from PaineWebber discussed with the Board of Directors
the possibility of making an informal approach to some or all of several
potential strategic partners. The Firstbank Board determined that before it
proceeded further, it was advisable to obtain additional information concerning
how the potential candidates might view Firstbank as a strategic business
combination partner. Accordingly, Mr. Ferguson was authorized to employ
PaineWebber for this limited purpose, and to further discuss with its
representatives the various issues and alternatives. No decision as to whether
to engage in a transaction was made at that time.
 
     On December 1, 1997, the Firstbank Board met again. Representatives from
PaineWebber attended and representatives from Suelthaus & Walsh, P.C.
participated via teleconference. A review of the information gathered to date
was presented by Mr. Ferguson and PaineWebber. The Firstbank Board also
discussed various actions that would be appropriate to take should Firstbank
elect to remain independent. The Firstbank Board authorized management and
PaineWebber to continue exploring opportunities for a strategic business
combination, and adopted resolutions formally authorizing the engagement of each
of PaineWebber, Suelthaus & Walsh, P.C., and Mayer, Brown & Platt in connection
with such exploration.
 
     The Firstbank Board next met on December 16, 1997, and management, together
with representatives from PaineWebber, continued its discussion with the
Firstbank Board regarding the various strategic alternatives. At this point MBI
was identified as the leading candidate for a strategic business combination
based upon a variety of factors, including its initial expressions of interest
and the strength with which it met the criteria previously identified by the
Firstbank Board for potential partners. The Board of Directors instructed
management to continue its discussions with MBI and to gather additional
information regarding its level of interest in a strategic business combination,
integration plans if such a combination were accomplished, and its senior
management's overall operating philosophy. Mr. Ferguson met with Thomas H.
Jacobsen, Chairman of the Board, President, and Chief Executive Officer of MBI,
later that day. The focus of the meeting was on each company's operations and
strategic plans, and a preliminary discussion regarding an appropriate exchange
ratio. However, no substantive negotiations regarding the exchange ratio or
other significant terms of a merger or other transaction took place.
 
     On December 19, 1997, the Board of Directors met again, and Mr. Ferguson
reviewed the progress of discussions with MBI with the Board. It was agreed that
discussions should be continued. By this point, both Firstbank and MBI had begun
preparing for due diligence reviews to be made by their respective management
and advisors, and thereafter, during the last week in December 1997, MBI
conducted a due diligence review of Firstbank and Firstbank began its due
diligence review of MBI.
 
                                       24
<PAGE>   36
 
     On January 16, 1998, the Firstbank Board met again, together with
management and representatives from PaineWebber, Suelthaus & Walsh, P.C. and
Mayer, Brown & Platt. Management reviewed in depth the process that had occurred
to date, including information regarding strategic alternatives that had been
developed by management during the course of 1997, the examination of potential
partners for a strategic business combination, and the negotiations and other
processes engaged in with MBI, including a second meeting between Mr. Jacobsen
and Mr. Ferguson on January 9, 1998. Through a series of face-to-face meetings,
telephone discussions, and exchanges of correspondence between MBI and its
advisors on the one hand, and Firstbank and its advisors on the other hand,
extending from mid-December through the date of the January 16 board meeting,
most of the details of the strategic business combination had been agreed upon,
but serious negotiations remained regarding, among other things, the Exchange
Ratio and the Option. Draft versions of the Merger Agreement and the Option were
provided to the Directors for their review and comment. Final negotiations with
MBI regarding the Exchange Ratio, the Option, and other remaining issues
followed over the course of the next two weeks.
 
     On January 29, 1998, the Board of Directors of Firstbank met again to
review the proposed definitive Merger Agreement and related documents.
Management described the events of that period. Special counsel reviewed various
legal aspects of the Merger Agreement, the Option, and related matters.
Representatives from PaineWebber reviewed the proposed transaction from a
financial point of view, and delivered its oral opinion (which was confirmed by
a written opinion, dated as of that date) stating that, subject to the various
factors set forth in the opinion letter, the exchange ratio provided in the
Merger Agreement was fair from a financial point of view to the Firstbank
Stockholders. After deliberating with respect to the Merger Agreement and the
transactions contemplated in connection therewith, the Firstbank Board
unanimously approved the Merger Agreement and the transactions contemplated
thereby as being in the best interests of Firstbank and the Firstbank
Stockholders. The Firstbank Board voted twice: first, with all directors voting,
then with all directors except for Messrs. Ferguson and Zemenick voting (the
interests of Messrs. Ferguson and Zemenick in the merger are discussed herein
under the caption "THE MERGER -- Interests of Certain Persons in the Merger").
 
REASONS FOR THE MERGER; FIRSTBANK BOARD RECOMMENDATION
 
     In reaching its determination to approve the Merger Agreement and recommend
approval of the Merger Agreement to Firstbank Stockholders, the Firstbank Board
consulted with Firstbank's management and its financial and legal advisors, and
considered a number of factors. The following include all of the material
factors, both positive and negative, considered by the Firstbank Board:
 
          (i) the Firstbank Board's familiarity with and review of Firstbank's
     business, operations, financial condition and earnings on an historical and
     a prospective basis;
 
          (ii) the Firstbank Board's review, based in part on presentations by
     its financial advisor and the Firstbank management, of the business,
     operations, financial condition and earnings of MBI on an historical and a
     prospective basis and of the combined company on a pro forma basis and the
     historical stock price performance of the MBI Common Stock, the resulting
     relative interests of Firstbank Stockholders and MBI Shareholders in the
     common equity of the combined company and the potential for appreciation in
     the market value of MBI Common Stock following the proposed Merger;
 
          (iii) the oral and/or written presentations of management and
     PaineWebber to the Firstbank Board at its meetings held on November 12,
     1997, December 1, 1997, December 16, 1997, December 19, 1997, January 16,
     1998, and January 29, 1998, and the financial information reviewed by
     PaineWebber at the meetings of the Firstbank Board on November 12, 1997,
     December 1, 1997, January 16, 1998, and January 29, 1998, and the opinion
     of PaineWebber, rendered on January 29, 1998, that, as of such date, the
     Exchange Ratio was fair from a financial point of view to Firstbank
     Stockholders (see "--Opinion of Firstbank's Financial Advisor";
 
          (iv) the process conducted by Firstbank's management and its financial
     advisor in exploring and determining the potential value which could be
     realized by Firstbank Stockholders in a business combination transaction
     (including the contacts between Firstbank and its financial advisor and
     certain
 
                                       25
<PAGE>   37
 
     bank holding companies determined to be the most likely companies to be
     both interested in and financially and otherwise capable of engaging in a
     business combination transaction with Firstbank) relative to the prospects
     of Firstbank on an independent basis or as part of a combination involving
     a similarly sized financial institution (see "--Background of the Merger");
 
          (v) the terms of the Merger Agreement and the Merger, including the
     Exchange Ratio, noting that it reflected a 13.2% premium for the holders of
     Firstbank Common Stock based on the closing prices of MBI Common Stock and
     Firstbank Common Stock on January 28, 1998, the last trading day prior to
     the approval by the Firstbank Board of the Merger, and multiples of
     price-to-1998 consensus earnings and price-to-tangible book value (as of
     December 31, 1997) of approximately 21.1x and 324%, respectively;
 
          (vi) the current and prospective economic and competitive environment
     facing the financial services industry generally, and Firstbank in
     particular, including the need to develop new delivery systems for its
     products and services; the relatively limited opportunity to become more
     efficient through cost-reduction efforts; the need for substantial
     investment in new technology; the dwindling number of attractive
     acquisition candidates and the accompanying escalation in pricing
     expectations of the remaining candidates; and an operating environment that
     required aggressive short-term pricing strategies that diminished prospects
     for long-term revenue growth;
 
          (vii) the Firstbank Board's review, based in part on the presentations
     of management and PaineWebber at the November 12, 1997 and the December 1,
     1997 meetings of the Firstbank Board, of alternatives to the Merger for
     enhancing stockholder value, the range of possible values to Firstbank
     Stockholders obtainable through implementation of such alternatives, and
     the timing and likelihood of actually achieving such value, and the
     Firstbank Board's belief, based upon such review, that such alternatives
     were not likely to result in greater value for Firstbank Stockholders than
     the value to be realized in the Merger;
 
          (viii) the general impact that the Merger could be expected to have on
     the constituencies served by Firstbank, including its customers, employees
     and communities;
 
          (ix) the Firstbank Board's belief that MBI possesses superior
     technological capabilities and information systems, and its expectation
     that MBI will be able to successfully leverage those capabilities and
     systems through the integration of the respective operations of MBI and
     Firstbank in connection with the Merger;
 
          (x) the expectation that the Merger would constitute a
     "reorganization" under Section 368(a) of the Code and that it would be
     accounted for as a pooling-of-interests for accounting and financial
     reporting purposes (see "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" and "--
     Accounting Treatment");
 
          (xi) the anticipated cost savings, operating efficiencies and
     opportunities for revenue enhancement available to the combined company
     from the Merger, and the likelihood of the foregoing being achieved
     following consummation of the Merger;
 
          (xii) the fact that Mr. Ferguson entered into an employment agreement
     with MBI pursuant to which he will continue to be employed by MBI or its
     affiliates following the consummation of the Merger as the Chairman,
     President, and Chief Executive Officer of MBI's banking franchise in
     Illinois outside Madison, St. Clair, Monroe, and Jo Davies Counties and
     will serve additionally as a member of the Board of Directors of the banks
     comprising such franchise. The Firstbank Board also considered the fact
     that under Mr. Zemenick's employment agreement, the Merger will constitute
     a Change in Control, thereby permitting Mr. Zemenick to terminate his
     employment and be paid the remainder of his base salary through the end of
     the calendar year in which his employment terminates and relieving Mr.
     Zemenick from certain restrictive covenants under such agreement regarding
     competition with Firstbank. The Firstbank Board also considered that Mr.
     Ferguson and Mr. Zemenick might be deemed to have interests in the Merger
     other than their interests generally as Firstbank Stockholders (see
     "--Interests of Certain Persons in the Merger"); and
 
                                       26
<PAGE>   38
 
          (xiii) the results of the due diligence investigation of MBI conducted
     by Firstbank's management; the Firstbank Board's assessment, with the
     assistance of counsel, concerning the likelihood that MBI would obtain all
     regulatory approvals required for the Merger (see "--Regulatory
     Approvals"); and the terms of the Stock Option Agreement, including the
     risk that the Stock Option Agreement might discourage third parties from
     offering to acquire Firstbank by increasing the cost of such an
     acquisition, and recognizing that the execution of the Stock Option
     Agreement was a condition to MBI's willingness to enter into the Merger
     Agreement (see "--Stock Option Agreement").
 
     The foregoing discussion of the information and factors considered by the
Firstbank Board is not intended to be exhaustive but includes all of the
material factors considered by the Firstbank Board. In reaching its
determination to approve and recommend the Merger, the Firstbank Board did not
assign any relative or specific weights to the foregoing factors, and individual
directors may have given differing weights to different factors.
 
     THE FIRSTBANK BOARD BELIEVES THE MERGER IS FAIR TO, AND IN THE BEST
INTERESTS OF, FIRSTBANK AND ITS STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT
FIRSTBANK STOCKHOLDERS VOTE "FOR" THE APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY.
 
OPINION OF FIRSTBANK'S FINANCIAL ADVISOR
 
   
     Pursuant to an engagement letter dated December 10, 1997, Firstbank
retained the investment banking firm of PaineWebber Incorporated ("PaineWebber")
to act as financial advisor to Firstbank. At a meeting of the Firstbank Board on
January 16, 1998, PaineWebber reviewed various valuation analyses with respect
to the proposed Merger and at the meeting of the Firstbank Board on January 29,
1998, PaineWebber updated certain of these analyses and delivered its opinion
stating that, on and as of the date of such opinion and based upon and subject
to the assumptions described in such opinion, the Exchange Ratio was fair to
Firstbank Stockholders from a financial point of view. In arriving at its
opinion, PaineWebber made its determination as to the fairness from a financial
point of view of the Exchange Ratio in light of the financial and comparative
analyses described below. In connection with the preparation and mailing of this
Proxy Statement/Prospectus, PaineWebber delivered an updated opinion dated May
22, a copy of which is included herein as Annex C and which is incorporated by
reference herein (the "Opinion"). The Opinion is substantially identical to the
opinion delivered to the Firstbank Board on January 29, 1998, and is based on
financial and comparative analyses substantially identical to those described
below. Holders of Firstbank Common Stock are urged to read the Opinion in its
entirety for a description of factors considered and assumptions made by
PaineWebber in rendering the Opinion.
    
 
     The Opinion does not address the relative merits of the Merger and any
other transactions or business strategies discussed by the Firstbank Board as
alternatives to the Merger or the decision of the Firstbank Board to proceed
with the Merger. No opinion is expressed as to the price at which the securities
to be issued in the Merger to the Firstbank Stockholders may trade at any time.
In rendering the Opinion, PaineWebber has not been engaged to act as agent or
fiduciary of Firstbank's equity holders or any other third party.
 
     In arriving at the Opinion, PaineWebber, among other things:
 
   
          (i) Reviewed Firstbank's audited Annual Reports, Forms 10-K, Forms
     10-Q and related financial information for the five fiscal years ended
     December 31, 1997, and Firstbank's Form 10-Q and related unaudited
     financial information for the three months ended March 31, 1998;
    
 
   
          (ii) Reviewed MBI's audited Annual Reports, Forms 10-K and related
     financial information for the five fiscal years ended December 31, 1997,
     and MBI's Form 10-Q and related unaudited financial information for the
     three months ended March 31, 1998;
    
 
   
          (iii) Reviewed certain information, including financial forecasts,
     relating to the business, earnings, cash flow, assets and prospects of
     Firstbank and MBI furnished to PaineWebber by Firstbank and MBI;
    
 
                                       27
<PAGE>   39
 
   
          (iv) Conducted discussions with members of senior management of
     Firstbank concerning businesses and prospects of Firstbank;
    
 
   
          (v) Conducted discussions with members of senior management of MBI
     concerning the businesses and prospects of MBI;
    
 
   
          (vi) Reviewed the historical market prices and trading activity for
     the shares of Firstbank Common Stock and the shares of MBI Common Stock and
     compared them with those of certain publicly traded companies which
     PaineWebber deemed to be relevant;
    
 
   
          (vii) Compared the results of operations of Firstbank and MBI with
     those of certain companies which PaineWebber deemed to be relevant;
    
 
   
          (viii) Compared the proposed financial terms of the Merger with the
     financial terms of certain other mergers and acquisitions which PaineWebber
     deemed to be relevant;
    
 
   
          (ix) Reviewed the Agreement and Plan of Reorganization dated January
     30, 1998 and the related Stock Option Agreement dated January 30, 1998,
     relating to the Merger; and
    
 
   
          (x) Reviewed such other financial studies and analyses and performed
     such other investigations and taken into account such other matters as
     PaineWebber deemed necessary, including its assessment of general economic,
     market and monetary conditions.
    
 
     As set forth in its opinion, PaineWebber relied upon the accuracy and
completeness of all information supplied or otherwise made available by
Firstbank and MBI and PaineWebber and did not assume any responsibility to
independently verify such information or undertake an independent appraisal of
the assets of Firstbank or MBI. PaineWebber did not conduct a physical
inspection of the properties and facilities of Firstbank or MBI, did not conduct
a review of the loan files of Firstbank or MBI and did not make or obtain any
evaluation or appraisal of the assets or liabilities of Firstbank or MBI.
PaineWebber relied upon the accuracy of Firstbank's and MBI's earnings
projections and possible cost savings projections as a result of the Merger, and
PaineWebber did not assume any responsibility to independently verify
assumptions underlying such projections. The projections confidentially
furnished to PaineWebber were prepared by the respective managements of
Firstbank and MBI, and PaineWebber has assumed that they were reasonably
prepared and reflect good faith estimates and judgments of the managements of
Firstbank and MBI, respectively, as to the future performance of Firstbank and
MBI. Firstbank and MBI do not publicly disclose internal management projections
of the type provided to PaineWebber in connection with its review of the Merger.
Such projections were not prepared with a view toward public disclosure. The
projections were based on numerous variables and assumptions which are
inherently uncertain, including, without limitation, factors related to future
economic and competitive conditions, the future financial condition and results
of operations of Firstbank and MBI and the future cost savings associated with
the Merger. Accordingly, actual results could vary significantly from those
reflected in such projections. See "CAUTIONARY STATEMENTS FOR PURPOSES OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995." The Opinion is necessarily
based upon market, economic, and other conditions as they existed on, and can be
evaluated as of, the date thereof. The Opinion is directed only to the Firstbank
Board and does not constitute a recommendation to any holder of Firstbank Common
Stock or MBI Common Stock as to how such stockholders should vote on the Merger.
 
     The preparation of a fairness opinion involves various determinations as to
the most appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances and, therefore,
such an opinion is not readily susceptible to summary description. Furthermore,
in arriving at its fairness opinion, PaineWebber did not attribute any
particular weight to any analysis or factor considered by it, but rather made
qualitative judgments as to the significance and relevance of each analysis and
factor. Accordingly, PaineWebber believes that its analyses must be considered
as a whole and that considering any portions of such analyses and factors
considered, without considering all analyses and factors, could create a
misleading or incomplete view of the process underlying its fairness opinion. In
its analyses, PaineWebber made numerous assumptions with respect to industry
performance, general business and economic conditions and other matters, many of
which are beyond the control of Firstbank and MBI. Any estimates contained in
these analyses are not necessarily indicative of actual values or predictive of
future results or values, which
 
                                       28
<PAGE>   40
 
may be significantly more or less favorable than as set forth therein. In
addition, analyses relating to the value of businesses do not purport to be
appraisals or to reflect the prices at which businesses actually may be sold.
 
     The following paragraphs summarize certain financial analyses performed by
PaineWebber and presented to the Firstbank board on January 16, 1998 and January
29, 1998 and used in arriving at its opinion dated January 29, 1998 as to the
fairness, from a financial point of view, of the Exchange Ratio. The following
does not purport to be a complete description of the analyses performed, or the
matters considered, by PaineWebber in arriving at its opinion.
 
   
     Selected Comparable Company Trading Analysis: Firstbank. Using publicly
available information, PaineWebber compared certain ratios of the financial
performance of Firstbank (for which September 30, 1997 financial data was used)
to the stock market price of Firstbank at January 14, 1998 with such ratios for
the following selected midwestern banks with assets between $1.0 billion and
$3.5 billion deemed relevant by PaineWebber ("Comparable Group I"): AMCORE
Financial Inc., First Midwest Bancorp Inc., First Financial Bancorp., 1st Source
Corp., Park National Corp., Corus Bancshares Inc., Mid Am Inc., First Commerce
Bancshares, Trans Financial Inc., Area Bancshares Corp., Community Trust
Bancorp, Republic Bancorp Inc., Chemical Financial Corp., Brenton Banks Inc.,
Grand Premier Financial, First Financial Corp., F&M Bancorp., Irwin Financial
Corp., Mid-America Bancorp, Mississippi Valley Bancshares, Heritage Financial
Services, National City Bancshares Inc., BancFirst Ohio Corp., Citizens
Bancshares, and Pinnacle Banc Group Inc. (for all of which September 30, 1997
financial data was used). Such comparisons included market price-to-book value
ratios (a median of 262% for Comparable Group I and 249.1% for Firstbank);
market price-to-tangible book value ratios (a median of 274% for Comparable
Group I and 280% for Firstbank); market price to last twelve months fully
diluted earnings per share (a median of 20.0x for Comparable Group I and 19.5x
for Firstbank); market price-to-estimated 1997 fully diluted earnings per share
(a median of 19.8x for Comparable Group I and 19.3x for Firstbank); and market
price-to-estimated 1998 fully diluted earnings per share (a median of 17.7x for
Comparable Group I and 18.2x for Firstbank). The 1997 and 1998 estimated fully
diluted earnings per share were the median published earnings estimates provided
by First Call Research Network, as of January 14, 1998.
    
 
     In connection with this analysis, and as previously discussed, management
of Firstbank confidentially provided PaineWebber with information with regard to
its projected future earnings. Because of the inherent differences between the
operations of Firstbank and the selected companies included in Comparable Group
I, PaineWebber believes that a purely quantitative comparable company analysis
would not be particularly meaningful in the context of the Merger. PaineWebber
believes that an appropriate use of comparable company analysis in this instance
would involve qualitative judgments concerning differences between the financial
and operating characteristics of Firstbank and the selected companies included
in Comparable Group I which would affect the public trading values of Firstbank
and the selected companies included in Comparable Group I. These qualitative
judgments made by PaineWebber in connection with its opinion included
PaineWebber's views as to business conditions and prospects in the various
markets in which these selected companies operate and the business mixes,
sources of revenue, risk profiles and prospects for these selected companies.
 
   
     Selected Comparable Company Trading Analysis: MBI. Using publicly available
information, PaineWebber compared certain ratios of the financial performance of
MBI (for which September 30, 1997 financial data was used) to the stock market
price of MBI at January 26, 1998 with such ratios for the following selected
U.S. banks with assets between $20.0 billion and $50.0 billion deemed relevant
by PaineWebber ("Comparable Group II"): Wachovia Corp., Mellon Bank Corp.,
Comerica Inc., State Street Corp., UnionBanCal Corp., SouthTrust Corp., Summit
Bancorp, BB&T Corp., Northern Trust Corp., Huntington Bancshares Inc., Crestar
Financial Corp., Regions Financial Corp., and Fifth Third Bancorp (for all of
which September 30, 1997 financial data was used). Such comparisons included,
among others, market price-to book value ratios (a median of 348% for Comparable
Group II and 287% for MBI); market price-to-tangible book value ratios (a median
of 382% for Comparable Group II and 441% for MBI); market price-to last twelve
months fully diluted earnings per share (a median of 21.7x for Comparable Group
II and 20.1x for MBI); market price-to-estimated 1997 fully diluted earnings per
share (a median of 18.7x for Comparable Group II and 18.8x for MBI); and market
price-to-estimated 1998 fully diluted earnings per share (a median of 16.8x for
    
 
                                       29
<PAGE>   41
 
Comparable Group II and 16.8x for MBI). The 1997 and 1998 estimated fully
diluted earnings per share were the median published earnings estimates provided
by First Call Research Network, as of January 23, 1998.
 
     Due to the inherent differences between the operations of MBI and the
selected companies included in Comparable Group II, PaineWebber believes that a
purely quantitative comparable company analysis would not be particularly
meaningful in the context of the Merger. PaineWebber believes that an
appropriate use of comparable company analysis in this instance would involve
qualitative judgments concerning differences between the financial and operating
characteristics of MBI and the selected companies included in Comparable Group
II which would affect the public trading values of MBI and the selected
companies included in Comparable Group II. These qualitative judgments made by
PaineWebber in connection with its opinion included PaineWebber's views as to
business conditions and prospects in the various markets in which these selected
companies operate and the business mixes, sources of revenue, risk profiles and
prospects for these selected companies.
 
     Selected Comparable Transaction Analysis.  Using publicly available
information, PaineWebber reviewed certain terms and financial characteristics
for the Merger, based on the Exchange Ratio of 0.8308 shares of MBI Common Stock
for each share of Firstbank Common Stock and a MBI stock price of $50.19 at
January 26, 1998 to selected midwestern bank merger and acquisition transactions
which PaineWebber deemed to be relevant (the "Comparable Transaction Group").
The Comparable Transaction Group consisted of the following transactions
(identified by buyer/seller): First Midwest Bancorp/Heritage Financial Services,
National City Corp./Fort Wayne National, Mercantile Bancorporation Inc./CBT
Corporation, Union Planters Corp./Peoples First Corp., CNB Bankshares/Pinnacle
Financial Services, Huntington Bancshares/First Michigan Bank, Mercantile
Bancorporation Inc./Mark Twain Bancshares, and Magna Group/Homeland Bankshares.
Among other financial characteristics of these transactions, PaineWebber
reviewed (i) offer price per share to book value per share multiple, (ii) offer
price per share to tangible book value per share multiple, (iii) offer price per
share to last twelve months fully diluted earnings per share multiples, (iv)
offer price per share to estimated fully diluted earnings per share multiples,
and (v) deal price/earnings ratio premium to buyer's price/earnings ratio. The
median values for the Comparable Transaction Group for the transaction
value-to-book value per share, transaction value-to-tangible book value per
share, transaction value-to last twelve months fully diluted earnings per share,
and transaction value-to estimated fully diluted earnings per share were 297%,
305%, 21.0x, 17.4x, and 22.2% respectively, compared with 288%, 324%, 22.5x,
21.1x, and 30.1% for the Merger.
 
     In the case of the Comparable Transaction Group, PaineWebber believes that
a purely quantitative comparable transaction analysis would not be particularly
meaningful in the context of the Merger, because the reasons for and
circumstances surrounding each of the transactions analyzed were so diverse and
because of the inherent differences between the operations of MBI, Firstbank,
and the selected companies included in the Comparable Transaction Group.
PaineWebber believes that an appropriate use of a comparable transaction
analysis in this instance would involve qualitative judgments concerning
differences between the characteristics of these transactions and the Merger
which would affect the acquisition value of the acquired companies and
Firstbank. These qualitative judgments made by PaineWebber in connection with
its opinion included: PaineWebber's views as to the universe of potential buyers
in each of these transactions, their potential level of interest in an
acquisition of these companies and the ability of the acquirors to implement
cost savings; business conditions and prospects in various markets in which
these acquired companies operate; and the business mixes, sources of revenue,
risk profiles and prospects for these acquired companies.
 
     Discounted Cash Flow Analysis.  PaineWebber performed an analysis to
calculate a range of present values per share of Firstbank Common Stock assuming
Firstbank continued to operate on a stand-alone basis. The range was calculated
by adding, for each of the annual periods from 1998 through 2002, (i) the
present value of the estimated cumulative dividends through the end of each such
annual period and (ii) the present value of the estimated stock price at each
such period-end. To calculate these present values, PaineWebber formulated three
scenarios: (i) a 5% growth scenario, (ii) a 7% growth scenario, and (iii) a 10%
growth scenario. Under all scenarios, Firstbank's 1998 fully diluted earnings
per share were estimated to be $1.98 with an annual dividend of $0.72 per share
for 1998. PaineWebber assumed that earnings and dividends in the years 1999
through 2002 would grow annually at 5%, 7% and 10%, respectively under the three
scenarios. For
 
                                       30
<PAGE>   42
 
comparison purposes, multiples of 16 and 20 times the earnings per share were
applied in order to estimate the value of the stock at the end of each of the
years 1998 through 2002. Based on earnings multiples applied to the projected
fully diluted earnings per share in the respective years, PaineWebber calculated
trading and control valuations for Firstbank at the end of such years.
PaineWebber then calculated the present value of the implied future stock prices
and the cumulative projected dividend streams using a range of discount rates
between 8.0 to 12.0%. Applying the aforementioned discount rates, growth rates
and multiples of earnings, PaineWebber calculated the fully diluted per share
value of Firstbank Common Stock to range from approximately $24.91 to $36.24 per
share under the 5% growth scenario, $26.82 to $39.01 under the 7% growth
scenario and $29.76 to $43.37 under the 10% growth scenario.
 
     Potential Partner Dilution Analysis.  Using publicly available information,
PaineWebber estimated the share price that potential partners ("Partner Group")
could pay for Firstbank's Common Stock, based on Firstbank's internally
estimated 1998 earnings, without diluting the acquirer's estimated 1998
estimated earnings per share based on the median published earnings estimates
provided by First Call Research Network as of January 14, 1998. The Partner
Group considered by PaineWebber in its analysis consisted of: MBI, US Bancorp,
Norwest Corp., National City Corp., Union Planters Corp., Commerce Bancshares
Inc., First of America Bank Corp., Magna Group, NationsBank Corp., BancOne
Corporation, First Chicago NBD Corp., Huntington Bancshares, Firstar
Corporation, Marshall & Ilsley Corporation, Old Kent Financial Corp., and UMB
Financial. In this analysis, Firstbank's internally estimated 1998 earnings per
share, assuming various cost savings projections based on Firstbank's estimated
1998 non-interest expense, were multiplied by the price-to-earnings multiple of
each member of the Partner Group to arrive at the maximum price per share that
each member of such group could pay without diluting their respective estimated
1998 earnings. PaineWebber noted that the hypothetical cost savings projections
assumed in this analysis are independent of the cost savings assumed by MBI and
Firstbank's respective managements as related to their proposed Merger and
therefore cannot be used to estimate acquisition prices for Firstbank in the
proposed Merger. The cost savings projections assumed in this analysis reflect
general assumptions about cost savings that might be attainable but there can be
no assurance that any potential partner could achieve such cost savings. The
savings assumed to be achieved by the Partner Group depend on a variety of
factors which cannot be predicted with certainty, including the timing of the
closing of the acquisitions, the pace and success of consolidation and the
future results of operations of the new entities. PaineWebber believed that an
appropriate use of a Potential Partner Dilution Analysis in this instance would
involve qualitative judgments concerning differences between the characteristics
of the partners which would affect the acquisition price range. These
qualitative judgments made by PaineWebber in connection with its opinion
included PaineWebber's views as to the universe of potential buyers and their
ability to implement cost savings and business synergies with Firstbank, and, in
addition, PaineWebber's views as to the regulatory environment, prospects in
various markets in which Firstbank operates and business mix, sources of
revenue, and risk profile.
 
     Pro Forma Merger Analysis.  PaineWebber estimated the impact of the
proposed Merger on MBI's projected fully diluted estimated earnings per share
for 1998, book and tangible book value per share and pro forma dividends per
share. In connection with this analysis and as previously discussed, management
of Firstbank and MBI confidentially provided PaineWebber with information with
regard to projected future earnings. Based on such information and the terms of
the proposed Merger, PaineWebber concluded that, for MBI, the Merger could have
a dilutive effect (before taking into account various cost savings which could
be accomplished upon consolidation of Firstbank's and MBI's operations) on
estimated fully diluted earnings per share in 1998 of approximately 2.2%, and,
based on financial information at September 30, 1997, would have a dilutive
effect to MBI's book value per share of approximately 1.0% and an accretive
effect to MBI's tangible book value per share of approximately 3.3%. PaineWebber
concluded that for Firstbank, the Merger would have an accretive effect to
Firstbank's book value per share of approximately 6.7% and a dilutive effect to
Firstbank's tangible book value per share of approximately 16.7%, based on
financial information at September 30, 1997. PaineWebber also concluded that the
proposed Merger would have an accretive effect on Firstbank's estimated 1998
earnings per share of approximately 23.2% (before taking into account various
cost savings which could be accomplished upon consolidation of Firstbank and
MBI's operations) and on Firstbank's dividend per share of approximately 32.5%,
based on the current dividend rates for Firstbank and MBI. PaineWebber's
analysis of the pro forma effect of the Merger on such per share information for
 
                                       31
<PAGE>   43
 
Firstbank was based on a comparison of such current information for Firstbank
versus such pro forma per share information for MBI multiplied by the Exchange
Ratio. PaineWebber calculated that the proposed Merger would become accretive to
MBI's 1998 earnings per share if pre-tax cost savings of greater than
approximately $15.4 million could be achieved.
 
     PaineWebber is an internationally recognized investment banking firm and,
as part of its investment banking activities, PaineWebber is regularly engaged
in the valuation of businesses and their securities in connection with mergers
and acquisitions, negotiated underwritings, competitive bids, secondary
distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. The Firstbank Board selected
PaineWebber because of its expertise, its reputation and its familiarity with
Firstbank and the thrift and banking industries in general.
 
   
     PaineWebber has acted as financial advisor to Firstbank in connection with
the Merger. As compensation for its services in connection with the Merger,
Firstbank has agreed to pay PaineWebber (i) $150,000 upon the signing of the
engagement letter dated December 10, 1997, (ii) $500,000 upon the signing of a
fairness opinion and (iii) a transaction fee of (a) 0.75% of the final
transaction value in the event that the purchase price, on a per share basis, is
below $40 per share or (b) 0.80% of the final transaction value in the event
that the purchase price, on a per share basis, is equal to or greater than $40
per share, but not less than $4,500,000, payable upon consummation of the Merger
(which fee would be approximately $5,878,646 if calculated as of May 21, 1998,
based on 16,590,588 shares of Firstbank Common Stock outstanding as of such date
(on a fully diluted basis) and a share price of $53.3125 (the closing price per
share for MBI Common Stock reported on the NYSE Composite Transactions Tape on
May 21, 1998), provided that the actual fee payable upon consummation of the
Merger will be calculated based on the actual aggregate consideration as of the
Effective Date and not as of May 21, 1998). Firstbank has paid PaineWebber
$650,000 to date. Any fees already paid to PaineWebber will be deducted in whole
from any transaction fee. In addition, Firstbank has agreed to reimburse
PaineWebber for reasonable out-of-pocket expenses incurred in connection with
the Merger and to indemnify PaineWebber against certain liabilities, including
liabilities that may arise under the federal securities law.
    
 
     In the ordinary course of its business, PaineWebber actively trades in the
securities of Firstbank and MBI for its own account and for the accounts of
others and, accordingly, may at any time hold a long or short position in such
securities.
 
INTERESTS OF CERTAIN PERSONS IN THE MERGER
 
     General.  As described below, certain members of Firstbank management and
of the Firstbank Board have certain arrangements with respect to certain
benefits under existing employment agreements and severance and benefits plans.
In addition, the Merger Agreement contains certain provisions relating to the
indemnification of Firstbank directors and officers and directors' and officers'
liability insurance. The Firstbank Board was aware of these interests and
considered them, among other matters, in approving the Merger Agreement and
transactions contemplated in connection therewith.
 
     New Employment Agreement.  Mark H. Ferguson, Chairman, President, and Chief
Executive Officer of Firstbank, entered into an employment agreement with MBI
pursuant to which he will be employed by MBI or its affiliates following the
consummation of the Merger.
 
     Pursuant to Mr. Ferguson's employment agreement, Mr. Ferguson will serve as
the Chairman, President and Chief Executive Officer of MBI's banking franchise
in Illinois (except with respect to Madison, St. Clair, Monroe, and Jo Davies
counties) and will serve additionally as a member of the board of directors of
the banks comprising such franchise. In consideration of such services, Mr.
Ferguson will receive an annual base salary of not less than $425,000, inclusive
of all customary directors' fees. Mr. Ferguson also will be eligible to receive
an annual bonus for each of the three years in an amount to be determined by the
Board of Directors of MBI, initially up to 40% of his base salary, but in no
event less than $125,000 in 1998. In addition to the base salary and annual
bonus, Mr. Ferguson will receive a restricted stock grant of 50,000 shares of
MBI Common Stock, which will vest as follows: (i) 20,000 shares on the third
anniversary of the Effective Time; (ii) 15,000
 
                                       32
<PAGE>   44
 
shares on the fourth anniversary of the Effective Time; and (iii) 15,000 shares
on the fifth anniversary of the Effective Time; provided that he is in the
employ of MBI as of each such applicable date.
 
     Pursuant to Mr. Ferguson's employment agreement, MBI will assume all of
Firstbank's obligations under that certain severance compensation agreement
between Mr. Ferguson and Firstbank, dated December 26, 1997 (the "Severance
Agreement") until the earlier to occur of the third anniversary of the Effective
Time or Mr. Ferguson's termination by MBI or payment of all obligations under
the Severance Agreement. Under the Severance Agreement as assumed by MBI, if Mr.
Ferguson's employment with MBI is terminated involuntarily by MBI other than for
"cause" (as defined in the Severance Agreement), or if Mr. Ferguson voluntarily
terminates his employment with MBI for any reason, in each case within three
years after the Merger, or if such termination otherwise results from a Change
in Control (as defined in the Severance Agreement), MBI shall (i) pay to Mr.
Ferguson an amount equal to three times the sum of (a) the higher of his annual
base salary as of the date of termination or his annual base salary as of the
effective date of the Change in Control, plus (b) the highest bonus paid to him
with respect to the three fiscal years of MBI or Firstbank immediately preceding
the effective date of the Change in Control, which amount shall be paid in a
lump sum to Mr. Ferguson as soon as practicable after the date of termination;
and (ii) continue to pay for 24 months any premiums (to the extent such premiums
are due) for Mr. Ferguson's health, dental, disability, and life insurance paid
prior to such date of termination. In addition, if payments under the Severance
Agreement cause Mr. Ferguson to become liable for any excise tax with respect to
such payments, Mr. Ferguson will be reimbursed in such amount plus any
additional amount equal to the taxes on the reimbursed amount.
 
     Existing Employment and Severance Agreements.  On January 2, 1997,
Firstbank purchased certain of the assets of Zemenick & Walker, Inc., a
registered investment advisory firm, partially owned by Richard E. Zemenick, a
director of Firstbank. As a part of that transaction, Mr. Zemenick entered into
an employment agreement with a subsidiary of Firstbank (also named Zemenick &
Walker, Inc.) that provides for Mr. Zemenick to render services to the
subsidiary in connection with its operation of the assets acquired by Firstbank
from Zemenick & Walker, Inc. The employment agreement provides, among other
things, for a multiple-year term, a base salary for Mr. Zemenick of $250,000
annually, plus an annual bonus based upon total revenues of the subsidiary, and
a covenant by Mr. Zemenick not to engage in a broad range of competitive
activities for a period generally lasting five years after termination of his
employment.
 
     Mr. Zemenick's employment agreement has certain provisions which become
operative only upon a Change in Control (as defined in his employment
agreement). The Merger will constitute such a Change in Control. Among other
things, after a Change in Control Mr. Zemenick may terminate his employment at
any time without advance notice, and in such circumstances will be paid the
remainder of his base salary through the end of the calendar year in which his
employment terminates. Additionally, Mr. Zemenick, upon a Change in Control,
will no longer be bound by his restrictive covenants regarding competition with
respect to clients of Zemenick & Walker, Inc. to whom services were rendered
prior to January 2, 1997. See "EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE IN CONTROL" for information regarding severance agreements
between Firstbank and certain executive officers.
 
     Indemnification and Insurance.  Under the Merger Agreement, MBI agreed to
(i) indemnify and hold harmless the past and present employees, agents,
directors or officers of Firstbank or its subsidiaries for all acts or omissions
occurring at or prior to the Effective Time to the same extent such persons are
indemnified and held harmless by Firstbank as of the date of the Merger
Agreement (whether by operation of Firstbank's or one of its subsidiaries'
certificate or articles of incorporation, corporate resolution, contract or
similar agreement or by operation of law), and (ii) assume the obligations of
Firstbank with respect to directors' and officers' insurance under its prior
acquisition agreements, which obligations are set forth in the Merger Agreement.
In addition, MBI agreed under the Merger Agreement to provide, for a period of
not less than six years after the Effective Time, an insurance and
indemnification policy that provides the officers and directors of Firstbank and
its subsidiaries in office immediately prior to the Effective Time coverage no
less favorable than the coverage provided by MBI to MBI's directors and officers
as of the date of the Merger Agreement.
 
                                       33
<PAGE>   45
 
CONDITIONS OF THE MERGER
 
     The respective obligations of MBI and Firstbank to consummate the Merger
are subject to the fulfillment or waiver at or prior to the Effective Time of
the following conditions:
 
          (i) The Merger Agreement shall have received the requisite approval of
     Firstbank Stockholders.
 
          (ii) All requisite approvals of the Merger Agreement and the
     transactions contemplated thereby shall have been received from the Federal
     Reserve Board, and any other necessary governmental or regulatory authority
     or agency (collectively, the "Regulatory Authorities").
 
          (iii) The Registration Statement shall have been declared effective
     and shall not be subject to a stop order or any threatened stop order.
 
          (iv) Neither MBI nor Firstbank shall be subject to any order, decree
     or injunction, and there shall be no pending or threatened order, decree or
     injunction, of a court or agency of competent jurisdiction which enjoins or
     prohibits the consummation of the Merger or any of the transactions related
     thereto.
 
          (v) There shall be no legislative, statutory or regulatory action
     (whether federal or state) pending which prohibits or threatens in a
     material way to prohibit consummation of, or which otherwise materially
     adversely affects the Merger or any of the transactions contemplated in the
     Merger Agreement.
 
          (vi) Each of MBI and Firstbank shall have received, from counsel
     reasonably satisfactory to the recipient, an opinion, dated the Closing
     Date, reasonably satisfactory in form and substance to the recipient,
     substantially to the effect that, on the basis of facts, representations
     and assumptions set forth in such opinion which are consistent with the
     state of facts existing at the Effective Time, (i) the Merger will
     constitute a reorganization within the meaning of Section 368(a) of the
     Code and (ii) no gain or loss will be recognized by the Firstbank
     Stockholders who receive solely MBI Common Stock in exchange for shares of
     Firstbank Common Stock pursuant to the Merger (except with respect to cash
     received in lieu of a fractional share interest in MBI Common Stock).
 
     Firstbank's obligation to effect the Merger is subject to the fulfillment
or waiver at or prior to the Effective Time of the following additional
conditions:
 
          (i) The representations and warranties of MBI set forth in Article III
     of the Merger Agreement shall be true and correct in all respects as of
     January 30, 1998 and as of the Effective Time (as though made on and as of
     the Effective Time except (A) to the extent such representations and
     warranties are by their express provisions made as of a specified date or
     period and (B) for the effect of transactions contemplated by the Merger
     Agreement), except for such failures to be true and correct as would not
     have and could not reasonably be expected to have, in the aggregate, a
     material adverse effect on the condition of MBI and its subsidiaries, taken
     as a whole.
 
          (ii) MBI shall have performed in all material respects all obligations
     required to be performed by it under the Merger Agreement prior to the
     Effective Time.
 
          (iii) Firstbank shall have received a certificate of the Chairman or
     Vice Chairman of MBI as to the satisfaction of the conditions set forth in
     clauses (i) and (ii).
 
     MBI's obligation to effect the Merger is subject to the fulfillment or
waiver at or prior to the Effective Time of the following additional conditions:
 
          (i) The representations and warranties of Firstbank set forth in
     Article II of the Merger Agreement shall be true and correct in all
     respects as of January 30, 1998 and as of the Effective Time (as though
     made on and as of the Effective Time except (A) to the extent such
     representations and warranties are by their express provisions made as of a
     specified date or period and (B) for the effect of transactions
     contemplated by the Merger Agreement), except for such failures to be true
     and correct as would not have and could not reasonably be expected to have,
     in the aggregate, a material adverse effect on the condition of MBI and its
     subsidiaries, taken as a whole.
 
                                       34
<PAGE>   46
 
          (ii) Firstbank shall have performed in all material respects all
     obligations required to be performed by it under the Merger Agreement prior
     to the Effective Time.
 
          (iii) MBI shall have received certificates of the Chairman and the
     President of Firstbank and a certificate of the Chief Financial Officer of
     Firstbank as to the satisfaction of the conditions set forth in clauses (i)
     and (ii).
 
          (iv) MBI shall have received as soon as practicable after January 30,
     1998 an opinion of KPMG Peat Marwick LLP, reasonably satisfactory in form
     and substance to MBI, to the effect that the Merger will qualify for
     pooling-of-interests accounting treatment, which opinion shall not have
     been withdrawn.
 
          (v) Firstbank shall have divested or shall have entered into binding
     agreements to divest, in each case on a basis reasonably acceptable to MBI
     and as required by applicable law or by any Regulatory Authority, the
     Missouri bank subsidiaries of Firstbank.
 
TERMINATION OF THE MERGER AGREEMENT
 
     The Merger Agreement may be terminated at any time prior to the Effective
Time, whether before or after Stockholder Approval: (i) by mutual consent of the
Executive Committee of the MBI Board (the "MBI Executive Committee") and the
Firstbank Board; (ii) by the MBI Executive Committee or the Firstbank Board (A)
at any time after January 27, 1999 if the Merger shall not theretofore have been
consummated (provided that the terminating party is not then in material breach
of any representation, warranty, covenant or other agreement contained in the
Merger Agreement), (B) if the Federal Reserve Board has denied approval of the
Merger and such denial has become final and nonappealable or (C) if Firstbank
Stockholders shall not have approved the Merger Agreement at the Annual Meeting
following a favorable recommendation of the Firstbank Board; (iii) by the MBI
Executive Committee in the event of a material breach by Firstbank of the Merger
Agreement, which breach is not cured within 30 days after written notice thereof
to Firstbank by MBI; (iv) by the Firstbank Board in the event of a material
breach by MBI of the Merger Agreement, which breach is not cured within 30 days
after written notice thereof is given to MBI by Firstbank; or (v) by the MBI
Executive Committee in the event that costs, if any, of remedial or other
corrective actions or measures with regard to specified properties exceed
$7,000,000.
 
     No assurance can be given that the Merger will be consummated, that MBI and
Firstbank will not mutually agree to terminate the Merger Agreement or that
either MBI or Firstbank will not elect to terminate the Merger Agreement if the
Merger has not been consummated on or before January 27, 1999.
 
REGULATORY APPROVAL
 
     The obligations of the parties to effect the Merger are subject to prior
approval of the Federal Reserve Board and any other necessary Regulatory
Authority.
 
     The Merger is subject to the prior approval of the Federal Reserve Board
under the BHCA. Under the BHCA, the Federal Reserve Board is required, in
approving transactions such as the Merger, to take into consideration the
financial and managerial resources 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 MBI and its bank subsidiaries following the Merger.
 
     The BHCA prohibits the Federal Reserve Board from approving the Merger if
the Merger would result in a monopoly, or 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, if the effect of the Merger in any section of
the country may be substantially to lessen competition or to tend to create a
monopoly, or if the Merger would in any other manner result in a restraint of
trade, unless the Federal Reserve Board finds that the anticompetitive effects
of the Merger are clearly outweighed in the public interest by the probable
effect of transactions in meeting the convenience and needs of the communities
to be served. In addition, under the Community Reinvestment Act of 1977, as
amended, the Federal Reserve Board must take into account the record of
 
                                       35
<PAGE>   47
 
performance of the existing institutions in meeting the credit needs of the
entire community, including low-and moderate-income neighborhoods, served by
such institutions.
 
     Under the BHCA, the Merger may not be consummated until the 30th day
following the date of Federal Reserve Board approval (or, if the United States
Department of Justice (the "DOJ") has not submitted adverse comments with
respect to competitive factors, the 15th day), during which time the DOJ may
challenge the Merger on antitrust grounds. The commencement of an antitrust
action would stay the effectiveness of the Federal Reserve Board's approval
unless a court specifically orders otherwise.
 
     The BHCA provides for the publication of notice and public comment on the
applications and authorizes the Federal Reserve Board 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.
 
     MBI is also required to file a change in control application with the
Illinois Office of Banks and Real Estate.
 
   
     MBI and Firstbank have filed all applications and notices and have taken
other appropriate action with respect to any requisite approvals or other action
of any Regulatory Authority. MBI and Firstbank 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, it is
presently contemplated that such approval or action would be sought.
    
 
     THE MERGER CANNOT PROCEED IN THE ABSENCE OF THE REQUISITE REGULATORY
APPROVALS. THERE CAN BE NO ASSURANCE THAT ANY NECESSARY APPROVALS OR ACTIONS
WILL BE RECEIVED OR TAKEN, AS TO THE TIMING OF SUCH APPROVALS OR ACTIONS, OR
THAT ANY APPROVALS OR ACTIONS WILL NOT BE CONDITIONED IN A MANNER THAT WOULD
CAUSE THE PARTIES TO ABANDON THE MERGER. IN ADDITION, THERE CAN BE NO ASSURANCE
THAT ACTION WILL NOT BE BROUGHT CHALLENGING SUCH APPROVALS OR ACTIONS, OR, IF
SUCH A CHALLENGE IS BROUGHT, AS TO THE RESULT THEREOF. See "--Closing and
Effective Time," "--Conditions of the Merger," "--Waiver and Amendment" and
"--Termination of the Merger Agreement" and "SUPERVISION AND REGULATION."
 
     In addition, upon consummation of the Merger, applicable Missouri law
requires MBI to divest itself of two bank subsidiaries of Firstbank. Such
divestitures must be completed within 90 days of the Effective Time. See "
Management and Operations After the Merger; Operations after the Merger" and
"PRO FORMA FINANCIAL INFORMATION--Mercantile Bancorporation Inc.--Pro Forma
Combined Consolidated Balance Sheet For the Year Ended December 31, 1997."
 
BUSINESS PENDING THE MERGER
 
     From January 30, 1998 to the Effective Time, each of MBI and Firstbank
agreed, and agreed to cause each of their respective subsidiaries, to conduct
its business according to the ordinary and usual course consistent with past
practices and to use its best efforts to maintain and preserve its business
organization, employees and advantageous business relationships and retain the
services of its officers and key employees.
 
     Pursuant to the Merger Agreement, Firstbank has agreed not to, and to cause
each of its subsidiaries not to, except as provided in the Merger Agreement or
with the prior written consent of MBI:
 
          (i) declare, set aside or pay any dividends or other distributions,
     directly or indirectly, in respect of its capital stock (other than
     dividends from a subsidiary of Firstbank to Firstbank or another subsidiary
     of Firstbank), except that Firstbank may declare and pay cash dividends on
     the Firstbank Common Stock equal to the product of (A) the Exchange Ratio
     and (B) the amount of the dividends per share declared by the Board of
     Directors of MBI; provided further, however, that Firstbank shall not
     declare or pay a quarterly dividend for any quarter in which Firstbank
     Stockholders will be entitled to receive a regular quarterly dividend on
     the shares of MBI Common Stock to be issued in the Merger;
 
                                       36
<PAGE>   48
 
          (ii) enter into or amend any employment, severance or similar
     agreement or arrangement with any director or officer or employee, or
     materially modify any of Firstbank's employee benefit plans specified in
     the Merger Agreement or grant any salary or wage increase or materially
     increase any employee benefit (including incentive or bonus payments),
     except normal individual increases in compensation to employees consistent
     with past practice, or as required by law or contract;
 
          (iii) authorize, recommend, propose or announce an intention to
     authorize, recommend or propose, or enter into an agreement in principle
     with respect to, any merger, consolidation or business combination (other
     than the Merger), any acquisition of a material amount of assets or
     securities, any disposition of a material amount of assets or securities or
     any release or relinquishment of any material contract rights;
 
          (iv) propose or adopt any amendments to its certificate or articles of
     incorporation, association or other charter document or by-laws;
 
          (v) issue, sell, grant, confer or award any of its Equity Securities
     (as defined in the Merger Agreement) (except that Firstbank may (A) issue
     shares of Firstbank Common Stock upon exercise of Firstbank Stock Options
     outstanding on January 30, 1998, and (B) issue shares of Firstbank Common
     Stock purchased by Firstbank on the open market for such purpose, and only
     such shares, pursuant to its dividend reinvestment plan) or effect any
     stock split or adjust, combine, reclassify or otherwise change its
     capitalization as it existed on January 30, 1998;
 
          (vi) purchase, redeem, retire, repurchase, or exchange, or otherwise
     acquire or dispose of, directly or indirectly, any of its Equity
     Securities, whether pursuant to the terms of such Equity Securities or
     otherwise;
 
          (vii) without first consulting with MBI and MBI not objecting to such
     action in writing, enter into, renew or increase any loan or credit
     commitment (including standby letters of credit) to, or invest or agree to
     invest in any person or entity or modify any of the material provisions or
     renew or otherwise extend the maturity date of any existing loan or credit
     commitment (collectively, "lend to") in an amount in excess of $3,000,000,
     or in an amount which, or when aggregated with any and all loans or credit
     commitments to such person or entity, would be in excess of $3,000,000,
     provided that Firstbank and its subsidiaries are not prohibited from (A)
     honoring any contractual obligations in existence as of January 30, 1998,
     and (B) increasing the aggregate amount of any credit facilities
     established as of January 30, 1998, beyond $3,000,000, provided that the
     aggregate amount of any and all such increases shall not be in excess of
     the lesser of 5% of such credit facility or $100,000;
 
          (viii) directly or indirectly (including through its officers,
     directors, employees or other representatives), initiate, solicit or
     encourage any discussions, inquiries or proposals with any third party
     relating to the disposition of any significant portion of the business or
     assets of Firstbank or any Firstbank subsidiary or the acquisition of
     Equity Securities of Firstbank or any Firstbank subsidiary or the merger of
     Firstbank or any Firstbank subsidiary with any person (other than MBI) or
     any similar transaction (each such transaction being referred to as an
     "Acquisition Transaction"), or provide any such person with information or
     assistance or negotiate with any such person with respect to an Acquisition
     Transaction, and Firstbank agreed to promptly notify MBI orally of all the
     relevant details relating to all inquiries, indications of interest and
     proposals which it may receive with respect to any Acquisition Transaction;
 
          (ix) take any action that would (A) materially impede or delay the
     consummation of the transactions contemplated by the Merger Agreement or
     the ability of MBI or Firstbank to obtain any approval of any Regulatory
     Authority required for the transactions contemplated by the Merger
     Agreement or to perform its covenants and agreements under the Merger
     Agreement or (B) prevent the Merger from qualifying as a reorganization
     within the meaning of Section 368(a) of the Code or (C) prevent the Merger
     from qualifying for pooling-of-interests accounting treatment;
 
          (x) other than in the ordinary course of business consistent with past
     practice, incur any indebtedness for borrowed money, assume, guarantee,
     endorse or otherwise as an accommodation become responsible or liable for
     the obligations of any other individual, corporation or other entity, or,
     pay without prior approval of MBI, which will not be unreasonably withheld,
     any fees and expenses to
 
                                       37
<PAGE>   49
 
     attorneys, accountants or investment bankers in connection with the Merger
     in excess of the amount set forth in the Merger Agreement;
 
          (xi) materially restructure or materially change its investment
     securities portfolio, without prior written consent of MBI, which consent
     will not be unreasonably withheld or delayed, through purchases, sales or
     otherwise, or the manner in which the portfolio is classified or reported
     or execute any individual investment transaction for its own account (A) in
     securities backed by the full faith and credit of the United States or an
     agency thereof in excess of $10,000,000 and (B) in any other investment
     securities in excess of $1,000,000; or
 
          (xii) agree in writing or otherwise to take any of the foregoing
     actions or engage in any activity, enter into any transaction or take or
     omit to take any other act which would make any of the representations and
     warranties of Firstbank in the Merger Agreement untrue or incorrect in any
     material respect if made anew after engaging in such activity, entering
     into such transaction, or taking or omitting such other act.
 
     The Merger Agreement further provides that, from January 30, 1998 to the
Effective Time, except as provided in the Merger Agreement, MBI has agreed not
to, and to cause each of its subsidiaries not to, without the prior written
consent of Firstbank:
 
          (i) declare, set aside or pay any dividends or other distributions,
     directly or indirectly, in respect of its capital stock (other than
     dividends from any of the MBI subsidiaries to MBI or to another of the MBI
     subsidiaries), except that MBI may pay its regular quarterly dividends in
     amounts as it will determine from time to time;
 
          (ii) take any action that would (A) materially impede or delay the
     consummation of the transactions contemplated by the Merger Agreement or
     the ability of Firstbank or MBI to obtain any approval of any Regulatory
     Authority required for the transactions contemplated by the Merger
     Agreement or to perform its covenants and agreements under the Merger
     Agreement, (B) prevent the Merger from qualifying as a reorganization
     within the meaning of Section 368(a) of the Code or (C) unless MBI shall
     have waived the condition set forth in Section 6.03 of the Merger
     Agreement, prevent the Merger from qualifying for pooling-of-interests
     accounting treatment; or
 
          (iii) agree in writing or otherwise to take any of the foregoing
     actions or engage in any activity, enter into any transaction or
     intentionally take or omit to take any other action which would make any of
     the representations and warranties in the Merger Agreement untrue or
     incorrect in any material respect if made anew after engaging in such
     activity, entering into such transaction, or taking or omitting such other
     action.
 
WAIVER AND AMENDMENT
 
     Any term, condition or provision of the Merger Agreement may be waived in
writing at any time by the party which is, or whose shareholders are, entitled
to the benefits thereof. The Merger Agreement may be amended by or on behalf of
the MBI Board and the Firstbank Board at any time before or after Stockholder
Approval, by an instrument in writing signed on behalf of each party; provided
that after Stockholder Approval no such modification may alter or change the
amount or kind of consideration to be received by holders of Firstbank Common
Stock in the Merger.
 
ACCOUNTING TREATMENT
 
   
     It is intended that the Merger will be accounted for as a
"pooling-of-interests" under generally accepted accounting principles. Receipt
of an opinion by KPMG Peat Marwick LLP, MBI's independent accountants, to such
effect is a condition to MBI's obligation to consummate the Merger. The
unaudited pro forma data included herein reflects the pooling-of-interests
method of accounting. See "SUMMARY INFORMATION--Comparative Unaudited Per Share
Data" and "--Summary Financial Data" and "PRO FORMA FINANCIAL INFORMATION."
    
 
                                       38
<PAGE>   50
 
MANAGEMENT AND OPERATIONS AFTER THE MERGER
 
     General.  Merger Sub, a wholly owned subsidiary of MBI, will be the
surviving corporation resulting from the Merger. Merger Sub will be governed by
the laws of the State of Missouri and will operate in accordance with the
articles of incorporation and by-laws of Merger Sub as in effect immediately
prior to the Merger, until otherwise amended or repealed after the Effective
Time.
 
     Management.  In connection with the proposed Merger, Mark H. Ferguson,
Chairman, President, and Chief Executive Officer of Firstbank, has entered into
an employment agreement with MBI pursuant to which he will continue to be
employed by MBI or its affiliates following the consummation of the Merger.
Pursuant to Mr. Ferguson's employment agreement, in addition to certain other
terms and conditions, Mr. Ferguson will serve as the Chairman, President, and
Chief Executive Officer of MBI's banking franchise in Illinois (except with
respect to Madison, St. Clair, Monroe, and Jo Davies counties) and will serve
additionally as a member of the Board of Directors of the banks comprising such
franchise. See "--Interests of Certain Persons in the Merger; Employment
Agreements."
 
     Operations after the Merger.  Following the Merger and subject to necessary
preparations for systems integration, MBI intends to combine the operations and,
subject to required regulatory approvals, to merge subsidiary banks of MBI and
Firstbank and to consolidate the operations of other subsidiaries of MBI and
Firstbank that provide similar services. Receipt of such regulatory approvals is
not a condition to the Merger.
 
     In order to comply with the law of the State of Missouri relating to the
percentage of the State's deposits that may be held by a bank holding company
seeking to obtain control of a Missouri banking institution, Firstbank is
soliciting indications of interest in Colonial Bank and Duchesne Bank, both of
which are Missouri banking institutions owned by Firstbank. If the Merger is
consummated, both such banks must be sold within 90 days of the Effective Time.
See "--Regulatory Approval" and "PRO FORMA FINANCIAL INFORMATION--Mercantile
Bancorporation Inc.--Pro Forma Combined Consolidated Balance Sheet For the Year
Ended December 31, 1997."
 
     At or following the Effective Time, MBI may merge or otherwise consolidate
legal entities to the extent desirable for regulatory or other reasons.
 
EMPLOYEE BENEFITS
 
     MBI has not agreed to continue the employment of any Firstbank employee
other than Mr. Ferguson. With respect to employees who continue their employment
with MBI (except as mentioned in the preceding sentence), MBI has not agreed to
any minimum period of employment, and such employment will be solely at the will
of MBI on the same basis as other MBI employees without contractual rights of
employment. MBI has agreed, however, that Firstbank's pension, retirement,
savings, profit sharing, medical, vacation, severance and other material
employee benefit, incentive and welfare policies, contracts, plans and
arrangements ("Firstbank Plans") will not be terminated as a result of the
Merger but will continue after the Merger as plans of Merger Sub until such time
as employees of Firstbank and its subsidiaries are integrated into MBI's plans.
Mercantile has agreed to take such steps as are necessary for integration as
soon as practicable after the Effective Time, (i) with full credit for prior
service with Firstbank or its subsidiaries for all purposes other than
determining the amount of benefit accruals under any MBI defined benefit plan
(provided that in no event will benefits as of the Effective Time under any
Firstbank Plan be extinguished), (ii) without waiting periods, evidence of
insurability, or application of any pre-existing condition limitations, and
(iii) with full credit for claims arising prior to the Effective time for
purposes of deductibles, out-of-pocket maximums, benefit maximums, and all other
similar limitations for the applicable plan year during which the Merger is
consummated.
 
                                       39
<PAGE>   51
 
ABSENCE OF DISSENTERS' APPRAISAL RIGHTS
 
     Firstbank Stockholders do not have appraisal rights under the Delaware
General Corporation Law or any other statute in connection with the Merger. See
"INFORMATION REGARDING MBI COMMON STOCK--Comparison of the Rights of
Shareholders of MBI and Stockholders of Firstbank; Dissenters' Rights."
 
                                       40
<PAGE>   52
 
             CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
 
     The following discussion summarizes the material anticipated federal income
tax consequences of the Merger to Firstbank Stockholders. The discussion does
not address all aspects of federal taxation that may be relevant to particular
Firstbank Stockholders, and it may not be applicable to Firstbank Stockholders
who, for federal income tax purposes, are subject to special treatment, such as
nonresident alien individuals, foreign corporations, foreign partnerships,
foreign trusts or foreign estates, insurance companies, tax-exempt
organizations, financial institutions, dealers in securities, persons who
acquired their Firstbank Common Stock pursuant to the exercise of employee stock
options or otherwise as compensation, and persons who hold shares of Firstbank
Common Stock as part of a hedge, straddle or conversion transaction. The
discussion does not address the effect of any applicable state, local or foreign
tax laws or any federal tax laws other than those pertaining to the income tax.
EACH FIRSTBANK STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S OWN TAX ADVISOR AS
TO THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO SUCH STOCKHOLDER.
 
     This discussion is based on the Code and current regulations,
administrative rulings and court decisions, all of which are subject to change,
possibly with retroactive effect. Any such change could alter the tax
consequences to Firstbank Stockholders discussed herein. This discussion is also
based on certain assumptions regarding the factual circumstances that will exist
at the Effective Time, including certain representations made by MBI and
Firstbank. This discussion assumes that Firstbank Stockholders hold their
Firstbank Common Stock as a capital asset within the meaning of Section 1221 of
the Code.
 
     The obligations of each of MBI and Firstbank to effect the Merger are
conditioned upon receipt by MBI and Firstbank of an opinion of counsel
reasonably acceptable to the recipient, dated as of the Closing Date,
substantially to the effect that, for federal income tax purposes, (i) the
Merger will constitute a reorganization within the meaning of Section 368(a) of
the Code and (ii) no gain or loss will be recognized by the Firstbank
Stockholders who receive solely MBI Common Stock in exchange for shares of
Firstbank Common Stock (except with respect to cash received in lieu of a
fractional share interest in MBI Common Stock).
 
     MBI and Firstbank, respectively, have received opinions of Wachtell,
Lipton, Rosen & Katz, special counsel to MBI, and Suelthaus & Walsh, P.C.,
special counsel to Firstbank, each dated as of the date of this Proxy
Statement/Prospectus, to the foregoing effect. Accordingly, the material federal
income tax consequences expected to result from the Merger, under currently
applicable law, are as follows:
 
          (i) The Merger will constitute a reorganization within the meaning of
     Section 368(a) of the Code.
 
          (ii) No gain or loss will be recognized by Firstbank or MBI as a
     result of the Merger.
 
          (iii) Firstbank Stockholders who receive solely shares of MBI Common
     Stock in exchange for their Firstbank Common Stock pursuant to the Merger
     will recognize no gain or loss, except with respect to cash received in
     lieu of fractional shares, if any, as discussed below.
 
          (iv) The aggregate adjusted tax basis of the shares of MBI Common
     Stock received by each Firstbank stockholder in the Merger (including any
     fractional share of MBI Common Stock deemed to be received, as described
     below), will be equal to the aggregate adjusted tax basis of the shares of
     Firstbank Common Stock surrendered therefor.
 
          (v) The holding period of the shares of MBI Common Stock (including
     any fractional share of MBI Common Stock deemed to be received, as
     described below) will include the holding period of the shares of Firstbank
     Common Stock exchanged therefor.
 
          (vi) A Firstbank Stockholder who receives cash in the Merger in lieu
     of a fractional share of MBI Common Stock should be treated as if the
     fractional share had been received in the Merger and then redeemed by MBI
     in return for the cash. The receipt of such cash should generally cause the
     recipient to recognize capital gain or loss equal to the difference between
     the amount of cash received and the portion of such holder's adjusted tax
     basis allocable to the fractional share. Such capital gain or loss will be
     long-term capital gain or loss if the holder's holding period (determined
     as described in paragraph (v) above) is more than one year. In the case of
     an individual holder, any such capital gain will be subject to tax at a
     maximum rate of 28% if the holder's holding period is more than one year
     but not more than 18 months and at a maximum rate of 20% if the holder's
     holding period is more than 18 months.
 
                                       41
<PAGE>   53
 
                        PRO FORMA FINANCIAL INFORMATION
 
COMPARATIVE UNAUDITED PER SHARE DATA
 
     The following table sets forth for the periods indicated selected
historical per share data of MBI and Firstbank and the corresponding pro forma
and pro forma equivalent per share amounts giving effect to the proposed Merger
and the proposed acquisitions of CBT and Financial Services (the "Other
Acquisitions"). The data presented is based upon the consolidated financial
statements and related notes of MBI and the consolidated financial statements
and related notes of Firstbank included in this Proxy Statement/Prospectus or in
documents prepared by the respective companies and provided to MBI, and the pro
forma combined consolidated balance sheet and income statements, including the
notes thereto, appearing elsewhere herein. This information should be read in
conjunction with such historical and pro forma financial statements and related
notes thereto. The assumptions used in the preparation of this table appear in
the notes to the pro forma financial information appearing elsewhere in the
Proxy Statement/Prospectus. See "--Pro Forma Combined Consolidated Financial
Statements (Unaudited)." This data is not necessarily indicative of the results
of the future operations of the combined organization or the actual results that
would have occurred if the Merger or the Other Acquisitions had been consummated
prior to the periods indicated.
 
   
<TABLE>
<CAPTION>
                                                          MBI/           MBI/            MBI/           MBI/
                                                        FIRSTBANK      FIRSTBANK     ALL ENTITIES   ALL ENTITIES
                                  MBI      FIRSTBANK    PRO FORMA      PRO FORMA      PRO FORMA       PRO FORMA
                                REPORTED   REPORTED    COMBINED(2)   EQUIVALENT(3)     COMBINED     EQUIVALENT(3)
                                --------   ---------   -----------   -------------   ------------   -------------
<S>                             <C>        <C>         <C>           <C>             <C>            <C>
Book Value per Share:
  March 31, 1998(1)(4)........  $18.650     $14.96       $18.060        $15.00         $18.000         $14.95
  December 31, 1997(1),(4)....  $18.470     $14.77       $17.830        $14.81         $17.770         $14.76
Cash Dividends Declared per
  Common Share:
  Three months ended March 31,
     1998.....................    0.310       0.26         0.310          0.26           0.310           0.26
  Year ended December 31,
     1997.....................    1.148       0.72         1.148          0.95           1.148           0.95
Earnings per Share:
  Three months ended March 31,
     1998 -- Basic............    0.780       0.49         0.770          0.64           0.760           0.63
  Three months ended March 31,
     1998 -- Diluted..........    0.770       0.48         0.750          0.62           0.750           0.62
  Year ended December 31, 1997
     -- Basic.................    1.680       1.90         1.740          1.45           1.450           1.20
  Year ended December 31, 1997
     -- Diluted...............    1.650       1.86         1.700          1.41           1.420           1.18
Market Price per Common Share:
  January 30, 1998(5).........   50.500      38.00        50.500         41.96          50.500          41.96
</TABLE>
    
 
- ---------------
 
(1) Includes the effect of pro forma adjustments for Firstbank as appropriate.
 
   
(2) Includes the effect of pro forma adjustments for Firstbank, CBT and
     Roosevelt as appropriate. Due to the immateriality of the financial
     condition and results of operations of Horizon, HomeCorp, Financial
     Services and First Financial to that of MBI, does not include the effect of
     pro forma adjustments of such companies. The unaudited pro forma
     comparative per share data combines the financial information of MBI with
     the financial information of Firstbank, each as of and for the three months
     ended March 31, 1998 and 1997, and the fiscal years ended December 31,
     1997, 1996 and 1995. See "--Notes to Pro Forma Combined Consolidated
     Financial Statements (Unaudited)."
    
 
   
(3) Based upon the pro forma combined per share amounts multiplied by 0.8308,
     the Exchange Ratio applicable to one share of Firstbank Common Stock.
    
 
                                       42
<PAGE>   54
 
   
(4) Based upon the following number of shares outstanding as of:
    
 
   
<TABLE>
<CAPTION>
                                                                  MARCH 31,
                                                                    1998         DECEMBER 31, 1997
                                                                -------------    -----------------
         <S>                                                    <C>              <C>
         Shares of MBI Common Stock, as reported............     133,115,227        130,508,090
         Aggregate number of shares of MBI Common Stock to
           be issued in the Merger, net of treasury
           shares...........................................      12,407,521         12,419,819
                                                                 -----------        -----------
         MBI/Firstbank Pro Forma Combined...................     145,522,748        142,927,909
         Aggregate number of shares of MBI Common Stock to
           be issued in the Merger with CBT, net of treasury
           shares...........................................       4,863,548          4,864,429
                                                                 -----------        -----------
         MBI/All Entities Pro Forma Combined................     150,386,296        147,792,338
                                                                 ===========        ===========
</TABLE>
    
 
(5) The market values of MBI Common Stock and Firstbank Common Stock were
     determined as of the last trading day preceding the public announcement of
     the Merger and as of the most recent practicable date prior to the mailing
     of this Proxy Statement/Prospectus based on the last sales price as
     reported on the NYSE Composite Tape or Nasdaq.
 
PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
   
     Recent Acquisitions.  MBI has completed or announced a number of
acquisitions during the years covered by the pro forma financial statements that
follow. Set forth below is a table that summarizes such completed and pending
acquisitions, including the name of the acquired entity, the date of
consummation of the acquisition, the assets and deposits of the acquired
entities at the date of consummation for the completed acquisitions, the assets
and deposits at March 31, 1998 for pending acquisitions, the consideration paid
in cash and/or shares of MBI Common Stock and the accounting method utilized.
    
 
                  ACQUISITIONS COMPLETED BY MBI (1995-PRESENT)
 
<TABLE>
<CAPTION>
                                                                                        CONSIDERATION
                                                                                    ----------------------
                                                                                                  GROSS      ACCOUNTING
                 NAME                         DATE          ASSETS      DEPOSITS      CASH       SHARES        METHOD
                 ----                     -------------   ----------   ----------   --------   -----------   ----------
                                                                     (DOLLARS IN THOUSANDS)
<S>                                       <C>             <C>          <C>          <C>        <C>           <C>
HomeCorp, Inc..........................    Mar. 2, 1998   $  335,137   $  309,157   $     14       854,760     Pooling(1)
Horizon Bancorp, Inc...................    Feb. 2, 1998      536,507      454,230          2     2,549,970     Pooling(1)
Roosevelt Financial Group, Inc.........    July 1, 1997    7,251,985    5,317,514    374,477    18,948,884    Purchase
Mark Twain Bancshares, Inc.............   Apr. 25, 1997    3,227,972    2,519,474         73    24,088,713     Pooling
Regional Bancshares, Inc...............    Mar. 5, 1997      171,979      135,954     12,300       900,625    Purchase
TODAY'S Bancorp, Inc...................    Nov. 7, 1996      501,418      432,104     34,912     1,690,587    Purchase
First Financial Corporation of
  America..............................    Nov. 1, 1996       87,649       76,791      3,253       388,113    Purchase
Peoples State Bank.....................   Aug. 22, 1996       95,657       75,149         --       488,756    Purchase
Metro Savings Bank, F.S.B..............    Mar. 7, 1996       80,857       73,843          5       296,853    Purchase
Security Bank of Conway, F.S.B.........    Feb. 9, 1996      102,502       89,697          1       482,946    Purchase
Hawkeye Bancorporation.................    Jan. 2, 1996    1,978,540    1,739,811         80    11,838,294     Pooling
First Sterling Bancorp, Inc............    Jan. 2, 1996      167,610      147,588          1       782,126     Pooling(1)
Southwest Bancshares, Inc..............    Aug. 1, 1995      187,701      155,628          1     1,012,463     Pooling(1)
AmeriFirst Bancorporation, Inc.........    Aug. 1, 1995      155,521      130,179          1       992,034     Pooling(1)
Plains Spirit Financial Corporation....    July 7, 1995      400,754      276,887      6,697     1,951,770    Purchase
TCBankshares, Inc......................     May 1, 1995    1,422,798    1,217,740         --     7,124,999(2)  Pooling
Central Mortgage Bancshares, Inc.......     May 1, 1995      654,584      571,105          8     3,806,585     Pooling
UNSL Financial Corp....................    Jan. 3, 1995      508,346      380,716         11     2,367,161     Pooling
Wedge Bank.............................    Jan. 3, 1995      195,716      152,865          1     1,454,931     Pooling(1)
</TABLE>
 
                                       43
<PAGE>   55
 
                          PENDING ACQUISITIONS BY MBI
 
   
<TABLE>
<S>                                   <C>            <C>         <C>         <C>              <C>
CBT Corporation.....................  3rd Qtr. 1998  1,030,998     714,686    5,398,785(3)    Pooling
Firstbank of Illinois Co............  3rd Qtr. 1998  2,283,670   2,000,539   13,786,135(3)    Pooling
Financial Services Corporation of
  the Midwest.......................  3rd Qtr. 1998    518,046     408,995    2,077,000(3)    Pooling
First Financial Bancorporation......  3rd Qtr. 1998    568,442     480,461    3,194,844(3)    Pooling
</TABLE>
    
 
- ------------------------------
 
(1) The historical financial statements of MBI were not restated for the
    acquisition due to the immateriality of the acquiree's financial condition
    and results of operations to those of MBI.
 
(2) In addition to MBI Common Stock issued, MBI assumed, through an exchange,
    the outstanding, non-convertible preferred stock of TCBankshares, Inc. Such
    preferred stock was redeemed in the first quarter of 1996.
 
(3) Estimated number of shares to be issued in acquisition.
 
   
     The following unaudited pro forma combined consolidated balance sheet gives
effect to the proposed Merger as if it were consummated on March 31, 1998.
    
 
   
     The unaudited pro forma combined consolidated financial statements should
be read in conjunction with the accompanying Notes to the Pro Forma Combined
Consolidated Financial Statements (Unaudited). These pro forma combined
consolidated financial statements may not be indicative of the results of
operations that actually would have occurred if the proposed acquisitions had
been consummated on the dates assumed above or of the results of operations that
may be achieved in the future. Due to the immateriality of the financial
condition and results of operations of the pending acquisitions of Financial
Services and First Financial to that of MBI, the pro forma financial statements
do not include the effect of such companies.
    
 
                                       44
<PAGE>   56
 
   
                         MERCANTILE BANCORPORATION INC.
    
 
   
                 PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
    
   
                              AS OF MARCH 31, 1998
    
   
                                  (THOUSANDS)
    
   
                                  (UNAUDITED)
    
   
<TABLE>
<CAPTION>
                                                                                                 MBI/
                                                                            COLONIAL BANK     FIRSTBANK
                                                                            AND DUCHESNE      PRO FORMA
                                                              FIRSTBANK         BANK           COMBINED
                                    MBI(1)      FIRSTBANK    ADJUSTMENTS   DIVESTITURES(6)   CONSOLIDATED      CBT
                                  -----------   ----------   -----------   ---------------   ------------   ----------
<S>                               <C>           <C>          <C>           <C>               <C>            <C>
ASSETS
 Cash and due from banks........  $ 1,193,064   $   96,021    $ (69,620)(2)    $   6,916     $ 1,192,931    $   38,227
                                                                (33,450)(5)
 Due from banks--interest
   bearing......................      269,342        1,782                         (197)         270,927             0
 Federal funds sold and
   repurchase agreements........      258,295       19,250                      (11,875)         265,670        20,230
 Investments in debt and equity
   securities
   Trading......................      125,634           46                            0          125,680             0
   Available-for-sale...........    8,027,916      627,548                      (69,551)       8,585,913       173,668
   Held-to-maturity.............      224,125       24,404                       (4,051)         244,478        59,157
                                  -----------   ----------    ---------       ---------      -----------    ----------
       Total....................    8,377,675      651,998            0         (73,602)       8,956,071       232,825
 Loans and leases...............   19,625,022    1,425,133                     (221,552)      20,828,603       711,779
 Reserve for possible loan
   losses.......................     (263,511)     (20,285)      (5,000)(5)        3,094        (285,702)       (9,771)
                                  -----------   ----------    ---------       ---------      -----------    ----------
       Net Loans and Leases.....   19,361,511    1,404,848       (5,000)       (218,458)      20,542,901       702,008
 Intangible assets..............      792,626       24,270                            0          816,896         5,677
 Other assets...................    1,549,209       85,501      238,489(3)       (8,883)       1,625,827        32,031
                                                               (238,489)(4)
                                  -----------   ----------    ---------       ---------      -----------    ----------
       Total Assets.............  $31,801,722   $2,283,670    $(108,070)      $(306,099)     $33,671,223    $1,030,998
                                  ===========   ==========    =========       =========      ===========    ==========
LIABILITIES
 Deposits
   Non-interest bearing.........  $ 3,487,875   $  288,895                    $ (54,857)     $ 3,721,913    $   78,204
   Interest bearing.............   18,576,440    1,711,644                     (247,581)      20,040,503       636,482
   Foreign......................      463,426            0                            0          463,426             0
                                  -----------   ----------    ---------       ---------      -----------    ----------
       Total Deposits...........   22,527,741    2,000,539            0        (302,438)      24,225,842       714,686
                                  -----------   ----------    ---------       ---------      -----------    ----------
 Short-term borrowings..........    3,596,915       18,604                       (1,119)       3,614,400       148,791
 Bank notes.....................       25,000            0                            0           25,000             0
 Long-term debt.................    2,193,061            0                            0        2,193,061        33,964
 Company-obligated mandatorily
   redeemable preferred
   securities of Mercantile
   Capital Trust I..............      150,000           --                            0          150,000             0
 Other liabilities..............      825,839       26,038      (13,842)(5)       (2,542)        835,493        11,526
                                  -----------   ----------    ---------       ---------      -----------    ----------
       Total Liabilities........   29,318,556    2,045,181      (13,842)       (306,099)      31,043,796       908,967
                                  -----------   ----------    ---------       ---------      -----------    ----------
SHAREHOLDERS' EQUITY
 Common stock...................  $     1,351   $   15,941    $     124(3)                   $     1,475    $    4,100
                                                                (15,941)(4)
 Capital surplus................      986,393       42,976      (10,827)(3)                      975,566        16,070
                                                                (42,976)(4)
 Retained earnings..............    1,592,681      179,572      179,572(3)                     1,747,645       101,861
                                                               (179,572)(4)
                                                                (24,608)(5)
 
 Treasury stock.................      (97,259)           0      (69,620)(2)                      (97,259)            0
                                                                 69,620(3)
                                  -----------   ----------    ---------       ---------      -----------    ----------
   Total Shareholders' Equity...    2,483,166      238,489      (94,228)              0        2,627,427       122,031
                                  ===========   ==========    =========       =========      ===========    ==========
   Total Liabilities and
     Shareholders' Equity.......  $31,801,722   $2,283,670    $(108,070)      $(306,099)     $33,671,223    $1,030,998
                                  ===========   ==========    =========       =========      ===========    ==========
 
<CAPTION>
                                                      MBI/
                                                  ALL ENTITIES
                                                   PRO FORMA
                                      CBT           COMBINED
                                  ADJUSTMENTS     CONSOLIDATED
                                  -----------     ------------
<S>                               <C>             <C>
ASSETS
 Cash and due from banks........   $ (28,233)(7)  $ 1,186,475
                                     (16,450)(5)
 Due from banks--interest
   bearing......................                      270,927
 Federal funds sold and
   repurchase agreements........                      285,900
 Investments in debt and equity
   securities
   Trading......................                      125,680
   Available-for-sale...........                    8,759,581
   Held-to-maturity.............                      303,635
                                   ---------      -----------
       Total....................           0        9,188,896
 Loans and leases...............                   21,540,382
 Reserve for possible loan
   losses.......................      (5,100)(5)     (300,573)
                                   ---------      -----------
       Net Loans and Leases.....      (5,100)      21,239,809
 Intangible assets..............                      822,573
 Other assets...................     122,031(8)     1,657,858
                                    (122,031)(9)
                                   ---------      -----------
       Total Assets.............   $ (49,783)     $34,652,438
                                   =========      ===========
LIABILITIES
 Deposits
   Non-interest bearing.........                  $ 3,800,117
   Interest bearing.............                   20,676,985
   Foreign......................                      463,426
                                   ---------      -----------
       Total Deposits...........           0       24,940,528
                                   ---------      -----------
 Short-term borrowings..........                    3,763,191
 Bank notes.....................                       25,000
 Long-term debt.................                    2,227,025
 Company-obligated mandatorily
   redeemable preferred
   securities of Mercantile
   Capital Trust I..............                      150,000
 Other liabilities..............      (7,758)(5)      839,261
                                   ---------      -----------
       Total Liabilities........      (7,758)      31,945,005
                                   ---------      -----------
SHAREHOLDERS' EQUITY
 Common stock...................   $      49(8)   $     1,524
                                      (4,100)(9)
 Capital surplus................      (8,112)(8)      967,454
                                     (16,070)(9)
 Retained earnings..............     101,861(8)     1,835,714
                                    (101,861)(9)
                                     (13,792)(5)
 Treasury stock.................     (28,233)(7)      (97,259)
                                      28,233(8)
                                   ---------      -----------
   Total Shareholders' Equity...     (42,025)       2,707,433
                                   =========      ===========
   Total Liabilities and
     Shareholders' Equity.......   $ (49,783)     $34,652,438
                                   =========      ===========
</TABLE>
    
 
   
       See Notes to Pro Forma Combined Consolidated Financial Statements.
    
                                       45
<PAGE>   57
 
   
                         MERCANTILE BANCORPORATION INC.
    
 
   
                PRO FORMA COMBINED CONSOLIDATED INCOME STATEMENT
    
   
                   FOR THE THREE MONTHS ENDED MARCH 31, 1998
    
   
                       (THOUSANDS EXCEPT PER SHARE DATA)
    
   
                                  (UNAUDITED)
    
   
<TABLE>
<CAPTION>
                                                                                                  MBI/
                                                                                               FIRSTBANK
                                                                                               PRO FORMA
                                                                            FIRSTBANK           COMBINED
                                                     MBI(1)    FIRSTBANK   ADJUSTMENTS        CONSOLIDATED     CBT
                                                    --------   ---------   -----------        ------------   -------
<S>                                                 <C>        <C>         <C>                <C>            <C>
Interest Income...................................  $530,331    $41,598       $(870)(10)        $571,059     $21,227
Interest Expense..................................   290,026     19,527                          309,553      10,345
                                                    --------    -------       -----             --------     -------
 Net Interest Income..............................   240,305     22,071        (870)             261,506      10,882
Provision for Possible Loan Losses................     6,606        762                            7,368       1,169
                                                    --------    -------       -----             --------     -------
 Net Interest Income after Provision for Possible
   Loan Losses....................................   233,699     21,309        (870)             254,138       9,713
Other Income
 Trust............................................    25,886      1,513                           27,399         303
 Service charges..................................    25,576      1,945                           27,521         832
 Credit card fees.................................     3,284          0                            3,284           0
 Securities gains (losses)........................     4,263         71                            4,334         119
 Other............................................    68,184      3,249                           71,433       1,535
                                                    --------    -------       -----             --------     -------
   Total Other Income.............................   127,193      6,778           0              133,971       2,789
Other Expense
 Salaries and employee benefits...................   111,575      9,133                          120,708       4,320
 Net occupancy and equipment......................    33,655      2,606                           36,261       1,001
 Other............................................    51,634      4,187                           55,821       2,784
                                                    --------    -------       -----             --------     -------
   Total Other Expense............................   196,864     15,926           0              212,790       8,105
                                                    --------    -------       -----             --------     -------
Income Before Income Taxes........................   164,028     12,161        (870)             175,319       4,397
 Income Taxes.....................................    60,136      4,395        (313)(11)          64,218       1,196
                                                    --------    -------       -----             --------     -------
 
   Net Income.....................................  $103,892    $ 7,766       $(557)            $111,101     $ 3,201
                                                    ========    =======       =====             ========     =======
Per Share Data(21)
 Basic Earnings per Share.........................  $   0.78                                    $   0.77
 Diluted Earnings per Share.......................      0.77                                        0.75
 
<CAPTION>
                                                                          MBI/
                                                                          ALL ENTITIES
                                                                          PRO FORMA
                                                          CBT             COMBINED
                                                      ADJUSTMENTS         CONSOLIDATED
                                                      -----------         ------------
<S>                                                 <C>                   <C>
Interest Income...................................       $(353)(12)         $591,933
Interest Expense..................................                           319,898
                                                         -----              --------
 Net Interest Income..............................        (353)              272,035
Provision for Possible Loan Losses................                             8,537
                                                         -----              --------
 Net Interest Income after Provision for Possible
   Loan Losses....................................        (353)              263,498
Other Income
 Trust............................................                            27,702
 Service charges..................................                            28,353
 Credit card fees.................................                             3,284
 Securities gains (losses)........................                             4,453
 Other............................................                            72,968
                                                         -----              --------
   Total Other Income.............................           0               136,760
Other Expense
 Salaries and employee benefits...................                           125,028
 Net occupancy and equipment......................                            37,262
 Other............................................                            58,605
                                                         -----              --------
   Total Other Expense............................           0               220,895
                                                         -----              --------
Income Before Income Taxes........................        (353)              179,363
 Income Taxes.....................................        (127)(13)           65,287
                                                         -----              --------
   Net Income.....................................       $(226)             $114,076
                                                         =====              ========
Per Share Data(21)
 Basic Earnings per Share.........................                          $   0.76
 Diluted Earnings per Share.......................                              0.75
</TABLE>
    
 
   
       See Notes to Pro Forma Combined Consolidated Financial Statements.
    
 
                                       46
<PAGE>   58
 
   
                         MERCANTILE BANCORPORATION INC.
    
 
   
                PRO FORMA COMBINED CONSOLIDATED INCOME STATEMENT
    
   
                   FOR THE THREE MONTHS ENDED MARCH 31, 1997
    
   
                       (THOUSANDS EXCEPT PER SHARE DATA)
    
   
                                  (UNAUDITED)
    
   
<TABLE>
<CAPTION>
                                                                                ROOSEVELT
                                                              MBI/FIRSTBANK   FOR THE THREE
                                                                PRO FORMA     MONTHS ENDED              ROOSEVELT/
                                                FIRSTBANK       COMBINED        MARCH 31,                   CBT
                         MBI(1)    FIRSTBANK   ADJUSTMENTS    CONSOLIDATED        1997          CBT     ADJUSTMENTS
                        --------   ---------   -----------    -------------   -------------   -------   -----------
<S>                     <C>        <C>         <C>            <C>             <C>             <C>       <C>
Interest Income.......  $398,462    $36,611       $(870)(10)    $434,203        $140,012      $19,874    $   (353)(12)
Interest Expense......   186,501     16,317                      202,818          90,590        9,523         858(15)
                                                                                                            8,844(16)
                        --------    -------       -----         --------        --------      -------    --------
  Net Interest
    Income............   211,961     20,294        (870)         231,385          49,422       10,351     (10,055)
Provision for Possible
  Loan Losses.........    18,443        717                       19,160             640          930
                        --------    -------       -----         --------        --------      -------    --------
  Net Interest Income
    after Provision
    for Possible Loan
    Losses............   193,518     19,577        (870)         212,225          48,782        9,421     (10,055)
Other Income
  Trust...............    22,801      1,156                       23,957               0          273
  Service charges.....    22,798      1,611                       24,409           5,979          836
  Credit card fees....     5,399          0                        5,399               0            0
  Net gain from
    financial
    instruments.......         0          0                            0             392            0           0
  Securities gains
    (losses)..........     1,049         (4)                       1,045               0            0
  Other...............    36,053      2,676                       38,729           5,981        1,363
                        --------    -------       -----         --------        --------      -------    --------
      Total Other
        Income........    88,100      5,439           0           93,539          12,352        2,472           0
Other Expense
  Salaries and
    employee
    benefits..........    97,722      7,973                      105,695          11,160        4,071
  Net occupancy and
    equipment.........    26,528      2,439                       28,967           4,811          905
  Other...............    41,345      3,478                       44,823           9,467        2,486      10,135(17)
                        --------    -------       -----         --------        --------      -------    --------
      Total Other
        Expense.......   165,595     13,890           0          179,485          25,438        7,462      10,135
                        --------    -------       -----         --------        --------      -------    --------
      Income Before
        Income
        Taxes.........   116,023     11,126        (870)         126,279          35,696        4,431     (20,190)
Income Taxes..........    41,028      3,941        (313)(11)      44,656          13,605        1,300        (127)(13)
                                                                                                           (3,492)(18)
                        --------    -------       -----         --------        --------      -------    --------
      Net Income......  $ 74,995    $ 7,185       $(557)        $ 81,623        $ 22,091      $ 3,131    $(16,571)
                        ========    =======       =====         ========        ========      =======    ========
Per Share Data(21)
  Basic Earnings per
    Share.............     $0.65                                   $0.65
  Diluted Earnings per
    Share.............      0.64                                    0.64
 
<CAPTION>
                            MBI/
                        ALL ENTITIES
                         PRO FORMA
                          COMBINED
                        CONSOLIDATED
                        ------------
<S>                     <C>
Interest Income.......    $593,736
Interest Expense......     312,633
                          --------
  Net Interest
    Income............     281,103
Provision for Possible
  Loan Losses.........      20,730
                          --------
  Net Interest Income
    after Provision
    for Possible Loan
    Losses............     269,217
Other Income
  Trust...............      24,230
  Service charges.....      31,224
  Credit card fees....       5,399
  Net gain from
    financial
    instruments.......         392
  Securities gains
    (losses)..........       1,045
  Other...............      46,073
                          --------
      Total Other
        Income........     108,363
Other Expense
  Salaries and
    employee
    benefits..........     120,926
  Net occupancy and
    equipment.........      34,683
  Other...............      66,911
                          --------
      Total Other
        Expense.......     222,520
                          --------
      Income Before
        Income
        Taxes.........     146,216
Income Taxes..........      55,942
                          --------
      Net Income......    $ 90,274
                          ========
Per Share Data(21)
  Basic Earnings per
    Share.............         $0.60
  Diluted Earnings per
    Share.............        0.59
</TABLE>
    
 
   
       See Notes to Pro Forma Combined Consolidated Financial Statements.
    
                                       47
<PAGE>   59
 
                         MERCANTILE BANCORPORATION INC.
 
                PRO FORMA COMBINED CONSOLIDATED INCOME STATEMENT
                      FOR THE YEAR ENDED DECEMBER 31, 1997
                       (THOUSANDS EXCEPT PER SHARE DATA)
   
<TABLE>
<CAPTION>
                                                                                   MBI/       ROOSEVELT FOR
                                                                                FIRSTBANK        THE SIX
                                                                                PRO FORMA        MONTHS
                                                              FIRSTBANK          COMBINED         ENDED
                                      MBI(1)     FIRSTBANK   ADJUSTMENTS       CONSOLIDATED   JUNE 30, 1997     CBT
                                    ----------   ---------   -----------       ------------   -------------   -------
<S>                                 <C>          <C>         <C>               <C>            <C>             <C>
Interest Income...................  $1,878,194   $157,373      $(3,484)(10)     $2,032,083      $272,169      $83,984
Interest Expense..................     957,690     71,472                        1,029,162       178,306       40,616
                                    ----------   --------      -------          ----------      --------      -------
 Net Interest Income..............     920,504     85,901       (3,484)          1,002,921        93,863       43,368
Provision for Possible Loan
 Losses...........................      79,309      2,958                           82,267         3,474        4,088
                                    ----------   --------      -------          ----------      --------      -------
 Net Interest Income after
   Provision for Possible Loan
   Losses.........................     841,195     82,943       (3,484)            920,654        90,389       39,280
Other Income
 Trust............................      96,055      5,010                          101,065             0        2,247
 Service charges..................      98,733      7,441                          106,174        13,018        3,338
 Credit card fees.................      20,480          0                           20,480             0            0
 Net loss from financial
   instruments....................           0          0                                0       (35,630)           0
 Securities gains (losses)........       6,985        636                            7,621             0           22
 Other............................     156,431     11,531                          167,962        10,038        4,214
                                    ----------   --------      -------          ----------      --------      -------
   Total Other Income.............     378,684     24,618            0             403,302       (12,574)       9,821
Other Expense
 Salaries and employee benefits...     414,882     35,009                          449,891        23,717       16,434
 Net occupancy and equipment......     118,758     10,082                          128,840         9,291        3,841
 Loss on the sale of credit card
   loans..........................      50,000          0                           50,000             0            0
 Other............................     311,140     16,030                          327,170        36,555       10,779
                                    ----------   --------      -------          ----------      --------      -------
   Total Other Expense............     894,780     61,121            0             955,901        69,563       31,054
                                    ----------   --------      -------          ----------      --------      -------
Income Before Income Taxes........     325,099     46,440       (3,484)            368,055         8,252       18,047
 Income Taxes.....................     120,506     16,796       (1,254)(11)        136,048         7,630        5,201
                                    ----------   --------      -------          ----------      --------      -------
   Net Income.....................  $  204,593   $ 29,644      $(2,230)         $  232,007      $    622      $12,846
                                    ==========   ========      =======          ==========      ========      =======
Per Share Data(21)
 Basic Earnings per Share.........  $     1.68                                  $     1.74
 Diluted Earnings per Share.......        1.65                                        1.70
 
<CAPTION>
                                                              MBI/
                                                          ALL ENTITIES
                                                           PRO FORMA
                                     ROOSEVELT/CBT          COMBINED
                                    ADJUSTMENTS(14)       CONSOLIDATED
                                    ---------------       ------------
<S>                                 <C>                   <C>
Interest Income...................     $ (1,412)(12)       $2,386,824
Interest Expense..................          858(15)         1,264,664
                                         15,722(16)
                                       --------            ----------
 Net Interest Income..............      (17,992)            1,122,160
Provision for Possible Loan
 Losses...........................                             89,829
                                       --------            ----------
 Net Interest Income after
   Provision for Possible Loan
   Losses.........................      (17,992)            1,032,331
Other Income
 Trust............................                            103,312
 Service charges..................                            122,530
 Credit card fees.................                             20,480
 Net loss from financial
   instruments....................                            (35,630)
 Securities gains (losses)........                              7,643
 Other............................                            182,214
                                       --------            ----------
   Total Other Income.............                            400,549
Other Expense
 Salaries and employee benefits...                            490,042
 Net occupancy and equipment......                            141,972
 Loss on the sale of credit card
   loans..........................                             50,000
 Other............................       20,269(17)           394,773
                                       --------            ----------
   Total Other Expense............       20,269             1,076,787
                                       --------            ----------
Income Before Income Taxes........      (38,261)              356,093
 Income Taxes.....................         (508)(13)          142,402
                                         (5,969)(18)
                                       --------            ----------
   Net Income.....................     $(31,784)           $  213,691
                                       ========            ==========
Per Share Data(21)
 Basic Earnings per Share.........                         $     1.45
 Diluted Earnings per Share.......                               1.42
</TABLE>
    
 
       See Notes to Pro Forma Combined Consolidated Financial Statements.
                                       48
<PAGE>   60
 
                         MERCANTILE BANCORPORATION INC.
 
                PRO FORMA COMBINED CONSOLIDATED INCOME STATEMENT
                      FOR THE YEAR ENDED DECEMBER 31, 1996
                       (THOUSANDS EXCEPT PER SHARE DATA)
 
   
<TABLE>
<CAPTION>
                                                                            MBI/                                       MBI/
                                                                         FIRSTBANK                                 ALL ENTITIES
                                                                         PRO FORMA                                  PRO FORMA
                                                           FIRSTBANK      COMBINED                     CBT           COMBINED
                                   MBI(1)     FIRSTBANK   ADJUSTMENTS   CONSOLIDATED     CBT     ADJUSTMENTS(14)   CONSOLIDATED
                                 ----------   ---------   -----------   ------------   -------   ---------------   ------------
<S>                              <C>          <C>         <C>           <C>            <C>       <C>               <C>
Interest Income................  $1,552,863   $140,611      $(3,484)(10)  $1,689,990   $77,646       $(1,412)(12)   $1,766,224
Interest Expense...............     724,910     61,005                      785,915     36,242                         822,157
                                 ----------   --------      -------      ----------    -------       -------        ----------
  Net Interest Income..........     827,953     79,606       (3,484)        904,075     41,404        (1,412)          944,067
Provision for Possible Loan
  Losses.......................      73,015      2,868                       75,883      2,883                          78,766
                                 ----------   --------      -------      ----------    -------       -------        ----------
  Net Interest Income after
    Provision for Possible Loan
    Losses.....................     754,938     76,738       (3,484)        828,192     38,521        (1,412)          865,301
Other Income
  Trust........................      86,616      4,292                       90,908      2,111                          93,019
  Service charges..............      88,916      6,142                       95,058      3,341                          98,399
  Credit card fees.............      27,962          0                       27,962          0                          27,962
  Securities gains (losses)....         (83)       340                          257         35                             292
  Other........................     134,069     11,024                      145,093      3,245                         148,338
                                 ----------   --------      -------      ----------    -------       -------        ----------
    Total Other Income.........     337,480     21,798            0         359,278      8,732             0           368,010
Other Expense
Salaries and employee
  benefits.....................     365,729     31,919                      397,648     15,592                         413,240
  Net occupancy and
    equipment..................     103,715      9,259                      112,974      3,584                         116,558
  Other........................     249,224     13,959                      263,183     11,806                         274,989
                                 ----------   --------      -------      ----------    -------       -------        ----------
    Total Other Expense........     718,668     55,137            0         773,805     30,982             0           804,787
                                 ----------   --------      -------      ----------    -------       -------        ----------
    Income Before Income
      Taxes....................     373,750     43,399       (3,484)        413,665     16,271        (1,412)          428,524
Income Taxes...................     128,535     15,526       (1,254)(11)     142,807     4,646          (508)(13)      146,945
                                 ----------   --------      -------      ----------    -------       -------        ----------
    Net Income.................  $  245,215   $ 27,873      $(2,230)     $  270,858    $11,625       $  (904)       $  281,579
                                 ==========   ========      =======      ==========    =======       =======        ==========
Per Share Data
  Basic Earnings per Share.....  $     2.11                              $     2.12                                 $     2.13
  Diluted Earnings per Share...        2.08                                    2.09                                       2.10
</TABLE>
    
 
       See Notes to Pro Forma Combined Consolidated Financial Statements.
 
                                       49
<PAGE>   61
 
                         MERCANTILE BANCORPORATION INC.
 
                PRO FORMA COMBINED CONSOLIDATED INCOME STATEMENT
                      FOR THE YEAR ENDED DECEMBER 31, 1995
                       (THOUSANDS EXCEPT PER SHARE DATA)
 
   
<TABLE>
<CAPTION>
                                                                                 MBI/                                    MBI/
                                                                              FIRSTBANK                              ALL ENTITIES
                                                                              PRO FORMA                               PRO FORMA
                                                               FIRSTBANK       COMBINED                   CBT          COMBINED
                                       MBI(1)     FIRSTBANK   ADJUSTMENTS    CONSOLIDATED     CBT     ADJUSTMENTS    CONSOLIDATED
                                     ----------   ---------   -----------    ------------   -------   -----------    ------------
<S>                                  <C>          <C>         <C>            <C>            <C>       <C>            <C>
Interest Income....................  $1,516,156   $134,401      $(3,484)(10)  $1,647,073    $75,762    $ (1,412)(12)  $1,721,423
Interest Expense...................     715,466     57,486                       772,952     35,588                      808,540
                                     ----------   --------      -------       ----------    -------    --------       ----------
 Net Interest Income...............     800,690     76,915       (3,484)         874,121     40,174      (1,412)         912,883
Provision for Possible Loan
 Losses............................      41,533      2,313                        43,846      1,106                       44,952
                                     ----------   --------      -------       ----------    -------    --------       ----------
 Net Interest Income after
   Provision for Possible Loan
   Losses..........................     759,157     74,602       (3,484)         830,275     39,068      (1,412)         867,931
Other Income
 Trust.............................      77,115      5,986                        83,101      1,469                       84,570
 Service charges...................      82,459      5,836                        88,295      3,656                       91,951
 Credit card fees..................      20,366          0                        20,366          0                       20,366
 Securities gains (losses).........       4,338         28                         4,366        268                        4,634
 Other.............................     127,371      8,318                       135,689      2,779                      138,468
                                     ----------   --------      -------       ----------    -------    --------       ----------
   Total Other Income..............     311,649     20,168            0          331,817      8,172           0          339,989
Other Expense
 Salaries and employee benefits....     346,156     30,882                       377,038     15,798                      392,836
 Net occupancy and equipment.......      95,896      9,215                       105,111      3,045                      108,156
 Other.............................     198,467     14,824                       213,291     11,632                      224,923
                                     ----------   --------      -------       ----------    -------    --------       ----------
   Total Other Expense.............     640,519     54,921            0          695,440     30,475           0          725,915
                                     ----------   --------      -------       ----------    -------    --------       ----------
 Income Before Income Taxes........     430,287     39,849       (3,484)         466,652     16,765      (1,412)         482,005
Income Taxes.......................     149,898     14,107       (1,254)(11)     162,751      4,741        (508)(13)     166,984
                                     ----------   --------      -------       ----------    -------    --------       ----------
   Net Income......................  $  280,389   $ 25,742      $(2,230)      $  303,901    $12,024    $   (904)      $  315,021
                                     ==========   ========      =======       ==========    =======    ========       ==========
Per Share Data(21)
 Basic Earnings per Share..........  $     2.41                               $     2.38                              $     2.38
 Diluted Earnings per Share........        2.37                                     2.34                                    2.34
</TABLE>
    
 
       See Notes to Pro Forma Combined Consolidated Financial Statements.
 
                                       50
<PAGE>   62
 
                         MERCANTILE BANCORPORATION INC.
         NOTES TO PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
 
   
(1) Represents MBI restated historical consolidated financial statements
     reflecting the acquisition of Mark Twain Bancshares Inc. effective April
     25, 1997, which was accounted for as a pooling-of-interests. The recently
     completed acquisitions of Horizon and HomeCorp were also accounted for as
     poolings-of-interests; however, due to the immateriality of the financial
     condition and results of operations of Horizon and HomeCorp to that of MBI,
     the historical financial statements were not restated. Regional Bancshares,
     Inc. was accounted for as a purchase and is included in these pro forma
     financial statements only from its acquisition date forward. The full
     impact of this acquisition is immaterial to the Pro Forma Combined
     Consolidated Financial Statements.
    
 
   
     MBI completed its acquisition of Roosevelt on July 1, 1997. The acquisition
     of Roosevelt was accounted for as a purchase; as such, historical financial
     statements were not restated. The estimated full impact of the Roosevelt
     acquisition is included in the pro forma combined consolidated income
     statement for the year ended December 31, 1997 and the three months ended
     March 31, 1997.
    
 
     All per share data reflects the 3-for-2 stock split declared by MBI on July
     16, 1997 that was distributed on October 1, 1997.
 
   
(2) In conjunction with the proposed acquisition of Firstbank, MBI plans to
     repurchase up to 1,378,614 shares of MBI Common Stock in the open market.
     The assumed repurchase price per share is $50.50, the closing price of MBI
     Common Stock on January 30, 1998, the last trading date preceding the
     announcement of the merger agreement between MBI and Firstbank.
    
 
   
(3) Acquisition of Firstbank with 13,786,135 shares of issued MBI Common Stock,
     including up to 1,378,614 reissued treasury shares, based on the exchange
     ratio of 0.8308 of a share of MBI Common Stock per share of Firstbank
     Common Stock. The number of shares of MBI Common Stock, which represents
     the aggregate number of shares to be issued in the merger, was calculated
     as follows:
    
 
   
<TABLE>
         <S>                                                             <C>
         Shares of Firstbank Common Stock............................    15,941,350
         Maximum number of shares of Firstbank Common Stock which
           could be issued pursuant to Firstbank's stock option
           plans.....................................................       652,457
         Maximum number of shares of Firstbank Common Stock to be
           canceled in the Merger....................................    16,593,807
         Exchange Ratio..............................................      X 0.8308
                                                                         ----------
         Aggregate number of shares of MBI Common Stock to be issued
           in the Merger.............................................    13,786,135
                                                                         ==========
</TABLE>
    
 
(4) Elimination of MBI's investment in Firstbank.
 
(5) Balance sheet impact of adjustments related to the mergers with Firstbank
     and CBT (see footnote 19 below). These adjustments will be initially
     recorded as a credit to accrued liabilities and the reserve for possible
     loan losses. Because the credit to accrued liabilities will be paid out in
     cash within an estimated 18-month period following the mergers, the Pro
     Forma Combined Consolidated Financial Statements reflect the cash outlay.
     An income tax benefit at an effective tax rate of 36% is included in these
     adjustments.
 
   
(6) Estimated impact of sales of Firstbank subsidiaries, Colonial Bank and
     Duchesne Bank, mandated by certain restrictions on deposit concentration.
     See "THE MERGER--Regulatory Approval" and "-- Management and Operations
     After the Merger; Operations after the Merger". MBI currently is in the
     process of evaluating such sales, and expects to record a gain in
     connection with the sales. The pro forma combined consolidated financial
     statements do not reflect a gain because the amount of gain is not known at
     this time.
    
 
                                       51
<PAGE>   63
 
   
(7) In conjunction with the proposed acquisition of CBT, MBI plans to repurchase
     up to 535,237 shares of MBI Common Stock in the open market. The assumed
     repurchase price per share is $52.75, the closing price of MBI Common Stock
     on January 9, 1998, the last trading date preceding the announcement of the
     merger agreement between MBI and CBT.
    
 
   
(8) Acquisition of CBT with 5,398,785 shares of issued MBI Common Stock,
     including up to 535,237 reissued treasury shares, based on the exchange
     ratio of 0.6513 of a share of MBI Common Stock per share of CBT Common
     Stock. The number of shares of MBI Common Stock, which represents the
     aggregate number of shares to be issued in the merger, was calculated as
     follows:
    
 
   
<TABLE>
         <S>                                                            <C>
         Shares of CBT Common Stock..................................   7,863,792
         Maximum number of shares of CBT Common Stock which could be
           issued pursuant to CBT's stock option plans...............     425,453
                                                                        ---------
         Maximum number of shares of CBT Common Stock to be canceled
           in the merger.............................................   8,289,245
         Exchange Ratio..............................................    x 0.6513
                                                                        ---------
         Aggregate number of shares of MBI Common Stock to be issued
           in the merger.............................................   5,398,785
                                                                        =========
</TABLE>
    
 
(9) Elimination of MBI's investment in CBT.
 
   
(10) Interest income foregone as a result of MBI repurchasing 1,378,614 treasury
     shares in conjunction with the acquisition of Firstbank by MBI. The assumed
     interest rate is 5%.
    
 
(11) Income tax benefit associated with interest income foregone as the result
     of repurchasing shares in conjunction with the acquisition of Firstbank by
     MBI. The assumed effective tax rate is 36%.
 
   
(12) Interest income foregone as a result of MBI repurchasing 535,237 treasury
     shares in conjunction with the acquisition of CBT by MBI. The assumed
     interest rate is 5%.
    
 
(13) Income tax benefit associated with interest income foregone as the result
     of repurchasing shares in conjunction with the acquisition of CBT by MBI.
     The assumed effective tax rate is 36%.
 
(14) The acquisition of Roosevelt was accounted for as a purchase transaction.
     Included herein is the amortization of goodwill over a 15-year period (see
     footnote 17 below) and interest expense related to the issuance of
     subordinated debt securities and notes as described in footnotes 15 and 16
     below. The impact of interest income lost on the cash consideration and
     stock buybacks is immaterial to the Pro Forma Combined Consolidated
     Financial Statements. The income tax benefit associated with taxable income
     statement adjustments is computed at an effective tax rate of 36%.
 
(15) On January 29, 1997, MBI issued $150,000,000 of subordinated debt
     securities, that were issued at a floating rate equal to the three-month
     LIBOR plus 85 basis points. The rate assumed in calculating the expense
     from January 1 through January 29, 1997 for the Pro Forma Combined
     Consolidated Financial Statements is 6.86%.
 
(16) On June 11, 1997, MBI issued $200,000,000 of 7.3% subordinated notes due
     2007, $150,000,000 of 6.8% senior notes due 2001 and $150,000,000 of 7.05%
     senior notes due 2004. This is the pro forma impact of interest expense on
     such notes.
 
   
(17) The pro forma excess of cost over fair value of net assets acquired was
     $608,076,000 for Roosevelt as of December 31, 1997. Given a 15-year
     amortization period, the pro forma income statements reflect one-quarter
     and one-half the annual amount of goodwill amortization for the three
     months ended March 31, 1997 and the year ended December 31, 1997,
     respectively.
    
 
(18) Income tax benefit associated with interest expense on debt issues (see
     footnotes 15 and 16 above). The assumed effective tax rate is 36%.
 
(19) Upon consummation of the acquisition of Firstbank, MBI expects to record
     certain adjustments related to the merger with an approximate pre-tax total
     between $25,000,000 and $40,000,000. Upon consummation of the merger with
     CBT, MBI expects to record certain adjustments related to the merger with
     an
 
                                       52
<PAGE>   64
 
     approximate pre-tax total between $15,000,000 and $25,000,000. The pre-tax
     adjustments for Firstbank and CBT are estimated as follows:
 
<TABLE>
<CAPTION>
                                                                         FIRSTBANK      CBT
                                                                         ---------    -------
                                                                            (IN THOUSANDS)
         <S>                                                             <C>          <C>
         Contract penalties, equipment abandonment costs and
           transition and duplicative costs related to system
           standardization and signage...............................     $14,250     $ 9,700
         Provision for possible loan losses..........................       5,000       5,100
         Accruals for severance and change of control payments.......      10,600       3,500
         Investment banking, legal and accounting fees...............       8,600       3,250
                                                                          -------     -------
         Total.......................................................     $38,450     $21,550
                                                                          =======     =======
</TABLE>
 
(20) Basic earnings per share was based upon the average shares listed below:
 
   
<TABLE>
<CAPTION>
                                          FOR THE THREE MONTHS
                                             ENDED MARCH 31             FOR THE YEAR ENDED DECEMBER 31
                                        -------------------------   ---------------------------------------
                                           1998          1997          1997          1996          1995
                                        -----------   -----------   -----------   -----------   -----------
<S>                                     <C>           <C>           <C>           <C>           <C>
MBI average shares as reported........  132,778,433   114,862,128   121,933,113   115,938,311   115,754,877
Firstbank average shares..............   15,844,163    15,443,916    15,599,571    15,478,554    15,502,544
Exchange Ratio........................       0.8308        0.8308        0.8308        0.8308        0.8308
MBI equivalent average shares.........   13,163,331    12,830,805    12,960,124    12,859,583    12,879,514
                                        -----------   -----------   -----------   -----------   -----------
Less treasury share repurchases in
  conjunction with Firstbank
  acquisition.........................   (1,378,614)   (1,379,980)   (1,379,980)   (1,379,980)   (1,379,980)
Shares of MBI Common Stock issued in
  the Roosevelt acquisition...........                 18,948,884    18,948,884
Less effect of shares of MBI shares
  issued in the Roosevelt acquisition
  in the second half of 1997..........                               (9,474,442)
CBT average shares....................    7,863,041     7,624,217     7,862,848     7,873,182     7,928,155
CBT Exchange Ratio....................       0.6513        0.6513        0.6513        0.6513        0.6513
                                        -----------   -----------   -----------   -----------   -----------
MBI equivalent average shares.........    5,121,199     4,965,653     5,121,073     5,127,803     5,163,607
Less treasury share repurchases in
  conjunction with CBT acquisition....     (535,237)     (535,358)     (535,358)     (535,358)     (535,358)
                                        -----------   -----------   -----------   -----------   -----------
Average shares outstanding for basic
  earnings per share..................  149,149,112   149,692,132   147,573,414   132,010,359   131,882,660
                                        ===========   ===========   ===========   ===========   ===========
</TABLE>
    
 
     Diluted earnings per share was based upon the average shares below:
 
   
<TABLE>
<CAPTION>
                                          FOR THE THREE MONTHS
                                             ENDED MARCH 31             FOR THE YEAR ENDED DECEMBER 31
                                        -------------------------   ---------------------------------------
                                           1998          1997          1997          1996          1995
                                        -----------   -----------   -----------   -----------   -----------
<S>                                     <C>           <C>           <C>           <C>           <C>
MBI diluted shares as reported........  135,250,283   116,831,720   124,338,414   117,789,773   118,059,213
MBI equivalent average shares for
  Firstbank acquisition...............   13,163,331    12,830,805    12,960,124    12,859,583    12,879,514
Less treasury share repurchases in
  conjunction with Firstbank
  acquisition.........................   (1,378,614)   (1,379,980)   (1,379,980)   (1,379,980)   (1,379,980)
MBI equivalent average shares for
  Firstbank dilutive stock options....      261,926       219,577       246,677       185,452       178,084
Shares of MBI Common Stock issued in
  the Roosevelt acquisition...........                 18,948,884    18,948,884
</TABLE>
    
 
                                       53
<PAGE>   65
 
   
<TABLE>
<CAPTION>
                                          FOR THE THREE MONTHS
                                             ENDED MARCH 31             FOR THE YEAR ENDED DECEMBER 31
                                        -------------------------   ---------------------------------------
                                           1998          1997          1997          1996          1995
                                        -----------   -----------   -----------   -----------   -----------
<S>                                     <C>           <C>           <C>           <C>           <C>
Less effect of MBI shares issued in
  the Roosevelt acquisition in the
  second half of 1997.................                               (9,474,442)
MBI equivalent average shares for CBT
  acquisition.........................    5,121,199     4,965,653     5,121,073     5,127,803     5,163,607
Less treasury share repurchases in
  conjunction with CBT acquisition....     (535,237)     (535,358)     (535,358)     (535,358)     (535,358)
MBI equivalent average shares for CBT
  dilutive stock options..............       95,365       170,558        40,918        33,418        34,236
                                        -----------   -----------   -----------   -----------   -----------
Average shares outstanding for diluted
  earnings per share..................  151,978,253   152,051,859   150,266,310   134,080,691   134,399,316
                                        ===========   ===========   ===========   ===========   ===========
</TABLE>
    
 
                                       54
<PAGE>   66
 
                            DESCRIPTION OF FIRSTBANK
 
     Firstbank is a corporation organized under the laws of Delaware. With its
principal offices in Springfield, Illinois, Firstbank owns all of the
outstanding capital stock of eight banking institutions which offer depository,
investment, loan and trust services at 42 offices throughout central,
southwestern and southern Illinois and five banking offices in Missouri.
 
     Illinois Banks.  Central Bank, headquartered in Fairview Heights, operates
22 banking locations in the St. Louis Metro East market and southern Illinois;
Central National Bank of Mattoon operates 4 banking offices in east central
Illinois; Elliott State Bank operates 4 banking offices in the central Illinois
community of Jacksonville; Farmers and Merchants Bank of Carlinville operates a
single location in this central Illinois community; First National Bank of
Central Illinois operates 7 banking offices in Springfield and 2 in
Bloomington/Normal; and First Trust & Savings Bank operates 2 banking offices in
the central Illinois community of Taylorville.
 
     Missouri Banks.  Colonial Bank, headquartered in Des Peres, operates 2
banking offices in that St. Louis metropolitan community and one office in
nearby Wildwood; Duchesne Bank headquartered in the St. Louis metropolitan
community of St. Peters, operates one banking office in St. Peters and one in
nearby St. Charles.
 
     Firstbank also operates FFG Investments Inc., a registered securities
broker/dealer. Originally involved in full-service brokerage activities, this
subsidiary primarily provided discount brokerage and trade execution services
from its Springfield office during 1997.
 
     In July, 1994, Firstbank organized a state-chartered trust company called
FFG Trust, Inc. Headquartered in Springfield, Illinois, FFG Trust handles
company-wide corporate trust business and agricultural services. The trust
company also provides operational support to the affiliate banks for their
personal trust activities.
 
     On January 2, 1997, Firstbank purchased certain assets of Zemenick &
Walker, Inc., a registered investment advisory firm headquartered in St. Louis,
Missouri. During 1997 a Springfield, Illinois office was opened to allow
Firstbank customers easier access to its unique non-discretionary investment
advisory services.
 
     Firstbank is registered with and subject to regulation by the Federal
Reserve Board. Each of Firstbank's non-bank subsidiaries is also subject to
regulation by the Federal Reserve Board. The subsidiary state-chartered banks
are subject to regulation and supervision by the banking regulators in the
states in which the banking units are chartered. The subsidiary national banks
are subject to regulation and supervision by the Office of the Comptroller of
the Currency. All subsidiary banks are subject to regulation by and are insured
by the Federal Deposit Insurance Corporation.
 
     The principal executive offices of Firstbank are located at 205 South Fifth
Street, Springfield, Illinois 62701, telephone (217) 753-7543. Firstbank
maintains a web page at http://www.fbic.com. for further information concerning
Firstbank, see "summary information-business of Firstbank," "The Merger," "Pro
Forma Financial Information" and "Incorporation of Certain Information by
Reference."
 
                        INFORMATION REGARDING MBI STOCK
 
DESCRIPTION OF MBI COMMON STOCK AND ATTACHED PREFERRED SHARE PURCHASE RIGHTS
 
   
     General.  MBI has 400,000,000 authorized shares of MBI Common Stock and
5,000,000 authorized shares of preferred stock, no par value ("MBI Preferred
Stock"). At April 30, 1998, MBI had 133,225,523 shares of MBI Common Stock
issued and outstanding and no shares of MBI Preferred Stock issued and
outstanding. Under the Missouri Law, the MBI Board may generally approve the
issuance of authorized shares of MBI Common Stock and MBI Preferred Stock
without shareholder approval.
    
 
     The MBI Board is also authorized to fix the number of shares and determine
the designation of any series of MBI Preferred Stock and to determine or alter
the rights, preferences, privileges and restrictions granted to or imposed upon
any series of MBI Preferred Stock. The MBI Board has designated and reserved
2,000,000 shares of Series A Junior Participating Preferred Stock pursuant to
MBI's Rights Plan described below.
 
                                       55
<PAGE>   67
 
     The existence of a substantial number of unissued and unreserved shares of
MBI Common Stock and undesignated shares of MBI Preferred Stock may enable the
MBI Board to issue shares to such persons and in such manner as may be deemed to
have an antitakeover effect.
 
     Dividends.  The holders of the MBI Common Stock are entitled to share
ratably in dividends when, as and if declared by the MBI Board from funds
legally available therefor, after full cumulative dividends have been paid or
declared, and funds sufficient for the payment thereof set apart, on all series
of MBI Preferred Stock ranking superior as to dividends to the MBI Common Stock.
 
     The MBI Board intends to maintain its present policy of paying quarterly
cash dividends on the MBI Common Stock when justified by the financial condition
of MBI and its subsidiaries. The declaration and amount of future dividends will
depend on circumstances existing at the time, including MBI's earnings,
financial condition and capital requirements as well as regulatory limitations,
note and indenture provisions and such other factors as the MBI Board may deem
relevant. The payment of dividends to MBI by subsidiary banks is subject to
extensive regulation by various state and federal regulatory agencies. See
"SUPERVISION AND REGULATION."
 
     Voting Rights.  Each holder of MBI Common Stock has one vote for each share
held on matters presented for consideration by the shareholders, except that, in
the election of directors, such shareholders presently have cumulative voting
rights which entitle each such shareholder to the number of votes which equals
the number of shares held by the shareholder multiplied by the number of
directors to be elected. All such cumulative votes may be cast for one candidate
for election as a director or may be distributed among two or more candidates.
 
     Preemptive Rights.  The holders of MBI Common Stock have no preemptive
right to acquire any additional unissued shares or treasury shares of MBI.
 
     Liquidation Rights.  In the event of liquidation, dissolution or winding-up
of MBI, whether voluntary or involuntary, the holders of MBI Common Stock will
be entitled to share ratably in any of its assets or funds that are available
for distribution to its shareholders after the satisfaction of its liabilities
(or after adequate provision is made therefor) and after preferences on any
outstanding MBI Preferred Stock.
 
     Assessment and Redemption.  Shares of MBI Common Stock issuable in the
Merger will be, when issued, fully paid and nonassessable. Such shares do not
have any redemption provisions.
 
   
     Preferred Share Purchase Rights Plan.  One Right is attached to each share
of MBI Common Stock. The Rights trade automatically with shares of MBI Common
Stock, and become exercisable and will trade separately from the MBI Common
Stock (i) on the tenth day after public announcement, or notice to MBI, that a
person or group has acquired, or has the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of MBI Common Stock, or (ii) upon
commencement or announcement, or notice to MBI, of intent to make a tender offer
for 20% or more of the outstanding shares of MBI Common Stock, in either case,
without prior written consent of a majority of the MBI Board. When exercisable,
each Right will entitle the holder to buy 1/100 of a share of Series A Junior
Participating Preferred Stock at an exercise price of $100 per Right. In the
event a person or group acquires beneficial ownership of 20% or more of MBI
Common Stock, holders of Rights (other than the acquiring person or group) may
purchase MBI Common Stock having a market value of twice the then current
exercise price of each Right. If MBI is acquired by any person or group after
the Rights become exercisable, each Right will entitle its holder to purchase
stock of the acquiring company having a market value of twice the current
exercise price of each Right. The Rights are designed to protect the interests
of MBI and its shareholders against coercive takeover tactics. The purpose of
the Rights is to encourage potential acquirers to negotiate with the MBI Board
prior to attempting a takeover and to give the MBI Board leverage in negotiating
on behalf of all shareholders the terms of any proposed takeover. The Rights may
deter certain takeover proposals. The Rights, which can be redeemed by the MBI
Board in certain circumstances, expire by their terms on June 3, 1998. On May
20, 1998, the MBI Board approved a new rights agreement pursuant to which the
Rights will be replaced with rights to purchase substantially similar
participating preferred stock. The new rights agreement will take effect upon
expiration of the existing agreement.
    
 
                                       56
<PAGE>   68
 
     Classification of the MBI Board.  The MBI Board is divided into three
classes, and the directors are elected by classes to three-year terms, so that
one of the three classes of the directors of MBI will be elected at each annual
meeting of the shareholders. While this provision promotes stability and
continuity of the MBI Board, classification of the MBI Board may also have the
effect of decreasing the number of directors that could otherwise be elected at
each annual meeting of shareholders by a person who obtains a controlling
interest in the MBI Common Stock and thereby could impede a change in control of
MBI. Because fewer directors will be elected at each annual meeting, such
classification also will reduce the effectiveness of cumulative voting as a
means of establishing or increasing minority representation on the MBI Board.
 
     Other Matters.  MBI's Restated Articles of Incorporation and By-Laws also
contain provisions which: (i) require the affirmative vote of holders of at
least 75% of the voting power of all of the outstanding shares of MBI entitled
to vote in the election of directors to remove a director or directors without
cause; (ii) require the affirmative vote of the holders of at least 75% of the
voting power of all shares of the outstanding capital stock of MBI to approve
certain "business combinations" with "interested parties" unless at least
two-thirds of the MBI Board first approve such business combinations; and (iii)
require an affirmative vote of at least 75% of the voting power of all shares of
the outstanding capital stock of MBI for the amendment, alteration, change or
repeal of any of the above provisions unless at least two-thirds of the MBI
Board first approve such an amendment, alteration, change or repeal. MBI's
Restated Articles of Incorporation also require the MBI Board, in considering
any business combination, to give due consideration to all factors that the MBI
Board may consider relevant, including the effects of the proposed transaction
on the depositors and customers of MBI and its subsidiaries, on the communities
and geographic areas served by MBI and its subsidiaries and on any of their
businesses and properties, as well as the adequacy of the consideration offered
in the proposed transaction in relation to the current market price of MBI's
outstanding securities and to the value of MBI in a freely negotiated
transaction and the estimate of the MBI Board of the future value of MBI. Such
provisions may be deemed to have an antitakeover effect.
 
RESTRICTIONS ON RESALE OF MBI COMMON STOCK BY AFFILIATES; AFFILIATE AGREEMENTS
 
     The issuance of shares of MBI Common Stock to Firstbank Stockholders upon
consummation of the Merger has been registered under the Securities Act. Such
securities may be traded freely without restriction by those stockholders who
are not deemed to be "affiliates" (as that term is defined in the rules
promulgated under the Securities Act) of Firstbank or MBI.
 
     Under Rule 145 of the Securities Act, all of the executive officers and
directors of Firstbank, including the Supporting Stockholders, by virtue of
being affiliates of Firstbank, as well as any person who becomes an affiliate of
MBI following the Merger, will be limited in their ability to resell the MBI
Common Stock received in the Merger, and will be able to resell such stock only
as permitted by Rule 145 under the Securities Act or as otherwise permitted
thereunder.
 
     Commission guidelines regarding qualifying for the "pooling-of-interests"
method of accounting also limit sales of shares of MBI Common Stock by
affiliates. Commission guidelines indicate that the pooling-of-interests method
of accounting generally will not be challenged on the basis of sales by
affiliates if such affiliates do not dispose of any of the shares of the
corporation that they own or shares of a corporation that they receive in
connection with a merger during the period beginning 30 days before consummation
of the merger and ending when financial results covering at least 30 days of
post-merger operations of the combined companies have been published.
 
     Firstbank has agreed in the Merger Agreement to use all reasonable efforts
to cause each person who is an affiliate of Firstbank (for purposes of both Rule
145 under the Securities Act and for purposes of qualifying the Merger for
pooling-of-interests accounting treatment) to deliver to MBI a written agreement
intended to ensure compliance with the Securities Act and to preserve the
ability of the Merger to be accounted for as a pooling-of-interests. MBI has
agreed in the Merger Agreement to use all reasonable efforts to publish, as
promptly as practicable but in no event later than 90 days after the end of the
first month after the Effective Time in which there are at least 30 days of
post-Merger combined operations, combined sales and net income
 
                                       57
<PAGE>   69
 
figures as contemplated by and in accordance with the terms of Accounting Series
Release No. 135 issued by the Commission.
 
     The shares of MBI Common Stock to be received by affiliates of Firstbank in
the Merger will be legended as to the restrictions imposed upon resale of such
stock.
 
COMPARISON OF THE RIGHTS OF SHAREHOLDERS OF MBI AND STOCKHOLDERS OF FIRSTBANK
 
     MBI is incorporated under the laws of the State of Missouri. Firstbank is
organized under the laws of the State of Delaware. The rights of MBI's
shareholders are governed by MBI's Restated Articles of Incorporation and
By-Laws and the Missouri Law. The rights of Firstbank's stockholders are
governed by Firstbank's Certificate of Incorporation and By-Laws and the
Delaware Law. The rights of Firstbank Stockholders who receive shares of MBI
Common Stock in the Merger will thereafter be governed by MBI's Restated
Articles of Incorporation and By-Laws and by the Missouri Law. The material
rights of such stockholders, and, where applicable, the differences between the
rights of MBI shareholders and Firstbank Stockholders, are summarized below. The
summary is qualified in its entirety by reference to the Missouri Law, the
Delaware Law, the Restated Articles of Incorporation and the By-Laws of MBI and
the Certificate of Incorporation and By-Laws of Firstbank.
 
     Preferred Share Purchase Rights Plan.  As described above under
"--Description of MBI Common Stock and Attached Preferred Share Purchase
Rights--Preferred Share Purchase Rights Plan," MBI Common Stock has attached
Rights, which may deter certain takeover proposals. Firstbank does not have a
shareholder rights plan.
 
     Supermajority Provisions.  MBI's Restated Articles of Incorporation and
By-Laws contain provisions requiring a supermajority vote of the shareholders of
MBI to approve certain proposals. Under both MBI's Restated Articles of
Incorporation and By-Laws, removal by the shareholders of the entire MBI Board
or any individual director from office without cause requires the affirmative
vote of not less than 75% of the total votes entitled to be voted at a meeting
of shareholders called for the election of directors. However, if less than the
entire MBI Board is to be so removed without cause, no individual director may
be so removed if the votes cast against such director's removal would be
sufficient to be elect such director if then cumulatively voted at an election
of the class of directors of which such director is a part. Amendment by the
shareholders of MBI's Restated Articles of Incorporation or By-Laws relating to
(i) the number or qualification of directors; (ii) the classification of the MBI
Board; (iii) the filling of vacancies on the MBI Board; or (iv) the removal of
directors, requires the affirmative vote of not less than 75% of the total votes
of MBI's then outstanding shares of capital stock entitled to vote at a meeting,
voting together as a single class, unless such amendment has previously been
expressly approved by at least two-thirds of the MBI Board, in which case, the
only required vote of stockholders is the vote provided for by the Delaware Law
or otherwise.
 
     The provisions of the Firstbank Certificate with respect to: (i) the
requirement that stockholder action need not take place at a meeting; (ii)
calling special meetings; (iii) removal of directors; (iv) classification of the
Board of Directors; and (v) amendment of the Certificate of Incorporation are
all subject to repeal or amendment only upon approval of the holders of at least
70 percent of the voting stock. All other provisions of the Firstbank
Certificate can be amended by the holders of a majority of the outstanding
Firstbank voting stock, unless a different vote is required by applicable law.
 
     The Restated Articles of Incorporation of MBI provide that, in addition to
any shareholder vote required under the Missouri Law, the affirmative vote of
the holders of not less than 75% of the total votes to which all of the then
outstanding shares of capital stock of MBI are entitled, voting together as a
single class (the "Voting Stock"), shall be required for the approval of any
Business Combination. A "Business Combination" is defined generally to include
sales, exchanges, leases, transfers or other dispositions of assets, mergers or
consolidations, issuances of securities, liquidations or dissolutions of MBI,
reclassifications of securities or recapitalizations of MBI, involving MBI on
the one hand, and an Interested Shareholder or an affiliate of an Interested
Shareholder (as defined in MBI's Restated Articles) on the other hand. If,
however, at least two-thirds of the MBI Board approve the Business Combination,
such Business Combination shall require only the vote of shareholders as
provided by the Missouri Law or otherwise. The amendment of the provisions of
MBI's
 
                                       58
<PAGE>   70
 
Restated Articles of Incorporation relating to the approval of Business
Combinations requires the affirmative vote of the holders of at least 75% of the
Voting Stock unless such amendment has previously been approved by at least
two-thirds of the MBI Board. Firstbank does not have a similar provision in
either its Certificate of Incorporation or its By-Laws.
 
     The provisions of MBI's Restated Articles of Incorporation and By-Laws
requiring a supermajority vote may have the effect of discouraging takeover
attempts that do not have MBI Board approval.
 
     With certain exceptions, Section 203 of the Delaware General Corporation
Law (the "DGCL") prohibits a corporation from engaging in any Business
Combination with any Interested Stockholder for a period of three years
following the time that such stockholder became an Interested Stockholder,
unless the Business Combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of two-thirds of the outstanding voting stock
which is not owned by the Interested Stockholder. Delaware law defines a
"Business Combination" as: (i) any merger or consolidation of the corporation or
any majority-owned subsidiary of the corporation with (A) the Interested
Stockholder or (B) with any other entity if the Business Combination is caused
by the Interested Stockholder; (ii) any sale, lease exchange, mortgage, pledge,
transfer or other disposition, except proportionately as a stockholder of the
corporation, to or with the Interested Stockholder; (iii) any transaction which
results in the issuance or transfer by the corporation or any majority-owned
subsidiary of the corporation to the Interested Stockholder of any stock of the
corporation or of such subsidiary, except pursuant to (A) the exercise, exchange
or conversion of securities, (B) a merger under Section 251(g) of the DGCL, (C)
a dividend or distribution made pro rata, (D) an exchange offer, or (E) any
issuance or transfer of stock that does not increase the Interested
Stockholder's proportionate share of the common stock of the corporation; (iv)
any transaction which has the effect of increasing the Interested Stockholder's
proportionate share of the stock of the corporation; or (v) any receipt by the
Interested Stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits. "Interested Stockholder" means, with
certain exceptions, any person that (i) is the owner of 15% or more of the
outstanding voting stock of the corporation, or (ii) is an affiliate or
associate of the corporation.
 
     Voting for Directors.  Cumulative voting entitles each shareholder to cast
an aggregate number of votes equal to the number of voting shares held,
multiplied by the number of directors to be elected. Each shareholder may cast
all such votes for one nominee or distribute them among two or more nominees,
thus permitting holders of less than a majority of the outstanding shares of
voting stock to achieve board representation. Where cumulative voting is not
permitted, holders of a majority of outstanding shares of voting stock of a
corporation may elect the entire board of directors of such corporation, thereby
precluding the election of any directors by the holders of less than a majority
of the outstanding shares of voting stock. Both MBI's By-Laws and Firstbank's
Certificate provide for cumulative voting.
 
     Classified Board.  As described under "--Description of MBI Common Stock
and Attached Preferred Share Purchase Rights--Classification of the MBI Board,"
the MBI Board is divided into three classes of directors, with each class being
elected to a staggered three-year term. By reducing the number of directors to
be elected in any given year, the existence of a classified board diminishes the
benefits of the cumulative voting rights to minority shareholders of MBI.
Firstbank also has a classified board of directors with three classes of
directors and its Certificate of Incorporation, as noted above, permits
cumulative voting in the election of directors.
 
     Action by Shareholders or Stockholders Without a Meeting.  Under the
Missouri Law and the Delaware Law, written action of stockholders in lieu of a
meeting is permitted unless the articles or certificate of incorporation or
by-laws of the corporation provide otherwise. MBI's By-Laws provide that any
action which must or may be taken at a meeting of the shareholders, may be taken
without a meeting of the shareholders if a consent in writing, setting forth the
action so taken, is signed by all of the shareholders. Firstbank's Certificate
of Incorporation provides that Firstbank shareholders may take action by written
consent only if such written consent shall have been 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.
 
                                       59
<PAGE>   71
 
     Special Meetings.  MBI's By-Laws provide that special meetings of
stockholders, for any purpose, may be called by the Chairman of the Board or by
the MBI Board at any time in their sole discretion. Firstbank's By-Laws provide
that special meetings of Firstbank Stockholders may be called only by the
directors or by any officer instructed by the directors to call a special
meeting.
 
     Anti-takeover Statutes.  The Missouri Law contains certain provisions
applicable to Missouri corporations which may be deemed to have an anti-takeover
effect. Such provisions include Missouri's business combination statute and the
control share acquisition statute.
 
     The Missouri business combination statute protects domestic corporations
from hostile takeovers (and action following such a takeover) by prohibiting
certain transactions once an acquiror has gained a significant holding in the
company. The statute restricts certain "Business Combinations" between a
corporation and an "Interested Shareholder" or affiliates of the Interested
Shareholder for a period of five years unless certain conditions are met. A
"Business Combination" includes a merger or consolidation, certain sales,
leases, exchanges, pledges and similar dispositions of corporate assets or stock
and certain reclassifications and recapitalizations. An "Interested Shareholder"
includes any person or entity which beneficially owns or controls 20% or more of
the outstanding voting shares of the corporation.
 
     During the initial five-year restricted period, no Business Combination may
occur unless such Business Combination or the transaction in which an Interested
Shareholder becomes an Interested Shareholder is approved by the board of
directors of the corporation. Business Combinations may occur following such
five-year period if: (i) prior to the stock acquisition by the Interested
Shareholder, the board of directors approves the transaction in which the
Interested Shareholder became an Interested Shareholder or approves the Business
Combination in question; (ii) the holders of a majority of the outstanding
voting stock, other than stock owned by the Interested Shareholder, approve the
Business Combination; or (iii) the Business Combination satisfies certain
detailed fairness and procedural requirements.
 
     The Missouri Law exempts from its provisions: (i) corporations not having a
class of voting stock registered under Section 12 of the Exchange Act; (ii)
corporations which adopted provisions in their articles of incorporation or
by-laws expressly electing not to be covered by the statute; and (iii) certain
circumstances in which a shareholder inadvertently becomes an Interested
Shareholder. MBI's Restated Articles of Incorporation and By-Laws were not
amended to "opt out" of the Missouri business combination statute.
 
     The Missouri Law also contains a "Control Share Acquisition Statute" which
provides that an "Acquiring Person" who, after any acquisition of shares of a
publicly traded corporation, has the voting power, when added to all shares of
the same corporation already owned or controlled by the Acquiring Person, to
exercise or direct the exercise of: (i) 20% or more but less than 33 1/3%, (ii)
33 1/3% or more but less than a majority or (iii) a majority, of the voting
power of outstanding stock of such corporation, must obtain shareholder approval
for the purchase of the "Control Shares." If approval is not given, the
Acquiring Person loses the right to vote the Control Shares. The statute
prohibits an Acquiring Person from voting its shares unless certain disclosure
requirements are met and the retention or restoration of voting rights is
approved by both: (i) a majority of the outstanding voting stock, and (ii) a
majority of the outstanding voting stock after exclusion of "Interested Shares."
"Interested Shares" are defined as shares owned by the Acquiring Person, by
directors who are also employees, and by officers of the corporation.
Shareholders are given dissenters' rights with respect to the vote on control
share acquisitions and may demand payment of the fair value of their shares by
following certain procedures set forth in the control share acquisition statute.
 
     A number of acquisitions of shares are deemed not to constitute control
share acquisitions, including good faith gifts, transfers pursuant to wills,
purchases pursuant to an issuance of shares by the corporation, mergers
involving the corporation which satisfy the other requirements of the Missouri
Law, transactions with a person who owned a majority of the voting power of the
corporation within the prior year, or purchases from a person who as previously
satisfied the provisions of the control share acquisition statute so long as the
transaction does not result in the purchasing party having voting power after
the purchase in a percentage range (such ranges are as set forth in the
immediately preceding paragraph) beyond the range for which the selling party
previously satisfied the provisions of the statute. Additionally, a corporation
may exempt itself from application of the statute by including a provision in
its articles of incorporation or by-laws expressly electing
 
                                       60
<PAGE>   72
 
not to be covered by the statute. MBI's Restated Articles of Incorporation and
By-Laws do not "opt out" of the Control Share Acquisition Statute.
 
     The Delaware Law contains a business combination statute similar to that
contained in the Missouri Law. See "--Supermajority provisions."
 
     The Missouri Law imposes a longer prohibition period on transactions with
Interested Persons (five years) than the Delaware Law (three years), thereby
potentially increasing the period during which a hostile takeover may be
frustrated. In addition, the Delaware Law, unlike its Missouri counterpart, does
not apply if the Interested Person obtains at least 85% of the corporation's
voting stock upon consummation of the transactions which resulted in the
stockholder becoming an Interested Person. Thus, a person acquiring at least 85%
of the corporation's voting stock could circumvent the defensive provisions of
the Delaware Law while being unable to do so under the Missouri Law.
 
     The Delaware Law does not contain a control share acquisition statute
similar to that contained in the Missouri Law.
 
     Dissenters' Rights.  Under the Missouri Law, a shareholder of any
corporation which is a party to a merger or consolidation, or which sells all or
substantially all of its assets, has the right to dissent from such corporate
action and to demand payment of the value of his shares. Under the Delaware Law,
stockholders of a corporation are entitled to certain appraisal rights upon the
consolidation or merger of the corporation; however, under the Delaware law (but
not the Missouri Law), stockholders are not entitled to appraisal rights in
circumstances in which the stockholder seeking to exercise such rights owns
shares in a widely held, publicly traded corporation and is to receive, or
continue to hold after the transaction under which such shareholder is seeking
to exercise dissenters' rights, shares of a widely held, publicly traded
corporation. In addition, the procedures and the filing deadlines applicable to
dissenters' rights under the Missouri Law are somewhat different than those
applicable in appraisal rights proceedings under the Delaware Law.
 
     Advance Notice Requirements for Nominations of Directors and Proposals for
New Business at Annual Meetings of Stockholders. MBI's By-Laws provide that a
shareholder may make nominations of persons for election to the MBI Board
providing notice in writing to MBI not less than 30 days nor more than 60 days
prior to the meeting; however, in the event that less than 40 days' notice of
the date of the meeting is given to the shareholders, such notice of nomination
must be received by MBI no later than the tenth day following the day on which
notice of the meeting was provided to shareholders. MBI's By-Laws provide that a
shareholder desiring to present a proposal at an annual meeting must provide
notice of such proposal in writing to the Secretary of MBI not less than 30 days
nor more than 60 days prior to the meeting; however, in the event that less than
40 days' notice of the date of the meeting is given to the shareholders, such
notice of proposal must be received by MBI no later than the tenth day following
the day on which notice of the meeting was provided to shareholders. The notice
of proposal must contain a brief description of the proposal and the reasons for
the proposal, the shareholder's name and address and the class and number of
shares beneficially owned by the shareholder and any interest of the shareholder
in the business proposed to be conducted. The presentation of a proposal at an
annual meeting will not be permitted if the shareholder proponent does not
follow the procedures described above.
 
     Firstbank's By-Laws provide that Firstbank Stockholders may make
nominations for the election of directors by delivering written notice of such
nominations to the Secretary of Firstbank at least 14 days prior to the date of
the annual meeting of stockholders; provided, however, that if less than 21 days
notice of the meeting is given to stockholders such written notice shall be
delivered or mailed, as prescribed, not later than the close of business on the
seventh day following the day on which notice of the meeting has been mailed to
stockholders.
 
     Stockholders' Right to Inspect.  Under the Delaware Law, any stockholder
may inspect the corporation's stock ledger, stockholder list and other books and
records for any proper purpose. A "proper purpose" is defined as a purpose
reasonably related to such person's interest as a stockholder. The Delaware Law
specifically provides that a stockholder may appoint an agent for the purpose of
examining the stock ledger, list of stockholders or other books and records of
the corporation. A stockholder may apply to the Delaware Court
 
                                       61
<PAGE>   73
 
of Chancery to compel inspection in the event the stockholder's request to
examine the books and records is refused. In general, the corporation has the
burden of proving an improper purpose where a stockholder requests to examine
the stockholder ledger or stockholder list and otherwise complies with the
procedures set forth in the statute. The right of stockholders to inspect under
the Missouri Law is similar to that of stockholders under the Delaware Law.
Neither the Missouri Law nor Missouri case law, however, provides any specific
guidance as to whether a shareholder may appoint an agent for the purpose of
examining books and records or the extent to which a shareholder must have a
"proper purpose" for inspection. Accordingly, in a given situation a shareholder
of a Missouri corporation may be provided with less guidance as to the scope of
his or her ability to inspect the books and records of the corporation than a
shareholder of a Delaware corporation.
 
     Size of Board of Directors.  As permitted under the Missouri Law, the
number of members of the MBI Board is set forth in MBI's By-Laws (currently 19)
which provide that the number of directors may be fixed from time to time at not
less than 12 nor more than 24 by an amendment of the By-Laws or by a resolution
of the MBI Board, in either case, adopted by the vote or consent of at least
two-thirds of the number of directors then authorized under MBI's ByLaws.
Similar to the Missouri Law, the Delaware Law provides that a corporation may
fix the number of directors in its Certificate of Incorporation or By-Laws. The
By-Laws of Firstbank provide that the number of directors shall be no more than
25, as fixed exclusively by the Firstbank Board.
 
                           SUPERVISION AND REGULATION
 
GENERAL
 
     As a bank holding company, MBI is subject to regulation under the BHCA and
its examination and reporting requirements. Under the BHCA, a bank holding
company may not, directly or indirectly, acquire the ownership or control of
more than 5% of the voting shares or substantially all of the assets of any
company, including a bank or savings and loan association, without the prior
approval of (or, in the case of certain non-bank companies, prior notice to) the
Federal Reserve Board. In addition, bank holding companies are generally
prohibited under the BHCA from engaging in nonbanking activities, subject to
certain exceptions.
 
     MBI and its subsidiaries are subject to supervision and examination by
applicable federal and state banking and other agencies. The earnings of MBI's
subsidiaries, and therefore the earnings of MBI, are affected by general
economic conditions, management policies and the legislative and governmental
actions of various Regulatory Authorities, including the Federal Reserve Board,
the Office of Thrift Supervision (the "OTS"), the Federal Deposit Insurance
Corporation (the "FDIC"), the Comptroller of the Currency (the "Comptroller")
and various state financial institution regulatory agencies. In addition, there
are numerous governmental requirements and regulations that affect the
activities of MBI and its subsidiaries.
 
CERTAIN TRANSACTIONS WITH AFFILIATES
 
     There are various legal restrictions on the extent to which a bank holding
company such as MBI and certain of its nonbank subsidiaries can borrow or
otherwise obtain credit from its bank subsidiaries. In general, these
restrictions require that any such extensions of credit must be on
nonpreferential terms and secured by designated amounts of specified collateral
and be limited, as to any one of the holding company or such nonbank
subsidiaries, to 10% of the lending bank's capital stock and surplus, and as to
the holding company and all such nonbank subsidiaries in the aggregate, to 20%
of such capital stock and surplus.
 
PAYMENT OF DIVIDENDS
 
     MBI is a legal entity separate and distinct from its wholly owned financial
institutions and other subsidiaries. The principal source of MBI's revenues is
dividends from its financial institution subsidiaries. Various federal and state
statutory provisions limit the amount of dividends the affiliate financial
institution can pay to MBI without regulatory approval. The approval of federal
and state bank regulatory agencies, as appropriate, is required for any dividend
if the total of all dividends declared in any calendar year would exceed
 
                                       62
<PAGE>   74
 
the total of the institution's net profits, as defined by regulatory agencies,
for such year combined with its retained net profits for the preceding two
years. In addition, a national bank or a state member bank may not pay a
dividend in an amount greater than its net profits then on hand. The payment of
dividends by any financial institution subsidiary may also be affected by other
factors, such as the maintenance of adequate capital.
 
     In addition, if, in the opinion of the applicable federal bank regulatory
agency, a depository institution under its jurisdiction is engaged in or is
about to engage in an unsafe and unsound practice (which, depending on the
financial condition of the institution, could include the payment of dividends),
such agency may require, after notice and hearing, that the institution in
question cease and desist from such practice. The Comptroller has indicated that
paying dividends that would deplete a depository institution's capital base to
an inadequate level would be an unsafe and unsound practice. Moreover, an
insured depository institution may not pay any dividends if such payment would
cause it to become undercapitalized or once it is undercapitalized. See
"--Capital Adequacy." Also, the federal bank regulatory agencies have issued
policy statements which provide that depository institutions and their holding
companies should generally pay dividends only out of current operating earnings.
 
CAPITAL ADEQUACY
 
     The Federal Reserve Board has issued standards for measuring capital
adequacy for bank holding companies. These standards are designed to provide
risk-responsive capital guidelines and to incorporate a consistent framework for
use by financial institutions operating in major international financial
markets. The banking regulators have issued standards for banks that are similar
to, but not identical with, the standards for bank holding companies.
 
     In general, the risk-related standards require financial institutions and
financial institution holding companies to maintain certain capital levels based
on "risk-adjusted" assets, so that categories of assets with potentially higher
credit risk will require more capital backing than categories with lower credit
risk. In addition, banks and bank holding companies are required to maintain
capital to support off-balance-sheet activities such as loan commitments.
 
   
     Under the risk-based capital standard, the minimum consolidated ratio of
total capital to risk-adjusted assets (including certain off-balance sheet
items, such as standby letters of credit) required by the Federal Reserve Board
for bank holding companies is currently 8%. At least one-half of the total
capital must be comprised of common equity, retained earnings, qualifying
noncumulative perpetual preferred stock, a limited amount of qualifying
cumulative perpetual preferred stock and minority interest in the equity
accounts of consolidated subsidiaries, plus certain items such as goodwill and
certain other intangible assets ("Tier I Capital"). The remainder may consist of
qualifying hybrid capital instruments, perpetual debt, mandatory convertible
debt securities, a limited amount of subordinated debt, preferred stock that
does not qualify as Tier I Capital and a limited amount of loan and lease loss
reserves. As of March 31, 1998, MBI's Tier I Capital and total capital to risk
adjusted assets ratios were 8.60% and 11.64%, respectively. At March 31, 1998,
on a pro forma combined basis after giving effect to the Merger, MBI's estimated
consolidated Tier I Capital and total capital to risk-adjusted assets ratios
would be 8.63% and 11.58%, respectively.
    
 
     In addition to the risk-based standard, the Federal Reserve Board has
established minimum leverage ratio guidelines for bank holding companies. These
guidelines provide for a minimum ratio of Tier I Capital to adjusted average
total assets less goodwill and certain other intangibles (the "Leverage Ratio")
of 3% for bank holding companies that meet certain specified criteria, including
having the highest regulatory rating. Other bank holding companies generally are
required to maintain a Leverage Ratio of at least 4% to 5%. The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above minimum supervisory levels, without significant reliance on intangible
assets.
 
     The guidelines also provide that bank holding companies experiencing
internal growth or making acquisitions are expected to maintain strong capital
positions substantially above the minimum supervisory levels without significant
reliance on intangible assets. Furthermore, the Federal Reserve Board has
indicated
 
                                       63
<PAGE>   75
 
that it will consider a "tangible Tier I Capital Leverage Ratio" (deducting all
intangibles) and other indicia of capital strength in evaluating proposals for
expansion or new activities.
 
   
     As of March 31, 1998, MBI's Leverage Ratio was 6.23%. At March 31, 1998, on
a pro forma combined basis after giving effect to the Merger, MBI's estimated
consolidated Leverage Ratio would be 6.19%.
    
 
SUPPORT OF SUBSIDIARY BANKS
 
     Under Federal Reserve Board policy, MBI is expected to act as a source of
financial strength to each subsidiary bank and to commit resources to support
each of the subsidiaries in circumstances where it may not choose to do so
absent such a policy. This support may be required at times when MBI may not
find itself able to provide it. In addition, any capital loans by MBI to any of
its subsidiaries would also be subordinate in right of payment to deposits and
certain other indebtedness of such subsidiary.
 
     Consistent with the policy regarding bank holding companies serving as a
source of financial strength for their subsidiary banks, the Federal Reserve
Board has stated that, as a matter of prudent banking, a bank holding company
generally should not maintain a rate of cash dividends unless its net income
available to common shareholders has been sufficient to fully fund the
dividends, and the prospective rate of earnings retention appears consistent
with the bank holding company's capital needs, asset quality and overall
financial condition.
 
FIRREA AND FDICIA
 
     The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") contains a cross-guarantee provision which could result in insured
depository institutions owned by MBI being assessed for losses incurred by the
FDIC in connection with assistance provided to, or the failure of, any other
insured depository institution owned by MBI. Under FIRREA, failure to meet the
capital guidelines could subject a banking institution to a variety of
enforcement remedies available to federal regulatory authorities, including the
termination of deposit insurance by the FDIC.
 
     The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") made extensive changes to the federal banking laws. FDICIA instituted
certain changes to the supervisory process, including provisions that mandate
certain regulatory agency actions against undercapitalized institutions within
specified time limits. FDICIA contains various other provisions that may affect
the operations of banks and savings institutions.
 
     The prompt corrective action provision of FDICIA requires the federal
banking regulators to assign each insured institution to one of five capital
categories ("well capitalized," "adequately capitalized" or one of three
"undercapitalized" categories) and to take progressively more restrictive
actions based on the capital categorization, as specified below. Under FDICIA,
capital requirements would include a leverage limit, a risk-based capital
requirement and any other measure of capital deemed appropriate by the federal
banking regulators for measuring the capital adequacy of an insured depository
institution. All institutions, regardless of their capital levels, are
restricted from making any capital distribution or paying any management fees
that would cause the institution to fail to satisfy the minimum levels for any
relevant capital measure.
 
     The FDIC and the Federal Reserve Board adopted capital-related regulations
under FDICIA. Under those regulations, a bank will be well capitalized if it:
(i) had a risk-based capital ratio of 10% or greater; (ii) had a ratio of Tier I
Capital to risk-adjusted assets of 6% or greater; (iii) had a ratio of Tier I
Capital to average assets of 5% or greater; and (iv) was not subject to an
order, written agreement, capital directive, or prompt corrective action
directive to meet and maintain a specific capital level for any capital measure.
An institution will be adequately capitalized if it was not "well capitalized"
and: (i) had a risk-based capital ratio of 8% or greater; (ii) had a ratio of
Tier I Capital to risk-adjusted assets of 4% or greater; and (iii) had a ratio
of Tier I Capital to average assets of 4% or greater (except that certain
associations rated "Composite 1" under the federal banking agencies' CAMEL
rating system may be adequately capitalized if their ratios of core capital to
average assets were 3% or greater). As previously discussed, all MBI subsidiary
financial institutions as of December 31, 1996 were categorized as "well
capitalized."
 
                                       64
<PAGE>   76
 
     FDICIA makes extensive changes in existing rules regarding audits,
examinations and accounting. It generally requires annual on-site, full scope
examinations by each bank's primary federal regulator. It also imposes new
responsibilities on management, the independent audit committee and outside
accountants to develop or approve reports regarding the effectiveness of
internal controls, legal compliance and off-balance-sheet liabilities and
assets.
 
DEPOSITOR PREFERENCE STATUTE
 
     Legislation enacted in August 1993 provides a preference for deposits and
certain claims for administrative expenses and employee compensation against an
insured depository institution in the liquidation or other resolution of such an
institution by any receiver. Such obligations would be afforded priority over
other general unsecured claims against such an institution, including federal
funds and letters of credit, as well as any obligation to shareholders of such
an institution in their capacity as such.
 
FDIC INSURANCE ASSESSMENTS
 
     The subsidiary depository institutions of MBI are subject to FDIC deposit
insurance assessments. The FDIC has adopted a risk-based premium schedule. Each
financial institution is assigned to one of three capital groups--well
capitalized, adequately capitalized or undercapitalized--and further assigned to
one of three subgroups within a capital group, on the basis of supervisory
evaluations by the institution's primary federal and, if applicable, state
supervisors, and on the basis of other information relevant to the institution's
financial condition and the risk posed to the applicable insurance fund. The
actual assessment rate applicable to a particular institution will, therefore,
depend in part upon the risk assessment classification so assigned to the
institution by the FDIC. See "--FIRREA and FDICIA."
 
     FIRREA, adopted in August 1989 to provide for the resolution of insolvent
savings associations, required the FDIC to establish separate deposit insurance
funds--the Bank Insurance Fund ("BIF") for banks and the Savings Association
Insurance Fund ("SAIF") for savings associations. FIRREA also required the FDIC
to set deposit insurance assessments at such levels as would cause BIF and SAIF
to reach their "designated reserve ratios" of 1.25 percent of the deposits
insured by them within a reasonable period of time. Due to low costs of
resolving bank insolvencies in the last few years, BIF reached its designated
reserve ratio in May 1995. As a result, effective January 1, 1996, the FDIC
eliminated deposit insurance assessments (except for the minimum $2,000 payment
required by law) for banks that are well capitalized and well managed and
reduced the deposit insurance assessments for all other banks. As of January 1,
1996, the SAIF had not reached the designated reserve ratio. MBI, which has
acquired substantial amounts of SAIF-insured deposits during the years from 1989
to the present, is required to pay SAIF deposit insurance premiums on these
SAIF-insured deposits.
 
     The Deposit Insurance Funds Act of 1996 (the "Funds Act"), enacted as part
of the Omnibus Appropriations Bill on September 30, 1996, required the FDIC to
take immediate steps to recapitalize the SAIF and to change the basis on which
funds are raised to make the scheduled payments on the FICO bonds issued in 1987
to replenish the Federal Savings and Loan Insurance Corporation. The new
legislation, combined with regulations issued by the FDIC immediately after
enactment of the Funds Act, provided for a special assessment in the amount of
65.7 basis points on SAIF-insured deposits held by depository institutions on
March 31, 1995 (the special assessment was required by the Funds Act to
recapitalize the SAIF to the designated reserve ratio of 1.25 percent of the
deposits insured by SAIF). Payments of this assessment were made in November
1996, but were accrued by financial institutions in the third calendar quarter
of 1996. Institutions such as MBI that have deposits insured by both the BIF and
the SAIF ("Oakar Banks") were required to pay the special assessment on 80% of
their "adjusted attributable deposit amounts" ("AADA"). In addition, for
purposes of future regular deposit insurance assessments, the AADA on which
Oakar Banks pay assessments to SAIF was also reduced by 20%. Commencing January
1, 1997, BIF insured institutions will be responsible for a portion of the
annual carrying costs of the FICO bonds. Such institutions will be assessed at
80% of the rate applicable to SAIF-insured institutions until December 31, 1999.
Effective January 1, 1997, the Funds Act also reduced ongoing SAIF deposit
insurance assessment rates to a range from $0.064 to $0.23 (from previous rates
of $0.23 to $0.31) per $100 of insured deposits and increased ongoing
 
                                       65
<PAGE>   77
 
BIF deposit insurance assessment rates to a range from $0.00 to $0.013 per $100
of insured deposits. Additionally, pursuant to the Funds Act, if the reserves in
BIF at the end of any semiannual assessment period exceed 1.25% of insured
deposits, the FDIC is required to refund the excess to the BIF-insured
institutions.
 
     The Funds Act contemplates the merger of the SAIF and BIF by 1999, provided
the consolidation/ merger of federal bank and thrift charters under applicable
law and regulation has been achieved by that time. Until such time, however,
depository institutions will continue to be prohibited from shifting deposits
from SAIF insurance coverage to BIF insurance coverage in an attempt to avoid
the higher SAIF assessments. The FDIC is required to issue regulations to guard
against the shifting of deposits from SAIF to BIF. A report to Congress
regarding the merger of the SAIF and the BIF is required from the Treasury
Department by March 31, 1997.
 
INTERSTATE BANKING AND OTHER RECENT LEGISLATION
 
     In September 1994, legislation was enacted that is expected to have a
significant effect in restructuring the banking industry in the United States.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
("Riegle-Neal") facilitates the interstate expansion and consolidation of
banking organizations by permitting (i) bank holding companies that are
adequately capitalized and managed, one year after enactment of the legislation,
to acquire banks located in states outside their home states regardless of
whether such acquisitions are authorized under the law of the host state, (ii)
the interstate merger of banks (effective since June 1, 1997), subject to the
right of individual states to "opt in" or to "opt out" of this authority before
that date, (iii) banks to establish new branches on an interstate basis provided
that such action is specifically authorized by the law of the host state, (iv)
foreign banks to establish, with approval of the regulators in the United
States, branches outside their home states to the same extent that national or
state banks located in the home state would be authorized to do so, and (v)
banks to receive deposits, renew time deposits, close loans, service loans and
receive payments on loans and other obligations as agent for any bank or thrift
affiliate, whether the affiliate is located in the same state or a different
state. One effect of this legislation will be to permit MBI to acquire banks
located in any state. One effect of Riegle-Neal is to permit MBI to acquire
banks located in any state and to permit bank holding companies located in any
state to acquire banks and bank holding companies in Missouri, including MBI.
Overall, Riegle-Neal may have the effects of increasing competition and
promoting geographic diversification in the banking industry.
 
     In addition, the Funds Act contains a variety of regulatory relief measures
affecting banks and thrifts, including provisions modifying some of the more
onerous requirements imposed under federal banking laws passed in the late 1980s
and early 1990s. Among the measures are provisions reducing certain regulatory
burdens imposed upon bank holding companies. For example, the Funds Act
eliminates the requirement that a bank holding company seeking to acquire
control of a thrift must file an application with the OTS and for approval to
become a unitary savings and loan holding company as a result of such
acquisition. The Funds Act also provides that a bank holding company owning or
controlling a thrift will no longer be subject to the supervision and regulation
of the OTS. The OTS will continue to regulate and supervise all thrifts acquired
in such transactions.
 
     There also have been a number of recent legislative and regulatory
proposals designed to strengthen the federal deposit insurance system and to
improve the overall financial stability of the United States banking system, and
to provide for other changes in the bank regulatory structure, including
proposals to reduce regulatory burdens on banking organizations and to expand
the nature of products and services banks and bank holding companies may offer.
It is not possible to predict whether or in what form these proposals may be
adopted in the future, and, if adopted, what their effect will be on MBI.
 
                                       66
<PAGE>   78
 
                      PROPOSAL II -- ELECTION OF DIRECTORS
 
                VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
 
   
     On May 15, 1998, the Record Date, Firstbank had outstanding and entitled to
vote 15,989,289 shares of common stock, par value $1.00 per share. Only holders
of common stock reflected on the records of Firstbank at the close of business
on the Record Date, will be entitled to vote at the meeting. Each share entitles
its owner to one vote on all matters submitted to a vote other than the election
of directors. In the election of directors, pursuant to Firstbank's Certificate
of Incorporation, stockholders are entitled to cumulative voting. Thus, each
stockholder has the number of votes equal to the number of shares owned by him
or her multiplied by the number of directors to be elected. Those votes can be
distributed among the candidates as the stockholder deems appropriate. At the
1998 Annual Meeting, three directors will be elected.
    
 
     The following table sets forth information as of January 31, 1998, with
respect to the ownership of Firstbank Common Stock held by (i) the only
stockholders known to management to be the beneficial owners of more than 5% of
Firstbank's outstanding common stock; (ii) each director of Firstbank; and (iii)
all directors and executive officers of Firstbank as a group. The table is based
upon information provided by such persons and upon Firstbank's records.
Beneficial ownership of securities generally means the power to vote or dispose
of the securities, regardless of any economic interest.
 
   
<TABLE>
<CAPTION>
                                                                  AMOUNT AND NATURE         PERCENT
            NAME AND ADDRESS OF BENEFICIAL OWNER              OF BENEFICIAL OWNERSHIP(1)    OF CLASS
            ------------------------------------              --------------------------    --------
<S>                                                           <C>                           <C>
William B. Hopper, South Side Square, Taylorville, IL.......            708,507              4.48%
Robert L. Sweney, One Metropolitan Square, St. Louis, MO....            268,576              1.70%
Mark H. Ferguson, 205 South Fifth Street, Springfield, IL...            100,610                  *
William T. Grant, Jr., 1800 South Dirksen Parkway,
  Springfield, IL...........................................             71,178                  *
William R. Schnirring, 718 North Ninth Street, Springfield,
  IL........................................................             37,275                  *
P. Richard Ware, 400 West State Street, Jacksonville, IL....             28,520                  *
Leo J. Dondanville, Jr., 1525 South Sixth Street,
  Springfield, IL...........................................             22,950                  *
Richard E. Zemenick, 100 South Brentwood Blvd., St. Louis,
  MO........................................................             12,110                  *
Robert W. Jackson, 1305 Southern Hills Lane, Springfield,
  IL........................................................              9,835                  *
William R. Enlow, 607 East Adams Street, Springfield, IL....              6,055                  *
All Executive Officers and Directors as a Group (Sixteen
  Persons)..................................................          1,576,137              9.80%
* Less than 1%
</TABLE>
    
 
- ---------------
(1)  All shareholdings are stated as of January 31, 1998, and include, without
     admission of beneficial ownership thereof by the named individual, shares
     held of record by or jointly with the named person's wife or children
     sharing the same household. Also included in the shares listed are shares
     voted by the named individuals as a result of their participation in the
     Firstbank Profit-Sharing Thrift Plan, which owns Firstbank shares and
     permits its participants to direct the voting of their proportionate number
     of such shares. The number of plan shares included in the table for each
     individual has been rounded down to the nearest whole share. Also included
     are shares that can be purchased pursuant to currently exercisable options
     granted pursuant to certain stock option agreements. See "BOARD OF
     DIRECTORS," "EXECUTIVE COMPENSATION--Incentive Stock Option" and
     "Profit-Sharing Thrift Plan."
 
                                       67
<PAGE>   79
 
                               BOARD OF DIRECTORS
 
ELECTION OF DIRECTORS
 
     Firstbank's Certificate of Incorporation provides for a Board of Directors
divided into three classes. The following persons have been nominated by
Firstbank management for election at the 1998 Annual Meeting, to serve a
three-year term expiring in 2001; provided, however that if the stockholders
approve the Merger Agreement and the Merger is consummated, the terms of all
directors of Firstbank shall cease upon completion of the Merger. It is the
intention of the persons named in the proxy to vote for the election of the
following nominees and to vote the proxies to secure the election of the largest
number of such nominees.
 
<TABLE>
<CAPTION>
                                              POSITION(S) WITH FIRSTBANK DIRECTOR            DIRECTOR
            NAME                AGE                (AND PRINCIPAL OCCUPATION)                 SINCE
            ----                ---           -----------------------------------            --------
<S>                             <C>    <C>                                                   <C>
William B. Hopper...........     59    Director and Vice Chairman of the Board                 1982
Robert W. Jackson...........     67    Director (Retired Senior Vice President, Central        1984
                                       Illinois Public Service Company, Springfield, IL)
P. Richard Ware.............     66    Director (Chairman of the Board, Wareco Service,        1989
                                       Inc., Jacksonville, IL)
</TABLE>
 
     Each of the foregoing nominees has been engaged in the principal occupation
described above, or in a similar position, for at least the past five years.
 
DIRECTORS WHOSE TERMS EXPIRE IN 1999 AND 2000
 
     The following table presents information with respect to the six directors
whose terms do not expire until 1999 or 2000 and who therefore will continue to
serve as directors beyond the 1998 Annual Meeting.
 
   
<TABLE>
<CAPTION>
                                          POSITION(S) WITH FIRSTBANK DIRECTOR       DIRECTOR     TERMS
            NAME                AGE           (AND PRINCIPAL OCCUPATION)             SINCE      EXPIRES
            ----                ---       -----------------------------------       --------    -------
<S>                             <C>    <C>                                          <C>         <C>
Leo J. Dondanville, Jr......    67     Director (Chairman of the Board, Hanson        1984       1999
                                       Group Inc., Springfield, IL)
Mark H. Ferguson............    44     Director, Chairman of the Board,               1988       1999
                                       President and Chief Executive Officer
William T. Grant, Jr........    58     Director (President, Landmark Automotive       1982       1999
                                       Group, Springfield, IL and St. Louis, MO)
William R. Enlow............    50     Director (Attorney at Law, Sorling             1997       2000
                                       Northrop Hanna Cullen Cochran Ltd.,
                                       Springfield, IL)
William R. Schnirring.......    69     Director (Chairman of the Board and Chief      1976       2000
                                       Executive Officer, Springfield Electric
                                       Supply Co., Springfield, IL)
Robert L. Sweney............    70     Director (Attorney at Law, Of Counsel,         1988       2000
                                       Bryan Cave, St. Louis, MO)
Richard E. Zemenick.........    55     Director (Chairman of the Board, Zemenick      1994       2000
                                       & Walker, Inc., St. Louis, MO)
</TABLE>
    
 
     Each of the foregoing directors has been engaged in the principal
occupation described above, or in a similar position, for at least the past five
years.
 
OTHER INFORMATION ON DIRECTORS
 
     Robert W. Jackson is a director of Ameren CIPS, which has a class of voting
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended, or is subject to the reporting requirements of Section 15(d)
of that Act. Mark H. Ferguson and Richard E. Zemenick are directors of Zemenick
& Walker, Inc., a wholly-owned subsidiary of Firstbank registered under the
Investment Advisors Act of 1940.
 
                                       68
<PAGE>   80
 
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
 
     The Board of Directors of Firstbank has established the following
committees to provide assistance in the discharge of its duties and
responsibilities.
 
     Examining Committee.  This committee conducts examinations of the financial
affairs of Firstbank and its subsidiaries, through Firstbank's internal auditors
and the independent public accounting firm retained by the Board of Directors.
The results of such examinations are reported directly to the Board of
Directors. Members of the committee during 1997 were Messrs. Grant, Hopper,
Jackson and Sweney. The committee met four times in 1997.
 
     Compensation, Benefits and Officer Nominating Committee.  This committee
reviews the personnel policies of Firstbank, as well as salaries and other
compensation paid to employees, including officers and directors. Its
recommendations are reported to the Board of Directors. Members of the committee
during 1997 were Messrs. Dondanville, Grant, Schnirring, Sweney and Ware. The
committee met twice in 1997.
 
     Nominating Committee.  This committee recommends individuals to be
appointed to the Board of Directors of Firstbank in the event a vacancy occurs
on the Board. Its recommendations are reported to the Board of Directors.
Members of the committee during 1997 were Messrs. Ferguson, Hopper, Jackson,
Schnirring and Zemenick. The committee met twice in 1997.
 
     In 1997, the Board of Directors met ten times. No director attended fewer
than 75 percent of the aggregate of the total number of board meetings and the
total number of meetings of committees of which he was a member.
 
OTHER NOMINATIONS FOR BOARD OF DIRECTORS
 
     Firstbank's Certificate of Incorporation specifies certain procedures to
govern the nomination of directors by stockholders. Any stockholder desiring to
nominate an individual for election as a director must notify the Secretary of
Firstbank, in writing, of his or her desire to do so. The notice must be
delivered or mailed by first class U.S. mail, postage prepaid, to the Secretary
at least 14 days in advance of any stockholders meeting called for the election
of directors. If less than 21 days, notice of such a stockholders meeting is
given, a stockholder must deliver or mail the prescribed notice not later than
the close of business on the seventh day following the day on which the notice
of the meeting was mailed to stockholders.
 
     The required notice must set forth (a) the name, age, business address and,
if known, residence address of each nominee proposed in such notice, (b) the
principal occupation or employment of each nominee, and (c) the number of shares
of common stock of Firstbank beneficially owned by each such nominee. Evidence
of each nominee's willingness to serve must also be provided.
 
                                       69
<PAGE>   81
 
                             EXECUTIVE COMPENSATION
 
     The following table summarizes compensation earned in 1997, 1996 and 1995
by Firstbank's chief executive officers and each of the four other most highly
compensated executive officers of Firstbank who earned in excess of $100,000
during 1997 (the "Named Executive Officers").
 
   
<TABLE>
<CAPTION>
                                                                                   LONG-TERM COMPENSATION
                                                ANNUAL COMPENSATION            -------------------------------
                                       -------------------------------------      OPTIONS
                                                              OTHER ANNUAL      (NUMBER OF        ALL OTHER
 NAME AND PRINCIPAL POSITION    YEAR    SALARY     BONUS     COMPENSATION(1)    SHARES)(2)     COMPENSATION(3)
 ---------------------------    ----   --------   --------   ---------------   -------------   ---------------
<S>                             <C>    <C>        <C>        <C>               <C>             <C>
Mark H. Ferguson..............  1997   $384,000   $146,000       $16,800           6,000           $ 6,650
  Chairman of the Board and     1996    360,000    115,200        16,800           7,500             7,200
  Chief Executive Officer       1995    335,000     93,800        16,800           7,500             7,987
Larry A. Burton...............  1997   $190,000   $      0       $     0               0           $ 6,650
  Executive Vice President      1996    185,000     32,468             0           3,750             7,200
                                1995    180,000     14,400             0           3,750             7,837
Sandra L. Stolte..............  1997   $199,000   $ 35,000       $ 6,000           3,000           $12,746
  Executive Vice President(4)   1996    192,000     40,752         6,000           3,750            13,200
                                1995    178,500     31,292         6,000           3,750            13,087
David W. Waggoner.............  1997   $203,000   $ 58,200       $ 3,000           3,000           $12,746
  Executive Vice President      1996    196,000     42,187         3,000           3,750            13,200
                                1995    189,881     40,114         3,000           3,750            16,164
Chris R. Zettek...............  1997   $145,000   $ 43,500       $     0           3,000           $ 6,090
  Executive Vice President and  1996    130,000     31,200             0           3,750             6,240
  Chief Financial Officer       1995    120,000     25,200             0           3,750             6,390
</TABLE>
    
 
- ---------------
 
(1) Directors' fees for Firstbank and its subsidiaries paid to Messrs. Ferguson
     and Waggoner, and Ms. Stolte.
 
(2) Option shares listed for 1997, 1996 and 1995 were actually awarded in
     January 1998, 1997 and 1996, respectively.
 
(3) Employer contributions to the Firstbank Profit Sharing Plan and subsidiary
     bank profit sharing plan, if applicable.
 
(4) Amounts for Ms. Stolte in 1997, 1996 and 1995 include amounts earned in her
     capacity as a Firstbank subsidiary bank president.
 
INCENTIVE COMPENSATION PLAN
 
     The Board of Directors adopted an incentive compensation program for the
benefit of the executive officers named in the Summary Compensation Table and
certain other officers of Firstbank and its subsidiaries. The program provides
that Firstbank and its subsidiaries must satisfy certain minimum net income
requirements as defined in the plan before any payments may be made. Depending
on the group in which an executive officer is included, the amount of
Firstbank's net income and progress toward individual goals, Mr. Ferguson may
receive up to 40% of his base salary and the remaining executive officers may
receive up to 30% of his or her base salary. Any payments under the program must
be approved by the Compensation, Benefits and Officer Nominating Committee of
the Firstbank Board of Directors. The cash compensation accrued in 1997 for
Firstbank's executive officers pursuant to this program for services rendered in
1997 is included under the "Bonus" category in the Summary Compensation Table.
 
INCENTIVE STOCK OPTION PLAN
 
     Firstbank maintains the Firstbank Incentive Stock Option Plan and Incentive
Stock Option Plan II (the "Option Plans") to provide additional benefits to
employers of Firstbank's and its subsidiaries' employees. Under the Option
Plans, approved by stockholders at previous annual meetings, selected officers
or key employees of Firstbank and its subsidiaries may be granted options to
purchase Firstbank Common Stock at a purchase price equal to the fair market
value of Firstbank stock at the time the options are granted. The grantees of
the options and the number of options granted are determined by the Board of
Directors of
 
                                       70
<PAGE>   82
 
Firstbank upon the recommendations of its Compensation, Benefits and Officer
Nominating Committee. Options granted pursuant to the Option Plans can be
exercised only during the period beginning two years after the date they are
granted and ending ten years after the date they are granted. All options
authorized under the Firstbank Incentive Stock Option Plan have been granted.
 
   
     Options granted to executive officers under the Option Plans approved by
the Compensation, Benefits and Officer Nominating Committee are reported in the
Summary Compensation Table. A total of 24,500 options were exercised by the
Named Executive Officers in 1997.
    
 
   
     The following table summarizes the Named Executive Officer's stock option
activity during 1997. Unexercised options reported include options awarded
January 2, 1998.
    
 
                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                      AND DECEMBER 31, 1997 OPTION VALUES
 
<TABLE>
<CAPTION>
                                                                        NUMBER OF            VALUE OF
                                                                       UNEXERCISED      UNEXERCISED IN-THE-
                                                                       OPTIONS AT        MONEY OPTIONS AT
                                       SHARES                       DECEMBER 31, 1997    DECEMBER 31, 1997
                                     ACQUIRED ON                      EXERCISABLE/         EXERCISABLE/
               NAME                   EXERCISE     VALUE REALIZED     UNEXERCISABLE        UNEXERCISABLE
               ----                  -----------   --------------   -----------------   -------------------
<S>                                  <C>           <C>              <C>                 <C>
Mark H. Ferguson..................      6,000         $177,667           61,155/            $1,538,695/
                                                                         19,050                186,127
Larry A. Burton...................     11,250         $321,875           36,375/            $  869,242/
                                                                          3,750                 52,109
Sandra L. Stolte..................      3,000         $ 84,542           33,375/            $  784,138/
                                                                          6,750                 47,796
David W. Waggoner.................      2,000         $ 78,389           28,750/            $  652,935/
                                                                          6,750                 47,796
Chris R. Zettek...................      2,250         $ 65,115           31,350/            $  726,692/
                                                                          6,750                 47,796
</TABLE>
 
            OPTION GRANTS IN THE FISCAL YEAR ENDED DECEMBER 31, 1997
 
   
     The following table sets forth, with respect to Firstbank's Chief Executive
Officer and the Named Executive Officers, certain information about option
grants in the fiscal year ended December 31, 1997.
    
 
            OPTION GRANTS IN THE FISCAL YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                     PERCENTAGES OF
                              NUMBER OF         TOTAL OPTIONS GRANTED TO    EXERCISE
                        SECURITIES UNDERLYING         EMPLOYEES IN            PRICE      EXPIRATION   GRANT DATE
        NAME                   OPTIONS                FISCAL YEAR          (PER SHARE)      DATE       VALUE(A)
        ----            ---------------------   ------------------------   -----------   ----------   ----------
<S>                     <C>                     <C>                        <C>           <C>          <C>
Mark H. Ferguson.....           6,000                    4.84%               $38.25       01/02/08     $62,280
Larry A. Burton......               0                       --                   --             --          --
Sandra L. Stolte.....           3,000                    2.24%               $38.25       01/02/08     $31,140
David W. Waggoner....           3,000                    2.24%               $38.25       01/02/08     $31,140
Chris R. Zettek......           3,000                    2.24%               $38.25       01/02/08     $31,140
</TABLE>
 
- ---------------
 
(a) Computed using the Black Scholes Valuation Model. The assumed values for
     expected volatility, risk-free rate of return, dividend yield and expected
     option life were, respectively, 20%, 5.68%, 2.09% and 7 years.
 
                                       71
<PAGE>   83
 
REPORT OF THE COMPENSATION, BENEFITS AND OFFICER NOMINATING COMMITTEE OF THE
BOARD OF DIRECTORS
 
     The Compensation, Benefits and Officer Nominating Committee ("Compensation
Committee" or "Committee") of the Board of Directors establishes the general
compensation policies of Firstbank, establishes the compensation plans and
specific compensation levels for executive officers and administers the
Incentive Compensation Plan, the Option Plans and the Thrift Plan. The
Compensation Committee is composed of five independent, non-employee directors.
The Compensation Committee, chaired by one of the independent directors,
receives input from Firstbank's Chief Executive Officer ("CEO") relative to
compensation for other executive officers.
 
     The Compensation Committee believes that the CEO's compensation should be
heavily influenced by Firstbank's performance. Therefore, although there is
necessarily some subjectivity in setting the CEO's salary, major elements of the
compensation package are directly tied to company performance. The Committee
establishes the CEO's salary by considering the salaries of CEOs of
comparably-sized companies and their performance according to independently
accumulated data obtained by the Committee.
 
     The CEO's incentive compensation award has been established primarily as a
direct function of Firstbank's earnings growth during the most recent fiscal
year. The Committee, in connection with Firstbank's budgeting process,
establishes a minimum target for earnings, and the CEO's bonus for the fiscal
year is largely a function of the amount by which the minimum earnings target is
met or exceeded during the fiscal year. In January of 1998, a cash bonus of
$146,000 was paid to the CEO based on 1997 earnings. For fiscal year 1998, a
target and formula have been established in a similar fashion.
 
     Stock options were granted to the CEO, as well as to other key employees,
primarily based on the employee's contribution to the long-term growth and
profitability of Firstbank. In January 1998, 6,000 options were granted to the
CEO as approved by the Committee and Board of Directors.
 
     The Compensation Committee has adopted similar policies with respect to the
compensation of other executive officers of Firstbank. Using independent salary
survey data, the Committee reviews the base salaries for persons holding
positions of similar responsibility at other companies. In addition, the
Committee also considers factors such as relative company performance, and each
individual's past performance and future potential in establishing the base
salaries of executive officers.
 
     The Committee's policy regarding other elements of the compensation package
for executive officers is similar to the CEO's in that the annual bonus payments
are largely tied to the achievement of performance targets. The annual incentive
compensation award criteria for executives other than the CEO are primarily
composed of three elements: (i) Firstbank's earnings as compared to the minimum
target established; (ii) achievement of objectives related to the executive's
area of responsibility; and (iii) the executive's progress toward individual
goals.
 
     As with the CEO, the number of options granted to other officers is
determined by the subjective evaluation of the executive's ability to influence
Firstbank's long-term growth and profitability. All options are granted with an
exercise price equal to the current market price. Since the value of the option
bears a direct relationship to Firstbank's stock price, it is an effective
incentive for managers to create value for stockholders. The Committee therefore
views stock options as an important component of its long-term,
performance-based compensation philosophy. In January 1998, options granted to
executive officers other than the CEO were approved by the Committee and Board
of Directors.
 
     Members of the Compensation Committee for 1997: William R. Schnirring,
Chairman; William T. Grant, Jr.; Leo J. Dondanville, Jr.; Robert L. Sweney; and
P. Richard Ware.
 
PROFIT-SHARING THRIFT PLAN
 
     The Firstbank Profit-Sharing Thrift Plan (the "Thrift Plan") was initiated
in 1982 for the benefit of Firstbank's and its subsidiaries' employees through
the investment in Firstbank stock. Each subsidiary of Firstbank has elected to
participate in the Thrift Plan. Participation is available to employees of
Firstbank and its subsidiaries who have completed one year of service and have
worked at least 1,000 hours during the
 
                                       72
<PAGE>   84
 
applicable plan year. The Thrift Plan was amended effective April 1, 1995, to
allow each participating employee (of Firstbank or its applicable subsidiary)
the opportunity to defer up to 15% of their annual compensation, to provide
opportunity for diversification from Firstbank stock through alternative
investment options, and to adjust the matching contribution schedule. The Thrift
Plan currently matches between 50% and 100% of employee contributions of up to
6% of their compensation, with the employer's contribution depending upon
Firstbank's return on equity for the applicable year. At December 31, 1997, 683
employees of Firstbank and its subsidiaries were participants in the Thrift
Plan.
 
RETIREMENT PLAN
 
     Firstbank has adopted the Firstbank Retirement Plan ("Retirement Plan"), a
defined benefit plan, to provide retirement benefits for Firstbank's and its
subsidiaries' employees. A subsidiary's employees are covered by the Retirement
Plan if and when the subsidiary adopts the Retirement Plan. Central Bank, a
wholly-owned subsidiary of Firstbank, has not adopted the Retirement Plan.
Accordingly, Mr. Waggoner and Ms. Stolte continue to be covered under a separate
profit sharing plan.
 
     Set forth below are estimated annual benefits payable under the Retirement
Plan. These benefits are payable during the participants' lifetimes upon
retirement at age 65 in the remuneration and service classes specified. Pension
benefits may be paid in other forms which are actuarially equivalent to the
benefits listed below. For purposes of the table below, "Average Annual
Compensation" generally means the average of the participants' compensation, as
defined in the Retirement Plan, during the five consecutive calendar years prior
to retirement.
 
<TABLE>
<CAPTION>
                                              YEARS OF CREDITED SERVICE
          AVERAGE          ---------------------------------------------------------------
    ANNUAL COMPENSATION      10         15         20         25         30          35
    -------------------    -------    -------    -------    -------    -------    --------
    <S>                    <C>        <C>        <C>        <C>        <C>        <C>
         $ 50,000          $10,207    $15,311    $20,415    $25,518    $28,018    $ 30,518
           75,000           16,207     24,311     32,415     40,518     44,268      48,018
          100,000           22,207     33,311     44,415     55,518     60,518      65,518
          125,000           28,207     42,311     56,415     70,518     76,768      83,018
          150,000           34,207     51,311     68,415     85,518     93,018     100,518
</TABLE>
 
     At December 31, 1997, Mr. Burton had 18 years, Mr. Ferguson had 11 years
and Mr. Zettek had 10 years credited service for purposes of the Retirement
Plan. The maximum annual benefit (defined in Code Section 415) payable from a
qualified defined benefit pension plan as a single life annuity during 1997 is
$120,000. The compensation limits of Code Section 401(a)(17) have also been
taken into account in determining the benefits listed in this table. For any
Retirement Plan participant in the 1997 Plan year, a qualified plan may not take
into account annual compensation greater than $150,000 (indexed annually).
 
     Firstbank has amended and restated the Retirement Plan to conform to
regulations under the Tax Reform Act of 1986. All employees who terminate or
retire after December 31, 1988, will receive the greater of their benefit
calculated under the current formula or their frozen accrued benefit under any
prior formula.
 
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
 
     Each Named Executive Officer has entered into a severance agreement with
Firstbank. Pursuant to these agreements, if the employee is terminated
involuntarily other than for "cause" (as defined in such severance agreements)
Firstbank shall pay to the terminated employee (i) an amount equal to one year
of salary based on the employee's annual base salary in effect immediately prior
to such termination plus the bonus received by or due to the employee with
respect to Firstbank's most recently ended fiscal year, payable in twelve
substantially equal monthly installments commencing as soon as practicable
following the date of termination; and (ii) continue to pay for one year any
premiums (to the extent such premiums are due) for the employee's health,
dental, disability, and life insurance paid prior to such termination; provided
that such payments shall be reduced by the amount of compensation paid to the
employee from other sources during the twelve-month period and, if the employee
accepts employment with a bank or bank holding company that operates in any of
 
                                       73
<PAGE>   85
 
the same cities in which Firstbank or its subsidiaries operates, the employee
shall receive no compensation from Firstbank.
 
     Additionally, such severance agreements provide that if the employee is
terminated involuntarily other than for cause within a period varying from two
to three years after a Change in Control (as defined in such severance
agreements) or such termination otherwise results from a Change in Control,
Firstbank shall: (i) pay the employee an amount equal to a multiple (varying
from two to three) of the sum of (a) the higher of such person's annual base
salary as of the date of termination or such person's annual base salary as of
the effective date of the Change in Control, plus (b) the highest bonus paid to
the employee with respect to the three fiscal years immediately preceding the
effective date of the Change in Control, which amount shall be paid in a lump
sum as soon as practicable after the date of termination; and (ii) continue to
pay for 24 months any premiums (to the extent such premiums are due) for such
employee's health, dental, disability, and life insurance paid prior to such
date of termination. In addition, if Mr. Ferguson voluntarily terminates his
employment within three years of a Change in Control he will be entitled to the
benefits described in this paragraph. Mr. Ferguson's Severance Agreement also
provides that if the payments under the agreement cause Mr. Ferguson to become
liable for any excise tax with respect to such payments, Mr. Ferguson will be
reimbursed the amount of such excise tax, as well as for any taxes on the
reimbursed amount. If approved by the stockholders of Firstbank and consummated,
the Merger will constitute a Change in Control under the Severance Agreements.
See "THE MERGER--Interests of Certain Persons in the Merger."
 
DIRECTORS' COMPENSATION
 
     Firstbank paid each of its directors a fee of $13,800 in 1997 to serve as a
director. Directors serving on the Loan and Discount Committee were paid an
additional $150 per meeting and met twelve times during 1997. Beginning June 1,
1997, in addition to the Loan and Discount Committee, directors appointed to the
other board committees were paid $150 per board committee meeting attended.
 
     In addition to the directors' fees, the stockholders of Firstbank approved
a Directors Stock Option Plan at the 1997 Annual Meeting. Under the Directors
Stock Option Plan, all non-employee directors are automatically granted options
each June 1, beginning in 1997 and ending in 2007, for 2,250 shares of Firstbank
common stock exercisable immediately and expiring ten years from the date
granted or prior to the termination of his term as a director, whichever is
earlier. The purchase price is equal to the fair market value of Firstbank stock
at the time the options are granted or the book value of the common stock at
that time, whichever is greater. Under identical plans previously in place, each
June 1, beginning 1988 and 1994 and ending in 1992 and 1996, respectively, a
non-employee director continuing, elected or re-elected as a member of the Board
received an option to purchase 2,250 shares of Firstbank common stock. All the
options granted under these Directors Stock Option Plans are reflected in the
table under "Voting Securities and Principal Holders Thereof."
 
                              CERTAIN TRANSACTIONS
 
     Several of the present and former officers and directors of Firstbank and
its subsidiaries and principal stockholders of Firstbank and/or their associates
have been or presently are indebted to one or more of Firstbank's subsidiary
banks. All such indebtedness was incurred in the ordinary course of business and
on substantially the same terms, including interest rates, collateral and
repayment terms on extensions of credit, as those prevailing at the time for
comparable transactions with other persons, and did not involve more than normal
risks of collectibility or present other unfavorable features. Firstbank expects
that such persons and/or their associates will borrow additional funds from
Firstbank subsidiaries in the future, all of which borrowings will be obtained
on a similar basis.
 
     Firstbank and its subsidiaries have for several years retained the services
of Zemenick & Walker, Inc., of which Richard E. Zemenick, a director, is
Chairman. On January 2, 1997, Zemenick & Walker, Inc. became a wholly-owned
subsidiary of Firstbank. Pursuant to the provisions of the purchase agreement
between Firstbank and Zemenick & Walker, Inc., Richard E. Zemenick and James C.
Walker entered into Employment Agreements for a period of five (5) years. See
"THE MERGER--Interests of Certain Persons."
 
                                       74
<PAGE>   86
 
                             FIRSTBANK PERFORMANCE
 
     The following graph sets forth the cumulative stockholder return (assuming
reinvestment of dividends) to Firstbank's stockholders during the five year
period ended December 31, 1997, as well as the Standard & Poors overall stock
market index (S & P 500 Index) and Firstbank's peer group index published by
Keefe, Bruyette & Woods, Inc. (KBW 50 Index).
 
                             FIRSTBANK PERFORMANCE
                         CUMULATIVE STOCKHOLDER RETURN
   
    
 
<TABLE>
<CAPTION>
               MEASUREMENT PERIOD
             (FISCAL YEAR COVERED)                   FIRSTBANK          S&P 500            KBW 50
<S>                                               <C>               <C>               <C>
12/92                                                       100.00            100.00            100.00
12/93                                                        98.56            110.08            105.54
12/94                                                       108.42            111.53            100.16
12/95                                                       133.26            153.45            160.42
12/96                                                       154.16            188.68            226.93
12/97                                                       249.71            251.62            331.75
</TABLE>
 
<TABLE>
<CAPTION>
                                        1992      1993      1994      1995      1996      1997
                                       ------    ------    ------    ------    ------    ------
<S>                                    <C>       <C>       <C>       <C>       <C>       <C>
S&P 500............................    100.00    110.08    111.53    153.45    188.68    251.62
                                       ------    ------    ------    ------    ------    ------
KBW 50.............................    100.00    105.54    100.16    160.42    226.93    331.75
                                       ------    ------    ------    ------    ------    ------
Firstbank..........................    100.00     98.56    108.42    133.26    154.16    249.71
                                       ------    ------    ------    ------    ------    ------
</TABLE>
 
- ---------------
 
Note: The stock performance graph assumes $100 was invested on January 1, 1993,
      and all dividends are reinvested.
 
                                       75
<PAGE>   87
 
                              INDEPENDENT AUDITORS
 
     KPMG Peat Marwick LLP, certified public accountants, were Firstbank's
independent auditors for, and reported on Firstbank's consolidated financial
statements for, the year ended December 31, 1997. The Firstbank Board has
appointed KPMG Peat Marwick LLP as Firstbank's auditors for the year ending
December 31, 1998. Representatives of KPMG Peat Marwick LLP are expected to
attend the Annual Meeting to respond to appropriate questions and will have the
opportunity to make a statement if they so desire.
 
            SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     Section 16(a) of the Exchange Act requires Firstbank's officers and
directors, and persons owning more than 10% of a registered class of Firstbank's
equity securities, to file periodic reports of ownership and changes in
ownership with the Commission and to provide Firstbank with copies of such
reports. Based solely upon its review of such reports received by it, or written
representation from such reporting persons, Firstbank believes that all filing
requirements applicable to such reporting persons were complied with during
1997.
 
                                 LEGAL MATTERS
 
     The validity of the MBI Common Stock to be issued in the Merger will be
passed upon by Jon W. Bilstrom, General Counsel and Secretary of MBI, who, as of
February 27, 1998, beneficially owned 58,174 shares of MBI Common Stock,
including 31,875 restricted shares subject to forfeiture in certain
circumstances, and held options to acquire 71,773 additional shares of MBI
Common Stock.
 
                                    EXPERTS
 
     The consolidated financial statements of MBI as of December 31, 1997, 1996
and 1995, and for each of the years in the three-year period ended December 31,
1997, incorporated by reference in the 1997 MBI Form 10-K have been incorporated
by reference herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of such firm as experts in accounting and auditing.
 
     The consolidated financial statements of Firstbank as of December 31, 1997,
1996 and 1995, and for each of the years in the three-year period ended December
31, 1997, incorporated by reference in the 1997 Firstbank Form 10-K have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of such firm as experts in accounting and
auditing.
 
                                 OTHER MATTERS
 
     The Firstbank Board, at the date hereof, is not aware of any business to be
presented at the Annual Meeting other than that referred to in the Notice of
Annual Meeting of Stockholders and discussed herein. If any other matter should
properly come before the Annual Meeting, the persons named as proxies will have
discretionary authority to vote the shares represented by proxies in accordance
with their discretion and judgment as to the best interests of Firstbank.
 
                             STOCKHOLDER PROPOSALS
 
     If the Merger is consummated, Firstbank Stockholders who receive MBI Common
Stock will become shareholders of MBI at the Effective Time. MBI shareholders
may submit to MBI proposals for formal consideration at the 1999 Annual Meeting
of MBI's shareholders and for inclusion in MBI's proxy statement and proxy for
such meeting. All such proposals must be received in writing by the Corporate
Secretary at Mercantile Bancorporation Inc., P.O. Box 524, St. Louis, Missouri
63166-0524 no later than November 16,
 
                                       76
<PAGE>   88
 
1998 in order to be considered for inclusion in MBI's Proxy Statement and proxy
for the 1998 Annual Meeting.
 
   
     In the event the Merger is not consummated, in order to be eligible for
inclusion in Firstbank's proxy materials for its next Annual Meeting of
Stockholders, any stockholder proposal to take action at such meeting must be in
writing and received at Firstbank's main office, 205 South Fifth Street,
Springfield, Illinois 62701, no later than January 26, 1999. Any such proposals
shall be subject to the requirements of the proxy rules adopted under the
Exchange Act.
    
 
                                          BY ORDER OF THE BOARD OF DIRECTORS
 
   
                                          /s/ MARK FERGUSON 
                                          Mark H. Ferguson
                                          Chairman, President and Chief
                                          Executive Officer
    
 
Springfield, Illinois
 
                                       77
<PAGE>   89
 
                                                                         ANNEX A
 
                      AGREEMENT AND PLAN OF REORGANIZATION
 
                                  BY AND AMONG
 
                        MERCANTILE BANCORPORATION INC.,
 
                                AMERIBANC, INC.,
 
                                      AND
 
                           FIRSTBANK OF ILLINOIS CO.
 
                             DATED JANUARY 30, 1998
 
                                       A-1
<PAGE>   90
 
                      AGREEMENT AND PLAN OF REORGANIZATION
 
     This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into on January 30, 1998, by and among MERCANTILE BANCORPORATION INC., a
Missouri corporation ("Mercantile"), Ameribanc, Inc., a Missouri corporation and
a wholly owned subsidiary of Mercantile ("Merger Sub"), and FIRSTBANK OF
ILLINOIS CO., a Delaware corporation ("Firstbank").
 
                                  WITNESSETH:
 
     WHEREAS, Mercantile is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHCA"); and
 
     WHEREAS, Firstbank is a registered bank holding company under the BHCA; and
 
     WHEREAS, the Board of Directors of Firstbank (the "Firstbank Board") and
the Executive Committee of the Board of Directors of Mercantile (the "Mercantile
Executive Committee") have approved the merger (the "Merger") of Firstbank with
and into Merger Sub, pursuant to the terms and subject to the conditions of this
Agreement; and
 
     WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
 
     WHEREAS, it is intended that the Merger shall qualify for
pooling-of-interests accounting treatment; and
 
     WHEREAS, as a condition to, and immediately after the execution of this
Agreement, Mercantile and certain directors of Firstbank will enter into Support
Agreements (the "Support Agreements") in the form attached hereto as Exhibit A;
and
 
     WHEREAS, as a condition to, and immediately prior to execution of this
Agreement, Mercantile and Firstbank will enter into a stock option agreement
(the "Stock Option Agreement") in the form attached hereto as Exhibit B; and
 
     WHEREAS, the parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated by this Agreement.
 
     NOW THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties agree as follows:
 
                                   ARTICLE I
 
                                   THE MERGER
 
     1.01.  The Merger.  Subject to the terms and conditions of this Agreement,
Firstbank shall be merged with and into Merger Sub in accordance with the
Delaware General Corporation Law (the "DGCL") and the Missouri General and
Business Corporation Law (the "MGBCL") and the separate corporate existence of
Firstbank shall cease. Merger Sub shall be the surviving corporation of the
Merger (sometimes referred to herein as the "Surviving Corporation") and shall
continue to be governed by the laws of the State of Missouri.
 
     1.02.  Closing.  The closing (the "Closing") of the Merger shall take place
at 10:00 a.m., local time, on the date that the Effective Time (as defined in
Section 1.03) occurs, or at such other time, and at such place, as Mercantile
and Firstbank shall agree (the "Closing Date").
 
     1.03.  Effective Time.  The Merger shall become effective on the date and
at the time (the "Effective Time") on which appropriate documents in respect of
the Merger are filed with the Secretaries of State of the States of Delaware and
Missouri in such form as required by, and in accordance with, the relevant
provisions of the DGCL and MGBCL, respectively. Subject to the terms and
conditions of this Agreement, the Effective
 
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Time shall occur on any such date as Mercantile shall notify Firstbank in
writing (such notice to be at least five business days in advance of the
Effective Time) but (i) not earlier than the satisfaction of all conditions set
forth in Section 6.01 and 6.02 (the "Approval Date") and (ii) subject to clause
(i), not later than the first business day of the first full calendar month
commencing at least five business days after the Approval Date. As soon as
practicable following the Effective Time, Mercantile and Firstbank shall cause a
certificate or plan of merger reflecting the terms of this Agreement to be
delivered for filing and recordation with other appropriate state or local
officials in the States of Delaware and Missouri in accordance with the DGCL and
the MGBCL, respectively.
 
     1.04.  Additional Actions.  If, at any time after the Effective Time,
Mercantile or the Surviving Corporation shall consider or be advised that any
further deeds, assignments or assurances or any other acts are necessary or
desirable to (a) vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of Firstbank or Merger Sub or (b) otherwise carry
out the purposes of this Agreement, Firstbank and Merger Sub and each of their
respective officers and directors, shall be deemed to have granted to the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such deeds, assignments or assurances and to do all acts necessary or
desirable to vest, perfect or confirm title and possession to such rights,
properties or assets in the Surviving Corporation and otherwise to carry out the
purposes of this Agreement, and the officers and directors of the Surviving
Corporation are authorized in the name of Firstbank or otherwise to take any and
all such action.
 
     1.05.  Articles of Incorporation and Bylaws.  The Articles of Incorporation
and Bylaws of Merger Sub in effect immediately prior to the Effective Time shall
be the Articles of Incorporation and Bylaws of the Surviving Corporation
following the Merger until otherwise amended or repealed.
 
     1.06. Boards of Directors and Officers.  At the Effective Time, the
directors and officers of Merger Sub immediately prior to the Effective Time
shall be directors and officers, respectively, of the Surviving Corporation
following the Merger; such directors and officers shall hold office in
accordance with the Surviving Corporation's Bylaws and applicable law.
 
     1.07. Conversion of Securities.  At the Effective Time, by virtue of the
Merger and without any action on the part of Mercantile, Firstbank or the holder
of any of the following securities:
 
             (i) Each share of the common stock, par value $.01 per share, of
        Merger Sub that is issued and outstanding immediately prior to the
        Effective Time shall remain outstanding and shall be unchanged after the
        Merger and shall thereafter constitute all of the issued and outstanding
        capital stock of the Surviving Corporation; and
 
             (ii) Subject to Sections 1.10 and 1.11 hereof, each share of the
        common stock, $1.00 par value ("Firstbank Common Stock"), of Firstbank
        issued and outstanding immediately prior to the Effective Time shall
        cease to be outstanding and shall be converted into and become the right
        to receive 0.8308 (the "Exchange Ratio") shares of common stock, par
        value $.01 per share ("Mercantile Common Stock"), of Mercantile and the
        associated Rights under the Mercantile Rights Agreement as those terms
        are defined in Section 3.02 (the "Per Share Stock Consideration"),
        provided, however, that any shares of Firstbank Common Stock held by
        Firstbank, Mercantile or any of their respective Subsidiaries, in each
        case other than in a fiduciary capacity or as a result of debts
        previously contracted, shall be cancelled and shall not be exchanged for
        shares of Mercantile Common Stock. The Exchange Ratio was computed by
        (i) aggregating (A) the total number of shares of Firstbank Common Stock
        that were issued and outstanding on the date of this Agreement (as set
        forth in Section 2.03 hereof) with (B) the total number of shares of
        Firstbank Common Stock that are reserved for issuance pursuant to
        Firstbank Stock Options (as set forth in Section 2.03 hereof) and
        dividing such number of shares of Firstbank Common Stock (computed by
        aggregating (A) and (B) hereof) into (ii) 13,800,000, the aggregate
        number of shares of Mercantile Common Stock to be issued in the Merger.
 
     1.08. Exchange Procedures.  (a) Holders of record of certificates formerly
representing shares of Firstbank Common Stock (the "Certificates") shall be
instructed to tender such Certificates to Mercantile
 
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pursuant to a letter of transmittal that Mercantile shall deliver or cause to be
delivered to such holders as soon as practicable following the Effective Time.
Such letters of transmittal shall specify that risk of loss and title to
Certificates shall pass only upon delivery of such Certificates to Mercantile or
the Exchange Agent (as defined below).
 
          (b) Subject to Section 1.10, after the Effective Time, each previous
     holder of a Certificate that surrenders such Certificate to Mercantile or
     to Harris Trust and Savings Bank, as the exchange agent designated by
     Mercantile (the "Exchange Agent"), will, upon acceptance thereof by
     Mercantile or the Exchange Agent, be entitled to a certificate or
     certificates representing the number of full shares of Mercantile Common
     Stock into which the shares represented by the Certificate so surrendered
     shall have been converted pursuant to this Agreement and any distribution
     theretofore declared and not yet paid with respect to such shares of
     Mercantile Common Stock, without interest, and a check representing the
     amount of any cash in lieu of fractional shares which such holder has the
     right to receive with respect to the Certificate(s) surrendered.
 
          (c) Mercantile or, at the election of Mercantile, the Exchange Agent
     shall accept Certificates upon compliance with such reasonable terms and
     conditions as Mercantile or the Exchange Agent may impose to effect an
     orderly exchange thereof in accordance with customary exchange practices.
     Certificates shall be appropriately endorsed or accompanied by such
     instruments of transfer as Mercantile or the Exchange Agent may reasonably
     require.
 
          (d) Each outstanding Certificate shall until duly surrendered to
     Mercantile or the Exchange Agent be deemed to evidence ownership of the
     consideration into which the stock previously represented by such
     Certificate shall have been converted pursuant to this Agreement.
 
          (e) After the Effective Time, holders of Certificates shall cease to
     have rights with respect to the stock previously represented by such
     Certificates, and their sole rights shall be to exchange such Certificates
     for the consideration provided for in this Agreement. After the Effective
     Time, there shall be no further transfer on the records of Firstbank of
     Certificates, and if such Certificates are presented to Firstbank for
     transfer, they shall be cancelled against delivery of the consideration
     provided therefor in this Agreement. Mercantile shall not be obligated to
     deliver the consideration to which any former holder of Firstbank Common
     Stock is entitled as a result of the Merger until such holder surrenders
     the Certificates as provided herein. No dividends declared will be remitted
     to any person entitled to receive Mercantile Common Stock under this
     Agreement until such person surrenders the Certificate representing the
     right to receive such Mercantile Common Stock, at which time such dividends
     shall be remitted to such person, without interest and less any taxes that
     may have been imposed thereon. Certificates surrendered for exchange by any
     person constituting an "affiliate" of Firstbank for purposes of Rule 145 of
     the Securities Act of 1933, as amended (together with the rules and
     regulations thereunder, the "Securities Act"), shall not be exchanged for
     certificates representing Mercantile Common Stock until Mercantile has
     received a written agreement from such person in the form attached as
     Exhibit C. Neither the Exchange Agent nor any party to this Agreement nor
     any affiliate thereof shall be liable to any holder of stock represented by
     any Certificate for any consideration paid to a public official pursuant to
     applicable abandoned property, escheat or similar laws. Mercantile and the
     Exchange Agent shall be entitled to rely upon the stock transfer books of
     Firstbank to establish the identity of those persons entitled to receive
     consideration specified in this Agreement, which books shall be conclusive
     with respect thereto. In the event of a dispute with respect to ownership
     of stock represented by any Certificate, Mercantile and the Exchange Agent
     shall be entitled to deposit any consideration represented thereby in
     escrow with an independent third party and thereafter be relieved with
     respect to any claims thereto.
 
     1.09. [Intentionally Omitted]
 
     1.10. No Fractional Shares. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of Mercantile
Common Stock shall be issued in the Merger. Each holder who otherwise would have
been entitled to a fraction of a share of Mercantile Common Stock shall receive
in lieu thereof cash (without interest) in an amount determined by multiplying
the fractional share interest to which such holder would otherwise be entitled
by the Closing Price per share of Mercantile Common Stock on the
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last business day preceding the Effective Time. With respect to a share of
stock, "Closing Price" shall mean: the closing price as reported on the
Consolidated Tape (as reported in The Wall Street Journal or in the absence
thereof, by any other authoritative source). No such holder shall be entitled to
dividends, voting rights or any other rights in respect of any fractional share.
 
     1.11. Anti-Dilution Adjustments.  If prior to the Effective Time Mercantile
shall declare a stock dividend or make distributions upon or subdivide, split
up, reclassify or combine or make other similar change to Mercantile Common
Stock, exchange Mercantile Common Stock for a different number or kind of shares
or securities or declare a dividend or make a distribution on Mercantile Common
Stock or on any security convertible into Mercantile Common Stock, or is
involved in any transaction resulting in any of the foregoing (including any
exchange of Mercantile Common Stock for a different number or kind of shares or
securities), appropriate adjustment or adjustments will be made to the Exchange
Ratio.
 
     1.12. Reservation of Right to Revise Transaction.  Mercantile may at any
time change the method of effecting the acquisition of Firstbank or Firstbank's
Subsidiaries by Mercantile and Firstbank shall cooperate in such efforts
(including without limitation (a) the provisions of this Article I and (b)
causing the merger of any of the Banks (as defined herein) with any depository
institution which is a Subsidiary of Mercantile (any such merger together with
the Merger being referred to herein as the "Transactions")) if and to the extent
it deems such change to be desirable, including without limitation to provide
for a merger of Firstbank directly into Mercantile, in which Mercantile is the
surviving corporation, provided, however, that no such change shall (A) alter or
change the amount or kind of consideration to be issued to holders of Firstbank
Common Stock as provided for in this Agreement (the "Merger Consideration"), (B)
adversely affect the tax treatment to Firstbank's stockholders as a result of
receiving the Merger Consideration or (C) materially delay receipt of any
approval referred to in Section 6.01(b) or the consummation of the transactions
contemplated by this Agreement.
 
                                   ARTICLE II
 
             REPRESENTATIONS, WARRANTIES AND COVENANTS OF FIRSTBANK
 
     Firstbank represents and warrants to and covenants with Mercantile as
follows:
 
     2.01. Organization and Authority.  Firstbank is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified, except as set forth on Schedule 2.01
and except where the failure to be so qualified would not have and could not
reasonably be expected to have a material adverse effect on the financial
condition, results of operations or business (collectively, the "Condition") of
Firstbank and its Subsidiaries, taken as a whole, and has corporate power and
authority to own its properties and assets and to carry on its business as it is
now being conducted. Firstbank is registered as a bank holding company with the
Board of Governors of the Federal Reserve System (the "Board") under the BHCA.
True and complete copies of the Certificate of Incorporation and the Bylaws of
Firstbank and, to the extent requested in writing by Mercantile, of the articles
of incorporation and bylaws of the Firstbank Subsidiaries (as defined in Section
2.02), each as in effect on the date of this Agreement, have been provided to
Mercantile.
 
     2.02. Subsidiaries.  Schedule 2.02 sets forth, among other things, a
complete and correct list of all of Firstbank's Subsidiaries (each a "Firstbank
Subsidiary" and collectively the "Firstbank Subsidiaries"), all outstanding
Equity Securities of each of which, except as set forth on Schedule 2.02, are
owned directly or indirectly by Firstbank. "Equity Securities" of an issuer
means capital stock or other equity securities of such issuer, options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, shares of any
capital stock or other Equity Securities of such issuer, or contracts,
commitments, understandings or arrangements by which such issuer is or may
become bound to issue additional shares of its capital stock or other Equity
Securities of such issuer, or options, warrants, scrip or rights to purchase,
acquire, subscribe to, calls on or commitments for any shares of its capital
 
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<PAGE>   94
 
stock or other Equity Securities. Except as set forth on Schedule 2.02, all of
the outstanding shares of capital stock of the Firstbank Subsidiaries are
validly issued, fully paid and nonassessable, and those shares owned by
Firstbank are owned free and clear of any lien, claim, charge, option,
encumbrance, agreement, mortgage, pledge, security interest or restriction (a
"Lien") with respect thereto. Each of the Firstbank Subsidiaries is a
corporation, savings bank, bank or bank and trust company duly incorporated or
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or organization, and has corporate power and
authority to own or lease its properties and assets and to carry on its business
as it is now being conducted. Each of the Firstbank Subsidiaries is duly
qualified to do business in each jurisdiction where its ownership or leasing of
property or the conduct of its business requires it so to be qualified, except
where the failure to so qualify would not have and could not reasonably be
expected to have a material adverse effect on the Condition of Firstbank and its
Subsidiaries, taken as a whole. Except as set forth on Schedule 2.02, Firstbank
does not own beneficially, directly or indirectly, any shares of any class of
Equity Securities or similar interests of any corporation, bank, business trust,
association or similar organization. The place and type of charter and the
applicable insurance fund for each of Firstbank's Subsidiaries which are
financial institutions (the "Banks") are set forth on Schedule 2.02. Except as
set forth on Schedule 2.02, neither Firstbank nor any Firstbank Subsidiary holds
any interest in a partnership or joint venture of any kind.
 
     2.03. Capitalization.  The authorized capital stock of Firstbank consists
of (i) 20,000,000 shares of Firstbank Common Stock, of which, as of January 2,
1998, 15,753,053 shares were issued and outstanding and (ii) 1,000,000 shares of
preferred stock, no par value per share, of which, as of January 2, 1998, no
shares were issued and outstanding ("Firstbank Preferred Stock"). As of January
2, 1998, Firstbank had reserved 857,201 shares of Firstbank Common Stock for
issuance under Firstbank's stock option and incentive plans, a list of which is
set forth on Schedule 2.03 (the "Firstbank Stock Plans"), pursuant to which
options ("Firstbank Stock Options") covering 857,201 shares of Firstbank Common
Stock were outstanding as of January 2, 1998. Except as set forth on Schedule
2.03, since December 31, 1997, no Equity Securities of Firstbank have been
issued other than shares of Firstbank Common Stock which may have been issued
upon the exercise of Firstbank Stock Options. Except as set forth above, there
are no other Equity Securities of Firstbank outstanding. All of the issued and
outstanding shares of Firstbank Common Stock are validly issued, fully paid, and
nonassessable, and have not been issued in violation of any preemptive right of
any stockholder of Firstbank. Since January 2, 1998, Firstbank has not granted
any options or similar rights pursuant to which shares of Firstbank Common Stock
may be issued and has not issued any shares of Firstbank Common Stock. Neither
Firstbank nor any Firstbank Subsidiary, to the best of Firstbank's knowledge,
has taken or agreed to take any action or has any knowledge of any fact or
circumstance and neither Firstbank nor any Firstbank Subsidiary will take any
action that would, or intentionally will fail to take any action the failure of
which to take would, prevent the Merger from qualifying for pooling-of-interests
accounting treatment.
 
     2.04. Authorization.  (a) Except as set forth on Schedule 2.04A, Firstbank
has the corporate power and authority to enter into this Agreement and, subject
to the approval of this Agreement by the stockholders of Firstbank, to carry out
its obligations hereunder. The only stockholder vote required for Firstbank to
approve this Agreement is the affirmative vote of the holders of at least a
majority of the shares of Firstbank Common Stock entitled to vote at a meeting
called for such purpose. The execution, delivery and performance of this
Agreement by Firstbank and the consummation by Firstbank of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Firstbank. Subject to approval by the stockholders of Firstbank, this Agreement
is a valid and binding obligation of Firstbank enforceable against Firstbank in
accordance with its terms, except as enforceability may be limited by applicable
laws relating to bankruptcy, insolvency or creditors rights generally and
general principles of equity.
 
          (b) Except as set forth on Schedule 2.04B, neither the execution nor
     delivery nor performance by Firstbank of this Agreement, nor the
     consummation by Firstbank of the transactions contemplated hereby, nor
     compliance by Firstbank with any of the provisions hereof, will (i)
     violate, conflict with, or result in a breach of any provisions of, or
     constitute a default (or an event which, with notice or lapse of time or
     both, would constitute a default) under, or result in the termination of,
     or accelerate the performance required by, or result in a right of
     termination or acceleration of, or result in the creation of, any Lien upon
     any of the material properties or assets of Firstbank or any Firstbank
     Subsidiary under any
 
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<PAGE>   95
 
     of the terms, conditions or provisions of (x) its articles or certificate
     of incorporation or bylaws or (y) any material note, bond, mortgage,
     indenture, deed of trust, license, lease, agreement or other instrument or
     obligation to which Firstbank or any Firstbank Subsidiary is a party or by
     which it may be bound, or to which Firstbank or any Firstbank Subsidiary or
     any of the material properties or assets of Firstbank or any Firstbank
     Subsidiary may be subject (in all cases other than any of the foregoing
     which would not have and could not reasonably be expected to have a
     material adverse effect on the Condition of Firstbank and the Firstbank
     Subsidiaries, taken as a whole), or (ii) subject to compliance with the
     statutes and regulations referred to in paragraph (c) of this Section 2.04,
     to the best knowledge of Firstbank, violate any judgment, ruling, order,
     writ, injunction, decree, statute, rule or regulation applicable to
     Firstbank or any Firstbank Subsidiary or any of their respective material
     properties or assets.
 
          (c) Other than in connection or in compliance with the provisions of
     the DGCL, the MGBCL, the Securities Act, the Securities Exchange Act of
     1934, as amended, and the rules and regulations thereunder (the "Exchange
     Act"), the Investment Company Act of 1940, the securities or blue sky laws
     of the various states or filings, consents, reviews, authorizations,
     approvals or exemptions required under the BHCA or any required approvals
     or filings pursuant to any state statutes or regulations applicable to
     Firstbank, Mercantile or their respective Subsidiaries with respect to the
     transactions contemplated by this Agreement, no notice to, filing with,
     exemption or review by, or authorization, consent or approval of, any
     public body or authority is necessary for the consummation by Firstbank of
     the transactions contemplated by this Agreement.
 
     2.05. Firstbank Financial Statements.  The consolidated balance sheets of
Firstbank and its Subsidiaries as of December 31, 1996, 1995 and 1994 and
related consolidated statements of income, cash flows and changes in
stockholders' equity for each of the three years in the three-year period ended
December 31, 1996, together with the notes thereto, audited by KPMG Peat Marwick
LLP and included in an annual report on Form 10-K (including amendments thereto)
as filed with the Securities and Exchange Commission (the "SEC"), and the
unaudited consolidated balance sheets of Firstbank and its Subsidiaries as of
March 31, June 30, and September 30, 1997 and the related unaudited consolidated
statements of income and cash flows for the periods then ended, together with
the notes thereto, included in quarterly reports on Form 10-Q (including
amendments thereto) (each a "Firstbank Form 10-Q") as filed with the SEC
(collectively, the "Firstbank Financial Statements"), except as set forth on
Schedule 2.05, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis ("GAAP"), present fairly the
consolidated financial position of Firstbank and its Subsidiaries at the dates
and the consolidated results of operations, cash flows and changes in
stockholders' equity of Firstbank and its Subsidiaries for the periods stated
therein and are derived from the books and records of Firstbank and its
Subsidiaries, which are complete and accurate in all material respects and have
been maintained in all material respects in accordance with applicable laws and
regulations. Except as set forth on Schedule 2.05, neither Firstbank nor any of
its Subsidiaries has any contingent liabilities that are material to Firstbank
and the Firstbank Subsidiaries, taken as a whole, and which are not reflected in
the Firstbank Reports (defined below) or disclosed in the financial statements
described above.
 
     2.06. Firstbank Reports.  Except as set forth on Schedule 2.06, since
January 1, 1994, each of Firstbank and the Firstbank Subsidiaries has filed all
material reports, registrations and statements, together with any required
material amendments thereto, that it was required to file with (i) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K and proxy
statements, (ii) the FDIC, (iii) the Board and (iv) any other federal, state,
municipal, local or foreign government, securities, banking, savings and loan,
insurance and other governmental or regulatory authority and the agencies and
staffs thereof (the entities in the foregoing clauses (i) through (iv) being
referred to herein collectively as the "Regulatory Authorities" and individually
as a "Regulatory Authority"). All such reports and statements filed with any
such Regulatory Authority are collectively referred to herein as the "Firstbank
Reports." As of its respective date, each Firstbank Report complied in all
material respects with all the rules and regulations promulgated by the
applicable Regulatory Authority and did 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.
 
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<PAGE>   96
 
     2.07. Properties and Leases.  Except as set forth on Schedule 2.07 or as
may be reflected in the Firstbank Financial Statements, except for any Lien for
current taxes not yet delinquent and except with respect to assets classified as
real estate owned, Firstbank and its Subsidiaries have good title free and clear
of any material Lien to all the real and personal property reflected in
Firstbank's consolidated balance sheet as of September 30, 1997 included in the
most recent Firstbank Form 10-Q and, in each case, all real and personal
property acquired since such date, except such real and personal property as has
been disposed of in the ordinary course of business. All leases material to
Firstbank or any Firstbank Subsidiary pursuant to which Firstbank or any
Firstbank Subsidiary, as lessee, leases real or personal property, are valid and
effective in accordance with their respective terms, and there is not, under any
of such leases, any material existing default by Firstbank or any Firstbank
Subsidiary or any event which, with notice or lapse of time or both, would
constitute such a material default. Substantially all of Firstbank's and
Firstbank Subsidiaries' buildings, structures and equipment in regular use have
been well maintained and are in good and serviceable condition, normal wear and
tear excepted.
 
     2.08. Taxes.  Except as set forth on Schedule 2.08, Firstbank and each
Firstbank Subsidiary have timely filed or will timely (including extensions)
file all material tax returns, reports and certifications required to be filed
on or prior to the Closing Date ("Firstbank Returns"), and such filed Firstbank
Returns are and will be complete and accurate in all material respects. Each of
Firstbank and its Subsidiaries has paid (taking into account all applicable
extensions), or set up adequate reserves on the Firstbank Financial Statements
for the payment of, all taxes required to be paid in respect of the periods
covered by the Firstbank Financial Statements and has set up adequate reserves
on the most recent financial statements Firstbank has filed under the Exchange
Act for the payment of all taxes anticipated to be payable in respect of all
periods up to and including the latest period covered by such financial
statements. Neither Firstbank nor any Firstbank Subsidiary will have any
liability material or reasonably expected to be material to the Condition of
Firstbank and the Firstbank Subsidiaries, taken as a whole, for any such taxes
in excess of the amounts so paid or reserves so established and, to the
knowledge of Firstbank, no material deficiencies for any tax, assessment or
governmental charge have been proposed, asserted or assessed (tentatively or
definitely) against any of Firstbank or any Firstbank Subsidiary which would not
be covered by existing reserves. Neither Firstbank nor any Firstbank Subsidiary
is delinquent in the payment of any material tax, assessment or governmental
charge, nor has it requested any extension of time within which to file any tax
returns in respect of any fiscal year which have not since been timely filed and
no requests for extensions or waivers of the time to assess any tax are pending.
The federal and state income tax returns of Firstbank and the Firstbank
Subsidiaries have been audited and settled by the Internal Revenue Service (the
"IRS") or appropriate state tax authorities for all periods ended through
December 31, 1994 (with respect to federal income tax returns) and December 31,
1993 (with respect to state income tax returns) or the period for assessment of
taxes in respect of such periods has expired. There is no deficiency or refund
litigation or matter in controversy with respect to Firstbank Returns. Neither
Firstbank nor any Firstbank Subsidiary has extended or waived any statute of
limitations on the assessment of any tax due that is currently in effect.
 
     2.09. Material Adverse Change.  Since September 30, 1997, there has been no
material adverse change in the Condition of Firstbank and its Subsidiaries,
taken as a whole, except (i) as may have resulted or may result from changes to
laws and regulations or changes in economic conditions applicable to banking
institutions generally or in general levels of interest rates affecting banking
institutions generally and (ii) costs, up to the amounts set forth on Schedule
2.23, incurred or to be incurred by Firstbank in connection with this Agreement,
which include costs incurred for investment banking, accounting and legal
services.
 
     2.10. Commitments and Contracts.  (a) Except as set forth on Schedule
2.10A, neither Firstbank nor any Firstbank Subsidiary is a party or subject to
any of the following (whether written or oral, express or implied):
 
             (i) any material agreement, arrangement or commitment (A) not made
        in the ordinary course of business or (B) pursuant to which Firstbank or
        any of its Subsidiaries is or may become obligated to invest in or
        contribute capital to any Firstbank Subsidiary;
 
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<PAGE>   97
 
             (ii) any agreement, indenture or other instrument not disclosed in
        the Firstbank Financial Statements relating to the borrowing of money by
        Firstbank or any Firstbank Subsidiary or the guarantee by Firstbank or
        any Firstbank Subsidiary of any such obligation (other than trade
        payables or instruments related to transactions entered into in the
        ordinary course of business by any Firstbank Subsidiary, such as
        deposits and Fed Funds borrowings);
 
             (iii) any contract, agreement or understanding with any labor union
        or collective bargaining organization relating to employees of Firstbank
        or any Firstbank Subsidiaries;
 
             (iv) any contract containing covenants which limit the ability of
        Firstbank or any Firstbank Subsidiary to compete in any line of business
        or with any person or which involve any restriction of the geographical
        area in which, or method by which, Firstbank or any Firstbank Subsidiary
        may carry on its business other than as may be required by law or any
        applicable Regulatory Authority) and which are not material or
        reasonably expected to be material to the Condition of Firstbank and the
        Firstbank Subsidiaries, taken as a whole;
 
             (v) any other contract or agreement which is a "material contract"
        within the meaning of Item 601(b)(10) of Regulation S-K promulgated by
        the SEC; or
 
             (vi) any lease with annual rental payments aggregating $250,000 or
        more.
 
          (b) Neither Firstbank nor any Firstbank Subsidiary is in violation of
     its charter documents or bylaws or in default under any material agreement,
     commitment, arrangement, lease, insurance policy, or other instrument,
     whether entered into in the ordinary course of business or otherwise and
     whether written or oral, and there has not occurred any event that, with
     the lapse of time or giving of notice or both, would constitute such a
     default, except, in all cases, where such default would not have and could
     not reasonably be expected to have a material adverse effect on the
     Condition of Firstbank and its Subsidiaries, taken as a whole.
 
     2.11. Litigation and Other Proceedings.  Except as set forth on Schedule
2.11, neither Firstbank nor any Firstbank Subsidiary is a party to any pending
or, to the best knowledge of Firstbank, threatened claim, action, suit,
investigation or proceeding, or is subject to any order, judgment or decree,
except for matters which, in the aggregate, will not have, or reasonably could
not be expected to have, a material adverse effect on the Condition of Firstbank
and its Subsidiaries, taken as a whole, or which purports or seeks to enjoin or
restrain the transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, as of the date of this Agreement, there are no
actions, suits, or proceedings pending or, to the best knowledge of Firstbank,
threatened against Firstbank or any Firstbank Subsidiary or any of their
respective officers or directors by any stockholder of Firstbank or any
Firstbank Subsidiary (or any former stockholder of Firstbank or any Firstbank
Subsidiary) or involving claims under the Securities Act, the Exchange Act, the
Community Reinvestment Act of 1977, as amended, or the fair lending laws.
 
     2.12. Insurance.  Each of Firstbank and its Subsidiaries has taken all
requisite action (including without limitation the making of claims and the
giving of notices) pursuant to its directors' and officers' liability insurance
policy or policies in order to preserve all rights thereunder with respect to
all matters (other than matters arising in connection with this Agreement and
the transactions contemplated hereby) occurring prior to the Effective Time that
are known to Firstbank, except for such matters which, individually or in the
aggregate, will not have and reasonably could not be expected to have a material
adverse effect on the Condition of Firstbank and its Subsidiaries, taken as a
whole. Set forth on Schedule 2.12 is a list of all insurance policies maintained
by or for the benefit of Firstbank or its Subsidiaries or their directors,
officers, employees or agents.
 
     2.13. Compliance with Laws.  (a) Except as set forth on Schedule 2.13A,
Firstbank and each of its Subsidiaries have all permits, licenses,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, all Regulatory Authorities that are required in order to
permit them to own or lease their properties and assets and to carry on their
business as presently conducted and that are material or reasonably expected to
be material to the Condition of Firstbank and its Subsidiaries, taken as a
whole; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the best
                                       A-9
<PAGE>   98
 
knowledge of Firstbank, no suspension or cancellation of any of them is
threatened; and all such filings, applications and registrations are current.
 
          (b) Except as set forth on Schedule 2.13B and except for failures to
     comply or defaults which individually or in the aggregate would not have
     and could not reasonably be expected to have a material adverse effect on
     the Condition of Firstbank and its Subsidiaries, taken as a whole, (i) each
     of Firstbank and its Subsidiaries has complied with all laws, regulations
     and orders (including without limitation zoning ordinances, building codes,
     the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
     and securities, tax, environmental, civil rights, and occupational health
     and safety laws and regulations and including without limitation in the
     case of any Firstbank Subsidiary that is a bank, banking organization,
     banking corporation or trust company, all statutes, rules, regulations and
     policy statements pertaining to the conduct of a banking, deposit-taking,
     lending or related business, or to the exercise of trust powers) and
     governing instruments applicable to them and to the conduct of their
     business, and (ii) neither Firstbank nor any Firstbank Subsidiary is in
     default under, and no event has occurred which, with the lapse of time or
     notice or both, could result in the default under, the terms of any
     judgment, order, writ, decree, permit, or license of any Regulatory
     Authority or court, whether federal, state, municipal, or local and whether
     at law or in equity. Except as set forth on Schedule 2.13B and except as
     would not have and could not reasonably be expected to have a material
     adverse effect on the Condition of Firstbank and its Subsidiaries, taken as
     a whole, as of the date of this Agreement, neither Firstbank nor any
     Firstbank Subsidiary is subject to or reasonably likely to incur a
     liability as a result of its ownership, operation, or use of any Property
     (as defined below) of Firstbank (whether directly or, to the best knowledge
     of Firstbank, as a consequence of such Property being part of the
     investment portfolio of Firstbank or any Firstbank Subsidiary) (A) that is
     contaminated by or contains any hazardous waste, toxic substance, or
     related materials, including without limitation asbestos, PCBs, pesticides,
     herbicides, and any other substance or waste that is hazardous to human
     health or the environment (collectively, a "Toxic Substance"), or (B) on
     which any Toxic Substance has been stored, disposed of, placed, or used in
     the construction thereof. "Property" of a person shall include all property
     (real or personal, tangible or intangible) owned or controlled by such
     person, including without limitation property under foreclosure, property
     held by such person or any Subsidiary of such person in its capacity as a
     trustee and property in which any venture capital or similar unit of such
     person or any Subsidiary of such person has an interest. Except as set
     forth on Schedule 2.13B, no claim, action, suit, or proceeding is pending
     against Firstbank or any Firstbank Subsidiary relating to Property of
     Firstbank before any court or other Regulatory Authority or arbitration
     tribunal relating to hazardous substances, pollution, or the environment,
     and there is no outstanding judgment, order, writ, injunction, decree, or
     award against or affecting Firstbank or any Firstbank Subsidiary with
     respect to the same. Except for statutory or regulatory restrictions of
     general application, no Regulatory Authority has placed any restriction on
     the business of Firstbank or any Firstbank Subsidiary which reasonably
     could be expected to have a material adverse effect on the Condition of
     Firstbank and its Subsidiaries, taken as a whole.
 
          (c) From and after January 1, 1994, neither Firstbank nor any
     Firstbank Subsidiary has received any notification or communication which
     has not been finally resolved from any Regulatory Authority (i) asserting
     that any Firstbank or any Subsidiary of Firstbank, is not in substantial
     compliance with any of the statutes, regulations or ordinances that such
     Regulatory Authority enforces, except with respect to matters which (A) are
     set forth on Schedule 2.13C or (B) reasonably could not be expected to have
     a material adverse effect on the Condition of Firstbank and its
     Subsidiaries, taken as a whole, (ii) threatening to revoke any license,
     franchise, permit or governmental authorization that is material or
     reasonably expected to be material to the Condition of Firstbank and its
     Subsidiaries, taken as a whole, including without limitation such company's
     status as an insured depositary institution under the Federal Deposit
     Insurance Act, or (iii) requiring or threatening to require Firstbank or
     any of its Subsidiaries, or indicating that Firstbank or any of its
     Subsidiaries may be required, to enter into a cease and desist order,
     agreement or memorandum of understanding or any other agreement restricting
     or limiting or purporting to direct, restrict or limit in any manner the
     operations of Firstbank or any of its Subsidiaries, including without
     limitation any restriction on the payment of dividends. No such cease and
     desist order, agreement or memorandum of understanding or other agreement
     is currently in effect.
                                      A-10
<PAGE>   99
 
          (d) Except as set forth on Schedule 2.13D, neither Firstbank nor any
     Firstbank Subsidiary is required by Section 32 of the Federal Deposit
     Insurance Act to give prior notice to any federal banking agency of the
     proposed addition of an individual to its board of directors or the
     employment of an individual as a senior executive officer.
 
     2.14. Labor.  No work stoppage involving Firstbank or any Firstbank
Subsidiary, is pending or, to the best knowledge of Firstbank, threatened which
reasonably could be expected to have a material adverse effect on the Condition
of Firstbank and its Subsidiaries, taken as a whole. Neither Firstbank nor any
Firstbank Subsidiary is involved in, or, to the best knowledge of Firstbank,
threatened with or affected by, any labor dispute, arbitration, lawsuit or
administrative proceeding which reasonably could be expected to have a material
adverse affect on the Condition of Firstbank and its Subsidiaries, taken as a
whole. Employees of neither Firstbank nor any Firstbank Subsidiary, are
represented by any labor union or any collective bargaining organization.
 
     2.15. Material Interests of Certain Persons.  (a) Except as set forth in
Firstbank's Proxy Statement for its 1997 Annual Meeting of Shareholders, to the
best knowledge of Firstbank, no officer or director of Firstbank or any
Subsidiary of Firstbank, or any "associate" (as such term is defined in Rule
14a-1 under the Exchange Act) of any such officer or director, has any material
interest in any material contract or property (real or personal, tangible or
intangible), used in, or pertaining to the business of, Firstbank or any
Subsidiary of Firstbank, which in the case of Firstbank is required to be
disclosed by Item 404 of Regulation S-K promulgated by the SEC or in the case of
any such Subsidiary would be required to be so disclosed if such Subsidiary had
a class of securities registered under Section 12 of the Exchange Act.
 
          (b) Except as set forth in Firstbank's Proxy Statement for its 1997
     Annual Meeting of Shareholders or on Schedule 2.15B, there are no loans
     from Firstbank or any Firstbank Subsidiary to any present officer,
     director, employee or any associate or related interest of any such person
     which was or would be required under any rule or regulation to be approved
     by or reported to Firstbank's or Firstbank Subsidiary's Board of Directors
     ("Insider Loans"). All outstanding Insider Loans from Firstbank or any
     Firstbank Subsidiary were approved by or reported to the appropriate board
     of directors to the extent required in accordance with applicable law and
     regulations.
 
     2.16. Allowance for Loan and Lease Losses; Nonperforming Assets.  (a) The
allowances for loan and lease losses contained in the Firstbank Financial
Statements were established in accordance with the past practices and
experiences of Firstbank and its Subsidiaries, and the allowance for loan losses
shown on the consolidated condensed balance sheet of Firstbank and its
Subsidiaries contained in the most recent Firstbank Form 10-Q is adequate in all
material respects under the requirements of GAAP to provide for possible losses
on loans (including without limitation accrued interest receivable) and credit
commitments (including without limitation stand-by letters of credit)
outstanding as of the date of such balance sheet.
 
          (b) As of September 30, 1997, the aggregate amount of all
     Nonperforming Assets (as defined below) on the books of Firstbank and its
     Subsidiaries does not exceed $12,000,000. "Nonperforming Assets" shall mean
     (i) all loans and leases (A) that are contractually past due 90 days or
     more in the payment of principal and/or interest, (B) that are on
     nonaccrual status, (C) where a reasonable doubt exists, in the reasonable
     judgment of Firstbank, as to the timely future collectibility of principal
     and/or interest, whether or not interest is still accruing or the loan is
     less than 90 days past due, (D) where the interest rate terms have been
     reduced and/or the maturity dates have been extended subsequent to the
     agreement under which the loan was originally created due to concerns
     regarding the borrower's ability to pay in accordance with such initial
     terms, (E) where a specific reserve allocation exists in connection
     therewith, or (F) that have been classified "doubtful", "loss" or the
     equivalent thereof by any Regulatory Authority, and (ii) all assets
     classified as real estate acquired through foreclosure or repossession and
     other assets acquired through foreclosure or repossession.
 
     2.17. Employee Benefit Plans.  (a) Except as set forth on Schedule 2.17A,
neither Firstbank nor any Firstbank Subsidiary is a party to any existing
employment, management, consulting, deferred compensation, change-in-control or
other similar contract. Schedule 2.17A lists all pension, retirement,
supplemental retirement, savings, profit sharing, stock option, stock purchase,
stock ownership, stock appreciation right,
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<PAGE>   100
 
deferred compensation, consulting, bonus, medical, disability, workers'
compensation, vacation, group insurance, severance and other material employee
benefit, incentive and welfare policies, contracts, plans and arrangements, and
all trust agreements related thereto, maintained (currently or at any time in
the last five years) by or contributed to by Firstbank or any Firstbank
Subsidiary in respect of any of the present or former directors, officers, or
other employees of and/or consultants to Firstbank or any Firstbank Subsidiary
(collectively, "Firstbank Employee Plans"). Firstbank has furnished Mercantile
with the following documents with respect to each Firstbank Employee Plan: (i) a
true and complete copy of all material written documents comprising such
Firstbank Employee Plan (including amendments and individual agreements relating
thereto) or, if there is no such written document, an accurate and complete
description of the Firstbank Employee Plan; (ii) the most recent Form 5500 or
Form 5500-C (including all schedules thereto), if applicable; (iii) the most
recent financial statements and actuarial reports, if any; (iv) the summary plan
description currently in effect and all material modifications thereof, if any;
and (v) the most recent IRS determination letter, if any. Without limiting the
generality of the foregoing, Firstbank has furnished Mercantile with true and
complete copies of each form of stock option grant or stock option agreement
that is outstanding under any stock option plan of Firstbank or any Firstbank
Subsidiary.
 
          (b) Except as set forth on Schedule 2.17B, all Firstbank Employee
     Plans have been maintained and operated materially in accordance with their
     terms and with the material requirements of all applicable statutes,
     orders, rules and final regulations, including without limitation ERISA and
     the Code. All contributions required to be made to Firstbank Employee Plans
     have been made.
 
          (c) With respect to each of the Firstbank Employee Plans which is a
     pension plan (as defined in Section 3(2) of ERISA) (the "Pension Plans"),
     except as set forth on Schedule 2.17C: (i) each Pension Plan which is
     intended to be "qualified" within the meaning of Section 401(a) of the Code
     has been determined to be so qualified by the IRS and, to the knowledge of
     Firstbank, such determination letter may still be relied upon, and each
     related trust is exempt from taxation under Section 501(a) of the Internal
     Revenue Code of 1986, as amended, together with the Treasury regulations
     thereunder (the "IRC"); (ii) the actuarial present value of all benefits
     under each Pension Plan which is subject to Title IV of ERISA, valued using
     the assumptions in the most recent actuarial report, did not, in each case,
     as of the last applicable annual valuation date (as indicated on Schedule
     2.17A), exceed the value of the assets of the Pension Plan allocable to
     such vested or accrued benefits; (iii) to the best knowledge of Firstbank,
     there has been no "prohibited transaction", as such term is defined in
     Section 4975 of the Code or Section 406 of ERISA, which could subject any
     Pension Plan or associated trust, or Firstbank or any Firstbank Subsidiary,
     to any material tax or penalty; (iv) except as set forth on Schedule 2.17C,
     no Pension Plan subject to Title IV of ERISA or any trust created
     thereunder has been terminated, nor have there been any "reportable events"
     with respect to any Pension Plan, as that term is defined in Section 4043
     of ERISA for which the 30-day notice requirement has not been waived on or
     after January 1, 1993; and (v) no Pension Plan or any trust created
     thereunder has incurred any "accumulated funding deficiency", as such term
     is defined in Section 302 of ERISA (whether or not waived). Except as set
     forth on Schedule 2.17C, no Pension Plan is a "multiemployer plan" as that
     term is defined in Section 3(37) of ERISA. With respect to each Pension
     Plan that is described in Section 4063(a) of ERISA (a "Multiple Employer
     Pension Plan"): (i) neither Firstbank nor any Firstbank Subsidiary would
     have any liability or obligation to post a bond under Section 4063 of ERISA
     if Firstbank and all Firstbank Subsidiaries were to withdraw from such
     Multiple Employer Pension Plan; and (ii) neither Firstbank nor any
     Firstbank Subsidiary would have any liability under Section 4064 of ERISA
     if such Multiple Employer Pension Plan were to terminate.
 
          (d) Except as set forth on Schedule 2.17D, neither Firstbank nor any
     Firstbank Subsidiary has any liability for any post-retirement health,
     medical or similar benefit of any kind whatsoever, except as required by
     statute or regulation.
 
          (e) Except as set forth on Schedule 2.17E, to the knowledge of
     Firstbank, neither Firstbank nor any Firstbank Subsidiary has any material
     liability under ERISA or the Code as a result of its being a member of a
     group described in Sections 414(b), (c), (m) or (o) of the IRC.
 
                                      A-12
<PAGE>   101
 
          (f) Except as set forth on Schedule 2.17F, neither the execution nor
     delivery of this Agreement, nor the consummation of any of the transactions
     contemplated hereby, will (i) result in any material payment (including
     without limitation severance, unemployment compensation or golden parachute
     payment) becoming due to any director or employee of Firstbank or any
     Firstbank Subsidiary from any of such entities, (ii) materially increase
     any benefit otherwise payable under any of the Firstbank Employee Plans or
     (iii) result in the acceleration of the time of payment of any such
     benefit. No holder of an option to acquire stock of Firstbank has or will
     have at any time through the Effective Time the right to receive any cash
     or other payment (other than the issuance of stock of Firstbank) in
     exchange for or with respect to all or any portion of such option. Except
     as described on Schedule 2.17F, Firstbank shall use its best efforts to
     insure that no amounts paid or payable by Firstbank, Firstbank Subsidiaries
     or Mercantile to or with respect to any employee or former employee of
     Firstbank or any Firstbank Subsidiary will fail to be deductible for
     federal income tax purposes by reason of Section 280G of the IRC. No
     Firstbank Stock Option has an associated "Additional Option Right" (e.g.,
     an SAR, etc.) or similar "re-load" feature.
 
     2.18.  Conduct of Firstbank to Date.  From and after January 1, 1997
through the date of this Agreement, except as set forth on Schedule 2.18 or in
Firstbank Financial Statements or Firstbank Reports: (i) Firstbank and the
Firstbank Subsidiaries have conducted their respective businesses in all
material respects in the ordinary and usual course consistent with past
practices; (ii) neither Firstbank nor any Firstbank Subsidiary has incurred any
material obligation or liability (absolute or contingent), except normal trade
or business obligations or liabilities incurred in the ordinary course of
business, or subjected to Lien any of its material assets or properties other
than in the ordinary course of business consistent with past practice; (iii)
neither Firstbank nor any Firstbank Subsidiary has discharged or satisfied any
material Lien or paid any material obligation or liability (absolute or
contingent), other than in the ordinary course of business; (iv) neither
Firstbank nor any Firstbank Subsidiary has sold, assigned, transferred, leased,
exchanged, or otherwise disposed of any of its material properties or assets
other than for a fair consideration in the ordinary course of business; (v)
except as required by contract or law, neither Firstbank nor any Firstbank
Subsidiary has (A) increased the rate of compensation of, or paid any bonus to,
any of its directors, officers, or other employees, except merit, promotion or
annual increases and bonuses in accordance with existing policy, (B) entered
into any new, or amended or supplemented any existing, employment, management,
consulting, deferred compensation, severance, or other similar contract, (C)
entered into, terminated, or substantially modified any of the Firstbank
Employee Plans or (D) agreed to do any of the foregoing; (vi) neither Firstbank
nor any Firstbank Subsidiary has suffered any material damage, destruction, or
loss, whether as the result of fire, explosion, earthquake, accident, casualty,
labor trouble, requisition, or taking of property by any Regulatory Authority,
flood, windstorm, embargo, riot, act of God or the enemy, or other casualty or
event, and whether or not covered by insurance; and (vii) neither Firstbank nor
any Firstbank Subsidiary has cancelled or compromised any material debt, except
for debts charged off or compromised in accordance with the past practice of
Firstbank and its Subsidiaries.
 
     2.19.  Proxy Statement, etc.  None of the information regarding Firstbank
or any Firstbank Subsidiary supplied or to be supplied by Firstbank for
inclusion and included in (i) the registration statement on Form S-4 to be filed
with the SEC by Mercantile for the purpose of registering the shares of
Mercantile Common Stock to be exchanged for shares of Firstbank Common Stock
pursuant to the provisions of this Agreement (the "Registration Statement"),
(ii) the proxy or information statement (the "Proxy Statement") to be mailed to
Firstbank's stockholders in connection with the transactions contemplated by
this Agreement or (iii) any other documents to be filed with any Regulatory
Authority in connection with the transactions
contemplated hereby will, at the respective times such documents are filed with
any Regulatory Authority and, in the case of the Registration Statement, when it
becomes effective and, with respect to the Proxy Statement, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the meeting of Firstbank's stockholders referred to in
Section 5.03 (the "Meeting") (or, if no Meeting is held, at the time the Proxy
Statement is first furnished to Firstbank's stockholders), 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 Meeting. All documents which Firstbank or
any Firstbank Subsidiary is responsible for
                                      A-13
<PAGE>   102
 
filing with any Regulatory Authority in connection with the Merger will comply
as to form in all material respects with the provisions of applicable law.
 
     2.20.  Registration Obligations.  Except as set forth on Schedule 2.20,
neither Firstbank nor any Firstbank Subsidiary is under any obligation,
contingent or otherwise to register any of its securities under the Securities
Act.
 
     2.21.  State Takeover Statutes; Firstbank's Certificate of
Incorporation.  (a) Except as set forth on Schedule 2.21, the transactions
contemplated by this Agreement are not subject to any applicable state takeover
law assuming that neither Mercantile nor any of its affiliates or associates
beneficially own (other than pursuant to or as a result of the Stock Option
Agreement) more than 15 percent of the outstanding voting shares of Firstbank
prior to the Effective Time.
 
          (b)  Except as set forth on Schedule 2.21, the transactions
     contemplated by this Agreement and the agreements contemplated hereby are
     not, and will not be, prohibited by, or subject to any super majority
     provisions under Firstbank's Certificate of Incorporation or Bylaws.
 
     2.22.  Accounting, Tax and Regulatory Matters.  Neither Firstbank nor any
Firstbank Subsidiary has taken or agreed to take any action or has any knowledge
of any fact or circumstance that would, or intentionally will fail to take any
action the failure of which to take would, (i) prevent the transactions
contemplated hereby from qualifying as a reorganization within the meaning of
Section 368(a) of the Code or (ii) materially impede or delay receipt of any
approval referred to in Section 6.01(b) or the consummation of the transactions
contemplated by this Agreement.
 
     2.23.  Brokers and Finders.  Except for Paine Webber, Inc., neither
Firstbank nor any Firstbank Subsidiary nor any of their respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions or
finder's fees, and no broker or finder has acted directly or indirectly for
Firstbank or any Firstbank Subsidiary in connection with this Agreement or the
transactions contemplated hereby. Schedule 2.23 discloses a bona fide estimate
of the aggregate amount of all fees and expenses expected to be paid by
Firstbank to all third parties in connection with the Merger ("Merger Fees").
 
     2.24.  Other Activities.  (a) Except as set forth on Schedule 2.24A,
neither Firstbank nor any of its Subsidiaries engages in any insurance
activities other than acting as a principal, agent
or broker for insurance that is directly related to an extension of credit by
Firstbank or any of its Subsidiaries and limited to assuring the repayment of
the balance due on the extension of credit in the event of the death, disability
or involuntary unemployment of the debtor.
 
          (b) Except as set forth on Schedule 2.24B, to the knowledge of
     Firstbank's management: each Firstbank Subsidiary that is a bank that
     performs personal trust, corporate trust and other fiduciary activities
     ("Trust Activities") has done so with requisite authority under applicable
     law of Regulatory Authorities and in material accordance with the
     agreements and instruments governing such Trust Activities, sound fiduciary
     principles and applicable law and regulation (specifically including but
     not limited to Section 9 of Title 12 of the Code of Federal Regulations);
     there is no investigation or inquiry by any governmental entity pending or,
     to the knowledge of Firstbank, threatened against Firstbank or any of its
     Subsidiaries thereof relating to the compliance by Firstbank or any of its
     Subsidiaries with sound fiduciary principles and applicable law and
     regulations; and, except where such failures would not have and could not
     reasonably be expected to have a material adverse effect on the Condition
     of Firstbank and the Firstbank Subsidiaries, taken as a whole, each
     employee of any such bank had the authority to act in the capacity in which
     such employee acted with respect to Trust Activities in each case in which
     such employee was held out as a representative of such bank; and such bank
     has established policies and procedures for the purpose of complying with
     applicable laws of governmental entities relating to Trust Activities, has
     followed such policies and procedures in all material respects and has
     performed appropriate internal audit reviews of Trust Activities, which
     audits have disclosed no material violations of applicable laws of
     governmental entities or such policies and procedures.
 
                                      A-14
<PAGE>   103
 
     2.25. Interest Rate Risk Management Instruments.  (a) Set forth on Schedule
2.25A is a list, as of the date hereof, of all interest rate swaps, caps,
floors, and option agreements and other interest rate risk management
arrangements to which Firstbank or any of its Subsidiaries is a party or by
which any of their properties or assets may be bound.
 
          (b) All interest rate swaps, caps, floors and option agreements and
     other interest rate risk management arrangements to which Firstbank or any
     of its Subsidiaries is a party or by which any of their properties or
     assets may be bound were entered into in the ordinary course of business
     and, to the best knowledge of Firstbank, in accordance with prudent banking
     practice and applicable rules, regulations and policies of Regulatory
     Authorities and with counterparties believed to be financially responsible
     at the time and are legal, valid and binding obligations, except as
     enforceability may be limited by applicable laws relating to bankruptcy,
     insolvency or creditors rights generally and general principles of equity,
     and are in full force and effect. Firstbank and each of its Subsidiaries
     has duly performed in all material respects all of its obligations
     thereunder to the extent that such obligations to perform have accrued,
     and, to the knowledge of Firstbank, there are no material breaches,
     violations or defaults or allegations or assertions of such by any party
     thereunder.
 
     2.26. Accuracy of Information.  To the best knowledge of Firstbank, the
statements of Firstbank contained in this Agreement, the Schedules and any other
written document executed and delivered by or on behalf of Firstbank pursuant to
the terms of this Agreement are true and correct in all material respects, and
such statements and documents do not omit any material fact necessary to make
the statements contained therein not misleading.
 
     2.27. Year 2000 Compliant.  Except as set forth on Schedule 2.27, to the
best knowledge of Firstbank, all computer software and hardware utilized by
Firstbank or any Firstbank Subsidiary is, or is reasonably expected to be, Year
2000 compliant, which, for purposes of this Agreement, shall mean that the data
outside the range 1900-1999 will be correctly processed in any level of computer
hardware or software including, but not limited to, microcode, firmware,
applications programs, files and data bases. All computer software is, or
Firstbank is taking steps to ensure that all computer software will be, designed
to be used prior to, during and after the calendar year 2000 A.D., and such
software will operate during each such time period without material error
relating to date data, specifically including any error relating to, or the
product of, date data that represents or references different centuries or more
than one century.
 
                                  ARTICLE III
 
                  REPRESENTATIONS, WARRANTIES AND COVENANTS OF
                           MERCANTILE AND MERGER SUB
 
     Each of Mercantile and Merger Sub represents, and warrants to and covenants
with Firstbank as follows:
 
     3.01. Organization and Authority.  Mercantile and each of its Subsidiaries
is a corporation, bank, trust company or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of
organization, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and, except where the failure to be so
qualified would not have and could not reasonably be expected to have a material
adverse effect on the Condition of Mercantile and its Subsidiaries, taken as a
whole, has corporate power and authority to own its properties and assets and to
carry on its business as it is now being conducted, except, in the case of the
Mercantile Subsidiaries, where the failure to be so qualified would not have and
could not reasonably be expected to have a material adverse effect on the
Condition of Mercantile and its Subsidiaries, taken as a whole. Mercantile is
registered as a bank holding company with the Board under the BHCA. True and
complete copies of the Articles of Incorporation and Bylaws of Mercantile and
Merger Sub, each in effect on the date of this Agreement, have been provided to
Firstbank.
 
     3.02. Capitalization of Mercantile.  The authorized capital stock of
Mercantile consists of (i) 200,000,000 shares of Mercantile Common Stock, of
which, as of December 31, 1997, 130,508,090 shares
 
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<PAGE>   104
 
were issued and outstanding and (ii) 5,000,000 shares of preferred stock, no par
value ("Mercantile Preferred Stock"), issuable in series, none of which, as of
December 31, 1997, is issued or outstanding. Mercantile has designated 2,000,000
shares of Mercantile Preferred Stock as "Series A Junior Participating Preferred
Stock" and has reserved such shares for issuance upon exercise of Preferred
Stock Purchase Rights ("Rights") under a Rights Agreement dated May 23, 1988
(the "Mercantile Rights Agreement"), between Mercantile and Mercantile Bank of
St. Louis National Association, as Rights Agent. As of December 31, 1997
Mercantile had reserved (i) 14,840,856 shares of Mercantile Common Stock for
issuance under various employee stock option and incentive plans and the
Mercantile Shareholder Investment Plan ("Mercantile Stock Options"), (ii) up to
951,380 shares of Mercantile Common Stock for issuance upon the acquisition of
HomeCorp, Inc. pursuant to an agreement dated October 29, 1997, (iii) up to
2,550,000 shares of Mercantile Common Stock for issuance upon the acquisition of
Horizon Bancorp, Inc. pursuant to an agreement dated July 31, 1997, and (iv) up
to 5,400,000 shares of Mercantile Common Stock for issuance upon the acquisition
of CBT Corporation pursuant to an agreement dated January 10, 1998. From
December 31, 1997 through the date of this Agreement, no shares of Mercantile
Common Stock or other Equity Securities of Mercantile have been issued excluding
any such shares which may have been issued pursuant to stock-based employee
benefit or incentive plans and programs or pursuant to the foregoing agreements.
Mercantile continually evaluates possible acquisitions and may prior to the
Effective Time enter into one or more agreements providing for, and may
consummate, the acquisition by it of another bank, association, bank holding
company, savings and loan holding company or other company (or the assets
thereof) for consideration that may include equity securities. In addition,
prior to the Effective Time, Mercantile may, depending on market conditions and
other factors, otherwise determine to issue equity, equity-linked or other
securities for financing purposes. Notwithstanding the foregoing, neither
Mercantile nor Merger Sub will take any action that would, or intentionally will
fail to take any action the failure of which to take would, (i) prevent the
transactions contemplated hereby from qualifying as a reorganization within the
meaning of Section 368 of the Code, (ii) materially impede or delay receipt of
any approval referred to in Section 6.01(b) or the consummation of the
transactions contemplated by this Agreement or (iii) unless Mercantile shall
have waived the condition set forth in Section 6.03(c), prevent the Merger from
qualifying for pooling-of-interests accounting treatment. Except as set forth
above and except pursuant to the Mercantile Rights Agreement, there are no other
Equity Securities of Mercantile outstanding. All of the issued and outstanding
shares of Mercantile Common Stock are validly issued, fully paid, and
nonassessable, and have not been issued in violation of any preemptive right of
any stockholder of Mercantile. At the Effective Time, the Mercantile Common
Stock to be issued in the Merger will be duly authorized, validly issued, fully
paid and non-assessable, and will not be issued in violation of any preemptive
right of any stockholder of Mercantile.
 
     3.03. Authorization.  (a) Each of Mercantile and Merger Sub has the
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. No stockholder vote is required for Mercantile to approve
this Agreement. The execution, delivery and performance of this Agreement by
Mercantile and Merger Sub and the consummation by Mercantile and Merger Sub of
the transactions contemplated hereby have been duly authorized by all requisite
corporate action of Mercantile and Merger Sub. This Agreement is a valid and
binding obligation of Mercantile and Merger Sub enforceable against Mercantile
and Merger Sub in accordance with its terms, except as enforceability may be
limited by applicable laws relating to bankruptcy, insolvency or creditors
rights generally and general principles of equity.
 
          (b) Neither the execution, delivery and performance by Mercantile or
     Merger Sub of this Agreement, nor the consummation by Mercantile or Merger
     Sub of the transactions contemplated hereby, nor compliance by Mercantile
     or Merger Sub with any of the provisions hereof, will (i) violate, conflict
     with or result in a breach of any provisions of, or constitute a default
     (or an event which, with notice or lapse of time or both, would constitute
     a default) or result in the termination of, or accelerate the performance
     required by, or result in a right of termination or acceleration of, or
     result in the creation of, any Lien upon any of the material properties or
     assets of Mercantile or any Mercantile Subsidiary under any of the terms,
     conditions or provisions of (x) its articles or certificate of
     incorporation or bylaws, or (y) any material note, bond, mortgage,
     indenture, deed of trust, license, lease, agreement or other instrument or
     obligation to which Mercantile or any of the material properties or assets
     of Mercantile is a party or by which it may be bound, or to which
     Mercantile may be subject (in all cases other than any of
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     the foregoing which would not have and could not reasonably be expected to
     have a material adverse effect on the Condition of Mercantile and the
     Mercantile Subsidiaries, taken as a whole), or (ii) subject to compliance
     with the statutes and regulations referred to in paragraph (c) of this
     Section 3.03, to the best knowledge of Mercantile, violate any judgment,
     ruling, order, writ, injunction, decree, statute, rule or regulation
     applicable to Mercantile or any of its Subsidiaries or any of their
     respective material properties or assets.
 
          (c) Other than in connection with or in compliance with the provisions
     of the DGCL, the MGBCL, the Securities Act, the Exchange Act, the
     Investment Company Act of 1940, the securities or blue sky laws of the
     various states or filings, consents, reviews, authorizations, approvals or
     exemptions required under the BHCA or any required approvals of, or notice
     to, any other Regulatory Authority, no notice to, filing with, exemption or
     review by, or authorization, consent or approval of, any public body or
     authority is necessary for the consummation by Mercantile of the
     transactions contemplated by this Agreement.
 
     3.04. Mercantile Financial Statements.  The supplemental consolidated and
parent company only balance sheets of Mercantile and its Subsidiaries as of
December 31, 1996, 1995 and 1994 and related supplemental consolidated and
parent company only statements of income, cash flows and changes in
stockholders' equity for each of the three years in the three-year period ended
December 31, 1996, together with the notes thereto, audited by KPMG Peat Marwick
LLP ("Mercantile Auditors") and included in Mercantile's current report on Form
8-K dated May 13, 1997 as filed with the SEC, and the unaudited consolidated
balance sheets of Mercantile and its Subsidiaries as of March 31, June 30, and
September 30, 1997 and the related unaudited consolidated statements of income
and cash flows for the periods then ended included in quarterly reports on Form
10-Q (including amendments thereto) as filed with the SEC (collectively, the
"Mercantile Financial Statements"), have been prepared in accordance with GAAP,
present fairly the consolidated financial position of Mercantile and its
Subsidiaries at the dates and the consolidated results of operations, changes in
stockholders' equity and cash flows of Mercantile and its Subsidiaries for the
periods stated therein and are derived from the books and records of Mercantile
and its Subsidiaries, which are complete and accurate in all material respects
and have been maintained in all material respects in accordance with applicable
laws and regulations. Neither Mercantile nor any of its Subsidiaries has any
material contingent liabilities that are not reflected in the Mercantile Reports
(defined below) or disclosed in the financial statements described above.
 
     3.05. Mercantile Reports.  Since January 1, 1994, each of Mercantile and
the Mercantile Subsidiaries has filed all material reports, registrations and
statements, together with any required material amendments thereto, that it was
required to file with any Regulatory Authority. All such reports and statements
filed with any such Regulatory Authority are collectively referred to herein as
the "Mercantile Reports." As of its respective date, each Mercantile Report
complied in all material respects with all the rules and regulations promulgated
by the applicable Regulatory Authority and did 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.
 
     3.06. Material Adverse Change.  Since September 30, 1997, there has been no
material adverse change in the Condition of Mercantile and its Subsidiaries,
taken as a whole, except as may have resulted or may result from changes to laws
and regulations or changes in economic conditions applicable to banking or
thrift institutions generally or in general levels of interest rates affecting
banking or thrift institutions generally.
 
     3.07. Registration Statement, etc.  None of the information regarding
Mercantile or any of its Subsidiaries supplied or to be supplied by Mercantile
for inclusion or included in (i) the Registration Statement, (ii) the Proxy
Statement, or (iii) any other documents to be filed with any Regulatory
Authority in connection with the transactions contemplated hereby will, at the
respective times such documents are filed with any Regulatory Authority and, in
the case of the Registration Statement, when it becomes effective and, with
respect to the Proxy Statement, when mailed (or furnished to stockholders of
Firstbank), be false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein not
misleading or, in the case of the Proxy Statement or any amendment thereof or
supplement thereto, at the time of the Meeting, be false or misleading with
respect to any material fact, or
 
                                      A-17
<PAGE>   106
 
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
Meeting. All documents which Mercantile or any of its Subsidiaries are
responsible for filing with any Regulatory Authority in connection with the
Merger will comply as to form in all material respects with the provisions of
applicable law.
 
     3.08. Brokers and Finders.  Except for UBS Securities Inc., neither
Mercantile nor any of its Subsidiaries nor any of their respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any financial advisory fees, brokerage fees, commissions or
finder's fees, and no broker or finder has acted directly or indirectly for
Mercantile or any of its Subsidiaries in connection with this Agreement or the
transactions contemplated hereby.
 
     3.09. Commitments and Contracts.  Neither Mercantile nor any Mercantile
Subsidiary is in violation of its charter documents or bylaws or in default
under any material agreement, commitment, arrangement, lease, insurance policy,
or other instrument, whether entered into in the ordinary course of business or
otherwise and whether written or oral, and there has not occurred any event
that, with the lapse of time or giving of notice or both, would constitute such
a default, except, in all cases, where such default would not have and could not
reasonably be expected to have a material adverse effect on the Condition of
Mercantile and its Subsidiaries, taken as a whole.
 
     3.10. Litigation and Other Proceedings.  Neither Mercantile nor any
Mercantile Subsidiary is a party to any pending or, to the best knowledge of
Mercantile, threatened claim, action, suit, investigation or proceeding, or is
subject to any order, judgment or decree, except for matters which, in the
aggregate, will not have, or reasonably could not be expected to have, a
material adverse effect on the Condition of Mercantile and its Subsidiaries,
taken as a whole. Without limiting the generality of the foregoing, as of the
date of this Agreement, there are no actions, suits, or proceedings pending or,
to the best knowledge of Mercantile, threatened against Mercantile or any
Mercantile Subsidiary or any of their respective officers or directors by any
stockholder of Mercantile or any Mercantile Subsidiary (or any former
stockholder of Mercantile or any Mercantile Subsidiary) involving claims under
the Securities Act, the Exchange Act, the Community Reinvestment Act of 1977, as
amended, or the fair lending laws or which purport or seek to enjoin or restrain
the transactions contemplated by this Agreement.
 
     3.11. Accounting, Tax and Regulatory Matters.  Neither Mercantile nor any
Mercantile Subsidiary has taken or agreed to take any action or has any
knowledge of any fact or circumstance that would (i) prevent the transactions
contemplated hereby from qualifying as a reorganization within the meaning of
Section 368(a) of the Code or (ii) materially impede or delay receipt of any
approval referred to in Section 6.01(b) or the consummation of the transactions
contemplated by this Agreement.
 
     3.12. Accuracy of Information.  The statements of Mercantile and Merger Sub
contained in this Agreement, the Schedules and in any other written document
executed and delivered by or on behalf of Mercantile or Merger Sub pursuant to
the terms of this Agreement are true and correct in all material respects, and
such statements and documents do not omit any material fact necessary to make
the statements contained herein or therein not misleading.
 
     3.13. Taxes.  Except as set forth on Schedule 3.13, Mercantile and each
Mercantile Subsidiary have timely filed or will timely (including extensions)
file all material tax returns, reports and certifications required to be filed
on or prior to the Closing Date ("Mercantile Returns"), and such filed
Mercantile Returns are and will be complete and accurate in all material
respects. Each of Mercantile and its Subsidiaries has paid (taking into account
all applicable extensions), or set up adequate reserves on the Mercantile
Financial Statements for the payment of, all taxes required to be paid in
respect of the periods covered by the Mercantile Financial Statements and has
set up adequate reserves on the most recent financial statements Mercantile has
filed under the Exchange Act for the payment of all taxes anticipated to be
payable in respect of all periods up to and including the latest period covered
by such financial statements. Neither Mercantile nor any Mercantile Subsidiary
will have any liability material or reasonably expected to be material to the
Condition of Mercantile and the Mercantile Subsidiaries, taken as a whole, for
any such taxes in excess of the amounts so paid or reserves so established and,
to the knowledge of Mercantile, no material deficiencies for any tax, assessment
or governmental charge have been proposed, asserted or assessed (tentatively or
definitely) against any of
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<PAGE>   107
 
Mercantile or any Mercantile Subsidiary which would not be covered by existing
reserves. Neither Mercantile nor any Mercantile Subsidiary is delinquent in the
payment of any material tax, assessment or governmental charge, nor has it
requested any extension of time within which to file any tax returns in respect
of any fiscal year which have not since been timely filed and no requests for
extensions or waivers of the time to assess any tax are pending. The federal and
state income tax returns of Mercantile and the Mercantile Subsidiaries have been
audited and settled by the Internal Revenue Service (the "IRS") or appropriate
state tax authorities for all periods ended through December 31, 1994 or the
period for assessment of taxes in respect of such periods has expired. There is
no deficiency or refund litigation or matter in controversy with respect to
Mercantile Returns. Except as set forth on Schedule 3.13, neither Mercantile nor
any Mercantile Subsidiary has extended or waived any statute of limitations on
the assessment of any tax due that is currently in effect.
 
     3.14. Compliance with Laws.  (a) Mercantile and each of its Subsidiaries
have all permits, licenses, authorizations, orders and approvals of, and have
made all filings, applications and registrations with, all Regulatory
Authorities that are required in order to permit them to own or lease their
properties and assets and to carry on their business as presently conducted and
that are material or reasonably expected to be material to the Condition of
Mercantile and its Subsidiaries, taken as a whole; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect
and, to the best knowledge of Mercantile, no suspension or cancellation of any
of them is threatened; and all such filings, applications and registrations are
current.
 
          (b) Except as set forth on Schedule 3.14B and except for failures to
     comply or defaults which individually or in the aggregate would not have
     and could not reasonably be expected to have a material adverse effect on
     the Condition of Mercantile and its Subsidiaries, taken as a whole, (i)
     each of Mercantile and its Subsidiaries has complied with all laws,
     regulations and orders (including without limitation zoning ordinances,
     building codes, ERISA, and securities, tax, environmental, civil rights,
     and occupational health and safety laws and regulations and including
     without limitation in the case of any Mercantile Subsidiary that is a bank,
     banking organization, banking corporation or trust company, all statutes,
     rules, regulations and policy statements pertaining to the conduct of a
     banking, deposit-taking, lending or related business, or to the exercise of
     trust powers) and governing instruments applicable to them and to the
     conduct of their business, and (ii) neither Mercantile nor any Mercantile
     Subsidiary is in default under, and no event has occurred which, with the
     lapse of time or notice or both, could result in the default under, the
     terms of any judgment, order, writ, decree, permit, or license of any
     Regulatory Authority or court, whether federal, state, municipal, or local
     and whether at law or in equity. Except as set forth on Schedule 3.14B and
     except as would not have and could not reasonably be expected to have a
     material adverse effect on the Condition of Mercantile and its
     Subsidiaries, taken as a whole, as of the date of this Agreement, neither
     Mercantile nor any Mercantile Subsidiary is subject to or reasonably likely
     to incur a liability as a result of its ownership, operation, or use of any
     Property of Mercantile (whether directly or, to the best knowledge of
     Mercantile, as a consequence of such Property being part of the investment
     portfolio of Mercantile or any Mercantile Subsidiary) (A) that is
     contaminated by or contains any Toxic Substance, or (B) on which any Toxic
     Substance has been stored, disposed of, placed, or used in the construction
     thereof. Except as set forth on Schedule 3.14B, no claim, action, suit, or
     proceeding is pending against Mercantile or any Mercantile Subsidiary
     relating to Property of Mercantile before any court or other Regulatory
     Authority or arbitration tribunal relating to hazardous substances,
     pollution, or the environment, and there is no outstanding judgment, order,
     writ, injunction, decree, or award against or affecting Mercantile or any
     Mercantile Subsidiary with respect to the same. Except for statutory or
     regulatory restrictions of general application, no Regulatory Authority has
     placed any restriction on the business of Mercantile or any Mercantile
     Subsidiary which reasonably could be expected to have a material adverse
     effect on the Condition of Mercantile and its Subsidiaries, taken as a
     whole.
 
          (c) From and after January 1, 1994, neither Mercantile nor any
     Mercantile Subsidiary has received any notification or communication which
     has not been finally resolved from any Regulatory Authority (i) asserting
     that any Mercantile or any Subsidiary of Mercantile, is not in substantial
     compliance with any of the statutes, regulations or ordinances that such
     Regulatory Authority enforces, except with
 
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<PAGE>   108
 
     respect to matters which (A) are set forth on Schedule 3.14C or (B)
     reasonably could not be expected to have a material adverse effect on the
     Condition of Mercantile and its Subsidiaries, taken as a whole, (ii)
     threatening to revoke any license, franchise, permit or governmental
     authorization that is material or reasonably expected to be material to the
     Condition of Mercantile and its Subsidiaries, taken as a whole, including
     without limitation such company's status as an insured depositary
     institution under the Federal Deposit Insurance Act, or (iii) requiring or
     threatening to require Mercantile or any of its Subsidiaries, or indicating
     that Mercantile or any of its Subsidiaries may be required, to enter into a
     cease and desist order, agreement or memorandum of understanding or any
     other agreement restricting or limiting or purporting to direct, restrict
     or limit in any manner the operations of Mercantile or any of its
     Subsidiaries, including without limitation any restriction on the payment
     of dividends. No such cease and desist order, agreement or memorandum of
     understanding or other agreement is currently in effect.
 
          (d) Except as set forth on Schedule 3.14D, neither Mercantile nor any
     Mercantile Subsidiary is required by Section 32 of the Federal Deposit
     Insurance Act to give prior notice to any federal banking agency of the
     proposed addition of an individual to its board of directors or the
     employment of an individual as a senior executive officer.
 
     3.15. Labor.  No work stoppage involving Mercantile or any Mercantile
Subsidiary, is pending or, to the best knowledge of Mercantile, threatened which
reasonably could be expected to have a material adverse effect on the Condition
of Mercantile and its Subsidiaries, taken as a whole. Neither Mercantile nor any
Mercantile Subsidiary is involved in, or, to the best knowledge of Mercantile,
threatened with or affected by, any labor dispute, arbitration, lawsuit or
administrative proceeding which reasonably could be expected to have a material
adverse affect on the Condition of Mercantile and its Subsidiaries, taken as a
whole. Employees of neither Mercantile nor any Mercantile Subsidiary, are
represented by any labor union or any collective bargaining organization.
 
     3.16. Interest Rate Risk Management Instruments.  All interest rate swaps,
caps, floors and option agreements and other interest rate risk management
arrangements to which Mercantile or any of its Subsidiaries is a party or by
which any of their properties or assets may be bound were entered into in the
ordinary course of business and, to the best knowledge of Mercantile, in
accordance with prudent banking practice and applicable rules, regulations and
policies of Regulatory Authorities and with counterparties believed to be
financially responsible at the time and are legal, valid and binding
obligations, except as enforceability may be limited by applicable laws relating
to bankruptcy, insolvency or creditors rights generally and general principles
of equity, and are in full force and effect. Mercantile and each of its
Subsidiaries has duly performed in all material respects all of its obligations
thereunder to the extent that such obligations to perform have accrued, and, to
the knowledge of Mercantile, there are no material breaches, violations or
defaults or allegations or assertions of such by any party thereunder.
 
     3.17. Year 2000 Compliant.  Except as set forth on Schedule 3.17, to the
best knowledge of Mercantile, all computer software and hardware utilized by
Mercantile or any Mercantile Subsidiary is, or is reasonably expected to be,
Year 2000 compliant, which, for purposes of this Agreement, shall mean that the
data outside the range 1900-1999 will be correctly processed in any level of
computer hardware or software including, but not limited to, microcode,
firmware, applications programs, files and data bases. All computer software is,
or Mercantile is taking steps to ensure that all computer software will be,
designed to be used prior to, during and after the calendar year 2000 A.D., and
such software will operate during each such time period without material error
relating to date data, specifically including any error relating to, or the
product of, date data that represents or references different centuries or more
than one century.
 
                                   ARTICLE IV
 
               CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
 
     4.01. Conduct of Businesses Prior to the Effective Time.  During the period
from the date of this Agreement to the Effective Time, each of Mercantile and
Firstbank shall, and shall cause each of their respective Subsidiaries to,
conduct its business according to the ordinary and usual course consistent with
past
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<PAGE>   109
 
practices and shall, and shall cause each such Subsidiary to, use all reasonable
efforts to maintain and preserve its business organization, employees and
advantageous business relationships and retain the services of its officers and
key employees.
 
     4.02. Forbearances of Firstbank.  Except as set forth on Schedule 4.02, to
the extent required by applicable law or Regulatory Authority or as otherwise
contemplated by this Agreement, during the period from the date of this
Agreement to the Effective Time, Firstbank shall not and shall not permit any of
its Subsidiaries to, without the prior written consent of Mercantile:
 
          (a) declare, set aside or pay any dividends or other distributions,
     directly or indirectly, in respect of its capital stock (other than
     dividends from a Subsidiary of Firstbank to Firstbank or another Subsidiary
     of Firstbank), except that Firstbank may declare and pay cash dividends on
     the Firstbank Common Stock equal to the product of (i) the Exchange Ratio
     and (ii) the amount of the dividends per share declared by the Board of
     Directors of Mercantile; provided, further, however, that Firstbank shall
     not declare or pay a quarterly dividend for any quarter in which Firstbank
     shareholders will be entitled to receive a regular quarterly dividend on
     the shares of Mercantile Common Stock to be issued in the Merger; or
 
          (b) enter into or amend any employment, severance or similar agreement
     or arrangement with any director or officer or employee, or materially
     modify any of the Firstbank Employee Plans or grant any salary or wage
     increase or materially increase any employee benefit (including incentive
     or bonus payments), except normal individual increases in compensation to
     employees consistent with past practice, or as required by law or contract;
     or
 
          (c) authorize, recommend, propose or announce an intention to
     authorize, so recommend or propose, or enter into an agreement in principle
     with respect to, any merger, consolidation or business combination (other
     than the Merger), any acquisition of a material amount of assets or
     securities, any disposition of a material amount of assets or securities or
     any release or relinquishment of any material contract rights; or
 
          (d) propose or adopt any amendments to its articles of incorporation,
     association or other charter document or bylaws; or
 
          (e) issue, sell, grant, confer or award any of its Equity Securities
     (except that Firstbank may (i) issue shares of Firstbank Common Stock upon
     exercise of Firstbank Stock Options outstanding on the date of this
     Agreement or granted in compliance with this subsection and (ii) issue
     shares of Firstbank Common Stock purchased by Firstbank on the open market
     for such purpose, and only such shares, pursuant to its dividend
     reinvestment plan) or effect any stock split or adjust, combine, reclassify
     or otherwise change its capitalization as it existed on the date of this
     Agreement; or
 
          (f) purchase, redeem, retire, repurchase, or exchange, or otherwise
     acquire or dispose of, directly or indirectly, any of its Equity
     Securities, whether pursuant to the terms of such Equity Securities or
     otherwise; or
 
          (g) without first consulting with and obtaining the written consent of
     Mercantile, enter into, renew or increase any loan or credit commitment
     (including stand-by letters of credit) to, or invest or agree to invest in,
     any person or entity or modify any of the material provisions or renew or
     otherwise extend the maturity date of any existing loan or credit
     commitment in an amount in excess of $3,000,000 or in any amount which,
     when aggregated with any and all loans or credit commitments to such person
     or entity, would be equal to or in excess of $3,000,000; provided that
     Firstbank or any Firstbank Subsidiary may make any such loan or credit
     commitment in the event (A) Firstbank or any Firstbank Subsidiary has
     delivered to Mercantile or its designated representative a notice of its
     intention to make such loan and such information as Mercantile or its
     designated representative may reasonably require in respect thereof and (B)
     Mercantile or its designated representative shall not have reasonably
     objected to such loan by giving written or facsimile notice of such
     objection within two business days following the delivery to Mercantile or
     its designated representative of the notice of intention and information as
     aforesaid; provided further, however, that nothing in this paragraph shall
     prohibit Firstbank or any Firstbank Subsidiary from honoring any
     contractual obligation in existence on the date of this Agreement.
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<PAGE>   110
 
     Notwithstanding this Section 4.02(g), Firstbank shall be authorized without
     first obtaining Mercantile's prior written consent, to increase the
     aggregate amount of any credit facilities theretofore established in favor
     of any person or entity (each a "Pre-Existing Facility") beyond the
     $3,000,000 credit level, provided that the aggregate amount of any and all
     such increases shall not be in excess of the lesser of five percent (5%) of
     such Pre-Existing Facility or $100,000; or
 
          (h) directly or indirectly (including through its officers, directors,
     employees or other representatives) initiate, solicit, encourage or
     facilitate any discussions, inquiries or proposals with any third party
     relating to the disposition of any significant portion of the business or
     assets of Firstbank or any Firstbank Subsidiary or the acquisition of
     Equity Securities of Firstbank or any Firstbank Subsidiary or the merger of
     Firstbank or any Firstbank Subsidiary with any person (other than
     Mercantile) or any similar transaction (each such transaction being
     referred to herein as an "Acquisition Transaction"), or provide any such
     person with information or assistance or negotiate with any such person
     with respect to an Acquisition Transaction, and Firstbank shall promptly
     notify Mercantile orally of all the relevant details relating to all
     inquiries, indications of interest and proposals which it may receive with
     respect to any Acquisition Transaction; or
 
          (i) take any action that would (A) materially impede or delay the
     consummation of the transactions contemplated by this Agreement or the
     ability of Mercantile or Firstbank to obtain any approval of any Regulatory
     Authority required for the transactions contemplated by this Agreement or
     to perform its covenants and agreements under this Agreement, (B) prevent
     the transactions contemplated hereby from qualifying as a reorganization
     within the meaning of Section 368(a) of the Code or (C) prevent the Merger
     from qualifying for pooling-of-interests accounting treatment; or
 
          (j) other than in the ordinary course of business consistent with past
     practice, incur any indebtedness for borrowed money, assume, guarantee,
     endorse or otherwise as an accommodation become responsible or liable for
     the obligations of any other individual, corporation or other entity, or
     pay without prior approval of Mercantile, which shall not be unreasonably
     withheld, any Merger Fees in excess of the amount set forth on Schedule
     2.23; or
 
          (k) materially restructure or materially change its investment
     securities portfolio, without prior written consent of Mercantile which
     consent shall not be unreasonably withheld or delayed, through purchases,
     sales or otherwise, or the manner in which the portfolio is classified or
     reported, or execute any individual investment transaction for its own
     account (i) in securities backed by the full faith and credit of the United
     States or an agency thereof in excess of $10,000,000 and (ii) in any other
     investment securities in excess of $1,000,000; or
 
          (l) agree in writing or otherwise to take any of the foregoing actions
     or engage in any activity, enter into any transaction or take or omit to
     take any other act which would make any of the representations and
     warranties in Article II of this Agreement untrue or incorrect in any
     material respect if made anew after engaging in such activity, entering
     into such transaction, or taking or omitting such other act.
 
     4.03. Forbearances of Mercantile.  Except to the extent required by law,
regulation or Regulatory Authority, or with the prior written consent of
Firstbank, during the period from the date of this Agreement to the Effective
Time, Mercantile shall not and shall not permit any of the Mercantile
Subsidiaries to:
 
          (a) declare, set aside or pay any dividends or other distributions,
     directly or indirectly, in respect of its capital stock (other than
     dividends from any of the Mercantile Subsidiaries to Mercantile or to
     another of the Mercantile Subsidiaries), except that Mercantile may pay its
     regular quarterly dividends in amounts as it shall determine from time to
     time consistent with past practices;
 
          (b) take any action that would (A) materially impede or delay the
     consummation of the transactions contemplated by this Agreement or the
     ability of Firstbank or Mercantile to obtain any approval of any Regulatory
     Authority required for the transactions contemplated by this Agreement or
     to perform its covenants and agreements under this Agreement, (B) prevent
     the transactions contemplated hereby from qualifying as a reorganization
     within the meaning of Section 368(a) of the Code or
 
                                      A-22
<PAGE>   111
 
     (C) unless Mercantile shall have waived the condition set forth in Section
     6.03(c), prevent the Merger from qualifying for pooling-of-interests
     accounting treatment; or
 
          (c) agree in writing or otherwise to take any of the foregoing actions
     or engage in any activity, enter into any transaction or intentionally take
     or omit to take any other action which would make any of the
     representations and warranties in Article III of this Agreement untrue or
     incorrect in any material respect if made anew after engaging in such
     activity, entering into such transaction, or taking or omitting such other
     action.
 
                                   ARTICLE V
 
                             ADDITIONAL AGREEMENTS
 
     5.01. Access and Information.  Mercantile and its Subsidiaries, on the one
hand, and Firstbank and its Subsidiaries, on the other hand, shall each afford
to each other, and to the other's accountants, counsel and other
representatives, full access during normal business hours, during the period
prior to the Effective Time, to all their respective properties, books,
contracts, commitments and records and, during such period, each shall furnish
promptly to the other (i) a copy of each report, schedule and other document
filed or received by it during such period pursuant to the requirements of
federal and state securities laws and (ii) all other information concerning its
business, properties and personnel as such other party may reasonably request.
Each party hereto shall, and shall cause its advisors and representatives to,
(A) hold confidential all information obtained in connection with any
transaction contemplated hereby with respect to the other party which is not
otherwise public knowledge, (B) return all documents (including copies thereof)
obtained hereunder from the other party to such other party and (C) use its best
efforts to cause all information obtained pursuant to this Agreement or in
connection with the negotiation of this Agreement to be treated as confidential
and not use, or knowingly permit others to use, any such information unless such
information becomes generally available to the public.
 
     5.02. Registration Statement; Regulatory Matters.  (a) Mercantile shall
prepare and, subject to the review and consent of Firstbank with respect to
matters relating to Firstbank, file with the SEC as soon as is reasonably
practicable, but in any event within 90 days following the date hereof, the
Registration Statement (or the equivalent in the form of preliminary proxy
material) with respect to the shares of Mercantile Common Stock to be issued in
the Merger and the exercise of Mercantile Stock Options (that replace Firstbank
Stock Options) after the Effective Time. After the date of filing the
Registration Statement with the SEC, each party hereto shall promptly notify the
others of and correct any information which it furnished for inclusion in the
Registration Statement that may have become false or misleading in any material
respect. Mercantile shall prepare and file a notice with the Board as soon as
reasonably practicable, but in any event within 90 days following the date
hereof. Mercantile shall use all reasonable efforts to cause the Registration
Statement to become effective. Mercantile shall also take any action required to
be taken under any applicable state blue sky or securities laws in connection
with the issuance of such shares and the exercise of such options, and Firstbank
and its Subsidiaries shall furnish Mercantile all information concerning
Firstbank and its Subsidiaries and the stockholders thereof as Mercantile may
reasonably request in connection with any such action. Mercantile shall use its
best efforts to cause the shares of Mercantile Common Stock to be issued in the
Merger to be approved for listing on the New York Stock Exchange, subject to
official notice of issuance, prior to the Effective Time.
 
          (b) Firstbank and Mercantile shall cooperate and use their respective
     best efforts to prepare all documentation, to effect all filings and to
     obtain all permits, consents, approvals and authorizations of all third
     parties and Regulatory Authorities necessary to consummate the transactions
     contemplated by this Agreement and, as and if directed by Mercantile and
     consistent with the other provisions of this Agreement, to consummate such
     other mergers, consolidations or asset transfers or other transactions by
     and among Mercantile's Subsidiaries and Firstbank's Subsidiaries
     concurrently with or following the Effective Time, provided, however, that
     the foregoing shall not (A) alter or change the Merger Consideration, (B)
     adversely affect the tax treatment to Firstbank's stockholders or Firstbank
     Stock
 
                                      A-23
<PAGE>   112
 
     Option holders as a result of receiving the Merger Consideration or (C)
     materially impede or delay receipt of any approval referred to in Section
     6.01(b) or the consummation of the transactions contemplated by this
     Agreement.
 
     5.03. Stockholder Approval.  Firstbank shall call a meeting of its
stockholders to be held as soon as practicable for the purpose of voting upon
the Merger or take other action for stockholders to authorize the Merger. In
connection therewith, Mercantile shall prepare the Proxy Statement and, with the
approval of each of Mercantile and Firstbank, the Proxy Statement shall be filed
with the SEC and, after such review and amendment as may be required, mailed to
the stockholders of Firstbank. The Board of Directors of Firstbank shall submit
for approval of Firstbank's stockholders the matters to be voted upon in order
to authorize the Merger. The Board of Directors of Firstbank hereby does and,
unless the Board of Directors of Firstbank reasonably determines not to so
recommend based upon the written opinion of counsel, which counsel either is one
of those identified on Schedule 2.23 or is otherwise reasonably acceptable to
Mercantile, to the effect that to so recommend would constitute a breach of the
Board's fiduciary duties under applicable law, will recommend this Agreement and
the transactions contemplated hereby to stockholders of Firstbank and will use
its best efforts to obtain any vote of Firstbank's stockholders that is
necessary for the approval and adoption of this Agreement and consummation of
the transactions contemplated hereby.
 
     5.04. Current Information.  During the period from the date of this
Agreement to the Effective Time, each party shall promptly furnish the other
with copies of all monthly and other interim financial statements as the same
become available and shall cause one or more of its designated representatives
to confer on a regular and frequent basis with representatives of the other
party. Each party shall promptly notify the other party of any material change
in its business or operations and of any governmental complaints, investigations
or hearings (or communications indicating that the same may be contemplated), or
the institution or the threat of material litigation involving such party, and
shall keep the other party fully informed of such events.
 
     5.05. Agreements of Affiliates.  (a) As soon as practicable after the date
of this Agreement, Firstbank shall deliver to Mercantile a letter identifying
all persons whom Firstbank believes to be, at the time this Agreement is
submitted to a vote of the stockholders of Firstbank, "affiliates" of Firstbank
for purposes of Rule 145 under the Securities Act and for purposes of
pooling-of-interests accounting treatment. Firstbank shall use all reasonable
efforts to cause each person who is so identified as an "affiliate" to deliver
to Mercantile as soon as practicable thereafter, and in any event no later than
the publication of notice in the Federal Register of Mercantile's notice to the
Board referred to in Section 5.02, a written agreement providing that from the
date of such agreement each such person will agree not to sell, pledge, transfer
or otherwise dispose of any shares of stock of Firstbank held by such person or
any shares of Mercantile Common Stock to be received by such person in the
Merger except in compliance with the applicable provisions of the Securities
Act. Prior to the Effective Time, Firstbank shall amend and supplement such
letter and use all reasonable efforts to cause each additional person who is
identified as an "affiliate" to execute a written agreement as set forth in this
Section 5.05.
 
          (b) Mercantile shall use all reasonable efforts to publish as promptly
     as reasonably practicable, but in no event later than 90 days after the end
     of the first month after the Effective Time in which there are at least 30
     days of post-Merger combined operations, combined sales and net income
     figures as contemplated by and in accordance with the terms of SEC
     Accounting Series Release No. 135.
 
     5.06. Expenses.  Each party hereto shall bear its own expenses incident to
preparing, entering into and carrying out this Agreement and to consummating the
Merger.
 
     5.07. Miscellaneous Agreements and Consents.  (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use,
respectively, all reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as expeditiously as possible,
including without limitation using, respectively, all reasonable efforts to lift
or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby. Each party shall, and shall cause each of its respective Subsidiaries
to, use all reasonable efforts to obtain consents of all third parties and
Regulatory Authorities
                                      A-24
<PAGE>   113
 
necessary or, in the opinion of Mercantile, desirable for the consummation of
the transactions contemplated by this Agreement.
 
          (b) Subject to applicable laws, regulations and requirements of
     Regulatory Authorities, Firstbank, prior to the Effective Time, shall (i)
     consult and cooperate with Mercantile regarding the implementation of those
     policies and procedures established by Mercantile for its governance and
     that of its Subsidiaries and not otherwise referenced in Section 5.15
     hereof, including, without limitation, policies and procedures pertaining
     to the accounting, asset/liability management, audit, credit, human
     resources, treasury and legal functions, and (ii) at the request of
     Mercantile, conform Firstbank's existing policies and procedures in respect
     of such matters to Mercantile's policies and procedures or, in the absence
     of any existing Firstbank policy or procedure regarding any such function,
     introduce Mercantile's policies or procedures in respect thereof, unless to
     do so would cause Firstbank or any of the Firstbank Subsidiaries to be in
     violation of any law, rule or regulation of any Regulatory Authority having
     jurisdiction over Firstbank and/or the Firstbank Subsidiary affected
     thereby; provided, however, that prior to the date that it shall be a
     requirement hereunder for such policies and procedures to be established,
     Mercantile shall certify to Firstbank that Mercantile's representations and
     warranties are true and correct as of such date, that the approval
     conditions to its obligations contemplated by Section 6.01(b) have been
     satisfied or waived (except to the extent that any waiting period
     associated therewith may then have commenced but not expired) and that
     Mercantile is otherwise in compliance with this Agreement; and provided,
     further, that Firstbank shall not be required to take any such action that
     is not consistent with GAAP and regulatory accounting principles or would,
     in the reasonable judgment of Firstbank's Board of Directors, have a
     material negative impact on Firstbank and/or its shareholders if the
     transactions contemplated by this Agreement are not consummated.
 
     5.08. Employee Benefits.  The Firstbank Employee Plans shall not be
terminated by reason of the Merger but shall continue thereafter as plans of the
Surviving Corporation until such time as the employees of Firstbank and the
Firstbank Subsidiaries are integrated into Mercantile's employee benefit plans
that are available to other employees of Mercantile and Mercantile Subsidiaries,
subject to the terms and conditions specified in such plans and to such changes
therein as may be necessary to reflect the consummation of the Merger.
Mercantile shall take such steps as are necessary or required to integrate the
employees of Firstbank and the Firstbank Subsidiaries in Mercantile's employee
benefit plans available to other employees of Mercantile and Mercantile
Subsidiaries as soon as practicable after the Effective Time, (i) with full
credit for prior service with Firstbank or any of the Firstbank Subsidiaries for
all purposes other than determining the amount of benefit accruals under any
Mercantile defined benefit plan (it being understood that benefits accrued as of
the Effective Time under any Firstbank defined benefit plan will not be
extinguished under any circumstances), (ii) without any waiting periods,
evidence of insurability, or application of any pre-existing condition
limitations, and (iii) with full credit for claims arising prior to the
Effective Time for purposes of deductibles, out-of-pocket maximums, benefit
maximums, and all other similar limitations for the applicable plan year during
which the Merger is consummated. Each of Mercantile and Firstbank shall use all
reasonable efforts to insure that (other than amounts paid pursuant to the
agreement described on Schedule 2.17F under the heading "Parachute Payments") no
amounts paid or payable by Firstbank, Firstbank Subsidiaries or Mercantile to or
with respect to any employee or former employee of Firstbank or any Firstbank
Subsidiary will fail to be deductible for federal income tax purposes by reason
of Section 280G of the IRC. Firstbank shall ensure that following the Effective
Time no holder of Firstbank Stock Options or any participant in any Firstbank
Stock Plan shall have any right thereunder to acquire any securities of
Firstbank or any Firstbank Subsidiary.
 
     5.09. Firstbank Stock Options.  (a) At the Effective Time, all rights with
respect to Firstbank Common Stock pursuant to Firstbank Stock Options that are
outstanding at the Effective Time, whether or not then exercisable, shall be
converted into and become rights with respect to Mercantile Common Stock, and
Mercantile shall assume each Firstbank Stock Option in accordance with the terms
of the stock option plan under which it was issued and the stock option
agreement by which it is evidenced. From and after the Effective Time, (i) each
Firstbank Stock Option assumed by Mercantile shall be exercised solely for
shares of Mercantile Common Stock, (ii) the number of shares of Mercantile
Common Stock subject to each Firstbank
 
                                      A-25
<PAGE>   114
 
Stock Option shall be equal to the number of shares of Firstbank Common Stock
subject to such Firstbank Stock Option immediately prior to the Effective Time
multiplied by the Exchange Ratio and (iii) the per share exercise price under
each Firstbank Stock Option shall be adjusted by dividing the per share exercise
price under such Firstbank Stock Option by the Exchange Ratio and rounding down
to the nearest cent; provided, however, that the terms of each Firstbank Stock
Option shall, in accordance with its terms, be subject to further adjustment as
appropriate to reflect any stock split, stock dividend, recapitalization or
other similar transaction subsequent to the Effective Time. It is intended that
the foregoing assumption shall be undertaken in a manner that will not
constitute a "modification" as defined in the IRC, as to any Firstbank Stock
Option that is an "incentive stock option." The parties recognize that the
Merger will not cause vesting to occur under the Firstbank Stock Options, except
as otherwise identified on Schedule 2.03.
 
          (b) At or prior to the Effective Time, Mercantile shall take all
     corporate action necessary to authorize and reserve for issuance a
     sufficient number of shares of Mercantile Common Stock for delivery upon
     exercise of Firstbank Stock Options to purchase Firstbank Common Stock
     assumed by it in accordance with paragraph (a) above. As soon as
     practicable after the Effective Time, Mercantile shall file a registration
     statement on Form S-3 or Form S-8, as the case may be (or any successor or
     other appropriate forms), or another appropriate form with respect to the
     shares of Mercantile Common Stock subject to such options and shall use its
     best efforts to maintain the effectiveness of such registration statements
     (and maintain the current status of the prospectus contained therein) for
     so long as such options remain outstanding.
 
     5.10. Press Releases.  Except as may be required by law, Firstbank and
Mercantile shall consult and agree with each other as to the form and substance
of any proposed press release relating to this Agreement or any of the
transactions contemplated hereby.
 
     5.11. State Takeover Statutes; Firstbank's Certificate of
Incorporation.  (a) Each of Mercantile and Firstbank will take all steps
reasonably necessary to exempt the transactions contemplated by this Agreement
and any agreement contemplated hereby from, and if necessary challenge the
validity of, any applicable state takeover law.
 
          (b) Firstbank will take all steps reasonably necessary to exempt the
     transactions contemplated by this Agreement and any agreement contemplated
     hereby from any super-majority voting provisions under Firstbank's
     Certificate of Incorporation and Bylaws.
 
     5.12. D&O Indemnification.  From and after the Effective Time, Mercantile
agrees to indemnify and hold harmless the past and present employees, agents,
directors or officers of Firstbank and/or its Subsidiaries against all losses,
expenses, claims, damages or liabilities relating to acts or omissions occurring
at or prior to the Effective Time to the same extent such persons are
indemnified and held harmless (A) under their respective Articles or Certificate
of Incorporation or Bylaws of Firstbank and its Subsidiaries in the form in
effect at the date of this Agreement, (B) by operation of law, or (C) by virtue
of any contract, resolution or other agreement or document existing at the date
of this Agreement, and such duties and obligations shall continue in full force
and effect for so long as they would (but for the Merger) otherwise survive and
continue in full force and effect. Mercantile will provide, or cause to be
provided, for a period of not less than six years from the Effective Time, an
insurance and indemnification policy that provides the officers and directors of
Firstbank and its Subsidiaries immediately prior to the Effective Time coverage
no less favorable in the aggregate than that provided by Mercantile to its
officers and directors.
 
     5.13. Best Efforts.  Each of Mercantile and Firstbank undertakes and agrees
to use its reasonable best efforts to cause the Merger (i) to qualify as a
reorganization within the meaning of Section 368(a) of the Code (including, if
necessary, to take reasonable steps to restructure the transactions contemplated
by this Agreement to so qualify) and (ii) to occur as soon as practicable. Each
of Mercantile and Firstbank agrees to not take any action that would materially
impede or delay the consummation of the transactions contemplated by this
Agreement or the ability of Mercantile or Firstbank to obtain any approval of
any Regulatory Authority required for the transactions contemplated by this
Agreement or to perform its covenants and agreements under this Agreement.
 
                                      A-26
<PAGE>   115
 
     5.14. Insurance.  Firstbank shall, and Firstbank shall cause each of its
Subsidiaries to, use its best efforts to maintain its existing insurance.
 
     5.15. Conforming Entries.  (a) Notwithstanding that Firstbank believes that
Firstbank and the Firstbank Subsidiaries have established all reserves and taken
all provisions for possible loan losses required by GAAP and applicable laws,
rules and regulations, Firstbank recognizes that Mercantile may have adopted
different loan, accrual and reserve policies (including loan classifications and
levels of reserves for possible loan losses). Subject to applicable laws,
regulations and the requirements of Regulatory Authorities, from and after the
date of this Agreement to the Effective Time, Firstbank and Mercantile shall
consult and cooperate with each other with respect to conforming the loan,
accrual and reserve policies of Firstbank and the Firstbank Subsidiaries to
those policies of Mercantile, as specified in each case in writing to Firstbank,
based upon such consultation and as hereinafter provided; provided that
Firstbank not be required to take any action that would, in the reasonable
judgment of Firstbank's Board of Directors, have a material negative impact on
Firstbank and/or its shareholders if the transactions contemplated by this
Agreement are not consummated.
 
          (b) Subject to applicable laws, regulations and the requirements of
     Regulatory Authorities, in addition, from and after the date of this
     Agreement to the Effective Time, Firstbank and Mercantile shall consult and
     cooperate with each other with respect to determining appropriate Firstbank
     accruals, reserves and charges to establish and take in respect of excess
     equipment write-off or write-down of various assets and other appropriate
     charges and accounting adjustments taking into account the parties'
     business plans following the Merger, as specified in each case in writing
     to Firstbank, based upon such consultation and as hereinafter provided;
     provided that Firstbank not be required to take any action that would, in
     the reasonable judgment of Firstbank's Board of Directors, have a material
     negative impact on Firstbank and/or its shareholders if the transactions
     contemplated by this Agreement are not consummated.
 
          (c) Subject to applicable laws, regulations and the requirements of
     Regulatory Authorities, Firstbank and Mercantile shall consult and
     cooperate with each other with respect to determining, as specified in a
     written notice from Mercantile to Firstbank, based upon such consultation
     and as hereinafter provided, the amount and the timing for recognizing for
     financial accounting purposes Firstbank's expenses of the Merger and the
     restructuring charges relating to or to be incurred in connection with the
     Merger; provided that Firstbank not be required to take any action that
     would, in the reasonable judgment of Firstbank's Board of Directors, have a
     material negative impact on Firstbank and/or its shareholders if the
     transactions contemplated by this Agreement are not consummated.
 
          (d) Subject to applicable laws, regulations and the requirements of
     Regulatory Authorities, Firstbank shall (i) establish and take such
     reserves and accruals at such time as Mercantile shall reasonably request
     to conform Firstbank's loan, accrual and reserve policies to Mercantile's
     policies, and (ii) establish and take such accruals, reserves and charges
     in order to implement such policies in respect of excess facilities and
     equipment capacity, severance costs, litigation matters, write-off or
     write-down of various assets and other appropriate accounting adjustments,
     and to recognize for financial accounting purposes such expenses of the
     Merger and restructuring charges related to or to be incurred in connection
     with the Merger, in each case at such times as are reasonably requested by
     Mercantile; provided, however, that on the date such reserves, accruals and
     charges are to be taken, Mercantile shall certify to Firstbank that
     Mercantile's representations and warranties are true and correct as of such
     date, that the approval conditions to its obligations contemplated by
     Section 6.01(b) have been satisfied or waived (except to the extent that
     any waiting period associated therewith may then have commenced but not
     expired) and that Mercantile is otherwise in compliance with this
     Agreement; and provided, further, that Firstbank shall not be required to
     take any such action that is not consistent with GAAP and regulatory
     accounting principles or would, in the reasonable judgment of Firstbank's
     Board of Directors, have a material negative impact on Firstbank and/or its
     shareholders if the transactions contemplated by this Agreement are not
     consummated.
 
          (e) No reserves, accruals or charges taken in accordance with Section
     5.15(d) above may be a basis to assert a violation of a breach of a
     representation, warranty or covenant of Firstbank herein.
 
                                      A-27
<PAGE>   116
 
     5.16. Environmental Reports.  Mercantile, at its expense, may perform, as
soon as reasonably practicable, but not later than ninety (90) days after the
date hereof, a phase one environmental investigation and/or asbestos survey by
Environmental Operations, Inc. on all real property owned, leased or operated by
Firstbank or any of the Firstbank Subsidiaries as of the date hereof (but
excluding space in retail and similar establishments leased by Firstbank for
automatic teller machines or leased bank branch facilities where the space
leased comprises less than 20% of the total space leased to all tenants of such
property) and within fifteen (5) days after being notified by Firstbank of the
acquisition or lease of any real property acquired or leased by Firstbank or any
of the Firstbank Subsidiaries after the date hereof (but excluding space in
retail and similar establishments leased by Firstbank for automatic teller
machines or leased bank facilities where the space leased comprises less than
20% of the total space leased to all tenants of such property). If the results
of the phase one investigation indicate, in Mercantile's reasonable opinion,
that additional investigation is warranted, Mercantile may perform, at its
expense, a phase two subsurface investigation or investigations by Environmental
Operations, Inc. on properties deemed to warrant such additional study.
Mercantile shall perform any such phase two investigation as soon as reasonably
practicable after receipt of the phase one report(s) for such properties. Should
the cost of taking all remedial or other corrective actions and measures (i)
required by applicable law or (ii) recommended by Environmental Operations, Inc.
in such phase one or phase two report or reports in light of potentially serious
life, health or safety concerns, in the aggregate, exceed the sum of $7,000,000,
as reasonably estimated by Environmental Operations, Inc. or if the cost of such
actions or measures cannot be so reasonably estimated by Environmental
Operations, Inc. to be such amounts or less with any reasonable degree of
certainty, Mercantile shall have the right pursuant to Section 7.01(f) hereof,
for a period of fifteen (5) business days following receipt from Environmental
Operations, Inc. of such estimate or indication that the cost of such actions
and measures cannot be so reasonably estimated, to terminate this Agreement.
 
     5.17. Best Efforts to Insure Pooling.  Firstbank undertakes and agrees and,
unless Mercantile shall have waived the condition set forth in Section 6.03(c),
Mercantile undertakes and agrees to use their reasonable best efforts to cause
the Merger to qualify for pooling-of-interests accounting treatment.
 
     5.18. Community Support.  Mercantile shall use all reasonable efforts
following the Effective Time to maintain a level of community support and
involvement in the communities served by Firstbank that is substantially
equivalent in the aggregate to Firstbank's general level of support and
involvement prior to the Merger.
 
                                   ARTICLE VI
 
                                   CONDITIONS
 
     6.01. Conditions to Each Party's Obligation To Effect the Merger.  The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Effective Time of the following
conditions:
 
          (a) This Agreement shall have received the requisite approval of
     stockholders of Firstbank.
 
          (b) All requisite approvals of this Agreement and the transactions
     contemplated hereby shall have been received from or waived by the Board
     and any other Regulatory Authority and all applicable waiting periods have
     expired.
 
          (c) The Registration Statement shall have been declared effective and
     shall not be subject to a stop order or any threatened stop order.
 
          (d) Neither Firstbank nor Mercantile shall be subject to any order,
     decree or injunction, and there shall be no pending or threatened order,
     decree or injunction, of a court or agency of competent jurisdiction which
     enjoins or prohibits the consummation of any of the Transactions.
 
                                      A-28
<PAGE>   117
 
          (e) There shall be no legislative, statutory or regulatory action
     (whether federal or state) pending which prohibits or threatens in a
     material way to prohibit consummation of the Transactions or which
     otherwise materially adversely affects the Transactions.
 
          (f) Each of Mercantile and Firstbank shall have received, from counsel
     reasonably satisfactory to the recipient, an opinion, dated the Closing
     Date, reasonably satisfactory in form and substance to the recipient,
     substantially to the effect that, on the basis of facts, representations
     and assumptions set forth in such opinion which are consistent with the
     state of facts existing at the Effective Time, (i) the Merger will
     constitute a reorganization within the meaning of Section 368(a) of the
     Code and (ii) no gain or loss will be recognized by the stockholders of
     Firstbank who receive solely Mercantile Common Stock in exchange for shares
     of Firstbank Common Stock pursuant to the Merger (except with respect to
     cash received in lieu of a fractional share interest in Mercantile Common
     Stock). In rendering such opinions, counsel shall receive, and may rely on,
     customary representations from Mercantile, Firstbank and others, including
     but not limited to representations contained in certificates of officers of
     Mercantile, Firstbank and others.
 
     6.02. Conditions to Obligations of Firstbank To Effect the Merger.  The
obligations of Firstbank to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the following
additional conditions:
 
          (a) Representations and Warranties.  The representations and
     warranties of Mercantile set forth in Article III of this Agreement shall
     be true and correct in all respects as of the date of this Agreement and as
     of the Effective Time (as though made on and as of the Effective Time
     except (i) to the extent such representations and warranties are by their
     express provisions made as of a specified date or period and (ii) for the
     effect of transactions contemplated by this Agreement), except for such
     failures to be so true and correct as would not have and could not
     reasonably be expected to have in the aggregate a material adverse effect
     on the Condition of Mercantile and its Subsidiaries, taken as a whole, and
     Firstbank shall have received a certificate of the chairman or vice
     chairman of Mercantile to that effect; provided, however, that for purposes
     of determining the satisfaction of the condition contained in this Section
     6.02(a), no effect shall be given to any exception or qualification in such
     representations and warranties relating to materiality or material adverse
     effect.
 
          (b) Performance of Obligations.  Mercantile shall have performed in
     all material respects all obligations required to be performed by it under
     this Agreement prior to the Effective Time, and Firstbank shall have
     received a certificate of the chairman or vice chairman of Mercantile to
     that effect.
 
     6.03. Conditions to Obligations of Mercantile To Effect the Merger.  The
obligations of Mercantile to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the following
additional conditions:
 
          (a) Representations and Warranties.  The representations and
     warranties of Firstbank set forth in Article II of this Agreement shall be
     true and correct in all respects as of the date of this Agreement and as of
     the Effective Time (as though made on and as of the Effective Time except
     (i) to the extent such representations and warranties are by their express
     provisions made as of a specific date or period and (ii) for the effect of
     transactions contemplated by this Agreement), except for such failures to
     be so true and correct as would not have and could not reasonably be
     expected to have in the aggregate a material adverse effect on the
     Condition of Firstbank and its Subsidiaries, taken as a whole, and
     Mercantile shall have received a certificate of the chairman and president
     of Firstbank and a certificate of the chief financial officer of Firstbank
     to that effect; provided, however, that for purposes of determining the
     satisfaction of the condition contained in this Section 6.03(a), no effect
     shall be given to any exception or qualification in such representations
     and warranties relating to materiality or material adverse effect.
 
          (b) Performance of Obligations.  Firstbank shall have performed in all
     material respects all obligations required to be performed by it under this
     Agreement prior to the Effective Time, and Mercantile shall have received a
     certificate of the chairman and president of Firstbank and a certificate of
     the chief financial officer of Firstbank to that effect.
 
                                      A-29
<PAGE>   118
 
          (c) Pooling Letter.  Mercantile shall have received as soon as
     practicable after the date of this Agreement an opinion of KPMG Peat
     Marwick LLP, reasonably satisfactory in form and substance to Mercantile,
     to the effect that the Merger will qualify for pooling-of-interests
     accounting treatment, which opinion shall have not been withdrawn.
 
          (d) Divestitures.  Firstbank shall have divested or have entered into
     binding agreements to divest, in each case on a basis reasonably acceptable
     to Mercantile and as required under applicable law or by any Regulatory
     Authority, the Missouri bank Subsidiaries of Firstbank.
 
                                  ARTICLE VII
 
                       TERMINATION, AMENDMENT AND WAIVER
 
     7.01. Termination.  This Agreement may be terminated at any time prior to
the Effective Time, whether before or after any requisite stockholder approval:
 
          (a) by mutual consent by the Executive Committee of the Board of
     Directors of Mercantile and the Board of Directors of Firstbank;
 
          (b) by the Executive Committee of the Board of Directors of Mercantile
     or the Board of Directors of Firstbank at any time after January 27, 1999
     if the Merger shall not theretofore have been consummated (provided that
     the terminating party is not then in material breach of any representation,
     warranty, covenant or other agreement contained herein);
 
          (c) by the Executive Committee of the Board of Directors of Mercantile
     or the Board of Directors of Firstbank if (i) the Board has denied approval
     of the Merger and such denial has become final and nonappealable or (ii)
     stockholders of Firstbank shall not have approved this Agreement at the
     Meeting following a favorable recommendation of Firstbank's Board of
     Directors;
 
          (d) by the Executive Committee of the Board of Directors of Mercantile
     in the event of a material breach by Firstbank of any representation,
     warranty, covenant or other agreement contained in this Agreement, which
     breach is not cured within 30 days after written notice thereof to
     Firstbank by Mercantile;
 
          (e) by the Board of Directors of Firstbank in the event of a material
     breach by Mercantile of any representation, warranty, covenant or other
     agreement contained in this Agreement, which breach is not cured within 30
     days after written notice thereof is given to Mercantile by Firstbank; or
 
          (f) by the Executive Committee of the Board of Directors of Mercantile
     pursuant to and in accordance with the provisions of the last sentence of
     Section 5.16.
 
     7.02. Effect of Termination.  In the event of termination of this Agreement
as provided in Sections 7.01(a) through 7.01(c) and Section 7.01(f) above, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Mercantile or Firstbank or their respective officers
or directors except as set forth in the second sentence of Section 5.01 and in
Section 5.06.
 
     7.03. Amendment.  This Agreement and the Schedules hereto may be amended by
the parties hereto, by action taken by or on behalf of their respective Boards
of Directors, at any time before or after approval of this Agreement by the
stockholders of Firstbank; provided, however, that after any such approval by
the stockholders of Firstbank no such modification shall alter or change the
amount or kind of consideration to be received by holders of Firstbank Common
Stock as provided in this Agreement. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of Mercantile and Firstbank.
 
     7.04. Severability.  Any term, provision, covenant or restriction contained
in this Agreement held by a court or a Regulatory Authority of competent
jurisdiction or the Board to be invalid, void or unenforceable, shall be
ineffective to the extent of such invalidity, voidness or unenforceability, but
neither the remaining terms, provisions, covenants or restrictions contained in
this Agreement nor the validity or enforceability thereof in any other
jurisdiction shall be affected or impaired thereby. Any term, provision,
covenant or
                                      A-30
<PAGE>   119
 
restriction contained in this Agreement that is so found to be so broad as to be
unenforceable shall be interpreted to be as broad as is enforceable.
 
     7.05. Waiver.  Any term, condition or provision of this Agreement may be
waived in writing at any time by the party which is, or whose stockholders are,
entitled to the benefits thereof.
 
                                  ARTICLE VIII
                               GENERAL PROVISIONS
 
     8.01. Non-Survival of Representations, Warranties and Agreements.  No
investigation by the parties hereto made heretofore or hereafter shall affect
the representations and warranties of the parties which are contained herein and
each such representation and warranty shall survive such investigation. Except
as set forth below in this Section 8.01, all representations, warranties and
agreements in this Agreement of Mercantile and Firstbank or in any instrument
delivered by Mercantile or Firstbank pursuant to or in connection with this
Agreement shall expire at the Effective Time or upon termination of this
Agreement in accordance with its terms or, in the case of any other such
instrument, in accordance with the terms of such instrument. In the event of
consummation of the Merger, the agreements contained in or referred to in
Sections 1.12 (last sentence only), 5.02(b), 5.05(b), 5.07, 5.08, 5.09, 5.12,
5.18 and in any other provision contained herein which by its terms applies in
whole or in part after the Effective Time shall survive the Effective Time. In
the event of termination of this Agreement in accordance with its terms, the
agreements contained in or referred to in the second sentence of Section 5.01,
Section 5.06 and Section 7.02 shall survive such termination.
 
     8.02. Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed to be duly received (i) on the date given if
delivered personally or (ii) upon confirmation of receipt, if by facsimile
transmission or (iii) on the date received if mailed by registered or certified
mail (return receipt requested), or (iv) on the business date after being
delivered to a reputable overnight delivery service, if by such service, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
 
             (i) if to Mercantile:
 
              Mercantile Bancorporation Inc.
              Mercantile Tower
              P.O. Box 524
              St. Louis, Missouri 63166-0524
              Attention: John W. Rowe
                         Executive Vice President,
                         Mercantile Bank National Association
 
           Copies to:
 
              Jon W. Bilstrom, Esq.
              General Counsel
              Mercantile Bancorporation Inc.
              Mercantile Tower
              P.O. Box 524
              St. Louis, Missouri 63166-0524
 
           and
 
              Wachtell, Lipton, Rosen & Katz
              51 West 52nd Street
              New York, New York 10019
              Attention: Edward D. Herlihy, Esq.
              Telecopy: (212) 403-2000
                                      A-31
<PAGE>   120
 
             (ii) if to Firstbank:
 
              Firstbank of Illinois Co.
               205 South Fifth
               Springfield, Illinois 62701
              Attention: Mark H. Ferguson
 
           Copies to:
 
              Suelthaus & Walsh, P.C.
               7733 Forsyth Boulevard, 12th Floor
               St. Louis, Missouri 63105
               Attention: Kenneth H. Suelthaus, Esq.
              Telecopy: (314) 727-7166
 
           and
 
              Mayer, Brown & Platt
               190 South LaSalle Street
               Chicago, Illinois 60603
               Attention: James J. Junewicz, Esq.
              Telecopy: (312) 701-7711
 
     8.03. Miscellaneous.  This Agreement (including the Schedules and other
written documents referred to herein or provided hereunder) (i) constitutes the
entire agreement and supersedes all other prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof, including any confidentiality agreement between the
parties hereto, (ii) except for the provisions of Sections 5.09 and 5.12, is not
intended to confer upon any person not a party hereto any rights or remedies
hereunder, (iii) shall not be assigned by operation of law or otherwise and (iv)
shall be governed in all respects by the laws of the State of Missouri, except
as otherwise specifically provided herein or required by the DGCL. Nothing in
this Agreement shall be construed to require any party (or any subsidiary or
affiliate of any party) to take any action or fail to take any action in
violation of applicable law, rule or regulation. This Agreement may be executed
in counterparts which together shall constitute a single agreement.
 
                                      A-32
<PAGE>   121
 
     IN WITNESS WHEREOF, Mercantile, Merger Sub and Firstbank have caused this
Agreement to be signed and, by such signature, acknowledged by their respective
officers thereunto duly authorized, and such signatures to be attested to by
their respective officers thereunto duly authorized, all as of the date first
written above.
 
<TABLE>
<S>                                                <C>
Attest:                                            MERCANTILE BANCORPORATION INC.
 
             /s/ DAVID W. GRANT                                By: /s/ JOHN W. ROWE
- --------------------------------------------       --------------------------------------------
            Name: David W. Grant                                Name: John W. Rowe
        Title: Senior Vice President                     Title: Executive Vice President
 
Attest:                                            AMERIBANC, INC.
 
             /s/ DAVID W. GRANT                                By: /s/ JOHN W. ROWE
- --------------------------------------------       --------------------------------------------
            Name: David W. Grant                                Name: John W. Rowe
        Title: Senior Vice President                          Title: Vice President
 
Attest:                                            FIRSTBANK OF ILLINOIS CO.
 
            /s/ CHRIS R. ZETTEK                              By: /s/ MARK H. FERGUSON
- --------------------------------------------       --------------------------------------------
           Name: Chris R. Zettek                              Name: Mark H. Ferguson
         Title: Assistant Secretary                           Title: Chairman & CEO
</TABLE>
 
                                      A-33
<PAGE>   122
 
                                                                         ANNEX B
 
                             STOCK OPTION AGREEMENT
 
     STOCK OPTION AGREEMENT ("Option Agreement") dated January 30, 1998, by and
between MERCANTILE BANCORPORATION INC. ("Mercantile"), a Missouri corporation
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended (the "BHCA"), and as a savings and loan holding company under the
Home Owners' Loan Act, as amended ("HOLA"), and FIRSTBANK OF ILLINOIS CO.
("Firstbank"), a Delaware corporation registered as a bank holding company under
the BHCA.
 
                                  WITNESSETH:
 
     WHEREAS, the Executive Committee of the Board of Directors of Mercantile
and the Board of Directors of Firstbank have approved an Agreement and Plan of
Reorganization dated as of even date herewith (the "Merger Agreement") providing
for the merger of Firstbank with and into a wholly owned subsidiary of
Mercantile;
 
     WHEREAS, as a condition to Mercantile's entering into the Merger Agreement,
Mercantile has required that Firstbank agree, and Firstbank has agreed, to grant
to Mercantile the option set forth herein to purchase authorized but unissued
shares of Firstbank Common Stock;
 
     NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
 
     1. Definitions.
 
     Capitalized terms used but not defined herein shall have the same meanings
as in the Merger Agreement.
 
     2. Grant of Option.
 
     Subject to the terms and conditions set forth herein, Firstbank hereby
grants to Mercantile an option (the "Option") to purchase up to 3,134,858
authorized and unissued shares of Firstbank Common Stock at a price of $37.75
per share (the "Purchase Price") payable in cash as provided in Section 4
hereof.
 
     3. Exercise of Option.
 
     (a) If not then in material breach of the Merger Agreement, Mercantile may
exercise the Option, in whole or in part, at any time or from time to time if a
Purchase Event (as defined below) shall have occurred; provided, however, that
(i) to the extent the Option shall not have been exercised, it shall terminate
and be of no further force and effect upon the earliest to occur of (A) the
Effective Time of the Merger, (B) the termination of the Merger Agreement in
accordance with Sections 7.01(e), 7.01(f) or 7.01(a) through 7.01(c) thereof,
and (C) two years following the termination of the Merger Agreement in
accordance with Section 7.01(d) thereof, provided that, with respect to any of
the foregoing, if such termination follows an Extension Event (as defined
below), the Option shall not terminate until the date that is 12 months
following such termination; (ii) if the Option cannot be exercised on such day
because of any injunction, order or similar restraint issued by a court of
competent jurisdiction, the Option shall expire on the 30th business day after
such injunction, order or restraint shall have been dissolved or when such
injunction, order or restraint shall have become permanent and no longer subject
to appeal, as the case may be; and (iii) that any such exercise shall be subject
to compliance with applicable law, including the BHCA.
 
     (b) As used herein, a "Purchase Event" shall mean any of the following
events:
 
               (i)  Firstbank or any of its Significant Subsidiaries, without
     having received prior written consent from Mercantile, shall have entered
     into, authorized, recommended, proposed or publicly announced its intention
     to enter into, authorize, recommend, or propose, an agreement, arrangement
     or understanding with any person (other than Mercantile or any of its
     Subsidiaries) to (A) effect a merger
 
                                       B-1
<PAGE>   123
 
     or consolidation or similar transaction involving Firstbank or any of its
     Significant Subsidiaries (other than internal mergers, reorganizing
     actions, consolidations or dissolutions involving only Firstbank and/or
     existing Subsidiaries of Firstbank), (B) purchase, lease or otherwise
     acquire 20% or more of the assets of Firstbank or any of its Significant
     Subsidiaries or (C) purchase or otherwise acquire (including by way of
     merger, consolidation, share exchange or similar transaction) Beneficial
     Ownership of securities representing 20% or more of the voting power of
     Firstbank or any of its Significant Subsidiaries; provided, that the making
     of any agreement to divest or the actual divestiture by Firstbank of any of
     Firstbank's Missouri chartered banks shall not constitute a Purchase
     Events; and provided that the term "Significant Subsidiary" shall have the
     meaning ascribed thereto in Rule 1-02 of Regulation S-X of the Securities
     Exchange Commission;
 
             (ii)  any person (other than Mercantile or any Subsidiary of
        Mercantile or any person acting in concert with Mercantile, or Firstbank
        or any Subsidiary of Firstbank in a fiduciary capacity) shall have
        acquired Beneficial Ownership or the right to acquire Beneficial
        Ownership of 20% or more of the voting power of Firstbank; or
 
             (iii)  Firstbank's Board of Directors shall have withdrawn or
        modified in a manner adverse to Mercantile the recommendation of
        Firstbank's Board of Directors with respect to the Merger Agreement,
        unless the Board of Directors of Firstbank reasonably determines not to
        so recommend based upon the written opinion of counsel, which counsel
        either is one of those identified on Schedule 2.23 to the Merger
        Agreement or is otherwise reasonably acceptable to Mercantile, to the
        effect that to so recommend would constitute a breach of the Board's
        fiduciary duties under applicable law, in each case after an Extension
        Event; or
 
             (iv) the holders of Firstbank Common Stock shall not have approved
        the Merger Agreement at the Meeting, or such Meeting shall not have been
        held or shall have been cancelled prior to termination of the Merger
        Agreement in accordance with its terms, in each case after an Extension
        Event.
 
     (c) As used herein, the term "Extension Event" shall mean any of the
following events:
 
             (i) a Purchase Event of the type specified in clauses (b)(i) and
        (b)(ii) above;
 
             (ii) any person (other than Mercantile or any of its Subsidiaries)
        shall have "commenced" (as such term is defined in Rule 14d-2 under the
        Exchange Act), or shall have filed a registration statement under the
        Securities Act with respect to, a tender offer or exchange offer to
        purchase shares of Firstbank Common Stock such that, upon consummation
        of such offer, such person would have Beneficial Ownership (as defined
        below) or the right to acquire Beneficial Ownership of 20% or more of
        the voting power of Firstbank; or
 
             (iii) any person (other than Mercantile or any Subsidiary of
        Mercantile, or Firstbank or any Subsidiary of Firstbank in a fiduciary
        capacity) shall have publicly announced (x) an offer described in clause
        (ii) above or (y) a transaction described in clause (i) above.
 
     (d) As used herein, the terms "Beneficial Ownership" and "Beneficially Own"
shall have the meanings ascribed to them in Rule 13d-3 under the Exchange Act.
 
     (e) In the event Mercantile wishes to exercise the Option, it shall deliver
to Firstbank a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of shares it intends to purchase
pursuant to such exercise and (ii) a place and date not earlier than three
business days nor later than 60 calendar days from the Notice Date for the
closing of such purchase (the "Closing Date").
 
     4. Payment and Delivery of Certificates.
 
     (a) At the closing referred to in Section 3 hereof, Mercantile shall pay to
Firstbank the aggregate Purchase Price for the shares of Firstbank Common Stock
purchased pursuant to the exercise of the Option in immediately available funds
by wire transfer to a bank account designated by Firstbank.
 
                                       B-2
<PAGE>   124
 
     (b) At such closing, simultaneously with the delivery of cash as provided
in Section 4(a), Firstbank shall deliver to Mercantile a certificate or
certificates representing the number of shares of Firstbank Common Stock
purchased by Mercantile, registered in the name of Mercantile or a nominee
designated in writing by Mercantile, and Mercantile shall deliver to Firstbank a
letter agreeing that Mercantile shall not offer to sell, pledge or otherwise
dispose of such shares in violation of applicable law or the provisions of this
Option Agreement.
 
     (c) If at the time of issuance of any Firstbank Common Stock pursuant to
any exercise of the Option, Firstbank shall have issued any share purchase
rights or similar securities to holders of Firstbank Common Stock, then each
such share of Firstbank Common Stock shall also represent rights with terms
substantially the same as and at least as favorable to Mercantile as those
issued to other holders of Firstbank Common Stock.
 
     (d) Certificates for Firstbank Common Stock delivered at any closing
hereunder shall be endorsed with a restrictive legend which 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
          , a copy of which is on file at the principal office of           ,
and to resale restrictions arising under the Securities Act of 1933 and any
applicable state securities laws. A copy of such agreement will be provided to
the holder hereof without charge upon receipt by           of a written request
therefor. It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such legend if Mercantile shall
have delivered to Firstbank an opinion of counsel, in form and substance
reasonably satisfactory to Firstbank and its counsel, to the effect that such
legend is not required for purposes of the Securities Act and any applicable
state securities laws.
 
     5. Authorization, etc.
 
     (a) Firstbank hereby represents and warrants to Mercantile that:
 
             (i) Firstbank has full corporate authority to execute and deliver
        this Option Agreement and, subject to Section 11(i), to consummate the
        transactions contemplated hereby;
 
             (ii) such execution, delivery and consummation have been authorized
        by the Board of Directors of Firstbank, and no other corporate
        proceedings are necessary therefor;
 
             (iii) this Option Agreement has been duly and validly executed and
        delivered and represents a valid and legally binding obligation of
        Firstbank, enforceable against Firstbank in accordance with its terms;
        and
 
             (iv) Firstbank has taken all necessary corporate action to
        authorize and reserve and, subject to Section 11(i), permit it to issue
        and, at all times from the date hereof through the date of the exercise
        in full or the expiration or termination of the Option, shall have
        reserved for issuance upon exercise of the Option, 3,134,858 shares of
        Firstbank Common Stock, all of which, upon issuance pursuant hereto,
        shall be duly authorized, validly issued, fully paid and nonassessable,
        and shall be delivered free and clear of all claims, liens,
        encumbrances, restrictions (other than federal and state securities
        restrictions) and security interests and not subject to any preemptive
        rights.
 
     (b) Mercantile hereby represents and warrants to Firstbank that:
 
             (i) Mercantile has full corporate authority to execute and deliver
        this Option Agreement and, subject to Section 11(i), to consummate the
        transactions contemplated hereby;
 
             (ii) such execution, delivery and consummation have been authorized
        by all requisite corporate action by Mercantile, and no other corporate
        proceedings are necessary therefor;
 
             (iii) this Option Agreement has been duly and validly executed and
        delivered and represents a valid and legally binding obligation of
        Mercantile, enforceable against Mercantile in accordance with its terms;
        and
 
                                       B-3
<PAGE>   125
 
             (iv) any Firstbank Common Stock or other securities acquired by
        Mercantile upon exercise of the Option will not be taken with a view to
        the public distribution thereof and will not be transferred or otherwise
        disposed of except in compliance with the Securities Act.
 
     6. Adjustment upon Changes in Capitalization.
 
     In the event of any change in Firstbank Common Stock by reason of stock
dividends, split-ups, recapitalizations or the like, the type and number of
shares subject to the Option, and the purchase price per share, as the case may
be, shall be adjusted appropriately. In the event that any additional shares of
Firstbank Common Stock are issued after the date of this Option Agreement (other
than pursuant to an event described in the preceding sentence or pursuant to
this Option Agreement), the number of shares of Firstbank Common Stock subject
to the Option shall be adjusted so that, after such issuance, it equals at least
19.9% of the number of shares of Firstbank Common Stock then issued and
outstanding (without considering any shares subject to or issued pursuant to the
Option).
 
     7. Repurchase.
 
     (a) Subject to Section 11(i), at the request of Mercantile at any time
commencing upon the occurrence of a Purchase Event and ending 13 months
immediately thereafter (the "Repurchase Period"), Firstbank (or any successor
entity thereof) shall repurchase the Option from Mercantile together with all
(but not less than all, subject to Section 10) shares of Firstbank Common Stock
purchased by Mercantile pursuant thereto with respect to which Mercantile then
has Beneficial Ownership, at a price (per share, the "Per Share Repurchase
Price") equal to the sum of:
 
             (i) The exercise price paid by Mercantile for any shares of
        Firstbank Common Stock acquired pursuant to the Option;
 
             (ii) The difference between (A) the "Market/Tender Offer Price" for
        shares of Firstbank Common Stock (defined as the higher of (x) the
        highest price per share at which a tender or exchange offer has been
        made for shares of Firstbank Common Stock or (y) the highest closing
        mean of the "bid" and the "ask" price per share of Firstbank Common
        Stock reported by NASDAQ, the automated quotation system of the National
        Association of Securities Dealers, Inc., for any day within that portion
        of the Repurchase Period which precedes the date Mercantile gives notice
        of the required repurchase under this Section 7) and (B) the Purchase
        Price as determined pursuant to Section 2 hereof (subject to adjustment
        as provided in Section 6), multiplied by the number of shares of
        Firstbank Common Stock with respect to which the Option has not been
        exercised, but only if the Market/Tender Offer Price is greater than
        such exercise price;
 
             (iii) The difference between the Market/Tender Offer Price and the
        Purchase Price paid by Mercantile for any shares of Firstbank Common
        Stock purchased pursuant to the exercise of the Option, multiplied by
        the number of shares so purchased, but only if the Market/Tender Offer
        Price is greater than such exercise price; and
 
             (iv) Mercantile's reasonable out-of-pocket expenses incurred in
        connection with the transactions contemplated by the Merger Agreement,
        including, without limitation, legal, accounting and investment banking
        fees.
 
     (b) In the event Mercantile exercises its rights under this Section 7,
Firstbank shall, within 10 business days thereafter, pay the required amount to
Mercantile by wire transfer of immediately available funds to an account
designated by Mercantile and Mercantile shall surrender to Firstbank the Option
and the certificates evidencing the shares of Firstbank Common Stock purchased
thereunder with respect to which Mercantile then has Beneficial Ownership, and
Mercantile shall warrant that it has sole record and Beneficial Ownership of
such shares and that the same are free and clear of all liens, claims, charges,
restrictions and encumbrances of any kind whatsoever. Notwithstanding the
foregoing, in the event (i) Mercantile exercises its rights under this Section
7, (ii) no Purchase Event, other than one or more of those described under
Section 3(b)(iii) and Section 3(b)(iv) of this Option Agreement, shall have
occurred prior to the termination of the Merger
 
                                       B-4
<PAGE>   126
 
Agreement, (iii) as of the termination of the Merger Agreement, Firstbank shall
not have knowingly violated any covenant, agreement or obligation on its part to
be observed, performed and/or kept by it under any of Sections 4.02(c), 4.02(h),
4.02(i) and 4.02(l) of the Merger Agreement and (iv) Firstbank shall have
delivered, within 5 business days of Mercantile's exercise of its rights under
this Section 7, a written notice certifying the satisfaction of clauses (i)
through (iv) of this Section 7(b), then Firstbank shall not be obligated to pay
to Mercantile an amount greater than $21,000,000 pursuant to this Section 7;
provided, however, that if any transaction of the type described in Section
3(b)(i) of this Option Agreement shall be consummated following the date of
termination of the Merger Agreement and on or before the second anniversary of
such date of termination, then Firstbank shall pay to Mercantile, immediately
prior to consummation of the first such transaction, an additional amount equal
to the excess, if any, of (x) the amount required to be paid by Firstbank to
Mercantile pursuant to Section 7(a) hereof (without giving effect to this
Section 7(b)) over (y) $21,000,000 by wire transfer of immediately available
funds to an account designated by Mercantile.
 
     (c) In determining the Market/Tender Offer Price, the value of any
consideration other than cash shall be determined by an independent nationally
recognized investment banking firm selected by Mercantile and reasonably
acceptable to Firstbank.
 
     8. Repurchase at Option of Firstbank and First Refusal.  (a) Except to the
extent that Mercantile shall have previously exercised its rights under Section
7, at the request of Firstbank during the six-month period commencing 13 months
following the first occurrence of a Purchase Event, Firstbank may repurchase
from Mercantile, and Mercantile shall sell to Firstbank, all (but not less than
all, subject to Section 10) of the Firstbank Common Stock acquired by Mercantile
pursuant hereto and with respect to which Mercantile has Beneficial Ownership at
the time of such repurchase at a price per share equal to the greater of (i)
110% of the Market/Tender Offer Price per share, (ii) the Per Share Repurchase
Price or (iii) the sum of (A) the aggregate Purchase Price of the shares so
repurchased plus (B) interest on the aggregate Purchase Price paid for the
shares so repurchased from the date of purchase to the date of repurchase at the
highest rate of interest announced by Mercantile as its prime or base lending or
reference rate during such period, less any dividends received on the shares so
repurchased, plus (C) Mercantile's reasonable out-of-pocket expenses incurred in
connection with the transactions contemplated by the Merger Agreement,
including, without limitation, legal, accounting and investment banking fees.
Any repurchase under this Section 8(a) shall be consummated in accordance with
Section 7(b).
 
     (b) If, at any time after the occurrence of a Purchase Event and prior to
the earlier of (i) the expiration of 18 months immediately following such
Purchase Event or (ii) the expiration or termination of the Option, Mercantile
shall desire to sell, assign, transfer or otherwise dispose of the Option or all
or any of the shares of Firstbank Common Stock acquired by it pursuant to the
Option, it shall give Firstbank written notice of the proposed transaction (an
"Offeror's Notice"), identifying the proposed transferee, and setting forth the
terms of the proposed transaction. An Offeror's Notice shall be deemed an offer
by Mercantile to Firstbank, which may be accepted within 10 business days of the
receipt of such Offeror's Notice, on the same terms and conditions and at the
same price at which Mercantile is proposing to transfer the Option or such
shares to a third party. The purchase of the Option or any such shares by
Firstbank shall be closed within 10 business days of the date of the acceptance
of the offer and the purchase price shall be paid to Mercantile by wire transfer
of immediately available funds to an account designated by Mercantile. In the
event of the failure or refusal of Firstbank to purchase the Option or all the
shares covered by the Offeror's Notice or if the Board or any other Regulatory
Authority disapproves Firstbank's proposed purchase of the Option or such
shares, Mercantile may, within 60 days from the date of the Offeror's Notice,
sell all, but not less than all, of the Option or such shares to such third
party at no less than the price specified and on terms no more favorable to the
purchaser than those set forth in the Offeror's Notice. The requirements of this
Section 8(b) shall not apply to (i) any disposition as a result of which the
proposed transferee would Beneficially Own not more than (or the right to
acquire not more than) 2% of the voting power of Firstbank or (ii) any
disposition of Firstbank Common Stock by a person to whom Mercantile has sold
shares of Firstbank Common Stock issued upon exercise of the Option.
 
                                       B-5
<PAGE>   127
 
     9. Registration Rights.
 
     At any time after a Purchase Event, Firstbank shall, if requested by any
holder or beneficial owner of shares of Firstbank Common Stock issued upon
exercise of the Option (except any beneficial holder who acquired all of such
holder's shares in a transaction exempt from the requirements of Section 8(b) by
reason of clause (i) thereof) (each a "Holder"), as expeditiously as practicable
file a registration statement on a form for general use under the Securities Act
if necessary in order to permit the sale or other disposition of the shares of
Firstbank Common Stock that have been acquired upon exercise of the Option in
accordance with the intended method of sale or other disposition requested by
any such Holder (it being understood and agreed that any such sale or other
disposition shall be effected on a widely distributed basis so that, upon
consummation thereof, no purchaser or transferee shall Beneficially Own more
than 2% of the shares of Firstbank Common Stock then outstanding). Each such
Holder shall provide all information reasonably requested by Firstbank for
inclusion in any registration statement to be filed hereunder. Firstbank shall
use all reasonable efforts to cause such registration statement first to become
effective and then to remain effective for such period not in excess of 90 days
from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sales or other dispositions. The
registration effected under this Section 9 shall be at Firstbank's expense
except for underwriting discounts and commissions and the fees and disbursements
of such Holders' counsel attributable to the registration of such Firstbank
Common Stock. In no event shall Firstbank be required to effect more than one
registration hereunder. The filing of the registration statement hereunder may
be delayed for such period of time as may reasonably be required to facilitate
any public distribution by Firstbank of Firstbank Common Stock or if a special
audit of Firstbank would otherwise be required in connection therewith. If
requested by any such Holder in connection with such registration, Firstbank
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 parties similarly situated. Upon
receiving any request for registration under this Section 9 from any Holder,
Firstbank agrees to send a copy thereof to any other person known to Firstbank
to be entitled to registration rights under this Section 9, in each case by
promptly mailing the same, postage prepaid, to the address of record of the
persons entitled to receive such copies.
 
     10. Severability.
 
     Any term, provision, covenant or restriction contained in this Option
Agreement held by a court or a Regulatory Authority of competent jurisdiction to
be invalid, void or unenforceable, shall be ineffective to the extent of such
invalidity, voidness or unenforceability, but neither the remaining terms,
provisions, covenants or restrictions contained in this Option Agreement nor the
validity or enforceability thereof in any other jurisdiction shall be affected
or impaired thereby. Any term, provision, covenant or restriction contained in
this Option Agreement that is so found to be so broad as to be unenforceable
shall be interpreted to be as broad as is enforceable. If for any reason such
court or Regulatory Authority determines that applicable law will not permit
Mercantile or any other person to acquire, or Firstbank to repurchase or
purchase, the full number of shares of Firstbank Common Stock provided in
Section 2 hereof (as adjusted pursuant to Section 6 hereof), it is the express
intention of the parties hereto to allow Mercantile or such other person to
acquire, or Firstbank to repurchase or purchase, such lesser number of shares as
may be permissible, without any amendment or modification hereof.
 
     11. Miscellaneous.
 
     (a) Expenses.  Each of the parties hereto shall 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, except as otherwise provided
herein.
 
     (b) Entire Agreement.  Except as otherwise expressly provided herein, this
Option Agreement and the Merger Agreement contain 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.
                                       B-6
<PAGE>   128
 
     (c) Successors; No Third Party Beneficiaries.  The terms and conditions of
this Option Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Nothing in
this Option Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors and
assigns, any rights, remedies, obligations, or liabilities under or by reason of
this Option Agreement, except as expressly provided herein.
 
     (d) Assignment.  Other than as provided in Sections 8 and 9 hereof, neither
of the parties hereto may sell, transfer, assign or otherwise dispose of any of
its rights or obligations under this Option Agreement or the Option created
hereunder to any other person (whether by operation of law or otherwise),
without the express written consent of the other party.
 
     (e) Notices.  All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered in
accordance with Section 8.02 of the Merger Agreement (which is incorporated
herein by reference).
 
     (f) Counterparts.  This Option Agreement may be executed in counterparts,
and each such counterpart shall be deemed to be an original instrument, but both
such counterparts together shall constitute but one agreement.
 
     (g) Specific Performance.  The parties hereto agree that if for any reason
Mercantile or Firstbank shall have failed to perform its obligations under this
Option Agreement, then either party hereto seeking to enforce this Option
Agreement against such non-performing party shall be entitled to specific
performance and injunctive and other equitable relief, and the parties hereto
further agree to waive any requirement for the securing or posting of any bond
in connection with the obtaining of any such injunctive or other equitable
relief. This provision is without prejudice to any other rights that either
party hereto may have against the other party hereto for any failure to perform
its obligations under this Option Agreement.
 
     (h) Governing Law.  This Option Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri applicable to
agreements made and entirely to be performed within such state. Nothing in this
Option Agreement shall be construed to require any party (or any subsidiary or
affiliate of any party) to take any action or fail to take any action in
violation of applicable law, rule or regulation.
 
     (i) Regulatory Approvals; Section 16(b).  If, in connection with (A) the
exercise of the Option under Section 3 or a sale by Mercantile to a third party
under Section 8, (B) a repurchase by Firstbank under Section 7 or a repurchase
or purchase by Firstbank under Section 8, prior notification to or approval of
the Board or any other Regulatory Authority is required, then the required
notice or application for approval shall be promptly filed and expeditiously
processed and periods of time that otherwise would run pursuant to such Sections
shall run instead from the date on which any such required notification period
has expired or been terminated or such approval has been obtained, and in either
event, any requisite waiting period shall have passed. In the case of clause (A)
of this subsection (i), such filing shall be made by Mercantile, and in the case
of clause (B) of this subsection (i), such filing shall be made by Firstbank,
provided that each of Mercantile and Firstbank shall use all reasonable efforts
to make all filings with, and to obtain consents of, all third parties and
Regulatory Authorities necessary to the consummation of the transactions
contemplated hereby, including without limitation applying to the Board under
the BHCA for approval to acquire the shares issuable hereunder. Periods of time
that otherwise would run pursuant to Sections 3, 7 or 8 shall also be extended
to the extent necessary to avoid liability under Section 16(b) of the Exchange
Act.
 
     (j) No Breach of Merger Agreement Authorized.  Nothing contained in this
Option Agreement shall be deemed to authorize Firstbank to issue any shares of
Firstbank Common Stock in breach of, or otherwise breach any of, the provisions
of the Merger Agreement and no action taken pursuant to this Option Agreement by
Firstbank shall constitute a breach of any of the provisions of the Merger
Agreement.
 
     (k) Waiver and Amendment.  Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision. This
Option Agreement may not be modified, amended, altered or supplemented except
upon the execution and delivery of a written agreement executed by the parties
hereto.
 
                                       B-7
<PAGE>   129
 
     IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the date first written above.
 
                                          MERCANTILE BANCORPORATION INC.
 
                                                   /s/ JOHN W. ROWE
                                          By:
                                          --------------------------------------
 
                                            Name: John W. Rowe
                                            Title: Executive Vice President
 
                                          FIRSTBANK OF ILLINOIS CO.
 
                                                 /s/ MARK H. FERGUSON
                                          By:
                                          --------------------------------------
 
                                            Name: Mark H. Ferguson
                                            Title: Chairman & CEO
 
                                       B-8
<PAGE>   130
 
                                                                         ANNEX C
 
PAINEWEBBER
 
   
May 22, 1998
    
Board of Directors
Firstbank of Illinois Co.
205 South Fifth St.
Springfield, IL 62794-9264
 
Gentlemen:
 
   
     Firstbank of Illinois Co. (the "Company") and Mercantile Bancorporation
Inc. (the "Acquiring Company"), propose to enter into a transaction (the
"Merger") in which the Company will merge with and into a subsidiary of the
Acquiring company and each share of the Company's common stock, par value $1.00
per share (the "Shares"), will be converted into 0.8308 shares of the Acquiring
Company's common stock (the "Exchange Ratio"), par value $0.01 per share (the
"Acquiring Company Shares"). In connection with the Merger, the parties also
propose to enter into an agreement (the "Stock Option Agreement") pursuant to
which the Company will grant the Acquiring Company an option to acquire a number
of Shares (subject to adjustment) which, if issued, would represent 19.9% of the
total number of currently issued Shares. The Merger is expected to be considered
by the shareholders of the Company at a special meeting on June 29, 1998 and
consummated shortly thereafter.
    
 
     You have asked us whether or not, in our opinion, the proposed Exchange
Ratio is fair to the shareholders of the Company from a financial point of view.
 
     In arriving at the opinion set forth below, we have, among other things:
 
   
             (1) Reviewed the Company's audited Annual Reports, Forms 10-K,
        Forms 10-Q and related financial information for the five fiscal years
        ended December 31, 1997, and the Company's Form 10-Q and related
        unaudited financial information for the three months ended March 31,
        1998;
    
 
   
             (2) Reviewed the Acquiring Company's audited Annual Reports, Forms
        10-K and related financial information for the five fiscal years ended
        December 31, 1997, and the Acquiring Company's Form 10-Q and related
        unaudited financial information for the three months ended March 31,
        1998;
    
 
   
             (3) Reviewed certain information, including financial forecasts,
        relating to the business, earnings, cash flow, assets and prospects of
        the Company and the Acquiring Company furnished to us by the Company and
        the Acquiring Company;
    
 
   
             (4) Conducted discussions with members of senior management of the
        Company concerning the business and prospects of the Company;
    
 
                                       C-1
<PAGE>   131
 
   
Board of Directors
    
   
Firstbank of Illinois Co.
    
   
May 22, 1998
    
   
Page 2
    
 
   
             (5) Conducted discussions with members of senior management of the
        Acquiring Company concerning the business and prospects of the Acquiring
        Company;
    
 
   
             (6) Reviewed the historical market prices and trading activity for
        the Shares of the Company and the Acquiring Company Shares and compared
        them with those of certain publicly traded companies which we deemed to
        be relevant;
    
 
   
             (7) Compared the results of operations of the Company and the
        Acquiring Company with those of certain companies which we deemed to be
        relevant;
    
 
   
             (8) Compared the proposed financial terms of the Merger with the
        financial terms of certain other mergers and acquisitions which we
        deemed to be relevant;
    
 
   
             (9) Reviewed the Agreement and Plan of Reorganization dated January
        30, 1998 and the related Stock Option Agreement dated January 30, 1998,
        relating to the Merger; and
    
 
   
             (10) Reviewed such other financial studies and analyses and
        performed such other investigations and taken into account such other
        matters as we deemed necessary, including our assessment of general
        economic, market and monetary conditions.
    
 
     In preparing our opinion, we have relied on the accuracy and completeness
of all information supplied or otherwise made available to us by the Company and
the Acquiring Company, and we have not assumed any responsibility to
independently verify such information. With respect to the financial forecasts
examined by us, we have assumed that they were reasonably prepared and reflect
good faith estimates and judgments of the management of the Company and the
Acquiring Company as to the future performance of the respective companies. We
have also relied upon assurances of the management of the Company and the
Acquiring Company, respectively, that they are unaware of any facts that would
make the information or financial forecasts provided to us incomplete or
misleading. We have not made any independent evaluation or appraisal of the
assets or liabilities (contingent or otherwise ) of the Company or the Acquiring
Company nor have we been furnished with any such evaluations or appraisals. We
have also assumed, with your consent, that (i) the Merger may be accounted for
under either the pooling-of-interests or the purchase method of accounting, (ii)
the Merger will be a tax free reorganization and (iii) any material liabilities
(contingent or otherwise, known or unknown) of the Company and the Acquiring
Company are set forth in the consolidated financial statements of the Company
and the Acquiring Company, respectively. We note that no information or
financial forecasts have been supplied or otherwise made available to us
relating to any pending acquisitions of the Acquiring Company (the "Pending
Acquisitions"), nor have we undertaken an independent appraisal of the assets of
the Pending Acquisitions. We have not reviewed the loan files of either the
Company, the Acquiring Company or the Pending
 
                                       C-2
<PAGE>   132
 
   
Board of Directors
    
   
Firstbank of Illinois Co.
    
   
May 22, 1998
    
   
Page 3
    
 
Acquisitions. This opinion does not address the relative merits of the Merger
any other transactions or business strategies discussed by the Board of
Directors of the Company as alternatives to the Merger or the decision of the
Board of Directors to proceed with the Merger. No opinion is expressed herein as
to the price at which the securities to be issued in the Merger to the
shareholders of the Company may trade at any time. Our opinion is based on
economic, monetary and market conditions existing on the date hereof.
 
     Our opinion is directed to the Board of Directors of the Company and does
not constitute a recommendation to any shareholder of the Company as to how any
such shareholder should vote on the Merger.
 
     In the ordinary course of business PaineWebber may trade in the securities
of the Company and the Acquiring Company for our own account and for the
accounts of our customers and, accordingly, may at any time hold long or short
positions in such securities.
 
     PaineWebber is currently acting as financial advisor to the Company in
connection with the Merger and will be receiving a fee in connection with the
rendering of this opinion and upon consummation of the Merger.
 
     On the basis of, and subject to the foregoing, we are of the opinion that,
as of the date hereof, the proposed Exchange Ratio is fair to such shareholders
from a financial point of view.
 
     This opinion has been prepared for the information of the Board of
Directors of the Company in connection with the Merger and shall not be
reproduced, summarized, described or referred to, provided to any person or
otherwise made public or used for any other purpose without the prior written
consent of PaineWebber Incorporated; provided, however, that this letter may be
reproduced in full in the Proxy Statement related to the Merger.
 
   
                                          Very truly yours,
    
 
                                          /S/ PAINEWEBBER INCORPORATED
 
   
                                          PAINEWEBBER INCORPORATED
    
 
                                       C-3
<PAGE>   133


                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

                  Sections 351.355(1) and (2) of The General and Business
Corporation Law of the State of Missouri provide that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, except that, in the case
of an action or suit by or in the right of the corporation, the corporation may
not indemnify such persons against judgments and fines and no person shall be
indemnified as to any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation, unless and only to the extent that the court in
which the action or suit was brought determines upon application that such
person is fairly and reasonably entitled to indemnity for proper expenses.

                  Section 351.355(3) provides that, to the extent that a
director, officer, employee or agent of the corporation has been successful in
the defense of any such action, suit or proceeding or any claim, issue or matter
therein, he shall be indemnified against expenses, including attorneys' fees,
actually and reasonably incurred in connection with such action, suit or
proceeding. Section 351.355(7) provides that a corporation may provide
additional indemnification to any person indemnifiable under subsection (1) or
(2), provided such additional indemnification is authorized by the corporation's
articles of incorporation or an amendment thereto or by a shareholder-approved
bylaw or agreement, and provided further that no person shall thereby be
indemnified against conduct which was finally adjudged to have been knowingly
fraudulent, deliberately dishonest or willful misconduct or which involved an
accounting for profits pursuant to Section 16(b) of the Securities Exchange Act
of 1934.

                  Article 12 of the Restated Articles of Incorporation of MBI
provides that MBI shall extend to its directors and executive officers the
indemnification specified in subsections (1) and (2) and the additional
indemnification authorized in subsection (7) and that it may extend to other
officers, employees and agents such indemnification and additional
indemnification.

                  Pursuant to directors' and officers' liability insurance
policies, with total annual limits of $45,000,000, MBI's directors and officers
are insured, subject to the limits, retention, exceptions and other terms and
conditions of such policy, against liability for any actual or alleged error,
misstatement, misleading statement, act or omission, or neglect or breach of
duty by the directors or officers of MBI, individually or collectively, or any
matter claimed against them solely by reason of their being directors or
officers of MBI.

                                     II-1

<PAGE>   134



ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

   
         Each of the following exhibits was filed as an exhibit to the
Registrant's Registration Statement on Form S-4, filed with the Commission on
April 29, 1998, except exhibits 5.1, 8.1, 8.2, 23.1, 23.5 and 23.6, each of
which is filed herewith.
    

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

2.1      --       Agreement and Plan of Reorganization dated January 30, 1998, 
                  by and among Mercantile Bancorporation Inc., Ameribanc, Inc.,
                  and Firstbank of Illinois Co., included as Annex A to the
                  accompanying Proxy Statement/Prospectus.  

2.2      --       Stock Option Agreement dated January 30, 1998, by and between
                  Mercantile Bancorporation Inc. and Firstbank of Illinois Co., 
                  included as Annex B to the accompanying Proxy 
                  Statement/Prospectus.

   
3.1      --       Mercantile  Bancorporation  Inc.'s Restated Articles of  
                  Incorporation, as amended and currently in effect
                  (incorporated herein by reference to Exhibit 3.1(a) to 
                  Mercantile Bancorporation Inc.'s Quarterly Report on Form
                  10-Q for the quarter ended March 31, 1998).
    
        
3.2      --       MBI's By-laws, as amended and  currently  in  effect
                  (incorporated herein by reference to Exhibit 3.2 to Amendment
                  No. 2 to MBI's Registration Statement on Form S-4 (No.
                  333-17757)).

4.1      --       Rights  Agreement  dated as of May 23, 1988,  between MBI
                  and Mercantile Bank, as Rights Agent (including as exhibits
                  thereto the form of Certificate of Designation, Preferences
                  and Rights of Series A Junior Participating Preferred Stock
                  and the form of Right Certificate) (incorporated herein by
                  reference to Exhibits 1 and 2 to MBI's Registration Statement
                  No. 0-6045 on Form 8-A, dated May 24, 1988).

   
5.1      --       Opinion of Jon W. Bilstrom, Esq., General Counsel of 
                  Mercantile Bancorporation Inc.

8.1      --       Opinion of Wachtell, Lipton, Rosen & Katz.

8.2      --       Opinion of Suelthaus & Walsh, P.C.
    

10.1     --       The Mercantile Bancorporation Inc. 1987 Stock Option Plan, as
                  amended (incorporated herein by reference to Exhibit 10-3 to 
                  MBI's Report on Form 10-K for the year ended December 31, 
                  1989).

10.2     --       The Mercantile Bancorporation Inc.  Amended and Restated
                  Executive Incentive Compensation Plan (incorporated herein by
                  reference to Annex H to MBI's definitive Proxy Statement for
                  the 1997 Annual Meeting of Shareholders).

10.3     --       The Mercantile Bancorporation Inc.  Employee Stock Purchase
                  Plan (incorporated herein by reference to Exhibit 10-7 to 
                  MBI's Report on Form 10-K for the year ended December 
                  31, 1989).

10.4     --       The Mercantile Bancorporation Inc.  1991 Employee Incentive
                  Plan (incorporated herein by reference to Exhibit 10-7 to 
                  MBI's Report on Form 10-K for the year ended December 
                  31, 1990).

10.5     --       Amendment Number One to the Mercantile Bancorporation Inc. 
                  1991 Employee Incentive Plan (incorporated herein by 
                  reference to Exhibit 10.6 to MBI's Report on Form 10-K for 
                  the year ended December 31, 1994).

10.6     --       The Mercantile Bancorporation Inc.  Amended and Restated
                  Stock Incentive Plan (incorporated herein by reference to 
                  Annex G to MBI's definitive Proxy Statement for the 1997 
                  Annual Meeting of Shareholders).


10.7     --       The Mercantile Bancorporation Inc. 1994 Stock Incentive Plan 
                  for Non-Employee Directors (incorporated herein by reference
                  to Appendix E to MBI's definitive Proxy Statement for the 
                  1994 Annual Meeting of Shareholders).

10.8     --       The Mercantile Bancorporation Inc.  Voluntary Deferred
                  Compensation Plan (incorporated herein by reference to 
                  Exhibit 10.1 to MBI's Registration Statement on Form S-8 
                  (file No. 339-47713)).

10.9     --       Employment Agreement for Thomas H. Jacobsen, as amended and
                  restated (incorporated herein by reference to Exhibit 10-9 to
                  MBI's Report on Form 10-K for the year ended December 
                  31, 1997).

10.10    --       Form of Change of Control Employment Agreement for John W. 
                  McClure, W. Randolph Adams, John Q. Arnold and Certain Other 
                  Executive Officers (incorporated herein by reference to 
                  Exhibit 10-10  to MBI's Report on Form 10-K for the year 
                  ended December 31, 1989).
        
10.11    --       The Mercantile Bancorporation Inc. Supplemental Retirement
                  Plan (incorporated herein by reference to Exhibit 10-12 to 
                  MBI's Report on Form 10-K for the year ended December 
                  31, 1992).
        
10.12    --       Mercantile Bancorporation Inc. Voluntary Deferred
                  Compensation Plan for Non-Employee Affiliate Directors and
                  Advisory Directors (incorporated herein by reference to 
                  Exhibit 10.3 to MBI's Registration Statement on Form S-8 
                  (File No. 333-47713)).
        
10.13    --       Mercantile Bancorporation Inc. Amended and Restated Stock
                  Incentive Plan for Non-Employee Directors (incorporated 
                  herein by reference to Exhibit 10.2 to MBI's Registration 
                  Statement on Form S-8 (File No. 333-47713)).
        
10.14    --       Employment Agreement for Alvin J. Siteman, dated November 18,
                  1996 (incorporated herein by reference to Exhibit 10.3 to 
                  MBI's Report on Form 10-Q for the quarter ended March 
                  31, 1997).
        
10.15    --       Employment Agreement for John P. Dubinsky, dated October 27,
                  1996 (incorporated herein by reference to Exhibit 10.4 to 
                  MBI's Report on Form 10-Q for the quarter ended March 
                  31, 1997).
        
10.16    --       Employment Agreement for Stanley J. Bradshaw, dated December
                  22, 1996 (incorporated herein by reference to Exhibit 10 to 
                  MBI's Report on Form 10-Q for the quarter ended June 
                  30, 1997).

23.1     --       Consent of PaineWebber Incorporated.

23.2     --       Consent of Jon W. Bilstrom,  Esq., General Counsel of 
                  Mercantile Bancorporation Inc., included in Exhibit 5.1 to
                  this Registration Statement.

23.3     --       Consent of Suelthaus & Walsh, P.C., included in Exhibit 8.2
                  to this Registration Statement.

23.4     --       Consent  of  Wachtell,  Lipton,  Rosen &  Katz, included in  
                  Exhibit 8.1 to this Registration Statement.

23.5     --       Consent of KPMG Peat Marwick LLP (with respect to 
                  Mercantile Bancorporation Inc.).

23.6     --       Consent of KPMG Peat Marwick LLP (with respect to Firstbank 
                  of Illinois Co.).

   
24.1     --       Power of Attorney (included on the signature page to the
                  Registration Statement as filed with the Commission on April
                  29, 1998).
    

                                     II-2
<PAGE>   135


24.1     --       Power of Attorney (set forth on the signature pages hereto).

99.1     --       Stock Option  Agreement  dated as of January 30, 1998, by and 
                  between Firstbank of Illinois, as issuer, and Mercantile
                  Bancorporation Inc., as grantee (incorporated by reference to
                  Exhibit 2.3 to Mercantile Bancorporation Inc.'s Current Report
                  on Form 8-K, dated January 30, 1998).

99.2     --       Form of Proxy for Annual Meeting of Stockholders of Firstbank 
                  of Illinois Co.

ITEM 22.  UNDERTAKINGS

     (a)  The undersigned registrant hereby undertakes:

                  (1) To file, during any period in which offers or sales are
                      being made, a post-effective amendment to this
                      registration statement:

                           (i)  To include any prospectus required by Section 
                  10(a)(3) of the Securities Act;

                           (ii) To reflect in the prospectus any facts or events
                  arising after the effective date of the registration statement
                  (or the most recent post-effective amendment thereof) which,
                  individually or in the aggregate, represent a fundamental
                  change in the information set forth in the registration
                  statement;

                           (iii) To include any material information with
                  respect to the plan of distribution not previously disclosed
                  in the registration statement or any material change in such
                  information in the registration statement;

                  (2) That, for the purpose of determining any liability under
                      the Securities Act, each such post-effective amendment
                      shall be deemed to be a new registration statement
                      relating to the securities offered therein, and the
                      offering of such securities at the time shall be deemed to
                      be the initial bona fide offering thereof.

                  (3) To remove from registration by means of a post-effective
                      amendment any of the securities being registered which
                      remain unsold at the termination of the offering.

         (b)  The undersigned registrant hereby undertakes that, for purposes of
              determining any liability under the Securities Act, each filing of
              the  registrant's  annual  report  pursuant  to  Section  13(a) or
              Section  15(d) of the Exchange Act (and,  where  applicable,  each
              filing of an employee  benefit  plan's annual  report  pursuant to
              Section  15(d)  of the  Exchange  Act)  that  is  incorporated  by
              reference in the  registration  statement  shall be 

                                     II-3

<PAGE>   136
                
              deemed to be a new registration statement relating to the 
              securities  offered therein, and the offering of such securities 
              at that time shall be deemed to be the initial bona fide offering 
              thereof.

         (c)  The  undersigned  registrant  hereby  undertakes that prior to any
              public reoffering of the securities  registered  hereunder through
              use  of  a  prospectus  which  is  a  part  of  this  registration
              statement,  by  any  person  or  party  who  is  deemed  to  be an
              underwriter   within  the  meaning  of  Rule  145(c),  the  issuer
              undertakes  that  such  reoffering  prospectus  will  contain  the
              information  called for by the applicable  registration  form with
              respect to reofferings by persons who may be deemed  underwriters,
              in  addition to the  information  called for by the other items of
              the applicable form.

         (d)  The undersigned  registrant  hereby  undertakes that every  
              prospectus (i) that is filed pursuant to paragraph (c) immediately
              preceding, or (ii) that purports to meet the requirements of
              Sections 10(a)(3) of the Securities Act and is used in connection
              with an offering of securities subject to Rule 415, will be filed
              as a part of an amendment to the registration statement and will
              not be used until such amendment is effective, and that, for
              purposes of determining any liability under the Securities Act,
              each such post-effective amendment shall be deemed to be a new
              registration statement relating to the securities offered therein,
              and the offering of such securities at that time shall be deemed
              to be the initial bona fide offering thereof.

         (e)  Insofar as indemnification for liabilities arising under the 
              Securities Act may be permitted to directors, officers and
              controlling persons of the registrant pursuant to the foregoing
              provisions, or otherwise, the registrant has been advised that in
              the opinion of the Securities and Exchange Commission such
              indemnification is against public policy as expressed in the Act
              and is, therefore, unenforceable. In the event that a claim for
              indemnification against such liabilities (other than the payment
              by the registrant of expenses incurred or paid by a director,
              officer or controlling person of the registrant in the successful
              defense of any action, suit or proceeding) is asserted by such
              director, officer or controlling person in connection with the
              securities being registered, the registrant will, unless in the
              opinion of its counsel the matter has been settled by controlling
              precedent, submit to a court of appropriate jurisdiction the
              question whether such indemnification by it is against public
              policy as expressed in the Act and will be governed by the final
              adjudication of such issue.

         (f)  The undersigned registrant hereby undertakes to respond to
              requests for information that is incorporated by reference into
              the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form,
              within one business day of receipt of such request, and to send
              the incorporated documents by first class mail or other equally
              prompt means. This includes information contained in documents
              filed subsequent to the effective date of the registration
              statement through the date of responding to the request.

                                     II-4

<PAGE>   137


      (g)   The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

                                   SIGNATURES

   
               Pursuant to the  requirements  of the Securities Act of 1933, the
Registrant  has duly  caused  this  Registration  Statement  to be signed on its
behalf by the undersigned,  thereunto duly authorized, in the City of St. Louis,
State of Missouri, on May 22, 1998.
    


                                   MERCANTILE BANCORPORATION INC.


   
                                   By:      /s/ John Q. Arnold
                                            John Q. Arnold
                                            Vice Chairman 
                                            and Chief Financial Officer
    


   
                  Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons on May 22,
1998, in the capacities indicated.
    

   
<TABLE>

         <S>                           <C>                                                   
         *                             Chairman of the Board, President     
         Thomas H. Jacobsen            and Chief Executive Officer (Principal Executive Officer)
</TABLE>
    


                                     II-5
<PAGE>   138
   
<TABLE>

         <S>                                      <C>                     
         /s/ John Q. Arnold                        Vice Chairman and Chief Financial Officer             
         John Q. Arnold                              (Principal Financial Officer)                       
                                                                                                         
                  *                                Senior Vice President - Finance and Control           
         Michael T. Normile                          (Principal Accounting Officer)                      
                                                                                                         
                  *                                Director                                              
         Richard E. Beumer                                                                               
                                                                                                         
                  *                                Director                                              
         Harry M. Cornell, Jr.                                                                           
                                                                                                         
                                                   Director                                              
         Dr. Henry Givens, Jr.                                                                           
                                                                                                         
                  *                                Director                                              
         William A. Hall                                                                                 
                                                                                                         
                  *                                Director                                              
         Frank Lyon, Jr.                                                                                 
                                                                                                         
                  *                                Director                                              
         Robert W. Murray                                                                                
                                                                                                         
                  *                                Director                                              
         Harvey Saligman                                                                                 
                                                                                                         
                  *                                Director                                              
         Craig D. Schnuck                                                                                
                                                                                                         
                  *                                Director                                              
         Alvin J. Siteman                                                                                
                                                                                                         
                  *                                Director
         Patrick Stokes

                  *                                Director
         John A. Wright

                  *  
        By John Q. Arnold, as Attorney-in-fact.
        /s/ John Q. Arnold
</TABLE>
    



                                     II-6
<PAGE>   139

   
                                INDEX TO EXHIBITS *
    
EXHIBIT
NUMBER            DESCRIPTION
- -------           -----------

2.1      --       Agreement and Plan of Reorganization dated January 30, 1998,
                  by and among Mercantile Bancorporation Inc., Ameribanc, Inc.,
                  and Firstbank of Illinois Co., included as Annex A to the
                  accompanying Proxy Statement/Prospectus.

2.2      --       Stock Option Agreement dated January 30, 1998, by and between
                  Mercantile Bancorporation Inc. and Firstbank of Illinois Co., 
                  included as Annex B to the accompanying Proxy 
                  Statement/Prospectus.

   
3.1      --       Mercantile Bancorporation Inc.'s Restated Articles of 
                  Incorporation, as amended and currently in effect
                  (incorporated herein by reference to Exhibit 3.1(a) to 
                  Mercantile Bancorporation Inc.'s Quarterly Report on Form
                  10-Q for the quarter ended March 31, 1998).
    
        
3.2      --       MBI's By-laws, as amended and currently in effect
                  (incorporated herein by reference to Exhibit 3.2 to Amendment
                  No. 2 to MBI's Registration Statement on Form S-4 (No.
                  333-17757)).

4.1      --       Rights Agreement dated as of May 23, 1988, between MBI and
                  Mercantile Bank, as Rights Agent (including as exhibits
                  thereto the form of Certificate of Designation, Preferences
                  and Rights of Series A Junior Participating Preferred Stock
                  and the form of Right Certificate) (incorporated herein by
                  reference to Exhibits 1 and 2 to MBI's Registration Statement
                  No. 0-6045 on Form 8-A, dated May 24, 1988).

5.1      --       Opinion of Jon W. Bilstrom, Esq., General Counsel of 
                  Mercantile Bancorporation Inc.
   
8.1      --       Opinion of Wachtell, Lipton, Rosen & Katz.

8.2      --       Opinion of Suelthaus & Walsh, P.C.
    
10.1     --       The Mercantile Bancorporation Inc. 1987 Stock Option Plan, as
                  amended (incorporated herein by reference to Exhibit 10-3 to 
                  MBI's Report on Form 10-K for the year ended December 31, 
                  1989). 

10.2     --       The Mercantile Bancorporation Inc. Amended and Restated
                  Executive Incentive Compensation Plan (incorporated herein by
                  reference to Annex H to MBI's definitive Proxy Statement for
                  the 1997 Annual Meeting of Shareholders).

10.3     --       The Mercantile Bancorporation Inc.  Employee Stock Purchase
                  Plan (incorporated herein by reference to Exhibit 10-7 to 
                  MBI's Report on Form 10-K for the year ended December 31, 
                  1989).

10.4     --       The Mercantile Bancorporation Inc.  1991 Employee Incentive
                  Plan (incorporated herein by reference to Exhibit 10-7 to 
                  MBI's Report on Form 10-K for the year ended December 31, 
                  1990).

10.5     --       Amendment Number One to the Mercantile Bancorporation Inc. 
                  1991 Employee Incentive Plan (incorporated herein by
                  reference to Exhibit 10.6 to MBI's Report on Form 10-K for 
                  the year ended December 31, 1994).

10.6     --       The Mercantile Bancorporation Inc.  Amended and Restated
                  Stock Incentive Plan (incorporated herein by reference to 
                  Annex G to MBI's definitive Proxy Statement for the 1997 
                  Annual Meeting of Shareholders). 


10.7     --       The Mercantile Bancorporation Inc.  1994 Stock Incentive Plan 
                  for Non-Employee Directors (incorporated herein by reference
                  to Appendix E to MBI's definitive Proxy Statement for the 
                  1994 Annual Meeting of Shareholders).

10.8     --       The Mercantile Bancorporation Inc.  Voluntary Deferred
                  Compensation Plan (incorporated herein by reference to
                  Exhibit 10.1 to MBI's Registration Statement on Form S-8 
                  (File No. 339-47713)).


10.9     --       Employment Agreement for Thomas H. Jacobsen, as amended and
                  restated (incorporated herein by reference to Exhibit 10-9 
                  to MBI's Report on Form 10-K for the year ended 
                  December 31, 1997).

10.10    --       Form of Change of Control Employment Agreement for John W. 
                  McClure, W. Randolph Adams, John Q. Arnold and Certain Other 
                  Executive Officers (incorporated herein by reference to 
                  Exhibit 10-10  to MBI's Report on Form 10-K for the year 
                  ended December 31, 1989).
        
10.11    --       The Mercantile Bancorporation Inc. Supplemental Retirement
                  Plan (incorporated herein by reference to Exhibit 10-12 to 
                  MBI's Report on Form 10-K for the year ended 
                  December 31, 1992).
        
10.12    --       Mercantile Bancorporation Inc. Voluntary Deferred
                  Compensation Plan for Non-Employee Affiliate Directors and
                  Advisory Directors (incorporated herein by reference to  
                  Exhibit 10.3 to MBI's Registration Statement on Form S-8 
                  (File No. 333-47713)).

        
10.13    --       Mercantile Bancorporation Inc. Amended and Restated Stock
                  Incentive Plan for Non-Employee Directors (incorporated
                  herein by reference to Exhibit 10.2 to MBI's Registration 
                  Statement on Form S-8 (File No. 333-47713)).
        
10.14    --       Employment Agreement for Alvin J. Siteman, dated November 18,
                  1996 (incorporated herein by reference to Exhibit 10.3 to 
                  MBI's Report on Form 10-Q for the quarter ended 
                  March 31, 1997).
        
10.15    --       Employment Agreement for John P. Dubinsky, dated October 27,
                  1996 (incorporated herein by reference to Exhibit 10.4 to 
                  MBI's Report on Form 10-Q for the quarter ended 
                  March 31, 1997). 
        
10.16    --       Employment Agreement for Stanley J. Bradshaw, dated December
                  22, 1996 (incorporated herein by reference to Exhibit 10 to 
                  MBI's Report on Form 10-Q for the quarter ended June 30, 
                  1997).

23.1     --       Consent of PaineWebber Incorporated.

23.2     --       Consent of Jon W. Bilstrom, Esq., General Counsel of 
                  Mercantile Bancorporation Inc., included in Exhibit 5.1 to
                  this Registration Statement.

23.3     --       Consent of Suelthaus & Walsh, P.C., included in Exhibit 8.2
                  to this Registration Statement.

23.4     --       Consent of Wachtell, Lipton, Rosen &  Katz, included 
                  in Exhibit 8.1 to this Registration Statement.

23.5     --       Consent of KPMG Peat Marwick LLP (with respect to Mercantile 
                  Bancorporation Inc.).

23.6     --       Consent of KPMG Peat Marwick LLP (with respect to Firstbank 
                  of Illinois Co.).

   
24.1     --       Power of Attorney (set forth on the signature page to the
                  Registration Statement as filed with the Commission on April 
                  29, 1998).
    


   
*  Each of the exhibits was filed as an exhibit to the Registration Statement
on Form S-4, filed with the Commission on April 29, 1998, except exhibits 5.1,
8.1, 8.2, 23.1, 23.5 and 23.6, each of which is filed herewith.
    


                                     II-8
<PAGE>   140


99.1     --       Stock Option Agreement dated as of January 30, 1998, by and 
                  between Firstbank of Illinois, as issuer, and Mercantile
                  Bancorporation Inc., as grantee (incorporated by reference to
                  Exhibit 2.3 to Mercantile Bancorporation Inc.'s Current Report
                  on Form 8-K, dated January 30, 1998).

99.2     --       Form of Proxy for Annual Meeting of Stockholders of Firstbank 
                  of Illinois Co.



   
*  Each of the exhibits was filed as an exhibit to the Registration Statement
on Form S-4, filed with the Commission on April 29, 1998, except exhibits 5.1,
8.1, 8.2, 23.1, 23.5 and 23.6, each of which is filed herewith.
    

                                     II-9

<PAGE>   1


                                                                     Exhibit 5.1


   
         May 22, 1998
    

         Mercantile Bancorporation Inc.

         RE:      Registration Statement on Form S-4 Related
                  to the Acquisition of Firstbank of Illinois Co.

   
         Ladies and Gentlemen:

                  I and other members of my staff have acted as counsel to
Mercantile Bancorporation Inc., a Missouri corporation (the "Company"), in
connection with the preparation and filing of a Registration Statement on Form
S-4 (the "Registration Statement") relating to the up to 13,800,000 shares (the
"Shares") of the Company's common stock, par value $0.01 per share, to be issued
by the Company in connection with the merger of Firstbank of Illinois Co., a
Delaware corporation, with and into Ameribanc, Inc., a Missouri corporation
which is a wholly-owned subsidiary of the Company.
    

                  In rendering this opinion, I have examined such corporate
records and other documents, and I have reviewed such matters of law, as I have
deemed necessary or appropriate. Based on the foregoing, I am of the opinion
that the Shares are legally authorized and, when the Registration Statement has
been declared effective by order of the Securities and Exchange Commission and
the Shares have been issued and paid for upon the terms and conditions set forth
in the Registration Statement, the Shares will be validly issued, fully paid and
nonassessable.

                  I hereby consent to be named in the Registration Statement and
in the related proxy statement/prospectus contained therein as the attorney who
passed upon the legality of the Shares and to the filing of a copy of this
opinion as Exhibit 5.1 to the Registration Statement. In giving such consent, I
do not thereby admit that I am in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended.


                                          Very truly yours,


   
                                          /s/ Jon W. Bilstrom
                                          -----------------------------
                                          JON W. BILSTROM
                                          General Counsel and Secretary
                                          Mercantile Bancorporation Inc.
    




<PAGE>   1


                                                                     Exhibit 8.1

                         [LETTERHEAD OF WACHTELL LIPTON]
   

                                 May 22, 1998
    


Mercantile Bancorporation Inc.
Mercantile Tower
P.O. Box 524
St. Louis, Missouri  63166-0524

Ladies/Gentlemen:

        We have acted as special counsel to Mercantile Bancorporation Inc., a 
Missouri corporation ("MBI"), in connection with the proposed merger (the 
"Merger") of Firstbank of Illinois Co., a Delaware corporation ("Firstbank") 
with and into Ameribanc, Inc., a Missouri corporation and a direct 
wholly-owned subsidiary of MBI ("Merger Sub"), upon the terms and conditions
set forth in the Agreement and Plan of Reorganization dated January 30, 1998,
by and among MBI, Merger Sub and Firstbank (the "Agreement"). At your request,
in connection with the filing of the Registration Statement on Form S-4 filed
with the Securities and Exchange Commission in connection with the Merger (the
"Registration Statement"), we are rendering our opinion concerning certain
federal income tax consequences of the Merger.

        For purposes of the opinion set forth below, we have relied, with the
consent  of MBI and the consent of Firstbank, upon the accuracy and
completeness of the  statements and representations (which statements and
representations we have  neither investigated nor verified) contained,
respectively, in the  certificates of the officers of MBI and Firstbank (copies
of which are attached hereto and which are incorporated herein by reference),
and have assumed that such statements and representations will be complete and
accurate as of the Effective Time. We have also relied upon the accuracy of the
Registration Statement and the Proxy Statement/Prospectus included therein (the
"Proxy Statement"). Any capitalized term used and not defined herein has the
meaning given to it in the Proxy Statement or the appendices thereto (including
the Agreement).

        We have also assumed that (i) the transactions contemplated by the
Agreement  will be consummated in accordance therewith and as described in the
Proxy  Statement and (ii) the Merger will qualify as a statutory merger under
the  applicable laws of the States of Missouri and Delaware.

        Based upon and subject to the foregoing, it is our opinion that, for
federal  income tax purposes, (i) the Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended, and (ii) no gain or loss will be recognized by the Firstbank
Stockholders who receive solely MBI Common Stock in exchange





<PAGE>   2
Mercantile Bancorporation Inc.
   
May 22, 1998
    

Page 2

for shares of Firstbank Common Stock (except with respect to cash received in
lieu of a fractional share interest in MBI Common Stock).

        We hereby consent to the filing of this opinion with the Securities and 
Exchange Commission as an exhibit to the Registration Statement, and to the 
references to us under the caption "SUMMARY INFORMATION -Federal Income Tax 
Consequences in General", under the caption "CERTAIN FEDERAL INCOME TAX 
CONSEQUENCES OF THE MERGER" and elsewhere in the Proxy Statement. In giving
such consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended.



   
                                        /s/ Wachtell, Lipton, Rosen & Katz
    


<PAGE>   1
                                                                     EXHIBIT 8.2
[SUELTHAUS & WALSH, P.C. LETTERHEAD]

   

         May 22, 1998
    



Board of Directors
Firstbank of Illinois Co.
205 South Fifth
Springfield, Illinois  62701

Re:      CERTAIN TAX ASPECTS OF TRANSACTIONS PURSUANT TO AGREEMENT AND PLAN OF
         REORGANIZATION BY AND AMONG MERCANTILE BANCORPORATION, INC., AMERIBANC,
         INC., AND FIRSTBANK OF ILLINOIS CO. DATED JANUARY 30, 1998

Gentlemen:

        You have requested our opinion with regard to certain federal income
tax consequences of the proposed plan of reorganization (the "MERGER") pursuant
to which Firstbank of Illinois Co. ("FIRSTBANK") will merge with and into
Ameribanc, Inc. ("AMERIBANC"), a wholly-owned subsidiary of Mercantile
Bancorporation, Inc. ("Mercantile"), and the Firstbank common stockholders will
exchange their shares for Mercantile common stock, but will receive cash in
lieu of any fractional share.

        In connection with the preparation of our opinion, we have examined and
have relied upon the following:

        (i)      The Agreement and Plan of Reorganization by and among
        Mercantile Bancorporation, Inc., Ameribanc, Inc. and Firstbank of
        Illinois Co., dated January 30, 1998 (the "PLAN");
   
        (ii)     The draft Proxy Statement/Prospectus contained in the
        Registration Statement on Form S-4 of Mercantile filed with the
        Securities and  Exchange Commission on or about April 29, 1998,
        identified as SEC File No. 333-51329;
    

        (iii)    The representations on behalf of Mercantile and its Board of
        Directors set forth in EXHIBIT A hereto (the "MERCANTILE CERTIFICATE");
 
        (iv)     The representations on behalf of Ameribanc and its Board of
        Directors set forth in EXHIBIT B hereto (the "AMERIBANC CERTIFICATE");

        (v)      The representations on behalf of Firstbank and its Board of
        Directors set forth in EXHIBIT C hereto (the "FIRSTBANK CERTIFICATE").
<PAGE>   2
   
May 22, 1998
    
Page 2

        Our opinion is based solely upon the factual information contained in
the above-referenced documents. In rendering our opinion, we have assumed the
accuracy of all information contained in each document (including information
in the Mercantile Certificate, the Ameribanc Certificate, and the Firstbank
Certificate represented to be accurate only to the "best knowledge" of the
person issuing the Certificate), and we have also assumed the authenticity of
all original documents, the conformity of all copies to the original documents,
and the genuineness of all signatures. We have not attempted to verify
independently the accuracy of any information in any such document. If the
actual facts relating to any aspect of the Merger differ in any material
respect from those facts set forth in any such document or those facts and
assumptions described below in the section captioned "Statement of Facts," any
or all of the opinions expressed herein may be inapplicable. All capitalized
terms appearing but not otherwise defined in this opinion letter shall have the
meaning ascribed to them in the Plan. No opinion should be considered to have
been given unless expressly stated herein.

        OPINIONS

        Based upon the foregoing and on the facts and representations described
in the Statement of Facts, and subject to the more detailed analyses of the
issues set forth in the section of this letter captioned "Legal Analysis" and
the conditions and limitations expressed elsewhere herein, we are of the
opinion that for federal income tax purposes:

        1.       The Merger will constitute a reorganization within the meaning
        of Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Internal 
        Revenue Code of 1986, as amended to the date hereof (the "CODE"), and 
        Mercantile, Ameribanc, and Firstbank each will constitute a "party to 
        a reorganization" within the meaning of Section 368(b) of the Code.

        2.       Neither Mercantile, Ameribanc, nor Firstbank will recognize
        gain or loss as a result of the Merger.

        3.       Each stockholder of Firstbank who exchanges shares of
        Firstbank Common Stock solely for shares of Mercantile Common Stock:

        (a)      will recognize no gain or loss;

        (b)      will have an aggregate tax basis in the shares of Mercantile
        Common Stock the stockholder receives equal to the stockholder's 
        aggregate tax basis  in the shares of Firstbank Common Stock the 
        stockholder surrenders in the  Merger; and

        (c)      will have a holding period for the shares of Mercantile Common
        Stock the stockholder receives which includes the stockholder's 
        holding period for the Firstbank Common Stock the stockholder 
        surrenders in the Merger.

        4.       A holder of Firstbank Common Stock who receives cash in the
        Merger in lieu of a 




<PAGE>   3
   
May 22, 1998
    
Page 3

fractional share interest in Mercantile Common Stock will be treated as having
received the cash in redemption of such fractional share interest. The tax
treatment of this deemed redemption is governed by the rules of Code Section
302.

        It is probable that the payment of cash to avoid the expense of issuing
fractional shares in connection with the Merger will be treated as a redemption
that is not essentially equivalent to a dividend for every holder of Firstbank
Common Stock who receives such a payment, and would therefore be treated as a
sale of the fractional share. Under sale treatment the recipient will recognize
gain or loss equal to the difference between the amount of cash received and
such stockholder's adjusted tax basis in the fractional share interest. The
stockholder's adjusted tax basis in the fractional share interest will be
determined as if Mercantile issued a fractional share of Mercantile Common
Stock in the Merger and then redeemed such fractional share. Thus, the
stockholder's adjusted tax basis in Firstbank Common Stock will be allocated to
the Mercantile Common Stock the stockholder receives, including the fractional
share so redeemed. If the stockholder's Firstbank Common Stock is a capital
asset in the stockholder's hands, the gain or loss will be capital, and
long-term or short-term depending upon the stockholder's holding period.

        We express no opinion with regard to state or local taxes, or to any
federal  tax consequences of the Merger not specifically referred to above and
discussed herein. Further, our opinions are based upon the Code, regulations
promulgated by the United States Department of the Treasury under the Code
("TREAS. REG."), and interpretations and judicial precedents as of the date
hereof, all of which are subject to change at any time, possibly with
retroactive effect; and we assume no obligation to advise you of any subsequent
change thereto. If there is any change in the applicable law or regulations, or
if there is any new administrative or judicial interpretation of the applicable
law or regulations, any or all of the opinions expressed herein may become
inapplicable.

        While these opinions reflect our best professional judgment with
respect to the matters they address, they have no official status and,
therefore, are not binding on the Internal Revenue Service (the "SERVICE") or
the courts.

        STATEMENT OF FACTS

PARTIES TO THE PROPOSED MERGER

        Mercantile Bancorporation Inc. Mercantile, a Missouri corporation, was 
organized in 1970 and is a registered bank holding company under the federal 
Bank Holding Company Act of 1956, as amended (the "BHCA"). As of February 27, 
1998, Mercantile owned, directly or indirectly, all of the capital stock 
(except for directors' qualifying shares) of Mercantile Bank National 
Association and 18 other commercial banks located throughout Missouri, 
Illinois, eastern Kansas, northern and central Arkansas, and Iowa. Mercantile 
currently has acquisitions pending with CBT Corporation, headquartered in 
Paducah, Kentucky, and Financial Services Corporation of the Midwest, 
headquartered in Rock Island, Illinois. Mercantile services concentrate in 
three major lines of business - 


<PAGE>   4
   
May 22, 1998
    
Page 4

consumer, corporate, and trust and investment advisory services. Mercantile also
operates non-banking subsidiaries that provide related financial services,
including investment management, brokerage services, and asset-based lending. As
of December 31, 1997, Mercantile reported, on a consolidated basis, total assets
of $30.0 billion, total deposits of $22.1 billion, total loans of $19.2 billion,
and shareholders' equity of $2.4 billion.

        Mercantile has two classes of authorized capital stock, consisting of
(i) 200,000,000 shares of voting Common Stock, $0.01 par value ("MERCANTILE
COMMON STOCK"), of which 130,508,090 shares were issued and outstanding as of
December 31, 1997, and (ii) 5,000,000 shares of Preferred Stock, no par value,
the rights and preferences of which may be designated in one or more series by
resolution of the Board of Directors of Mercantile, and of which 2,000,000
shares have been designated as Series A Junior Participating Preferred Stock,
but none of which had been issued as of December 31, 1997. Mercantile Common
Stock will be the only class of stock tendered in the Merger. Mercantile Common
Stock is traded on the New York Stock Exchange under the symbol "MTL."

        Ameribanc, Inc. Ameribanc, a Missouri corporation organized in 1991, is
a  wholly owned subsidiary of Mercantile and a registered bank holding company 
under the BHCA. At December 31, 1997, Ameribanc owned all of the capital stock 
of Mercantile Bank National Association, and 18 other commercial banks which
operate from over 500 locations throughout Missouri, Illinois, eastern Kansas,
northern and central Arkansas, and Iowa. Ameribanc, the surviving corporation
in the Merger, will continue to be a wholly owned subsidiary of Mercantile.

        Firstbank of Illinois Co. Firstbank, a Delaware corporation, is a
registered bank holding company under the BHCA. As of December 31, 1997,
Firstbank owned, directly or indirectly, all of the outstanding capital stock
of eight banks operating from 42 offices throughout downstate Illinois and from
five offices in Missouri. Additionally, Firstbank owns all of the outstanding
capital stock of three non-banking subsidiaries: FFG Trust, Inc., a trust
company organized under the laws of the State of Illinois; FFG Investments
Inc., an Illinois corporation and a registered broker-dealer; and Zemenick &
Walker, Inc., an Illinois corporation and a registered investment advisory
firm. At December 31, 1997, Firstbank had consolidated assets of $2.28 billion,
loans of $1.43 billion, deposits of $1.98 billion and shareholders' equity of
$233 million.

        Firstbank has two classes of authorized capital stock, consisting of
(i) 20,000,000 shares of voting Common Stock, $1.00 par value ("FIRSTBANK
COMMON STOCK"), of which 15,753,053 shares were issued and outstanding as of
January 2, 1998, and (ii) 1,000,000 shares of Preferred Stock, no par value,
none of which was issued and outstanding as of January 2, 1998. As of January
2, 1998, 857,201 shares of Firstbank Common Stock were reserved for issuance
under certain Firstbank incentive and stock option plans. Firstbank Common
Stock is traded on the NASDAQ exchange under the symbol "FBIC."

THE PROPOSED MERGER


<PAGE>   5
   
May 22, 1998
    
Page 5

Background; Business Purposes. Firstbank's Board of Directors has determined
that the Merger will result in a combined entity that is (i) capable of
competing more effectively with larger financial institutions that have exerted
increasing competitive pressures on Firstbank, (ii) well-capitalized and capable
of enjoying significant penetration in the banking market of central and
southern Illinois and the metropolitan St. Louis area, (iii) capable of
offering, directly or in cooperation with Mercantile and its current
subsidiaries, certain customer services in a more cost-effective manner, and
(iv) committed to serving the banking and other financial needs of Firstbank's
depositors, employees, customers, and communities.

        Mercantile's Board of Directors has determined that the Merger will
enable Mercantile to (i) take advantage of a unique opportunity for Mercantile
to increase its share of the downstate Illinois banking market by the
acquisition of an established banking franchise, (ii) give Mercantile a strong
presence in Springfield, Illinois, that will provide a link between
Mercantile's banks in northern Illinois and those in the St. Louis metropolitan
area, and (iii) enhance Mercantile's ability to compete in the increasingly
concentrated and competitive banking and financial services industry.

        The Plan of Reorganization. As a result of the foregoing determinations
and arm's-length negotiations, Mercantile and Firstbank entered into the Plan
on January 30, 1998. Firstbank's Board of Directors has approved the Plan and
recommended approval to its stockholders. Upon approval by holders of at least
a majority of the issued and outstanding shares of Firstbank Common Stock, and
upon satisfaction of certain conditions in the Plan, including approval by the
requisite state and federal regulatory agencies, Firstbank will be merged with
and into Ameribanc, a wholly-owned subsidiary of Mercantile. The Merger will be
a statutory merger under the Delaware General Corporation Law and the Missouri
General and Business Corporation Law, and Ameribanc will be the surviving
corporation.

        On the date the Merger is consummated (the "EFFECTIVE DATE"), each
share of Firstbank Common Stock will be converted into 0.8308 (the "CONVERSION
RATIO") shares of Mercantile Common Stock. The Conversion Ratio was based upon
arm's-length negotiations. No fractional shares of Mercantile Common Stock will
be issued in the Merger. Cash will be paid by Mercantile in lieu of fractional
shares.

SALE OF MISSOURI BANKS

        Firstbank owns two Missouri-chartered banks: Colonial Bank,
headquartered in  Des Peres, Missouri, with two banking offices in Des Peres
and one in Wildwood; and Duchesne Bank, headquartered in St. Peters, Missouri,
with one office in  each of St. Peters and St. Charles. Missouri limits the
percentage of deposits  in Missouri any one banking organization may have.
Mercantile, due to prior acquisitions, exceeds this deposit cap. Consequently,
the Missouri Division of Finance is of the opinion that the two Missouri banks
owned by Firstbank must be sold. It is anticipated that either Firstbank will
complete such sale prior to consummation of the Merger, or will have 


<PAGE>   6
   
May 22, 1998
    
Page 6

entered into definitive agreement(s) for such sale(s) by that time.

        LEGAL ANALYSIS

QUALIFICATION AS A REORGANIZATION

        Overview. Section 368(a)(1)(A) of the Code provides that the term
"reorganization" includes "a statutory merger or consolidation." A merger can
also be structured as a three-party transaction (a triangular merger). In one
variant, the forward subsidiary merger, one corporation (the target
corporation) merges into a second corporation (the acquiring corporation) that
is a subsidiary of a third corporation (the parent corporation), and the
shareholders of the target corporation receive stock of the parent corporation
as consideration. Section 368(a)(2)(D) of the Code provides that such a forward
subsidiary merger qualifies as a "reorganization" if the following conditions
are satisfied: (i) the parent corporation must control the acquiring
corporation, (ii) substantially all of the properties of the target corporation
must be acquired in the transaction, (iii) consideration for the acquisition
must consist in part of the parent corporation's stock and cannot include any
stock of the acquiring corporation, and (iv) if the target corporation had
instead merged into the parent corporation that hypothetical two-party
statutory merger would have qualified as a reorganization under Section
368(a)(1)(A). Treas. Reg. Section 1.368-2(b)(2). The requirement that a
hypothetical merger of the target corporation into the parent corporation would
qualify as a reorganization under Section 368(a)(1)(A) means that a forward
subsidiary merger also must satisfy the nonstatutory requirements of "business
purpose," "continuity of business enterprise," and "continuity of proprietary
interest" set forth in Treas. Reg. Sections 1.368-1(b) and 1.368-2(b)(2).

        Control Requirement. Mercantile owns all of the outstanding common
stock of Ameribanc, and Ameribanc has only common stock outstanding. The
ownership of Ameribanc will be unaffected by the Merger. Consequently
Mercantile, the parent of the acquiring corporation (Ameribanc), will own stock
possessing at least 80 percent of the total combined voting power of all
classes of Ameribanc stock entitled to vote, and at least 80 percent of the
total number of shares of all other classes of stock of Ameribanc. This
satisfies the definition of control (Code Section 368(c)) that applies in
testing the qualification of a forward subsidiary merger as a reorganization
under Code Section 368(a)(2)(D).

        Substantially All Properties. For a forward subsidiary merger to
qualify as a reorganization, substantially all of the properties of the target
corporation must be acquired in the transaction. Code section 368(a)(2)(D);
Treas. Reg. Section 1.368-2(b)(2). In issuing advance rulings the Service
considers the "substantially all" requirement satisfied if the transferred
assets represent at least 90 percent of the fair market value of the net assets
and at least 70 percent of the fair market value of the gross assets held by
the target corporation before the transaction. Rev. Proc. 77-37, Section 3.01,
1977-2 C.B. 568, 569. For purposes of this test, assets removed from the target
corporation by payments to dissenting shareholders, or by redemptions or
extraordinary distributions preceding the acquisition and integral to it, are
counted as assets not transferred to the acquiring 



<PAGE>   7
   
May 22, 1998
    
Page 7


corporation. The Plan does not call for payments to dissenting
shareholders, and Firstbank has expressly undertaken not to make any unusual
distributions or to purchase or redeem any of its equity securities prior to
the effective date of the Merger. Plan Section 4.02(a), (f). Accordingly, the
Merger will result in the transfer of substantially all of Firstbank's assets
to Ameribanc.

        The requirement that substantially all properties be transferred will
be satisfied even though certain Firstbank banks will be sold to obtain
approval of the Merger by bank regulatory authorities. Where, in connection
with a reorganization, assets of a target corporation are sold to persons who
are unrelated to the target corporation and its shareholders and the sale
proceeds are transferred to the acquiring corporation along with the target's
other assets, the "substantially all" requirement is satisfied. Rev. Rul.
88-48, 1988-1 C.B. 117; Treas. Reg. Section 1.368-2(b)(2).

        Consideration Requirements. For a forward subsidiary merger to qualify
as a reorganization, consideration for the acquisition must consist in part of
the parent corporation's stock and cannot include any stock of the acquiring
corporation. Code Section 368(a)(2)(D). All of the outstanding stock of
Ameribanc, the acquiring corporation, is owned by Mercantile, and no Ameribanc
stock will be issued or transferred to Firstbank shareholders in connection
with the Merger. As consideration for the Merger Firstbank shareholders will
receive only Mercantile Common Stock (i.e., stock of the parent corporation)
plus a cash payment in lieu of any fractional shares. Cash or other property of
either the acquiring corporation or the parent corporation (except for stock of
the acquiring corporation) is permissible consideration under Section
368(a)(2)(D), subject only to the limit imposed by the continuity of
proprietary interest requirement (discussed below). Moreover, the regulations
expressly permit the parent corporation to assume liabilities of the target
corporation, including substituting stock of the parent corporation for stock
of the target corporation under an outstanding employee stock option agreement.
Treas. Reg. Section 1.368-2(b)(2). The Plan (Section 5.09) calls for
Mercantile, the parent corporation, to assume certain Firstbank employee stock
options, substituting rights with respect to Mercantile Common Stock under the
terms of the stock option agreements.

        Business Purpose Requirement. The business purpose requirement is
satisfied if the reorganization is undertaken for reasons germane to the
continuance of the business of a corporation in modified corporate form. Treas.
Reg. Section 1.368-1(b), -2(g). Based on the business reasons for the Merger
identified in the section hereof entitled "The Proposed Merger," the accuracy
of which we assume, this requirement is satisfied.

        Continuity of Business Enterprise Requirement. Continuity of business
enterprise exists if the parent corporation (Mercantile) or one of its
controlled subsidiaries (such as Ameribanc) continues a historic business of
the target corporation (Firstbank) or uses a significant portion of the target
corporation's historic business assets in a business. Treas. Reg. Section
1.368-1(d). Based on the representations contained in the Ameribanc
Certificate, following the Merger Mercantile or Ameribanc (or another
subsidiary controlled by Mercantile) will continue to conduct the historic
banking business currently

<PAGE>   8
   
May 22, 1998
    
Page 8


conducted by Firstbank. As a result, the continuity of business enterprise test
will be satisfied. Rev. Rul. 85-198,1985-2 C.B. 120.

        Continuity of Proprietary Interest Requirement. The "continuity of
proprietary interest" requirement means that a substantial part of the value of
the proprietary interests in the target corporation must be preserved in the
reorganization. In the context of a forward subsidiary merger, the stockholders
of the target corporation (Firstbank) must receive proprietary interests in the
parent corporation (Mercantile) which represent a substantial part of the value
of the transferred assets. Treas. Reg. Section 1.368-1(e)(1). See Helvering v.
Minnesota Tea Co., 296 U.S. 378, 386 (1935); LeTulle v. Scofield, 308 U.S. 415
(1940); Cortland Speciality Co. v. Commissioner, 60 F.2d 937 (2d Cir. 1932).

        Mercantile Common Stock is the type of consideration that qualifies as
a proprietary interest. The Service has generally concluded that a "substantial
part" of the proprietary interests in the target corporation is preserved if
the former stockholders of the target corporation receive stock in the parent
corporation having a value on the effective date of the merger equal to at
least 50 percent of the value of the formerly outstanding stock of the target
corporation. Treas. Reg. Section 1.368-1(e)(6), Example (1). See Rev. Proc.
77-37, 1977-2 C.B. 568; Rev. Proc. 86-42, 1986-2 C.B. 722 (50 percent
continuity test applied as a condition to issuing a favorable advance ruling
under Section 368(a)(1)(A)). Cash payments made to Firstbank shareholders in
lieu of fractional shares will amount to much less than 50 percent of the
pre-Merger value of Firstbank shares, and the proprietary interests in
Firstbank will not be reduced by pre-Merger redemptions or extraordinary
distributions. See Treas. Reg. Section 1.368-1T(e)(1)(ii).

        Because Firstbank stock is actively traded, long-term shareholders may
dispose of their interests in advance of the Merger. In addition, the
registration of the Mercantile Common Stock to be issued to Firstbank
shareholders will facilitate the disposition of the substitute proprietary
interest received in the Merger. The regulations provide that such sales do not
weigh against continuity of proprietary interest except to the extent that (i)
pre-Merger sales are made to the target corporation (Firstbank) or the parent
corporation (Mercantile) or a corporation related to either, or (ii)
post-Merger sales are made to the parent corporation (Mercantile) or a related
corporation. Treas. Reg. Section 1.368-1(e)(1)(i), -1(e)(2)(i). See Treas. Reg.
Section 1.368-1(e)(6), Example (1) (pre-merger sale), Example (3) (post-merger
sale facilitated by registration of stock). The Plan prohibits Firstbank and
its subsidiaries from purchasing Firstbank stock prior to the Merger (Section
4.02(f)). Reorganization status could be jeopardized if Mercantile or any of
its subsidiaries were to acquire (i) Firstbank stock before the Merger, or (ii)
Mercantile stock held by former Firstbank shareholders after the Merger, and
the amount of such acquisitions was large enough that the former Firstbank
shareholders would be left holding Mercantile Common Stock representing less
than 50 percent of the pre-Merger value of Firstbank. Based on the
representations contained in the Mercantile Certificate that such acquisitions
will not be undertaken in connection with the Merger, the continuity of
proprietary interest requirement will be satisfied.

PARTIES TO THE REORGANIZATION
<PAGE>   9
   
May 22, 1998
    

Page 9


Because the Merger will (as explained above) satisfy the definition of a
reorganization, Firstbank and Ameribanc, the corporations to be merged, will be
parties to the reorganization. Mercantile, the parent corporation, will also
have the status of a "party to the reorganization" because the special
requirements imposed by Code Section 368(a)(2)(D) on forward subsidiary mergers
will be satisfied. Code Section 368(b).

FEDERAL INCOME TAX CONSEQUENCES TO THE PARTIES

        A forward subsidiary merger qualifying as a reorganization under
Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code will result in the
following federal income tax consequences:

        No Corporate Level Gain. Because the assumption of Firstbank's
liabilities (to which the Firstbank assets transferred by operation of law will
be subject) will occur for a bona fide business purpose and not for a tax
avoidance purpose, Firstbank will recognize no gain or loss as a result of the
transfer of its assets in the course of the Merger. Code Sections 357(a), (b),
and 361(a). Ameribanc will hold the assets it receives from Firstbank with
their historical adjusted tax bases and other tax attributes, including their
holding periods, as if Firstbank had continued to own the assets. Code Section
362(b). Mercantile and Ameribanc also will not recognize gain or loss. Code
Section 1032(a); Treas. Reg. Section 1.1032-2(b).

        Stock Received. Except for cash received in lieu of fractional share
interests, Firstbank stockholders will receive only Mercantile Common Stock.
Because cash is to be paid for the exclusive purpose of saving Mercantile the
expense and inconvenience of issuing fractional shares and is not separately
bargained-for consideration, Firstbank shareholders will be treated for tax
purposes as if they first received solely Mercantile Common Stock in the Merger
(including fractional shares), and subsequently received cash in redemption of
any fractional share interest. Rev. Rul. 66-365, 1966-2 C.B. 116. From this
analysis it follows that each Firstbank stockholder will recognize no gain or
loss on the receipt of Mercantile Common Stock under Code Section 354(a)(1).

        Stock Basis. Firstbank stockholders will have a tax basis in the
Mercantile Common Stock they receive (including any fractional share deemed
received) equal to the adjusted tax basis of the Firstbank Common Stock they
surrender in exchange therefor. Code Section 358(a)(1).

        Cash in Lieu of Fractional Shares. Each former stockholder of Firstbank
who receives cash in lieu of a fractional share of Mercantile Common Stock will
be treated as if the fractional share were received as part of the Merger and
were then redeemed by Mercantile. The tax consequences of that hypothetical
redemption are governed by Code Section 302. Rev. Rul. 66-365, 1966-2 C.B. 116.
Redemption proceeds are generally treated as an ordinary distribution (taxable
as a dividend to the extent of corporate earnings and profits) unless the
redemption satisfies one of the tests set forth in Section 302(b). If one of
those tests is satisfied a redemption is instead taxable as a sale of the




<PAGE>   10
   
May 22, 1998
Page 10
    


redeemed shares, triggering gain or loss recognition (capital gain or loss if
the stock was held as a capital asset) and allowing recovery of the stock's
basis. The test that is most relevant to the elimination of fractional shares in
the Merger is the general standard, which provides that a redemption is treated
as a sale if it "is not essentially equivalent to a dividend." Code Section
302(b)(1). As construed by the Supreme Court, that standard requires that the
redemption work "a meaningful reduction of the shareholder's proportionate
interest in the corporation." United States v. Davis, 397 U.S. 301, 313 (1970).

        The payment of cash to save the expense and inconvenience of issuing
fractional shares is common practice in corporate reorganizations and is
justified by valid business purposes. It is generally assumed that if the
payment is not separately bargained-for consideration the transaction will be
treated as a sale of the fractional shares. See Rev. Rul. 74-36, 1974-1 C.B.
86. In 1977 the Service announced that it would generally issue an advance
ruling that the elimination of fractional shares is eligible for sale treatment
(Rev. Proc. 77-41, 1977-2 C.B. 574), and in fact dozens of private letter
rulings approving sale treatment have been issued. It appears likely that in
the circumstances of the Merger the Service would not challenge sale treatment,
regardless of the individual circumstances of the former Firstbank
shareholders.

        If sale treatment applies, the amount of gain or loss recognized as a
result of the receipt of cash in lieu of a fractional share will be equal to
the difference between the cash payment and the proportionate part of the
recipient's total adjusted basis in Firstbank stock that is assigned to the
fractional share. (See the prior discussion of stock basis.) Such gain or loss
will constitute a capital gain or loss if the recipient held the Firstbank
stock as capital asset. Code Section 1221. Any such capital gain or loss will
constitute a long-term gain or loss if the former Firstbank stockholder has
held the Firstbank shares for more than one year before the Merger. Code
Section 1222(3) and (4).

        CONSENT

   
        We hereby consent to the filing of this letter as an exhibit to
Registration Statement 333-51329 in connection with the proposed Merger
and to all references made to this letter in such Registration Statement.
    
                                  Very truly yours,
                                  /s/ Suelthaus & Walsh, P.C.




<PAGE>   1
                                                                EXHIBIT 23.1


CONSENT OF PAINEWEBBER, INCORPORATED

   
May 22, 1998
    

Firstbank of Illinois Co.                                       

Dear Sirs:

          We hereby consent to the inclusion in the prospectus accompanying the
Registration Statement of Mercantile Bancorporation Inc. ("Mercantile"),
relating to the proposed merger of Mercantile and Firstbank of Illinois Co.
("Firstbank"), of our opinion letter in the Proxy Statement/Prospectus which is
a part of the Registration Statement, and to the references of our firm name
therein.  In giving such consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations adopted by the
Securities and Exchange Commission thereunder nor do we admit that we are
experts with respect to any part of such Registration Statement within the
meaning of the term "experts" as used in the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.

                                                Very truly yours,


                                                PAINEWEBBER INCORPORATED

                                                By:  Halle J. Benett
                                                     Vice President     





                                    II-13

<PAGE>   1


                                                                    Exhibit 23.5

INDEPENDENT AUDITORS' CONSENT

The Board of Directors and Shareholders
Mercantile Bancorporation Inc.:

   
We consent to the use of our report incorporated herein by reference and
to the reference to our firm under the heading "Experts" in Amendment No. 1 to
the Prospectus.
    

St. Louis, Missouri                                   /s/ KPMG Peat Marwick LLP
   
May 22, 1998
    





                                    II-14


<PAGE>   1


                                                                    Exhibit 23.6

INDEPENDENT AUDITORS CONSENT

The Board of Directors and Stockholders
Firstbank of Illinois Co.:

   
We consent to the use of our report incorporated herein by reference and
to the reference to our firm under the heading "Experts" in Amendment No. 1 to
the Prospectus forming a portion of this Registration Statement.
    

St. Louis, Missouri                                   /s/ KPMG Peat Marwick LLP
   
May 22, 1998
    



                                    II-15



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