BANPONCE CORP, S-4, 1997-04-21

BANPONCE CORP
S-4, 1997-04-21
STATE COMMERCIAL BANKS

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As filed with the Securities and Exchange Commission on April 18, 1997.

Registration No. 333-_____
______________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________

FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
BANPONCE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

6711
(Primary Standard Industrial Classification Code Number)

Puerto Rico 66-0416582
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)

209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
(787) 765-9800
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

Brunilda Santos de Alvarez, Esq.
BanPonce Corporation
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918
(787) 753-1017
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copy To:
Jennifer R. Evans, Esq.
Vincent M. Lichtenberger, Esq.
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street, Chicago, Illinois 60601
Telephone: (312) 609-7500 Facsimile: (312) 609-5005

Approximate date of commencement of proposed sale to the public: Upon
consummation of the Acquisition as described in the Registration Statement.

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. /__/

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to be Offering Price Aggregate Registration
Securities to be Registered Registered(1) Per Share Offering Price(3) Fee

<S> <C> <C> <C> <C>
Common stock; par value $6.00 per
share (including attached rights to
purchase Series A Participating
Preferred Stock).................... 1,267,391 (2) $13,528,000 $4,099

</TABLE>

(1) This Registration Statement covers the maximum number of the
Registrant's securities that could be issued in the transaction
described herein.

(2) Not applicable.

(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f)(2), based upon the pro forma book value per
share of National Bancorp, Inc., as of December 31, 1996, adjusted to
give effect to NBI's Plan of Reorganization.

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, or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.

______________________________________________________________________________

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.

SUBJECT TO COMPLETION, DATED APRIL 18, 1997

PROSPECTUS

BanPonce Corporation
Common Stock
(Par Value $6.00 Per Share)

This Prospectus of BanPonce Corporation ("BanPonce") relates to the
shares of common stock, par value $6.00 per share ("BanPonce Common Stock")
which may be issued in connection with BanPonce's acquisition (the
"Acquisition") of National Bancorp, Inc. ("NBI") and its wholly owned
subsidiary, AmericanMidwest Bank & Trust ("AmMid"), pursuant to the Stock
Purchase Agreement, dated December 6, 1996 (the "Stock Purchase Agreement") by
and between BanPonce, NBI and the shareholders of NBI (the "Sellers"). The
Stock Purchase Agreement is attached hereto as Appendix A and is incorporated
herein by reference. The Acquisition will be effected through a share
exchange between Popular International Bank, Inc., a wholly-owned subsidiary
of BanPonce, and Sellers of BanPonce Common Stock for all of the outstanding
shares of common stock of NBI, par value $10,000 per share ("NBI Common
Stock"), following the corporate restructuring of NBI described below. The
exact number of shares of BanPonce Common Stock to be exchanged for the NBI
Common Stock will depend upon the price of the BanPonce Common Stock during
the 10 day period specified in the Stock Purchase Agreement and calculated
pursuant to a formula contained therein. Prior to the Acquisition, certain of
NBI's subsidiaries are to be split off, spun off or sold in accordance with
NBI's Plan of Reorganization dated September 16, 1996, as amended by Amendment
No. 1 dated December 5, 1996, to the extent such actions are expressly
permitted by the IRS Ruling (as defined below) (the Amended Plan of
Reorganization in effect as of the date hereof is hereinafter referred to as
"NBI's Reorganization Plan"). A copy of NBI's Reorganization Plan is attached
hereto as Appendix B and is incorporated herein by reference. See "TERMS OF
THE ACQUISITION -- Share Exchange."

Consummation of the Acquisition is subject to the receipt of all
required regulatory approvals, completion of NBI's Reorganization Plan and
certain other conditions. See "TERMS OF THE ACQUISITION -- Termination and
Waiver."

All information contained in this Prospectus with respect to NBI or any
of its subsidiaries has been supplied by NBI and all information with respect
to BanPonce has been supplied by BanPonce.

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

NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY INFORMATION
OR REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE HEREIN MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY BANPONCE. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF
THE SECURITIES OFFERED BY THIS PROSPECTUS IN ANY JURISDICTION OR TO ANY PERSON
TO WHOM IT WOULD BE UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

The date of this Prospectus is ________________, 1997.
<PAGE>

<PAGE>

AVAILABLE INFORMATION

BanPonce is subject to the informational reporting 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 can be inspected and copied at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Regional Offices of the Commission at the
following locations: Seven World Trade Center, Suite 1300, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains a Web site on the Internet at
http://www.sec.gov that contains such materials.

This Prospectus constitutes a part of a Registration Statement filed by
BanPonce with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain information, exhibits and
undertakings contained in the Registration Statement. Reference is hereby
made to the Registration Statement and to the exhibits thereto for further
information with respect to the securities offered hereby. Any statements
contained herein concerning the provisions of any contract, agreement or other
document are not necessarily complete and, in each instance, reference is made
to the copy of such contract, agreement or other document included as an
appendix hereto or filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.

INCORPORATION BY REFERENCE

This Prospectus incorporates certain documents by reference which are
not presented herein or delivered herewith. These documents are
available upon request from Amilcar L. Jordan, Senior Vice President and
Comptroller, Banco Popular de Puerto Rico, P.O. Box 362708, San Juan, Puerto
Rico 00936-2708, (787) 765-9800.

The following documents, which have heretofore been filed by BanPonce
(File No. 0-13818) with the Commission, are incorporated by reference in this
Prospectus: (i) BanPonce's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996; (ii) BanPonce's Current Report on Form 8-K, dated
January 9, February 12, and April 7, 1997; and (iii) the description of Common
Stock and Series A Participating Cumulative Preferred Stock set forth in
BanPonce's Registration Statements filed pursuant to Section 12 of the
Exchange Act and any amendment or report filed for the purpose of updating
those descriptions.

All documents filed by BanPonce with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made by this
Prospectus shall be deemed to be incorporated herein by reference and to be a <PAGE>

part hereof. Any statements contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein) modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as so modified or superseded.

ii
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<PAGE>

TABLE OF CONTENTS

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . ii

INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . ii

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Terms of the Acquisition . . . . . . . . . . . . . . . . . . . . . . 1
Approval of the Acquisition . . . . . . . . . . . . . . . . . . . . 2
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . 2
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . 3
Conditions to the Acquisition and Required Regulatory Approvals . . 3
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Resales of BanPonce Common Stock by Affiliates . . . . . . . . . . . 4
Market and Market Prices . . . . . . . . . . . . . . . . . . . . . . 4
NBI's Reorganization Plan . . . . . . . . . . . . . . . . . . . . . 4
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . 5
BanPonce's Assignment to PIB . . . . . . . . . . . . . . . . . . . . 5
Comparative Per Share Data . . . . . . . . . . . . . . . . . . . . . 5

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF BANPONCE
CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
OF NATIONAL BANCORP, INC. . . . . . . . . . . . . . . . . . . . . . 7

THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Background of the Acquisition . . . . . . . . . . . . . . . . . . . 8
Reasons for the Acquisition . . . . . . . . . . . . . . . . . . . . 9

TERMS OF THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . 10
Share Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Closing Date of the Acquisition . . . . . . . . . . . . . . . . . . 11
Issuance of BanPonce Common Stock . . . . . . . . . . . . . . . . . 11
Conditions to the Acquisition . . . . . . . . . . . . . . . . . . . 11
Business Pending the Acquisition . . . . . . . . . . . . . . . . . . 14
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Operations of NBI after the Acquisition . . . . . . . . . . . . . . 15
Interests of Certain Persons in the Acquisition . . . . . . . . . . 15
Termination and Waiver . . . . . . . . . . . . . . . . . . . . . . . 16
Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Certain Federal Income Tax Consequences of the Acquisition . . . . . 17
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . 19
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Resale of BanPonce Common Stock . . . . . . . . . . . . . . . . . . 19

BANPONCE CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . 20
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . 21

iii
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NATIONAL BANCORP, INC. . . . . . . . . . . . . . . . . . . . . . . . . 22
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Security Ownership of Certain Beneficial Holders and of Management . 22
Cash Dividends Declared by NBI . . . . . . . . . . . . . . . . . . . 23
Management's Discussion and Analysis of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Statistical Disclosure . . . . . . . . . . . . . . . . . . . . . . . 33
Investment Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 37
Loan Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Summary of Loan Loss Experience . . . . . . . . . . . . . . . . . . 40

COMPARISON OF STOCKHOLDERS' RIGHTS . . . . . . . . . . . . . . . . . . 46
BanPonce's Capital Stock . . . . . . . . . . . . . . . . . . . . . . 46
BanPonce's Common Stock . . . . . . . . . . . . . . . . . . . . . . 46
8.35% Series A Preferred Stock . . . . . . . . . . . . . . . . . . . 47
Size and Classification of the Board of Directors . . . . . . . . . 48
Special Voting Requirements for Certain Transactions . . . . . . . . 48
Meetings of Shareholders . . . . . . . . . . . . . . . . . . . . . . 48
Amendments to Certificate of Incorporation and Bylaws . . . . . . . 49

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . F-1

APPENDIX A
STOCK PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . A-1

APPENDIX B
AMENDED PLAN OF REORGANIZATION OF NATIONAL BANCORP, INC. . . . . . . B-1

iv
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<PAGE>

SUMMARY

The following is a summary, which is not intended to be complete, of
certain information contained elsewhere in this Prospectus or in documents
incorporated herein by reference. Reference is made to, and this summary is
qualified in its entirety by, the more detailed information contained herein,
the exhibits hereto and the documents incorporated by reference herein. Each
stockholder is urged to carefully read this Prospectus and the exhibits hereto
in their entirety.

The Parties

BanPonce is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended ("BHCA"). BanPonce was incorporated in 1984
under the laws of the Commonwealth of Puerto Rico ("Puerto Rico"). BanPonce
is the largest financial institution in Puerto Rico, with consolidated assets
of $16.8 billion, total deposits of $10.8 billion and stockholders' equity of
$1.3 billion at December 31, 1996. Based on total assets at September 30,
1996, BanPonce ranked 42nd in asset size among U.S. bank holding companies.
BanPonce has three subsidiaries: Banco Popular de Puerto Rico ("Banco
Popular"), Popular International Bank, Inc. ("PIB"), and BP Capital Markets,
Inc. ("BP Capital"). BanPonce's principal subsidiary, Banco Popular, was
incorporated over 100 years ago in 1893 and is Puerto Rico's largest bank with
total assets of $14.0 billion, deposits of $10.1 billion and shareholders'
equity of $1.0 billion at December 31, 1996. BanPonce's principal executive
office is located at 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918 and
its telephone number is (787) 765-9800. See "BANPONCE CORPORATION."

NBI was incorporated in Delaware in 1980. NBI is a registered multi-
bank holding company having its principal place of business in Streamwood,
Illinois. At December 31, 1996, NBI had total consolidated assets of
$323.7 million, total consolidated deposits of $266.6 million and consolidated
stockholders' equity of $22.4 million. AmMid, a wholly-owned subsidiary of
NBI, is an Illinois state bank operating two branches in Melrose Park,
Illinois, a suburb of Chicago. At December 31, 1996, AmMid had total
consolidated assets of approximately $175 million and total consolidated
deposits of approximately $146 million. NBI's principal executive office is
located at 1300 East Irving Park Road, Suite 200, Streamwood, Illinois 60107
and its telephone number is (630) 372-3240. See "NATIONAL BANCORP, INC." and
"SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF NATIONAL BANCORP, INC."

Terms of the Acquisition

BanPonce, NBI and Sellers entered into a Stock Purchase Agreement dated
as of December 6, 1996, pursuant to which BanPonce will acquire NBI and its
wholly owned subsidiary, AmMid. The Acquisition will be effected by an
exchange between PIB and Sellers of BanPonce Common Stock for all of the
outstanding NBI Common Stock. The Stock Purchase Agreement provides that
1,100,000 shares of BanPonce Common Stock will be exchanged for the NBI Common
Stock, subject to adjustment if the BanPonce Average Stock Price (as defined
below) is outside the range of $26.50 to $28.50 per share. See "TERMS OF THE
ACQUISITION -- Share Exchange."

If the BanPonce Average Stock Price (as defined below) is greater than
$28.50 per share, then the number of shares of BanPonce Common Stock to be
exchanged will be determined by multiplying 1,100,000 by a fraction, the
numerator of which is $28.50 and the denominator of which is the BanPonce
Average Stock Price. If the BanPonce Average Stock Price is greater than
$34.00 per share, however, then NBI, for itself and Sellers, has the option to
terminate the Stock Purchase Agreement unless BanPonce agrees to exchange
922,059 shares of BanPonce Common Stock for the NBI Common Stock. In the
event that the BanPonce Average Stock price is greater than $34.00 per share
and BanPonce does not agree to exchange 922,059 shares of BanPonce Common
Stock for the NBI Common Stock, NBI may terminate, for itself and for the
Sellers, the Stock Purchase Agreement without the consent of, or obtaining
approval from, the Sellers (the "walk-away" provision). The average daily
closing price for the BanPonce Common Stock for the 10 trading days ended
April __, 1997 was $_____. See "TERMS OF THE ACQUISITION -- Share Exchange"
and "-- Termination and Waiver" for important information concerning the terms
of the transaction and termination rights, including the "walk-away"
provision.

1
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If the BanPonce Average Stock Price (as defined below) is less than
$26.50, then the number of shares of BanPonce Common Stock to be exchanged
will be determined by multiplying 1,100,000 by a fraction, the numerator of
which is $26.50 and the denominator of which is the BanPonce Average Stock
Price. If the BanPonce Average Stock Price (as defined below) is less than
$23.00, however, then BanPonce has the option to terminate the Stock Purchase
Agreement unless NBI agrees to exchange for the NBI Common Stock 1,267,391
shares of BanPonce Common Stock. See "TERMS OF THE ACQUISITION -- Share
Exchange" and "-- Termination and Waiver" for important information concerning
the terms of the transaction and termination rights, including the "walk-away"
provision.

At the time of execution of the Stock Purchase Agreement, there were
92.17949 outstanding shares of NBI Common Stock. On or prior to the Closing
Date, NBI's Series 4 Debentures will have been converted by the holders
thereof into NBI Common Stock. Upon conversion of the Series 4 Debentures,
there will be 105.81585 outstanding shares of NBI Common Stock. Assuming that
1,100,000 shares of BanPonce Common Stock will be exchanged and that there are
105.81585 shares of NBI Common Stock outstanding on the Closing Date, each
share of NBI Common Stock will be exchanged for 10,395.41808 shares of
BanPonce Common Stock (the "Exchange Ratio"). Any resulting fractional shares
of BanPonce Common Stock will be paid in cash at the closing price per share
for such shares as quoted on Nasdaq on the trading day preceding the Closing
Date. See "TERMS OF THE ACQUISITION -- Share Exchange" and "-- Closing Date
of the Acquisition."

Pursuant to the Stock Purchase Agreement, prior to the sale of any
amount of NBI Common Stock in excess of $1,000,000, NBI must obtain the prior
written consent of BanPonce. NBI has sought and obtained the prior written
consent of BanPonce to offer to Sellers, on a pro rata basis, up to $2,000,000
of NBI's Series Five Mandatorily Convertible Subordinated Debentures ("Series
5 Debentures"). If, and when, such sale occurs, the Exchange Ratio will be
adjusted proportionately. See "TERMS OF THE ACQUISITION - Share Exchange" and
"-- Business Pending the Acquisition."

Prior to the Closing Date, under the terms of the Stock Purchase
Agreement and NBI's Reorganization Plan, NBI is to spin off, split off or sell
all of its subsidiaries, except AmMid. The Stock Purchase Agreement provides
that, on the Closing Date, the only subsidiary of NBI will be AmMid and that
NBI will not own any shares of any of its former subsidiaries, nor have any
remaining liability for such subsidiaries. See "TERMS OF THE ACQUISITION --
Conditions to the Acquisition."

The Stock Purchase Agreement permits NBI and its subsidiaries to declare
and pay dividends from time to time prior to the Closing Date subject to the
following conditions: (i) NBI's and AmMid's combined capital at no time,
including at the Closing, after giving effect to all transactions contemplated
under NBI's Reorganization Plan, be less than $14,235,687, excluding any
unrealized gains or losses of AmMid's bond portfolio and (ii) all dividends
declared by NBI or AmMid are to be paid from the assets of NBI or its
subsidiaries without incurring any loan to fund the payment of such dividend.
See "TERMS OF THE ACQUISITION -- Dividends."

Approval of the Acquisition

The Board of Directors of each of BanPonce and NBI, and each Seller,
have approved the terms and conditions of, and the transactions contemplated
by, the Stock Purchase Agreement. Prior to being irrevocably bound to the
exchange of shares provided for in the Stock Purchase Agreement, each Seller
must have received and accepted this Prospectus. See "THE ACQUISITION --
Background of the Acquisition."

Certain Federal Income Tax Consequences

The Acquisition is structured in a manner intended to qualify as a tax-
free reorganization under Section 368(a) of the Internal Revenue Code of 1986,
as amended (the "Code"). Subject to receipt of the IRS Ruling described below
and based upon various assumptions and representations made by BanPonce,
Sellers and NBI, Vedder, Price, Kaufman & Kammholz, counsel to BanPonce, has
provided its tax opinion to BanPonce and NBI, which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part, to
the effect that, assuming receipt of a favorable IRS Ruling, Sellers will not
recognize any gain or loss by reason of

2
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<PAGE>

receiving shares of BanPonce Common Stock in the Acquisition, except to the
extent they receive cash in lieu of a fractional share of BanPonce Common
Stock, and that the shares of BanPonce Common Stock which Sellers receive in
the Acquisition will (i) have the same tax basis and (ii) have the same
holding period as the respective shares of NBI Common Stock surrendered in
exchange therefor, provided the shares of NBI Common Stock were held as
capital assets by Sellers on the date of the exchange. Cash received by any
Seller, which will be limited to cash received in lieu of fractional shares of
BanPonce Common Stock, will be taxable to the Sellers. On January 9, 1997,
NBI filed with the Internal Revenue Service (the "IRS") a private letter
ruling request (the "IRS Request") regarding NBI's Reorganization Plan. In
the IRS Request, NBI sought, among other things, a ruling that certain
transfers of stock to NBI and Sellers would be non-taxable events pursuant to
Section 355 of the Code. Receipt of a ruling from the IRS reasonably
satisfactory to counsel for BanPonce and NBI in response to the IRS Request is
a condition to the obligations of all parties under the Stock Purchase
Agreement (the "IRS Ruling"). See "TERMS OF THE ACQUISITION -- Certain
Federal Income Tax Consequences of the Acquisition" and "-- Conditions to the
Acquisition."

DUE TO THE COMPLEXITIES OF FEDERAL, STATE AND LOCAL INCOME TAX LAWS, IT
IS STRONGLY RECOMMENDED THAT SELLERS CONSULT THEIR OWN TAX ADVISORS CONCERNING
ANY PARTICULAR FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF THE ACQUISITION
RELATIVE TO THE SPECIFIC FACTS AND CIRCUMSTANCES OF THEIR PARTICULAR
SITUATIONS.

Accounting Treatment

The Acquisition will be treated as a purchase for accounting purposes.
See "TERMS OF THE ACQUISITION -- Accounting Treatment."

Conditions to the Acquisition and Required Regulatory Approvals

Consummation of the Acquisition is subject to certain conditions,
including, among others: receipt of all required regulatory approvals
discussed below; the continued effectiveness of the Registration Statement of
which this Prospectus forms a part; receipt by BanPonce and NBI of the opinion
of Vedder, Price, Kaufman & Kammholz, counsel to BanPonce, dated as of the
Closing Date as to the qualification of the Acquisition as a tax-free
reorganization for federal income tax purposes; NBI selling, spinning off or
otherwise transferring without recourse all of its ownership interest in all
of its subsidiaries, except AmMid; receipt of the IRS Ruling regarding NBI's
Reorganization Plan reasonably satisfactory to counsel for BanPonce and NBI;
and certain other customary closing conditions. There can be no assurance as
to when and if all of the remaining conditions will be satisfied (or, where
permissible, waived) or that the Acquisition will be consummated. See "TERMS
OF THE ACQUISITION -- Conditions to the Acquisition" and "-- Regulatory
Approvals."

Before the Acquisition is consummated, the Acquisition must be approved
by (i) the Board of Governors of the Federal Reserve System (the "Federal
Reserve"); and (ii) the Illinois Commissioner of Banks and Real Estate (the
"Illinois Commissioner"). BanPonce filed an application with the Federal
Reserve pursuant to the BHCA on February 12, 1997, and an application with the
Illinois Commissioner on March 26, 1997.

Although BanPonce currently anticipates that all necessary bank
regulatory approvals will be received, and all waiting periods will be
expired, by the end of May 1997, there can be no assurance as to the timing of
receipt of the requisite final approvals or that all such approvals will in
fact be granted as expected. Receipt of all requisite approvals is a
condition precedent to consummation of the Acquisition. See "TERMS OF THE
ACQUISITION -- Closing Date of the Acquisition";
"-- Conditions to the Acquisition"; and "-- Regulatory Approvals."

Termination

The Stock Purchase Agreement provides that it may be terminated, under
certain conditions, including by mutual written consent of NBI, Sellers and
BanPonce and by written notice by the parties if certain of the conditions of
the Stock Purchase Agreement have not been substantially satisfied or waived
in writing

3
<PAGE>

<PAGE>

by June 30, 1997. In addition, the Stock Purchase Agreement provides NBI and
BanPonce with certain "walk-away" rights based upon the BanPonce Average Stock
Price. Under the "walk-away" provision, NBI, for itself and Sellers, may
terminate the Stock Purchase Agreement if the BanPonce Average Stock Price is
greater than $34.00 per share unless BanPonce agrees to exchange 922,059
shares of BanPonce Common Stock for all of the NBI common Stock. NBI does not
need the consent or approval of Sellers in order to terminate the Stock
Purchase Agreement pursuant to the "walk-away" provision. The average daily
closing price for the BanPonce Common Stock for the 10 trading days ended
April __, 1997 was $_____. See "TERMS OF THE ACQUISITION -- Share Exchange";
"-- Conditions to the Acquisition"; "-- Termination and Waiver"; and "--
Termination Fee."

Termination Fee

As a condition and inducement to BanPonce entering into and performing
the Stock Purchase Agreement, NBI agreed to pay BanPonce a fee (the
"Termination Fee") of either $500,000 if termination of the Stock Purchase
Agreement is the result of a breach by NBI or $1,000,000 upon the occurrence
of certain specified events. The specified events relate generally to the
Board of Directors of NBI failing to support the Acquisition, and unopposed
offers by, or transactions or proposed transactions with, third parties. The
Termination Fee may discourage competing offers from third parties to acquire
NBI and is intended to increase the likelihood that the Acquisition will be
consummated. See "TERMS OF THE ACQUISITION -- Termination Fee."

Resales of BanPonce Common Stock by Affiliates

The resale of BanPonce Common Stock issued to "affiliates" (as such term
is defined by Rule 145 promulgated by the Commission under the Securities Act)
of NBI in connection with the Acquisition will be subject to restriction. In
addition, to the extent the resale of shares of any Seller is deemed to be a
distribution of the shares for purposes of the Securities Act, disposition of
such shares may also be subject to certain restrictions. Such shares may only
be sold: (a) pursuant to a separate registration statement relating to such
persons' shares of BanPonce Common Stock (which BanPonce has not agreed to
provide); (b) pursuant to the terms and conditions of Rule 145 under the
Securities Act, if applicable; or (c) pursuant to some other exemption from
registration. See "TERMS OF THE ACQUISITION -- Resale of BanPonce Common
Stock."

Market and Market Prices

BanPonce Common Stock is traded in the over-the-counter market and is
quoted on The Nasdaq Stock Market ("Nasdaq") in the National Market System,
under the symbol "BPOP." The last sale price per share of BanPonce Common
Stock on Nasdaq on December 16, 1996, the last trading day prior to the public
announcement of the proposed Acquisition, was $34.875.

There is no established trading market for the NBI Common Stock. As of
April 15, 1997, there were approximately 28 holders of record of NBI Common
Stock.

NBI's Reorganization Plan

The Acquisition is part of NBI's Reorganization Plan, which, under the
General Corporation Law of Delaware ("DGCL"), required the affirmative vote of
a majority of the outstanding shares of NBI Common Stock. The Sellers,
constituting all of the holders of the outstanding shares of NBI Common Stock,
voted unanimously to approve of NBI's Reorganization Plan. As of the date of
the Stock Purchase Agreement, the directors and executive officers of NBI, and
their affiliates, owned 73.47333 of the 92.17949 shares of NBI Common Stock,
which represented 79.71% of the outstanding NBI Common Stock. Upon the
conversion of NBI's Series 4 Debentures (as discussed below) to NBI Common
Stock, the directors and executive officers of NBI, and their affiliates, will
own 82.26878 of the then outstanding 105.81585 shares of NBI Common Stock,
which will represent 77.75% of the outstanding NBI Common Stock. To the
extent that the Series 5 Debentures of NBI are not purchased on a pro rata
basis by Sellers, the percentage ownership of the directors and executive
officers of NBI, and their affiliates, will change accordingly. See "TERMS OF
THE ACQUISITION -- Share Exchange."

4
<PAGE>

<PAGE>

Dissenters' Rights

Under applicable Delaware law, holders of NBI Common Stock will not be
entitled to dissenters' rights of appraisal in connection with the
Acquisition.

BanPonce's Assignment to PIB

Pursuant to Section 11.3 of the Stock Purchase Agreement, BanPonce may
assign its rights and obligations thereunder to PIB. BanPonce has elected to
assign its rights and obligations to PIB and, accordingly, after consummation
of the Acquisition, NBI and AmMid will become the wholly-owned subsidiaries of
PIB.

Comparative Per Share Data

The following table presents selected comparative per share data for
BanPonce Common Stock and NBI Common Stock on an historical and pro forma
combined basis and for NBI Common Stock on a pro forma equivalent basis,
giving effect to the Acquisition.

The pro forma combined information is not necessarily indicative of the
actual results that would have occurred had the Acquisition been consummated
at the beginning of the periods indicated, or of the future operations of the
combined entity.

Year Ended
December 31, 1996
-----------------
BanPonce Historical:
Net income per share . . . . . . . . . . $ 2.68
Cash dividends declared per share . . . . 0.69
Book value per share (at period end) . . 17.59

NBI Historical:
Net income per share . . . . . . . . . . $ 1,101.67
Cash dividends declared per share . . . . 9,914.89
Book value per share (at period end) . . 221,822.00

BanPonce Pro Forma Combined(1):
Net income per share . . . . . . . . . . $ 2.61
Cash dividends declared per share(2) . . 0.69
Book value per share (at period end)(3) . 17.51

NBI Common Stock-
Equivalent Pro Forma Combined(1)(4):
Net income per share . . . . . . . . . . $ 27,132.04
Cash dividends declared per share . . . . 7,172.84
Book value per share (at period end) . . 182,023.77

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

(1) Assumes exchange of 1,100,000 shares of BanPonce Common Stock for the
NBI Common Stock.

(2) The pro forma combined dividends declared assume no changes in
historical dividends per share declared by BanPonce.

5
<PAGE>
<PAGE>

(3) The pro forma combined book value per share of BanPonce Common Stock
is based upon the historical total common equity for BanPonce and NBI
divided by total pro forma common shares of the combined entity
assuming conversion of the NBI Common Stock.

(4) The equivalent pro forma combined income, dividends and book value of
NBI Common Stock represent the pro forma combined amounts multiplied
by the Exchange Ratio of 10,395.41808, which assumes conversion of
NBI Series 4 Debentures.

6
<PAGE>

<PAGE>

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA OF BANPONCE CORPORATION

The following table sets forth in summary form certain consolidated
financial data of BanPonce and its subsidiaries at and for each of the five
years in the period ended December 31, 1996, and is qualified in its entirety
by the detailed information and the consolidated financial statements of
BanPonce, including the respective notes thereto, which are included in
documents incorporated by reference in this Prospectus. Operating results
from any prior period are not necessarily indicative of the results that might
be expected for any future period.

<TABLE>
<CAPTION>
Quarter Ended March 31
----------------------
1997 1996
---- ----
(Dollars in thousands, except per share data)

<S> <C> <C>
CONDENSED INCOME STATEMENTS
Interest income . . . . . . . . . . $ 334,266 $ 302,927
Interest expense . . . . . . . . . 153,621 140,467
------------ ------------

Net interest income . . . . . . 180,645 162,460
Security and trading gains
(losses) . . . . . . . . . . . . (1,660) 729
Operating income . . . . . . . . . 55,481 50,325
Operating expenses . . . . . . . . 70,641 62,896
Provision for loan losses . . . . . 23,687 21,273
Income tax . . . . . . . . . . . . 19,548 17,338
Dividends on preferred stock
of Banco Popular . . . . . . . .
Cumulative effect of
accounting changes . . . . . . .
------------ ------------
Net Income . . . . . . . . . . $ 49,539 $ 45,142
============ ============
Net income applicable to
common stock $ 47,452 $ 43,055
============ ============

PER COMMON SHARE DATA*
Net income . . . . . . . . . . . . $ 0.72 $ 0.65
Dividends declared . . . . . . . . .18 .15
Book value . . . . . . . . . . . . 17.96 16.07
Market price . . . . . . . . . . . 35.30 23.13
Outstanding shares:
Average . . . . . . . . . . . . . 66,121,855 65,949,872
End of period . . . . . . . . . . 66,121,855 65,949,872
AVERAGE BALANCES
Net loans . . . . . . . . . . . . . $ 9,777,772 $ 8,748,657
Earning assets . . . . . . . . . . 15,855,669 14,630,906
Total assets . . . . . . . . . . . 16,916,854 15,556,830
Deposits . . . . . . . . . . . . . 10,476,798 10,054,868
Subordinated notes . . . . . . . . 125,000 125,000
Total stockholders' equity . . . . 1,279,599 1,156,888
PERIOD END BALANCES
Net loans . . . . . . . . . . . . . $ 9,889,254 $ 8,850,078
Allowance for loan losses . . . . . 191,360 174,724
Earning assets . . . . . . . . . . 16,341,827 14,801,284
Total assets . . . . . . . . . . . 17,407,292 15,805,083
Deposits . . . . . . . . . . . . . 10,465,153 10,183,082
Subordinated notes . . . . . . . . 125,000 175,000
Total stockholders' equity . . . . 1,287,779 1,159,570
SELECTED RATIOS
Net interest yield (taxable
equivalent basis) . . . . . . . . 4.58% 4.45%
Return on average total assets . . 1.19 1.17
Return on average earning assets . 1.27 1.24
Return on average common
stockholders' equity . . . . . . 16.32 16.39
Dividend payout ratio to
common stockholders . . . . . . . 25.07 22.36
Average net loans/average
total deposits . . . . . . . . . 93.33 87.01
Average earning assets/average
total assets . . . . . . . . . . 93.73 94.05
Average stockholders' equity/
average net loans . . . . . . . . 13.09 13.22
Average stockholders' equity/
average assets . . . . . . . . . 7.56 7.44
Overhead ratio . . . . . . . . . . 48.64 48.45
Tier I capital to risk-adjusted
assets . . . . . . . . . . . . . 13.35 11.96
Total capital to risk-adjusted
assets . . . . . . . . . . . . . 15.90 14.68
Effective tax rate . . . . . . . . 28.29 27.75

</TABLE>

At and for the Years Ended December 31,
---------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(Dollars in thousands, except per share data)

<S> <C> <C> <C> <C> <C>
CONDENSED INCOME STATEMENTS
Interest income . . . . . . . $ 1,272,853 $ 1,105,807 $ 887,141 $ 772,136 $ 740,354
Interest expense . . . . . . 591,540 521,624 351,633 280,008 300,135
------------ ------------ ------------ ------------ ------------
Net interest income . . . 681,313 584,183 535,508 492,128 440,219
Security and trading gains
(losses) . . . . . . . . . 3,202 7,153 451 1,418 625
Operating income . . . . . . 202,270 166,185 140,852 123,762 123,879
Operating expenses . . . . . 541,919 486,833 447,846 412,276 366,945
Provision for loan losses . . 88,839 64,558 53,788 72,892 97,633
Income tax . . . . . . . . . 70,877 59,769 50,043 28,151 14,259
Dividends on preferred stock
of Banco Popular . . . . . 385 770 770
Cumulative effect of
accounting changes . . . . . 6,185
------------ ------------ ------------ ------------ ------------
Net Income . . . . . . . $ 185,150 $ 146,361 $ 124,749 $ 109,404 $ 85,116
============ ============ ============ ============ ============
Net income applicable to
common stock. . . . . . $ 176,800 $ 138,011 $ 120,504 $ 109,404 $ 85,116
============ ============ ============ ============ ============
PER COMMON SHARE DATA*
Net income . . . . . . . . . $ 2.68 $ 2.10 $ 1.84 $ 1.67 $ 1.40
Dividends declared . . . . . 0.69 0.58 0.50 0.45 0.40
Book value . . . . . . . . . 17.59 15.81 13.74 12.75 11.52
Market price . . . . . . . . 33.75 19.38 14.07 15.50 15.13
Outstanding shares:
Average . . . . . . . . . . 66,022,312 66,816,300 65,596,486 65,402,472 60,922,988
End of period . . . . . . . 66,088,506 65,897,272 65,676,256 65,464,846 65,309,728
AVERAGE BALANCES
Net loans . . . . . . . . . . $ 9,210,964 $ 8,217,834 $ 7,107,746 $ 5,700,069 $ 5,150,328
Earning assets . . . . . . . 15,306,311 13,244,170 11,389,680 9,894,662 8,779,981
Total assets . . . . . . . . 16,301,082 14,118,183 12,225,530 10,683,753 9,528,518
Deposits . . . . . . . . . . 10,461,796 9,582,151 8,837,226 8,124,885 7,641,123
Subordinated notes . . . . . . 147,951 56,850 56,082 73,967 85,585
Total stockholders' equity . . 1,194,511 1,070,482 924,869 793,001 668,990
PERIOD END BALANCES
Net loans . . . . . . . . . . $ 9,779,028 $ 8,677,484 $ 7,781,329 $ 6,346,922 $ 5,252,053
Allowance for loan losses . . 185,574 168,393 153,798 133,437 110,714
Earning assets . . . . . . . . 15,484,454 14,668,195 11,843,806 10,657,994 9,236,024
Total assets . . . . . . . . . 16,764,103 15,675,451 12,778,358 11,513,368 10,002,327
Deposits . . . . . . . . . . . 10,763,275 9,876,662 9,012,435 8,522,658 8,038,711
Subordinated notes . . . . . . 125,000 175,000 50,000 62,000 74,000
Total stockholders' equity . . 1,262,532 1,141,697 1,002,423 834,195 752,119
SELECTED RATIOS
Net interest yield (taxable
equivalent basis) . . . . . 4.77% 4.74% 5.06% 5.50% 6.11%
Return on average total assets 1.14 1.04 1.02 1.02 0.89
Return on average earning assets 1.21 1.11 1.10 1.11 0.97
Return on average common
stockholders' equity . . . . 16.15 14.22 13.80 13.80 12.72
Dividend payout ratio to
common stockholders . . . . 24.63 26.21 27.20 25.39 28.33
Average net loans/average
total deposits . . . . . . . 88.04 85.76 80.43 70.16 67.40
Average earning assets/
average total assets . . . . 93.90 93.81 93.16 92.61 92.14
Average stockholders' equity/
average net loans. . . . . . 12.97 13.03 13.01 13.91 12.99
Average stockholders' equity/
average assets . . . . . . . 7.33 7.58 7.57 7.42 7.02
Overhead ratio . . . . . . . 49.38 53.66 57.24 58.34 55.07
Tier I capital to risk-adjusted
assets . . . . . . . . . . 11.63 11.91 12.85 12.29 12.88
Total capital to risk-adjusted
assets . . . . . . . . . . 14.18 14.65 14.25 13.95 14.85
Effective tax rate . . . . . . 27.68 29.00 28.57 21.30 14.24

</TABLE>

* Per common share data is based on the average number of shares outstanding
during the periods, except for the book value which is based on total
shares at the end of the periods. All per share data has been adjusted to
reflect two stock splits effected in the form of a dividend on July 1, 1996
and on April 3, 1989.

7
<PAGE>

<PAGE>

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
OF NATIONAL BANCORP, INC.

The selected financial data and other data presented below are qualified
in their entirety by reference to the consolidated financial statements of
National Bancorp Inc. incorporated by reference herein. The number of shares
outstanding and related financial data has been restated for the year ending
December 31, 1992 to reflect the 1993 reverse stock split.

<TABLE>
<CAPTION>
At and for the Years Ended December 31,
---------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(Dollars in thousands, except per share data)

<S> <C> <C> <C> <C> <C>
Interest income . . . . . . $ 21,076 $ 19,547 $ 17,183 $ 16,702 $ 18,677
Interest expense . . . . . 9,899 8,609 6,920 7,127 9,296
-------- -------- -------- -------- --------
Net interest income . . . 11,177 10,938 10,263 9,575 9,381
Provision for loan losses . 2,703 219 955 790 895
-------- -------- -------- -------- --------
Net interest income after
provision for loan losses 8,474 10,719 9,308 8,785 8,486
Other income . . . . . . . 4,704 7,279 9,308 7,459 6,765
Net security gains . . . . 220 132 33 719 1,947
Other expenses . . . . . . 13,275 15,054 15,705 14,459 13,040
-------- -------- -------- -------- --------
Income before taxes . . . . 123 3,076 2,944 2,504 4,158
Income taxes . . . . . . . 27 1,101 1,091 913 1,347
-------- -------- -------- -------- --------
Net income . . . . . . . . $ 96 $ 1,975 $ 1,853 $ 1,591 $ 2,811
======== ======== ======== ======== ========

Per common share data fully diluted:
Earnings per share
fully diluted . . . . . $ 1,101.67 $ 15,921.87 $ 16,909.32 $14,658.24 $ 27,587.78
Book value . . . . . . . 221,822.00 240,239.00 209,708.00 184,434.00 160,968.00
Dividends paid . . . . . 9,914.89 10,435.59 5,587.74 0.00 0.00
Average common shares outstanding
on a fully diluted basis 105.81585 98.71548 92.17992 93.90733 96.98600

Selected Financial Data at end
of period:
Total assets . . . . . . $323,732 $318,341 $301,107 $292,382 $282,539
Loans . . . . . . . . . . 169,246 143,528 132,423 133,645 129,670
Portfolio funds . . . . . 111,270 120,528 111,595 106,626 97,317
Deposits . . . . . . . . 266,619 254,582 239,547 239,808 239,402
Securities sold under agreement
to repurchase . . . . . 21,989 13,626 11,395 3,600 6,791
Notes payable . . . . . . 6,566 18,615 18,573 15,148 5,214
Stockholders' equity . . 22,474 22,993 25,584 24,670 23,749

Selected financial ratios and
other data:

Return on average assets. 0.03% 0.65% 0.62% 0.57% 1.02%
Return on average equity. 0.40% 7.40% 6.95% 6.70% 12.13%
Net interest margin . . . 3.21% 3.28% 3.32% 3.41% 3.37%
Dividend payout . . . . . 1092.87% 52.16% 27.80% 0.00% 0.00%
Average equity to
average assets. . . . . 7.61% 8.73% 8.92% 8.50% 8.39%
Allowance for loan losses to
period end loans. . . . 1.11% 0.97% 1.00% 1.09% 0.94%
Net charge-offs to
average loans . . . . . 1.40% 0.12% 0.79% 0.42% 0.66%
Non-performing assets to period
end assets . . . . . . 0.95% 0.84% 0.43% 0.93% 0.49%

</TABLE>

<PAGE>

THE ACQUISITION

Background of the Acquisition

BanPonce

The changing competitive situation in banking and financial services has
been evidenced by considerable consolidation activity in recent years. The
increasing size of competitors and the benefits that an increased scale of
operation contribute to supporting product innovations and technological
improvements has led BanPonce to recognize that acquisitions, with proper
characteristics, are beneficial to its long-term financial performance.
BanPonce's acquisition strategy includes a preference for institutions
servicing communities with a large Hispanic population. With a presence
already established in Illinois through Banco Popular, Illinois, BanPonce was
interested in exploring possible acquisitions of other healthy Chicago-area
financial institutions of varying sizes to expand, and to achieve certain
economies of scale with respect to, its Chicago operations.

In late 1995, representatives of BanPonce and NBI met to discuss NBI's
operations and to determine whether there was any mutual interest in pursuing
acquisition negotiations. Subsequent to these preliminary discussions in
December 1995, BanPonce's Board of Directors authorized further discussions
regarding the possible acquisition of NBI and AmMid. In the early part of
1996, the parties discussed, in general terms, the parameters and structuring
of a possible transaction between BanPonce and NBI. In May 1996, BanPonce
proposed a share exchange between BanPonce and NBI to effect the transaction
and, on June 17, 1996, BanPonce delivered a letter of intent to NBI. During
the summer of 1996, the parties conducted due diligence while negotiations
continued. Negotiations continued through the latter part of 1996, until the
parties executed the Stock Purchase Agreement dated as of December 6, 1996.

Following the presentations and a discussion by the directors, the Board
of Directors unanimously approved the Stock Purchase Agreement and the
transactions contemplated thereby on December 12, 1996.

NBI

Beginning in the latter part of 1995, NBI management started evaluating
banking and other opportunities because of conflicting capital needs of
certain of its subsidiaries, the divergent interest of the Sellers and NBI's
subsidiaries, and the changing banking environment. In late 1995,
representatives of BanPonce and NBI met to discuss whether there was any
mutual interest in pursuing acquisition negotiations. BanPonce's
representatives expressed an interest in NBI and AmMid. BanPonce was not
interested, however, in acquiring FLC, DeKalb or NWC. Discussions between
management of NBI and BanPonce continued throughout the summer. NBI's
management developed a Plan of Reorganization dated as of September 16, 1996
("Plan of Reorganization"), which, among other things, contemplated the
divesture of DeKalb, FLC, and NWC from NBI, and an exchange of shares between
BanPonce and NBI to effect the Acquisition. At a Special Meeting of NBI
shareholders and debenture holders commenced on Monday, September 9, 1996, and
continued to and concluded on Monday, September 16, 1996, the Plan of
Reorganization was unanimously approved.

At a Special Shareholders Meeting on November 22, 1996, NBI shareholders
unanimously ratified the Plan of Reorganization and executed a Joint
Designation that permitted NBI's Executive Committee to act on their behalf
with regard to the change or other amendment of the Stock Purchase Agreement.

Negotiations between the management of BanPonce and NBI continued and
ultimately resulted in the execution of the Stock Purchase Agreement dated as
of December 6, 1996. On December 5, 1996, NBI's Executive Committee adopted
Amendment No. 1 to the Plan of Reorganization. As of December 6, 1996, each
Seller signed the Stock Purchase Agreement. Prior to being irrevocably bound
to the exchange of shares provided for in the Stock Purchase Agreement, each
Seller must have received and accepted this Prospectus.

9
<PAGE>

<PAGE>

Reasons for the Acquisition

BanPonce

BanPonce's management believes that the acquisition of NBI and AmMid is
consistent with its long-term strategies of developing and diversifying its
sources of revenues in the mainland United States. BanPonce's management
believes that the acquisition of NBI and AmMid will complement the existing
operations of Banco Popular, Illinois and will allow BanPonce to achieve
certain economics of scale within Illinois with respect to marketing and
business development resources.

The Acquisition is also consistent with BanPonce's expansion initiative
which targets areas with sizable Hispanic populations. AmMid's two branches
are located in Melrose Park, Illinois which has a large Hispanic population.
It is expected that the Hispanic population serviced by AmMid's branches will
continue to grow. Management believes that the development of AmMid, along
with Banco Popular, Illinois, will provide BanPonce with a strong base for
future growth in Illinois. In addition, management anticipates significant
opportunities to market to existing customers of AmMid products and services
now offered by Banco Popular, Illinois.

BanPonce's management also believes that AmMid is a well-run community
bank with an excellent reputation in the community it serves. Through the
Acquisition of AmMid, BanPonce will add significant management resources to
its staff. In particular, BanPonce will acquire the expertise of AmMid
managers in the areas of commercial lending and finance, who, by virtue of the
Acquisition, will have a wider range of products and resources at their
disposal.

NBI

During the past year, NBI's management has been exploring various
banking and other business opportunities for NBI and its subsidiaries. This
evaluation was necessitated by the capital needs of NBI's subsidiaries, the
changing banking environment, and the interests of Sellers. AmMid's
management, for example, has considered expanding its banking business by
building a branch bank on property located in Bolingbrook, Illinois at a cost
estimated to be in excess of $2 million. NWC's management has also determined
that it must move out of its temporary leased quarters and acquire land for
the purpose of constructing its own banking facilities to compete more
effectively in its market area. NWC anticipates the costs of such a project
also to be in excess of $2 million.

While AmMid and NWC require capital investment for improving their
banking facilities, DeKalb's management believes that it needs to expand
through acquisitions to compete more effectively within its market area.
Finally, FLC is in a self-liquidating business which has become more
competitive in recent years, thereby reducing FLC's profitability. As bank
closures have become less frequent in the last two years, FLC has acquired
only a small number of loans. Accordingly, the continuation of FLC as an
operating entity in the long-term would also require the infusion of
significant capital.

To complete these and other projects would require the infusions
of millions of dollars. NBI's management concluded that these capital-
intensive projects would over-tax NBI's resources and could not be pursued
simultaneously under the present structure.

In addition, the management of NWC and DeKalb have expressed an interest
in acquiring ownership interests in those entities, which cannot be
accomplished under the present NBI ownership structure. Many NBI shareholders
have expressed an interest in continuing to receive NBI dividends and in
having the investment liquidity of a publicly-traded stock. Since NBI is a
closely-held company, with virtually all NBI stock purchases during the past
decade involving NBI as purchaser, the likelihood of NBI continuing to pay
dividends and repurchasing its stock would be diminished if NBI engaged in the
capital-intensive projects described above.

<PAGE>

Under these circumstances, NBI management was directed to search for
alternatives to determine whether, and how, some or all of these ventures
might be pursued. NBI's Reorganization Plan was identified as the most
feasible approach. After management's search was underway, BanPonce expressed
an interest in acquiring NBI and AmMid, but expressed no interest in acquiring
FLC, DeKalb or NWC. In order to complete the Acquisition, the divesture of
FLC, DeKalb and NWC must be effected. The Sellers have been kept advised of
discussions with BanPonce, and the ancillary transfers and sales of assets
involved in NBI's Reorganization Plan including: (a) the distribution of
DeKalb shares to electing NBI shareholders; (b) the sale of NWC to the
Svendsen family for the amount of $4,100,000; and (c) FLC's sale or spin-off
to Sellers, or the sale or other disposition of FLC's loan portfolios. These
transactions will enable DeKalb, NWC, FLC and AmMid to pursue divergent
business interests and opportunities and thereby avoid the compromises which
would confront their business futures were they to remain a part of NBI's
business structure.

TERMS OF THE ACQUISITION

The following description of the Acquisition is qualified in its
entirety by reference to the Stock Purchase Agreement, which is attached as
Appendix A to this Prospectus and is incorporated herein by reference.

Share Exchange

On the Closing Date, subject to the terms and conditions of the Stock
Purchase Agreement, BanPonce will acquire all of the outstanding shares of NBI
and its wholly owned subsidiary, AmMid. The Acquisition will be effected
through a share exchange between PIB and Sellers on the Closing Date.
BanPonce Common Stock will be distributed to the Sellers in accordance with
their respective percentage ownership of NBI Common Stock issued and
outstanding on the Closing Date. Assuming that 1,100,000 shares of BanPonce
Common Stock will be exchanged and that 105.81585 shares of NBI Common Stock
are outstanding on the Closing Date, the Exchange Ratio will be one share of
NBI Common Stock for 10,395.41808 shares of BanPonce Common Stock. The
Exchange Ratio is subject to possible adjustment if the BanPonce Average Stock
Price (as defined below) is outside the range of $26.50 to $28.50 per share.

In the Stock Purchase Agreement, the BanPonce Average Stock Price is
defined as the average of the mean of the closing bid and asked quotations
(the "Closing Price") of BanPonce Common Stock reported on The Nasdaq Stock
Market on each of the 10 consecutive business days beginning on the first
business day following the receipt of approval of the Acquisition from the
Federal Reserve, after eliminating one day of the highest and one day of the
lowest Closing Price during such period. In the event the BanPonce Average
Stock Price exceeds $28.50, then the number of shares of BanPonce Common Stock
to be exchanged will be determined by multiplying 1,100,000 by a fraction, the
numerator of which is $28.50 and the denominator of which is the BanPonce
Average Stock Price. If, however, the BanPonce Average Stock Price is greater
than $34.00, then during the five business day period commencing on the day
after computation, NBI, for itself and Sellers, shall have the option to
terminate the Stock Purchase Agreement by delivering written notice of such
termination within such five business day period, unless BanPonce agrees in
writing within five business days after receipt of such notice of termination <PAGE>

to exchange 922,059 shares of BanPonce Common Stock for all of the then
outstanding NBI Common Stock. In the event that the BanPonce Average Stock
price is greater than $34.00 per share and BanPonce does not agree to exchange
922,059 shares of BanPonce Common Stock for the NBI Common Stock, NBI may
terminate, for itself and for the Sellers, the Stock Purchase Agreement
without the consent of, or obtaining approval from, the Sellers (the
"walk-away" provision). The average daily closing price for the BanPonce
Common Stock for the 10 trading days ended April __, 1997 was $_____.

<PAGE>

writing within five business days after receipt of such notice of termination
to exchange all of the then outstanding NBI Common Stock for 1,267,391 shares
of the BanPonce Common Stock.

At the time of execution of the Stock Purchase Agreement, there were
92.17949 outstanding shares of NBI Common Stock. On or prior to the Closing
Date (as defined below), the Series 4 Debentures are to have been converted by
the holders thereof into NBI Common Stock. Upon conversion of the Series 4
Debentures, there will be 105.81585 outstanding shares of NBI Common Stock.
Under the terms of the Stock Purchase Agreement, NBI may issue to Sellers
additional shares of NBI Common Stock up to an aggregate amount of $1,000,000
without the prior consent of BanPonce. NBI may issue shares of NBI in excess
of $1,000,000 only with the prior written consent of BanPonce. BanPonce has
consented to the sale, on a pro rata basis, of up to $2,000,000 of the
Series 5 Debentures to Sellers. If the Series 5 Debentures are issued and
converted into shares of NBI Common Stock, the total number of shares of NBI
Common Stock will be increased to 114.32649. Assuming that 1,100,00 shares of
BanPonce Common Stock will be exchanged and $2,000,000 of the Series 5
Debentures are issued and converted, the Exchange Ratio will be one share of
NBI Common Stock for 9,621.567 shares of BanPonce Common Stock.

Closing Date of the Acquisition

The closing date of the Acquisition will take place on the tenth
business day of the first calendar month following the satisfaction or waiver
of the last of the conditions to the obligations of the parties or on a date
mutually agreed upon by the parties, but not later than 30 days after receipt
of all required regulatory approvals and the expiration of any waiting periods
in connection with such regulatory approvals (the "Closing Date").

Issuance of BanPonce Common Stock

Upon the Closing, BanPonce will issue or make available to PIB shares of
BanPonce Common Stock as necessary to complete the transactions contemplated
by the Stock Purchase Agreement. If, prior to the Closing Date, the
outstanding shares of BanPonce Common Stock shall have been changed into a
different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares,
readjustment, stock dividend or similar transactions, or a distribution shall
be made on the BanPonce Common Stock in any security convertible into BanPonce
Common Stock, or a declaration of, or a record date for, such a change or
distribution shall occur within that period, then appropriate adjustment or
adjustments will be made to the number of shares of BanPonce Common Stock to
be issued in connection with the transaction.

Conditions to the Acquisition

Consummation of the Acquisition is subject to certain conditions unless
waived, to the extent waiver is permitted by applicable law.

Conditions to Obligations of BanPonce. The obligations of BanPonce to
effect the Acquisition are subject to the fulfillment on the Closing Date of
the following conditions (unless waived by BanPonce): (i) the representations
and warranties of NBI and Sellers contained in the Stock Purchase Agreement
shall have been true and correct in all material respects at, or as of, the
Closing Date; (ii) NBI and Sellers shall have performed or complied with in
all material respects all conditions, agreements and covenants required by the
Stock Purchase Agreement to be performed or complied with by them on or prior
to the Closing Date; (iii) there shall have not been any suit, action or
proceeding pending or overtly threatened before any court or other
governmental agency or the federal or any state government which seeks to
restrain or prohibit the consummation of the Acquisition or any suit, action
or proceeding pending or, to the knowledge of NBI, threatened against or
affecting NBI or AmMid which is likely to have a material adverse effect on
NBI or AmMid; (iv) as of the Closing Date, there shall have been no material
adverse change in the business, assets, liabilities, financial conditions or
results of operations of NBI or AmMid; (v) NBI shall have delivered a
certificate of the chief executive officer of NBI, and opinion of counsel of
The Law Office of Victor J. Cacciatore, Chicago, Illinois; (vi) BanPonce and
Price Waterhouse LLP shall have had an adequate opportunity to conduct a
complete review, in accordance with standards established by the American
Institute of

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<PAGE>

Certified Public Accountants, or audit, in accordance with generally accepted
auditing standards, of the financial condition, assets, liabilities, results
of operation and business of NBI, AmMid and AmMid subsidiaries as BanPonce
shall deem prudent; (vii) BanPonce shall have had the opportunity to conduct,
or to have conducted by an entity of its choosing, an audit of all NBI Benefit
Plans, as that term is defined in the Stock Purchase Agreement;
(viii) BanPonce shall have received a Certificate of Good Standing issued by
the State of Delaware for NBI and a certificate of corporate existence from
the Illinois Commissioner relating to AmMid, each dated within five days prior
to the Closing Date; (ix) BanPonce shall have received, for informational
purposes only, a copy of the bills or statements for fees, which NBI and
Sellers represent are reasonable and fair, from any accountants, attorneys or
advisers to NBI or AmMid for services performed in connection with the
transactions contemplated in the Stock Purchase Agreement, through two
business days prior to the Closing Date; (x) BanPonce shall have received an
opinion from Vedder, Price, Kaufman & Kammholz opining that the Acquisition
will be treated as a tax-free reorganization under the Code; (xi) NBI shall
have taken all actions necessary to cause the termination or merger into a
benefit plan maintained by BanPonce of the NBI pension plan; (xii) in
accordance with NBI's Reorganization Plan (as discussed below), NBI shall have
sold, spun off or otherwise transferred without recourse all of its ownership
interest in all of its subsidiaries except AmMid; (xiii) BanPonce shall have
received certificates representing all shares of NBI Common Stock, along with
all necessary stock powers and all other transfer documents, duly executed and
endorsed to BanPonce in form and substance reasonably acceptable to BanPonce;
(xiv) as of the Closing Date, the aggregate deposit liabilities of AmMid shall
have decreased no more then $12,000,000 from the aggregate deposit liabilities
of AmMid as of October 31, 1996; (xv) BanPonce shall have received duly
executed Non-Competition Agreements (as discussed below); (xvi) the Series 4
Debentures and Series 5 Debentures, if issued, shall have been converted into
shares of NBI Common Stock; (xvii) AmMid shall have received a signed
commitment from National Bancorp Data Systems L.L.C. ("Data Systems") as
contemplated in the Stock Purchase Agreement; and (xviii) all liabilities of
NBI and AmMid to any other party under any tax sharing agreements shall have
been satisfied.

Conditions to Obligations of NBI and Sellers. The obligations of NBI
and Sellers to effect the Acquisition shall be subject to the fulfillment on
the Closing Date of the following conditions (unless waived by NBI and
Sellers): (i) the representations and warranties of BanPonce contained in the
Stock Purchase Agreement shall be true and correct in all material respects
at, or as of, the Closing Date; (ii) BanPonce shall have performed and
satisfied in all material respects all conditions, covenants and agreements
required by the Stock Purchase Agreement to be performed or satisfied; (iii)
BanPonce shall have delivered a certificate signed by its officers as required
in the Stock Purchase Agreement; (iv) there shall not have been any material
adverse change, or discovery of a condition or the occurrence of any event
that has or is likely to result in such a change, in the consolidated
financial condition, assets, liabilities, results of operation or business of
BanPonce; (v) there shall have been no suit, action or proceeding pending or
overtly threatened before any court or other governmental agency by the
federal or any state government in which it is sought to restrain or prohibit
the consummation of the Acquisition and no suit, action or proceeding pending,
or to the knowledge of BanPonce, threatened against or affecting BanPonce
which is likely to have a material adverse effect on BanPonce; (vi) BanPonce
shall have delivered legal opinions; and (vii) no federal or state bank
regulatory authority shall have denied approval of the sale by NBI of NWC to
Robert W. Svendsen ("Svendsen") or the split-off of DeKalb to the Svendsen
family pursuant to NBI's Reorganization Plan.

Conditions to Obligations of all Parties. The obligation of each party
to consummate the Acquisition is further conditioned upon the following: (i)
the receipt of all necessary regulatory approvals required to consummate the
Acquisition, with no material terms or conditions that are not acceptable to
BanPonce; (ii) the Registration Statement of which this Prospectus is a part
shall have become effective by an order of the Commission; (iii) the BanPonce
Common Stock to be issued in the Acquisition shall have been qualified or
exempted under applicable state securities or blue sky laws; (iv) the absence
of a stop order suspending effectiveness of the Registration Statement of
which this Prospectus is a part or any proceedings seeking such a stop order;
and (v) NBI shall have filed the IRS Request and shall have received the IRS
Ruling in a form reasonably satisfactory to counsel for BanPonce and NBI. In
addition, each party's obligation to consummate the Acquisition is subject to
performance by the other party of its obligations under the Stock Purchase
Agreement and the receipt of certain certificates from the other party and
legal opinions.

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<PAGE>

Non-Competition Agreements. Pursuant to the Stock Purchase Agreement,
as a condition to BanPonce's obligations thereunder, Messrs. Svendsen and
Roth, and NWC and First Bank of Schaumburg, a banking corporation owned by
certain of the Sellers, must deliver duly executed Non-Competition Agreements
in the form of Exhibit 6.16 thereto. The Non-Competition Agreements prohibit,
for a period of three years, Messrs. Svendsen and Roth, and NWC and First Bank
of Schaumburg from: (i) soliciting retail or commercial banking business or
related business from any of AmMid's customers; (ii) hiring AmMid employees,
unless BanPonce consents in writing; and (iii) disclosing any information
about AmMid's customers for business solicitation purposes. Under the Stock
Purchase Agreement, NWC will not be required to execute a Non-Competition
Agreement if, as of the Closing Date, Mr. Roth is not the largest shareholder
of NWC.

NBI's Reorganization Plan. Pursuant to NBI's Reorganization Plan, NBI
will: (i) sell the stock of NWC to Mr. Svendsen for cash; (ii) sell the stock
or assets of FLC for a cash payment and the assumption of debt owed by FLC to
LaSalle National Bank, to either a third party or to a limited liability
company owned by one or more of Sellers; (iii) transfer all of its stock in
DeKalb to a new holding company ("Holdco") in exchange for all of the issued
and outstanding stock of Holdco; and (iv) distribute all of its Holdco stock
to Mr. Svendsen, Richard L. Willey, Chairman and President of DeKalb, and
certain members of the Svendsen Family in exchange for a certain number of
shares of NBI Common Stock held by them.

In its IRS Request, NBI has requested rulings that: (i) the transfer by
NBI to Holdco of DeKalb's stock, followed by the distribution of the Holdco
stock to Sellers, will be a reorganization within the meaning of Section
368(a)(1)(D) of the Code; (ii) no gain or loss will be recognized to NBI upon
the transfer of its DeKalb stock to Holdco in exchange for Holdco stock;
(iii) no gain or loss will be recognized by Holdco upon the receipt of the
stock of DeKalb in exchange for Holdco stock; (iv) the basis of the stock of
DeKalb received by Holdco will be the same as the basis of such stock in the
hands of NBI immediately prior to the transaction; (v) the holding period of
DeKalb stock received by Holdco will include the period during which the stock
was held by NBI; (vi) no gain or loss will be recognized to, and no amount
will be included in the income of, Sellers upon the receipt of the Holdco
stock in exchange for their NBI stock; (vii) the basis of Holdco stock in the
hands of Sellers will be the same as the basis of the NBI stock exchanged
therefor; (viii) the holding period of the Holdco stock received by Sellers
will include the holding period of the NBI stock exchanged therefor, provided
the stock of NBI is held as a capital asset on the date of the exchange;
(ix) no gain or loss will be recognized to NBI on the distribution of all of
its Holdco stock to Sellers; and (x) the subsequent exchange of BanPonce
Common Stock for the NBI Common Stock will not adversely affect the
qualification of the distribution of Holdco stock under Section 355 of the
Code.

Receipt of an IRS Ruling in a form reasonably satisfactory to counsel
for NBI and BanPonce is a condition to the obligations of all parties under
the Stock Purchase Agreement.

Federal Reserve Board. Pursuant to the BHCA and 12 C.F.R. Sec. 225.11,
BanPonce is required to seek prior approval of the Federal Reserve of its
acquisition of control of NBI and its subsidiary, AmMid. On
February 12, 1997, BanPonce filed its application for approval with the
Federal Reserve.

Illinois Commissioner of Banks and Real Estate. The change of control
of NBI and AmMid are subject to the prior approval of the Illinois
Commissioner under the Illinois Bank Holding Company Act of 1957, as amended.
BanPonce, NBI and AmMid filed a joint application with the Illinois
Commissioner on March 26, 1997.

The Acquisition cannot proceed in the absence of all requisite
regulatory approvals. See "-- Conditions to the Acquisition," "-- Closing
Date of the Acquisition" and "-- Termination and Waiver." BanPonce and NBI
have agreed to take all reasonable actions necessary to obtain approvals and
comply with the requirements of the Federal Reserve, the Illinois
Commissioner, and other governmental entities. However, the obligation to
take reasonable actions is not to be construed as including an obligation to
accept any terms of, or conditions to, an agreement or other approval of, or
any exemption by, any party that are not customarily contained in approvals of
similar transactions granted by such regulators if BanPonce in good faith
determines that such terms or conditions would have a material adverse effect
on its business or financial condition or would materially detract from the
value of NBI or AmMid to BanPonce. There can be no

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<PAGE>

assurance that any regulatory approvals will not contain a term or condition
that causes such approvals to fail to satisfy the conditions described above.

BanPonce and NBI are not aware of any other governmental approvals or
actions that are required for consummation of the Acquisition except as
described above. Should any other approval or action be required, it is
presently contemplated that such approval or action would be sought. There
can be no assurance that any such approval of action, if needed, could be
obtained and, if such approvals or actions are obtained, there can be no
assurance as to the timing thereof.

Business Pending the Acquisition

Under the Stock Purchase Agreement, NBI is generally obligated to carry
on, and to cause its subsidiaries to carry on, their respective businesses in
substantially the same manner as before and to use its reasonable best efforts
to maintain and preserve its business organization intact, to retain its
present employees and to maintain its relationships with customers.

The Stock Purchase Agreement also provides that until the earlier of the
Closing Date or termination of the Stock Purchase Agreement, unless BanPonce
gives its prior written consent, NBI may not, and may not allow its
subsidiaries to, among other things: (i) enter into any transaction or incur
any obligation or liability except (a) liabilities incurred and obligations
entered into in the ordinary course of business, (b) for fair and reasonable
legal services in connection with the Stock Purchase Agreement and the
transactions contemplated thereby, and (c) with respect to any agreement for
fees with Crowe, Chizek and Company LLP for fair and reasonable services in
connection with the activities contemplated by the Stock Purchase Agreement;
(ii) except as recommended by a regulatory authority and reported to BanPonce,
change its lending, investment, liability management and other material
policies concerning its or AmMid's banking business; (iii) except as expressly
provided in the Stock Purchase Agreement, grant any bonus or increase in the
rates of pay of employees or directors except normal salary and bonus
increases to employees, based on past practice, not to exceed for any
individual employee or director five percent in the aggregate; (iv) incur or
commit to any capital expenditures which exceed $25,000 individually or
$100,000 in the aggregate; and (v) except as expressly contemplated in the
Stock Purchase Agreement or NBI's Reorganization Plan, and, in the case of
sales for more than $50,000, after prior notice to BanPonce, sell any loans
made prior to the date of the Stock Purchase Agreement, or sell any investment
securities from their respective investment portfolios, or sell or otherwise
dispose of any assets. Notwithstanding the above, NBI must terminate its
office lease in Streamwood, Illinois prior to the Closing Date without any
continuing liability to NBI and may sell AmMid's Bolingbrook, Illinois
property so long as the sale price is not less than AmMid's purchase price.

Neither Sellers nor NBI will initiate, solicit or encourage and will not
permit AmMid to initiate, solicit or encourage, or take any other affirmative
action to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Competing
Transaction (as defined below), or negotiate with any person in furtherance of
such inquiries to obtain a Competing Transaction, or agree to endorse any
Competing Transaction, or authorize or permit any of its officers, directors
or employees or any financial advisor, attorney, accountant or other
representative to take any such action. For purposes of the Stock Purchase
Agreement, a "Competing Transaction" means any of the following: (i) the
merger or consolidation of NBI or AmMid with any person or entity other than
BanPonce or its subsidiaries; (ii) the acquisition of more than ten percent of
the consolidated gross assets or outstanding equity securities of NBI or AmMid
(except as contemplated by the Stock Purchase Agreement) by any person or
entity other than BanPonce or its subsidiaries; (iii) the acquisition of any
of the capital stock of AmMid by any person or entity other than BanPonce or
its subsidiaries; or (iv) the acquisition by NBI or AmMid of the stock or the
assets of any other person or entity.

Each Seller has agreed that he, she or it will not: (i) transfer or
vote in favor or consent to any transfer of any or all of the Seller's shares
or any interests therein, except pursuant to the Stock Purchase Agreement;
(ii) enter into any contract or option with respect to any transfer of any or
all of such shares or any interest therein; (iii) grant any proxy, power of
attorney or other authorization in or with respect to such shares, except for
the Stock Purchase Agreement, or (iv) deposit such shares into a voting

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trust or enter into a voting agreement or arrangement with respect to such
shares, except as provided for in the Stock Purchase Agreement.

Data Systems, an Illinois limited liability company having its principal
place of business in Streamwood, Illinois, is owned 34% by AmMid, 33% by
DeKalb and 33% by First Bank of Schaumburg. Data Systems provides electronic
data processing services for its member banks and affiliates under contractual
fee arrangements. Data Systems, which commenced operations in 1995, generated
data processing revenue of $254,000 in 1996 and $165,000 in 1995. As soon as
practicable after the Closing Date, pursuant to Section 6.18 of the Stock
Purchase Agreement, Data Systems will (i) redeem the equity interest of AmMid
for cash (the "Redemption Amount") and (ii) terminate the Data Processing
Agreement between AmMid and Data Systems in return for AmMid's payment of a
termination fee in the amount of the Redemption Amount.

Dividends

The Stock Purchase Agreement permits NBI and its subsidiaries to declare
and pay dividends from time to time prior to the Closing Date subject to the
following conditions: (i) NBI's and AmMid's combined capital may at no time,
including at the Closing, after giving effect to all transactions contemplated
under NBI's Reorganization Plan, be less than $14,235,687, excluding any
unrealized gains or losses of AmMid's bond portfolio; and (ii) all dividends
declared by NBI or AmMid are to be paid from the assets of NBI or its
subsidiaries without incurring any loan to fund the payment of such dividend.

Operations of NBI after the Acquisition

Pursuant to Section 11.3 of the Stock Purchase Agreement, BanPonce has
elected to assign its rights and obligations to PIB, BanPonce's wholly-owned
subsidiary. BanPonce has not finalized plans regarding the operation and the
management of NBI and AmMid following completion of the Acquisition. It is
expected that after the Acquisition BanPonce will elect certain current
officers or directors of BanPonce to NBI's and AmMid's board of directors.
However, BanPonce does not contemplate any wholesale changes in the management
or operations of AmMid immediately following the consummation of the
transaction. It is anticipated that AmMid's current senior management staff
will remain in place.

Interests of Certain Persons in the Acquisition

NBI

The Stock Purchase Agreement provides for the termination, or merger
into a benefit plan maintained by BanPonce, of NBI's pension plan prior to the
Closing Date.

Logotype and Name. The use of AmMid's logotype will be assigned to
DeKalb. DeKalb or American Midwest Credit Card Co., an Illinois corporation,
may use the logotype in connection with the merchant processing business of
AmMid to be assigned by AmMid to DeKalb prior to the Closing Date in
accordance with NBI's Reorganization Plan. Neither DeKalb nor American
Midwest Credit Card Co. is permitted to use the logo generally in connection
with its banking business for a period of three years.

Prior to the Closing, without compensation to NBI, or after the Closing,
upon payment of compensation to BanPonce in the amount of $100.00, BanPonce
will relinquish all right, title and interest in and to the name "National
Bancorp, Inc." both in Delaware and elsewhere and will allow the assignment of
such name to DeKalb.

BanPonce

No director or executive officer of BanPonce has any personal interest
in the Acquisition other than by reason of his or her holdings of BanPonce
Common Stock, nor do such directors or executive officers own any shares of
NBI Common Stock. Except as otherwise described in this Prospectus, there are
no material relationships among

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executive officers, directors and principal stockholders of NBI or of its
subsidiaries and the executive officers, directors and principal stockholders
of BanPonce.

Termination and Waiver

Pursuant to the terms and conditions of the Stock Purchase Agreement,
the Stock Purchase Agreement may be terminated at any time before the Closing
Date by: (a) the mutual consent of the parties; (b) written notice from
BanPonce to NBI and Sellers if (i) any condition set forth in Article VI or
VIII of the Stock Purchase Agreement has not been substantially satisfied or
waived in writing by June 30, 1997, unless the failure to satisfy such
condition is due to a breach by BanPonce, (ii) any warranty or representation
made by NBI or Sellers is discovered to be or to have become untrue,
incomplete or misleading, and such breach (if capable of cure) remains uncured
for a period of twenty days after such notice is given, where any such breach,
individually or in the aggregate, is reasonably likely to have a material
adverse impact on NBI or AmMid or on the benefits to have been received by
BanPonce from consummation of the transactions contemplated by the Stock
Purchase Agreement, or (iii) NBI or any Seller breaches one or more covenants
of the Stock Purchase Agreement in any material respect and such breach (if
capable of cure) remains uncured for a period of twenty days notice after such
notice is given; or (c) written notice from NBI and Sellers to BanPonce, if
(i) any condition set forth in Article VII or VIII of the Stock Purchase
Agreement has not been substantially satisfied or waived in writing by June
30, 1997, unless the failure to satisfy such condition is due to a breach by
NBI or Sellers, (ii) any warranty or representation made by BanPonce is
discovered to be or has become untrue, incomplete or misleading, and such
breach (if capable of cure) remains uncured for a period of twenty days after
such notice is given, where any such breach, individually or in the aggregate,
is reasonably likely to have a material adverse impact on BanPonce or on the
benefits to have been received by NBI or the Sellers from consummation of the
transactions contemplated by the Stock Purchase Agreement, or (iii) BanPonce
breaches one or more covenants of the Stock Purchase Agreement in any material
respect and such breach (if capable of cure) remains uncured for a period of
twenty days after such notice is given.

The Stock Purchase Agreement provides that it may be terminated by NBI,
for itself and Sellers, by delivering written notice of such termination to
BanPonce within five business days after the date of computation of the
BanPonce Average Stock Price if: (i) the BanPonce Average Stock Price is
greater than $34.000 and (ii) BanPonce does not agree to exchange 922,059
shares of BanPonce Common Stock for all NBI Common Stock. This provision is
known as the "walk-away" provision. The average daily closing price for the
BanPonce Common Stock for the 10 trading days ended April ___, 1997 was
$______.

Thus, if BanPonce did not agree to exchange 922,059 shares of BanPonce
Common Stock for the NBI Common Stock, NBI, for itself and Sellers, would have
the right to terminate the Stock Purchase Agreement as of the date of this
Prospectus. Such right would be within the discretion of the Board of
Directors of NBI which could either terminate the Stock Purchase Agreement or,
alternatively, waive the "walk-away" provision and proceed to consummate the
Acquisition pursuant to the terms of the Stock Purchase Agreement. Any
decision the Board of Directors may make regarding the "walk-away" provision
may be made without the consent of, or approval from, the Sellers.

In the event that the BanPonce Average Stock Price is less than $26.50,
then the number of shares of BanPonce Common Stock to be exchanged will be
determined by multiplying 1,100,000 by a fraction, the numerator of which is
$26.50 and the denominator of which is the BanPonce Average Stock Price. If,
however, the BanPonce Average Stock Price is less than $23.00, then during the
five business day period commencing on the day after computation, BanPonce has
the option to terminate the Stock Purchase Agreement by delivering written
notice within such five business day period unless NBI agrees in writing
within five business days after receipt of such notice of termination to
exchange all of the then outstanding NBI Common Stock for 1,267,391 shares of
the BanPonce Common Stock. In the event that the BanPonce Average Stock Price
was less than $23.00, NBI's Board of Directors would decide whether to accept
1,267,391 shares of the BanPonce Common Stock for all of the NBI Common Stock.
NBI's Board of Directors would not be required to obtain the consent of, or
approval from, the Sellers in making its decision.

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Except as provided in Article IX of the Stock Purchase Agreement, in the
event of termination of the Stock Purchase Agreement, there is no liability on
the part of the parties of any nature, unless such termination is caused by a
breach of the Stock Purchase Agreement by one of the parties thereto or caused
by (i) willful breach by a party of any agreement, covenant, or undertaking of
such party contained therein or in any exhibit thereto, (ii) any uncured
material misrepresentations or breach of warranty in any material respect by a
party therein, or (iii) the failure of any condition set forth in Article VI,
VII or VIII thereof which has failed because a party did not exercise good
faith and best efforts towards the fulfillment of such condition, then the
other party is entitled to all of its legal and equitable remedies.

Termination Fee

As a condition and inducement to BanPonce's willingness to enter into
the Stock Purchase Agreement, NBI agreed to pay BanPonce a fee of $1,000,000
upon the occurrence of any of the events identified in paragraphs (1) and (2)
below, or $500,000 upon the occurrence of the event identified in paragraph
(3) below, provided that the Stock Purchase Agreement had not been terminated
as described in Section 9.1(d) thereof:

(1) except as specifically permitted by NBI's Reorganization
Plan or as otherwise provided for in the Stock Purchase Agreement, NBI
and/or one or more of its stockholders enters into an agreement or
understanding with a party other than BanPonce providing for (i) the
acquisition by any person, other than BanPonce or any BanPonce
subsidiary, alone or together with such person's affiliates and
associates or any group, of beneficial ownership of 10% or more of NBI
Common Stock, (ii) a merger, consolidation, liquidation or dissolution,
share exchange, business combination or any other similar transaction
involving NBI or AmMid, or (iii) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of 25% or more of the assets of
NBI or AmMid, in a single transaction or series of transactions, or the
public announcement, by or on behalf of NBI or one or more of its
stockholders, of negotiations relating to the occurrence of any of the
above; or the announcement of a tender or exchange offer with the intent
to accomplish any of the foregoing, which offer the NBI Board of
Directors does not reject immediately after receipt thereof;

(2) the Board of Directors of NBI withdraws, modifies or amends
in any respect its approval or recommendation of the Stock Purchase
Agreement or the transactions contemplated thereby; or

(3) the termination of the Stock Purchase Agreement following a
breach of the Stock Purchase Agreement by NBI.

Section 9.1(d) of the Stock Purchase Agreement provides that BanPonce's
right to the termination fee will terminate upon the earliest to occur of: (i)
the Closing Date; (ii) the termination of the Stock Purchase Agreement due to
an untrue, incomplete or misleading representation or warranty by BanPonce;
(iii) the termination of the Stock Purchase Agreement due to a breach of the
Stock Purchase Agreement by BanPonce; (iv) the termination of the Stock
Purchase Agreement by mutual agreement of the parties; or (v) the expiration
of one year after the termination of the Stock Purchase Agreement, other than
terminations described in (2) and (3) above.

Any such fee is payable in immediately available funds within two days
following the occurrence of any of the foregoing events.

Certain Federal Income Tax Consequences of the Acquisition

The Acquisition is structured in a manner intended to qualify as a
tax-free reorganization under Section 368(a)(1)(B) of the Code. The Internal
Revenue Service (the "Service") has not been asked to rule upon the tax
consequences of the Acquisition and such request will not be made. Instead,
NBI and BanPonce will rely upon the opinion of Vedder, Price, Kaufman &
Kammholz with respect to certain federal income tax consequences of the
Acquisition. The opinion of Vedder, Price, Kaufman & Kammholz is based
entirely upon the Code, regulations now in effect thereunder, current
administrative rulings and practice, and judicial authority, all of which are
subject to change. Unlike a ruling

18
<PAGE>
<PAGE>

from the Service, an opinion of counsel is not binding on the Service and
there can be no assurance, and none is hereby given, that the Service will not
take a position contrary to one or more positions reflected herein or that the
opinion of counsel will be upheld by the courts if challenged by the Service.

In order for the Acquisition to qualify as a tax-free reorganization,
NBI will be required to satisfy certain federal income tax reporting
requirements applicable to transactions in which stock of a domestic
corporation is transferred to a foreign corporation. It is expected and the
opinion of Vedder, Price, Kaufman & Kammholz assumes that NBI will satisfy
these requirements when it timely files its federal income tax return for the
year in which the Acquisition occurs.

EACH STOCKHOLDER OF NBI IS URGED TO CONSULT HIS OR HER OWN TAX AND
FINANCIAL ADVISORS AS TO THE EFFECT OF SUCH FEDERAL INCOME TAX CONSEQUENCES OF
THE ACQUISITION ON HIS OR HER OWN PARTICULAR FACTS AND CIRCUMSTANCES AND ALSO
AS TO ANY STATE, LOCAL, FOREIGN OR OTHER TAX CONSEQUENCES ARISING OUT OF THE
ACQUISITION.

Based upon the opinion of Vedder, Price, Kaufman & Kammholz, which in
turn is based upon various representations and subject to various assumptions
and qualifications, the following federal income tax consequences will result
from the Acquisition:

(i) the Acquisition will constitute a tax-free reorganization
within the meaning of Section 368(a)(1)(B) of the Code and BanPonce,
PIB, and NBI will each be a party to the reorganization;

(ii) the exchange in the Acquisition of BanPonce Common Stock for
NBI Common Stock will not give rise to the recognition of any income,
gain or loss to BanPonce, PIB or the stockholders of NBI with respect to
such exchange except with respect to the stockholders of NBI, to the
extent of any cash received in lieu of fractional shares of BanPonce
Common Stock;

(iii) the adjusted tax basis of the BanPonce Common Stock received
by NBI stockholders in the Acquisition will equal the adjusted tax basis
of the shares of the NBI Common Stock surrendered in exchange therefor
decreased by any amount of money received in the exchange and increased
by the amount of gain recognized in the exchange; and

(iv) the holding period of the shares of the BanPonce Common
Stock received in the Acquisition will include the period during which
the shares of NBI Common Stock surrendered in exchange therefor were
held, provided such shares of NBI Common Stock were held as capital
assets at the time of the exchange;

The foregoing is only a general description of certain material federal
income tax consequences of the Acquisition for NBI stockholders who are
citizens or residents of the United States and who hold their shares as
capital assets, without regard to the particular facts and circumstances of
the tax situation of each such stockholder. It does not discuss all of the
particular consequences that may be relevant to NBI stockholders entitled to
special treatment under the Code (such as insurance companies, financial
institutions, dealers in securities, tax-exempt organizations or foreign
persons). The summary set forth above does not purport to be a complete
analysis of all potential tax effects of the transactions contemplated by the
Stock Purchase Agreement or the Acquisition itself. No information is
provided herein with respect to the tax consequences, if any, of the
Acquisition under state, local or foreign tax laws.

19
<PAGE>
<PAGE>

Accounting Treatment

The Acquisition will be accounted for under the purchase method of
accounting in accordance with generally accepted accounting principles,
resulting in adjustments in the carrying value of NBI's and AmMid's assets and
liabilities to reflect their respective fair values at the Closing Date.

Expenses

The Stock Purchase Agreement provides, in general, that BanPonce, NBI
and Sellers will each pay their own expenses in connection with the
Acquisition and the transactions contemplated thereby, including fees and
expenses of their own financial or other consultants, investment bankers,
accountants and counsel. BanPonce has agreed to bear the cost of preparation,
filing and duplication of the Prospectus.

Indemnification

For a period of eighteen months after the Closing Date (the "Expiration
Date"), NBI and Messrs. Svendsen and Roth have agreed to indemnify BanPonce
and its parent, subsidiaries, affiliates, stockholders, officers, directors,
employees, agents, successors, and assigns for any Losses (defined below)
relating to any breach of a representation, warranty, agreement or covenant of
NBI or any Seller in the Stock Purchase Agreement if those Losses exceed
$100,000. Under the Stock Purchase Agreement, NBI and Messrs. Svendsen and
Roth will not be required to indemnify BanPonce for aggregate Losses in excess
of $400,000, except as provided below.

Pursuant to the Stock Purchase Agreement, Messrs. Svendsen and Roth have
agreed to indemnify BanPonce and its parent, subsidiaries, affiliates,
stockholders, officers, directors, employees, agents, successors, and assigns
for all Losses arising out of, based upon or relating to NBI's Reorganization
Plan or tax consequences relating thereto, or any transactions contemplated
thereby.

The term "Losses" is defined in the Stock Purchase Agreement as all
losses, fines, penalties, settlements, damages, interest, awards, judgments,
taxes, and out-of-pocket costs and expenses (including court costs, reasonable
attorneys' fees, and other expenses of investigating and defending) relating
to or arising out of NBI's or AmMid's business, actually incurred by BanPonce,
NBI or AmMid prior to the Expiration Date or of which written evidence or
notice has been received from a third party prior to the Expiration Date,
which evidence provides a reasonable basis to believe that any of such items
will be incurred, or the subject matters of such evidence or notice will
become subject to litigation.

Resale of BanPonce Common Stock

Shares of BanPonce Common Stock issued to those of the Sellers who are
considered to be "affiliates" of NBI, as defined by the rules and regulations
of the Commission under the Securities Act will be subject to certain
restrictions upon transfer. In addition, to the extent the resale of shares
of any Seller is deemed to be a distribution of the shares for purposes of the
Securities Act, disposition of such shares may also be subject to certain
restrictions. Pursuant to the Stock Purchase Agreement, NBI has delivered to
BanPonce a written undertaking from each affiliate of NBI to the effect that
he or she will not sell or dispose of BanPonce Common Stock, acquired by him
or her in connection with the Acquisition, other than in accordance with the
Securities Act, except under (i) a separate registration statement for
distribution (which BanPonce has not agreed to provide), or (ii) the manner of
sale and volume limitations of Rule 145 promulgated thereunder by the
Commission, if applicable, or (iii) pursuant to some other exemption from
registration.

In addition, NBI stockholders who become "affiliates" of BanPonce will
be subject to similar resale restrictions for as long as they remain
"affiliates" of BanPonce. Generally, persons who are not officers, directors
or greater than 10% stockholders of NBI will not be considered "affiliates" in
the absence of other factors indicating a control relationship.

20
<PAGE>
<PAGE>

BANPONCE CORPORATION

Business

BanPonce is a bank holding company registered under the BHCA. BanPonce
was incorporated in 1984 under the laws of Puerto Rico. BanPonce is the
largest financial institution in Puerto Rico, with consolidated assets of
$16.8 billion, total deposits of $10.8 billion and stockholders' equity of
$1.26 billion at December 31, 1996. Based on total assets at September 30,
1996, BanPonce was the 42nd largest bank holding company in the United States.

BanPonce's principal subsidiary, Banco Popular, was incorporated over
100 years ago in 1893 and is Puerto Rico's largest bank with total assets of
$14.0 billion, deposits of $10.1 billion and shareholders' equity of $1.0
billion at December 31, 1996. Banco Popular accounted for 84% of the total
consolidated assets of BanPonce at December 31, 1996. A consumer-oriented
bank, Banco Popular has the largest retail franchise in Puerto Rico, operating
178 branches and 327 automated teller machines on the island. Banco Popular
also has the largest trust operation in Puerto Rico and is the largest
servicer of mortgage loans for investors. In addition, it operates the
largest Hispanic bank branch network in the mainland United States with 29
branches in New York and an agency in Chicago. As of December 31, 1996, these
branches had a total of approximately $1.5 billion in deposits. Banco Popular
also operates seven branches in the U.S. Virgin Islands and one in the British
Virgin Islands. Banco Popular has three subsidiaries: (i) Popular Leasing &
Rental, Puerto Rico's largest vehicle leasing and daily rental company;
(ii) Popular Consumer Services, Inc., a small-loan and secondary mortgage
company with 35 offices in Puerto Rico operating under the name of Best
Finance and Popular Mortgage, Inc.; and (iii) a mortgage loan company with
four offices in Puerto Rico operating under the name of Puerto Rico Home
Mortgage.

BanPonce's other direct subsidiaries are BP Capital and PIB. BP Capital
engages in the business of a securities broker-dealer in Puerto Rico, with
institutional brokerage, financial advisory, and investment and security
brokerage operations.

PIB was organized in 1992 under the laws of Puerto Rico and operates as
an "international banking entity" under the International Banking Center
Regulatory Act of Puerto Rico (the "IBC Act"). PIB owns all of the
outstanding capital stock of BanPonce Financial Corp. ("BanPonce Financial").
PIB does not engage directly in any activities other than providing managerial
services to BanPonce Financial and BanPonce Financial's subsidiaries. Summary
consolidated financial statements of PIB are included in the notes to
BanPonce's consolidated financial statements.

BanPonce Financial, a wholly owned subsidiary of PIB and an indirect,
wholly owned subsidiary of BanPonce, was organized in 1991 under the laws of
the State of Delaware. BanPonce Financial does not engage directly in any
activities other than providing managerial services to its subsidiaries, Banco
Popular, FSB and Pioneer Bancorp, Inc. Banco Popular, FSB is a federal
savings bank that acquired from the Resolution Trust Corporation ("RTC")
certain assets and deposits of the former Carteret Federal Savings Bank, a
federal savings bank under RTC conservatorship, and that currently has six
branches in New Jersey. Banco Popular, FSB is also the direct owner of 100%
of the issued and outstanding common stock of Equity One, Inc., a non-bank
subsidiary which engages in consumer finance activities in a number of eastern
states, including Florida. Pioneer Bancorp, Inc., through its wholly owned
subsidiary, River Associates Bancorp, Inc., owns and operates Banco Popular,
Illinois, formerly known as Pioneer Bank & Trust Company, a bank organized
under the laws of the State of Illinois with five branches in that state.

On September 30, 1996, BanPonce completed the acquisition of CombanCorp.
CombanCorp is the parent company of Banco Popular, N.A. (California) which
operates three branches in California located in City of Commerce, Montebello
and Downey, with $75 million in assets and $63 million in deposits.
CombanCorp subsequently acquired the only Banco Popular branch operated in Los
Angeles, California at the time.

21
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<PAGE>

BanPonce is in the process of completing the final steps to establish
ATH-Costa Rica, the first automated teller machine (ATM) network in Costa
Rica. The combined efforts of Banco Popular, with its shared network ATH (A
Toda Hora) and fifteen local banking institutions, will add 70 machines to the
80 ATMs currently operating, while providing its customers with access to ATMs
in Puerto Rico and the United States, and vice-versa.

Recent Developments

In December 1996, BanPonce agreed to acquire Seminole National Bank
("Seminole") through an indirect wholly owned interim national bank subsidiary
of BanPonce pursuant to an Agreement and Plan of Merger by and among BanPonce,
BP Interim National Bank and Seminole. Seminole is a national banking
association having its principal place of business in Sanford, Florida and
operates three branches in Sanford and Orlando, Florida. At September, 1996,
Seminole had total assets of approximately $26.1 million and total
consolidated deposits of approximately $22.2 million. Upon consummation of
the Merger, it is anticipated that Seminole will become an indirect wholly
owned subsidiary of BanPonce and a direct wholly owned subsidiary of BanPonce
Financial. All necessary approvals have been obtained, subject to the
expiration of all applicable waiting periods.

On December 30, 1996, BanPonce announced an agreement for the
acquisition of Roig Commercial Bank ("Roig Commercial"). Roig Commercial
operates twenty-five branches, mainly located in the eastern part of Puerto
Rico, with assets of approximately $900 million and deposits of $650 million.
Applications for prior approval have been filed with the Federal Reserve and
local banking authorities, and the transaction is subject to their approval.

Also, on January 24, 1997, BanPonce signed a definitive agreement to
acquire CBC Bancorp, Ltd. ("CBC"), the parent company of Capitol Bank & Trust
and Capitol Bank of Westmont, through an indirect wholly owned subsidiary of
BanPonce pursuant to an Agreement and Plan of Merger by and among BanPonce,
CBC Interim, Inc. and CBC. CBC, with assets of $315 million and deposits of
$280 million at June 30, 1996, operates three branches in Chicago and
Westmont, Illinois through its banking subsidiaries. The acquisitions of
Seminole, Roig Commercial and CBC are subject to BanPonce's receipt of all
required regulatory approvals.

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NATIONAL BANCORP, INC.

Business

NBI is a multi-bank holding company incorporated in 1980 under the laws
of the State of Delaware. NBI's principal place of business is located at
1300 E. Irving Park Road, Suite 200, Streamwood, Illinois 60107. NBI is the
parent company for three commercial banks and a nonbank collection service
company. AmMid, an Illinois state bank organized in 1914, is NBI's principal
bank subsidiary providing a full line of financial services to retail and
commercial customers in Melrose Park, Illinois and its adjacent suburban area.
American National Bank of DeKalb County, a national banking association
organized in 1973 ("DeKalb"), is a commercial bank headquartered in Sycamore,
Illinois, which provided a full line of financial services to commercial and
retail customers in DeKalb County, Illinois. Northwest Community Bank ("NWC")
is a de novo Illinois state bank which commenced operations on May 3, 1995 and
provides financial services to corporate and retail customers in the northwest
suburban area of Cook County, Illinois. First Lake Corp., a Delaware
corporation formed in 1989 ("FLC"), is engaged in the business of acquiring
loan portfolios from the Federal Deposit Insurance Corporation ("FDIC") and
other sources at substantial discounts from principal amounts outstanding and
liquidating the portfolios through collection efforts or through bulk sales.

National Bancorp Data Systems, L.L.C. ("Data Systems") was formed by two
of NBI's banks and an affiliated bank. NBI indirectly owns 67% of Data
Systems and the affiliated bank owns 33%. Data Systems is a limited liability
company which provides data processing services for its members and
affiliates.

Security Ownership of Certain Beneficial Holders and of Management

The following table sets forth information as of December 31, 1996, with
respect to beneficial ownership of shares of NBI held by (i) any person who is
known to NBI to be the beneficial owner of more than five percent of any class
of NBI's common equity, (ii) each director and nominee, and (iii) all
directors and officers as a group.

<TABLE>
<CAPTION>
Total NBI
Shares Subject Beneficial
to Conversion Ownership Pro Forma
Common % of NBI from Series 4 After % of NBI
Shares (1) Total (2) Debentures (3) Conversion Total (4)
---------- -------- -------------- ---------- ---------

<S> <C> <C> <C> <C> <C>
Directors
- ---------
Robert W. Svendsen, Sr. (5) . . 50.66667 54.965% 8.93455 59.60122 56.325%
Thomas H. Roth . . . . . . . . 11.00000 11.933% 1.70454 12.70454 12.006%
Ronald T. Ciucci . . . . . . . 1.33333 1.446% 0.18182 1.51515 1.431%
Robert C. Gremley (6) . . . . . 3.64103 3.949% 0.25000 3.89103 3.677%
Kurt Heerwagen . . . . . . . . 1.33333 1.446% 0.18182 1.51515 1.431%
Howard Jahntz (7) . . . . . . . 2.33333 2.531% 0.25000 2.58333 2.441%
Louis D. Napolitano (8) . . . . 1.56410 1.696% 0.18182 1.74592 1.649%
James A. Norini . . . . . . . . 1.00000 1.084% 0.18182 1.18182 1.116%
Peter F. Wais . . . . . . . . . 1.33333 1.446% 0.18182 1.51515 1.441%
Ray Weiss (9) . . . . . . . . . 3.48718 3.783% 0.50000 3.98718 3.768%
Richard L. Willey . . . . . . . 1.00000 1.084% 0.18182 1.18182 1.649%
-------- ------ -------- -------- ------
Total Directors . . . . . . 78.69230 85.363% 12.73001 91.42231 86.397%

Non-Director Executive Officer
- ------------------------------
Elizabeth A. Chartier . . . . . -- --% .13636 .13636 0.126%
-------- ------ -------- -------- ------
Total Directors and Executive
Officers as a group . . . . 78.69230 85.363% 12.86637 91.55867 86.523%
======== ====== ======== ======== ======
</TABLE>

_______________

(1) Includes shares held directly and, if applicable, indirectly through
such person's spouse, minor children, certain family trusts or IRA's.

(2) Beneficial ownership percentages are calculated in accordance with SEC
Rule 13d-3 promulgated under the Securities Exchange Act of 1934.

(3) Pursuant to the Stock Purchase Agreement, all of the Series 4
Debentures will have been converted by the holders thereof into NBI
Common Stock.

(4) Assumes no additional distributions of NBI Common Stock to Debenture
holders.

(5) Includes 8.00 shares of NBI Common Stock and an additional 0.59091
shares upon conversion of the Debentures held in an IRA. Also includes
4.00 shares of NBI Common Stock and an additional 4.08091 shares upon
conversion of the Debentures held by Mr. Svendsen's wife, Valda M.
Svendsen.

(6) Includes 0.12867 shares of NBI Common Stock held by Mr. Gremley's wife,
Mary Gremley.

(7) Shares of NBI Common Stock and Debentures held by Howard E. Jahntz
Living Trust, Co-Trustees Howard and Carlotta Jahntz.

(8) Includes 0.06154 shares and 0.09231 shares held in IRA accounts in the
names of Louis Napolitano and Frances Napolitano, respectively.

(9) Includes 1.00 share of NBI Common Stock held by Mr. Weiss's wife,
Lucille A. Weiss.

Cash Dividends Declared by NBI

The following table sets forth the cash dividend per share payments made
by NBI to the holders of NBI Common Stock during the two most recent fiscal
years.

Dividends Paid Per
------------------
Share
-----
Common Stock
- ------------
1st Quarter 1995 . . . $3,000.00
2nd Quarter 1995 . . . 3,000.00
3rd Quarter 1995 . . . 3,000.00
4th Quarter 1995 . . . 3,000.00
---------

1st Quarter 1996 . . . $3,000.00
2nd Quarter 1996 . . . 3,000.00
3rd Quarter 1996 . . . 3,000.00
4th Quarter 1996 . . . 3,000.00
---------

Upon consummation of the Acquisition, the Sellers, as owners of BanPonce
Common Stock, will be entitled to cash dividends declared by the Board of
Directors of BanPonce. The amount and timing of any future dividends will
depend upon the earnings of BanPonce and its subsidiaries, their financial
condition, needs for funds, and other relevant factors.

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Management's Discussion and Analysis of Financial Condition and Results of
Operations

The following represents NBI management's discussion and analysis of
NBI's financial condition and results of operations for the periods indicated,
which predate the implementation of NBI's Reorganization Plan.

Comparison of Operating Results for the Years Ended December 31, 1996 and 1995

Net Income

Consolidated net income was $96,000, or $1,101.67 per share, in 1996, a
decrease from the $1,975,000 or $15,921.87 per share, on a fully diluted
basis, earned in 1995. The return on average assets was 0.03% for 1996 and
0.65% for 1995. For each year the return on average equity was 0.40% and
7.40% respectively.

The primary factor for the decrease in 1996 earnings was a provision for
loan losses of $2,703,000 as compared to the $219,000 provision recorded in
1995. The majority of this provision was to the allowance for loan losses at
AmMid, which had charge offs of $2,157,000.

Net interest income increased 2%, primarily as a result of an 8.5%
increase in average earning assets. Other factors contributing to increased
operating results in 1996 were an 18% increase in noninterest income from bank
subsidiaries offset by a 3% increase in operating expenses. NBI's non-bank
subsidiary, FLC, recorded a net loss for 1996 of $(369,000) as compared to
1995's net income of $609,000.

Net Interest Income. The primary component of NBI's consolidated
earnings is net interest income, or the difference between interest income on
earning assets and interest paid on supporting liabilities. The net interest
margin is net interest income expressed as a percentage of average earning
assets. NBI's earning assets consist of loans, securities, interest-bearing
deposits at financial institutions and federal funds sold. Supporting
liabilities primarily consist of deposits, federal funds purchased and
securities sold under agreements to repurchase of subsidiary banks, notes
payable of its non-bank subsidiary FLC and notes payable and convertible
subordinated debentures of NBI. The net interest margin for 1996 was 3.21%
compared to 3.28% for 1995 on a fully tax equivalent basis.

Average earning assets were $281,489,000 in 1996, an increase of 8.5%
over 1995 levels. This increase in earning assets is primarily due to the
growth of NWC, which ended 1996 with earning assets of $25,639,000. The yield
on total earning assets was 7.66% in 1996 compared to 7.74% in 1995 on a fully
tax equivalent basis. The decrease resulted from lower interest rates in 1996
which were partially offset by an 11% increase in the loan to deposit ratio of
79% during 1996. The average volume and yield of the securities portfolio
remained relatively constant during the two year period. Average securities
in 1996 of $116,354,000 earned 6.02% as compared to 1995 volumes of
$117,259,000, yielding 6.16%. Average loan volumes increased 18% during 1996
to $157,872,000, an increase of $24,000,000. Approximately half of this
volume growth is attributable to NWC, and the remainder to loan growth at
AmMid. The yield on the loan portfolio decreased to 8.97% in 1996 from 9.25%
on a fully tax equivalent basis in 1995. During the same period the prime
rate decreased 56 basis points while NBI's loan portfolio declined only 31
basis points. Total interest income in 1996 was $21,076,000 as compared to
$19,548,000 in 1995.

The average cost of NBI's interest-bearing liabilities decreased
slightly in 1996 to 4.44% compared to 4.46% in 1995. The decline in cost of
funds of NBI was less than peer groups experienced during 1996 due to higher
rates paid on premium deposits at NWC. The average interest-bearing deposits
increased $12,952,000 or 7% during 1996 to $200,981,000. The majority of this
increase, $10,700,000, is related to deposit growth at NWC. Average rates
paid on interest bearing demand deposits and savings deposits decreased 13
basis points to 2.28% in 1996 with little impact on the volume outstanding.
Conversely, the average rate paid on money market deposits declined only seven
basis points to 3.26% and average balances dropped $3,387,000 during 1996.
The average rate paid on other time deposits increased 15 basis points during
1996 to 4.97% which resulted in 14% growth in this category to an average
balance of $136,730,000 in 1996 as compared to $119,901,000 in 1995.

25
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<PAGE>

Other interest-bearing liabilities include securities sold under
agreements to repurchase and federal funds purchased of subsidiary banks,
collateralized notes payable of FLC and collateralized notes payable and
convertible subordinated debenture issues of NBI.

The subsidiary banks' outstanding repurchase agreements represent
primarily one day collateralized sweep accounts. The average balance
increased approximately $5,000,000 during 1996 while the rate paid dropped 24
basis points to 4.51%. These balances represent a cash management product
offered to commercial accounts as a vehicle to earn interest on daily excess
funds. The interest rate paid floats weekly and is tied to the six month
treasury bill rate.

Notes payable of NBI consist of a $4,000,000 draw under a $5,000,000
line of credit with a commercial bank. The proceeds of this advance were used
in May 1995 to capitalize NWC. Prior to the capitalization of NWC there were
no advances outstanding under this line of credit. The interest expense in
1996 was $330,000 as compared to $187,000 in 1995. The rate paid on this note
is tied to a LIBOR-based index.

As of December 31, 1995, NBI had two issues of convertible subordinated
debentures outstanding. The 9%, $950,000 Series III mandatorily convertible
subordinated debentures were issued on September 6, 1991 and were converted
into common stock at $150,000 per share on September 30, 1996. The 10%,
$3,000,000 Series IV convertible subordinated debentures were issued on
August 1, 1995, are convertible into common stock at $220,000 per share and
mature on September 30, 2001. Interest expense for these debentures was
$364,000 in 1996 and $223,000 in 1995.

A detailed Analysis of Net Interest Income and an Analysis of Change in
Interest Differential for the years ended December 31, 1996, 1995 and 1994 is
included on pages 34 through 36.

Provision for Loan Losses. Management records a provision for loan
losses in an amount sufficient to maintain the allowance for loan losses at a
level commensurate with the risk in the loan portfolio. The allowance for
loan losses is adjusted through charges to current income based on factors
such as past loan loss experience, management's evaluation of known potential
losses in the loan portfolio and prevailing economic conditions. Management's
system of review of the loan portfolio and the determination of the adequacy
of the allowance for loan losses is made up of a number of factors. NBI
provides loan review services for its subsidiary banks. A specific
credit/balance threshold is established for each subsidiary bank to insure
that between 85% to 90% of all commercial credits are reviewed. All credits
meeting this criteria are reviewed on an annual basis and assigned a grade
based on risk assessment. This estimated risk, as well as any valuation
allowance related to impaired loans, is taken into account in determining the
allowance for loan losses. On a quarterly basis an internal report provides
an analysis of the adequacy of the allowance for management and the Board of
Directors. This analysis focuses on allocations based on loan review data,
the status of management's watch list loans as well as historical charge-off
and recovery data. In addition the allowance includes additional reserves for
coverage of unidentified risks.

The provision for loan losses in 1996 was $2,703,000 as compared to
$219,000 in 1995. This increase was the result of losses incurred at AmMid.
Charge-offs in the amount of $2,119,300 were recorded during 1996 and were the
result of management's decision to write off the unsecured portion of two
substantial commercial credits due to cash flow problems and operating losses
incurred by these companies during 1996. These charge-offs were for specific
credits and, in NBI management's opinion, are not indicative of a trend or a
general deterioration of the loan portfolio. The allowance for loan losses
was $1,875,000 or 1.11% of loans at December 31, 1996, compared to 0.97% of
loans at December 31, 1995.

At December 31, 1996, nonperforming loans totaled $3,003,000 as compared
to $2,428,000 for the previous year end. Nonperforming loans consisted of
$2,225,000 in nonaccrual loans and $778,000 in loans past due greater than 90
days. Total nonperforming loans represent 1.77% of outstanding loans as of
year end 1996 and 1.69% of year end 1995. Total nonperforming assets were
0.95% of total assets at year end. The investment in impaired loans was
$2,933,000 at year end 1996 and is included in the totals above.

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Noninterest Income. The major components of NBI's noninterest income
consists of service charges on deposit accounts, trust fees, security
gains(losses) and other banking services and its nonbank subsidiary revenue.
Noninterest income decreased 34% in 1996. This decrease was the result of
FLC's revenue declining 321% to $1,030,500 from $4,343,000 in 1995 which was
due to the completion of the 1995 asset sale agreement. Excluding this
component, noninterest income increased 27% to $3,894,000. Service charges on
deposit accounts increased $264,000 or 19%, other income increased 48% to
$1,077,000 and trust fees were up 6% to $671,000. Included in 1996
noninterest income was $220,000 in security gains as compared to $132,000
recorded in 1995. NWC commenced operations during May 1995 and contributed
$37,000 in noninterest income for 1995. Data Systems recorded data processing
revenue in 1996 of $254,000 as compared to $165,000 in the start up year 1995.

Noninterest Expense. Non interest-expense was $13,275,000 in 1996, a
decrease of 12% compared with 1995's level of $15,055,000. The decline in the
servicing and collection expenses on loan portfolios sold by FLC during these
periods accounts for the majority of this decrease. Nonbank operating
expenses of FLC were reduced to $1,300,000 in 1996 from $3,421,000 in 1995.
Excluding this component, noninterest expense increased 3% to $11,975,000.
Salaries and employee benefits increased 6% in 1996 to $6,498,000. 1996
included a full year of operation for NWC and Data Systems which accounts for
$213,000 of this increase or 54%. The effect of a full year of operation of
these subsidiary organizations also impacted other operating expenses which
rose 26% to $2,735,000. Offsetting these increases were decreases in goodwill
and core deposit amortization expense of $372,000 and a $267,000 reduction in
FDIC insurance premium costs.

Income Taxes. NBI's federal and state income tax returns are prepared
on a consolidated basis including the accounts of its subsidiary banks. The
provision for income taxes was $27,000 in 1996 compared with $1,101,000 in
1995. The decrease in the provision is primarily the result of lower pre-tax
income. The major components of NBI's deferred taxes are the differences
between book and tax basis of securities, allowance for loan losses, income
recognition on purchased loan portfolios, deferred loan fees and other assets.

Balance Sheet

Total consolidated assets were $323,732,000 at December 31, 1996, a
modest increase of 2% compared to $318,341,000 at year end 1995. The increase
relates to the $16,290,000 growth in assets of NWC which was offset by the
$14,997,000 decline in the assets of FLC due to the culmination of the loan
portfolio asset sale during 1996. The remaining growth in assets is
attributable to the other subsidiary banks.

Cash and Cash Equivalents. Cash and cash equivalents were comprised of
cash and due from banks of $22,114,000 and federal funds sold of $7,895,000 as
of December 31, 1996 as compared with $18,560,000 in cash and cash equivalents
and $8,700,000 in federal funds sold as of December 31, 1995.

Securities. The securities portfolio totaled $111,270,000 at
December 31, 1996, compared with $120,528,000 at year-end 1995. The portfolio
decline is primarily due to maturities of local tax exempt issues of
$4,400,000 and $7,500,000 in paydowns on collateralized mortgage obligations.
The majority of this runoff was reinvested in the loan portfolio. The
portfolio mix as of December 31, 1996 consisted of U.S. Government securities
of $77,152,000; MBS's and CMO's of $26,724,000; state and municipal bonds of
$6,746,000 and other securities of $648,000.

At December 31, 1996, 92% of the securities portfolio was classified as
available for sale in the amount of $102,393,000. These securities are
carried on the Balance Sheet at fair value, with a corresponding (after tax)
valuation allowance included in shareholder's equity. During the year the
valuation allowance decreased $517,000, resulting in a cumulative net
unrealized loss, net of taxes, of $422,000 at December 31, 1996.

Loans. Total loans were $169,246,000 at December 31, 1996, an increase
of 18% over loans outstanding of $143,528,000 at December 31, 1995. NWC
contributed $15,993,000 to the loan growth during this period. The remaining
growth in the loan portfolio was distributed between NBI's other subsidiary
banks with the majority of the funding provided through maturities and
paydowns in the securities portfolio.

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At December 31, 1996, NBI's mix of loans consisted of 40% in commercial
loans, 22% in commercial real estate loans, 24% in real estate mortgage loans
and 14% in consumer loans. Commercial credits increased 24% and consumer
credits increased 9% during 1996.

NBI's loan to deposit ratio increased to 63% as of December 31, 1996, as
compared to 56% in the prior year.

Goodwill. Goodwill and core deposit intangibles were $2,664,000 or 12%
of shareholders equity at December 31, 1996. Goodwill and core deposit
intangibles relate primarily to the 1991 purchase of Farmers and Merchants
Bank, which was subsequently merged into DeKalb. The goodwill is being
amortized over fifteen years using the straight-line method and the premium
for acquiring core deposits is being amortized over the estimated benefit life
of twelve years using the sum-of-the-years' digits method.

Deposits. Total deposits were $266,619,000 at December 31, 1996,
increasing 5% from year end 1995 at $254,582,000. The cause of this increase
was from NWC's $16,346,000 growth during 1996. AmMid experienced a shift in
funds from deposits to securities sold under agreements to repurchase,
(collateralized sweep accounts) which increased $8,522,000 during 1996 to
$15,971,000 and offset the $10,548,000 decline in deposits over the comparable
periods. At December 31, 1996, 23% of the consolidated deposits of NBI were
noninterest bearing deposits. The remaining interest-bearing funds consisted
of 11% interest-bearing demand deposits (NOW Accounts), 12% savings accounts,
9% money market accounts and 68% other time deposits. The majority of the
increase during 1996 was in other time deposits, with an emphasis on
promotional certificates of deposit rates at NWC.

NBI's deposit base continues to consist of a high amount of low cost
core deposits in comparison to peer group institutions. However deposit
growth has been in higher earning time deposit accounts, indicating customers
are more willing to commit their funds for defined periods of time.

Notes Payable. NBI had $6,566,000 of notes payable outstanding at
December 31, 1996, compared to $18,615,000 at December 31, 1995. The
outstanding debt at year end is comprised of parent company only debt of
$4,000,000 and FLC's debt of $2,566,000. FLC repaid $12,773,000 of debt
during 1996, primarily from the bulk sale of loan pools. NBI has a revolving
line of credit of $5,000,000 of which $4,000,000 is outstanding and
collateralized by all of the outstanding stock of its three subsidiary banks.

Capital Resources

Total shareholders' equity of NBI was $22,474,000 at December 31, 1996,
as compared to $22,993,000 at year end 1995. The ratio of equity to assets
was 6.94% and 7.22% at each year end respectively.

The Federal Reserve Board ("Board") regulations prescribe capital
requirements for bank holding companies. NBI must have a minimum Leverage
Capital to Asset Ratio of 4.00%. Leverage Capital is the same as Tier One
capital, and consists of common stock, additional paid in capital, retained
earnings and is exclusive of NBI's allowance for loan losses, goodwill and
other intangibles, and unrealized gains(losses) on securities available for
sale. As of December 31, 1996 and December 31, 1995, NBI's Leverage Capital
Ratio amounted to 6.40% and 6.37% respectively.

In addition, the Board has issued Risk Based Capital Guidelines with a
minimum standard of Tier One regulatory capital to risk weighted assets of
4.00% and total regulatory capital to risk weighted assets of 8.00%. Total
capital includes the allowance for loan losses up to 1.25% of risk weighted
assets and subordinated debt that qualifies as secondary capital. Total risk
based capital ratios were 14.40% and 13.89% at each year end respectively.
The structure of NBI's balance sheet results in a risk based capital ratio
significantly in excess of the guidelines.

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The following table provides an analysis of the minimum capital
requirements (as defined), ratios and excess over minimum which NBI holds as
capital as of December 31, 1996, in thousands.

Minimum Minimum Excess
Required Required Actual Actual Over
Ratio Amount Ratio Amount Minimum
-------- -------- ------ ------ -------

Leverage Capital . . . . 4.00% $ 9,631 6.40% $20,477 $10,862
Risk Based Capital:
Tier One . . . . . . . 4.00% $ 7,077 11.60% $20,477 $13,416
Total (Tier Two) . . . 8.00% $14,155 14.40% $25,352 $11,213

In addition, each of NBI's subsidiary banks must meet similar minimum capital
requirements as prescribed by the federal and state banking regulatory
authorities. At December 31, 1996, each of NBI's subsidiary banks was in
compliance with the current capital guidelines.

On June 29, 1993, NBI shareholders approved an amendment to the articles
of incorporation providing for a 1 for 1,000 reverse stock split. The
amendment provided for issuing one share of new $10,000 par value common stock
for each share of existing $10 par value common stock. NBI currently has
92.17949 shares of common stock outstanding. The fully diluted book value per
share of common stock was $221,822 at December 31, 1996, as compared with
$240,239 at December 31, 1995. Dividends of $12,000 per share were paid in
1996.

Liquidity

NBI's cash flows are comprised of three general types. Cash flows from
operating activities are primarily net income. Cash flows from investing
activities consist of loans made to and collected from customers; and
purchases, sales and maturities of securities. Cash flows from financial
activities are determined by NBI's deposit base and from NBI's ability to
borrow and repay debt and issue or repurchase stock. For 1996, cash flows
were generated from a $8,342,000 net decrease in securities, a $20,401,000
increase in deposits and repurchase agreements, $8,861,000 from collection of
a receivable from sale of loans and $6,130,000 from earnings and related
operating activities. Cash flow uses and needs include a $28,066,000 increase
in loans, a $12,048,000 net decrease in collateralized notes payable and
$1,049,000 to pay dividends. NBI's net cash position increased $2,749,000
during 1996.

Regulatory requirements exist which influence NBI's liquidity and cash
flow needs. These requirements include the maintenance of satisfactory
capital ratios on a consolidated and subsidiary bank basis, restrictions on
the amount of dividends which a subsidiary bank may pay and reserve
requirements with the Federal Reserve Bank. NBI has made loan commitments
which could result in increased cash flow requirements. NBI's subsidiary
banks have a relatively stable base of deposits and any increased loan demand
can be sufficiently funded without a material change in the balance sheet.
Management is of the opinion that these regulatory requirements and loan
commitments will not have a significant impact on the liquidity of NBI.
Management is not aware of any known trends, events or uncertainties that will
have or that are reasonable likely to have, a material effect on NBI.

Management has no significant commitments for capital expenditures at
December 31, 1996.

Impact of New Accounting Standards

Statement of Financial Accounting Standards No. 121 ("SFAS No. 121").
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be disposed of"
was effective January 1, 1996. The standard requires evaluation of impairment
of long lived assets to be reviewed when indicators of impairment are present.
Indicators of impairment include, but are not limited to a significant decease
in the market value of an asset or a significant change in the manner an asset
is used. The cost of the impaired asset is then compared to its

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<PAGE>

fair value, and any impairment is recorded in current earnings. There was no
effect on the adoption of this standard on the financial position or results
of operations of NBI.

Statement of Financial Accounting Standard No. 122 ("SFAS No.122"). On
May 12, 1995, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 122. This statement provides for capitalization of Mortgage Servicing
Rights (MSRs) when mortgage loans, (whether originated or purchased) are
subsequently sold with MSRs retained. This statement applies to MSRs
resulting from mortgage loans only, and is effective for fiscal years
beginning after December 15, 1995. Adoption of SFAS No. 122 did not have a
material impact on NBI's earnings or financial condition.

Statement of Financial Accounting Standard No. 125 ("SFAS No. 125"). In
June, 1996, the FASB released SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities." SFAS 125
provides accounting and reporting standards for transfers and servicing of
financial assets and extinguishment of liabilities. SFAS 125 requires a
consistent application of a financial-components approach that focuses on
control. Under that approach, after a transfer of financial assets, an entity
recognizes the financial and servicing assets it controls and the liabilities
it has incurred, and derecognizes liabilities when extinguished. SFAS 125
also supersedes SFAS 122 and requires that servicing assets and liabilities be
subsequently measured by amortization in proportion to and over the period of
estimated net servicing income or loss and requires assessment for asset
impairment or increases obligation based on their fair values. SFAS 125
applies to transfers and extinguishment occurring after December 31, 1996 and
early or retroactive application is not permitted. Portions of this statement
are being delayed by SFAS 127. Adoption of these statements will not have a
material effect on earnings or the financial position of NBI.

Statement of Financial Accounting Standard No. 128 ("SFAS No. 128"). In
March, 1997, the accounting requirements for calculating earnings per share
were revised. Basic earnings per share for calendar 1997 and later will be
calculated solely on average common shares outstanding. Diluted earnings per
share will reflect the potential dilution of stock options and other common
stock equivalents. All prior calculations will be restated to be comparable
with the new methods. As NBI has not had significant dilution from stock
options, the new calculation methods will not significantly affect future
basic and diluted earnings per share.

Comparison of Operating Results for the Years Ended December 31, 1995 and 1994

Net Income

Consolidated net income was $1,975,000, or $15,921.87 per share in 1995,
an increase from the $1,853,000 or $16,909.32 per share, on a fully diluted
basis, earned in 1994. The return on average assets was 0.65% for 1995 and
0.62% for 1994. For each year the return on average equity was 7.40% and
6.95% respectively.

A contributing factor to the increase in 1995 earnings was a reduction
of the provision for loan losses to $219,000 as compared to a $955,000
provision recorded in 1994. The 1994 provision included a specific allocation
for loan losses at DeKalb, after subsequent charge offs of $1,097,000. This
reduction of expense is offset by net losses recorded in NBI's new subsidiary
organizations, which commenced operations during 1995. NWC recorded a net
loss of $(367,000) and Data Systems' net loss for 1995 was $(179,000).

Net interest income increased 7%, primarily as a result of an increase
in average earning assets. Other factors contributing to operating results in
1995 were the 20% increase in net noninterest expense. NBI's non-bank
subsidiary, FLC, recorded net income in 1995 of $609,000 as compared to
$824,000 in 1995.

Net Interest Income. The net interest margin for 1995 was 3.28%
compared to 3.32% for 1994 on a fully taxable equivalent basis. Average
earning assets were $259,505,000 in 1995, an increase of 3.5% over 1994
levels. This increase in earning assets is due in part to the organization of
NWC which ended 1995 with earning assets of $4,602,000 and an

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8.9% increase in noninterest-bearing demand deposits of NBI's other subsidiary
banks during 1995. The yield on total earning assets was 7.74% in 1995
compared to 7.05% in 1994 on a fully tax equivalent basis. The increase
resulted from higher interest rates in 1995. The average volume of the
securities portfolio increased $9,326,000 and the yield improved 62 basis
points during the two year period. Average securities in 1995 of $117,259,000
earned 6.15% as compared to 1994 volumes of $107,933,000, yielding 5.53% on a
fully tax equivalent basis. Average loan volumes decreased 2.7% during 1995
to $133,822,000, while loan yields improved 96 basis points to offset the
volume decline. During the same period the average prime rate increased 1.52
basis points. Total interest income in 1995 was $19,547,000 as compared to
$17,183,000 in 1994.

The average cost of NBI's interest-bearing liabilities increased in 1995
to 4.46% compared to 3.73% in 1994. The average interest-bearing deposits
increased $1,441,000 or less than 1% during 1995 to $188,029,000. This
increase is related to deposit growth at NWC. NBI's other subsidiary banks
experienced minimal growth in interest-bearing deposit accounts during 1995,
however funds shifted from lower paying savings and money market accounts to
higher earning other time deposits. Average rates paid on interest-bearing
demand deposits increased 22 basis points with little impact on the volume
outstanding during 1995. Savings and money market rates increased 41 basis
points to 3.05% while average balances dropped $1,939,000. The average rate
paid on other time deposits rose 82 basis points to 4.82% which resulted in a
3% growth in this category to an average balance of $119,901,000 in 1995
compared to $116,632,000 in 1994.

The subsidiary banks outstanding repurchase agreements represent
collateralized one day sweep accounts. The average balance increased
approximately $1,120,000 during 1995 and the rate paid averaged 4.75% as
compared to 3.68% in 1994. These balances represent a cash management product
offered to commercial accounts as a vehicle to earn interest on daily excess
funds. The interest rate paid floats weekly and is tied to the six month
treasury bill rate.

Notes payable of NBI consist of a $4,000,000 draw under a $5,000,000
line of credit with a commercial bank. The proceeds of this advance were used
in May 1995 to capitalize NWC. Prior to the capitalization of NWC, there were
no advances outstanding under this line of credit. The interest expense in
1995 was $188,000 as compared to $96,000 in 1994. The rate paid on this note
is tied to a LIBOR-based index.

As of December 31, 1995, NBI had two issues of convertible subordinated
debentures outstanding. The 9%, $950,000 Series III mandatorily convertible
subordinated debentures were issued on September 6, 1991 and are convertible
into common stock at $150,000 per share on September 30, 1996. The 10%,
$3,000,000 Series IV convertible subordinated debentures were issued on
August 1, 1995, are convertible into common stock at $220,000 per share and
mature on September 30, 2001. Interest expense for these debentures was
$223,000 in 1995 and $218,000 in 1994.

Provision for Loan Losses. Effective January 1, 1995, NBI adopted
Statements of Financial Accounting Standards ("SFAS") No. 114, "Accounting by
Creditors for Impairment of a Loan", and its amendment No 118, "Accounting by
Creditors for Impairment of a Loan -- Income Recognition and Disclosure". The
adoption of these standards did not have any effect on the financial position
and results of operations of NBI.

The provision for loan losses in 1995 was $219,000 as compared to
$955,000 in 1994. The expense recorded in 1995 was to support loan growth at
NWC and maintain NBI's other subsidiary bank's allowance for loan losses at
adequate levels. The 1994 provision was the result of losses incurred at
DeKalb. Net charge-offs of $1,097,000 were recorded during the fourth quarter
of 1994 and were primarily the result of the deterioration of a substantial
commercial credit. The allowance for loan losses was $1,389,000 or 0.97% of
loans at December 31, 1995, compared to $1,327,000 or 1.00% of loans at
December 31, 1994.

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At December 31, 1995, nonperforming loans were $2,428,000 as compared to
$941,000 for the previous year end. Nonperforming loans consisted of
$1,075,000 in nonaccrual loans and $1,353,000 in loans past due greater than
90 days and still accruing. Total nonperforming loans represent 1.69 % of
outstanding loans as of year end 1995 and 0.86% at year end 1995. Total
nonperforming assets were 0.84% of total assets at year end 1995. The
investment in impaired loans was $1,299,000 at year end 1995 and is included
in the totals above.

Noninterest Income. The major components of NBI's noninterest income
consists of service charges on deposit accounts, trust fees, security
gains(losses) and other banking services and its nonbank subsidiary revenue.
Noninterest income decreased 21% in 1995. This decrease was the result of
FLC's revenue declining 32% to $4,343,000 from $6,407,000 in 1994 which was
due to the 1995 asset sale agreement. Excluding this component, noninterest
income increased 5% to $3,068,000. Service charges on deposit accounts
declined $109,000 or 7%, as interest rates increase commercial accounts offset
fees for services with compensating balances rather incur hard dollar charges.
Other income decreased 10% to $729,000 and trust fees were up 9% to $635,000.
Included in 1995 noninterest income were $132,000 in security gains as
compared to $34,000 recorded in 1994. NWC and Data Systems commenced
operations during 1995 and contributed $37,000 and $165,000, respectively, in
noninterest income for 1995.

Noninterest Expense. Noninterest expense was $15,055,000 in 1995, a
decrease of 4% compared with 1994's level of $15,705,000. The decline in the
servicing and collection expenses on loan portfolio's sold by FLC during these
periods contributed to this decrease. Nonbank operating expenses of FLC were
reduced to $3,421,000 in 1995 from $5,158,000 in 1994. Excluding this
component, noninterest expense increased 10% to $11,634,000. Salaries and
employee benefits increased 15% in 1995 to $6,105,000. 1995 was the first
period of operation for NWC and Data Systems which accounts for $538,000 of
this increase or 69%. The effect of commencing operation of these subsidiary
organizations also impacted occupancy and equipment expense which increased
27% and other operating expenses which rose 6% to $2,172,000. Offsetting
these increases was a $251,000 reduction in FDIC insurance expense as a result
of a premium rebate during 1995.

Balance Sheet

Total consolidated assets were $318,341,000 at December 31, 1995, an
increase of 6% compared to $301,107,000 at year end 1994. The increase
relates to an $11,455,000 growth in assets of NWC, a $6,544,000 increase in
DeKalb's assets, a $6,636,000 increase in the assets of AmMid and an
offsetting $4,915,000 decline in the assets of FLC during 1995.

Cash and Cash Equivalents. Cash and cash equivalents were comprised of
cash and due from banks of $18,560,000 and federal funds sold of $8,700,000 as
of December 31, 1995 as compared with $17,500,000 in cash and cash equivalents
and $4,820,000 in federal funds sold as of December 31, 1994.

Securities. The securities portfolio totaled $120,528,000 at
December 31, 1995, compared with $111,594,000 at year-end 1994. The majority
of the increase was in the U.S. Treasuries securities portfolios of the
subsidiary banks, with NWC's portfolio increasing $3,565,000. The portfolio
mix as of December 31, 1995 consisted of U.S. Government securities of
$73,208,000; MBS's and CMO's of $35,531,000; State and municipal bonds of
$11,144,000 and other securities of $644,000.

At December 31, 1995, 88% of the securities portfolio was classified as
available for sale in the amount of $106,523,000. These securities are
carried on the Balance Sheet at fair value, with a corresponding (after tax)
valuation allowance included in shareholder's equity. During the year the
valuation allowance increased $2,565,000, resulting in a cumulative net
unrealized gain, net of taxes, of $95,000 at December 31, 1995.

Loans. Total loans were $143,258,000 at December 31, 1995, an increase
of 8% over loans outstanding of $132,423,000 at December 31, 1994. NWC
contributed $4,675,000 to the loan growth during this period. The remaining
growth in the loan portfolio was distributed between NBI's other subsidiary
banks with the majority of the funding provided through deposit growth.

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At December 31, 1995, NBI's mix of loans consisted of 44% in commercial
loans, 15% in commercial real estate loans, 24% in real estate mortgage loans
and 17% in consumer loans. Commercial loans increased 4% and consumer
credits, primarily real estate mortgage loans, decreased 3% during 1995.

NBI's loan to deposit ratio remained constant during this two year
period at 56% as of December 31, 1995, as compared to 55% in the prior year.

Goodwill. Goodwill and core deposit intangibles were $3,280,000 or 14%
of shareholders' equity at December 31, 1995. Goodwill and core deposit
intangibles relate primarily to the 1991 purchase of Farmers and Merchants
Bank.

Deposits. Total deposits were $254,582,000 at December 31, 1995,
increasing $15,035,000 or 6% from year end 1994 at $239,547,000. Noninterest-
bearing deposits increased 9% or $5,069,000 and interest-bearing deposits grew
5% to $192,319,000. NWC ended 1995 with total deposits of $7,673,000, the
majority of which were interest-bearing. At December 31, 1995, 24% of the
consolidated deposit of NBI were noninterest-bearing deposits. The remaining
interest-bearing funds consisted of 12% interest-bearing demand deposits (NOW
Accounts), 13% savings accounts, 9% money market accounts and 66% other time
deposits. The majority of the increase during 1995 was in other time
deposits, with the an emphasis on promotional certificates of deposit rates at
NWC and a shift in funds to higher earning time deposits at the other
subsidiary banks.

NBI's deposit base continues to be made up of a high amount of low cost
core deposits in comparison to peer group institutions. However deposit
growth has been in higher earning time deposit accounts, indicating customers
are more willing to commit their funds for defined periods of time.

Notes Payable. NBI had $18,615,000 of notes payable outstanding at
December 31, 1995, compared to $18,573,000 at December 31, 1994. The
outstanding debt at year end 1995 is comprised of parent company only debt of
$4,000,000 and FLC's debt of $14,615,000. At December 31, 1994, outstanding
notes payable represented only FLC's liability. NBI has a revolving line of
credit of $5,000,000 collateralized by all of the outstanding stock of its
three subsidiary banks. $4,000,000 was advanced under this line to capitalize
NWC on May 3, 1995.

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Statistical Disclosure

Distribution of Assets, Liabilities and Stockholders' Equity; Interest Rates
and Interest Differential

Analysis of Net Interest Income. The following schedule presents, for
the periods indicated, the daily average balance outstanding for the major
categories of interest-bearing assets and interest-bearing liabilities, and
the average interest rate earned or paid thereon. Except for percentages, all
data is in thousands.

Year ended December 31, 1996 Year ended December 31, 1995
---------------------------- ----------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------

<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets
Interest-bearing deposits and federal
funds sold . . . . . . . . . . . . . . $ 7,263 $ 394 5.42% $ 8,424 $ 472 5.60%
Taxable securities . . . . . . . . . . 105,914 6,048 5.71 104,297 6,023 5.77
Tax-exempt securities . . . . . . . . . 10,440 955 9.15 12,962 1,199 9.25
Loans . . . . . . . . . . . . . . . 157,872 14,156 8.97 133,822 12,384 9.25
-------- ------- ----- -------- ------- ----
Total interest-earning assets . . . . $281,489 $ 21,553 7.66% $259,505 $20,078 7.74%
-------- ------- ----- -------- ------- ----
Noninterest-earning assets
Cash and due from banks . . . . . . . . . 15,364 16,221
Allowance for loan losses . . . . . . . . (1,504) (1,347)
Other assets . . . . . . . . . . . . . . 19,038 31,258
-------- --------
Total assets . . . . . . . . . . . . . $314,387 $305,637
======== ========
Liabilities and shareholders' equity:
Interest-bearing liabilities
Interest-bearing demand deposits . . $ 22,654 $ 423 1.87% $ 23,039 $ 447 1.94%
Savings accounts . . . . . . . . . . 25,259 670 2.65 25,364 721 2.84
Money market accounts . . . . . . . . 16,338 532 3.26 19,725 656 3.33
Other time deposits . . . . . . . . . 136,730 6,799 4.97 119,901 5,776 4.82
Short-term borrowings . . . . . . . . 17,725 780 4.40 12,712 599 4.71
Notes payable . . . . . . . . . . . . 8,072 676 8.37 14,984 1,299 8.67
Convertible subordinated debentures . 3,709 364 9.81 2,229 223 10.00
-------- ------- ----- -------- ------- -----
Total interest-bearing liabilities. $230,487 $ 10,244 4.44% $217,954 $ 9,721 4.46%
-------- ------- ----- -------- ------- -----
Noninterest-bearing liabilities
Demand deposits . . . . . . . . . . . . 55,963 53,444
Other liabilities . . . . . . . . . . . 4,580 8,492
Shareholders' equity . . . . . . . . . 23,357 25,747
-------- --------
Total liabilities and shareholders'
equity . . . . . . . . . . . . . . $314,387 $305,637
======== ========
Net interest income and margin . . . . . . $ 11,309 3.21% $10,357 3.28%
======= ===== ======= =====
</TABLE>

<TABLE>
<CAPTION>
Year ended December 31, 1995 Year ended December 31, 1994
---------------------------- ----------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------- -------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets
Interest-bearing deposits and federal
funds sold . . . . . . . . . . . . . $ 8,424 $ 472 5.60% $ 5,150 $ 289 5.61%
Taxable securities . . . . . . . . . . 104,297 6,023 5.77 96,696 4,956 5.13
Tax-exempt securities . . . . . . . . . 12,962 1,199 9.25 11,237 1,014 9.02
Loans . . . . . . . . . . . . . . . 133,822 12,384 9.25 137,612 11,412 8.29
-------- ------- ----- -------- ------- -----
Total interest-earning assets . . . . $259,505 $20,078 7.74% $250,695 $17,671 7.05%
-------- ------- ----- -------- ------- -----
Noninterest-earning assets
Cash and due from banks . . . . . . . . 16,221 15,211
Allowance for loan losses . . . . . . . (1,347) (1,585)
Other assets . . . . . . . . . . . . . 31,258 34,464
-------- --------
Total assets . . . . . . . . . . . . $305,637 $298,785
======== ========
Liabilities and shareholders' equity:
Interest-bearing liabilities
Interest-bearing demand deposits . . $ 23,039 $ 447 1.94% $ 22,928 $ 395 1.72%
Savings accounts . . . . . . . . . . 25,364 721 2.84 26,826 779 2.90
Money market accounts . . . . . . . . 19,725 656 3.33 20,202 467 2.31
Other time deposits . . . . . . . . . 119,901 5,776 4.82 116,632 4,662 4.00
Short-term borrowings . . . . . . . . 12,712 599 4.71 11,526 302 2.62
Notes payable . . . . . . . . . . . . 14,984 1,299 8.67 18,303 1,335 7.29
Convertible subordinated debentures . 2,229 223 10.00 2,363 218 9.23
-------- ------- ----- -------- ------- -----
Total interest-bearing liabilities. $217,954 $ 9,721 4.46% $218,780 $ 8,158 3.73%
-------- ------- ----- -------- ------- -----
Noninterest-bearing liabilities
Demand deposits . . . . . . . . . . . . 53,444 49,059
Other liabilities . . . . . . . . . . . 8,492 5,498
Shareholders' equity . . . . . . . . . 25,747 25,448
-------- --------
Total liabilities and shareholders'
equity . . . . . . . . . . . . . . $305,637 $298,785
======== ========
Net interest income and margin . . . . . $10,357 3.28% $ 9,513 3.32%
======= ===== ======= =====
</TABLE>

Interest income is adjusted to taxable equivalents for the tax-exempt
assets based at a federal income tax rate of 34% for each year. The fully
taxable equivalent adjustments to interest income for the years ended
December 31, 1996, 1995, and 1994 were, in thousands, $470, $512 and $464,
respectively. The average balance of nonaccrual loans is included in the
total loans category in each year. Interest income and interest expense have
been reclassified to include FLC's interest earned on interest bearing
deposits and interest paid on notes payable. These amounts are included in
other income and other expense as nonbank subsidiary revenue and expenses in
the financial statements.

35
<PAGE>
<PAGE>

Analysis of Changes in Interest Differential. The following table show
the changes in interest income and interest expense attributable to rate and
volume variances.

1996 versus 1995 1995 versus 1994
---------------- ----------------
Volume Rate Net Volume Rate Net
------ ---- --- ------ ---- ---

<S> <C> <C> <C> <C> <C> <C>
Interest earned on:
Interest-bearing deposits and
federal funds sold . . . . . . . . . . $ (65) $ (13) $ (78) $183 $ -- $ 183
Taxable securities . . . . . . . . . . . 93 (68) 25 390 677 1,067
Nontaxable securities . . . . . . . . . . (233) (11) (244) 156 29 185
Loans (net of unearned discount) . . . . 2,226 (454) 1,772 (314) 1,286 972
------ ----- ------ ----- ------ ------
Total interest income . . . . . . . . . 2,021 (546) 1,475 415 1,992 2,407
------ ----- ------ ----- ------ ------
Interest paid on:
Interest-bearing demand deposits . . . . (7) (17) (24) 2 50 52
Savings accounts . . . . . . . . . . . . (3) (48) (51) (42) (16) (58)
Money market accounts . . . . . . . . . . (110) (14) (124) (11) 200 189
Other time deposits . . . . . . . . . . . 836 187 1,023 131 983 1,114
Short-term borrowings . . . . . . . . . . 220 (39) 181 31 266 297
Notes payable . . . . . . . . . . . . . . (578) (45) (623) (242) 206 (36)
Convertible subordinated debentures . . . 145 (4) 141 (12) 17 5
------ ----- ------ ----- ------ ------
Total interest-bearing liabilities . . 503 20 523 (143) 1,706 1,563
------ ----- ------ ----- ------ ------
Net change in net interest income . . . $1,518 $(566) $ 952 $558 $ 286 $ 844
------ ----- ------ ----- ------ ------
</TABLE>

The change due to volume is calculated by multiplying the change in
volume by the prior year's rate. The change due to rate is calculated by
multiplying the change in rate by the prior year's volume. The change
attributable to both volume and rate has been allocated to the rate column.

Interest income is adjusted to taxable equivalents for the tax-exempt
assets based at federal income tax rate of 34%. Interest income and interest
expense have been reclassified to include FLC's interest earned on interest-
bearing deposits and interest paid on notes payable. These amounts are
included in other income and other expenses as nonbank subsidiary revenue and
expenses in the financial statements.

36
<PAGE>
<PAGE>

<TABLE>
Analysis of Interest Rate Sensitivity

1-90 Days 90-180 Days 181-365 Days Over 1 Year Total
--------- ----------- ------------ ----------- -----

<S> <C> <C> <C> <C> <C>
Rate Sensitive Assets
Interest-bearing deposits and
federal funds sold . . . . . . . . . . . $ 8,140 $ -- $ -- $ -- $ 8,140
Taxable securities . . . . . . . . . . . . 6,804 63 21,521 76,136 104,524
Nontaxable securities . . . . . . . . . . . 680 -- 375 5,691 6,746
Loans (net) . . . . . . . . . . . . . . . . 75,207 5,870 8,851 79,318 169,246
-------- -------- -------- -------- --------
Total . . . . . . . . . . . . . . . . . . $ 90,831 $ 5,933 $ 30,747 $161,145 $ 288,656
Cumulative total . . . . . . . . . . . . $ 90,831 $ 96,764 $127,511 $288,656
======== ======== ======== ========

Rate Sensitive Liabilities
Interest-bearing demand deposits . . . . . $ 22,414 $ -- $ -- $ -- $ 22,414
Savings accounts . . . . . . . . . . . . . 23,701 -- -- -- 23,701
Money market accounts . . . . . . . . . . . 18,439 -- -- -- 18,439
Other time deposits . . . . . . . . . . . . 66,165 26,612 16,151 31,325 140,253
Short-term borrowings . . . . . . . . . . . 21,989 -- -- -- 21,989
Notes payable . . . . . . . . . . . . . . . -- 2,566 -- 4,000 6,566
Convertible subordinated debentures . . . . -- -- -- 3,000 3,000
-------- -------- -------- -------- --------
Total . . . . . . . . . . . . . . . . . . $152,708 $ 29,178 $ 16,151 $ 38,325 $236,362
--------
Cumulative total . . . . . . . . . . . . $152,708 $181,886 $198,037 $236,362
======== ======== ======== ======== --------
Cumulative gap . . . . . . . . . . . . . $(61,877) $(85,122) $(70,526) $ 52,294
======== ======== ======== ========
Cumulative ratio of earning assets to
interest-bearing liabilities . . . . . 0.59 0.53 0.64 1.22

</TABLE>

This table details NBI's interest rate sensitivity position as of
December 31, 1996. The table is one method of monitoring the interest rate
risk of NBI. Interest rate risk arises when maturities or repricing of assets
differs significantly from the maturity or repricing of liabilities.

The table represents a static gap analysis which does not fully capture
the true dynamics of interest rate changes including the timing and the degree
of change. NBI analyzes on a continuing basis the effects that changes in
interest rates would have on its interest sensitive position using various
rate risk models which assess the effect of 100 basis point swings in interest
rates and the impact on the net interest margin and net income.

Shifts in the structure of interest sensitive assets and liabilities are
made by management in response to interest rate movements. These changes are
made primarily through the purchase and sale of securities. The majority of
NBI's securities portfolio is available for sale and the proceeds from the
sale of securities could be reinvested in an alternative maturity range in
order to respond to changes in interest rates.

The above table includes the subsidiary banks' savings deposits as
repricing within the earliest period presented. Management believes that
these deposits have longer repricing characteristics than presented because of
the infrequency of repricing, the relatively low interest rate and historical
stability of these deposits at the mature subsidiary banks.

37
<PAGE>
<PAGE>

Investment Portfolio

The following table presents the book value of securities, in thousands,
at the dates indicated:

<TABLE>
<CAPTION>
Securities available for sale Securities held to maturity
----------------------------- ---------------------------
December 31, December 31,
------------ ------------
1996 1995 1994 1996 1995 1994
---- ---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury and federal agency
securities . . . . . . . . $ 77,152 $ 73,208 $59,693 $ -- $ -- $ --
State and municipal . . . . . . -- -- -- 6,746 11,145 13,331
Mortgage-backed securities and
floating rate collateralized
mortgage obligations . . . . . 25,241 33,315 34,749 1,483 2,216 3,151
Corporate and other . . . . . . -- -- -- 648 644 671
-------- -------- ------- ------ ------- -------
Total securities . . . . . . . $102,393 $106,523 $94,442 $8,877 $14,005 $17,153
======== ======== ======= ====== ======= =======
</TABLE>

The following tables shows the maturities in thousands, at December 31,
1996 and the weighted average fully taxable equivalent yields:

<TABLE>
<CAPTION>
U.S. Treasury and Federal
Agency Securities State and Municipal Equity Securities
------------------------- ------------------- ------------------
Maturities Yield Maturities Yield Maturities Yield
---------- ----- ---------- ----- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
One year or less . . . . . . . $ 23,151 5.58% $ 3,541 9.17% $ -- --%
One year to five years . . . . 54,001 5.40 2,350 9.62 -- --
Five years to ten years . . . . -- 855 12.88 -- --
Over ten years . . . . . . . . -- -- -- -- -- --
No fixed maturity . . . . . . . -- -- -- -- 648 6.00
------- ---- ------ ----- ---- ----
$ 77,152 5.45% $ 6,746 9.80% $ 648 6.00%
======= ==== ====== ===== ==== ====
</TABLE>

<TABLE>
<CAPTION>
Collateralized Mortgage
Mortgage-backed Obligations, Corporate &
Securities Other Debt Securities
--------------- ----------------------- Total Total
Maturities Yield Maturities Yield Maturities Yield
---------- ----- ---------- ----- ---------- -----

<S> <C> <C> <C> <C> <C> <C>
One year or less . . . . . . $ -- --% $ -- --% $ 26,692 6.06%
One year to five years . . . -- -- -- -- 56,351 5.58
Five years to ten years . . . -- -- -- -- 855 12.88
Over ten years . . . . . . . -- -- -- -- -- --
No fixed maturity . . . . . . 15,434 6.64 11,290 6.02 27,372 6.37
--------- ---- -------- ---- ---------- -----
$ 15,434 6.64% $ 11,290 6.02% $ 111,270 5.95%
========= ==== ======== ==== ========== =====

</TABLE>

Securities included in the category of no fixed maturity are mortgage-
backed securities and floating rate collateralized mortgage obligations, due to
their ability to prepay, as well as equity securities.

The average taxable equivalent yield by maturity includes the weighted
average yield on tax exempt obligations which have been computed on a fully
taxable equivalent basis assuming a tax rate of 34% for December 31, 1996.

38
<PAGE>
<PAGE>

Loan Portfolio

The following table sets forth the outstanding loans, in thousands, for
the years ended December 31, 1996, 1995, 1994, 1993 and 1992.

<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
Commercial and other . . . $67,649 $ 62,643 $ 62,788 $ 65,895 $63,482
Consumer . . . . . . . 24,448 25,764 22,858 22,468 18,981
Real estate
Residential . . . . . 41,323 34,578 33,809 31,235 32,539
Commercial . . . . . 36,613 21,447 14,186 15,682 16,518
-------- -------- -------- -------- --------
Total gross loans . . 170,033 144,432 133,641 135,280 131,520
Less: unearned discount . (787) (904) (1,218) (1,635) (1,850)
-------- -------- -------- -------- --------
Net loans . . . . . . $169,246 $143,528 $132,423 $133,645 $129,670
======== ======== ======== ======== ========
</TABLE>

The following table sets forth the maturity distribution of the
following categories of loans December 31, 1996, in thousands:

Remaining Maturity
-----------------
One year One to Over
or less five years five years Total
-------- ---------- ---------- -----

Commercial and other . . . $37,005 $25,151 $ 5,493 $67,649
Consumer . . . . . . . . . 6,035 14,930 2,696 23,661
Real Estate
Residential . . . . . . . 4,190 31,836 5,297 41,323
Commercial . . . . . . . 8,031 20,788 7,794 36,613
------- ------- ------- --------
$55,261 $92,705 $21,280 $169,246
======= ======= ======= ========

Of the loans listed in the maturity schedule above, a total of
$113,985 are due after one year; $79,328 of these loans have a predetermined
interest rate and $34,657 of these loans have floating interest rates.

Collateral and Appraisal Guidelines. The loan policy for each NBI
bank details collateral requirements for all collateralized loans which a bank
may make. The loan officers and loan operations areas have the responsibility
for monitoring all compliance with collateral requirements. Collateral
requirements for the most commonly funded loans include an 85%-90% loan-to-
value ratio for loans secured by U.S. Government securities, 70% for NYSE
traded stock, 65% for AMEX and 50% for all other common stocks, with the
exception of restricted stocks which are not acceptable as collateral.
Commercial loans for working capital can have a maximum loan-to-value ratio of
80% against eligible accounts receivable, a maximum of 50% if secured by
inventory and a maximum of 80% if secured by equipment. Residential real
estate loans can have a maximum loan-to-value ratio of 80% unless private
mortgage insurance is provided for advances over 80%. Commercial real estate
loans typically are funded at a lower loan-to-value ratio and may require the
personal guarantee of the others. Home equity loans require a loan-to-value
ratio of 80% of the appraised value less any debt.

Loans which are collateralized by real estate require an appraisal
prior to funding of the loan. These loans are reappraised when management
believes that the financial condition or resources of the borrower have
deteriorated or when the collectibility of the loan is in question. Loans
collateralized by real estate are not necessarily reappraised on a routine
basis by policy; however, all loans secured by real estate are generally made
in the local market area served by NBI's subsidiaries and each are is closely
monitored by management for economic changes. A new appraisal is required for
any loan which undergoes foreclosure or is transferred to other real estate
owned.

39
<PAGE>
<PAGE>

Updated appraisals on other real estate owned are completed as required by
regulatory authorities or if management believes a material change in the
value of the property has taken place.

The current loan policies in effect for collateral and appraisals
are similar and consistent with the policies in place in prior years.

Risk Elements

Nonaccrual, Past Due and Restructured Loans. The following table
represents information regarding the aggregate amount of nonaccrual, past due
and restructured loans, in thousands.

<TABLE>
<CAPTION>
December 31
-----------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
Nonaccrual . . . . . . . . . $2,225 $1,075 $ 798 $1,634 $ 759
Past due 90 days or
more and still accruing . . . 778 1,353 143 1,044 614
Restructured . . . . . . . . . -- -- -- -- --
------- ------- ------- ------- -------
Nonperforming loans . . . $3,003 $2,428 $ 941 $2,678 $1,373
======= ======= ======= ======= =======
Other real estate owned . . . . $ 81 $ 243 $ 361 $ 28 $ --

Ratios
Nonperforming loans/
total loans . . . . . . 1.77% 1.69% 0.71% 2.00% 1.06%
Nonperforming assets/
total assets . . . . . 0.95 0.84 0.43 0.93 0.49
Net charge-offs/
average loans . . . . . 1.40 0.12 0.79 0.42 0.66
Allowance for loan losses/
total loans . . . . . . 1.11 0.97 1.00 1.09 0.94
Allowance for loan losses/
nonperforming loans . . 62.44% 57.21% 141.02% 54.59% 88.57%

</TABLE>

A discussion regarding the nonperforming assets listed above is
contained within the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

Loan Concentrations. Loan concentrations are defined as amounts
loaned to a multiple number of borrowers engaged in similar activities, which
would cause them to be similarly impacted by economic or other conditions.
Although NBI has a diverse loan portfolio, a substantial natural geographic
concentration of credit risk exists within NBI's subsidiary banks defined
customer market areas. These geographic market areas include the Melrose Park
and adjacent suburban area, Dekalb County, Illinois and the Northwest suburban
area of Cook County, Illinois.

Adoption of Statements of Financial Accounting Standards "SFAS"
Nos. 114 and 118. Effective January 1, 1995 NBI adopted SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan," and its amendment No. 118,
"Accounting by Creditors for Impairment of a Loan -- Income Recognition and
Disclosure." There was no effect on financial position or results of
operations of NBI as a result of adopting these statements. No changes were
required to NBI's accounting policies for loans, charge-offs, and interest
income as a result of adopting these statements. Loans considered impaired
under these statements include nonaccrual loans, restructured loans, and loans
considered doubtful under NBI's loan review classifications. Total investment
in impaired loans were $2,933,000 at December 31, 1996 and consisted of
$2,089,000 in commercial loans and $844,000 in real estate loans. $2,406,000
of NBI's impaired loans are included in the nonperforming category.

40
<PAGE>
<PAGE>

Nonaccrual Loan Policy. NBI follows bank regulatory guidelines
with respect to classifying loans on a nonaccrual basis. Loans are placed on
nonaccrual when the loan becomes past due 90 days with no intervening activity
or when the collection in full of interest and principal is doubtful.
Thereafter, no interest is taken into income until such time as the borrower
demonstrates the ability to pay interest and principal or full payment is
received.

Loans to Affiliates. Loans are made in the normal course of
business to directors, executive officers and principal shareholders of NBI.
The terms of these loans, including interest rates and collateral, are similar
to those prevailing for comparable transactions with others and do not involve
more than a normal risk of collectibility. Changes in such loans during the
years ended December 31, 1996 and 1995 were as follows:

Balance at December 31, 1994 . . . $3,772
Additions . . . . . . . . . . 200
Collections . . . . . . . . . (284)
-------
Balance at December 31, 1995 . . . $3,688
Additions . . . . . . . . . . 295
Collections . . . . . . . . . (1,390)
-------
Balance at December 31, 1996 . . . $2,593
=======

Summary of Loan Loss Experience

The following table summarizes loan balances at the end of each period
and daily average balances; changes in the allowance for loan losses arising
from loans charged off and recoveries on loans previously charged off, by loan
category and additions to the allowance which have been charged to operating
expense.

<TABLE>
<CAPTION>
Year ended December 31
----------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Average loans outstanding . $157,872 $133,822 $137,612 $130,085 $131,219
Total loans at period end . 169,246 143,528 132,423 133,645 129,670
Allowance for loan losses
at beginning of period 1,389 1,327 1,462 1,216 1,192
Loans charged off:
Commercial and other . (2,189) (151) (1,102) (475) (755)
Consumer . . . . . . . (56) (62) (53) (120) (143)
Real estate . . . . . (20) (12) -- (13) --
-------- -------- -------- -------- --------
Total . . . . . . . (2,265) (225) (1,155) (608) (898)
-------- -------- -------- -------- --------
Recoveries of loans
previously charged off:
Commercial and other . 20 15 33 21 7
Consumer . . . . . . . 28 53 32 43 20
Real Estate . . . . . -- -- -- -- --
-------- -------- -------- -------- --------
Total . . . . . . . 48 68 65 64 27
-------- -------- -------- -------- --------
Net loans (charged off)
recovered . . . . . . (2,217) (157) (1,090) (544) (871)
Provision charged to
expense . . . . . . . 2,703 219 955 790 895
-------- -------- -------- -------- --------
Allowance for loan losses
at end of period . . . $ 1,875 $ 1,389 $ 1,327 $ 1,462 $ 1,216
======== ======== ======== ======== ========
Ratio of net charge-offs
to average loans
outstanding . . . . . 1.40% 0.12% 0.79% 0.42% 0.66%

</TABLE>

41
<PAGE>
<PAGE>

Allocation of Allowance for Loan Losses. NBI's subsidiary banks
allocate the allowance for loan losses into three categories: an allocated
amount for impaired or specific loans, an allocation by loan classifications
and an unallocated portion. Management allocates the allowance by loan
category based on historical charge-off experience and management's evaluation
of potential risk in the portfolio. The specific allocations are not intended
to be indicative of future charge-offs. The unallocated portion of the
allowance for loan losses represents that portion of the allowance which has
not been specifically allocated by the analysis performed. The percent of
loans in each category to total loans and the allocation of the allowance for
loan losses at December 31 of each year, in thousands, is as follows:

<TABLE>
<CAPTION>
1996 1995 1994
Allocation % Allocation % Allocation %
---------- - ---------- - ---------- -
<S> . . . . . . . . . . . <C> <C> <C> <C> <C> <C>
Loan Category
Commercial and other loans . 948 39.8% 625 43.4% 558 47.0%
Consumer . . . . . . . . . . 74 14.4 85 17.8 78 17.1
Real estate . . . . . . . . . 25 45.8 29 38.8 27 35.9
Unallocated . . . . . . . . . 828 650 664
----- ----- ----- ----- ----- -----
Total . . . . . . . . . 1,875 100.0% 1,389 100.0% 1,327 100.0%
===== ===== ===== ===== ===== =====

Loan Category
Commercial and other loans . 830 48.7% 571 48.3%
Consumer . . . . . . . . . . 104 16.6 114 14.4
Real estate . . . . . . . . . 39 34.7 42 37.3
Unallocated . . . . . . . . . 489 489
----- ----- ----- -----
Total . . . . . . . . . 1,462 100.0% 1,216 100.0%
===== ===== ===== =====

</TABLE>

Management believes that the portfolio is well diversified and, to
a large extent, secured without any undue concentration in any specific risk
area. Control of loan quality is continually monitored by management.
Management's system of review of the loan portfolio and the determination of
the adequacy of the allowance for loan losses is made up of a number of
factors. NBI provides loan review services for its subsidiary banks. A
specific credit/balance threshold is established for each subsidiary bank to
insure that between 85% - 90% of all commercial credits are reviewed. All
credits meeting this criteria are reviewed on an annual basis and assigned a
grade scoring based on risk assessment. This estimated risk, as well as any
valuation allowance related to impaired loans, is taken into account in
determining the allowance for loan losses.

In addition to the credit review system, on a quarterly basis an
internal report provides an analysis of the adequacy of the allowance for
management and the Board of Directors. This analysis focuses on allocations
based on loan review data, the status of management's watch list loans and
historical charge-off and recovery statistics. The process and the amount of
the allowance and of the provision have also been subject to the review of
external auditors and banking regulatory authorities. Management believes
that an effective system of credit review assessment is in place.

Deposits

Reference is made to the Distribution of Assets, Liabilities and
Stockholder's Equity for data regarding average daily deposits and rates paid
thereon for the periods ending December 31, 1996, 1995 and 1994. The
aggregate amount of certificates of deposit in denominations of $100,000 or
more, as of December 31, 1996 are shown below.

42
<PAGE>
<PAGE>

December 31, 1996
(in thousands)

Three months or less . . . . . . $11,670
Over three months through
six months . . . . . . . . . 8,769
Over six months through
twelve months . . . . . . . 1,028
Over twelve months . . . . . . . 0
--------
Total . . . . . . . . . . . $21,467
========

Return on Average Equity

The following table shows consolidated operating and capital ratios for
the years ended December 31, 1996, 1995 and 1994. The return on average
assets and the return on average shareholders' equity is calculated by
dividing net income for the period by average assets or average shareholders'
equity, respectively. The dividend payout ratio is calculated by dividing
total dividends paid by net income.

December 31,
------------
1996 1995 1994
---- ---- ----

Return on average assets . . . . . . 0.03% 0.65% 0.62%
Return on average shareholders' equity 0.40% 7.40% 6.95%
Dividend payout . . . . . . . . . . . 1092.87% 52.16% 27.80%
Average shareholders' equity
to average assets . . . . . . . . . 7.61% 8.73% 8.92%

Short-Term Borrowings

The following table shows the distribution of short-term borrowings and
the weighted average interest rate thereon for the years ended December 31,
1996, 1995 and 1994. Included in short-term borrowings are Federal funds
purchased and securities sold under agreements to repurchase which generally
mature in one day from the transaction date. The majority of the securities
sold under agreements to repurchase represent collateralized sweep accounts.

<TABLE>
<CAPTION>
December 31,
------------
1996 1995 1994
---- ---- ----
(Dollars in thousands)

<S> <C> <C> <C>
Amount outstanding at period
end Federal funds purchased . . . . $ 0 $ 0 $ 0
Securities sold under
agreements to repurchase . . . . . $21,989 $13,626 $11,395
Average amount outstanding during
the period
Federal funds purchased . . . . . . $ 789 $ 496 $ 338
Securities sold under
agreements to repurchase . . . . $16,936 $12,215 $ 9,670
Weighted average interest rate
during the period
Federal funds purchased . . . . . . 5.07% 6.25% 4.73%
Securities sold under
agreements to repurchase . . . 4.51% 4.75% 3.68%
Maximum amount outstanding
at any month end . . . . . . . . . $24,037 $21,869 $13,861

</TABLE>

43
<PAGE>
<PAGE>

NATIONAL BANCORP, INC.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following unaudited pro forma consolidated balance sheet as of
December 31, 1996 and the unaudited pro forma condensed consolidated statement
of income for the year ended December 31, 1996 have been prepared to reflect
the proposed reorganization and restructuring plan of NBI as if the plan had
occurred on January 1, 1996 after giving effect to the pro forma adjustments
described in notes to pro forma financial statements, which are based on
estimates made for the purpose of preparing these pro forma financial
statements. In the opinion of NBI's management, the estimates used in the
preparation of the pro forma financial statements are reasonable under the
circumstances.

These pro forma financial statements should be read in conjunction with
the historical financial statements and related notes of NBI presented
elsewhere in this prospectus. The unaudited pro forma consolidated statement
of income is not necessarily indicative of either the results of operations
that would have occurred had the plan been effective as of January 1, 1996, or
of the future results of operations of NBI after effecting the plan.

44
<PAGE>
<PAGE>

NATIONAL BANCORP, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 1996
(Unaudited)

Split Off
American
National Sale of
Bank of Northwest
1996 DeKalb Community
(In Thousands) Historical County(1) Bank(2)
---------- --------- ---------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents . . . . . $ 30,009 $ (6,395) $ (2,930)
Interest-bearing deposits . . . . . 245 (100) --
Securities . . . . . . . . . . 111,270 (31,149) (4,478)
Loans . . . . . . . . . . 167,372 (75,271) (19,362)
Unamortized cost of purchased
loan portfolios . . . . . . . 2,789 -- --
Premises and equipment . . . . . . 6,071 (1,578) (345)
Goodwill and core deposit
intangibles . . . . . . . . . 2,664 (2,664) --
Other assets . . . . . . . . . . 3,312 (1,415) (507)
--------- --------- --------
Total assets . . . . . . . . $323,732 $(118,572) $ (27,622)
======== ========= =========

LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities
Deposits . . . . . . . . . . $266,619 $ (98,385) $ (23,896)
Securities sold under agreements
to repurchase . . . . . . . . 21,989 (6,018) --
Collateralized bank loans . . . . . 6,566 -- (4,000)
Convertible subordinated
debentures . . . . . . . . . . 3,000 -- --
Other liabilities . . . . . . . . . 2,731 (1,068) (306)
-------- --------- ---------
Total liabilities . . . . . . . . . 300,905 (105,471) (28,202)
Minority interest . . . . . . . . . 353 -- --
Common stock . . . . . . . . . . 932 (270) --
Additional paid-in capital . . . . 5,045 -- --
Retained earnings . . . . . . . . . 17,138 (12,931) 563
-------- --------- ---------
23,115 (13,201) 563
Unrealized loss on securities
available-for-sale . . . . . . (421) 100 17
-------- --------- ---------
22,694 (13,101) 580
Less treasury stock at cost -
1.0250 shares . . . . . . . . (220) -- --
-------- --------- ---------
Total shareholders' equity . . . . 22,474 (13,101) 580
-------- --------- ---------
Total liabilities and
shareholders' equity . . . . . $323,732 $(118,572) $ (27,622)
======== ========= =========

</TABLE>

<PAGE>

Elimination
of
Sale of National
First Bancorp
Lake Data Systems
(In Thousands) Corp.(3) L.L.C.(4) Other Pro Forma
-------- ----------- ------ ---------

<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents . . . . $ (44) $ (265) $(6,471)(5) $ 14,137
233 (6)
Interest-bearing deposits . . . . (145) -- -- --
Securities . . . . . . . . . -- -- -- 75,643
Loans . . . . . . . . . -- -- -- 72,739
Unamortized cost of purchased
loan portfolios . . . . . . (2,789) -- -- --
Premises and equipment . . . . . -- (700) -- 3,448
Goodwill and core
deposit intangibles . . . . -- -- -- --
Other assets . . . . . . . . . (130) 590 (459)(6) 2,309
------- ------- ------- --------
Total assets . . . . . . . $(3,108) $ (375) $(5,779) $168,276
======= ======= ======= ========

LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities
Deposits . . . . . . . . . $ -- $ -- $ (598)(5) $143,973
233 (6)
Securities sold under agreements
to repurchase . . . . . . -- -- (5,873)(5) 10,098
Collateralized bank loans . (2,566) -- -- --
Convertible subordinated
debentures . . . . . . . . -- -- (3,000)(8) --
Other liabilities . . . . . (790) (22) 459 (6) 1,004
------- ----- ------- --------
Total liabilities . . . . (3,356) (22) (8,779) 155,075
Minority interest . . . . . . . . -- (353) -- --
Common stock . . . . . . . . . -- -- -- 662
Additional paid-in capital . . . -- -- 3,000 (8) 8,045
Retained earnings . . . . . . . . 248 -- -- 5,018
------- ----- ------- --------
248 -- 3,000 13,735
Unrealized loss on securities
available-for-sale . . . . . -- -- -- (304)
------- ----- ------- --------
248 -- 3,000 13,421
Less treasury stock at cost -
1.0250 shares . . . . . . . -- -- -- (220)
------- ----- ------- --------
Total shareholders' equity . . . 248 -- 3,000 13,221
------- ----- ------- --------
Total liabilities and
shareholders' equity . . . . $(3,108) $ (375) $ (5,779) $168,276
======= ===== ======= ========
</TABLE>
45
<PAGE>
<PAGE>

NATIONAL BANCORP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31, 1996
(Unaudited)

Split Off
American
National Sale of
Bank of Northwest
1996 DeKalb Community
(In Thousands) Historical County(1) Bank(2)
---------- --------- ---------
<S> <C> <C> <C>
Interest income . . . . . . . . . . $21,076 $(8,576) $(1,454)
Interest expense . . . . . . . . . 9,899 (4,329) (705)
-- -- --
-------- ------- -------
Net interest income . . . . . . . . 11,177 (4,247) (749)
Provision for loan losses . . . . . 2,703 (122) (149)
-------- ------- -------
Net interest income after provision
for loan losses .. . . . . . . . 8,474 (4,125) (600)
Other income . . . . . . . . . . . 4,924 (1,049) (205)
Other expenses . . . . . . . . . . (13,275) (3,788) (947)
-------- ------- -------
Income before income taxes . . . . 123 (1,386) 142
Income taxes . . . . . . . . . . . 27 (557) 46
-------- ------- -------
Net Income . . . . . . . . . . . . $ 96 $ (829) $ 96
======== ======= =======
</TABLE>

Elimination
of
Sale of National
First Bancorp
Lake Data Systems
(In Thousands) Corp.(3) L.L.C.(4) Other Pro Forma
-------- --------- ----- ---------
<S> <C> <C> <C>
Interest income . . . . . . . . . . $ -- $ -- $ -- $11,046
Interest expense . . . . . . . . . -- -- (330)(7) 4,235
. . . . . . . . . . . . . . -- -- (300)(8) --
. . . . . . . . . . . . . . ------- ------ ------ -------
Net interest income . . . . . . . . -- -- 630 6,811
Provision for loan losses . . . . . -- -- -- 2,432
. . . . . . . . . . . . . . ------- ------ ------ -------
Net interest income after provision
for loan losses . . . . . . . . -- -- 630 4,379
Other income . . . . . . . . . . . (1,030) (263) (276)(5) 2,101
Other expenses . . . . . . . . . . (1,300) (276) (504)(7) (6,460)
. . . . . . . . . . . . . . ------- ------ ------ -------
Income before income taxes . . . . 270 13 858 20
Income taxes . . . . . . . . . . . (99) -- 531(9) (52)
. . . . . . . . . . . . . . ------- ------ ------ -------
Net Income . . . . . . . . . . . . $ 369 $ 13 $ 327 $ 72
======= ======= ====== =======
</TABLE>

NATIONAL BANCORP, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS

(1) Reflects the split off of DeKalb to certain electing NBI shareholders
in exchange for 26.97267 NBI shares, which will be retired.

(2) Sale of NWC to NBI's largest shareholder and payment of $4,000,000 of
National Bancorp bank borrowings.

(3) Sale of FLC to participating NBI shareholders.

(4) Adjustments necessary to eliminate the consolidation of Data Systems,
because of assumed redemption of AmMid's equity interest by Data
Systems.

(5) Sale of AmMid's merchant credit card processing operation to DeKalb.

(6) Adjustments and elimination of intercompany balances.

(7) Elimination of certain NBI executive salaries, internal audit costs
and loan review expenses related to DeKalb and NWC, and interest on
the $4,000,000 of bank loans repaid upon the sale of NWC.

(8) Conversion of 10% subordinated debentures into common stock and
elimination of interest expense related thereto.

(9) Income taxes at rate of 34% on pretax income effect
of pro forma income adjustments $296

State income tax credits attributable to subsidiaries
leaving the consolidated group 235
----

$531
====

46
<PAGE>
<PAGE>

COMPARISON OF STOCKHOLDERS' RIGHTS

BanPonce is incorporated under the laws of Puerto Rico. Stockholders of
NBI, whose rights are governed by the Certificate of Amendment of Certificate
of Incorporation and By-laws of NBI and by Delaware law will, upon
consummation of the Acquisition, become stockholders of BanPonce. Their
rights as BanPonce stockholders will then be governed by BanPonce's Restated
Certificate of Incorporation and By-laws and by Puerto Rico law.

In some respects, the rights of holders of NBI Common Stock are similar to
those of BanPonce Common Stock. There are, however, differences between the
corporate governance documents of NBI and those of BanPonce and between the
laws of Delaware and Puerto Rico. Although it is impractical to compare all
aspects of those differences, the following summarizes the material
differences.

BanPonce's Capital Stock

BanPonce's authorized capital stock consists of 90,000,000 shares of Common
Stock, par value $6.00 per share, and 10,000,000 shares of Preferred Stock.
The amount of the authorized capital stock of any class or classes of stock
may be increased or decreased by the affirmative vote of the holders of a
majority of the stock of BanPonce entitled to vote. As of February 28, 1997,
BanPonce had 66,121,855 shares of Common Stock and 4,000,000 shares of 8.35%
Series A Preferred Stock outstanding.

BanPonce's Common Stock

The BanPonce common stockholders of record on any date designated by
resolution of the Board of Directors have preference for the subscription for
common stock on a pro rata basis unless the Board of Directors unanimously
resolves otherwise, but the stockholders do not have a preference to subscribe
for new shares authorized pursuant to a dividend reinvestment and stock
purchase plan of BanPonce or shares which are authorized in order to exchange
such shares for property which the Board of Directors considers convenient or
necessary for BanPonce to acquire. In addition, BanPonce common stockholders
do not have a right of preference in the event of new issues of shares in
payment of services rendered to BanPonce, or of shares to be issued for sale
to officers or employees, on the basis of incentive options. The holders of
the Common Stock are entitled to one vote per share on all matters brought
before the shareholders. The holders of the Common Stock do not have the
right to cumulate their shares of Common Stock in the election of directors.
The Restated Certificate of Incorporation provides that the approval of a
merger, reorganization, or consolidation of BanPonce or the sale of
substantially all of the assets of BanPonce or the approval or voluntary
dissolution of BanPonce requires the vote of the holders of 75% of the total
number of outstanding shares of BanPonce.

In the event of liquidation, holders of BanPonce Common Stock will be
entitled to receive pro rata any assets distributable to shareholders with
respect to the shares held by them, after payment of indebtedness and such
preferential amounts as may be required to be paid to the holders of any
Preferred Stock hereafter issued by BanPonce.

Pursuant to a Rights Agreement, dated as of August 11, 1988, as amended as
of December 11, 1990 (the "Rights Agreement"), between BanPonce and Chemical
Bank, holders of shares of Common Stock outstanding at the close of business
on August 31, 1988 received the right (the "Preferred Rights") to purchase one
one-hundredth of a share of Series A Participating Cumulative Preferred Stock
of BanPonce ("Series A Participating Preferred Stock") on the terms set forth
in the Rights Agreement. There is one Preferred Right attached to each share
of Common Stock outstanding. In addition, as long as the Preferred Rights are
attached to the Common Stock, one Preferred Right will be issued with each new
share of Common Stock issued. At the time the Preferred Rights become
exercisable, separate certificates will be issued and the Preferred Rights
could begin to trade separately from the Common Stock. Preferred Rights
become exercisable (i) on the close of business on the tenth business day
after BanPonce or any person or group publicly announces that such person or
group has acquired 15% or more of the shares of the Common Stock then
outstanding, or (ii) on the close of business on the tenth business day after

47
<PAGE>
<PAGE>

the commencement of a tender or exchange offer which, if consummated, would
result in such person becoming the beneficial owner of 20% or more of the
Common Stock. The Preferred Rights may be deemed to have an anti-takeover
effect and generally may cause substantial dilution to a person or group that
attempts to acquire BanPonce under circumstances not approved by BanPonce's
Board of Directors.

All outstanding shares of BanPonce Common Stock are, and shares to be
issued pursuant to the Stock Purchase Agreement will be when issued, fully
paid and nonassessable.

8.35% Series A Preferred Stock

BanPonce's authorized Preferred Stock consists of 10,000,000 shares, of
which, as of February 28, 1997, 4,000,000 shares of 8.35% Series A Preferred
Stock were outstanding. BanPonce's Preferred Stock may have such
designations, powers, preferences and relative participating, optional or
other rights and such qualifications, limitations or restrictions as may be
provided for the issue of such series by resolution adopted by the BanPonce
Board. Such Preferred Stock will have priority over BanPonce Common Stock as
to dividends and as to distribution of BanPonce's assets upon liquidation,
dissolution or winding up of BanPonce. Such Preferred Stock may be redeemable
for cash, property or rights of BanPonce, may be convertible into shares of
BanPonce Common Stock, and may have voting rights entitling the holder to not
more than one vote per share.

The 8.35% Series A Preferred Stock entitles the holders thereof to receive,
when, as and if declared by the Board of Directors of BanPonce, out of funds
legally available therefor, cash dividends at the annual rate per share of
8.35% of the liquidation preference of $25 per share, or $0.173958 per share
per month, accruing from the date of original issuance and payable monthly in
arrears in United States dollars on the last day of each calendar month
thereafter.

Dividends on the 8.35% Series A Preferred Stock are non-cumulative. To the
extent that funds are not legally available for the payment of such dividends
for any monthly dividend period or that such dividends are not declared with
respect to any monthly dividend period, then the holders of the 8.35% Series A
Preferred Stock have no right to receive a dividend in respect of such monthly
dividend period. BanPonce may not pay dividends on or acquire shares of
common stock of BanPonce or other class of stock of BanPonce ranking junior to
the 8.35% Series A Preferred Stock unless all accrued and unpaid dividends on
the 8.35% Series A Preferred Stock for the twelve monthly dividend periods
ending on the immediately preceding dividend payment date shall have been paid
or are paid contemporaneously and the full monthly dividend on the 8.35%
Series A Preferred Stock for the then current month has been or is
contemporaneously declared and paid or declared and set apart for payment.

The 8.35% Series A Preferred Stock is redeemable on and after June 30,
1998, at the option of BanPonce, in whole or in part from time to time. The
redemption price per share is $26.25 from June 30, 1998 through June 29, 1999,
$26.00 from June 30, 1999 through June 29, 2000, $25.75 from June 30, 2000
through June 29, 2001, $25.50 from June 30, 2001 through June 29, 2002 and
$25.00 from June 30, 2002 and thereafter, plus accrued and unpaid dividends
for the then current monthly dividend period to the date fixed for redemption.
Under current regulations, BanPonce is not permitted to exercise any option to
redeem shares of 8.35% Series A Preferred Stock without the prior approval of
the Federal Reserve Board.

The 8.35% Series A Preferred Stock is not convertible into or exchangeable
for any other securities of BanPonce. Holders of shares of 8.35% Series A
Preferred Stock have no right to require BanPonce to redeem or repurchase any
such shares, and such shares are not subject to any sinking fund or similar
obligation.

In the event of the liquidation, dissolution or winding up of BanPonce.
holders of the 8.35% Series A Preferred Stock will be entitled to receive a
liquidation preference of $25 for each share, plus accrued and unpaid
dividends for the then current monthly dividend period to the date of payment.

NBI's authorized common stock consists of 150 shares of common stock, par
value $10,000 per share, 89,500 shares of preferred stock, par value $1.00 per
share, and 10,500

48
<PAGE>
<PAGE>

shares of Class A preferred stock, par value $10.00 per share. Each
shareholder is entitled to one vote for each share of common stock. There are
currently no shares of preferred stock or Class A preferred stock outstanding.

Size and Classification of the Board of Directors

BanPonce's Restated Certificate of Incorporation provides that the exact
number of directors will be established from time to time by resolution
approved by an absolute majority of the Board of Directors. The total number
of directors must be an odd number between nine and twenty-five. The Board of
Directors has currently set the number of directors at fifteen. BanPonce's
Restated Certificate of Incorporation provides that the Board of Directors is
to be divided into three classes as nearly equal in number as possible, with
each class having at least three members and with the term of office of one
class expiring each year. Except as noted below, a director must be elected
by the affirmative vote of a majority of the shares of the class of stock
represented at the annual meeting of stockholders for which the director
stands for election and entitled to elect such director. Any vacancies in the
Board of Directors are filled solely by a majority vote of the directors then
in office, even if less than a quorum, but any director so elected serves only
until the next succeeding annual meeting of stockholders. Any director may be
removed, but only for cause, by the affirmative vote of the holders of two-
thirds of the combined voting power of the then outstanding shares of stock of
BanPonce entitled to vote generally in the election of directors, voting
together as a single class.

NBI's Certificate of Incorporation provides that directors are to be
elected at the annual meeting of stockholders, with each director to continue
in office until his successor has been elected or qualified, or until death,
resignation, or removal for adequate cause. At each election, the persons
receiving the greatest number of votes will become the directors. The Board
of Directors has currently set the number of directors at twelve. Any
vacancies in the board are filled by a majority vote of the remaining
directors then in office, even if less than a quorum, but any director so
elected serves only for the unexpired term of the director he or she replaced.

Any director of NBI can be removed with or without cause, at any time by
the affirmative vote of the holders of a majority of all the shares of stock
outstanding and entitled to vote. The number of directors may be increased by
amendment to NBI's By-laws by the affirmative vote of a majority of the
directors, even if less than a quorum, or, by the affirmative vote of a
majority in interest of the stockholders at the annual meeting or a special
meeting called for that purpose.

Special Voting Requirements for Certain Transactions

Under Article TENTH of BanPonce's Restated Certificate of Incorporation, an
affirmative vote of seventy-five percent or more of the total number of
outstanding shares of BanPonce is required for the following transactions: (i)
to amend Article TENTH of the Restated Certificate of Incorporation; (ii) to
approve any Business Combination for which stockholder approval is required by
applicable law; or (iii) to approve the voluntary dissolution of BanPonce.
For purposes of Article TENTH of the Restated Articles of Incorporation, the
term "Business Combination" is defined as (i) a merger, reorganization or
consolidation in which BanPonce is a constituent corporation; or (ii) the
sale, lease, or hypothecation of substantially all of the assets of BanPonce.
Other than with respect to Article TENTH, the affirmative vote of the holders
of two-thirds of the outstanding shares of BanPonce is required to amend the
Restated Articles of Incorporation.

NBI's Certificate of Incorporation and By-laws do not identify any
transactions as requiring more than a majority vote of the outstanding shares.

Meetings of Shareholders

The corporate governance documents of both BanPonce and NBI provide that
the presence, in person or by proxy, of stockholders holding a majority of the
stock of the corporation entitled to vote constitutes a quorum at a meeting of
stockholders. If no quorum is present, BanPonce's corporate governance
documents require that the meeting be adjourned from time to time without
further notice until a date not less than eight days

49
<PAGE>
<PAGE>

after the date for which the first meeting was called. At such adjourned
meeting, any business may be transacted which might have been transacted at
the meeting originally noticed, regardless of the number of shares represented
by person or proxy.

NBI's corporate governance documents provide that, in the event that a
quorum is not present at any meeting, a majority of stockholders entitled to
vote who are present, in person or by proxy, may adjourn the meeting from time
to time without notice until the requisite amount of stock entitled to vote is
present.

Amendments to Certificate of Incorporation and Bylaws

The BanPonce Restated Certificate of Incorporation provides that its By-
laws may be adopted, amended or repealed by an absolute majority vote of the
Board of Directors or by the affirmative vote of a majority of BanPonce
stockholders entitled to vote.

Under BanPonce's Restated Certificate of Incorporation, amendments to the
Restated Certificate of Incorporation require the approval of not less than
two-thirds of the total number of outstanding shares of capital stock (both
common and preferred voting as a class) of BanPonce and, if such amendment
concerns Article TENTH (which governs the approval of certain business
combinations and voluntary dissolution), the approval of not less than
seventy-five percent (75%) of the total number of outstanding shares of
capital stock of BanPonce.

NBI's Certificate of Incorporation provides that its By-laws can be altered
by a majority vote of the Board of Directors, subject to any restrictions
imposed upon such power by NBI stockholders. It also provides that NBI
reserves the right to amend, alter, change or repeal any provision contained
therein, and all rights conferred upon stockholders, in the manner prescribed
by statute.

LEGAL MATTERS

The validity of the shares and certain legal matters will be passed upon by
Brunilda Santos de Alvarez, Esq., Senior Vice President and Legal Counsel to
BanPonce. Certain legal matters will also be passed upon for BanPonce by
Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street, Chicago, Illinois
60601, and for NBI and Sellers by The Law Office of Victor J. Cacciatore,
Chicago, Illinois.

Robert J. Stucker, Esq., a partner in the firm of Vedder, Price, Kaufman &
Kammholz, is also a director of Banco Popular, Illinois, a subsidiary of
BanPonce.

EXPERTS

The consolidated financial statements of BanPonce incorporated in this
Prospectus (and elsewhere in the Registration Statement) by reference from
BanPonce's Annual Report on Form 10-K for the year ended December 31, 1996
have been audited by Price Waterhouse LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.

The consolidated financial statements of NBI and subsidiaries at
December 31, 1996 and 1995, and for each of the three years in the period
ended December 31, 1996, included in this Prospectus have been audited by
Crowe, Chizek and Company LLP, independent auditors. These consolidated
financial statements, audited by Crowe, Chizek and Company LLP, are included
herein in reliance upon their report given upon the authority of that firm as
experts in accounting and auditing.

50
<PAGE>
<PAGE>

INDEX TO FINANCIAL STATEMENTS

National Bancorp, Inc. Page

Report of Independent Auditors . . . . . . . . . . . . . . . F-2

Consolidated Balance Sheets at December 31, 1996 and 1995 . . F-3

Consolidated Statements of Income for the
Three Years Ended December 31, 1996 . . . . . . . . . . . F-4

Consolidated Statements of Changes in Shareholders' Equity
for the Three Years Ended December 31, 1996 . . . . . . . F-5

Consolidated Statements of Cash Flows for the
Three Years Ended December 31, 1996 . . . . . . . . . . . . F-6

Notes to Consolidated Financial Statements . . . . . . . . . F-7

F-1
<PAGE>
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors
and Shareholders
National Bancorp, Inc.

We have audited the accompanying consolidated balance sheets of National
Bancorp, Inc. and Subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the three years in the period ended December 31,
1996. These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of National
Bancorp, Inc. and Subsidiaries at December 31, 1996 and 1995, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles.

Crowe, Chizek and Company LLP

Oak Brook, Illinois
February 11, 1997

F-2
<PAGE>
<PAGE>
NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . $ 30,009,261 $ 27,260,082
Interest-bearing deposits in
other financial institutions . . . . . 245,029 390,346
Securities available-for-sale . . . . . . 102,393,220 106,523,340
Securities held-to-maturity
(fair value: 1996--$8,911,250;
1995--$14,051,219) . . . . . . . . . . 8,876,622 14,004,720
Loans, net of unearned discount . . . . . 169,246,448 143,528,236
Allowance for loan losses . . . . . . . . (1,874,655) (1,388,872)
------------- -------------
167,371,793 142,139,364
Unamortized cost of
purchased loan portfolios . . . . . . . 2,788,651 5,964,358
Receivable from sale of
loan portfolio . . . . . . . . . . . . -- 8,860,773
Premises and equipment, net . . . . . . . 6,071,386 6,607,781
Goodwill and core deposit intangibles . . 2,663,979 3,280,418
Accrued interest and other assets . . . . 3,331,882 3,310,177
------------- -------------
$323,731,823 $318,341,359
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing . . . . . . . . . $ 61,812,059 $ 62,262,535
Interest-bearing . . . . . . . . . . 204,807,297 192,319,343
------------- -------------
266,619,356 254,581,878
Securities sold under
agreements to repurchase . . . . . . 21,989,038 13,625,628
Collateralized bank loans . . . . . . . 6,565,520 18,614,500
Convertible subordinated debentures . . 3,000,000 3,950,000
Accrued interest and
other liabilities . . . . . . . . . . 2,731,362 4,219,143
------------- -------------
300,905,276 294,991,149
Minority interest . . . . . . . . . . . . 352,950 357,243
Shareholders' equity
Preferred stock - par value $10;
authorized 89,500 shares;
none issued . . . . . . . . . . . . . -- --
Common stock - par value $10,000;
authorized 150 shares; issued:
93.20449 in 1996 and
86.87116 in 1995 . . . . . . . . . . 932,045 868,712
Additional paid-in capital . . . . . . 5,045,032 4,158,365
Retained earnings . . . . . . . . . . . 17,138,108 18,090,942
Unrealized gain (loss) on
securities available-for-sale,
net of income taxes . . . . . . . . . (421,588) 94,948
Treasury stock (1.025 shares),
at cost . . . . . . . . . . . . . . . (220,000) (220,000)
------------- -------------
22,473,597 22,992,967
------------- -------------
$323,731,823 $318,341,359
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.

F-3
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Interest income
Loans, including fees . . . . . $ 14,010,868 $ 12,280,206 $ 11,292,873
Securities
Taxable . . . . . . . . . . . 6,047,731 6,022,683 4,956,457
Exempt from federal
income taxes . . . . . . . 630,121 791,194 669,244
Federal funds sold . . . . . . 375,475 417,181 173,147
Deposits in other
financial institutions . . . 11,983 36,334 91,156
------------ ------------ ------------
21,076,178 19,547,598 17,182,877
Interest expense . . . . . . . .
Deposits . . . . . . . . . . . 8,424,285 7,600,449 6,303,477
Bank loans, convertible
subordinated debentures
and other . . . . . . . . . . 1,474,610 1,008,747 616,351
------------ ------------ ------------
9,898,895 8,609,196 6,919,828
------------ ------------ ------------
Net interest income . . . . . . . 11,177,283 10,938,402 10,263,049
Provision for loan losses . . . . 2,703,300 219,000 955,468
------------ ------------ ------------
Net interest income after
provision for loan losses . . . 8,473,983 10,719,402 9,307,581
Other income
Nonbank subsidiary revenue . . 1,030,502 4,343,021 6,406,665
Data processing revenue . . . . 253,533 165,000 --
Securities gains, net . . . . . 220,180 132,011 33,719
Trust department income . . . . 671,019 635,392 581,327
Service charges on
deposit accounts . . . . . . 1,671,380 1,407,282 1,515,610
Other income . . . . . . . . . 1,077,459 728,370 804,611
------------ ------------ ------------
4,924,073 7,411,076 9,341,932
Other expenses
Nonbank subsidiary expenses . . 1,300,061 3,420,514 5,158,100
Salaries and
employee benefits . . . . . . 6,497,939 6,105,030 5,327,853
Occupancy and
equipment expense . . . . . . 2,078,542 2,055,995 1,606,974
Amortization of goodwill and
core deposit intangibles . . 616,439 987,662 1,000,062
FDIC insurance . . . . . . . . 46,766 313,928 564,840
Other expenses . . . . . . . . 2,735,211 2,171,585 2,047,193
------------ ------------ ------------
13,274,958 15,054,714 15,705,022
------------ ------------ ------------
Income before income taxes . . . 123,098 3,075,764 2,944,491
Income taxes . . . . . . . . . . 26,779 1,101,150 1,091,200
------------ ------------ ------------
Net income . . . . . . . . . . . $ 96,319 $ 1,974,614 $ 1,853,291
============ ============ ============
Earnings per share
Primary . . . . . . . . . . . . $ 1,101.67 $ 16,589.19 $ 21,626.02
=========== =========== ===========
Fully diluted . . . . . . . . . $ 1,101.67 $ 15,921.87 $ 16,909.32
=========== =========== ===========

</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
8% Class A Additional
Preferred Common Paid-in
Stock Stock Capital
---------- ------ ----------

<S> <C> <C> <C>
Balance at January 1, 1994 . . . . . $5,480,482 $460,000 $1,701,948
Purchase .23077 share of
common treasury stock . . . . . . . -- -- --
Conversion of Series I and II
subordinated debentures into
39.87116 shares of common stock,
including cash received for
additional fractional shares
necessary to acquire a full
share of common stock . . . . . . . -- 398,712 2,316,417
Preferred stock dividends . . . . . . -- -- --
Common stock dividends . . . . . . . -- -- --
Unrealized loss on securities
available-for-sale,
net of $1,391,584 of
income taxes . . . . . . . . . . . -- -- --
Net income for the year . . . . . . . -- -- --
----------- --------- -----------
Balance at December 31, 1994 . . . . 5,480,482 858,712 4,018,365
Conversion of Series III
subordinated debentures into
one share of common stock . . . . . -- 10,000 140,000
Purchase one share of
common treasury stock . . . . . . . -- -- --
Preferred stock dividends . . . . . . -- -- --
Common stock dividends . . . . . . . -- -- --
Redemption of preferred stock . . . . (5,480,482) -- --
Unrealized gain on securities
available-for-sale, net of
$1,321,641 of income taxes . . . . -- -- --
Net income for the year . . . . . . . -- -- --
----------- --------- -----------
Balance at December 31, 1995 . . . . -- 868,712 4,158,365
Conversion of Series III
subordinated debentures into
6.333 shares of common stock . . . -- 633,333 886,667
Common stock dividends . . . . . . . -- -- --
Unrealized gain on securities
available-for-sale, net of
$266,103 of income taxes . . . . . -- -- --
Net income for the year . . . . . . . -- -- --
----------- --------- -----------
Balance at December 31, 1996 . . . . $ -- $932,045 $5,045,032
=========== ========= ===========
</TABLE>

Unrealized
Appreciation
(Loss) on
Securities Common
Retained Available- Treasury
Earnings for-Sale Stock Total
-------- ----------- -------- -----

<S> <C> <C> <C> <C>
Balance at January 1, 1994 . . . . $16,796,857 $ 230,720 $ $24,670,007
Purchase .23077 share of
common treasury stock . . . . . . -- -- (43,876) (43,876)
Conversion of Series I and II
subordinated debentures into
39.87116 shares of common stock,
including cash received for
additional fractional shares
necessary to acquire a full
share of common stock . . . . . . -- -- 43,876 2,759,005
Preferred stock dividends . . . . . (438,439) -- -- (438,439)
Common stock dividends . . . . . . (515,077) -- -- (515,077)
Unrealized loss on securities
available-for-sale,
net of $1,391,584 of
income taxes . . . . . . . . . . -- (2,701,311) -- (2,701,311)
Net income for the year . . . . . . 1,853,291 -- -- 1,853,291
----------- ----------- --------- ------------
Balance at December 31, 1994 . . . 17,696,632 (2,470,591) -- 25,583,600
Conversion of Series III
subordinated debentures into
one share of common stock . . . . -- -- -- 150,000
Purchase one share of
common treasury stock . . . . . . -- -- (220,000) (220,000)
Preferred stock dividends . . . . . (550,150) -- -- (550,150)
Common stock dividends . . . . . . (1,030,154) -- -- (1,030,154)
Redemption of preferred stock . . . -- -- -- (5,480,482)
Unrealized gain on securities
available-for-sale, net of
$1,321,641 of income taxes . . . -- 2,565,539 -- 2,565,539
Net income for the year . . . . . . 1,974,614 -- -- 1,974,614
------------ ----------- ---------- ------------
Balance at December 31, 1995 . . . 18,090,942 94,948 (220,000) 22,992,967
Conversion of Series III
subordinated debentures into
6.333 shares of common stock . . -- -- -- 950,000
Common stock dividends . . . . . . (1,049,153) -- -- (1,049,153)
Unrealized gain on securities
available-for-sale, net of
$266,103 of income taxes . . . . -- (516,536) -- (516,536)
Net income for the year . . . . . . 96,319 -- -- 96,319
------------ ----------- --------- ------------
Balance at December 31, 1996 . . . $17,138,108 $ (421,588) $(220,000) $22,473,597
============ =========== ========= ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995 1994
---- ---- ----

<S> <C> <C> <C>
Cash flows from operating activities
Net income . . . . . . . . . . . . $ 96,319 $ 1,974,614 $ 1,853,291
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities
Depreciation . . . . . . . . . . . . . 794,918 742,555 572,746
Loss on sale and
disposal of assets . . . . . . . . . -- 109,498 275
Securities gains . . . . . . . . . . . (220,180) (132,011) (33,719)
Premium amortization
on securities . . . . . . . . . . . 485,569 442,411 395,289
Discount accretion on securities . . . (132,564) (109,280) (88,677)
Provision for loan losses . . . . . . 2,703,300 219,000 955,468
Amortization of goodwill and
core deposit intangibles . . . . . . 616,439 987,662 1,000,062
Net change in unamortized cost
of loan portfolios . . . . . . . . . 3,175,707 4,137,502 (5,389,286)
Decrease (increase) in
accrued interest and
other assets . . . . . . . . . . . . (164,538) 1,019,529 (237,591)
Decrease in accrued interest
and other liabilities. . . . . . . . (1,224,688) (1,653,502) (621,999)
------------ ------------ ------------
Net cash provided by (used in)
operating activities. . . . . . . . 6,130,282 7,737,978 (1,594,141)

Cash flows from investing activities
Proceeds from sales, maturities,
and paydowns of securities
available-for-sale . . . . . . . . . 50,114,637 133,985,475 31,730,434
Proceeds from maturities and
paydowns of securities
held-to-maturity . . . . . . . . . . 9,083,347 10,274,296 5,835,307
Purchase of securities
available-for-sale . . . . . . . . . (46,869,220) (142,372,085) (40,205,432)
Purchase of securities
held-to-maturity . . . . . . . . . . (3,986,000) (7,135,377) (6,694,000)
Net decrease in deposits with
other financial institutions . . . . 145,317 1,130,364 2,163,506
Net (increase) decrease in loans . . . (28,065,729) (11,644,260) 131,575
Proceeds from sale of
property and equipment . . . . . . . 5,900 29,247 22,000
Property and equipment expenditures. . (264,423) (2,912,310) (344,234)
Sale of other real estate . . . . . . 291,540 614,702 --
Proceeds from sale of loan portfolios. -- 2,206,558 --
Collection of receivable from
sale of loan portfolios . . . . . . 8,860,773 -- --
------------ ------------- ------------
Net cash used in
investing activities. . . . . . . (10,683,858) (15,823,390) (7,360,844)

Cash flows from financing activities
Net increase (decrease) in deposits . 12,037,478 15,034,401 (260,623)
Net increase in securities sold
under agreements to repurchase. . . 8,363,410 2,231,128 7,794,391
Issuance of subordinated debentures . -- 3,000,000 --
Redemption of preferred stock . . . . -- (5,480,482) --

F-6
<PAGE>
<PAGE>

</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash Flows from Financing Activities
(cont'd)
Purchase of treasury stock and
fractional shares of new common
stock . . . . . . . . . . . . -- (220,000) (43,876)
Issuance of fractional shares to
acquire new common and treasury
stock . . . . . . . . . . . . -- -- 234,005
Preferred stock dividends . . . . . . -- (550,150) (438,439)
Common stock dividends . . . . . . . (1,049,153) (1,030,154) (515,077)
Reduction of collateralized
bank loans . . . . . . . . . . . . (12,773,495) (13,213,283) (15,673,248)
Increase in collateralized
bank loans . . . . . . . . . . . . 724,515 13,254,483 19,098,300
------------ ------------- ------------
Net cash provided by financing
activities . . . . . . . . . . . 7,302,755 13,025,943 10,195,433
------------ ------------- ------------
Increase in cash and cash equivalents. 2,749,179 4,940,531 1,240,448
Cash and cash equivalents at beginning
of year . . . . . . . . . . . . 27,260,082 22,319,551 21,079,103
------------ ------------- ------------
Cash and cash equivalents at end
of year . . . . . . . . . . . . $ 30,009,261 $ 27,260,082 $ 22,319,551
============= =============== =============
Supplemental disclosures of cash flow
information
Cash paid during the year for:
Interest . . . . . . . . . . . . . $ 9,669,955 $ 9,550,785 $ 8,085,805
Income taxes . . . . . . . . . . . 1,420,000 885,000 935,200

Schedule of noncash investing and
financing activities
Conversion of subordinated
debentures into common stock . . $ 950,000 $ 150,000 $ 2,525,000
Real estate acquired through
foreclosure on property held
as collateral . . . . . . . . . 130,000 382,139 --

</TABLE>
See accompanying notes to consolidated financial statements.

F-7
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- NATURE OF OPERATIONS

National Bancorp, Inc. (the "Corporation" or "NBI") is a multi-bank
holding company organized under the laws of the state of Delaware. NBI is the
parent company for three commercial banks and a nonbank collection service
company. American Midwest Bank & Trust ("AmMid") is NBI's principal bank
subsidiary providing a full line of financial services to retail and
commercial customers in Melrose Park, Illinois and its adjacent suburban area.
American National Bank of DeKalb County ("DeKalb") is a commercial bank
headquartered in Sycamore, Illinois, which provides a full line of financial
services to commercial and retail customers in DeKalb County, Illinois.
Northwest Community Bank ("NWC") is a de novo bank which commenced operations
on May 3, 1995 and provides financial services to corporate and retail
customers in the Northwest suburban area of Cook County, Illinois. FLC is
engaged in the business of acquiring loan portfolios from the FDIC and other
sources at substantial discounts from principal amounts outstanding and
liquidating the portfolios through collection efforts or through bulk sales.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The consolidated financial statements include
those of NBI and all of its subsidiaries. Results of operations of Data
Systems are included from May 19, 1995, which is the date the Company was
organized, and from May 3, 1995 for NWC, the date NWC began operations.

The accounting policies followed by NBI and the methods of applying
those policies conform with generally accepted accounting principles and with
general practice within the banking industry. The preparation of financial
statements in conformity with generally accepted accounting principals
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Actual results could
differ from those estimates.

Securities: Securities are classified as held-to-maturity when
management has the positive intent and NBI has the ability to hold those
securities to maturity. They are stated at cost, adjusted for amortization of
premiums and accretion of discounts. All other securities are classified as
available-for-sale because NBI may decide to sell those securities for changes
in market interest rates, liquidity needs, changes in yields on alternative
investments, and for other reasons. These securities are carried at fair
value. Unrealized gains and losses on securities available-for-sale are
charged or credited to a valuation allowance which is included as a separate
component of shareholders' equity. Realized gains and losses on disposition
are based on the net proceeds and the adjusted carrying amount of the
securities sold, using the specific identification method.

Loans: Loans are stated at the principal amount outstanding, net of the
allowance for loan losses and unearned discount. Interest income on loans is
reported on the accrual basis over the term of the loan based on the amount of
principal outstanding. Where there is doubt as to the ability of the debtor
to meet the terms of the loan contract or the loan is not adequately secured,
the accrual of interest is discontinued. Loan fees and direct loan
origination costs are deferred and amortized over the term of the loan as a
yield adjustment.

F-8
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Loan Losses: NBI has established an allowance for loan
losses to provide for those loans which may not be repaid in their entirety.
The allowance is increased by provisions for loan losses charged to expense
and decreased by charge-offs, net of recoveries. Although a loan is charged
off by management when deemed uncollectible, collection efforts may continue
and future recoveries may occur.

The allowance is maintained by management at a level considered to be
adequate to cover losses that are currently anticipated based on past loss
experience, general economic conditions, information about specific borrower
situations including their financial position and collateral values, and other
factors and estimates which are subject to change over time. Estimating the
risk of loss and the amount of loss on any loan is necessarily subjective and
ultimate losses may vary from current estimates. These estimates are reviewed
periodically, and as adjustments become necessary, they are reported in
earnings in the periods in which they become known.

Loans considered to be impaired are reduced to the present value of
expected cash flows or to the fair value of the collateral by allocating a
portion of the allowance for loan losses to each loan.

Nonbank Revenue Recognition: Income of NBI's nonbank collection service
subsidiary is recognized and loan portfolio costs are amortized as collections
are received. Portfolio costs are amortized over periods ranging from three
to five years based on the ratio of original cost to initial estimated future
cash collections times the amount of cash received during the period. The
ratio is adjusted if estimated future cash collections are revised downward.

Premises and Equipment: Premises and equipment are stated at cost, less
accumulated depreciation and amortization. Provisions for depreciation and
amortization are computed on the straight-line method over the estimated
service lives of the related assets. The cost of maintenance and repairs is
charged to income as incurred; significant repairs are capitalized.

Other Real Estate: Properties financed by the subsidiary banks and
subsequently acquired as a result of default on the part of the borrowers, are
carried at the lower of cost, which is generally the fair value at the date of
foreclosure, or fair value less estimated selling expenses. Writedowns which
may be required after acquisition, as a result of changes in economic
conditions or other factors, are charged directly to operating expense.

Goodwill and Core Deposit Intangibles: Goodwill represents the excess
of the aggregate purchase price paid over the fair value of the net tangible
assets of acquired banks, and is being amortized over a fifteen-year period
using the straight-line method. The premium paid to acquire the core deposits
of subsidiary banks is being amortized over the estimated benefit life of
twelve years using accelerated methods. Goodwill and core deposit intangibles
are assessed annually for impairment based upon estimated undiscounted future
cash flows.

Income Taxes: Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income
Taxes". SFAS No. 109 generally provides that deferred tax assets and
liabilities are recognized for temporary differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities and
expected benefits of operating loss carryforwards and tax credit
carryforwards. Deferred taxes are recognized for the estimated taxes
ultimately payable or recoverable based on enacted tax laws. Changes in
enacted tax rates or laws will be reflected in the financial statements in the
periods they occur.

Cash Equivalents: For purposes of reporting cash flows, NBI considers
amounts due from banks, federal funds sold and all highly liquid debt
instruments, purchased with a maturity of three months or less, to be cash
equivalents.

F-9
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 -- SECURITIES

The amortized cost and fair value of debt securities are as follows:

<TABLE>
<CAPTION>
December 31, 1996
-----------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----
<S> <C> <C> <C> <C>
Securities available-for-sale
U.S. Treasury securities . . . . . $ 70,591,686 $ 16,349 $(425,844) $ 70,182,191
U.S. government agencies . . . . . 6,998,372 3,268 (31,782) 6,969,858
Mortgage-backed securities . . . . 14,519,856 136,817 (193,345) 14,463,328
Collateralized mortgage obligations 10,922,075 11,572 (155,804) 10,777,843
------------ -------- --------- ------------
$103,031,989 $168,006 $(806,775) $102,393,220
============ ======== ========= ============
Securities held-to-maturity
Mortgage-backed securities . . . . $ 1,482,737 $ 7,669 $(26,403) $ 1,464,003
Obligations of states and political
subdivisions . . . . . . . . . . 6,745,820 59,781 (6,419) 6,799,182
Other securities . . . . . . . . . 648,065 -- -- 648,065
------------ -------- -------- ------------
$ 8,876,622 $ 67,450 $(32,822) $ 8,911,250
=========== ======== ======== ============
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
-----------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----
<S> <C> <C> <C> <C>
Securities available-for-sale
U.S. Treasury securities . . . . . . $ 67,423,740 $281,823 $(45,875) $ 67,659,688
U.S. government agencies . . . . . . 5,507,815 44,346 (4,222) 5,547,939
Mortgage-backed securities . . . . . 15,052,893 22,701 (144,928) 14,930,666
Collateralized mortgage obligations . 18,395,032 185,910 (195,895) 18,385,047
------------ -------- --------- ------------
$106,379,480 $534,780 $(390,920) $106,523,340
============ ======== ========= ============
Securities held-to-maturity
Mortgage-backed securities . . . . . $ 2,215,559 $ 5,941 $ (24,911) $ 2,196,589
Obligations of states and political
subdivisions . . . . . . . . . . . 11,144,661 77,857 (12,390) 11,210,128
Other securities . . . . . . . . . . 644,500 -- -- 644,500
------------ -------- --------- ------------
$ 14,004,720 $ 83,798 $ (37,301) $ 14,051,217
============ ======== ========= ============
</TABLE>
F-10
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amortized cost and fair value of debt securities at December 31, 1996,
by contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalty.

<TABLE>
<CAPTION>
Amortized Fair
Cost Value
--------- -----
<S> <C> <C>
Securities available-for-sale
Due in one year or less .. . . . . . . $ 23,202,644 $ 23,151,033
Due after one year through five years. 54,387,414 54,001,016
------------ ------------
77,590,058 77,152,049
Mortgage-backed securities and
collateralized mortgage obligations 25,441,931 25,241,171
------------ ------------
$103,031,989 $102,393,220
============ ============
Securities held-to-maturity
Due in one year or less . . . . . . . $ 1,728,964 $ 1,739,077
Due after one year through five years 3,681,648 3,718,356
Due after five years through ten years 1,335,208 1,344,749
Due after ten years . . . . . . . . . 648,065 648,065
------------ ------------
7,393,885 7,450,247
Mortgage-backed securities . . . . . 1,482,737 1,461,003
------------ ------------
$ 8,876,622 $ 8,911,250
============ ============
</TABLE>

Proceeds from sales of securities available-for-sale and the gross
realized gains and losses on such sales in 1996, 1995 and 1994 were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Proceeds from sales . . . . . $37,874,298 $128,323,428 $25,954,542
Gross realized gains . . . . 250,135 570,945 96,212
Gross realized losses . . . . (29,955) (438,934) (62,493)

</TABLE>

Securities with a carrying value of $52,865,000 and $35,861,000 at
December 31, 1996 and 1995, respectively, were pledged to secure public
deposits, borrowings, and for other purposes as required or permitted by law.

NOTE 4 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, requires
corporations to disclose fair value information about their financial
instruments. Statement of Financial Accounting Standards No. 107 defines the
fair value of a financial instrument as the amount at which the instrument
could be exchanged in a current transaction between willing parties, other
than a forced or liquidation sale. The methods and assumptions used to
determine fair values for each class of financial instruments are presented
below.

Cash and Cash Equivalents: Cash and cash equivalents are reported at
carrying amounts, which approximate fair values.

F-11
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities: Fair values for securities are determined from quoted
market prices. If a quoted market price is not available, fair value is
estimated using quoted market prices for similar instruments.

Loans: Fair values of loans have been determined by calculating the
present value of future cash flows using current rates at which similar loans
would be made to borrowers with similar credit ratings and the same remaining
maturities.

Purchased Loan Portfolios: The fair values of purchased loan portfolios
were determined by discounting estimated future cash collections at current
market rates, adjusted for credit and collection risk.

Receivable From Sale of Loan Portfolios: The carrying amount of the
receivable from sale of loan portfolios approximates fair value due to the
short-term maturity.

Deposit Liabilities: Deposit liabilities with stated maturities and
repurchase agreements have been valued using the present value of future cash
flows at rates which approximate current market rates for similar instruments.
Fair values of demand deposits are equal to the respective amounts due on
demand. The carrying amount for variable rate instruments approximates fair
value.

Collateralized Bank Loans: The carrying amount for variable rate notes
payable approximates fair value, using rates currently available to the Bank
for debt with similar terms and remaining maturities.

Debentures: The carrying amount for debentures approximates fair value
due to the short-term maturity of these instruments and the restrictions on
marketability.

Off-Balance-Sheet Instruments: Off-balance-sheet items consist
principally of unfunded loan commitments and standby letters of credit. The
fair value of commitments is estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreement and the present creditworthiness of counterparties. For fixed-rate
loan commitments, fair value also considers the difference between current
levels of interest rates and the committed rates. The fair value of
guarantees and letters of credit is based on fees currently charged for
similar agreements or on the estimated cost to terminate them or otherwise
settle the obligations with the counterparties at the reporting date.

The carrying amount and estimated fair values of NBI's significant
financial instruments as of December 31, 1996 and 1995, are as follows:

1996 1995
---- ----
(In thousands) Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Financial assets
Cash and cash equivalents . . . . . $ 30,009 $ 30,009 $ 27,260 $ 27,260
Interest-bearing deposits in other
financial institutions . . . . . 245 245 390 390
Receivable from the sale of loan
portfolios . . . . . . . . . . . -- -- 8,861 8,861
Securities . . . . . . . . . . . . 111,270 111,304 120,528 120,575
Loans, net . . . . . . . . . . . . 167,372 167,843 142,139 147,980
Purchased loan portfolios . . . . . 2,789 2,789 5,964 5,721

</TABLE>

F-12
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<S> <C> <C> <C> <C>
Financial liabilities
Deposits and repurchase agreements $(288,608) $(288,526) $(268,208) $(268,205)
Collateralized bank loans . . . . . (6,566) (6,566) (18,615) (18,615)
Debentures . . . . . . . . . . . . (3,000) (3,000) (3,950) (3,950)

</TABLE>

Other assets and liabilities of NBI not defined as financial
instruments, such as premises and equipment, are not included in the above
disclosures. Also not included are nonfinancial instruments typically not
recognized in financial statements such as the value of core deposits, loan
servicing rights, customer goodwill, and similar items.

There is no ready market for a significant portion of NBI's financial
instruments. Accordingly, fair values are based on various factors relative
to expected loss experience, current economic conditions, risk
characteristics, and other factors. The assumptions and estimates used in the
fair value determination process are subjective in nature and involve
uncertainties and significant judgment and, therefore, fair values cannot be
determined with precision. Changes in assumptions could significantly affect
these estimated values.

NOTE 5 -- LOANS

Major classifications of loans as of December 31, 1996 and 1995, are
summarized as follows:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Commercial loans . . . . . . . . . . $ 67,648,612 $ 62,643,235
Commercial real estate loans . . . . 36,612,994 21,447,717
Real estate mortgage loans . . . . . 41,323,177 34,577,501
Installment loans . . . . . . . . . . 24,448,080 25,763,978
------------ ------------
170,032,863 144,432,431
Unearned discount . . . . . . . . . . 786,415 904,195
------------ ------------
$169,246,448 $143,528,236
============ ============
</TABLE>

Information regarding impaired loans is as follows for the years ended
December 31, 1996 and 1995:

1996 1995
---- ----
<S> <C> <C>
Average investment in impaired loans . . . $ 3,524,000 $ 730,000
Interest income recognized on impaired
loans on a cash basis . . . . . . . . . . 129,800 9,500

</TABLE>

F-13
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information regarding impaired loans at December 31, 1996 and 1995 is as
follows:

<S> <C> <C>
Balance of impaired loans . . . . . . . . . . . $2,933,000 $1,229,000
Less portion for which no allowance for
loan losses is allocated . . . . . . . . . . 921,000 597,000
---------- ----------
Portion of impaired loan balance for which
an allowance for loan losses is allocated . . $2,012,000 $ 632,000
========== ==========
Portion of allowance for loan losses
allocated to impaired loans . . . . . . . . . $ 460,000 $ 234,000
========== ==========
</TABLE>

Mortgage loans serviced for others are not included in the accompanying
consolidated financial statements. The unpaid principal balances of mortgage
loans serviced for others was $13,869,000 at December 31, 1996 and $15,551,000
at December 31, 1995.

Custodial escrow balances maintained in connection with the foregoing
loan servicing and included in demand deposits were approximately $125,000 at
December 31, 1996 and $140,000 at December 31, 1995.

Mortgage servicing rights retained are permitted to be capitalized and
amortized over future periods effective January 1, 1996. Such servicing
rights are not material to the consolidated financial statements and are
therefore excluded.

NOTE 6 -- ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses for the years ended
December 31, 1996, 1995, and 1994, were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Balance, beginning of year . . . . . . $ 1,388,872 $1,327,234 $ 1,461,983
Provision for loan losses . . . . . . . 2,703,300 219,000 955,468
Recoveries on loans previously
charged off . . . . . . . . . . . . . 47,462 67,713 64,306
Loans charged off . . . . . . . . . . . (2,264,979) (225,075) (1,154,523)
----------- ---------- -----------
Balance, end of year . . . . . . . . . $ 1,874,655 $1,388,872 $ 1,327,234
=========== ========== ===========

</TABLE>
F-14
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 -- PREMISES AND EQUIPMENT

Premises and equipment as of December 31, 1996 and 1995, are summarized
as follows:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Land and land improvements . . . . . . . . . . $ 1,546,171 $ 1,546,171
Buildings and improvements . . . . . . . . . . 5,443,125 5,403,665
Furniture and equipment . . . . . . . . . . . . 4,248,788 3,769,409
Data processing systems . . . . . . . . . . . . 625,517 893,219
----------- -----------
11,863,601 11,612,464
Accumulated depreciation and amortization . . . 5,792,215 5,004,683
----------- -----------
$ 6,071,386 $ 6,607,781
=========== ===========
</TABLE>

NOTE 8 -- GOODWILL AND CORE DEPOSIT INTANGIBLES

The components of goodwill and core deposit intangibles at December 31,
1996 and 1995, were as follows:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Goodwill, net of accumulated amortization
of $10,340,397 in 1996 and $9,852,723
in 1995 . . . . . . . . . . . . . . . . . $ 2,232,893 $ 2,720,567
Core deposit intangibles, net of
accumulated amortization of $714,007 in
1996 and $585,242 in 1995 . . . . . . . . . 431,086 559,851
----------- -----------
$ 2,663,979 $ 3,280,418
=========== ===========
</TABLE>
F-15
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 -- NONBANK SUBSIDIARY

Condensed balance sheets as of December 31, 1996 and 1995 and statements
of income for each of the three years in the period ended December 31, 1996,
for FLC, are presented below:

BALANCE SHEETS

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . $ 43,655 $ 709,838
Interest-bearing deposits in other financial
institutions . . . . . . . . . . . . . . . . 145,029 191,707
Receivable from sale of loan portfolios . . . . -- 8,860,773
Unamortized cost of loan portfolios . . . . . . 2,788,651 5,964,358
Note receivable from parent . . . . . . . . . . -- 2,350,000
Other assets . . . . . . . . . . . . . . . . . 130,239 27,929
---------- -----------
$3,107,574 $18,104,605

LIABILITIES AND SHAREHOLDERS' EQUITY
Collateralized bank loans . . . . . . . . . . . $2,565,520 $14,614,500
Accrued interest and other liabilities . . . . 779,559 2,158,647
---------- -----------
3,345,079 16,773,147
Shareholders' equity (deficit) . . . . . . . . (237,505) 1,331,458
---------- -----------
$3,107,574 $18,104,605
========== ===========
</TABLE>

STATEMENTS OF INCOME

1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Income from loan portfolios . . . . . . $ 675,050 $4,253,202 $ 6,382,537
Interest income . . . . . . . . . . . . 7,161 18,253 24,128
Other income . . . . . . . . . . . . . 348,291 71,566 --
----------- ---------- -----------
1,030,502 4,343,021 6,406,665
Interest expense . . . . . . . . . . . 345,515 1,111,471 1,238,593
Servicing fees . . . . . . . . . . . . 494,428 1,175,169 2,182,866
Other expense . . . . . . . . . . . . . 460,118 1,133,874 1,736,641
----------- ---------- -----------
1,300,061 3,420,514 5,158,100
----------- ---------- -----------
Income (loss) before income taxes . . . (269,559) 922,507 1,248,565
Income taxes . . . . . . . . . . . . . 99,404 313,600 424,500
----------- ---------- -----------
Net income (loss) . . . . . . . . . . . $ (368,963) $ 608,907 $ 824,065
=========== ========== ===========
</TABLE>

On September 19, 1995, FLC entered into an asset sale agreement to sell
a substantial portion of its loan portfolios with a carrying value of
$13,514,125. As part of the agreement, the buyer paid FLC $1,665,000 in
cash, canceled a payable due the buyer of $835,000 and agreed to repay the
remaining bank debt on these portfolios of $10,702,529. At December 31, 1995,
the present value of the debt to be paid by the buyer was $8,860,773 and was
paid in full in 1996. The income effect of the transaction is included in
other income in the 1995 consolidated statements of income.

F-16
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 -- COLLATERALIZED BANK LOANS

Collateralized bank loans consisted of the following as of December 31,
1996 and 1995:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Various notes under a $10,000,000 line of
credit agreement with a commercial bank. The
notes bear interest at the prime rate and are
collateralized by a security interest in
purchased loan portfolios and a $3,000,000
unconditional guaranty of NBI. Repayment is
based upon 87% of collections received from
the loan portfolios, with a maturity date of
May 1, 1997 (see Note 9) . . . . . . . . . . . $2,565,520 $14,614,500

$5,000,000 line of credit with a commercial
bank. Borrowings on the line are on demand
notes. Minimum annual principal payments of
$800,000 are required, beginning in 1997.
The note bears interest at LIBOR plus 225
basis points and is collateralized by all of
the outstanding stock of AmMid, DeKalb, and
NWC. Interest is payable quarterly . . . . . . 4,000,000 4,000,000
---------- -----------
$6,565,520 $18,614,500
========== ===========
</TABLE>

The $5,000,000 line of credit agreement contains various restrictive
covenants relating to minimum capital ratios, return on assets, loan loss
ratios, and the amount of cash dividends. At December 31, 1996, NBI had
complied with these covenants or had obtained appropriate waivers.

NOTE 11 -- OTHER BORROWINGS

Federal funds purchased and securities sold under agreements to
repurchase generally mature within one day from the transaction date.
Physical control is maintained for securities sold under repurchase
agreements. Information concerning securities sold under agreements to
repurchase is summarized as follows:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Average daily balance during the year . . . . . $16,936,000 $12,215,000
Average interest rate during the year . . . . . 4.51% 4.75%
Maximum month-end balance during the year . . . $24,037,000 $21,869,000

</TABLE>

F-17
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 -- INCOME TAXES

The provision for income taxes, included in the statements of income,
consists of the following:

<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----

<S> <C> <C> <C>
Currently payable . . . . . . . $ 1,047,243 $1,082,040 $ 784,460
Deferred . . . . . . . . . . (1,020,464) 19,110 306,740
----------- ---------- ----------
$ 26,779 $1,101,150 $1,091,200
=========== ========== ==========
</TABLE>

The difference between the provision for income taxes shown in the
statements of income and amounts computed by applying the statutory federal
income tax rate of 34% to income before income taxes follows:

<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----

<S> <C> <C> <C>
Income taxes computed at
the statutory rate . . . . . . . . $ 41,853 $1,045,760 $1,001,127
Increase (decrease) in income
taxes resulting from
Tax-exempt income . . . . . . . . (309,663) (337,544) (305,976)
Nondeductible interest expense related
to carrying tax-exempt securities 27,986 29,748 23,569
Amortization of goodwill and other
intangibles . . . . . . . . . 230,539 361,706 363,939
Other, net . . . . . . . . . . . 36,064 1,480 8,541
----------- ---------- ----------
$ 26,779 $1,101,150 $1,091,200
=========== ========== ==========
</TABLE>

Deferred income tax assets and liabilities consisted of the following
at December 31, 1996 and 1995:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Gross deferred tax assets
Deferred loan fees . . . . . . . . . $ 8,857 $ 15,045
Allowance for loan losses . . . . . 377,993 211,106
Unrealized loss on securities
available-for-sale . . . . . . . . 217,181 --
Other . . . . . . . . . . . . . . . 48,922 --
---------- ----------
652,953 226,151
Gross deferred tax liabilities
Income recognition on purchased loan
portfolios . . . . . . . . . . . . 517,970 1,304,568
Depreciation . . . . . . . . . . . . 195,649 213,763
Unrealized gain on securities
available-for sale . . . . . . . . 48,912
Other . . . . . . . . . . . . . . . 6,141
----------- -----------
713,619 1,573,384
----------- ----------
Net deferred tax liability . . . . . $ (60,666) $(1,347,233)
========== ===========
</TABLE>
F-18
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 -- EMPLOYEE BENEFIT PLANS

Substantially all full-time employees are included in the 401(k) salary
deferral plan of the Corporation. Eligible employees may elect to defer
payment of a percentage of their compensation as defined in the plan. NBI's
contributions are based upon matching a specific percentage of compensation as
determined annually by the Board of Directors. NBI contributed $118,899,
$93,673, and $112,760 to the plan for the years ended December 31, 1996, 1995,
and 1994, respectively.

NOTE 14 -- RELATED PARTY TRANSACTIONS

Certain directors and executive officers of the subsidiary banks, their
families, and companies in which they are principal owners, were loan
customers of the banks. Loans to these persons aggregated approximately
$2,593,000 and $3,688,000 at December 31, 1996 and 1995, respectively.

On January 1, 1993, NBI entered into a lease agreement with First Bank
of Schaumburg, majority-owned by NBI's largest shareholder, to occupy
approximately 16% of space in the Bank's branch facility. The lease expires
December 31, 1999 and provides for annual rentals of approximately $107,000.

DeKalb has a lease agreement with NBI's largest shareholder to occupy
its DeKalb, Illinois branch facility. The lease expires December 31, 1999 and
provides for annual rentals of approximately $84,000.

NOTE 15 -- LEASES

At December 31, 1996, NBI was obligated under noncancelable operating
leases for bank facilities and office space expiring at various dates through
2001. These leases contain renewal options for 5 through 20 year periods.

Minimum rental payments required under all operating leases subsequent
to December 31, 1996, are as follows:

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

<S> <C>
1997 . . . . . . . . . . . . $ 326,785
1998 . . . . . . . . . . . . 329,733
1999 . . . . . . . . . . . . 332,750
2000 . . . . . . . . . . . . 144,841
2001 . . . . . . . . . . . . 141,839
Thereafter . . . . . . . . . 112,598
----------
$1,388,546
==========
</TABLE>

Rental expense, under all operating leases, was $384,000, $402,000, and
$261,000 in 1996, 1995, and 1994, respectively.

F-19
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 -- CONVERTIBLE SUBORDINATED DEBENTURES

Convertible subordinated debentures as of December 31, 1996 and 1995,
are summarized as follows:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Series III . . . . . . . . $ -- $ 950,000
Series IV . . . . . . . . . 3,000,000 3,000,000
---------- -----------
$3,000,000 $3,950,000
</TABLE>

The Series III debentures were converted into common stock at $150,000
per share on September 30, 1996, the maturity date. The Series IV debentures
were issued on August 1, 1995, bear interest at 10%, maturity on September 30,
2001, and are convertible into common stock at $220,000 per share at any time
prior to maturity.

NOTE 17 -- PREFERRED STOCK

The Class A preferred stock paid cash dividends on January 1 and July 1
of each year at a rate of 8%. On October 2, 1995, NBI redeemed all of the
outstanding shares at approximately $522 a share, plus unpaid dividends.

NOTE 18 -- REGULATORY MATTERS

NBI and its subsidiary banks are subject to various capital requirements
administered by the federal banking agencies. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, banks
must meet specific capital guidelines that involve quantitative measures of
assets, liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices.

Quantitative measures established by regulation to ensure capital
adequacy require banks and holding companies to maintain minimum amounts and
ratios of total and Tier I capital to risk-weighted assets and Tier I capital
to average assets. If banks do not meet these minimum capital requirements,
as defined, bank regulators can initiate certain actions that could have a
direct material effect on a bank's financial statements. Management believes,
as of December 31, 1996, that NBI and its subsidiary banks meet all capital
adequacy requirements to which they are subject.

As of December 31, 1996, the most recent notifications received from
each bank's primary regulator categorized the banks as well capitalized under
the regulatory framework for prompt corrective action. There are no
conditions or events since these notifications that management believes have
changed the institutions' category. To be categorized as well capitalized,
banks must maintain minimum total risk-based, Tier I risk-based, and Tier I
leverage ratios as set forth in the table below.

F-20
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The actual capital amounts and ratios as of December 31, 1996 for NBI
consolidated and AmMid, its largest subsidiary, are presented in the following
table:

(Dollars in millions) To be Well
Capitalized
To be Under Prompt
Adequately Corrective
Actual Capitalized Action Provisions
------ ----------- -----------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----

<S> <C> <C> <C> <C> <C> <C>
Total capital (to risk-
weighted assets)
NBI consolidated . . . . . $25.3 14.4% $14.2 8.0% $17.7 10.0%
AmMid . . . . . . . . . . 14.2 17.2 6.6 8.0 8.3 10.0
Tier I capital (to risk-
weighted assets)
NBI consolidated . . . . . $20.5 11.6% $7.1 4.0% $10.6 6.0%
AmMid . . . . . . . . . . 13.2 15.9 3.3 4.0 5.0 6.0
Tier I capital (to average
assets)
NBI consolidated . . . . . $20.5 6.4% $12.8 4.0% $16.0 5.0%
AmMid . . . . . . . . . . 13.2 7.6 7.0 4.0 8.7 5.0

</TABLE>

NOTE 19 -- TIME DEPOSITS

The aggregate amount of time deposits, in denominations of $100,000 and
over, as of December 31, 1996 and 1995, was $21,467,000 and $15,840,000,
respectively. Interest expense related to deposits, in denominations of
$100,000 and over, approximated $1,315,000 in 1996, $888,800 in 1995, and
$732,100 in 1994.

At December 31, 1996, scheduled maturities of certificates of deposit
were as follows:

<S> <C>
1997 . . . . . . . . . . . . $74,961,164
1998 . . . . . . . . . . . . 14,558,054
1999 . . . . . . . . . . . . 5,022,220
2000 . . . . . . . . . . . . 2,698,203
2001 . . . . . . . . . . . . 200,270
Thereafter . . . . . . . . . 6,671
-----------
$97,446,582
===========
</TABLE>
F-21
<PAGE>
<PAGE>
NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20 -- CASH AND CASH EQUIVALENTS

Cash and cash equivalents were comprised of the following as of
December 31, 1996 and 1995:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash and due from banks . . . . . . . . $22,114,261 $18,560,082
Federal funds sold . . . . . . . . . . 7,895,000 8,700,000
----------- -----------
$30,009,261 $27,260,082
=========== ===========
</TABLE>

NOTE 21 -- OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK

NBI is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet financing needs of its customers. These
financial instruments include commitments to extend credit, standby letters of
credit, and unused lines of credit. Commitments to extend credit are
agreements to lend to a customer as long as there is no violation of any
condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require the payment of
fees. Standby letters of credit and financial guarantees written are
conditional commitments issued by the banks to guarantee the performance of a
customer to a third party. Credit risk is the principal risk associated with
these instruments. The contractual amounts of these instruments represent the
credit risk should the instrument be fully drawn upon and the customer fail
completely to perform as contracted. In order to control the credit risk
associated with entering into commitments and issuing letters of credit, NBI
subjects such activity to the same credit quality and monitoring controls as
its lending activities. The contractual amounts of these credit-related
instruments are summarized in the following table by category of instrument.
Because many of these instruments expire without being drawn upon in whole or
in part, the amounts do not necessarily represent future cash requirements.

<TABLE>
<CAPTION>
Contract Amount
---------------
1996 1995
---- ----
<S> <C> <C>
Financial instruments whose contract amounts
represent credit risk
Unused lines of credit . . . . . . . . . . . $35,968,946 $28,336,829
Standby letters of credit . . . . . . . . . 2,201,676 1,122,412
Commitments to extend credit . . . . . . . . 11,486,060 5,734,000

</TABLE>

At December 31, 1996, commitments to extend credit included $378,000 of
fixed rate commitments at rates ranging from 5.25% to 9.00%.

Financial instruments which potentially subject NBI to concentrations of
credit risk consist principally of loans to local businesses, municipalities,
and consumers in the Chicago, Illinois suburban area; securities;
correspondent bank accounts; and federal funds sold.

NOTE 22 -- REORGANIZATION AND RESTRUCTURING

NBI's shareholders have approved a plan of complete reorganization and
restructuring under which NBI will be sold and all of its subsidiaries
distributed to shareholders or sold. The plan provides for DeKalb to be
distributed to a group

F-22
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of electing shareholders, NWC to be sold to NBI's largest shareholder, and FLC
to be sold to certain participating shareholders. NBI and its remaining
subsidiary, AmMid, will then be sold, pursuant to a stock purchase agreement
dated December 6, 1996, to BanPonce, a publicly held bank holding company, in
an exchange of stock estimated to have a value of approximately $31 million,
based on BanPonce's average stock price of $33.50 as traded during the latter
part of December 1996. If the average stock price exceeds $34 a share at
closing, NBI has the option to terminate the agreement, but BanPonce can
require execution of the agreement at $34 for the purpose of determining the
number of shares to be received, even if the average price exceeds $34 at
closing. Conversely, if the BanPonce average stock price drops below $23 a
share, BanPonce can terminate the agreement, unless NBI accepts $23 as the
average price for determining the number of shares to be received.

DeKalb will also acquire the merchant credit card processing operations
of AmMid prior to the sale to BanPonce. In addition, the stock purchase
agreement provides for Data Systems to redeem the equity interest of AmMid
prior to closing. It is anticipated that AmMid will use alternative data
processing resources and pay a termination fee to Data Systems in an amount
equal to the redemption price.

All of the above transactions are intended to be tax free
reorganizations or exchanges under the Internal Revenue Code, except for the
sale of NWC and FLC. NBI has requested a private letter ruling from the
Internal Revenue Service regarding the tax free status of the DeKalb splitoff
under Section 355 of the Internal Revenue Code. A favorable ruling is a
condition precedent to the reorganization plan and sale of NBI to BanPonce.

It is expected that, because of minimum capital amounts guaranteed to
BanPonce, the debenture holders will convert the entire amount of outstanding
convertible debentures into common stock and the shareholders of NBI will
contribute approximately $2,000,000 of additional capital prior to the
closing.

NOTE 23 -- LITIGATION

FLC, NBI's nonbank subsidiary, has instituted a lawsuit against the FDIC
for breach of contract to sell to FLC a certain package of nonperforming loans
through its public auction process. Damages are also requested for being
excluded from acting as a qualified bidder by the FDIC at subsequent auctions.
Damages sought by FLC approximate $2.5 million. The parties are presently
discussing the matter in an attempt to reach a settlement. NBI's management
believes its suit has sufficient merit to pursue the claim to the fullest
extent of the law, but it is not possible to predict the eventual outcome at
December 31, 1996.

NOTE 24 -- EARNINGS PER SHARE

Primary earnings per share amounts are based on the weighted average
number of shares outstanding during the year after deducting applicable
preferred stock dividends from net income. The weighted average number of
shares outstanding was 87.42950 for 1996, 85.86700 for 1995, and 65,42359 for
1994.

Fully diluted earnings per share amounts are based on the weighted
average number of shares of 105.81585 in 1996, 98.71548 in 1995, and 92.17992
in 1994, assuming conversion of the subordinated debentures and that the
related interest expense, net of income taxes, was restored to income. Fully
diluted earnings per common share exclude the effect of the subordinated
debentures in 1996 because they were anti-dilutive.

F-23
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 25 -- PARENT COMPANY FINANCIAL STATEMENTS

The following are condensed balance sheets and statements of income and
cash flows for National Bancorp, Inc. without subsidiaries:

CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
------------
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . $ 222,670 $ 255,389
Investment in subsidiaries . . . . . 29,644,010 33,078,003
Premises and equipment, net . . . . . 12,403 19,532
Other assets . . . . . . . . . . . . 53,890 428,647
----------- -----------
Total assets . . . . . . . . . . $29,932,973 $33,781,571
=========== ===========
LIABILITIES
Collateralized bank loans . . . . . . $ 4,000,000 $ 4,000,000
Convertible subordinated debentures . 3,000,000 3,950,000
Accrued interest and other liabilities 459,376 2,838,604
----------- -----------
Total liabilities . . . . . . . . 7,459,376 10,788,604

SHAREHOLDERS' EQUITY
Common stock . . . . . . . . . . . . 932,045 868,712
Additional paid-in capital . . . . . 5,045,032 4,158,365
Retained earnings . . . . . . . . . . 17,138,108 18,090,942
Unrealized gain (loss) on securities
available-for-sale of subsidiary banks (421,588) 94,948
Treasury stock . . . . . . . . . . . (220,000) (220,000)
----------- -----------
Total shareholders' equity. . . . . 22,473,597 22,992,967
----------- -----------
Total liabilities and shareholder's
equity . . . . . . . . . . . . $29,932,973 $33,781,571
=========== ===========
</TABLE>
F-24
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 25 -- PARENT COMPANY FINANCIAL STATEMENTS (Continued)

CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Operating income
Dividends from subsidiaries . . . . $ 4,333,000 $3,271,347 $ 3,385,140
Interest income . . . . . . . . . . -- -- 10,359
Other income . . . . . . . . . . . 330 125,774 123,985
----------- ---------- ----------
Total operating income . . . . . 4,333,330 3,397,121 3,519,484
Operating expenses
Salaries and employee benefits . . 970,968 945,959 905,248
Amortization of goodwill and core
deposit intangible . . . . . . . 253,450 608,290 608,290
Interest expense . . . . . . . . . 694,342 410,620 314,415
Occupancy expense . . . . . . . . . 160,726 165,163 202,777
Other expense . . . . . . . . . . . 485,843 154,558 263,990
----------- ---------- ----------
Total operating expenses . . . . 2,565,329 2,284,590 2,294,720
----------- ---------- ----------
Income before income taxes and equity in
undistributed income of subsidiaries. 1,768,001 1,112,531 1,224,764
Income tax benefit . . . . . . . . . 959,325 552,300 543,400
----------- ---------- ----------
Income before equity in undistributed
income of subsidiaries . . . . . . . 2,727,326 1,664,831 1,768,164
Equity in undistributed income
of subsidiaries . . . . . . . . . . . (2,631,007) 309,783 85,127
----------- ---------- ----------
Net income . . . . . . . . . . . . . $ 96,319 $1,974,614 $1,853,291
=========== ========== ==========
</TABLE>
F-25
<PAGE>
<PAGE>

NATIONAL BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 25 -- PARENT COMPANY FINANCIAL STATEMENTS (Continued)

CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------
1996 1995 1994
---- ---- ----

<S> <C> <C> <C>
Cash flows from operating activities
Net income . . . . . . . . . . . . . $ 96,319 $1,974,614 $ 1,853,291
Adjustments to reconcile net income to net
cash provided by operating activities
Equity in undistributed income of
subsidiaries . . . . . . . . . . . 2,631,007 (309,783) (85,127)
Depreciation and amortization . . . . 293,579 654,156 656,192
Decrease (increase) in other assets . 374,757 (141,048) (8,891)
Increase (decrease) in other liabilities (2,379,228) 2,135,120 (21,348)
----------- ---------- ----------
Net cash provided by operating
activities . . . . . . . . . . . 1,016,434 4,313,059 2,394,117

Cash flows from investing activities
Investment in subsidiary . . . . . . . -- (4,000,000) --
Property and equipment expenditures . . -- (9,316) (2,413)
Net decrease in loans . . . . . . . . . -- -- 75,000
----------- ---------- ----------
Net cash provided by (used in) investing
activities . . . . . . . . . . . . . -- (4,009,316) 72,587

Cash flows from financing activities
Increase in collateralized bank loans . . -- 4,000,000 --
Payments on bank borrowings . . . . . . . -- -- (2,000,000)
Preferred stock dividends . . . . . . . . -- (550,150) (438,439)
Common stock dividends . . . . . . . . . (1,049,153) (1,030,154) (515,077)
Issuance of subordinated debentures . . . -- 3,000,000 --
Redemption of preferred stock . . . . . . -- (5,480,482) --
Purchase of treasury stock and fractional
shares of new common stock . . . . . . -- (220,000) (43,876)
Issuance of fractional shares to acquire
new common and treasury stock . . . . . -- -- 234,005
----------- ---------- ----------
Net cash used in financing activities (1,049,153) (280,786) (2,763,387)
----------- ---------- ----------
Increase (decrease) in cash and cash
equivalents . . . . . . . . . . . . . . (32,719) 22,957 (296,683)

Cash and cash equivalents at beginning of year 255,389 232,432 529,115
----------- ---------- ----------
Cash and cash equivalents at end of year . $ 222,670 $ 255,389 $ 232,432
=========== ========== ==========
</TABLE>
F-26
<PAGE>
<PAGE>
APPENDIX A

STOCK PURCHASE AGREEMENT
BY AND AMONG
BANPONCE CORPORATION,
NATIONAL BANCORP, INC.,
AND
THE STOCKHOLDERS OF
NATIONAL BANCORP, INC.

December 6, 1996
<PAGE>
<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I
UNDERTAKINGS OF THE PARTIES. . . . . . . . . . . . . . . . . . . . . 2

1.1 The Acquisition. . . . . . . . . . . . . . . . . . . . . . 2
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Default by Any Seller at the Closing . . . . . . . . . . . 3
1.4 Preparation of Registration Statement. . . . . . . . . . . 3
1.5 Issuance of BanPonce Common Stock. . . . . . . . . . . . . 4
1.6 Preparation of Bank Regulatory Applications. . . . . . . . 4
1.7 Confidential Information . . . . . . . . . . . . . . . . . 5
1.8 No Covenant as to Tax Consequences; IRS Ruling . . . . . . 5
1.9 Release of Information . . . . . . . . . . . . . . . . . . 6
1.10 Board of Directors . . . . . . . . . . . . . . . . . . . . 6
1.11 Seller Releases. . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF NBI AND SELLERS. . . . . . . . . . 7

2.1 Organization of NBI and NBI Subsidiaries . . . . . . . . . 7
2.2 Ownership of Shares/Purchase for Investment. . . . . . . . 8
2.3 Capitalization of NBI. . . . . . . . . . . . . . . . . . . 8
2.4 Organization of AmMid. . . . . . . . . . . . . . . . . . . 9
2.5 Capitalization of AmMid. . . . . . . . . . . . . . . . . .10
2.6 Authorization. . . . . . . . . . . . . . . . . . . . . . .10
2.7 No Violation . . . . . . . . . . . . . . . . . . . . . . .10
2.8 Financial Information and Statements . . . . . . . . . . .11
2.9 Absence of Certain Changes . . . . . . . . . . . . . . . .12
2.10 Employee Benefits. . . . . . . . . . . . . . . . . . . . .12
2.11 Labor Contracts. . . . . . . . . . . . . . . . . . . . . .15
2.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . .15
2.13 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . .16
2.14 Registration Statement . . . . . . . . . . . . . . . . . .17
2.15 Title and Condition. . . . . . . . . . . . . . . . . . . .18
2.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . . .19
2.17 Compliance with Laws and Orders. . . . . . . . . . . . . .19
2.18 Governmental Regulation. . . . . . . . . . . . . . . . . .19
2.19 Material Contracts . . . . . . . . . . . . . . . . . . . .20
2.20 Stockholders . . . . . . . . . . . . . . . . . . . . . . .20
2.21 Matters Relating to Directors, Officers and Stockholders .20

2.22 Absence of Adverse Agreements. . . . . . . . . . . . . . .21
2.23 Accuracy of Information. . . . . . . . . . . . . . . . . .21
2.24 Loans/Allowance for Loan Losses. . . . . . . . . . . . . .21
2.25 No Undisclosed Liabilities . . . . . . . . . . . . . . . .22
2.26 Tax-Free Status Matters. . . . . . . . . . . . . . . . . .22
2.27 Reports. . . . . . . . . . . . . . . . . . . . . . . . . .22
2.28 Matters Concerning Regulatory Approvals. . . . . . . . . .22
2.29 Investment Banker/Finder Fee . . . . . . . . . . . . . . .22
2.30 Intellectual Property. . . . . . . . . . . . . . . . . . .22
2.31 Trust and Fiduciary Accounts . . . . . . . . . . . . . . .23

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BANPONCE . . . . . . . . . . . . .23

3.1 Corporate Organization . . . . . . . . . . . . . . . . . .23
3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . 23
3.3 Authorization. . . . . . . . . . . . . . . . . . . . . . .24
3.4 No Violation . . . . . . . . . . . . . . . . . . . . . . .24
3.5 Financial Statements . . . . . . . . . . . . . . . . . . .24
3.6 Registration Statement . . . . . . . . . . . . . . . . . .25
3.7 Shares to Be Issued. . . . . . . . . . . . . . . . . . . .25
3.8 Accuracy of Information. . . . . . . . . . . . . . . . . .25
3.9 Matters Concerning Regulatory Approvals. . . . . . . . . .25
3.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . 25
3.11 Reports. . . . . . . . . . . . . . . . . . . . . . . . . .25

ARTICLE IV
CONDUCT OF BUSINESS BY BANPONCE. . . . . . . . . . . . . . . . . . .26

4.1 Subsequent SEC Filings . . . . . . . . . . . . . . . . . .26
4.2 Conduct of Business; Certain Covenants . . . . . . . . . .26
4.3 Treatment of Employee Benefit Plans. . . . . . . . . . . .26
4.4 Access to Information. . . . . . . . . . . . . . . . . . .27
4.5 Indemnification. . . . . . . . . . . . . . . . . . . . . .27
4.6 No Adverse Action. . . . . . . . . . . . . . . . . . . . .27

ARTICLE V
CONDUCT OF BUSINESS BY NBI . . . . . . . . . . . . . . . . . . . . .28

5.1 Dividends and Capital. . . . . . . . . . . . . . . . . . .28
5.2 Capitalization . . . . . . . . . . . . . . . . . . . . . .28
5.3 Ordinary Course of Business. . . . . . . . . . . . . . . .28
5.4 Contact with Third Parties; No Board Recommendation. . . .29
5.5 Corporate Structure. . . . . . . . . . . . . . . . . . . .30

5.6 Accounting and Tax Reporting . . . . . . . . . . . . . . .30
5.7 Full Access to Books and Records . . . . . . . . . . . . .30
5.8 Reports to BanPonce. . . . . . . . . . . . . . . . . . . .31
5.9 Supplements to NBI Disclosure Schedule . . . . . . . . . .31
5.10 Allowance for Loan Losses. . . . . . . . . . . . . . . . .31

ARTICLE VI
CONDITIONS TO OBLIGATIONS OF BANPONCE. . . . . . . . . . . . . . . .31

6.1 No Material Adverse Change . . . . . . . . . . . . . . . .31
6.2 Representations and Warranties . . . . . . . . . . . . . .32
6.3 Performance and Compliance . . . . . . . . . . . . . . . .32
6.4 No Proceeding or Litigation. . . . . . . . . . . . . . . .32
6.5 Review or Audit by BanPonce and Accountants. . . . . . . .32
6.6 Audit of Benefit Plans . . . . . . . . . . . . . . . . . .32
6.7 Opinion of Counsel for NBI and Sellers . . . . . . . . . .32
6.8 Certificate of Chief Executive Officer . . . . . . . . . .32
6.9 Corporate Certificates . . . . . . . . . . . . . . . . . .32
6.10 Bills for Certain Fees of NBI or AmMid . . . . . . . . . .33
6.11 Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . .33
6.12 Termination of Pension Plan. . . . . . . . . . . . . . . .33
6.13 Sale or Spin Off of Certain NBI Subsidiaries . . . . . . .33
6.14 NBI Common Stock Shares. . . . . . . . . . . . . . . . . .33
6.15 Deposits at Closing. . . . . . . . . . . . . . . . . . . .33
6.16 Non-Competition Agreements . . . . . . . . . . . . . . . .33
6.17 Conversion of Debentures . . . . . . . . . . . . . . . . .33
6.18 Sale of Data Systems/Termination of
Data Systems Agreement . . . . . . . . . . . . . . . . .34
6.19 Termination of Employment and Severance Agreements . . . .34
6.20 Tax Sharing Agreements . . . . . . . . . . . . . . . . . .34

ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF NBI AND SELLERS . . . . . . . . . .34

7.1 No Material Adverse Change . . . . . . . . . . . . . . . .34
7.2 Representations and Warranties . . . . . . . . . . . . . .34
7.3 Performance and Compliance . . . . . . . . . . . . . . . .34
7.4 No Proceeding or Litigation. . . . . . . . . . . . . . . .34
7.5 Opinion of Counsel for BanPonce. . . . . . . . . . . . . .35
7.6 Certificate of Executive Officer . . . . . . . . . . . . .35
7.7 Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . .35
7.8 No Denial of Approval. . . . . . . . . . . . . . . . . . .35

iii

ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES . . . . . . . . . . . .35

8.1 Governmental Approvals . . . . . . . . . . . . . . . . . .35
8.2 Securities Law Compliance. . . . . . . . . . . . . . . . .35
8.3 Internal Revenue Service Ruling. . . . . . . . . . . . . .36

ARTICLE IX
INDUCEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

9.1 Inducement . . . . . . . . . . . . . . . . . . . . . . . .36

ARTICLE X
TERMINATION/INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . .37

10.1 Reasons for Termination. . . . . . . . . . . . . . . . . .37
10.2 Liability. . . . . . . . . . . . . . . . . . . . . . . . .38
10.3 Survival of Representations and Warranties . . . . . . . .38
10.4 Indemnification. . . . . . . . . . . . . . . . . . . . . .39
10.5 Claims for Losses. . . . . . . . . . . . . . . . . . . . .39
10.6 Third-Party Claims . . . . . . . . . . . . . . . . . . . .39
10.7 Direct Claims. . . . . . . . . . . . . . . . . . . . . . .40

ARTICLE XI
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . .40

11.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . .40
11.2 Waivers; Amendments. . . . . . . . . . . . . . . . . . . .40
11.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . .41
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . .41
11.5 Captions and Counterparts. . . . . . . . . . . . . . . . .41
11.6 Governing Law. . . . . . . . . . . . . . . . . . . . . . .41
11.7 Nonsurvival. . . . . . . . . . . . . . . . . . . . . . . .41
11.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . .42

iv
<PAGE>
<PAGE>

Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
ADA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.15(a)
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . .9.1(c)
Affiliates List. . . . . . . . . . . . . . . . . . . . . . . . . .2.20
Affiliates' Undertakings . . . . . . . . . . . . . . . . . . . . .2.20
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Applicable Regulatory Authorities. . . . . . . . . . . . . . . . . 1.6
Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6
AmMid. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
AmMid Corporate Documents. . . . . . . . . . . . . . . . . . . . . 2.4
AmMid Stock. . . . . . . . . . . . . . . . . . . . . . . . . . .2.5(a)
AmMid Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
Arbiter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1
BanPonce . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
BanPonce Average Stock Price . . . . . . . . . . . . . . . . . .1.1(a)
BanPonce Benefit Plans . . . . . . . . . . . . . . . . . . . . .4.3(b)
BanPonce Common Stock. . . . . . . . . . . . . . . . . . . . .Preamble
BanPonce Reports . . . . . . . . . . . . . . . . . . . . . . . . .3.11
BanPonce Share . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . 2.10(a)
BHCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6
Borrowing Agreement. . . . . . . . . . . . . . . . . . . . . . . .2.24
Change of Control Benefit. . . . . . . . . . . . . . . . . . . 2.10(a)
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Closing Price. . . . . . . . . . . . . . . . . . . . . . . . . .1.1(a)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Competing Transaction. . . . . . . . . . . . . . . . . . . . . . . 5.4
Consideration. . . . . . . . . . . . . . . . . . . . . . . . . .1.1(a)
Contract List. . . . . . . . . . . . . . . . . . . . . . . . . . .2.19
Credit Card. . . . . . . . . . . . . . . . . . . . . . . . . . .2.3(b)
Crowe, Chizek. . . . . . . . . . . . . . . . . . . . . . . . . .2.8(a)
Data Systems . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
DeKalb . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
Employee Benefit Plan List . . . . . . . . . . . . . . . . . . 2.10(a)
Employment Agreements. . . . . . . . . . . . . . . . . . . . . . .6.19
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 2.15(b)
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10(a)
ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . 2.10(a)
Expiration Date. . . . . . . . . . . . . . . . . . . . . . . . . .10.3
FDIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.18
Federal Reserve. . . . . . . . . . . . . . . . . . . . . . . . . . 1.6

v
<PAGE>
<PAGE>

Fiduciary List . . . . . . . . . . . . . . . . . . . . . . . . . .2.31
First Lake . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
Illinois Commissioner. . . . . . . . . . . . . . . . . . . . . . . 1.6
Illinois BHCA. . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6
Indemnitee . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.5
Indemnitor . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.5
Interim Financial Statements . . . . . . . . . . . . . . . . . .2.8(c)
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.8(a)
IRS Request. . . . . . . . . . . . . . . . . . . . . . . . . . .1.8(b)
IRS Ruling . . . . . . . . . . . . . . . . . . . . . . . . . . .1.8(b)
Labor Contract List. . . . . . . . . . . . . . . . . . . . . . . .2.11
Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.5
Material Contract. . . . . . . . . . . . . . . . . . . . . . . . .2.19
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . .2.19
NBI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
NBI Common Stock . . . . . . . . . . . . . . . . . . . . . . .Preamble
NBI Corporate Documents. . . . . . . . . . . . . . . . . . . . .2.1(a)
NBI Employees. . . . . . . . . . . . . . . . . . . . . . . . . .4.3(b)
NBI Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . .2.27
NBI Share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
NBI Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
NBI Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
Northwest. . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
OCC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.18
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10(e)
Person/person. . . . . . . . . . . . . . . . . . . . . . . . . .9.1(c)
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Real Properties. . . . . . . . . . . . . . . . . . . . . . . . 2.15(a)
Redemption Amount. . . . . . . . . . . . . . . . . . . . . . . . .6.18
Registration Effective Date. . . . . . . . . . . . . . . . . . . . 1.4
Registration Statement . . . . . . . . . . . . . . . . . . . . . . 1.4
Released Claims. . . . . . . . . . . . . . . . . . . . . . . . . .1.11
Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.11
Responsible Sellers. . . . . . . . . . . . . . . . . . . . . . 10.4(a)
Roth . . . . . . . . . . . . . . . . . . . . . . . . . . . .Article II
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4
Sellers. . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Suburban . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
Svendsen . . . . . . . . . . . . . . . . . . . . . . . . . .Article II
Tax Sharing Agreement. . . . . . . . . . . . . . . . . . . . . 2.13(a)
Trigger Event. . . . . . . . . . . . . . . . . . . . . . . . . .9.1(b)
Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.5(c)

vi
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<PAGE>

INDEX TO EXHIBITS

Exhibit A - Holders of NBI Common Stock or Debentures

Exhibit 2.3(b) - License Agreement

Exhibit 2.8 - Financial Information and Statements

Exhibit 2.20 - Affiliates' Undertakings

Exhibit 6.7 - Opinion of Burke, Warren & MacKay, P.C.

Exhibit 6.11 - Form of Tax Opinion

Exhibit 6.16 - Non-Competition Agreements

Exhibit 7.5 - Opinion of Counsel for BanPonce

Exhibit 7.7 - Form of Tax Opinion

Exhibit 8.3 - Form of IRS Ruling Request

vii
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<PAGE>

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement dated December 6, 1996 ("Agreement") is
entered into by and among BanPonce Corporation, a Puerto Rico corporation
("BanPonce"), National Bancorp, Inc., a Delaware corporation ("NBI"), and
each of the stockholders and/or debenture holders of NBI identified on
Exhibit A hereto who own either NBI Common Stock (defined below) or NBI
Convertible Debentures (collectively, the "Sellers").

W I T N E S S E T H:

WHEREAS, this Agreement provides for the acquisition of NBI and its
wholly owned subsidiary, American Midwest Bank & Trust, an Illinois state
bank ("AmMid");

WHEREAS, the acquisition shall exclude certain NBI Subsidiaries (as
defined below) which shall be split off, spun off or sold in accordance
with NBI's Plan of Reorganization dated September 16, 1996, as amended by
Amendment No. 1 dated December 5, 1996, to the extent such actions are
expressly permitted by the IRS Ruling (as defined below) (the Amended Plan
of Reorganization in effect as of the date hereof, as covered by the IRS
Ruling, is hereinafter referred to as the "Plan") immediately prior to the
closing of BanPonce's acquisition of NBI as contemplated herein;

WHEREAS, the acquisition shall be effected through the exchange on
the Closing Date (defined below) of all the then outstanding shares of
common stock of NBI, par value $10,000 per share ("NBI Common Stock"), for
One Million One Hundred Thousand (1,100,000) shares of common stock, par
value $6.00 per share, of BanPonce ("BanPonce Common Stock"), subject to
adjustment pursuant to Section 1.1(a) below, in accordance with the terms
and conditions hereof (the "Acquisition"); and

WHEREAS, the parties hereto desire and intend that the Acquisition
qualify as a tax-free reorganization under Section 368(a)(1)(B)of the
Internal Revenue Code of 1986, as amended (the "Code").

NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties and agreements herein contained, and
in order to set forth the conditions upon which the foregoing transactions
will be carried out, the parties agree as follows:

ARTICLE I

UNDERTAKINGS OF THE PARTIES

1.1 The Acquisition. (a) Subject to the terms and conditions of
this Agreement, on the Closing Date, Sellers will exchange, transfer,
assign and cause to be delivered all of their shares of NBI Common Stock
("NBI Shares") to BanPonce free and clear of all liens, claims,
encumbrances or other charges. Subject to the terms and conditions of this
Agreement, in consideration of the NBI Shares, and in reliance on the
representations, warranties, covenants and agreements of NBI and Sellers
contained herein, BanPonce will deliver to Sellers One Million One Hundred
Thousand (1,100,000) shares (each, a "BanPonce Share") of BanPonce Common
Stock (the "Consideration"), subject to adjustment as follows:

(i) if the BanPonce Average Stock Price (as defined below) is
greater than $28.50, then the Consideration shall be equal to
1,100,000 BanPonce Shares multiplied by a fraction, the numerator of
which is $28.50 and the denominator of which is the BanPonce Average
Stock Price; provided, however, that in the event the BanPonce
Average Stock Price is greater than $34.00, then during the five (5)
business day period commencing on the day after computation, NBI, for
itself and Sellers, shall have the option to terminate this Agreement
by delivering written notice of such termination within such five (5)
business day period; provided, further, that NBI may not terminate
this Agreement pursuant to this Section 1.1 if BanPonce agrees in
writing within five (5) business days after receipt of such notice of
termination to modify the Consideration to be 922,059 BanPonce Shares
[1,100,000 x (28.50/34)]; or

(ii) if the BanPonce Average Stock Price is less than $26.50,
then the Consideration shall be equal to 1,100,000 BanPonce Shares
multiplied by a fraction, the numerator of which is $26.50 and the
denominator of which is the BanPonce Average Stock Price; provided,
however, that in the event the BanPonce Average Stock Price is less
than $23.00, then during the five (5) business day period commencing
on the day after computation, BanPonce shall have the option to
terminate this Agreement by delivering written notice of such
termination within such five (5) business day period; provided,
further, that BanPonce may not terminate this Agreement pursuant to
this Section 1.1 if NBI agrees in writing within five (5) business
days after receipt of such notice of termination to modify the
Consideration to be 1,267,391 BanPonce Shares [1,100,000 x
(26.50/23)].

As used herein, "BanPonce Average Stock Price" means the
average (rounded to the nearest whole cent) of the mean of the closing bid
and asked prices per share (the "Closing Price") of BanPonce Common Stock
reported under the symbol "BPOP" on The Nasdaq Stock Market, the automated
quotation system of the NASD ("Nasdaq"), for each of the ten (10)
consecutive business days beginning on the first business day following the
receipt of approval of the Acquisition from the Federal Reserve, after
eliminating one (1) day of the highest and one (1) day of the lowest
Closing Price during such period.

(b) On or prior to the Closing Date, NBI's Series 4 Debentures (the
"Debentures") shall have been converted by the holders thereof into NBI
Common Stock. At the time of execution hereof, there are outstanding
92.17949 shares of NBI Common Stock. Upon conversion of all Debentures,
there will be outstanding 105.81585 shares of NBI Common Stock. In the
event additional NBI Shares are issued by NBI subsequent to the date hereof
in accordance with Section 5.2 hereof, such NBI Shares shall only be issued
to Sellers and such NBI Shares shall be subject to the terms of this
Agreement. In any event, the number of outstanding NBI Shares on the
Closing Date shall be certified to BanPonce by NBI's President. BanPonce
Common Stock shall be distributed to the Sellers in accordance with the
percentage ownership of NBI Shares issued and outstanding on the Closing
Date. Accordingly, assuming that all 105.81585 NBI Shares are outstanding
at Closing, and further assuming that the Consideration is 1,100,000
BanPonce Shares, each such NBI Share shall be exchanged for 10,395.418
BanPonce Shares, with fractional shares of BanPonce Common Stock to be paid
in cash at the market price for such shares at the close of business on the
trading day preceding the Closing Date.

1.2 Closing. Subject to the terms and conditions herein set forth,
the closing of the transactions contemplated by this Agreement (the
"Closing") will be effected on the tenth business day of the first calendar
month following the satisfaction or waiver of the last of the conditions
set forth in Articles VI, VII and VIII, respectively, hereof and the
expiration of any waiting periods in connection with necessary regulatory
approvals, or on such other date as may be mutually agreed upon by the
parties, but in no event shall the Closing take place more than thirty (30)
business days after receipt of all required regulatory approvals and the
expiration of any waiting periods in connection with such regulatory
approvals ("Closing Date"). Each of the parties hereto agrees to pursue
with reasonable diligence the satisfaction of such conditions. The Closing
will take place on the Closing Date at the offices of Vedder, Price,
Kaufman & Kammholz, 222 North LaSalle Street, Chicago, Illinois 60601-1003,
or at such other place as shall be mutually agreeable to BanPonce, NBI and
Sellers.

1.3 Default by Any Seller at the Closing. If any of the Sellers
shall fail or refuse to deliver any of the Shares as provided in Section
1.1 hereof, or if any of the Sellers shall fail or refuse to consummate the
transactions described in this Agreement prior to or on the Closing Date,
such failure or refusal shall not relieve the other Sellers of any
obligations under this Agreement, and BanPonce, at its option and without
prejudice to its rights against any such defaulting Seller, may (1) acquire
the remaining NBI Shares which it is entitled to acquire hereunder on the
exchange terms provided in Section 1.1 hereof, (2) delay the Closing while
taking appropriate judicial action, or (3) refuse to make such acquisition
and thereby terminate all of its obligations hereunder without liability
therefor. The Sellers acknowledge that the NBI Shares are unique and
otherwise not available and agree that, in addition to any other remedies,
BanPonce may invoke any equitable remedies to enforce delivery of the NBI
Shares hereunder including, without limitation, any action or suit for
specific performance.

1.4 Preparation of Registration Statement. BanPonce will use its
best efforts to file, within forty-five (45) days after the date hereof,
and to subsequently prosecute the filing of, a registration statement on
Form S-4 and amendments thereto (such registration statement and amendments
thereto are hereinafter collectively referred to as the "Registration
Statement") with the Securities and Exchange Commission (the "SEC")
covering the BanPonce Common

3
<PAGE>
<PAGE>

Stock to be issued in the Acquisition. BanPonce shall promptly request in
writing the information required from NBI and Sellers, and Sellers and NBI
shall timely furnish to BanPonce all information concerning NBI or Sellers
required to be set forth in the Registration Statement. BanPonce shall
promptly advise NBI and its counsel, and provide them with copies, of all
filings with the SEC regarding the Registration Statement and any material
communication received by BanPonce or its counsel from the SEC with respect
to the Registration Statement. BanPonce will bear the cost of preparation,
filing and duplication of the Registration Statement. The date on which
the Registration Statement becomes effective is referred to herein as the
"Registration Effective Date." BanPonce, NBI and Sellers will each render
to the others their full cooperation in preparing, filing, prosecuting the
filing of, and amending the Registration Statement such that it comports at
all times with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"). Specifically, but without limitation, each will
promptly advise the others if at any time before the Closing Date any
information provided by it for inclusion in the Registration Statement
appears to have been, or shall have become, incorrect or incomplete and
will furnish the information necessary to correct such misstatements or
omissions. Except with the prior written consent of BanPonce, NBI will not
mail or otherwise furnish or publish to its stockholders any material
relating to the Acquisition that might constitute a "prospectus" within the
meaning of the Securities Act. BanPonce shall, as soon as practicable
after the date hereof, make all filings required to obtain any Blue Sky
permits, authorizations, consents or approvals required for the issuance of
the BanPonce Common Stock to be issued in the Acquisition.

1.5 Issuance of BanPonce Common Stock. Upon the Closing, BanPonce
shall issue or make available shares of BanPonce Common Stock as necessary
to complete the transactions contemplated in this Agreement. If, during
the period beginning on the date hereof and ending on the Closing Date, the
outstanding shares of BanPonce Common Stock shall have been changed into a
different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of
shares, readjustment, stock dividend or similar transaction, or a
distribution shall be made on the BanPonce Common Stock in any security
convertible into BanPonce Common Stock, or a declaration of, or a record
date for, such a change or distribution shall occur within that period,
then appropriate adjustment or adjustments will be made to the number of
shares of BanPonce Common Stock to be issued in connection with the
transactions contemplated herein.

1.6 Preparation of Bank Regulatory Applications. The parties
hereto will cooperate in the preparation by BanPonce of, and BanPonce will
use its reasonable best efforts to submit for filing within 45 days after
the date hereof, applications (the "Applications") to (i) the Board of
Governors of the Federal Reserve System (the "Federal Reserve") pursuant to
the Bank Holding Company Act of 1956, as amended (the "BHCA"), for approval
of BanPonce's acquisition of control of NBI and its subsidiary, AmMid,
(ii) the Illinois Commissioner of Banks and Real Estate (the "Illinois
Commissioner") pursuant to the Illinois Bank Holding Company Act of 1957,
as amended (the "Illinois BHCA"), for approval of the transactions

contemplated by this Agreement, and (iii) any other federal or state bank
regulatory agency the approval of which may be necessary or appropriate
(the "Applicable Regulatory Authorities"). BanPonce will provide NBI and
its counsel with an opportunity to review the portions of the drafts of all
such Applications that contain information about NBI. BanPonce will also
provide NBI and its counsel with: (i) copies of all the non-confidential
portions of such Applications as filed, together with the non-confidential
portions of related correspondence to or from the regulatory authorities,
(ii) a copy of BanPonce's request for confidential treatment of the
confidential portions of such Applications, and (iii) a copy of the index
of the confidential portions of such Applications. NBI will furnish such
information, appropriate representations and documents as may be necessary
in connection therewith and as the parties may mutually agree. NBI, its
directors, officers, agents and representatives shall use their reasonable
best efforts in providing the information and performing the reviews
described in this Section 1.6.

1.7 Confidential Information. All information that has been or
will be furnished by any party to another party in connection with this
Agreement that is regarded by such furnishing party as confidential (and is
so designated at the time of delivery or the date of this Agreement,
whichever is later) will be kept confidential by such other party and will
be used only in connection with this Agreement and the transactions
contemplated hereby, except to the extent that: (i) such information is or
hereafter becomes lawfully obtainable from other public sources; (ii) such
information is already known on a non-confidential basis to such other
party when received; or (iii) disclosure is required by a law, regulation
or order of a court or regulatory agency of competent jurisdiction or
authority. In the event this Agreement is terminated as provided in
Article X hereof, all documents or materials provided by either party shall
be either destroyed or returned promptly to the supplying party, and the
receiving party shall not retain any copies thereof and shall destroy any
notes which have been prepared from such documents or materials. The
parties agree that the terms and conditions of this Section 1.7 shall
supersede any previously executed and delivered confidentiality agreements
between the parties. The term "party" in this Section 1.7 shall include
all officers, directors, employees, agents, advisors or representatives of
such party.

1.8 No Covenant as to Tax Consequences; IRS Ruling. (a) It is
understood and agreed that BanPonce, NBI, Sellers and all of their
respective officers, agents and representatives have not made any
representation, warranty or agreement, expressed or implied, as to the tax
consequences of the transactions contemplated by this Agreement or the tax
consequences of any action pursuant to or growing out of this Agreement;
provided, however, that none of BanPonce, NBI or any Seller shall take any
action to prevent, or omit to take any action necessary for, the
qualification of the Acquisition as a tax-free reorganization under
Section 368(a)(1)(B) of the Code; provided, further, that prior to Closing,
but after receipt of the IRS Ruling (defined below), NBI and Sellers shall
be entitled to take such actions as are specifically contemplated by the
Plan, to the extent such actions are consistent with the IRS Request
(defined below) and the IRS Ruling. Prior to receipt of the IRS Ruling,
NBI and each Seller agree not to knowingly take any action in material
violation of, or materially inconsistent with, the IRS Request. Following
the Closing, BanPonce shall make such filings with the Internal Revenue
Service ("IRS") as are required by the regulations promulgated under
Section 368(a)(1)(B) of the Code.

(b) NBI shall promptly prepare, utilizing its independent
accountants and attorneys, a request of the IRS (the "IRS Request") for a
favorable ruling reasonably acceptable to BanPonce's counsel (the "IRS
Ruling") with respect to the distribution of DeKalb Bancshares, Inc. stock
to certain Sellers under the Plan and pursuant to Section 355 of the Code
to the effect that such distribution is non-taxable both to the receiving
Sellers and to NBI. In conjunction therewith, NBI shall confer with
BanPonce, its attorneys and accountants in the drafting and finalization of
the IRS Request, and shall provide BanPonce with an opportunity to review
the drafts of the IRS Request.

1.9 Release of Information. None of BanPonce, NBI or any Seller
shall, nor shall any of them permit their respective directors, officers,
employees, representatives or agents to, issue or cause the publication of
any announcement with respect to this Agreement or the Acquisition without
the prior consent of BanPonce and NBI, which consent shall not be
unreasonably withheld; provided, however, that such consent shall not be
required where such release, announcement or disclosure is required by
applicable law or the rules or regulations of a securities exchange, the
Applicable Regulatory Authorities, or any other regulatory authority or
governmental agency, in which case the disclosing party shall seek
confidential treatment for such information reasonably deemed proprietary
or confidential by NBI. NBI and BanPonce will each use their best efforts
to cooperate in coordinating the public release of information concerning
the transactions contemplated by this Agreement. Any press releases or
other like distributions of information shall be agreed to by BanPonce and
NBI.

1.10 Board of Directors. Except as disclosed in writing to NBI
prior to the Closing Date, the directors of AmMid immediately prior to the
Closing Date shall be directors of AmMid immediately following the Closing
Date.

1.11 Seller Releases. Except as provided in Schedule 1.11 to the
NBI Disclosure Schedule, effective on the Closing, each Seller hereby
releases, remises and forever discharges NBI and AmMid, and their officers,
agents, attorneys, representatives, directors, employees and insurers, and
their respective successors and assigns, and each of them (hereinafter
individually and collectively referred to as the "Releases") of and from
any and all liabilities, claims, demands, debts, accounts, covenants,
agreements, obligations, costs, expenses, actions or causes of action of
every nature, character or description, now accrued or which may hereafter
accrue, without limitation of law, equity or otherwise, based in whole or
in part on any facts, conduct, activities, transactions, events or
occurrences known or unknown, which have or allegedly have existed,
occurred, happened, arisen or transpired from the beginning of time to the
date of this Release (the "Released Claims"). Each Seller represents and
warrants that no claim released herein has been assigned, expressly,
impliedly or by operation of law, and that all claims of Seller released
herein are owned by Seller, who has the sole authority to release them.
Each Seller agrees that he shall forever refrain and forebear from
commencing, instituting or prosecuting any lawsuit, action or proceeding,
judicial, administrative or otherwise, or otherwise attempting to collect
or enforce any Released Claims which are released and discharged herein.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF NBI AND SELLERS

NBI, as to Article II hereof in its entirety; NBI and each Seller,
jointly and severally, as to Sections 2.2, 2.6(b), 2.7, 2.20, 2.21 and 2.29
inclusive hereof, as such Sections pertain to his/her ownership of Shares
on the Closing Date; and NBI, Robert W. Svendsen, Sr. ("Svendsen") and
Thomas H. Roth ("Roth"), jointly and severally as to Sections 2.1, 2.3,
2.4, 2.5, 2.6(a), 2.7 to 2.14 inclusive, 2.16 to 2.19 inclusive, and 2.22
to 2.31 inclusive hereof, represent and warrant to BanPonce as follows:

2.1 Organization of NBI and NBI Subsidiaries. (a) NBI is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware with all necessary power and authority to
engage in the activities and business now conducted by it. NBI possesses
and is in full compliance with all licenses, franchises, permits and other
governmental authorizations that are legally required, except where the
failure to be in full compliance would not have a material adverse effect
on the financial condition, assets or business operations of NBI or AmMid.
NBI is registered and in good standing with the Federal Reserve as a bank
holding company under the BHCA. NBI has delivered to BanPonce true,
accurate and complete copies of the currently effective Certificate of
Incorporation and Bylaws of NBI, including any amendments thereto ("NBI
Corporate Documents"). NBI is currently being operated in accordance with
the NBI Corporate Documents. The minute books of NBI and AmMid contain
complete and accurate records of all meetings and other corporate actions
of their respective stockholders and Boards of Directors. NBI has no
subsidiaries and does not control (whether directly or indirectly, whether
through the beneficial or record ownership of securities or otherwise, and
whether alone or in combination with others) any corporation, partnership,
business organization or other persons other than American National Bank of
DeKalb County ("DeKalb"), Northwest Community Bank ("Northwest"), First
Lake Corp. ("First Lake"), AmMid, Suburban Lands Corporation ("Suburban")
and National Bancorp Data Systems L.L.C. ("Data Systems") (Suburban and
Data Systems are collectively referred to herein as "AmMid Subsidiaries";
DeKalb, Northwest, First Lake, AmMid, Suburban and Data Systems are
collectively referred to herein individually as an "NBI Subsidiary," and
collectively as "NBI Subsidiaries"). NBI has no equity investment in any
other entity. Schedule 2.1 to the NBI Disclosure Schedule shows for each
of the NBI Subsidiaries: its date and jurisdiction of incorporation or
organization; each other jurisdiction in which it is qualified or licensed
to do business; its authorized, issued and outstanding capital stock, other
equity securities and other ownership interests; and the record owners
thereof and the number of shares or other ownership interests owned by each
such owner.

(b) Each AmMid Subsidiary is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation
(in the case of Suburban) or organization (in the case of Data Systems) and
has all necessary corporate power to own its properties and assets and to
carry on its business as now conducted. Each AmMid Subsidiary is duly
qualified to conduct its business and is in good standing in each
jurisdiction in which the nature of the business transacted by it requires

such qualification. Other than as set forth in Schedule 2.1 to the NBI
Disclosure Schedule, all of the issued and outstanding shares of capital
stock, other equity securities and other ownership interests of AmMid
Subsidiaries are duly and validly authorized and issued, are fully paid and
nonassessable and are owned by AmMid, free and clear of all liens, security
interests, charges, claims and encumbrances. Other than as set forth in
Schedule 2.1 to the NBI Disclosure Schedule, there are no shares of any
class of capital stock, other equity securities or other ownership
interests of any AmMid Subsidiary outstanding and there are no outstanding
or existing subscriptions, options, warrants, convertible securities,
preemptive rights or other agreements, commitments or obligations relating
to the issuance of additional shares of any class of capital stock, other
equity securities or other ownership interests of any AmMid Subsidiary.

2.2 Ownership of Shares/Purchase for Investment. (a) Each Seller
is the owner of all right, title and interest (legal and beneficial) in and
to that number of shares of NBI Common Stock, and NBI's Series 4
Convertible Debentures, listed opposite the name of such Seller in
Schedule 2.2 to the NBI Disclosure Schedule, free and clear of any and all
liens of any nature whatsoever except as set forth on Schedule 2.2 to the
NBI Disclosure Schedule. The delivery to BanPonce of the Shares pursuant
to the provisions of this Agreement will transfer to BanPonce valid title
thereto, free and clear of any and all liens. Except as specifically
contemplated by this Agreement, no person or entity has any contract or
right (whether preemptive or contractual) for the purchase of any of the
Shares from any Seller. Each Seller is a resident of the State of
Illinois.

(b) The shares of BanPonce Common Stock to be received by Sellers
in the exchange contemplated by this Agreement will be acquired for
investment only and not with a view to any public distribution thereof, and
each Seller will refrain from offering to sell or otherwise disposing of
any of the shares of BanPonce Common Stock in violation of any of the
registration requirements of the Securities Act. The shares of common
stock of DeKalb Bancshares, Inc. to be received by any Seller as
contemplated by the Plan will be acquired for investment only and not with
a view to any public distribution thereof.

2.3 Capitalization of NBI. (a) The authorized capital stock of NBI
consists of 100,500 shares of stock as follows: 150 shares of common
stock, par value $10,000 per share, of which 92.17949 shares are issued and
outstanding (to be increased to 105.81585 shares upon the conversion at
Closing of NBI's Debentures) and 1.025 shares are held as treasury stock,
and 100,000 shares of preferred stock, of which 10,500 shares have been
designated as $10.00 par value Class A Preferred Stock, of which none are
issued or outstanding, and 89,500 shares of $1.00 par value Preferred
Stock, of which none are issued or outstanding. All of such issued and
outstanding shares of NBI Common Stock are fully paid and nonassessable and
not issued in violation of any preemptive rights of any stockholder.
Except as specifically contemplated by the Plan, other than with regard to
shares to be issued with regard to NBI's Debentures, NBI does not have any
arrangements or commitments obligating NBI to issue or sell or otherwise
dispose of, or to purchase or redeem shares of, its capital stock.

(b) Names and Logotypes.

(i) Reflected on Schedule 2.3.1 to the NBI Disclosure
Schedule is a copy of AmMid's service marked name "American Midwest
Bank" and its logotype, together with copies of federal service mark
documentation with respect thereto. BanPonce agrees to assign the
use of such logotype (but not the name or service mark with respect
thereto) to DeKalb upon Closing, such logotype to be useable by
DeKalb or American Midwest Credit Card Co. in connection with the
Merchant Processing Business of AmMid to be assigned by AmMid to
DeKalb prior to Closing in accordance with the Plan. The parties
agree that neither DeKalb nor American Midwest Credit Card Co.
("Credit Card") shall utilize the logo generally in connection with
its banking business for a period of three (3) years following the
Closing, but may utilize the logo in connection with its Merchant
Processing Business from and after the date of the transfer of the
Merchant Processing Business from AmMid to DeKalb. Prior to Closing,
without compensation to AmMid other than the payment contemplated by
the Plan, AmMid shall enter into a Licensing Agreement in the form
attached to Exhibit 2.3(b) hereto, and DeKalb shall enter into a
Sublicensing Agreement with Credit Card in the form attached to such
Exhibit 2.3(b) authorizing the use of the "America Midwest" name and
logo by DeKalb and Credit Card in connection with such Merchant
Processing Business as provided therein.

(ii) Prior to the Closing, without compensation to NBI, or
after the Closing, upon payment of compensation to BanPonce in the
amount of $100.00, BanPonce shall relinquish all right, title and
interest in and to the name "National Bancorp, Inc." both in Delaware
and elsewhere and shall allow to be assigned to DeKalb the name
"National Bancorp, Inc." in Delaware and elsewhere.

2.4 Organization of AmMid. AmMid is an Illinois banking
corporation duly organized, validly existing and in good standing under the
laws of the State of Illinois. NBI has delivered to BanPonce, as
Schedule 2.4 to the NBI Disclosure Schedule, true, accurate and complete
copies of the currently effective Charter and Bylaws of AmMid, including
all amendments thereto ("AmMid Corporate Documents"). AmMid (i) is duly
authorized to conduct a general banking business subject to the supervision
of the Illinois Commissioner at its offices identified in Schedule 2.4 to
the NBI Disclosure Schedule, (ii) is an insured depository institution as
defined in the Federal Deposit Insurance Act ("FDIA"), (iii) has full power
and authority to engage in the business and activities now conducted by it,
(iv) possesses and is in compliance in all material respects with all
licenses, franchises, permits and other governmental authorizations that
are legally required, except where the lack of such license, franchise,
permit or other governmental authorization or failure to be in such
compliance would not have a material adverse effect on the financial
condition of AmMid, and (v) is being operated in accordance with the AmMid
Corporate Documents. Other than AmMid Subsidiaries, AmMid has no interest
in any subsidiaries and does not control (whether directly or indirectly,
whether through the beneficial or record ownership of securities or
otherwise, and whether alone or in combination with others) any
corporation, partnership, business organization or other persons.

2.5 Capitalization of AmMid. (a) The authorized capital stock of
AmMid consists of 200,000 shares of common stock, par value $10.00 per
share ("AmMid Stock"), of which 200,000 shares are validly issued and
outstanding, and all of which are owned by NBI free and clear of all liens,
pledges, assignments and security interests, except as provided in
Schedule 2.1 to the NBI Disclosure Schedule. All of the shares of the
capital stock of AmMid are fully paid and nonassessable and not issued in
violation of the preemptive rights of any stockholder.

(b) The authorized capital stock of Suburban consists of 1,000
shares of common stock, par value $1.00 per share, of which 1,000 shares
are validly issued and outstanding, and all of which are owned by AmMid
free and clear of all liens, pledges, assignments and security interests.
All of the shares of the capital stock of Suburban are fully paid and
nonassessable and not issued in violation of the preemptive rights of any
stockholder.

(c) The authorized capital of Data Systems consists of 100 limited
liability company units ("Units") of which 100 Units are validly issued and
outstanding, and 34% of which are owned by AmMid free and clear of all
liens, pledges, assignments and security interests. Schedule 2.5(c) to the
NBI Disclosure Schedule sets forth all unitholders of Data Systems, and the
number of Units held by each such holder. All of the Units of Data Systems
are fully paid and nonassessable and not issued in violation of the
preemptive rights of any holder thereof.

2.6 Authorization. (a) The Board of Directors of NBI has approved
this Agreement and the transactions contemplated hereby and has authorized
the execution, delivery and performance by NBI of this Agreement and the
transactions contemplated hereby. This Agreement is the valid and binding
obligation of NBI, enforceable against NBI in accordance with its terms,
subject to (i) all applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally, and
(ii) the application of equitable principles.

(b) Each Seller has the full power, authority and capacity
necessary to enter into and perform his, her or its respective obligations
under this Agreement, to sell, assign, transfer and convey the Shares so
owned by such Seller pursuant to this Agreement, and to consummate the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by each Seller and constitutes the legal, valid and binding
obligation of each Seller, enforceable against each Seller in accordance
with its terms, subject to (i) all applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally, and (ii) the application of equitable principles.

2.7 No Violation. Provided that the requisite approvals from the
Applicable Regulatory Authorities are obtained and the BanPonce Common
Stock to be issued hereunder is duly registered under the Securities Act
and, to the extent applicable, is duly registered or exempt from
registration under state securities or blue sky laws, neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will conflict with, result in the breach of, constitute
a default under or accelerate the performance of, the terms of any law, or
any rule or regulation of any governmental agency or authority, or any

judgment, order or decree of any court or other governmental agency to
which NBI, any NBI Subsidiary or any Seller may be subject, or any
contract, agreement or instrument to which NBI, any NBI Subsidiary or any
Seller is a party or by which NBI, any NBI Subsidiary or any Seller is
bound or committed, or the Certificate of Incorporation or Bylaws of NBI or
the Charter or Bylaws of any NBI Subsidiary, or constitute an event that,
with the lapse of time or action by a third party or both, would, to the
best of NBI's or any Seller's knowledge, result in a default under any of
the foregoing or result in the creation of any lien, charge or encumbrance
upon any of the assets, properties or stock of NBI or any NBI Subsidiary,
other than in the case of contracts, agreements or instruments, such
conflicts, breaches or defaults of which will be cured or waived prior to
the Closing Date.

2.8 Financial Information and Statements. In addition to the
information set forth in Schedule 2.8 to the NBI Disclosure Schedule, NBI
has furnished to BanPonce copies of the following financial information and
statements:

(a) Audited consolidated balance sheets of NBI as of December 31,
1995, 1994 and 1993, and the related audited consolidated statements of
income, cash flow and stockholders' equity for each of the years then
ended, accompanied by the unqualified audit report thereon of Crowe, Chizek
and Company, LLP (successor to Crowe, Chizek and Co.) (hereinafter "Crowe,
Chizek");

(b) Annual Report on form F.R.Y-6 of NBI as of December 31, 1995,
and the related statements of income for the period then ended, and the
consolidated quarterly report on form F.R.Y-9 of NBI as of September 30,
1996, and the related statements of income for the period then ended, each
as filed with the Federal Reserve as of said date;

(c) Unaudited Statement of Condition of AmMid as of October 31,
1996, together with the related unaudited Report of Income for the period
then ended, as included in the reports of AmMid as of said date as filed
with the Illinois Commissioner (the statements identified in
subsections (b) and (c) hereof being hereinafter referred to as the
"Interim Financial Statements");

(d) State of Illinois Examination Report of AmMid dated as of
January 31, 1995; and

(e) Federal and Illinois State Consolidated Income Tax Returns for
NBI for December 31, 1993, 1994 and 1995.

Each of the financial statements referred to in this Section 2.8 and
in Exhibit 2.8 hereto is true and correct in all material respects, and
together they fairly present, in accordance with applicable laws and
regulations and generally accepted accounting principles (applied on a
consistent basis except as disclosed in the footnotes thereto), the
financial position and results of operation of NBI and AmMid as of the
dates and for the periods therein set forth. Each of the financial

statements referred to in clause (a) of this Section 2.8 has been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis. Each of the financial statements referred to in clause
(b) and clause (c) of this Section 2.8 has been prepared in accordance with
the applicable regulations and standards of the Federal Reserve or the
Illinois Commissioner. Each of the financial statements referred to in
this Section 2.8 does not, as of the date thereof, include any assets or
omit to state any liability, absolute or contingent, or other facts, the
inclusion or omission of which renders such financial statement, in light
of the circumstances under which it was made, misleading in any material
respect. Except as provided in Schedule 2.8(a) to the NBI Disclosure
Schedule, since December 31, 1995, there has been no material adverse
change in the financial condition, results of operation, business or
prospects of NBI or any NBI Subsidiary and no fact or condition exists that
NBI believes will cause such a material adverse change in the future.

2.9 Absence of Certain Changes. Since December 31, 1995, other
than matters disclosed in the NBI Disclosure Schedule and Exhibits thereto,
or other than as contemplated by the Plan, neither NBI nor AmMid has
(i) issued or sold any corporate debt securities (except certificates of
deposit, letters of credit, cashier's checks, and other documents and
instruments issued in the ordinary course of the banking business of
AmMid); (ii) granted any option for the purchase of its capital stock;
(iii) declared or set aside or paid any dividend or other distribution in
respect of its capital stock, except as listed on Schedule 2.9 to the NBI
Disclosure Schedule or as otherwise provided for in this Agreement;
(iv) incurred any material obligation or liability (absolute or contingent)
or mortgaged, pledged or subjected to lien or encumbrance (other than
statutory liens for taxes not yet delinquent) any of its assets or
properties; (v) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent), other than current
liabilities included in NBI's balance sheet as of December 31, 1995, and
current liabilities incurred since the date thereof in the ordinary course
of business; (vi) sold, exchanged or otherwise disposed of any of its
capital assets; (vii) except as provided in Schedules 2.10(a) and 2.11 to
the NBI Disclosure Schedule, made or modified any general wage or salary
increase exceeding 5% annually in the aggregate; (viii) suffered any
damage, destruction or loss, whether or not covered by insurance, in excess
of $10,000, or waived any rights of value in excess of $10,000; (ix) except
as otherwise provided herein or in the Plan, entered, or agreed to enter,
into any agreement or arrangement granting any preferential right to
purchase any of its assets, properties or rights or requiring the consent
of any party to the transfer and assignment of any such assets, properties
or rights; (x) entered into any transaction outside the ordinary course of
its business (consistent with past practices), except in each case as
expressly contemplated by this Agreement; or (xi) except as reflected in
the financial statements of NBI or AmMid, sold or otherwise disposed of any
of its investment securities.

2.10 Employee Benefits. (a) NBI has furnished to BanPonce a list
(the "Employee Benefit Plan List"), attached as Schedule 2.10(a) to the NBI
Disclosure Schedule, which identifies each and every compensation,
consulting, employment, employment termination or collective bargaining
agreement, and each stock option, stock purchase, stock appreciation right,
life, health, accident or other benefit insurance, bonus, deferred or
incentive compensation, severance or separation agreement or any agreement
providing any compensatory payment or benefit resulting from a change in
control, vacation, disability, profit sharing, retirement, or other
employment or employee benefit plan, policy or arrangement of any kind,
oral or written, covering directors, officers, employees, former directors

or former employees of NBI or any ERISA Affiliate (as defined below) or its
respective beneficiaries, including, but not limited to, any employee
benefit plans within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which NBI or any ERISA
Affiliate maintains, to which NBI or any ERISA Affiliate contributes, or
under which any present or former director, officer or employee of NBI or
any ERISA Affiliate is covered or has benefit rights and with respect to
which any liability of NBI or any ERISA Affiliate exists or is reasonably
likely to occur ("Benefit Plans"). The Employee Benefit Plan List also
sets forth a list which identifies each and every provision in the Benefit
Plans which specifically references a change of control as causing an
increase or acceleration of benefits to present or former directors,
officers or employees of NBI or any ERISA Affiliate or their respective
beneficiaries, and any other similar provisions which would cause an
increase in liability to any such person (in his capacity as a present or
former director, officer or employee of NBI or any ERISA Affiliate or his
respective beneficiaries) as a result of the transactions contemplated by
this Agreement ("Change of Control Benefit"). The term "Benefit Plans"
does not constitute an acknowledgment that a particular arrangement is an
employee benefit plan within the meaning of Section 3(3) of ERISA. Without
limitation of the foregoing, except as separately set forth on the Employee
Benefit Plan List, (i) no Benefit Plan is a multi-employer plan within the
meaning of Section 3(37) of ERISA, (ii) no Benefit Plan is an employee
pension benefit plan (as defined in Section 3(2) of ERISA) subject to Title
IV of ERISA, and (iii) neither NBI nor any ERISA Affiliate maintains,
sponsors or has an obligation to contribute to (or has ever maintained,
sponsored or had an obligation to contribute to within the preceding six
years) any such multi-employer plan or employee pension benefit plan
subject to Title IV of ERISA or has any liability with respect to any such
multi-employer plan or employee pension benefit plan subject to Title IV of
ERISA. For the purposes of this subsection 2.10(a), the terms "NBI" and
"ERISA Affiliate" shall be deemed to include predecessors thereof.

(b) Each of the Benefit Plans that is intended to be a pension,
profit sharing, stock bonus, thrift, savings or employee stock ownership
plan that is qualified under Section 401(a) of the Code has been determined
by the IRS to qualify under Section 401(a) of the Code, and, to the best of
NBI's knowledge, there exist no circumstances likely to materially
adversely affect the qualified status of any such Benefit Plan. No Benefit
Plan is currently under audit by the United States Department of Labor, the
Pension Benefit Guaranty Corporation or the IRS, and neither NBI nor any
ERISA Affiliate has received either written or oral notification by one or
more of such federal regulatory agencies of their intention to audit a
Benefit Plan.

(c) All accrued contributions and other payments to be made by NBI
or any ERISA Affiliate to any Benefit Plan through December 31, 1995 have
been made, or reserves adequate for such purposes as of December 31, 1995
have been reflected in the December 31, 1995 financial statements. Neither
NBI nor any ERISA Affiliate is in material default in performing any of its
respective contractual obligations under any of the Benefit Plans or any
related trust agreement or insurance contract. There are no outstanding
material liabilities of any Benefit Plan other than liabilities for
benefits to be paid to participants in such plan and their beneficiaries in
accordance with the terms of such plan.

(d) There is no pending litigation or, to NBI's or any ERISA
Affiliate's knowledge, any overtly threatened litigation or pending claim
(other than benefit claims made in the ordinary course) by or on behalf of
or against any of the Benefit Plans (or with respect to the administration
of any of the Benefit Plans) now or heretofore maintained by NBI or any
ERISA Affiliate which alleges violations of applicable state or federal law
and which has a reasonable probability of being determined adversely to NBI
or any ERISA Affiliate.

(e) NBI and each ERISA Affiliate and, to the knowledge of NBI, each
other ERISA Affiliate and all other persons having fiduciary or other
responsibilities or duties with respect to any Benefit Plan, are and since
the inception of each such Benefit Plan have been in substantial compliance
in all respects with, and each such Benefit Plan is and has been operated
in all respects substantially in accordance with, its provisions and in
substantial compliance in all respects with the applicable laws, rules and
regulations governing such Benefit Plan, including the rules and
regulations promulgated by the Department of Labor, the Pension Benefit
Guaranty Corporation ("PBGC") and the IRS under ERISA, the Code or any
other applicable law. No Benefit Plan has engaged in or been a party to a
non-exempt "prohibited transaction" (as defined in Section 406 of the ERISA
or 4975(c) of the Code). All Benefit Plans which are group health plans
have been operated in substantial compliance with the group health plan
continuation coverage requirements of Section 4980B of the Code and Section
601 of ERISA.

(f) NBI has delivered to BanPonce (i) a true and complete copy of
each Benefit Plan (or, in the case of any Benefit Plan that is not in
written form, a complete and accurate description of the material
provisions of the Benefit Plan), including all amendments thereto, (ii) a
complete and current copy of the summary plan description of each Benefit
Plan that is subject to ERISA, (iii) each trust agreement, insurance policy
or other instrument relating to the funding of any Benefit Plan, (iv) the
three most recent Annual Reports (Form 5500 series) and accompanying
schedules filed with the IRS or United States Department of Labor with
respect to each Benefit Plan for which Annual Reports are required, (v) the
most recent determination letter issued by the IRS with respect to each
Benefit Plan that is intended to qualify under Section 401(a) of the Code
and a complete copy of any applications pending before the IRS or the
United States Department of Labor with respect to any such Benefit Plan,
(vi) the most recent available financial statements for each Benefit Plan
that has assets, and (vii) the most recent audited financial statements for
each Benefit Plan for which audited financial statements are required by
ERISA.

(g) No Benefit Plan is subject to the provisions of Part 3 of Title
I of ERISA, Section 412 of the Code or the provisions of Title IV of ERISA.
Neither NBI nor any ERISA Affiliate has incurred, nor to NBI's knowledge is
there a basis for believing that either NBI or any ERISA Affiliate may
incur, any material liability under Title IV of ERISA in connection with
any plan subject to the provisions of Title IV of ERISA now or heretofore
maintained or contributed to by it or by any ERISA Affiliate (as that term
is defined in the next sentence) of NBI. The term "ERISA Affiliate" shall
mean any person which is or was a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code) as NBI or

is or was under common control (within the meaning of Section 414(c) of the
Code) with NBI, and such term includes, but is not limited, to the NBI
Subsidiaries.

(h) Schedule 2.10(h) to the NBI Disclosure Schedule lists: (i)
each executive officer and director of NBI or any ERISA Affiliate who is
eligible to receive a Change of Control Benefit, (ii) the amount of each
such Change of Control Benefit calculated as if a change of control
occurred, and such benefit payment became due, on the date hereof, (iii)
each such individual's base rate of compensation in effect as of the date
of this Agreement, (iv) such individual's compensation from NBI and any
ERISA Affiliate for each of the calendar years 1991 through 1995, as
reported by NBI and any ERISA Affiliate on Form W-2 or Form 1099, and (v)
any other amounts, identified by type, necessary to calculate such
benefits. Notwithstanding anything to the contrary contained herein or in
the lists and schedules hereto or the NBI Disclosure Schedule, neither NBI
nor any ERISA Affiliate has made any payments or provided any compensation
or benefits or is a party to any agreement or any Benefit Plan that could
obligate it or any successor thereto to make any payments or provide any
compensation or benefits, the deductibility of which is limited by Section
280G of the Code.

2.11 Labor Contracts. Except as set forth on the list furnished to
BanPonce (the "Labor Contract List") and attached as Schedules 2.10(a) and
2.11 to the NBI Disclosure Schedule, neither NBI nor any NBI Subsidiary is
a party to or has in effect any organized labor contract or collective
bargaining agreement. Neither NBI nor any NBI Subsidiary is aware of any
efforts during the past five years to unionize or organize any employees of
NBI or AmMid and no claim related to such employees under the Fair Labor
Standards Act, National Labor Relations Act, Civil Rights Act of 1964,
Walsh-Healy Act, Davis-Bacon Act, Civil Rights Act of 1968, Age
Discrimination in Employment Act, Equal Pay Act of 1963, Executive Order
No. 11246, Federal Unemployment Tax Act, Vietnam Era Veterans Readjustment
Act, Occupational Safety and Health Act, or any other federal, state or
local employment-related law, order, ordinance or regulation, and no unfair
labor practice, discrimination or wage-and-hour claim is pending or, to
NBI's knowledge, threatened against NBI or any NBI Subsidiary.

2.12 Litigation. Except as provided in Schedule 2.12 to the NBI
Disclosure Schedule: (a) no claims have been asserted and no relief has
been sought against NBI, AmMid or any AmMid Subsidiary in any pending
litigation or governmental proceedings or otherwise; (b) to NBI's
knowledge, there are no circumstances, conditions, events or arrangements,
contractual or otherwise, which may hereafter give rise to any proceedings,
claims, actions or government investigations involving NBI or any NBI
Subsidiary which would reasonably be expected to have a material adverse
effect on the financial condition of NBI, AmMid or any AmMid Subsidiary,
nor are any such proceedings, claims, actions or government investigations,
to NBI's knowledge, threatened involving NBI or any NBI Subsidiary; and (c)
neither NBI nor any NBI Subsidiary is a party to any order, judgment or
decree which would reasonably be expected to have a material adverse effect
on the financial condition, assets or business of NBI, AmMid or any AmMid
Subsidiary, and neither NBI nor any NBI Subsidiary (i) is the subject of
any cease and desist order, or other formal or informal enforcement action

by any regulatory authority, or (ii) has made any commitment to or entered
into any agreement with any regulatory authority that currently restricts
or adversely affects its operations or financial condition. Except as
otherwise prohibited by law, NBI will make available to BanPonce copies of
all correspondence with or memoranda of other communications with any
regulatory authority since January 1, 1993, relating to the operation or
condition, financial or otherwise, of NBI, AmMid or any AmMid Subsidiary.

2.13 Tax Matters. (a) NBI and each NBI Subsidiary shall have filed
with the appropriate governmental agencies all federal, foreign, state and
local tax returns that are required to be filed by them on or prior to the
Closing Date, and such tax returns are true and complete in all material
respects, and shall have duly paid in full or have made adequate provision
on their financial statements for the payment of all taxes for all periods
ending on or prior to the Closing Date. Neither NBI nor any NBI Subsidiary
is delinquent in the payment of any taxes except for assessments being
contested in good faith by NBI or any NBI Subsidiary and for which adequate
reserves have been established. There are included in the NBI consolidated
balance sheet as of December 31, 1995, and NBI's and AmMid's unaudited
balance sheets as of September 30, 1996, adequate reserves for the payment
of all accrued but unpaid federal, foreign, state and local taxes of NBI
and each NBI Subsidiary, including interest and penalties, whether or not
disputed, for all periods ending on or prior thereto. Except as set forth
in Schedule 2.13 to the NBI Disclosure Schedule, (i) there are no material
liens for taxes upon any property or asset of NBI or any NBI Subsidiary,
except for (x) liens for taxes not yet due and (y) any such liens for taxes
shown on such Schedule 2.13 to the NBI Disclosure Schedule, which are being
contested in good faith through appropriate proceedings; (ii) since 1992,
neither NBI nor any NBI Subsidiary has made any change in accounting method
for income tax reporting, except as provided in the footnotes to the
audited financial statements relating thereto, received a ruling from any
taxing authority or signed an agreement with any taxing authority which
will materially and adversely affect NBI or any NBI Subsidiary in future
periods; (iii) during the past ten years, neither NBI nor any NBI
Subsidiary has received any notice of deficiency, proposed deficiency or
assessment from any governmental taxing authority with respect to taxes of
NBI or any NBI Subsidiary, except any such deficiency or assessment shown
on such Schedule 2.13 to the NBI Disclosure Schedule, or which has been
paid or is being contested in good faith through appropriate proceedings;
(iv) the tax returns for NBI and each NBI Subsidiary are not currently the
subject of any audit by the IRS or any other taxing authority, and NBI's
federal income tax returns have been examined by the IRS (or the applicable
statutes of limitation of the assessment of federal taxes for such period
have expired) for all periods through and including calendar year 1992, and
no material deficiencies were asserted as a result of such examinations
which have not been resolved and fully paid; (v) there are no outstanding
requests, agreements, consents or waivers to extend the statutory period of
limitation applicable to the assessment of any taxes or deficiencies
against NBI or any NBI Subsidiary, and no power of attorney granted by
either NBI or any NBI Subsidiary with respect to any taxes is currently in
force; (vi) except for the Tax Sharing Agreement between NBI and its
Subsidiaries set forth on Schedule 2.13 to the NBI Disclosure Schedule (the
"Tax Sharing Agreement"), neither NBI nor any NBI Subsidiary is a party to
any agreement providing for the allocation or sharing of taxes; and (vii)
neither NBI nor any NBI Subsidiary is a party to any action or proceeding
for, nor has any of them received any claim for, the assessment or

collection of any taxes, except tax liens or levies against customers of
DeKalb, Northwest or AmMid. Neither NBI nor any NBI Subsidiary has, with
regard to any assets or property held, acquired or to be acquired by any of
them, filed a consent to the application of Section 341(f) of the Code.
Neither NBI nor any NBI Subsidiary has agreed to, or to the best knowledge
of NBI is required to, make any adjustments under Section 481(a) of the
Code by reason of a change in accounting method or otherwise. Neither NBI
nor any NBI Subsidiary is a "United States Real Property Holding
Corporation" as defined in Section 897 of the Code. Except as specifically
contemplated by the Plan, neither NBI nor any NBI Subsidiary, which has
been included in a combined or consolidated tax return in which NBI or any
NBI Subsidiary was included, has taken any action that would generate a tax
liability for NBI or any NBI Subsidiary upon any such corporations ceasing
to be a member of such consolidated or combined group, except for matters
specified in Schedule 2.13 to the NBI Disclosure Schedule. To NBI's
knowledge, except for matters covered in Schedule 2.13 to the NBI
Disclosure Schedule, no circumstances exist which reasonably could be
expected to result in a material assessment of taxes in excess of reserved
amounts for periods subsequent to December 31, 1995. All liabilities for
unpaid taxes will be accrued and reflected in the financial statements of
NBI and AmMid as of the Closing Date. All intercompany accounts arising
from the Tax Sharing Agreement will be settled among the subsidiaries as of
the Closing Date.

(b) All monies required to be withheld from employees of NBI or any
NBI Subsidiary for income taxes, social security and unemployment insurance
taxes have been withheld or collected and paid, when due, to the
appropriate governmental authority, or if such payment is not yet due, an
adequate reserve has been established and each of NBI and each NBI
Subsidiary have otherwise complied in all material respects with applicable
laws, rules, and regulations relating to tax withholding and remittance
from employees.

(c) The term "tax" shall include any tax, assessment, levy, impost,
duty or withholding of any nature now or hereafter imposed by a government
authority and any interest, additional tax, deficiency, penalty, charge or
other addition thereon, including without limitation any income, gross
receipts, profits, franchise, sales, use, property (real and personal),
transfer, payroll, unemployment, social security, occupancy and excise tax
and customs duty. The term "return" shall include any return, declaration,
report, estimate, information return and statement required to be filed
with or supplied to any taxing authority in connection with any taxes.

(d) Neither NBI nor any NBI Subsidiary has made any payments, is
obligated to make any payments or is a party to any agreement that under
certain circumstances could obligate it or BanPonce to make any payment
that would constitute a "parachute payment" under Section 280G of the Code.

2.14 Registration Statement. The parts of the Registration
Statement that relate to NBI or any NBI Subsidiary and any of their
affiliates or associates which were provided by NBI will not as of the
Registration Effective Date contain any statement that is, at the time at
which, and in light of the circumstances under which, it is made, false or
misleading in any material respect with regard to any facts or omit to
state any fact required to be stated therein or necessary in order to make
the statements therein not materially false or misleading. Notwithstanding

the foregoing, NBI makes no representation or warranty regarding and shall
have no responsibility for the truth or accuracy of any information with
respect to BanPonce or any of its affiliates or associates contained in the
Registration Statement.

2.15 Title and Condition. (a) Except as provided in Schedule 2.15
to the NBI Disclosure Schedule, NBI or AmMid has good and marketable title
to all assets and properties, whether real or personal, tangible or
intangible, that it purports to own, including without limitation all
assets and properties reflected in the Interim Financial Statements and the
audited consolidated balance sheet of NBI as of December 31, 1995, or
acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the ordinary course of
business since the dates of such balance sheets or will be disposed of in
accordance with the Plan), subject to no liens, mortgages, security
interests, encumbrances or charges of any kind, except: (i) as noted in
said balance sheets or the notes thereto; (ii) statutory liens for taxes
not yet delinquent; and (iii) security interests granted to secure deposits
of funds by federal, state or other governmental agencies. Except as
specified in Schedule 2.15 to the NBI Disclosure Schedule, NBI or AmMid, as
lessee, has the right under valid and subsisting leases to occupy, use,
possess and control all property leased by NBI or AmMid, qualified only by
the written terms of such leases, true and complete copies of which are
provided in Section 2.15(a) to the NBI Disclosure Schedule. Legal
descriptions of all real property owned by NBI or AmMid, including
properties held by AmMid as a result of foreclosure or repossession or
carried on AmMid's books as "other real estate owned," or which for
purposes of any Environmental Law (as hereinafter defined) are alleged to
be under the control of NBI or AmMid (the "Real Properties"), have been
provided in Schedule 2.15(a) to the NBI Disclosure Schedule. There are no
investigations, proceedings, or complaints by any governmental agency
pending or, to NBI's knowledge, threatened in writing against NBI or AmMid
in connection with the Real Properties (including automatic teller
machines) under the Americans with Disabilities Act of 1990 ("ADA") or the
ATBCB Accessibility Guidelines for Buildings and Facilities, or any other
local, state or federal law concerning accessibility for individuals with
disabilities.

(b) BanPonce has commenced a Phase I environmental audit of the
main banking facility and related drive-in facility of AmMid, the cost of
which shall be borne by NBI. The Real Properties are in good condition and
have been well maintained in accordance with reasonable and prudent
business practices applicable to like facilities, reasonable wear and tear
excepted. To NBI's knowledge, the Real Properties are in compliance with
all Environmental Laws and to NBI's knowledge there are no conditions in
connection with the Real Properties, including the presence of lead or
asbestos, which would be likely to subject NBI or any NBI Subsidiary to
damages, penalties, injunctive relief or cleanup costs under any
Environmental Laws, or which would, if known, be likely to materially
reduce the value of any Real Property or which would require or be likely
to require cleanup, removal, remedial action or other response pursuant to
Environmental Laws by NBI or any NBI Subsidiary. To NBI's knowledge,
neither NBI nor any NBI Subsidiary is a party to any litigation or
administrative proceeding alleging NBI's or any NBI Subsidiary's violation
of Environmental Laws, nor has NBI or any NBI Subsidiary violated

Environmental Laws, nor is NBI or any NBI Subsidiary required by any
governmental agency to clean up, remove or take remedial or other
responsive action due to the disposal, depositing, discharge, leaking or
other release of any hazardous substances or hazardous materials. To NBI's
knowledge, neither the Real Properties nor NBI or any NBI Subsidiary is
subject to any judgment, decree, order or citation related to or arising
out of, or listed as a potentially responsible party by any governmental
body or agency in a matter arising under, any Environmental Laws. The term
"Environmental Laws" shall mean all federal, state and local laws,
including statutes, regulations, ordinances, codes and rules relating to
the discharge of air pollutants, water pollutants or process waste water or
substances, in effect now or as of the Closing Date, including, but not
limited to, the Federal Solid Waste Disposal Act, the Federal Hazardous
Materials Transportation Act, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976, the
Federal Comprehensive Environmental Response, Cleanup and Liability Act of
1980, as amended, regulations of the Environmental Protection Agency, any
so-called "Superfund" or "Superlien" laws, and the Illinois Responsible
Property Transfer Act.

2.16 Insurance. Schedule 2.16 to the NBI Disclosure Schedule
contains true, accurate and complete copies of all insurance policies of
NBI and each NBI Subsidiary. Neither NBI nor any NBI Subsidiary has
received any notice of any premium deficiency relating to any insurance
coverage in force at the date of this Agreement. NBI will maintain, or
will cause each NBI Subsidiary to maintain, the coverage provided in each
of such policies through the Closing Date.

2.17 Compliance with Laws and Orders. Except as specified in
Schedule 2.17 to the NBI Disclosure Schedule, NBI and each NBI Subsidiary
have complied in all material respects with all laws, regulations and
orders (including zoning ordinances) applicable to them and to the conduct
of their businesses, including without limitation, all statutes, rules and
regulations pertaining to the conduct of DeKalb's, Northwest's and AmMid's
banking activities. Neither NBI nor any NBI Subsidiary is in default
under, and no event has occurred that, with the lapse of time or action by
a third party or both, could result in the default under the terms of any
judgment, decree, order or writ of any governmental authority or court,
whether federal, state or local and whether at law or in equity.

2.18 Governmental Regulation. Except as specified in Schedule 2.12
to the NBI Disclosure Schedule, NBI and each NBI Subsidiary hold all
material licenses, certificates, permits, franchises and rights from all
appropriate federal, state and other public authorities necessary for the
conduct of their businesses, and, between the date hereof and the Closing
Date, NBI will, and will cause each NBI Subsidiary to, maintain all such
licenses, certificates, permits, franchises and rights in effect. AmMid is
an insured financial institution as defined in the FDIA. Neither NBI nor
any Seller or NBI Subsidiary is a party or subject to any agreement with,
or directive or order issued by, the Federal Reserve, the Federal Deposit
Insurance Corporation ("FDIC"), the Office of the Comptroller of the
Currency (the "OCC"), the Illinois Commissioner or any other bank
regulatory authority, which imposes any restrictions or requirements not
applicable generally to bank holding companies (in the case of NBI),

national banks (in the case of DeKalb), or Illinois state banks (in the
case of AmMid and Northwest), with respect to the conduct of its business.

2.19 Material Contracts. Each executory contract, indenture and
other binding commitment and agreement that provides for the receipt or
expenditure of in excess of $25,000 over the course of any twelve-month
period, or which cannot be terminated without penalty in excess of $25,000,
to which NBI and/or any NBI Subsidiary is a party or to which NBI and/or
any NBI Subsidiary or any of their properties are subject (collectively,
the "Material Contracts" and each a "Material Contract") was entered into,
and is, in the ordinary course of business, and appears on a list set forth
in Section 2.19 to the NBI Disclosure Schedule (the "Contract List"). True
copies of the agreements appearing on the Contract List, including all
amendments and supplements thereto, have been made available to BanPonce.
All of the Material Contracts are binding upon NBI and/or NBI's
Subsidiaries (as applicable) (assuming such Material Contracts are binding
upon the other parties thereto) and, to NBI's knowledge, the other parties
thereto. NBI and the NBI Subsidiaries have each duly performed all of
their obligations under each Material Contract to which they are parties to
the extent that such obligations to perform have accrued. No breach or
default under the terms of any Material Contract by NBI or any of the NBI
Subsidiaries or, to NBI's knowledge, any other party thereto has occurred
which will impair the ability of NBI or any of the NBI Subsidiaries to
enforce any of its or their material rights thereunder. None of the
Material Contracts contains an express prohibition against assignment by
operation of law or a change of control of NBI or a NBI Subsidiary which
would preclude BanPonce from exercising and enjoying all of the rights,
remedies and obligations of NBI or a NBI Subsidiary, as the case may be,
under such Material Contracts.

2.20 Stockholders. Schedule 2.20 to the NBI Disclosure Schedule
identifies each officer or director of NBI or AmMid or holder of ten
percent (10%) or more of the outstanding NBI Common Stock, as determined
under the rules and regulations of the SEC, and sets out the number of
shares owned by each such person ("Affiliates List"). NBI will cause each
person named on the Affiliates List to execute prior to the filing of the
bank regulatory applications contemplated in Section 1.6 hereof written
undertakings, in the form attached as Exhibit 2.20 hereto ("Affiliates'
Undertakings").

2.21 Matters Relating to Directors, Officers and Stockholders.
Except as specified in Schedule 2.21 to the NBI Disclosure Schedule, no
director or executive officer of NBI or any NBI Subsidiary, or holder of
ten percent (10%) or more of the outstanding NBI Common Stock, as
determined under the rules and regulations of the SEC, nor any "associate"
of any such person (as such term is defined in the general rules and
regulations under the Securities Act) (i) is or has been during the period
subsequent to December 31, 1992, a party (other than as a depositor) to any
transaction with NBI or AmMid, whether as a borrower or otherwise, which
(x) was made other than in the ordinary course of business, (y) was made on
other than substantially the same terms, including interest rate and
collateral, as those prevailing at the time for comparable transactions for
other persons, or (z) involves more than the normal risk of collectibility
or presents other unfavorable features, or (ii) is a party to any loan or

loan commitment, whether written or oral, from NBI or AmMid involving an
amount in excess of $10,000.

2.22 Absence of Adverse Agreements. Except with regard to the Plan
and contracts and agreements contemplated thereby, neither NBI nor AmMid is
a party to any agreement, option or contract (other than this Agreement and
the transactions contemplated by this Agreement), the subject of which
involves or relates to the merger, consolidation, or sale of assets or
stock of NBI or any NBI Subsidiary.

2.23 Accuracy of Information. The statements of NBI, any NBI
Subsidiary or any Seller contained in any written documents executed and/or
delivered by or on behalf of NBI or Sellers pursuant to the terms of this
Agreement are true and correct in all material respects and such documents
do not omit any fact necessary to make the statements contained therein not
materially misleading. The statements contained in such documents will be
deemed to constitute representations and warranties of NBI and Sellers
under this Agreement to the same extent as if set forth herein in full.

2.24 Loans/Allowance for Loan Losses. Except as specified in
Schedule 2.24 of the NBI Disclosure Schedule, as of the date of this
Agreement (i) neither NBI nor AmMid is a party to any loan agreement, note
or other borrowing agreement (each, a "Borrowing Agreement") under the
terms of which the obligor is more than 45 days delinquent in payment of
principal or interest or, to NBI's knowledge, in default of any other
material provision as of the dates shown thereon other than (A) loans the
unpaid balances of which do not exceed $50,000 per obligor or (B) in the
case of loans guaranteed by the United States Small Business
Administration, loans the portion of the unpaid balances of which not so
guaranteed do not exceed $50,000 per obligor; (ii) neither NBI nor any NBI
Subsidiary is a party to any Borrowing Agreement which has been classified
as "substandard," "doubtful," "loss," "other loans especially mentioned" or
any comparable classifications by NBI, any NBI Subsidiary or any Applicable
Regulatory Authority; (iii) neither NBI nor any NBI Subsidiary is a party
to any Borrowing Agreement, including any loan guaranty, with any director
or executive officer of NBI or an NBI Subsidiary, or any corporation or
enterprise controlling, controlled by or under common control with any of
the foregoing; or (iv) to NBI's knowledge, neither NBI nor any NBI
Subsidiary is a party to any Borrowing Agreement in violation in any
material respect of any law, regulation or rule of any Applicable
Regulatory Authority. All loans of NBI and NBI Subsidiaries are
enforceable against NBI or the NBI Subsidiaries in accordance with the
terms thereof, and to NBI's knowledge are the valid and binding obligations
of the obligors, except as limited by (a) bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors'
rights generally, and (b) general principles of equity, regardless of
whether asserted in a proceeding in equity or at law. Except as provided
in Schedule 2.24 to the NBI Disclosure Schedule, the allowance for loan and
lease losses shown on the unaudited Statement of Condition of AmMid as of
October 31, 1996 is adequate under the requirements of generally accepted
accounting principles to provide for possible losses, net of recoveries
relating to loans previously charged off, on loans outstanding (including,
without limitation, accrued interest receivable) as of October 31, 1996.

2.25 No Undisclosed Liabilities. None of NBI, AmMid or any of their
respective properties is subject to any material liability or obligation
(absolute, accrued, contingent or otherwise) including without limitation,
any lease, contract, commitment or purchase or sale agreement, except:

(a) as specifically disclosed in this Agreement, the NBI Disclosure
Schedule or the financial statements of NBI delivered pursuant to Section
2.8 hereof;

(b) liabilities or obligations arising or incurred in the ordinary
course of business of NBI or AmMid since December 31, 1995 and consistent
with past practices including, without limitation, any taxes; or

2.26 Tax-Free Status Matters. Neither NBI nor, to the knowledge of
NBI, any of its affiliates has through the date hereof taken or agreed to
take any action that would prevent the Acquisition from qualifying as a
tax-free reorganization under Section 368(a)(1)(B) of the Code.

2.27 Reports. Since January 1, 1993, NBI and AmMid have filed all
reports, registrations and statements, together with any amendments
required to be made with respect thereto, that were and are required to be
filed with the Federal Reserve, the FDIC, the OCC, the Illinois
Commissioner and any other applicable governmental or regulatory
authorities (all such reports and statements are collectively referred to
herein as the "NBI Reports"). As of their respective dates, the NBI
Reports filed prior to the date hereof complied in all material respects
with all of the statutes, rules and regulations enforced or promulgated by
the governmental or regulatory authority with which they were filed and did
not contain any untrue statement of a fact or omit to state a 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 materially
misleading.

2.28 Matters Concerning Regulatory Approvals. To the best knowledge
of NBI and Sellers, there are no matters likely to cause denial of the
regulatory approvals contemplated in Section 1.6 hereof.

2.29 Investment Banker/Finder Fee. None of NBI, any NBI Subsidiary
or any of their respective affiliates, or any Seller, has incurred or paid
or will incur or pay any fee or remuneration to any finder, broker or
investment banker with respect to matters provided for in this Agreement.

2.30 Intellectual Property. Schedule 2.30 to the NBI Disclosure
Schedule reflects all trademarks, tradenames and service marks of NBI and

each NBI Subsidiary. Each of NBI and each NBI Subsidiary has the right to
use such marks as currently being used in its operations and business.

2.31 Trust and Fiduciary Accounts. Except for the trust department
operated by AmMid in the ordinary course, NBI and AmMid do not act in a
trust capacity and do not accept or maintain any trust or fiduciary
accounts, nor, to NBI's knowledge, has NBI or AmMid been appointed as
trustee or other fiduciary with respect to any person or other beneficiary,
except as set forth on a list (the "Fiduciary List") attached as Schedule
2.31 to the NBI Disclosure Schedule, and which provides detailed
information about and lists of AmMid's trust or fiduciary operations, and
except for normal escrow accounts established in connection with loans
(including with respect to real estate taxes, insurance premiums and like
matters).

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BANPONCE

BanPonce represents and warrants to NBI and Sellers as follows:

3.1 Corporate Organization. BanPonce is a corporation duly
organized, validly existing and in good standing under the General
Corporation Law of Puerto Rico with full power and authority to engage in
the activities and business now conducted by it. BanPonce possesses and is
in compliance in all material respects with all licenses, franchises,
permits and other governmental authorizations that are legally required
except where the lack of any such license, franchise, permit or
authorization or the failure to be in such compliance would not reasonably
be expected to have a material adverse effect on the financial condition,
assets or business operations of BanPonce. BanPonce is registered and is
in good standing with the Federal Reserve as a bank holding company under
the BHCA.

3.2 Capitalization. As of September 30, 1996, the authorized
capital stock of BanPonce consisted of: (i) 90,000,000 shares of BanPonce
Common Stock, 66,048,673 shares of which were validly issued and
outstanding; and (ii) 10,000,000 shares of Non-Cumulative Monthly Income
Preferred Stock, 1994 Series A (Liquidation Preference $25.00 per share),
4,000,000 shares of which were validly issued and outstanding. All of such
issued and outstanding shares of capital stock are fully paid and
nonassessable and not issued in violation of any preemptive rights. Except
as contemplated in this Agreement or as set forth in the most recent report
of BanPonce filed with the SEC on Form 10-K, or as required in any publicly
announced acquisition transaction or in the ordinary course of business in
connection with BanPonce's currently existing stock option plans, there
are, as of the date of this Agreement, no outstanding warrants, options,
rights, calls or other commitments of any nature relating to the authorized
but unissued shares of BanPonce Common Stock or concerning the
authorization, issuance or sale of any other class of equity or debt
securities of BanPonce or all of its subsidiaries.

3.3 Authorization. The transactions contemplated by this Agreement
and the execution, delivery and performance by BanPonce of this Agreement
have been authorized by all necessary corporate action of BanPonce.
BanPonce has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This
Agreement constitutes a valid and binding obligation of BanPonce,
enforceable against BanPonce in accordance with its terms, subject to
(i) all applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and (ii) the
application of equitable principles.

3.4 No Violation. Provided that the requisite approvals from the
Applicable Regulatory Authorities are obtained and the BanPonce Common
Stock to be issued hereunder is duly registered pursuant to the Securities
Act and, to the extent applicable, registered or exempt from registration
under state securities or blue sky laws, neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated
herein will conflict with, result in the breach of, constitute a default
under or accelerate the performance provided by the terms of any law, or
any rule or regulation of any governmental agency or authority, or any
judgment, order or decree of any court or other governmental agency to
which BanPonce may be subject, or any contract, agreement or instrument to
which BanPonce is a party or by which BanPonce is bound or committed, or
the Certificate of Incorporation or Bylaws of BanPonce, or constitute an
event that with the lapse of time or action by a third party, could, to the
best of BanPonce's knowledge, result in a default under any of the
foregoing or result in the creation of any lien, charge or encumbrance upon
any of the assets or properties of BanPonce or its subsidiaries or the
capital stock of BanPonce.

3.5 Financial Statements. BanPonce has heretofore delivered to NBI
and Sellers copies of the following financial statements and information
relating to BanPonce and its consolidated subsidiaries:

(a) the Audited Consolidated Statements of Condition of BanPonce as
of December 31, 1995, 1994 and 1993, and the Consolidated Statements of
Income, Stockholders' Equity and Changes in Cash Flows for each of the
years in the three-year period ended December 31, 1995, together with the
notes thereto, as audited and reported on by Price, Waterhouse, BanPonce's
independent auditors which issued an unqualified opinion thereon;

(b) BanPonce's 1994 and 1995 Form 10-Ks filed with the SEC; and

Each of the aforementioned financial statements has, where necessary,
been filed in a timely manner with the SEC and all other federal or state
regulatory agencies as necessary and is true and correct in all material
respects, and together they fairly present, in accordance with applicable
laws and regulations and generally accepted accounting principles (applied
on a consistent basis except as disclosed in the footnotes thereto), the
financial position and results of operations of BanPonce as of the dates
and for the periods therein set forth. Since June 30, 1996, there has been

no material adverse change in the financial condition, assets, liabilities,
results of operation or business of BanPonce.

3.6 Registration Statement. The Registration Statement (i) will
comply in all material respects with the requirements of the Securities
Act, and (ii) will not, at the Registration Effective Date, contain any
statement that is, at the time at which and in the light of the
circumstances under which it is made, false or misleading with respect to
any material facts or omit to state any material fact required to be stated
therein or which is necessary in order to make the statements therein not
false or misleading. Notwithstanding the foregoing, BanPonce makes no
representation or warranty and shall have no responsibility for the truth
or accuracy of any information with respect to NBI, any NBI Subsidiary, or
their affiliates or associates contained in the Registration Statement and
which was provided by NBI, Seller, any NBI Subsidiary, or their affiliates
or associates.

3.7 Shares to Be Issued. The shares of BanPonce Common Stock to be
issued pursuant to this Agreement will, upon issuance, be validly issued,
fully paid and nonassessable and will not be subject to any preemptive
rights.

3.8 Accuracy of Information. The statements of BanPonce contained
in this Agreement and in any other written documents executed and/or
delivered by or on behalf of BanPonce pursuant to the terms of this
Agreement are true and correct in all material respects and do not omit any
fact necessary to make the statements contained herein or therein not
materially misleading.

3.9 Matters Concerning Regulatory Approvals. To the best knowledge
of BanPonce, there are no matters likely to cause denial of the regulatory
approvals contemplated in Section 1.6.

3.10 Litigation. There is no litigation, action, suit,
investigation or proceeding pending or, to the best knowledge of BanPonce,
overtly threatened against or affecting BanPonce or any of its subsidiaries
or involving any of their respective properties or assets, at law or in
equity, before any federal, state, municipal, local or other governmental
authority, which is reasonably likely to be resolved adversely to the
interest of BanPonce or its subsidiaries and, if so resolved, which would
have a material adverse effect on the financial condition, assets,
liabilities, results of operation or business of BanPonce, or would
materially impair its ability to perform under this Agreement.

3.11 Reports. Since January 1, 1993, BanPonce and its subsidiaries
have filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that were and are
required to be filed with (i) the SEC, including but not limited to Forms
10-K, Forms 10-Q, Forms 8-K and proxy statements, (ii) the Federal Reserve,
and (iii) any other applicable governmental or regulatory authorities (all
such reports and statements are collectively referred to herein as the
"BanPonce Reports"). As of their respective dates, the BanPonce Reports
filed prior to the date hereof complied in all material respects with all

of the statutes, rules and regulations enforced or promulgated by the
governmental or regulatory authority with which they were filed and did not
contain any untrue statement of a fact or omit to state a fact required to
be stated therein or which was necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading.

ARTICLE IV

CONDUCT OF BUSINESS BY BANPONCE

4.1 Subsequent SEC Filings. Promptly after the filing thereof,
BanPonce will furnish NBI copies of all BanPonce's periodic reports on
Forms 10-K, 10-Q and 8-K filed with the SEC subsequent to the date hereof.
Such reports shall be prepared in compliance with laws applicable to
BanPonce.

4.2 Conduct of Business; Certain Covenants. From and after the
execution and delivery of this Agreement and until the Closing Date, except
insofar as deviations from the following covenants would not reasonably be
expected to have a material adverse impact on BanPonce and its
subsidiaries, taken as a whole, BanPonce will:

(a) conduct its business and operate and cause its subsidiaries to
conduct their respective businesses only in accordance with sound banking
and/or business practices; and

(b) maintain its corporate existence in good standing and file all
materially required reports with all applicable regulatory authorities.

4.3 Treatment of Employee Benefit Plans. NBI and BanPonce shall
cooperate in effecting the following treatment of the Benefit Plans, except
as mutually agreed upon by the parties hereto prior to the Closing Date:

(a) NBI shall not establish, amend or terminate any Benefit Plan
except to the extent required by applicable law or in the ordinary course
of business consistent with past practices. With respect to any amendments
to any Benefit Plan that is intended to qualify under Section 401(a) of the
Code where such amendments are not covered by a favorable IRS determination
of qualification, an application for determination of such Benefit Plan's
qualification, as so amended, will be made to the IRS prior to the end of
the applicable remedial amendment period under Section 401(b) of the Code,
or if earlier, prior to the Closing.

(b) Except as otherwise provided herein, BanPonce shall cause each
Benefit Plan sponsored by NBI or any ERISA Affiliate to be continued in
effect after the Closing Date without a termination of discontinuance
thereof as a result of the Acquisition, subject to the power reserved under
each such plan to subsequently amend or terminate the Benefit Plan. NBI,
each ERISA Affiliate and BanPonce will use all reasonable efforts to amend
such plans to the extent necessary to provide for substitutions and
assumptions and such other actions contemplated under this Agreement.

After the Closing Date, BanPonce shall (i) provide to each employee of NBI,
AmMid and AmMid Subsidiaries ("NBI Employees") as soon as practicable after
the Closing Date the opportunity to participate in each generally available
employee benefit plan and program maintained by BanPonce for similarly
situated employees on the same basis as for such similarly situated
employees (the "BanPonce Benefit Plans"), subject to the generally
applicable provisions of each BanPonce Benefit Plan, policy or arrangement
and (ii) grant to each NBI Employee credit for prior service with NBI,
AmMid and each AmMid Subsidiary (and their respective predecessors) for
purposes of crediting periods of service for eligibility, waiting periods,
pre-existing conditions, limitations and vesting of all benefits under the
BanPonce Benefit Plans, except that no credit for any such prior service
shall be given for benefit accrual purposes. Nothing in this Section
4.3(b) shall obligate BanPonce to provide or cause to be provided any
benefits duplicative of those provided under any Benefit Plan continued
pursuant to subsection (ii) above during any period when such Benefit Plan
is continued or to establish any employee benefit plan, program, policy or
arrangement upon the discontinuance of any Benefit Plan. Except as
otherwise provided in this Agreement, the power of BanPonce to amend or
terminate any benefit plan or program, including any Benefit Plan, shall
not be altered or affected.

(c) Nothing in this Agreement shall constitute a contract of
employment or create any right to be retained in the employment of
BanPonce, NBI or any NBI Subsidiary. This Agreement is not intended, nor
shall it be construed, to create any express or implied third-party
beneficiary rights in any person, including, but not limited to, present or
former employees of NBI or any ERISA Affiliate, and any beneficiaries or
dependents thereof.

4.4 Access to Information. After the date hereof and prior to the
Closing Date, upon reasonable notice, BanPonce shall afford to the
officers, employees, agents and representatives of NBI reasonable access
during normal business hours to its properties, books, contracts and
records.

4.5 Indemnification. BanPonce agrees that all indemnification now
existing in favor of the directors and officers of NBI and AmMid, as
provided in the Certificate of Incorporation, Charter and By-Laws of NBI
and AmMid and applicable regulations, with respect to matters occurring
prior to the Closing, shall survive the Acquisition and shall continue in
full force and effect for two (2) years following Closing.

4.6 No Adverse Action. Except as specifically contemplated by this
Agreement, from the date hereof until the Closing Date, BanPonce shall not,
or agree or commit to, or permit any of its subsidiaries to, without the
prior written consent of NBI (which shall not be unreasonably withheld),
take any action which would (i) materially and adversely affect the ability
of either BanPonce or NBI to obtain any necessary approvals of governmental
authorities required for the transactions contemplated hereby, on the terms
and conditions set forth in Sections 1.6 and 8.1 hereto; (ii) materially
and adversely affect NBI's ability to perform its covenants and agreements
under this Agreement; or (iii) result in any of the conditions to the
Acquisition set forth in this Agreement not being satisfied.

ARTICLE V

CONDUCT OF BUSINESS BY NBI

5.1 Dividends and Capital. NBI and the NBI Subsidiaries may
declare and pay dividends from time to time after the date of this
Agreement until the Closing Date; provided, however, that NBI's and AmMid's
combined capital shall at no time, including at the Closing, after giving
effect to all transactions contemplated hereunder or under the Plan,
including, without limitation, the Employment Agreements (defined below)
and the Tax Sharing Agreements, be less than the amount of $14,235,687
(AmMid's capital existing as of December 31, 1995, consisting of capital,
surplus and undivided profits); provided, further, that any unrealized
gains or losses of AmMid's bond portfolio will not be included in the
calculation of capital; provided, further, that all dividends declared by
NBI or AmMid must be paid from the assets of NBI or NBI Subsidiaries and no
loan may be incurred to fund the payment of such dividend. On the Closing
Date, BanPonce, NBI and Sellers will agree on a balance sheet (the "Closing
Balance Sheet") reflecting NBI's assets, liabilities and stockholders
equity as of the Closing Date. The Closing Balance Sheet shall reflect
ownership of AmMid and that NBI has no outstanding and unpaid, or accrued
(unless adequately reserved against), liabilities, and NBI shall have a
positive net worth. If BanPonce and NBI are unable to agree on the Closing
Balance Sheet, a mutually acceptable public accounting firm shall
immediately be appointed as arbiter ("Arbiter"). Arbiter will prepare and
deliver to NBI and BanPonce a Closing Balance Sheet in review format within
thirty (30) days of the date of appointment thereof pursuant to this
Section 5.1. The Closing will be postponed until the Arbiter has prepared
the Closing Balance Sheet. The determination of Arbiter will be conclusive
and binding upon the parties hereto. The fees and expenses of Arbiter
shall be split equally between the Sellers and BanPonce.

5.2 Capitalization. From the date hereof until the Closing Date,
NBI will not, nor will it permit AmMid to, except as otherwise specifically
permitted herein or with the prior written consent of BanPonce, which shall
not be unreasonably withheld, issue, sell or otherwise dispose of, grant an
option for, or acquire for value, any shares of capital stock of NBI or
AmMid or otherwise effect any change in connection with its capitalization
or that of AmMid. Notwithstanding the above, prior to Closing, NBI shall
be permitted to issue in the aggregate to existing Sellers additional
shares of NBI Common Stock in an amount not to exceed $1,000,000.

5.3 Ordinary Course of Business. From the date hereof until the
earlier to occur of the Closing Date or termination of this Agreement, NBI
will, and will cause the NBI Subsidiaries to, carry on its business in
substantially the same manner as heretofore and use its reasonable best
efforts to maintain and preserve its business organization intact, to
retain its present employees and to maintain its relationships with
customers. Except with the prior written consent of BanPonce, which
consent shall not be unreasonably withheld, NBI will not, and will not
permit the NBI Subsidiaries to: (i) enter into any transaction or incur or
agree to incur any obligation or liability, except (a) liabilities incurred
and obligations entered into in the ordinary course of business consistent
with past practices (including legal and other professional services),

(b) for fair and reasonable legal services in connection with this
Agreement and the transactions contemplated hereby, and (c) with respect to
any agreement for fees with Crowe, Chizek for fair and reasonable services
in connection with activities contemplated by this Agreement; (ii) except
as recommended by a regulatory authority and reported to BanPonce, change
its lending, investment, liability management and other material policies
concerning its or AmMid's banking business, unless required by statute,
regulation or order; (iii) except as provided in Schedules 2.10(a), 2.11
and 5.3 to the NBI Disclosure Schedule, grant any bonus or increase in the
rates of pay of employees or directors except normal salary and bonus
increases to employees, based on past practice, not to exceed for any
individual employee or director five percent (5%) in the aggregate;
(iv) incur or commit to any capital expenditures which exceed $25,000
individually or $100,000 in the aggregate; (v) except as expressly
contemplated by this Agreement or the Plan or except as provided in
Schedule 5.3 to the NBI Disclosure Schedule, and, in the case of sales for
more than $50,000, after prior notice to BanPonce, sell any loans made
prior to the date hereof, or sell any investment securities from their
respective investment portfolios, or sell or otherwise dispose of any
assets; or (vi) agree to any of the foregoing actions.

5.4 Contact with Third Parties; No Board Recommendation. (a) From
the date hereof until the Closing Date, neither Sellers nor NBI will
initiate, solicit or encourage and will not permit AmMid to initiate,
solicit or encourage, or take any other affirmative action to facilitate,
any inquiries or the making of any proposal which constitutes, or may
reasonably be expected to lead to, any Competing Transaction (defined
below), or negotiate with any person in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize or permit any of its officers, directors or
employees or any financial advisor, attorney, accountant or other
representative to take any such action. For purposes of this Agreement,
"Competing Transaction" shall mean any of the following: (i) the merger or
consolidation of NBI or AmMid with any person or entity other than BanPonce
or its subsidiaries; (ii) the acquisition of more than ten percent (10%) of
the consolidated gross assets or outstanding equity securities of NBI or
AmMid (except as contemplated by this Agreement) by any person or entity
other than BanPonce or its subsidiaries; (iii) the acquisition of any of
the capital stock of AmMid by any person or entity other than BanPonce or
its subsidiaries; or (iv) the acquisition by NBI or AmMid of the stock or
the assets of any other person or entity. Promptly upon receiving any oral
or written offer relating to any such event or proposed event, NBI shall
notify BanPonce, or counsel for BanPonce, by telephone, confirmed by
letter, giving all relevant details of such oral or written offer,
including, without limitation, the identity of the parties thereto and the
general terms of any financing arrangement or commitment in connection
therewith. The Board of Directors of NBI will not recommend that it or its
stockholders vote in favor of any Competing Transaction.

(b) Each Seller agrees that from the date hereof until the Closing
Date, he, she or it will not (i) transfer (which term shall include for the
purposes of this Agreement, any sale, gift, pledge or other disposition),
or vote in favor of or consent to any transfer of (whether pursuant to an
Acquisition Proposal or otherwise), any or all of the Seller's Shares or
any interests therein, except pursuant to this Agreement, (ii) enter into

any contract or option with respect to any transfer of any or all of such
Shares or any interest therein, (iii) grant any proxy, power of attorney or
other authorization in or with respect to such Shares, except for this
Agreement, or (iv) deposit such Shares into a voting trust or enter into a
voting agreement or arrangement with respect to such Shares; provided,
however, that any Seller shall be permitted to make transfers of Shares to
a trust, of which such Seller is primary beneficiary, for purposes of
estate planning only, as long as: (A) each such Seller remains bound by the
terms of this Agreement; and (B) the transferee in such transfer agrees in
writing to be bound by the provisions of this Agreement relating to such
transferred Shares.

5.5 Corporate Structure. From the date hereof until the Closing
Date, NBI will not, nor will it permit AmMid to, without the prior written
consent of BanPonce, create or acquire any subsidiary. There will be no
change in the Certificate of Incorporation or Bylaws of NBI or the Charter
or Bylaws of AmMid, without the prior written consent of BanPonce.

5.6 Accounting and Tax Reporting. From the date hereof until the
Closing Date, NBI will not, nor will it permit AmMid to, change any of its
methods of accounting in effect at the end of its last fiscal year or
change any of its methods of reporting income or deductions for federal
income tax purposes from those employed in the preparation of the federal
income tax returns of NBI or AmMid for its last taxable year, except as may
be required by law or changes in generally accepted accounting principles
caused by new pronouncements issued by the Financial Accounting Standards
Board and the American Institute of Certified Public Accountants, concurred
in by its independent certified public accountants. NBI will promptly
notify BanPonce of receipt of any notice of assessment received from any
taxing authority by NBI or AmMid. Sellers, at their expense, will cause
Crowe, Chizek to prepare final consolidated federal and State of Illinois
income tax returns for NBI for the period January 1, 1997 through the
Closing Date. BanPonce agrees to cooperate with Sellers and Crowe, Chizek
in the preparation of such final consolidated income tax returns by
permitting reasonable access to the books and records of NBI, including the
reasonably necessary review and copying, at Seller's expense, of any books,
records, accounts, reports, agreements, minutes, correspondence,
communications and other documents of NBI or AmMid (whether in physical or
electronic form). BanPonce agrees to furnish Sellers and Crowe, Chizek
with such financial data and other information with respect to the business
of NBI as are reasonably necessary to prepare such final consolidated
income tax returns.

5.7 Full Access to Books and Records. From the date hereof until
the Closing Date, NBI will afford BanPonce, its officers, accountants,
counsel and other authorized representatives access to all books, records,
tax returns, leases, contracts and documents of NBI and the NBI
Subsidiaries and to the buildings, structures, fixtures and appurtenances
of NBI and the NBI Subsidiaries for purposes of inspecting their condition,
and will furnish to BanPonce information with respect to the assets and
business of NBI and the NBI Subsidiaries as BanPonce may from time to time
reasonably request in connection with this Agreement and the transactions
contemplated hereby and as permitted by law, provided that such access or
investigation shall not unnecessarily interfere with the normal operations
of NBI and the NBI Subsidiaries.

5.8 Reports to BanPonce. From the date hereof until the Closing
Date, NBI will promptly advise BanPonce in writing of all actions taken by
the directors and stockholders of NBI, AmMid and AmMid Subsidiaries at
meetings or in connection with written consents filed with NBI, AmMid and
AmMid Subsidiaries and furnish BanPonce with copies of all monthly and
other interim financial statements of NBI, AmMid and AmMid Subsidiaries as
they become available. NBI will keep BanPonce fully informed concerning
all trends and developments of which it becomes aware that may have a
material effect upon the business, properties or condition (either
financial or otherwise) of NBI, AmMid or AmMid Subsidiaries.

5.9 Supplements to NBI Disclosure Schedule. From the date hereof
until the Closing Date, NBI will promptly supplement or amend the NBI
Disclosure Schedule with respect to any matter hereafter arising that, if
existing or occurring at the date of this Agreement, would have been
required to be set forth or described in the NBI Disclosure Schedule. No
supplement or amendment to the NBI Disclosure Schedule will have any effect
for the purpose of determining satisfaction of the conditions set forth in
Section 6.2 hereof.

5.10 Allowance for Loan Losses. BanPonce acknowledges that the loan
loss reserve amount as of July 31, 1996 is adequate, based on the
information then known by BanPonce. Not later than as of the month-end
immediately preceding the Closing Date, charge-offs and other entries with
regard to AmMid's allowance for loan losses shall be then in accordance
with Schedule 2.24 to the NBI Disclosure Schedule.

ARTICLE VI

CONDITIONS TO OBLIGATIONS OF BANPONCE

The obligations of BanPonce under this Agreement to cause the
transactions contemplated therein to be consummated shall be subject to the
satisfaction of the following conditions unless waived in writing by
BanPonce:

6.1 No Material Adverse Change. There shall not have been any
material adverse change, or discovery of a condition or the occurrence of
any event that has resulted or is likely to result in such a change, in the
financial condition, assets, liabilities, results of operation or business
of NBI or AmMid effective as of the date hereof to the Closing Date, except
for such changes as may occur as a consequence of the transactions
contemplated by the Plan and this Agreement. For purposes hereof,
"material adverse change" means any change or effect, individually or
collectively, that is or is reasonably likely to be materially adverse to a
party's business, operations, properties (including intangible properties),
condition (financial or otherwise), assets or liabilities (including
contingent liabilities). Notwithstanding the foregoing, a decrease in the
aggregate deposit liabilities of AmMid since October 31, 1996, in an amount
of less than $12,000,000 shall not, in and of itself, constitute a
"material adverse change" hereunder.

6.2 Representations and Warranties. All representations and
warranties by NBI and Sellers contained in this Agreement shall be true and
correct in all material respects at, or as of, the Closing Date as though
such representations and warranties were made on and as of said date,
except with respect to (a) changes expressly contemplated in this
Agreement, or (b) representations or warranties as of a specified time
other than the Closing Date, which shall be true in all material respects
at such specified time.

6.3 Performance and Compliance. NBI and Sellers shall have
performed or complied with all covenants, agreements and conditions
required by this Agreement to be performed and satisfied by them on or
prior to the Closing Date unless waived in writing by BanPonce.

6.4 No Proceeding or Litigation. At the Closing Date, (i) no suit,
action or proceeding shall be pending or overtly threatened before any
court or other governmental agency by the federal or any state government
which seeks to restrain or prohibit the consummation of the Acquisition,
and (ii) no suit, action or proceeding shall be pending or, to the
knowledge of NBI, threatened against or affecting NBI or AmMid which is
likely to have a material adverse effect on NBI or AmMid.

6.5 Review or Audit by BanPonce and Accountants. Upon reasonable
advance notice, but in no case later than three (3) business days prior to
the Closing Date, BanPonce and Price Waterhouse shall have had an adequate
opportunity to conduct such a complete review, in accordance with standards
established by the American Institute of Certified Public Accountants, or
audit, in accordance with generally accepted auditing standards, of the
financial condition, assets, liabilities, results of operation and business
of NBI, AmMid and AmMid Subsidiaries as BanPonce shall deem prudent. Any
such audit or review shall be performed at BanPonce's sole expense.

6.6 Audit of Benefit Plans. Upon reasonable advance notice, but in
no case later than three (3) business days prior to the Closing Date,
BanPonce shall have had the opportunity to conduct, or to have conducted by
an entity of its choosing, at its expense, an audit of any Benefit Plans.

6.7 Opinion of Counsel for NBI and Sellers. BanPonce shall have
received an opinion from Burke, Warren & MacKay, P.C., counsel for NBI and
Sellers, dated the Closing Date, substantially in the form set forth in
Exhibit 6.7 hereto.

6.8 Certificate of Chief Executive Officer. NBI shall have
furnished BanPonce a certificate, signed by its Chief Executive Officer,
dated the Closing Date, to the effect that the conditions described in
Sections 6.1, 6.2, 6.3, 6.4, 6.12, 6.13, 6.14, 6.15 and 6.16 of this
Agreement have been fully satisfied.

6.9 Corporate Certificates. BanPonce shall have received (i) a
Certificate of Good Standing issued by the State of Delaware, certifying

that NBI is a corporation in good standing in Delaware, and (ii) a
certificate of corporate existence from the Illinois Commissioner relating
to AmMid, each dated within five business days prior to the Closing Date.

6.10 Bills for Certain Fees of NBI or AmMid. BanPonce shall have
received, for informational purposes only, a copy of the bills or
statements for fees, which NBI and Sellers represent are reasonable and
fair, from any accountants, attorneys or advisors to NBI or AmMid for
services performed in connection with the transactions contemplated in this
Agreement, through two (2) business days prior to the Closing Date;
provided, however, that bills and statements for fees shall not include
costs relating to the divesture of certain NBI Subsidiaries pursuant to the
Plan, the expenses of which shall be borne by Sellers.

6.11 Tax Opinion. BanPonce shall have received an opinion from
Vedder, Price, Kaufman & Kammholz substantially in the form of Exhibit 6.11
hereto dated the Closing Date, opining that the Acquisition will be treated
as a tax-free reorganization under the Code.

6.12 Termination of Pension Plan. NBI shall have taken all actions
necessary to cause the termination or merger into a Benefit Plan maintained
by BanPonce of the NBI pension plan.

6.13 Sale or Spin Off of Certain NBI Subsidiaries. In accordance
with the Plan, NBI shall have sold, spun off or otherwise transferred
without recourse all of its ownership interest in DeKalb, Northwest and
First Lake such that at the closing of the Acquisition, the only subsidiary
of NBI will be AmMid and NBI will not own, of record or beneficially, any
shares of DeKalb, Northwest or First Lake, nor have any remaining liability
for such subsidiaries.

6.14 NBI Common Stock Shares. BanPonce shall have received
certificates representing all Shares of NBI Common Stock, along with all
necessary stock powers and all other necessary transfer documents, duly
executed and endorsed to BanPonce in form and substance reasonably
acceptable to BanPonce.

6.15 Deposits at Closing. At Closing, the aggregate deposit
liabilities of AmMid shall have decreased no more than $12,000,000 from the
aggregate deposit liabilities of AmMid as of October 31, 1996.

6.16 Non-Competition Agreements. BanPonce shall have received duly
executed Non-Competition Agreements from Svendsen, Roth, Northwest and
First Bank of Schaumburg in the form of Exhibit 6.16 hereto; provided,
however, that Northwest will not be required to execute a Non-Competition
Agreement in the event that as of the Closing Date, Roth is not the largest
shareholder of Northwest (after giving effect to beneficial ownership of
Northwest by Roth, and including shareholdings of members of the immediate
family of Roth).

6.17 Conversion of Debentures. All Debentures shall have been
converted into shares of NBI Common Stock.

6.18 Sale of Data Systems/Termination of Data Systems Agreement.
AmMid shall have obtained a signed commitment from Data Systems, in a form
reasonably acceptable to BanPonce, whereby Data Systems shall agree, as
soon as practicable after the Closing, to (i) redeem its shares held by
AmMid for cash (such amount being referred to herein as the "Redemption
Amount"); and (ii) terminate the Data Processing Agreement between AmMid
and Data Systems in return for AmMid's payment of a termination fee in the
amount of the Redemption Amount.

6.19 Termination of Employment and Severance Agreements. The
Employment and Severance Agreements of Thomas H. Roth and Peter Wais (the
"Employment Agreements") shall have been terminated with no further
liability to, or obligation of, NBI.

6.20 Tax Sharing Agreements. All liabilities of NBI and AmMid to
any other party under any Tax Sharing Agreements shall have been satisfied.

ARTICLE VII

CONDITIONS TO THE OBLIGATIONS OF NBI AND SELLERS

The obligations of NBI and Sellers under this Agreement to cause the
transactions contemplated herein to be consummated shall be subject to the
satisfaction of the following conditions unless waived in writing by NBI
and Sellers:

7.1 No Material Adverse Change. There shall not have been any
material adverse change, or discovery of a condition or the occurrence of
any event that has or is likely to result in such a change, in the
consolidated financial condition, assets, liabilities, results of operation
or business of BanPonce from the date hereof to the Closing Date.

7.2 Representations and Warranties. All representations and
warranties of BanPonce contained in this Agreement shall be true and
correct in all material respects at, or as of, the Closing Date as though
such representations were made at and as of said date, except with respect
to changes expressly contemplated in this Agreement.

7.3 Performance and Compliance. BanPonce shall have performed or
complied with all covenants, agreements and conditions required by this
Agreement to be performed and satisfied by it at or prior to the Closing
Date.

7.4 No Proceeding or Litigation. At the Closing Date, (i) no suit,
action or proceeding shall be pending or overtly threatened before any
court or other governmental agency by the federal or any state government
in which it is sought to restrain or prohibit the consummation of the
Acquisition, and (ii) there shall be no suit, action or proceeding pending
or, to the knowledge of BanPonce, threatened against or affecting BanPonce
which is likely to have a material adverse effect on BanPonce.

7.5 Opinion of Counsel for BanPonce. BanPonce shall have delivered
to NBI an opinion of counsel for BanPonce, dated the Closing Date,
substantially in the form set forth in Exhibit 7.5 hereto.

7.6 Certificate of Executive Officer. BanPonce shall have
furnished to NBI a certificate, signed by any one of its executive officers
and dated the Closing Date, to the effect that the conditions described in
Sections 7.1, 7.2., 7.3 and 7.4 of this Agreement have been fully
satisfied.

7.7 Tax Opinion. NBI shall have received an opinion from Vedder,
Price, Kaufman & Kammholz, substantially in the form of Exhibit 7.7 hereto,
dated the Closing Date, opining that the Acquisition will be treated as a
tax-free reorganization under the Code. NBI and Sellers shall provide such
law firm with such representations as are true, accurate and complete with
respect to NBI, its stockholders and the Acquisition as are reasonably
necessary to enable such law firm to deliver such opinion (and the opinion
referred to in Section 6.11). The failure to obtain such opinion due to an
affirmative act or omission of NBI shall constitute a waiver of such
condition.

7.8 No Denial of Approval. No federal or state bank regulatory
authority having jurisdiction over the transactions contemplated by the
Plan shall have denied approval of the sale by NBI of Northwest to Svendsen
or the split-off of DeKalb to the Svendsen family pursuant to the Plan
following the best efforts of NBI to obtain such approval.

ARTICLE VIII

CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES

In addition to the provisions of Articles VI and VII hereof, the
obligations of NBI, Sellers and BanPonce to cause the transactions
contemplated herein to be consummated shall be subject to the satisfaction
of the following conditions:

8.1 Governmental Approvals. The parties hereto shall have received
all necessary approvals of governmental agencies and authorities, which do
not contain material terms or conditions that are not acceptable to
BanPonce, of the transactions contemplated by this Agreement and each of
such approvals shall remain in full force and effect at the Closing Date
and such approvals and the transactions contemplated thereby shall not have
been contested by any federal or state governmental authority nor by any
other third party by formal proceeding. BanPonce shall promptly notify NBI
upon receipt of all necessary governmental approvals. If any contest as
aforesaid is brought by formal proceedings, any party may, but shall not be
obligated to, answer and defend such contest.

8.2 Securities Law Compliance. The Registration Statement shall
have become effective by an order of the SEC and the prospectus included
therein as of the date of its effectiveness shall have been delivered to
Sellers; the BanPonce Common Stock to be issued in the Acquisition shall

have been qualified or exempted under all applicable state securities or
blue sky laws; and there shall have been no stop order issued or threatened
by the SEC that suspends the effectiveness of the Registration Statement,
and no proceeding shall have been commenced, be pending or have been
overtly threatened for such purpose.

8.3 Internal Revenue Service Ruling. NBI shall have filed with the
IRS a request for a Private Letter Ruling in the form attached hereto as
Exhibit 8.3, and shall have received such Private Letter Ruling, with
customary representations and warranties, in a form reasonably satisfactory
to counsel for BanPonce and NBI.

ARTICLE IX

INDUCEMENT

9.1 Inducement. (a) Subject to subsection (d), as a condition and
inducement to BanPonce's willingness to enter into and perform this
Agreement, in the event that a Trigger Event (as hereinafter defined) has
occurred, then NBI shall pay to BanPonce a fee of $1,000,000 if such
Trigger Event occurs under Section 9.1(b)(i) or 9.1(b)(iii) below, or
$500,000 if such Trigger Event occurs under Section 9.1(b)(ii) below. Such
fee shall be payable in immediately available funds within two (2) days
following the occurrence of a Trigger Event.

(b) As used herein, "Trigger Event" shall mean the occurrence of
one or more of the following events:

(i) Except as specifically permitted by the Plan or as
otherwise provided herein, NBI and/or one or more of its stockholders
enters into an agreement or understanding with a party other than
BanPonce providing for (1) the acquisition by any person, other than
BanPonce or any BanPonce Subsidiaries, alone or together with such
person's affiliates and associates or any group, of beneficial
ownership of 10% or more of NBI Common Stock (for purposes of this
Section 9.1(b)(i), the terms "group" and "beneficial ownership" shall
be as defined in Section 13(d) of the Exchange Act and regulations
promulgated thereunder and as interpreted thereunder); (2) a merger,
consolidation, liquidation or dissolution, share exchange, business
combination or any other similar transaction involving NBI or AmMid;
or (3) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 25% or more of the assets of NBI or AmMid, in a single
transaction or series of transactions, or the public announcement, by
or on behalf of NBI or one or more of its stockholders, of
negotiations relating to or the occurrence of any of the above; or
the announcement of a tender or exchange offer with the intent to
accomplish any of the foregoing, which offer the NBI Board of
Directors does not reject immediately after receipt thereof;

(ii) Termination of this Agreement following a breach hereof
by NBI; or

(iii) The Board of Directors of NBI shall have withdrawn,
modified or amended in any respect its approval or recommendation of
this Agreement or the transactions contemplated hereby or shall have
resolved to do any of the foregoing.

(c) As used in this Agreement, "Person" shall mean any individual,
firm, corporation, or other entity and shall include any syndicate or group
of persons deemed to be a "person" by Section 13(d)(3)(e) of the Securities
Act, and "Affiliate" shall mean a Person that directly or indirectly,
through one or more intermediaries, (A) beneficially owns, directly or
indirectly, in excess of 10% of the voting capital stock of any other
Person or (B) controls, is controlled by, or is under common control with
another Person.

(d) The rights of BanPonce under this Section 9.1 shall terminate
upon the earliest to occur of (i) the Closing Date, (ii) the termination of
this Agreement by NBI and Sellers pursuant to Section 10.1(c)(ii) or
10.1(c)(iii), (iii) the termination of this Agreement by mutual agreement
of the parties or (iv) the expiration of [one (1) year] after the
termination of this Agreement (other than terminations described in clause
(ii) or (iii)).

ARTICLE X

TERMINATION/INDEMNIFICATION

10.1 Reasons for Termination. This Agreement may be terminated and
the Acquisition abandoned at any time before the Closing Date:

(a) By mutual written consent of NBI, Sellers and BanPonce;

(b) By written notice from BanPonce to NBI and Sellers if:

(i) any condition set forth in Article VI or VIII of this
Agreement has not been substantially satisfied or waived in writing
by June 30, 1997, unless the failure to satisfy such condition is due
to a breach of this Agreement by BanPonce;

(ii) any warranty or representation made by NBI or Sellers is
discovered to be or to have become untrue, incomplete or misleading,
and such breach (if capable of cure) remains uncured for a period of
twenty (20) days after such notice is given, where any such breach,
individually or in the aggregate, is reasonably likely to have a
material adverse impact on NBI or AmMid or on the benefits to have
been received by BanPonce from consummation of the transactions
contemplated by this Agreement; or

(iii) NBI or any Seller shall have breached one or more
covenants of this Agreement in any material respect and such breach
(if capable of cure) remains uncured for a period of twenty (20) days
after such notice is given; or

(i) any condition set forth in Article VII or VIII of this
Agreement has not been substantially satisfied or waived in writing
by June 30, 1997, unless the failure to satisfy such condition is due
to a breach of this Agreement by NBI or Sellers;

(ii) any warranty or representation made by BanPonce shall be
discovered to be or to have become untrue, incomplete or misleading,
and such breach (if capable of cure) remains uncured for a period of
twenty (20) days after such notice is given, where any such breach,
individually or in the aggregate, is reasonably likely to have a
material adverse impact on BanPonce or on the benefits to have been
received by NBI or the Sellers from consummation of the transactions
contemplated by this Agreement; or

(iii) BanPonce shall have breached one or more covenants of
this Agreement in any material respect and such breach (if capable of
care) remains uncured for a period of twenty (20) days after such
notice is given.

10.2 Liability. In the event of termination of this Agreement
caused (a) otherwise than by breach of a party hereto, or (b) by any breach
or misrepresentation by a party hereto not covered by the next sentence,
there shall be no liability on the part of NBI, Sellers or BanPonce of any
nature whatsoever except that each party shall pay its own fees and
expenses pursuant to Section 11.1 of this Agreement and shall continue to
comply with the obligations set forth in Section 1.7 of this Agreement. In
the event of termination of this Agreement caused by (i) willful breach by
a party of any agreement, covenant, or undertaking of such party contained
herein or in any exhibit hereto; (ii) any uncured material
misrepresentations or breach of warranty in any material respect by a party
herein; or (iii) the failure of any condition set forth in Article VI, VII
or VIII hereof which has failed because a party did not exercise good faith
and best efforts towards the fulfillment of such condition, then the other
party shall be entitled to all its legal and equitable remedies.

10.3 Survival of Representations and Warranties. EXCEPT AS PROVIDED
IN SECTION 10.4(b) BELOW, THE REPRESENTATIONS, WARRANTIES, COVENANTS, AND
AGREEMENTS OF BANPONCE, THE SELLERS AND NBI CONTAINED IN THIS AGREEMENT
SHALL SURVIVE THE CLOSING FOR A PERIOD OF EIGHTEEN (18) MONTHS THEREAFTER
(THE "EXPIRATION DATE"). EXCEPT AS PROVIDED IN SECTION 10.4(b) BELOW,
AFTER THE EXPIRATION DATE, NO CLAIM OR ANY OTHER CLAIM MAY BE BROUGHT FOR
INDEMNIFICATION, REIMBURSEMENT, RECOVERY, OR OTHERWISE WITH RESPECT TO THIS
AGREEMENT AND THE REPRESENTATIONS, WARRANTIES, COVENANTS, AND AGREEMENTS
CONTAINED HEREIN; PROVIDED, HOWEVER, THAT ANY CLAIM FOR INDEMNIFICATION
ASSERTED IN WRITING ON OR BEFORE THE EXPIRATION DATE SHALL SURVIVE UNTIL
RESOLVED OR JUDICIALLY DETERMINED.

10.4 Indemnification.

(a) Indemnification by Responsible Sellers. Until the Expiration
Date, Svendsen and Roth (collectively referred to herein as "Responsible
Sellers") and NBI shall save, defend, indemnify and hold harmless BanPonce
and its parent, subsidiaries, affiliates, stockholders, officers,
directors, employees, agents, successors, and assigns from and against any
and all losses incurred by or assessed against any of them and arising out
of, based upon or relating to the untruth, inaccuracy, or breach of any
representation, warranty, agreement, or covenant of NBI or any Seller
contained in this Agreement; provided, however, that the Responsible
Sellers shall not be required to indemnify and hold BanPonce harmless under
this Section 10.4(a) unless and until the aggregate amount of such Losses
exceeds $100,000; provided, further, that, except as provided in Section
10.4(b) below, in no event shall Responsible Sellers collectively be
required to indemnify BanPonce under this Section 10.4(a) for an amount in
the aggregate in excess of $400,000.

(b) Indemnification by Responsible Sellers. From and after the
Closing, Responsible Sellers shall save, defend, indemnify and hold
harmless BanPonce and its parent, subsidiaries, affiliates, stockholders,
officers, directors, employees, agents, successors, and assigns from and
against any and all Losses incurred by or assessed against any of them and
arising out of, based upon or relating to the Plan or tax consequences
relating thereto, or any transactions contemplated thereby.

10.5 Claims for Losses. A party entitled or claiming to be entitled
to indemnification pursuant to Section 10.4 above (the "Indemnitee") shall
request reimbursement for Losses against which Indemnitee is or may be
indemnified by another party under this Agreement (the "Indemnitor") by
submitting Claim Requests as set forth in Sections 10.6 and 10.7 below.
Any party submitting a Claim Request shall provide the Indemnitor with
access to (i) such information as is, under the circumstances, reasonably
necessary to allow the Indemnitor to determine its liability for the Losses
for which reimbursement is being sought, (ii) supporting documentation
reasonably sufficient to evidence the amount of the Losses, and (iii) an
assignment to the Indemnitor of all recoveries related to the Claim
Request. For purposes hereof, "Losses" shall mean all losses, fines,
penalties, settlements, damages, interest, awards, judgments, taxes, and
out-of-pocket costs and expenses (including court costs, reasonable
attorneys' fees, and other expenses of investigating and defending)
relating to or arising out of NBI's or AmMid's business, actually incurred
by BanPonce, NBI or AmMid prior to the Expiration Date or of which written
evidence or notice has been received from a third party prior to the
Expiration Date, which evidence provides a reasonable basis to believe that
any of such items will be incurred, or the subject matter of such evidence
or notice will become subject to litigation.

10.6 Third-Party Claims. By the end of the calendar month following
the date on which Indemnitee receives written notice of the commencement of
any action or the assertion of any claim, liability, or obligation by a
third party (whether by legal process or otherwise), against which claim,
liability, or obligation Indemnitor is, or may be, required under this

Agreement to indemnify Indemnitee, the Indemnitee shall, if a claim thereon
is to be, or may be, made against the Indemnitor, deliver a Claim Request
to the Indemnitor and give the Indemnitor a copy of such claim process
and/or any and all legal pleadings relating thereto. The Indemnitor shall
have the right to contest and conduct the defense of such action with
counsel of reputable standing reasonably acceptable to Indemnitee by giving
written notice to the Indemnitee of its election to do so within thirty
(30) business days of the receipt of the Claim Request, and the Indemnitee
may participate in such defense by counsel of its own choosing at its own
expense. If the Indemnitee shall be required by final judgment not subject
to appeal or by a settlement agreement to pay any amount in respect of any
obligation or liability against which the Indemnitor has agreed to
indemnify the Indemnitee under this Agreement, such amount plus all
reasonable out-of-pocket expenses incurred by such Indemnitee in accordance
with such obligation or liability (including, without limitation,
reasonable attorneys' fees (other than fees incurred by counsel to
Indemnitee employed pursuant to the immediately preceding sentence) and
out-of-pocket costs of investigations) shall be promptly paid by the
Indemnitor to the Indemnitee, subject to reasonable documentation and cost
substantiation of all such amounts. The Indemnitee shall not settle or
compromise any claim, action or proceeding without the prior written
consent of the Indemnitor, which consent shall not be unreasonably
withheld. The Indemnitee shall use reasonable efforts to mitigate any
damage, loss, cost, expense, liability or obligation with respect to which
it shall be entitled to indemnification hereunder. Failure of the
Indemnitee to give the Claim Request to Indemnitor within the period
required hereunder shall not affect the Indemnitee's rights to
indemnification hereunder, except if (and then only to the extent that) the
Indemnitor incurs additional out-of-pocket expenses or the Indemnitor's
defense of such claim is actually prejudiced by reason of such failure to
give timely notice.

10.7 Direct Claims. With respect to claims other than third-party
claims, the Indemnitee shall use reasonable efforts promptly to deliver a
Claim Request to the Indemnitor, but failure of the Indemnitee so to give
notice to the Indemnitor shall not affect the rights of Indemnitee to
indemnification hereunder, except if (and then only to the extent that) the
Indemnitor incurs additional out-of-pocket expenses or the Indemnitor is
actually prejudiced by reason of such failure to give timely notice.

ARTICLE XI

MISCELLANEOUS

11.1 Expenses. Each party to this Agreement will pay its respective
fees and expenses incurred in connection with the preparation and
performance of this Agreement, including fees and expenses of its counsel,
accountants, and other experts and advisors.

11.2 Waivers; Amendments. At any time prior to the Closing Date,
any of BanPonce, by action taken by its Board of Directors or any committee
thereof or officers thereunto authorized, NBI, by action taken by its Board
of Directors or officers thereunto authorized, or Sellers may waive the
performance of any of the obligations of the others or waive compliance by
the others with any of the covenants or conditions contained in this

Agreement or agree to the amendment or modification of this Agreement by an
agreement in writing executed in the same manner as this Agreement.

11.3 Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns, but shall not be assigned by the parties hereto without the prior
written consent of the other parties, except that BanPonce may assign its
rights and obligations (with continuing recourse to BanPonce) hereunder to
Popular International Bank, Inc., a Puerto Rico corporation and wholly-
owned subsidiary of BanPonce, and any wholly owned direct or indirect
subsidiary of BanPonce; provided, however, that in the event BanPonce or
any of its successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then, and in
each such case, proper provision shall be made so that the successors and
assigns of BanPonce, as the case may be, assume the obligations set forth
in this Agreement.

11.4 Entire Agreement. This Agreement and the Affiliates'
Undertakings supersede any other agreement, whether written or oral, that
may have been made or entered into by NBI, BanPonce or Sellers or by any
officer or officers of such parties relating to the acquisition of the
business or the capital stock of NBI by BanPonce. The aforementioned
agreements constitute the entire agreement by the respective parties, and
there are no agreements or commitments except as set forth herein and
therein.

11.5 Captions and Counterparts. The captions in this Agreement are
for convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in several counterparts, each of which shall
constitute one and the same instrument.

11.6 Governing Law. The Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware.

11.7 Nonsurvival. No representations, warranties or covenants in
this Agreement shall survive (a) the Acquisition, other than the
obligations set forth in Sections 1.7, 1.9, 1.10, 4.3 and 4.5, and the
representations set forth in Article II of this Agreement, and (b) the
termination under Article X hereof, other than the obligations set forth in
Sections 1.7, 1.9, 9.1 and 11.2.

11.8 Notices. All notices given hereunder shall be in writing and
shall be mailed by first class mail, postage prepaid, or by nationally
recognized overnight delivery service, addressed as follows:

(a) If to BanPonce, to:

BanPonce Corporation
Banco Popular Center
209 Munoz Rivera
3rd Floor
San Juan, Puerto Rico 00918
Attn: Brunilda Alvarez

Banco Popular de Puerto Rico
2525 North Kedzie Avenue
Chicago, Illinois 60647
Attn: Roberto Herencia

with a copy to:

Robert J. Stucker, Esq.
Douglas M. Hambleton, Esq.
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
26th Floor
Chicago, IL 60601-1003

(b) If to NBI or Sellers, to:

(Prior to the Closing Date)

National Bancorp, Inc.
1300 E. Irving Park Road
Melrose Park, IL 60107
Attn: President

(After the Closing Date)

First Bank of Schaumburg
321 West Golf Rod
Schaumburg, Illinois 60196
Attn: President

with a copy to:

Thomas H. Jacobs, Esq.
Burke, Warren & MacKay, P.C.
330 North Wabash Avenue
Suite 2200
Chicago, IL 60611

IN WITNESS WHEREOF, the parties hereto have caused this Stock
Purchase Agreement to be duly executed as of the date first above written.

ATTEST: BANPONCE CORPORATION

/s/ BRUNILDA SANTOS DE ALVAREZ
- -------------------------------
Secretary - Assistant By: /s/ JORGE A. JUNQUERA
------------------------
Its Senior Vice President

ATTEST: NATIONAL BANCORP, INC.

/s/ THOMAS H. JACOBS
- -------------------------------
Secretary - Assistant By: /s/ THOMAS H. ROTH
-------------------------
Its President

SELLERS

/s/ ROBERT W. SVENDSEN /s/ VALDA M. SVENDSEN
- ------------------------------- -------------------------------
ROBERT W. SVENDSEN VALDA M. SVENDSEN

/s/ THOMAS H. ROTH
-------------------------------
AMERICAN MIDWEST BANK & TRUST, THOMAS H. ROTH
Trustee for Robert W. Svendsen
IRA #6028

By: /s/ BARBARA KARG
----------------------------
Its Vice President

/s/ RAY WEISS /s/ ROBERT C. GREMLEY
- -------------------------------- -------------------------------
RAY WEISS ROBERT C. GREMLEY

AMERICAN MIDWEST BANK & TRUST, AMERICAN MIDWEST BANK & TRUST,
Trustee for Howard E. Jahntz Trustee for Thomas H. Jacobs
IRA #6131 IRA #36650

By: /s/ BARBARA KARG By: /s/ BARBARA KARG
--------------------------- -------------------------
Its Vice President Its Vice President

/s/ RONALD T. CIUCCI /s/ JAMES A. NORINI
- ------------------------------- -------------------------------
RONALD T. CIUCCI JAMES A. NORINI

/s/ WAYNE HUMMER
AMERICAN MIDWEST BANK & TRUST, WAYNE HUMMER, Custodian for
Trustee for James J. Carmody Kurt Heerwagen IRA

By: /s/ BARBARA KARG
---------------------------
Its Vice President

/s/ PETER F. WAIS /s/ RANDALL S. SVENDSEN
- ------------------------------- -------------------------------
PETER F. WAIS RANDALL S. SVENDSEN

/s/ RICHARD L. WILLEY /s/ LOUIS D. NAPOLITANO
- ------------------------------- -------------------------------
RICHARD L. WILLEY LOUIS D. NAPOLITANO

/s/ ELIZABETH A. CHARTIER /s/ DOMINIC F. PANTANO
- ------------------------------- -------------------------------
ELIZABETH A. CHARTIER DOMINIC F. PANTANO

/s/ KURT HEERWAGEN
-------------------------------
AMERICAN MIDWEST BANK & TRUST, KURT HEERWAGEN
Trustee for Frances Napolitano
IRA #6031

By: /s/ BARBARA KARG
---------------------------
Its Vice President

/s/ RONALD P. SVENDSEN
------------------------------
AMERICAN MIDWEST BANK & TRUST, RONALD P. SVENDSEN
Trustee for Louis Napolitano
IRA #6030

By: /s/ BARBARA KARG
---------------------------
Its Vice President

/s/ ROBERT W. SVENDSEN
-------------------------------
AMERICAN MIDWEST BANK & TRUST, ROBERT W. SVENDSEN
Trustee for Mary Gremley IRA #6343

By: /s/ BARBARA KARG
---------------------------
Its Vice President

/s/ JAMES J. CARMODY
-------------------------------
AMERICAN MIDWEST BANK & TRUST, JAMES J. CARMODY
Trustee for Robert C. Gremley
IRA #6342

By /s/ BARBARA KARG /s/ JACK CARPENTER
--------------------------- -------------------------------
Its Vice President JACK CARPENTER

/s/ JEFF P. NASH
-------------------------------
AMERICAN MIDWEST BANK & TRUST, JEFF P. NASH
Trustee for Elmore Boeger IRA #6272

By: /s/ BARBARA KARG
----------------------------
Its Vice President

/s/ ROBERT C. GREMLEY /s/ HOWARD JAHNTZ
- -------------------------------- -------------------------------
ROBERT C. GREMLEY, Trustee of the HOWARD JAHNTZ, Trustee of the
Robert C. Gremley Self Directed Trust Howard Jahntz Living Trust
dated May 18, 1979

/s/ LUCILLE A. WEISS
- --------------------------------
LUCILLE A. WEISS
46
<PAGE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT A

HOLDERS OF NBI COMMON STOCK OR DEBENTURES

<S> <C> <C> <C> <C>
NATIONAL BANCORP INC. #Shares
SHAREHOLDERS LISTING 9/30/96 SER 4 Total
#NBI Series 4 Convert NBI
NAME & ADDRESS Shares DEB @ $220M Shares
________ ________ _______ _______

AMERICANMIDWEST BANK AS TRUSTEE 0.61539 0 0.00000 0.61539
TRUST #6272 ELMORE BOEGER
303 E. WASHINGTON STREET #331
BENSENVILLE, ILLINOIS 60106

JAMES J. CARMODY 0.16667 0.16667
161 CARRIAGE WAY
BURR RIDGE ILLINOIS 60521

AMERICANMIDWEST BANK AS TRUSTEE 1.70512 40,000 0.18182 1.88694
IRA #6029 JAMES J. CARMODY
1600 W. LAKE STREET
MELROSE PARK ILLINOIS 60160

JACK CARPENTER 0.16667 0.16667
319 GREEN ACRES DRIVE
DEKALB, ILLINOIS 60115

RONALD T. CIUCCI 1.3333 40,000 0.18182 1.51515
1080 SURREY LANE
ITASCA, ILLINOIS 60143

ROBERT C. GREMLEY 3.30769 3.30769
3 COURT FOX RIVER VALLEY
LINCOLNSHIRE, ILLINOIS 60069

ROBERT C. GREMLEY SELF DIRECTION 0.10000 55,000 0.25000 0.35000
OF TRUST DATED 12/27/91
ROBERT C. GREMLEY TRUSTEE
3 COURT FOX RIVER VALLEY
LINCOLNSHIRE, ILLINOIS 60069

AMERICANMIDWEST BANK AS TRUSTEE 0.10667 0.10667
IRA #6342 ROBERT C. GREMLEY
1600 W. LAKE STREET
MELROSE PARK ILLINOIS 60160

AMERICANMIDWEST BANK AS TRUSTEE 0.12667 0.12667 IRA
#6343 MARY GREMLEY
1600 W. LAKE STREET
MELROSE PARK ILLINOIS 60160

KURT HEERWAGEN 1.33333 1.33333
4142 HOWARD AVENUE
WESTERN SPRINGS, ILLINOIS 60558

WAYNE HUMMER AS CUSTODIAN FOR 0.00000 40,000 0.18182 0.18182
KURT HEERWAGEN IRA #052-3372316
300 S WACKER DRIVE
CHICAGO ILLINOIS 60606

</TABLE>
<PAGE>
<PAGE>

<S> <C> <C> <C> <C>
NATIONAL BANCORP INC. #Shares
SHAREHOLDERS LISTING 9/30/96 SER 4 Total
#NBI Series 4 Convert NBI
NAME & ADDRESS Shares DEB @ $220M Shares
________ ________ _______ _______

HOWARD E. JAHNTZ LIVING TRUST 2.33333 2.33333
DTD 5/18/79 CO-TRUSTEES
HOWARD & CARLOTTA JAHNTZ
18 SHEFFIELD LANE
OAK BROOK, ILLINOIS 60523

AMERICANMIDWEST BANK AS TRUSTEE 0.00000 55,000 0.25000 0.25000
IRA #6131 HOWARD E. JAHNTZ
1600 W. LAKE STREET
MELROSE PARK ILLINOIS 60160

JEFF P. NASH 0.16667 0.16667
2932 COUNTRY CLUB LANE
DEKALB, ILLINOIS 60115

LOUIS D. NAPOLITANO 1.41025 40,000 0.18182 1.59207
1007 NORTH 13TH AVENUE
MELROSE PARK, ILLINOIS 60160

AMERICANMIDWEST BANK AS TRUSTEE 0.06154 0.06154
IRA #6030 LOUIS NAPOLITANO
1600 W. LAKE STREET
MELROSE PARK ILLINOIS 60160

AMERICANMIDWEST BANK AS TRUSTEE 0.09231 0.09231
IRA #6031 FRANCES NAPOLITANO
1600 W. LAKE STREET
MELROSE PARK ILLINOIS 60160

JAMES A. NORINI 1.00000 40,000 0.18182 1.18182
3 HUNT CLUB DRIVE
OAK BROOK, ILLINOIS 60521

DOMINIC F. PANTANO 1.00000 30,000 0.13636 1.13636
4 N 225 9TH AVENUE
ADDISON, ILLINOIS 60101

THOMAS H. ROTH 11.00000 375,000 1.70454 12.70454
1709 APPLEBY COURT
INVERNESS, ILLINOIS 60067

RANDALL S. SVENDSEN 3.33333 40,000 0.18182 3.51515
420 CANTEBURRY
HINSDALE, ILLINOIS 60521

ROBERT W. SVENDSEN SR. 38.66667 940,000 4.27273 42.93940
1601 BURR RIDGE CLUB DRIVE
HINSDALE, ILLINOIS 60521

</TABLE>
<PAGE>
<PAGE>

<S> <C> <C> <C> <C>
NATIONAL BANCORP INC. #Shares
SHAREHOLDERS LISTING 9/30/96 SER 4 Total
#NBI Series 4 Convert NBI
NAME & ADDRESS Shares DEB @ $220M Shares
________ ________ _______ _______

AMERICANMIDWEST BANK AS TRUSTEE 8.00000 130,000 0.59091 8.59091
IRA #6028 ROBERT W. SVENDSEN SR.
1600 W. LAKE STREET
MELROSE PARK ILLINOIS 60160

ROBERT W. SVENDSEN JR. 3.00000 3.00000
740 COUNTY LINE ROAD
HINSDALE, ILLINOIS 60521

RONALD P. SVENDSEN 3.00000 3.00000
205 NORTH PARK
HINSDALE, ILLINOIS 60521

VALDA M. SVENDSEN 4.00000 900,000 4.09091 8.09091
1601 BURR RIDGE CLUB DRIVE
HINSDALE, ILLINOIS 60521

PETER F. WAIS 1.33333 40,000 0.18182 1.51515
938 PINE STREET
WINNETKA, ILLINOIS 60093

RAY WEISS 2.48718 110,000 0.50000 2.98718
1006 NORTH 10TH AVENUE
MELROSE PARK, ILLINOIS 60160

LUCILLE A. WEISS 1.00000 1.00000
1006 NORTH 10TH AVENUE
MELROSE PARK, ILLINOIS 60160

RICHARD L. WILLEY 1.00000 40,000 0.18182 1.18182
715 CAMBRIDGE PLACE
SYCAMORE, ILLINOIS 60178

AMERICANMIDWEST BANK TRUST AS TRUSTEE 0.33333 55,000 0.25000 0.58333
IRA #6650 THOMAS H. JACOBS
1600 WEST LAKE STREET
MELROSE PARK, ILLINOIS 60160

ELIZABETH A. CHARTIER 0.00000 30,000 0.13636 0.13636
940 MITCHELL AVENUE
ELMHURST, ILLINOIS 60126

TREASURY STOCK 1.02500 1.02500
________ _________ ________ _________

TOTAL SHARES ISSUED 93.20448 3,000,000 13.63637 106.84085

LESS: TREASURY STOCK (1.02500) (1.02500)

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

TOTAL SHARES OUTSTANDING 92.17948 105.81585
======== =========
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 2.3(b)

LICENSE AGREEMENT

THIS LICENSE AGREEMENT, effective _____________________, 1997, by and
between AMERICAN MIDWEST BANK & TRUST, an Illinois state bank with its
principal place of business located at 1600 West Lake Street, Melrose Park,
Illinois ("Licensor"), and [AMERICAN MIDWEST CREDIT CARD CO.], a
corporation organized and existing under the laws of the State of Illinois,
with its principal place of business located at _______________________,
______________________ ("Licensee");

W I T N E S S E T H:

WHEREAS, Licensor and Licensee are parties to that certain Bank
Services and Merchant Processing Agreement made as of May 23, 1994, as
amended by the First Amendment thereto dated January 17, 1996, and the
Second Amendment thereto dated August 26, 1996 (as amended, the "Merchant
Processing Agreement"), wherein Licensor granted Licensee the right to use
the mark AMERICANMIDWEST (set forth on Exhibit A) for use in connection
with credit card merchant processing services; and

WHEREAS, Licensor and Licensee desire to set forth in greater detail
their understanding in respect to Licensee's right to use AMERICANMIDWEST
by Licensee.

NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, and
the mutual undertakings of the parties as hereinafter expressed:

IT IS AGREED:

1. GRANT

Licensor hereby grants to Licensee a non-exclusive royalty-free
license to use AMERICANMIDWEST (the "Mark") as a service mark only in
connection with credit card merchant processing services in the State of
Illinois.

2. TERM

The term of this License Agreement shall be [for so long as the
Merchant Processing Agreement shall remain in full force and effect].

3. RELATIONSHIP OF THE PARTIES

This License Agreement does not create nor is it to be construed as
creating a partnership, joint venture, or the relationship of principal and
agent between Licensor and Licensee. Licensee is and shall at all times be
deemed to be a separate corporation. No representations shall be made by

either party which would create an agency, partnership or joint venture,
and neither party shall have authority to act for the other in any manner
to create obligations or debts which purport to be binding on the other,
except as expressly provided in this License Agreement. There shall be no
liability on the part of Licensor to any person for any debts incurred on
behalf of Licensee and its business unless Licensor agrees in writing to
pay such debts. Licensee shall not indicate in any manner whatsoever that
it is a licensee of Licensor or that it has any relationship, contractual
or otherwise, with Licensor.

4. RESTRICTIONS UPON USE

A. Quality Control

Licensor expressly recognizes Licensee's prior and current use
of the Mark and the quality, integrity, goodwill and reputation of Licensee
in connection with its offering of the services associated with the Mark.
Licensee covenants and agrees to continue to offer the services under the
Mark in the same high quality manner in which it has offered its services
in the past. Licensee acknowledges that if the services conducted by it
under the Mark is inferior in quality, integrity or otherwise are below the
standards Licensee has set in connection with its offering of its services,
the valuable goodwill and reputation that Licensor has in the Mark could be
impaired. In order that the quality of the services offered under the Mark
is assured, Licensee shall exercise the utmost care and attention in the
offering of its services under the Mark. In connection with Licensor's
assurance of quality, Licensor shall have the right, during reasonable
business hours and upon reasonable notice and with a frequency not to
exceed a fiscal quarterly basis, to inspect Licensee's operations of the
Licensee's services that are promoted under the Mark.

All services performed under the Mark shall at all times be in
compliance with the applicable federal and state laws, and the services
shall be performed in a manner so as not to bring discredit upon the Mark.

B. Advertising

All advertising and publicity of Licensee featuring the Mark
shall be conducted in good taste. Licensee shall periodically send and/or
send at the request of Licensor, representative advertisements featuring
the Mark which are used by Licensee.

C. Trade Conduct

Licensee shall conduct itself with due regard to trade and
business ethics, and shall not engage in or knowingly permit any acts or
practices by its employees or dealers which would disparage or tend to
disparage the Mark or reduce or diminish the goodwill thereof.

5. INDEMNIFICATION AND INSURANCE.

Licensee agrees to indemnify Licensor and to undertake to defend
Licensor and to hold Licensor harmless from any claims, suits, loss and
damage (including reasonable attorney's fees, costs, expenses and the like)
arising out of any allegedly unauthorized use by Licensee of the Mark or
any other alleged action by Licensee of any nature whatsoever, including
without limitation those arising out of the rendering of services under the
Mark, alleged defects in Licensee's premises or facilities, or arising out
of the negligent operation of Licensee's premises or facilities. In the
event of any such action, Licensor shall have sole and exclusive control
over the defense thereof and any settlement, compromise or other
disposition thereof, as well as the right to select counsel of its own
choosing to defend such action on behalf of Licensor and Licensee.
Licensee further agrees to maintain at its expense insurance with an
underwriter approved by Licensor and in such amounts as Licensor shall from
time to time determine for the benefit of Licensor and Licensee, jointly
and singly, covering liability of all kinds. The minimum amount of such
insurance shall be One Million and no/100 Dollars ($1,000,000.00) for
personal injury to or death of any one person in any occurrence, and One
Million and no/100 Dollars ($1,000,000.00) for personal injury to or death
of more than one person in any occurrence, and property damage in the
amount of One Million and no/100 Dollars ($1,000,000.00). The policy shall
insure Licensee as well as Licensor against any and all liability to
persons, including customers, invitees or employees of Licensee. Licensee
also agrees to lodge said certificates of insurance with Licensor, to pay
all premiums promptly when due, and to notify Licensor promptly upon such
payment.

6. ASSIGNABILITY

The License hereby granted shall be and hereby is personal to
Licensee and shall not be assignable by act of Licensee, directly or
indirectly, without the prior written consent of Licensor. Licensor may
assign all or part of this License Agreement without the consent of
Licensee.

7. WAIVER

No custom or practice of parties at variance with the terms hereof,
nor any failure by Licensor to insist upon strict compliance by Licensee
with the terms hereof, nor any failure of Licensor to exercise any of its
rights hereunder shall constitute a waiver of any of the terms, conditions
or obligations of this License Agreement. Licensor's waiver of a
particular default on the part of Licensee shall not affect Licensor's
rights with respect to any subsequent default of any nature, nor shall any
delay or failure by Licensor to exercise any rights arising from a default
affecting Licensor's rights with respect to said default or any subsequent
default.

8. SEVERABILITY

If any part of this License Agreement for any reason be declared
invalid, such declaration shall not affect the validity of the remaining
portion, which remaining portion shall remain in force and effect as if
this License Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto
that they would exercise the remaining portion of this License Agreement
without including therein any such part, parts or portions which may, for
any reason, be hereinafter declared invalid.

9. NOTICES

Any notice required or permitted to be given hereunder shall be in
writing and shall be delivered to the other party personally or by
registered or certified mail, with return receipt requested, at the address
indicated on the title page of this License Agreement. Notice to Licensor
shall be directed to the corporate Secretary thereof. Either party may
designate another address at any time by appropriate written notice to the
other.

10. TERMINATION

A. With Cause

In the event of breach or failure to perform any of the terms
or conditions of this License Agreement on the part of Licensee, or in the
event of an uncured default on the part of Licensee, Gitles or Vertel as
set forth in paragraph 14 of the Merchant Processing Agreement, Licensor
may terminate this License Agreement upon written notice of the nature of
such breach or non-performance to the defaulting party provided such breach
or failure to perform is not cured within ten (10) days from the date of
said notice. If Licensee does not cure such breach or failure to perform
within said period, then said notice served upon Licensee shall effect
termination of this License Agreement at the end of such period.

B. Automatic

This License Agreement shall automatically terminate if
Licensee files a petition in bankruptcy or is adjudicated a bankrupt, or if
a petition in bankruptcy is filed against Licensee or if it becomes
insolvent, or makes an assignment for the benefit of its creditors or an
arrangement pursuant to any bankruptcy law, or if Licensee discontinues its
business or if a receiver is appointed for it or its business, or if it
fails to use the Mark for two consecutive years in connection with
providing merchant processing Services. In no event shall this License
Agreement or any right or interest hereunder be deemed an asset in any
bankruptcy, insolvency, assignment, arrangement or receivership proceeding.

11. OBLIGATION OF LICENSEE UPON TERMINATION

In the event of termination of this License Agreement for any reason,
Licensee, upon ten (10) days of the termination date, shall:

A. Cease using, advertising and/or displaying the Mark;

B. Destroy all signs which display the Mark and destroy all paper
products, advertising and other material bearing the Mark; and

C. Execute any and all documents which manifest the severance of
the relationship between the parties, including but not limited
to releases, disclaimers, assignments and the like.

12. OBLIGATION OF LICENSEE NOT TO USE MARK

For the duration of this License Agreement and thereafter, Licensee
agrees not to use a trademark, service mark, trade name, corporate name or
other identifying means identical to or a colorable imitation of the Mark
except as permitted herein.

13. USE OF LICENSEE ENURES TO THE BENEFIT OF LICENSOR

For the duration of this License Agreement and thereafter, Licensee
agrees that nothing herein shall give to Licensee any right, title or
interest in the Mark (except the right to use said Mark in accordance with
the terms of this License Agreement), that said Mark is the sole property
of Licensor and that any and all uses, either prior to the date of this
License Agreement or after, by Licensee of said Mark shall enure to the
benefit of Licensor. If Licensee now has or at any time had rights in the
Mark, such rights are hereby transferred and assigned to Licensor.

14. OBLIGATION OF LICENSEE NOT TO CONTEST VALIDITY

For the duration of this License Agreement and thereafter, Licensee
agrees not to raise or to cause to be raised any question concerning or
objection to the validity of said Mark or to the right of Licensor thereto
on any grounds whatsoever. Licensee further agrees that it does not now
have and will not make any claims to the right to use the Mark apart from
this License Agreement, nor will it make any claims adverse to the rights
of Licensor.

15. TITLES NOT LIMITING

Titles to paragraphs of this License Agreement are for the purpose of
information and guidance only, are not part of this License Agreement and
shall in no way be deemed to limit the effect of any language to which they
relate.

16. INTEGRATION OF AGREEMENT

This License Agreement constitutes the entire agreement between the
parties and supersedes all prior negotiations, understandings and
agreements, including, but not limited to, the Merchant Processing
Agreement between the parties. This License Agreement may not be amended
or modified orally but may be amended or modified only by written
instrument signed by the parties hereto.

17. SUCCESSION

All rights of Licensor under this License Agreement shall accrue to
the benefit of its successors and assigns.

IN WITNESS WHEREOF, this License Agreement has been executed in
duplicate by a duly authorized officer of the parties hereto.

AMERICAN MIDWEST BANK & TRUST

By__________________________________

Title_______________________________

Date________________________________
ATTEST:

____________________________________
Secretary

AMERICAN MIDWEST CREDIT CARD CO.

By__________________________________

Title_______________________________

Date________________________________

ATTEST:

____________________________________
Secretary

<PAGE>
<PAGE>
EXHIBIT A

[MARK]

7
<PAGE>
<PAGE>
EXHIBIT 2.8

FINANCIAL INFORMATION AND STATEMENTS

SEE SCHEDULE 2.8 OF THE DISCLOSURE SCHEDULE
<PAGE>
<PAGE>
EXHIBIT 2.20

[Affiliates Letter]

____________, 1996

BanPonce Corporation
_______________________
_______________________

Ladies and Gentlemen:

I have been advised that I may be deemed an "affiliate" of National
Bancorp, Inc., a Delaware corporation ("NBI"), as the term "affiliate" is
defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933, as amended (the
"Securities Act"), and may be deemed an "affiliate" of NBI at the time of
the acquisition (the "Acquisition") of NBI by BanPonce Corporation, a
Puerto Rico corporation ("BanPonce"), in accordance with the Stock Purchase
Agreement dated as of ____________, 1996 (the "Acquisition Agreement"), by
and among NBI and BanPonce. Pursuant to the terms of the Acquisition, I
may receive shares of common stock, par value $6.00 per share, of BanPonce
("BanPonce Common Stock").

I represent, warrant and covenant to BanPonce that in the event I
acquire any BanPonce Common Stock as a result of the Acquisition:

1. I agree that I will not make any sale, transfer or other
disposition of such shares of BanPonce Common Stock in violation of the
Securities Act or the rules and regulations promulgated thereunder by the
SEC.

2. I have carefully read this agreement and the Acquisition
Agreement and have discussed the requirements relating to, and other
applicable limitations upon, the sale, transfer or other disposition of
shares of BanPonce Common Stock acquired by me as a result of the
Acquisition to the extent I felt necessary with my counsel or counsel for
NBI.

3. I have been advised that the offering, sale and delivery of the
shares of BanPonce Common Stock to me pursuant to the Acquisition will be
registered under the Securities Act by BanPonce through the filing of a
Registration Statement with the SEC and that such registration does not
apply to any distribution by me of shares of BanPonce Common Stock received
by me in the Acquisition. I also have been advised that, because at the
Effective Time of the Acquisition (as defined in the Acquisition Agreement)
I may be deemed to have been an "affiliate" of NBI, any offering or sale by
me of any of the shares of BanPonce Common Stock acquired in the
Acquisition will, under current law, require either (i) further
registration under the Securities Act of the shares of BanPonce Common
Stock to be sold; (ii) compliance with the volume and other applicable
limitations of paragraph (d) of Rule 145 (which incorporates by reference
paragraphs (c), (e), (f) and (g) of Rule 144) promulgated under the
Securities Act; or (iii) the availability of some other exemption from
registration with respect to any such proposed sale, transfer or other
disposition by me which shall include, in the case of a distribution under
some other exemption from registration, an opinion of counsel, which
opinion of counsel shall be reasonably satisfactory to counsel for

BanPonce, or a "no-action" letter obtained by me from the staff of the SEC
that such exemption is available. In addition, I have been advised that
any transferee of my shares of BanPonce Common Stock in a private offering
or other similar disposition will be subject to the same limitations as
those imposed on me. With respect to a transfer under (ii) above, I
understand that unless you have a reasonable basis for believing to the
contrary, such transfer will be viewed by you as in conformity with Rule
145 upon my delivery to you or your transfer agent of a broker's letter in
customary form stating that the requirements of Rule 145(d)(1) have been
met.

4. I understand that BanPonce is under no obligation to register
shares of BanPonce Common Stock that I may wish to sell, transfer or
otherwise dispose of or to take any other action necessary in order to make
compliance with an exemption from registration available.

5. I also understand that if I rely on the exemption from the
registration provisions contained in Section 4 of the Securities Act (other
than as provided in Rule 144 or 145), I will obtain and deliver to BanPonce
a copy of a letter from any prospective transferee which will contain (a)
representations reasonably satisfactory to BanPonce as to the
nondistributive intent, sophistication, ability to bear risk and access to
information of such transferee; (b) an acknowledgement of the restrictions
on transfer of the BanPonce Common Stock proposed for transfer; and (c) an
assumption of the obligations of the undersigned under this paragraph 5.

6. I also understand that to enforce the foregoing commitments,
stop transfer instructions will be given to BanPonce's transfer agent with
respect to BanPonce Common Stock and there will be placed on the
certificates for the shares of BanPonce Common Stock issued to me pursuant
to the Acquisition, or any substitution therefor, a legend stating in
substance:

"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, APPLIES. THE SHARES REPRESENTED BY
THIS CERTIFICATE ONLY MAY BE TRANSFERRED IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT DATED ____________, 1996, BETWEEN THE
REGISTERED HOLDER HEREOF AND BANPONCE CORPORATION, A COPY OF
WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF BANPONCE
CORPORATION."

I also understand that unless the transfer by me of shares of
BanPonce Common Stock which I have acquired in the Acquisition has been
registered under the Securities Act or in a sale in conformity with the
provisions of Rule 145, BanPonce reserves the right to put the following
legend on the certificates issued to my transferee:

"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FROM
A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), APPLIES. THE SHARES HAVE BEEN ACQUIRED BY
THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION
WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE ACT
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT."

-2-
<PAGE>
<PAGE>

It is understood and agreed that the legend(s) set forth in this
paragraph shall be removed by the delivery of substitute certificates
without such legend if such legend is not required for purposes of the
Securities Act. It is understood and agreed that such legend(s) and the
stop orders referred to in this Paragraph 6 will be removed if (i) two
years shall have elapsed from the date the undersigned acquired the
BanPonce Common Stock in the Acquisition and the provisions of Rule
145(d)(2) are then available to the undersigned, (ii) three years shall
have elapsed from the date the undersigned acquired the BanPonce Common
Stock in the Acquisition and the provisions of Rule 145(d)(3) are then
available to the undersigned, or (iii) BanPonce has received either an
opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to BanPonce, or a "no-action" letter obtained by the
undersigned from the staff of the SEC, to the effect that the restrictions
imposed by Rule 145 under the Securities Act no longer apply to the
undersigned.

7. I have no present plan or intent, and as of the Effective Time
of the Acquisition, will not have a plan or intent, to engage in a sale,
exchange, transfer (other than an intrafamily gift), distribution
(including a distribution by a corporation to its shareholders),
redemption, pledge (other than a pledge replacing an existing pledge of NBI
Common Stock) or reduction in any way of any risk of ownership by short
sale or otherwise, or other disposition, directly or indirectly with
respect to any of the shares of BanPonce Common Stock to be received by me
as a result of the Acquisition.

Very truly yours,

_________________________________

Accepted and agreed to as of
the date first above written.

BANPONCE CORPORATION

By:__________________________
Its:_________________________

-3-
<PAGE>
<PAGE>
EXHIBIT 6.7

[OPINION OF COUNSEL FOR NBI AND SELLERS]

, 1997

BanPonce Corporation
_______________________
_______________________

Re: BanPonce Corporation's Purchase of National Bancorp, Inc.

Ladies and Gentlemen:

We have acted as counsel to National Bancorp, Inc., a Delaware
corporation ("NBI"), its subsidiaries and each of the stockholders and/or
debenture holders of NBI who either own NBI Common Stock or NBI Convertible
Debentures (referred to herein individually as "Seller" and collectively as
"Sellers") in connection with that certain Stock Purchase Agreement dated
____________________, 1996 (the "Stock Purchase Agreement") by and between
NBI, Sellers and BanPonce Corporation, a Puerto Rico corporation (the
"Purchaser"), relating to the sale by Sellers to Purchaser of all of the
outstanding shares of capital stock of NBI. This opinion is furnished to you
at the request of NBI and Sellers pursuant to Section 6.7 of the Stock
Purchase Agreement. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings assigned to them in the Stock Purchase
Agreement.

In rendering this opinion, we have examined:

a. the Stock Purchase Agreement;
b. the Non-Competition Agreements;
c. the Certificate of Incorporation and the Articles of Incorporation
of NBI and its subsidiaries;
d. the By-laws of NBI and its subsidiaries;
e. a Certificate of Good Standing as of a recent date from the
Secretary of State of each of Delaware, Illinois and
_____________, with respect to NBI and its subsidiaries;
f. resolutions of the Board of Directors of NBI and its subsidiaries
approving the Stock Purchase Agreement and the transactions
contemplated thereby; and
g. such other documents as we, in our professional judgment, have
deemed necessary or appropriate as a basis for the opinions set
forth below (items a and b above are referred to herein
collectively as the "Transaction Documents").

In examining the documents referred to above, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of documents purporting to be originals and the conformity to
originals of all documents submitted to us as copies. As to questions

<PAGE>

of fact material to our opinion, we have relied (without investigation or
independent confirmation) upon the representations contained in the
Transaction Documents and on certificates and other communications from public
officials, officers and transfer agents of Seller. We have also assumed that
each of the Transaction Documents has been duly authorized, executed and
delivered by, and constitutes the legal and valid obligation of each party
thereto (other than NBI, its subsidiaries and Sellers), and is enforceable
thereagainst in accordance with its terms. With respect to matters stated to
be based on our knowledge, our opinion is based on such information as has
come to the actual attention of the attorneys in our firm who have represented
NBI, its subsidiaries and Sellers in connection with the transactions
contemplated by the Transaction Documents and we have made no special
investigation or inquiries with respect thereto.

We express no opinion as to the laws of any jurisdiction other than the
General Corporation Law of the State of Delaware and the laws of the State of
Illinois (except that we express no opinion as to any choice of law provisions
thereof) and the Federal laws of the United States of America.

Based on the foregoing, and subject to the qualifications, assumptions
and limitations set forth herein, we are of the opinion that:

1. NBI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. NBI is duly qualified to do
business and in good standing as a foreign corporation in the State of
Illinois. NBI has adequate corporate power and authority to conduct its
business as it is now being conducted. NBI is registered and in good standing
with the Federal Reserve as a bank holding company under the Bank Holding
Company Act.

2. NBI's authorized capital stock consists of 100,500 shares of stock
as follows: 150 shares of $10,000 par value common stock, of which 93.20449
are outstanding (to be increased to 105.81585 shares upon the conversion at
Closing of NBI's Series 4 Convertible Debentures), 100,000 shares of preferred
stock of which 10,500 shares have been designated as $10.00 par value Class A
Preferred Stock of which none are issued or outstanding, and 89,500 shares of
$1.00 par value Preferred Stock of which none are issued or outstanding. All
of such issued and outstanding shares of NBI Common Stock are fully paid,
nonassessable and not issued in violation of any preemptive rights of any
stockholder. Other than with regard to the shares to be issued with regard to
NBI's Series 4 Convertible Debentures, NBI does not have any arrangements or
commitments obligating NBI to issue or sell or otherwise dispose of, or to
purchase or redeem shares of its capital stock.

3. Each of the Sellers owns all rights, titles and interests (both
legal and beneficial) in and to that number of shares of NBI Common Stock and
NBI's Series 4 Convertible Debentures, free and clear of any and all liens of
any nature whatsoever.

4. Each AmMid Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation.
Each AmMid Subsidiary is duly qualified to do business and in good standing

-2-
<PAGE>

<PAGE>

as a foreign corporation in each jurisdiction in which the nature of its
business requires such qualification. Each AmMid Subsidiary has the necessary
corporate power and authority to own its properties and assets and to conduct
its business as it is now being conducted. All the issued and outstanding
shares of capital stock, other equity securities and other ownership interests
of the AmMid Subsidiaries are duly and validly authorized and issued, are
fully paid, nonassessable and owned by AmMid, free and clear of all liens,
security interests, charges, claims and encumbrances.

5. AmMid is an Illinois banking corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois. AmMid
(i) is duly authorized to conduct a general banking business subject to the
supervision of the Illinois Commissioner at its offices, (ii) is an insured
depository institution as defined in the Federal Deposit Insurance Act, and
(iii) has full power and authority to engage in the business and activities
now conducted by it.

6. The authorized capital stock of AmMid consists of 200,000 shares
of common stock, par value $10.00 per share, of which 200,000 shares are
validly issued and outstanding. All of the 200,000 shares are owned by NBI
free and clear of all liens, pledges, assignments and security interests. All
of the shares of the capital stock of AmMid are fully paid, nonassessable and
not issued in violation of the preemptive rights of any stockholder.

7. The Board of Directors of NBI has approved the Transaction
Documents and the transactions contemplated thereby and has authorized the
execution, delivery and performance by NBI and its subsidiaries of the
Transaction Documents and the transactions contemplated thereby. The
Transaction Documents are valid and binding obligations of NBI and the NBI
Subsidiaries, enforceable against NBI and the NBI Subsidiaries in accordance
with their respective terms.

8. Each Seller has the full power, authority and capacity necessary
to enter into and perform his, her or its respective obligation under the
Transaction Documents, to sell, assign, transfer and convey the shares so
owned by each Seller pursuant to the Transaction Documents, and to consummate
the transactions contemplated thereby. The Transaction Documents have been
duly executed and delivered by each Seller. The Transaction Documents
constitute the legal, valid and binding obligation of each of the Sellers and
is enforceable against each Seller in accordance with its respective terms.

9. The execution and delivery by NBI and each of the Sellers of the
Agreement, and the consummation of the transactions contemplated thereby, do
not (a) violate the Certificate of Incorporation or By-laws of NBI or any NBI
Subsidiary, (b) result in a breach of, constitute a default under, or result
in the creation of any lien, security interest or other encumbrance upon any
of the assets, properties or stock of NBI or any NBI Subsidiary, (c) result in
a breach of, constitute a default under, or accelerate the performance of any
contract, agreement or instrument to which NBI, any NBI Subsidiary or any
Seller is a party or by which NBI, any NBI Subsidiary or any Seller is bound
or committed, or (d) violate the terms of any law, or rule or regulation of
any governmental agency or authority, or any judgment, decree or order of any
court or governmental

-3-

agency to which NBI, any NBI Subsidiary or any Seller may be subject. Other
than in the case of (c) above, such conflicts, breaches or defaults will be
cured or waived prior to the Closing Date.

10. No approval, consent or authorization of, or filing with, any
governmental agency or authority of the United States of America or the State
of Illinois, is required on the part of NBI or Sellers to make valid and
legally binding the execution, delivery and performance by NBI or Sellers of
the Transaction Documents, except for approvals, consents, authorizations and
filings (a) specified in the Transaction Documents or (b) already obtained or
made.

11. No claims have been asserted and no relief has been sought against
NBI, AmMid or any AmMid Subsidiary in any pending litigation or governmental
proceedings or otherwise. There are no circumstances, conditions, events or
arrangements, contractual or otherwise, which may hereafter give rise to any
proceedings, claims, actions or governmental investigations involving NBI or
any NBI Subsidiary which could reasonably be expected to have a material
adverse effect on the assets, business or financial condition of NBI, AmMid or
any AmMid Subsidiary. Neither NBI nor any NBI Subsidiary (i) is the subject
of any cease and desist order, or other formal or informal enforcement action
by any regulatory authority, or (ii) has made any commitment to or entered
into any agreement with any regulatory authority that currently restricts or
adversely affects its operations or financial condition.

The foregoing opinions are subject to the following qualifications:

(a) With respect to our opinions in paragraph 1 above regarding
the good standing of NBI, and NBI's due qualification to do business as
a foreign corporation, we have relied solely on Certificates of Good
Standing issued by the Secretaries of State of the States of Delaware
and Illinois.

(b) With respect to our opinions in paragraph 4 above regarding
the good standing of each AmMid Subsidiary, and each AmMid Subsidiary's
due qualification to do business as a foreign corporation, we have
relied solely on Certificates of Good Standing issued by the Secretaries
of State of the states of incorporation and the jurisdictions where the
nature of the AmMid Subsidiary's business requires qualification to do
business as a foreign corporation.

(c) With respect to our opinions in paragraph 5 above regarding
the good standing of AmMid, we have relied solely on the Certificate of
Good Standing issued by the Secretaries of State of the State of
Illinois.

(d) The enforceability of any obligation of NBI, its
subsidiaries or Sellers may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, rehabilitation, moratorium,
marshalling or other laws affecting the enforcement generally of
creditors' rights and remedies.

-4-
<PAGE>

<PAGE>

(e) The enforceability of any obligation of NBI, its
subsidiaries or Sellers is subject to principles of equity (regardless
of whether considered and applied in a proceeding in equity or at law),
public policy, applicable law relating to fiduciary duties, and judicial
imposition of an implied covenant of good faith and fair dealing.

(f) No opinion is given herein as to the availability of
specific performance or equitable relief of any kind.

(g) We express no opinion as to compliance by NBI, its
subsidiaries or Sellers with any federal or state securities laws or
regulations.

(h) The opinions expressed herein relate only to laws which are
specifically referred to in this opinion and which laws, in our
experience, are normally directly applicable to transactions of the type
provided for in the Transaction Documents (other than by reason of
Purchaser's legal or regulatory status or because of any other facts
specifically pertaining to Purchaser).

(i) We express no opinion as to the validity, binding effect or
enforceability of (i) purported waivers of any statutory or other
rights, court rules or defenses to obligations or consents to any
actions where such waivers or consents (A) are against public policy or
(B) constitute waivers of rights or consents to actions which by law,
regulation or judicial decision may not otherwise be waived or given,
(ii) provisions indemnifying any person against, or relieving any person
of liability for, that person's own negligent or wrongful acts or in any
other circumstances where enforcement of such provisions would be
against public policy or limited or prohibited by applicable law,
(iii) any provisions which purport to authorize or permit any person to
act in a manner which is determined not to be in good faith or
commercially reasonable or any provisions which purport to waive any
rights in respect of such acts, (iv) any provisions which purport to
authorize or permit any person to exercise any right or remedy upon any
nonmaterial breach or default, (v) any forum selection provision, (vi)
any powers of attorney to the extent that they purport to grant rights
and powers that may not be granted under applicable law, (vii) any
provisions that purport to permit the exercise of "self-help" remedies,
including, without limitation, the exercise of rights of setoff or
purported rights to enter onto the property of any person or take
physical possession of any property, (viii) any right or obligation to
the extent that the same may be varied by course of dealing or
performance, (ix) any provision which may provide for the compounding of
interest or the payment or accrual of interest on interest, or (x) any
provision that is subject to any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence.

(j) The opinions expressed herein are matters of professional
judgment and are not a guarantee of result.

-5-
<PAGE>

<PAGE>

This opinion is solely for the information of the addressee hereof and
is not to be quoted in whole or in part or otherwise referred to, nor is it to
be filed with any government agency or any other person, without our prior
written consent, and no one other than the addressee hereof is entitled to
rely on this opinion. This opinion is given to you as of the date hereof and
we assume no obligation to advise you of any change which may hereafter be
brought to our attention.

Very truly yours,

BURKE, WARREN & MACKAY, PC

-6-
<PAGE>
<PAGE>
EXHIBIT 6.11

_____________, 1996

Board of Directors Board of Directors
BanPonce Corporation National Bancorp, Inc.
Banco Popular Center 1300 East Irving Park Road
209 Munoz Rivera Suite 200
3rd Floor Streamwood, Illinois 60107
San Juan, Puerto Rico 00918

Gentlemen:

You have requested our opinion regarding certain federal income tax
consequences of the proposed acquisition of all the outstanding shares (the
"Reorganization") of National Bancorp, Inc., a Delaware corporation ("NBI"),
by BanPonce Corporation, a Puerto Rico corporation ("BanPonce"). The
Reorganization contemplates the acquisition by BanPonce of all the outstanding
shares of stock of NBI, consisting of one class of common stock, par value
$10,000 per share ("NBI Common), in exchange for voting common shares of
BanPonce, $6.00 par value per share ("BP Common"). The foregoing will be
accomplished pursuant to the Stock Purchase Agreement By and Among BanPonce
Corporation, National Bancorp, Inc., and the Stockholders of National Bancorp,
Inc., dated December 2, 1996 (the "Agreement").

In rendering this opinion, we have reviewed and relied upon
representations made to us by certain officers of BanPonce and NBI and by
certain shareholders of NBI in certificates dated _______________, 19____,
which representations are incorporated herein by reference. We have also
examined such other agreements, documents, and corporate records that have
been made available to us and such other matters as we have deemed relevant
for purposes of this opinion. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of the signatories to such
certificates, agreements, and other documents, the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies and the authenticity of the originals of
such copies.

Our opinion is based, in part, on the assumption that the proposed
Reorganization described herein will occur in accordance with the Agreement
and related agreements as well as with the facts and representations set forth
or referred to in this opinion letter, and that such facts and representations
are accurate and complete in all respects as of the date hereof and will be
accurate and complete in all respects on the effective date of such
Reorganization ("Effective Date"). We have also assumed in issuing our
opinion that the shareholders of NBI do not have any plan or intention to
sell, exchange, or otherwise dispose of a number of shares of BP Common
received by them in the Reorganization that would result in the former
shareholders of NBI owning shares of BP Common that have a value, as of the
Effective Time, of less than 50 percent of all the formerly outstanding shares
of NBI Common as of the same date. Any changes in these facts, or in the
accuracy of the assumptions, representations, or covenants, may necessitate
reconsideration of our opinion and possibly may result in different
conclusions. We have undertaken no independent investigation of the accuracy
of the facts, assumptions, representations and covenants set forth or referred
to herein.

For the purposes indicated above, and based upon the facts, assumptions
and conditions as set forth herein, it is our opinion that:

<PAGE>

BanPonce Corporation
National Bancorp, Inc.
____________, 1996
Page 2

1. The acquisition by BanPonce of all the outstanding shares of
NBI in exchange solely for BP Common and cash in lieu of fractional
shares of BP Common will constitute a "reorganization" within the
meaning of section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"), and BanPonce and NBI will each be "a party to a
reorganization" within the meaning of section 368(b) of the Code;

2. No gain or loss will be recognized by BanPonce upon the
acquisition of all the outstanding shares of NBI Common in exchange
solely for shares of BP Common and cash in lieu of fractional shares of
BP Common (Code section 1032(a));

3. NBI's shareholders will recognize no gain or loss upon the
exchange of their shares of NBI Common for shares of BP Common, except
with respect to cash received for a fractional share of BP Common, if
any (Code section 354(a)(1));

4. The basis of the shares of BP Common to be received by NBI's
shareholders will be, in each instance, the same as the basis of shares
of NBI Common surrendered in exchange therefor, decreased by any cash
received and increased by the amount of gain recognized on the exchange
(Code section 358(a)(1)); and

5. The holding period of shares of BP Common to be received by
NBI's shareholders will include the period during which the shares of
NBI Common to be surrendered in exchange therefor were held, provided
the shares of NBI Common were held as capital assets by those
shareholders on the date of the exchange (Code section 1223(1)).

The opinions expressed in this letter are based on the Code, the Income
Tax Regulations promulgated by the Treasury Department thereunder and judicial
authority reported as of the date hereof. We have also considered the
positions of the Internal Revenue Service (the "Service") reflected in
published and private rulings. Although we are not aware of any pending
changes to these authorities that would alter our opinions, there can be no
assurances that future legislative or administrative changes, court decisions
or Service interpretations will not significantly modify the statements or
opinions expressed herein.

issues, arising from the transactions contemplated by the Agreement. Although
the discussion herein is based upon our best interpretation of existing
sources of law and expresses what we believe a

BanPonce Corporation
National Bancorp, Inc.
____________, 1996
Page 3

court would properly conclude if presented with these issues, no assurance can
be given that such interpretations would be followed if they were to become
the subject of judicial or administrative proceedings.

Very truly yours,

VEDDER, PRICE, KAUFMAN & KAMMHOLZ
<PAGE>
<PAGE>

EXHIBIT 6.16

NON-COMPETITION AGREEMENT
-------------------------

This Non-Competition Agreement dated as of ________________, 1997 (the
"Agreement"), is entered into by and between Thomas H. Roth ("Covenantor") and

BanPonce Corporation, a Puerto Rico corporation ("BanPonce").

W I T N E S S E T H
- - - - - - - - - -

all of the outstanding common stock of NBI (the "Acquisition") and its wholly-

owned subsidiary, American Midwest Bank & Trust, an Illinois state bank
("AmMid");

WHEREAS, Covenantor is a stockholder, a director and an executive
officer of NBI and, pursuant to Section 6.16 of the Acquisition Agreement,
hereby enters into this Non-Competition Agreement; and

WHEREAS, Covenantor acknowledges that as a director, executive officer
and stockholder of NBI, he has become familiar with the customers and related
customer information of NBI.

NOW, THEREFORE, in consideration of and as a condition and inducement to

BanPonce consummating the transactions contemplated by the Acquisition
Agreement, and in consideration of the premises and the mutual covenants,
representations, warranties and agreements herein contained, Covenantor and
BanPonce agree as follows:

1. Covenants.

(a) Covenantor covenants and agrees that for a period of three
(3) years beginning upon the Closing Date (as defined in the Acquisition
Agreement) (the "Non-Competition Period") he shall not knowingly:

making of a proposal to render, retail or commercial banking services by

Covenantor to any customer of AmMid in response to an unsolicited
request from such customer therefor, or prevent the withdrawal of any
account or <PAGE>

<PAGE>

termination of relationship of any entity owned or controlled by
Covenantor or in which Covenantor is a general partner; or

(ii) without the prior written consent of BanPonce, within
a five (5) mile radius of AmMid, either alone or in partnership or
jointly or in conjunction with any person or persons, financial
institution, firm, association, syndicate, company or corporation as
principal, agent, employee, officer, director, shareholder, consultant,
investor or advisor or in any other manner whatsoever establish a
facility to: (A) carry on or be engaged in the commercial or retail
banking or related business or do any other business under the name of
"American Midwest Bank & Trust" (or any derivation thereof); or (B)
carry on or engage in the commercial or retail banking business
generally; provided, however, that this Section 1(a)(ii) shall not
prohibit Covenantor from owning less than 5% of the outstanding stock of

any class of a retail or commercial banking institution or corporation
controlling a retail or commercial banking institution which is publicly

traded, so long as he has no active participation in the business or
management of such corporation or financial institution.

(b) Covenantor agrees that during the Non-Competition Period, he

will not offer or cause to be offered employment to or hire or cause to be
hired any person who is employed by AmMid on the date hereof or on the Closing

Date, except with the prior written consent of BanPonce; provided, however,
that Covenantor shall not be prohibited from either:

(i) placing in any mass media any general advertisement
for prospective employees, provided that such advertisement is not
specifically targeted at employees of AmMid; or

(ii) employing a person whose employment was terminated by
BanPonce.

not limited to the identity thereof and loan and account balances, which is
not available to the general public and was learned by Covenantor as a
consequence of his relationship with NBI or AmMid. Covenantor acknowledges
that such information is specialized, unique in nature and of great value to
BanPonce, as purchaser of NBI.

2. Remedies. Covenantor acknowledges that the covenants and
agreements which he has made in this Agreement are reasonable and are required

for the reasonable protection of BanPonce's purchase of NBI. Covenantor
agrees that the breach of any covenant or agreement contained herein will
result in irreparable injury to BanPonce, and that in addition to all other
remedies provided by law or in equity with respect to the breach of any
provision of this Agreement, BanPonce, its subsidiaries and their successors
and assigns will be entitled to enforce the specific performance by Covenantor
of his obligations hereunder and to enjoin him

-2-
<PAGE>

<PAGE>

from Covenantor reasonable attorney's fees and costs of litigation. In the
event of a breach or a violation by Covenantor of any of the provisions of
this Agreement, the running of the Non-Competition Period (but not of
Covenantor's obligations hereunder) shall be tolled during the period of the
continuance of any actual breach or violation.

3. Partial Invalidity. The various covenants and provisions of this
Agreement are intended to be severable and to constitute independent and
distinct binding obligations. Should any covenant or provision of this
Agreement be determined to be void and unenforceable, in whole or in part, it
shall not be deemed to affect or impair the validity of any other covenant or
provision or part thereof, and such covenant or provision or part thereof
shall be deemed modified to the extent required to permit enforcement.
Without limiting the generality of the foregoing, if the scope of any covenant

contained in this Agreement is too broad to permit enforcement to its full
extent, such covenant shall be enforced to the maximum extent permitted by
law, and Covenantor hereby agrees that such scope may be judicially modified
accordingly.

4. Assignment. Covenantor agrees that this Agreement may be assigned
by BanPonce to any direct or indirect majority owned affiliate of BanPonce and
that upon such assignment, such affiliate shall acquire all of BanPonce's
rights under this Agreement, including, without limitation, the right of
assignment set forth in this Section 4.

5. No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

6. Notice. Any notice or other communication required or permitted
to be given hereunder shall be determined to have been duly given to any party

or parties:

(a) upon delivery to the address of such party or parties
specified below if delivered in person or by courier, or if sent by
certified or registered mail (return receipt requested), postage
prepaid, or

(b) one business day following dispatch if transmitted by
confirmed telecopy or other means of facsimile, in any case to the party

or parties at the following address(es) or telecopy number(s), as the
case may be:

-3-
<PAGE>

<PAGE>

If to Covenantor:

Mr. Thomas H. Roth
__________________________________
__________________________________
__________________________________
Attention: ______________________

with a copy to:

Burke, Warren & MacKay, P.C.
330 North Wabash Avenue
22nd Floor
Chicago, Illinois 60611-3607
Attention: Thomas H. Jacobs, Esq.

If to BanPonce:

BanPonce Corporation
__________________________________
__________________________________
__________________________________
Attention: _______________________

with a copy to:

Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Suite 2600
Chicago, Illinois 60601-1003
Attention: Robert J. Stucker, Esq.
Douglas M. Hambleton, Esq.

7. Waiver of Breach. The waiver by either party hereto of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach.

8. Applicable Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Illinois,
without giving effect to the principles of conflicts of laws thereof.

-4-
<PAGE>

<PAGE>

9. Entire Understanding. This Agreement and the agreements referred
to herein constitute the entire understanding and shall not be changed,
altered, or modified except by the written consent of both parties.

10. Survival. If the Acquisition Agreement is terminated in
accordance with its terms, this Agreement shall terminate and be null and
void. All of the provisions herein shall survive the Closing Date.

11. Binding Effect. This Agreement shall be binding upon Covenantor's

executors, administrators, legal representatives, heirs and legatees and the
successors and permitted assigns of BanPonce.

IN WITNESS WHEREOF, the party has executed this Non-Competition
Agreement on the date first above written.

THOMAS H. ROTH

_________________________________

BANPONCE CORPORATION

By:______________________________
Its:_____________________________

-5-
<PAGE>

<PAGE>

NON-COMPETITION AGREEMENT
-------------------------

This Non-Competition Agreement dated as of ________________, 1997 (the
"Agreement"), is entered into by and between Robert Svendsen, Sr.
("Covenantor") and BanPonce Corporation, a Puerto Rico corporation
("BanPonce").

W I T N E S S E T H
- - - - - - - - - -

WHEREAS, BanPonce, National Bancorp, Inc., a Delaware corporation
(collectively, with its subsidiaries "NBI"), and stockholders of NBI entered
into a Stock Purchase Agreement dated as of ____________, 1996 (the
"Acquisition Agreement") providing, among other things, for the acquisition of
all of the outstanding common stock of NBI (the "Acquisition") and its wholly-
owned subsidiary, American Midwest Bank & Trust, an Illinois state bank
("AmMid");

WHEREAS, Covenantor is a stockholder and a director of NBI and, pursuant
to Section 6.16 of the Acquisition Agreement, hereby enters into this Non-
Competition Agreement; and

WHEREAS, Covenantor acknowledges that as a director and stockholder of
NBI, he has become familiar with the customers and related customer
information of NBI.

NOW, THEREFORE, in consideration of and as a condition and inducement to
BanPonce consummating the transactions contemplated by the Acquisition
Agreement, and in consideration of the premises and the mutual covenants,
representations, warranties and agreements herein contained, Covenantor and
BanPonce agree as follows:

1. Covenants.

(i) solicit or cause to be solicited retail or commercial
banking business or related business from any of AmMid's customers
existing on the signing hereof and AmMid's customers existing on the
Closing Date; provided, however, that nothing in this Section 1(a)(i)
shall be deemed or construed to prevent general advertisement, mass
mailings or other marketing efforts soliciting retail or commercial
banking business provided that such advertisement, mass mailings or
other marketing efforts are not specifically targeted at customers of
AmMid; provided, further, that nothing contained in this Section 1(a)(i)
shall prevent, or be deemed to prevent, the rendering of, or the making
of a proposal to render, retail or commercial banking services by
Covenantor to any customer of AmMid in response to an unsolicited
request from such customer therefor, or prevent the withdrawal of any
account or termination of relationship of any entity owned or
<PAGE>

<PAGE>

controlled by Covenantor or in which Covenantor is a general partner;
or

(b) Covenantor agrees that during the Non-Competition Period, he
will not offer or cause to be offered employment to or hire or cause to be
hired any person who is employed by AmMid on the date hereof or on the Closing
Date, except with the prior written consent of BanPonce; provided, however,
that Covenantor shall not be prohibited from either:

(i) placing in any mass media any general advertisement
for prospective employees, provided that such advertisement is not
specifically targeted at employees of AmMid; or

(ii) employing a person whose employment was terminated by
BanPonce.

(c) Covenantor agrees that he shall not disclose to others or
use, or allow others to use, for business solicitation purposes, whether
directly or indirectly, any information about AmMid's customers, including but
not limited to the identity thereof and loan and account balances, which is
not available to the general public and was learned by Covenantor as a
consequence of his relationship with NBI or AmMid. Covenantor acknowledges
that such information is specialized, unique in nature and of great value to
BanPonce, as purchaser of NBI.

2. Remedies. Covenantor acknowledges that the covenants and
agreements which he has made in this Agreement are reasonable and are required
for the reasonable protection of BanPonce's purchase of NBI. Covenantor
agrees that the breach of any covenant or agreement contained herein will
result in irreparable injury to BanPonce, and that in addition to all other
remedies provided by law or in equity with respect to the breach of any
provision of this Agreement, BanPonce, its subsidiaries and their successors
and assigns will be entitled to enforce the specific performance by Covenantor
of his obligations hereunder and to enjoin him

-2-
<PAGE>

<PAGE>

from engaging in any activity in violation hereof and that no claim by
Covenantor against BanPonce, its subsidiaries or their successors or assigns
will constitute a defense or bar to the specific enforcement of such
obligations. In the event of a lawsuit, BanPonce shall be entitled to recover
from Covenantor reasonable attorney's fees and costs of litigation. In the
event of a breach or a violation by Covenantor of any of the provisions of
this Agreement, the running of the Non-Competition Period (but not of
Covenantor's obligations hereunder) shall be tolled during the period of the
continuance of any actual breach or violation.

6. Notice. Any notice or other communication required or permitted
to be given hereunder shall be determined to have been duly given to any party
or parties:

(b) one business day following dispatch if transmitted by
confirmed telecopy or other means of facsimile, in any case to the party
or parties at the following address(es) or telecopy number(s), as the
case may be:

-3-
<PAGE>

<PAGE>

If to Covenantor:

Mr. Robert Svendsen, Sr.
__________________________________
__________________________________
__________________________________
Attention: ______________________

with a copy to:

Burke, Warren & MacKay, P.C.
330 North Wabash Avenue
22nd Floor
Chicago, Illinois 60611-3607
Attention: Thomas H. Jacobs, Esq.

If to BanPonce:

BanPonce Corporation
__________________________________
__________________________________
__________________________________
Attention: _______________________

with a copy to:

Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Suite 2600
Chicago, Illinois 60601-1003
Attention: Robert J. Stucker, Esq.
Douglas M. Hambleton, Esq.

7. Waiver of Breach. The waiver by either party hereto of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach.

-4-
<PAGE>

<PAGE>

11. Binding Effect. This Agreement shall be binding upon Covenantor's
executors, administrators, legal representatives, heirs and legatees and the
successors and permitted assigns of BanPonce.

IN WITNESS WHEREOF, the party has executed this Non-Competition
Agreement on the date first above written.

ROBERT SVENDSEN, SR.

_________________________________

BANPONCE CORPORATION

By:______________________________
Its:_____________________________

-5-
<PAGE>

<PAGE>

NON-COMPETITION AGREEMENT
-------------------------

This Non-Competition Agreement dated as of ________________, 1997 (the
"Agreement"), is entered into by and between Northwest Community Bank
("Covenantor") and BanPonce Corporation, a Puerto Rico corporation
("BanPonce").

W I T N E S S E T H
- - - - - - - - - -

WHEREAS, Covenantor is an affiliated institution of NBI and, pursuant to
Section 6.16 of the Acquisition Agreement, hereby enters into this Non-
Competition Agreement; and

WHEREAS, Covenantor acknowledges that as an affiliated institution of
NBI, it has become familiar with the customers and related customer
information of NBI.

1. Covenants.

(i) solicit or cause to be solicited retail or commercial
banking business or related business from any of AmMid's customers
existing on the signing hereof and AmMid's customers existing on the
Closing Date; provided, however, that nothing in this Section 1(a)(i)
shall be deemed or construed to prevent general advertisement, mass
mailings or other marketing efforts soliciting retail or commercial
banking business provided that such advertisement, mass mailings or
other marketing efforts are not specifically targeted at customers of
AmMid; and provided, further, that nothing contained in this Section
1(a)(i) shall prevent, or be deemed to prevent, the rendering of, or the
making of a proposal to render, retail or commercial banking services by
Covenantor to any customer of AmMid in response to an unsolicited
request from such customer therefor, or prevent the withdrawal of any
account or termination of relationship of any entity owned or controlled
by Covenantor or in which Covenantor is a general partner; or
<PAGE>

<PAGE>

(b) Covenantor agrees that during the Non-Competition Period, it
will not offer or cause to be offered employment to or hire or cause to be
hired any person who is employed by AmMid on the date hereof or on the Closing
Date, except with the prior written consent of BanPonce; provided, however,
that Covenantor shall not be prohibited from either:

(i) placing in any mass media any general advertisement
for prospective employees, provided that such advertisement is not
specifically targeted at employees of AmMid; or

(ii) employing a person whose employment was terminated by
BanPonce.

not limited to the identity thereof and loan and account balances, which is
not available to the general public and was learned by Covenantor as a
consequence of its relationship with NBI or AmMid. Covenantor acknowledges
that such information is specialized, unique in nature and of great value to
BanPonce, as purchaser of NBI.

2. Remedies. Covenantor acknowledges that the covenants and
agreements which it has made in this Agreement are reasonable and are required
for the reasonable protection of BanPonce's purchase of NBI. Covenantor
agrees that the breach of any covenant or agreement contained herein will
result in irreparable injury to BanPonce, and that in addition to all other
remedies provided by law or in equity with respect to the breach of any
provision of this Agreement, BanPonce, its subsidiaries and their successors
and assigns will be entitled to enforce the specific performance by Covenantor
of its obligations hereunder and to enjoin it from engaging in any activity in
violation hereof and that no claim by Covenantor against BanPonce, its
subsidiaries or their successors or assigns will constitute a defense or bar
to the specific enforcement of such obligations. In the event of a lawsuit,
BanPonce shall be entitled to recover from Covenantor reasonable attorney's
fees and costs of litigation.

-2-
<PAGE>

<PAGE>

In the event of a breach or a violation by Covenantor of any of the provisions
of this Agreement, the running of the Non-Competition Period (but not of
Covenantor's obligations hereunder) shall be tolled during the period of the
continuance of any actual breach or violation.

6. Notice. Any notice or other communication required or permitted
to be given hereunder shall be determined to have been duly given to any party
or parties:

(b) one business day following dispatch if transmitted by
confirmed telecopy or other means of facsimile, in any case to the party

or parties at the following address(es) or telecopy number(s), as the
case may be:

If to Covenantor:

Northwest Community Bank
__________________________________
__________________________________
__________________________________
Attention: ______________________

-3-
<PAGE>

<PAGE>

with a copy to:

Burke, Warren & MacKay, P.C.
330 North Wabash Avenue
22nd Floor
Chicago, Illinois 60611-3607
Attention: Thomas H. Jacobs, Esq.

If to BanPonce:

BanPonce Corporation
__________________________________
__________________________________
__________________________________
Attention: _______________________

with a copy to:

Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Suite 2600
Chicago, Illinois 60601-1003
Attention: Robert J. Stucker, Esq.
Douglas M. Hambleton, Esq.

7. Waiver of Breach. The waiver by either party hereto of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach.

-4-
<PAGE>

<PAGE>

11. Binding Effect. This Agreement shall be binding upon Covenantor's
successors and assigns and the successors and permitted assigns of BanPonce.

IN WITNESS WHEREOF, the party has executed this Non-Competition
Agreement on the date first above written.

NORTHWEST COMMUNITY BANK

By:______________________________
Its:_____________________________

BANPONCE CORPORATION

By:______________________________
Its:_____________________________

-5-
<PAGE>

<PAGE>

NON-COMPETITION AGREEMENT
-------------------------

This Non-Competition Agreement dated as of ________________, 1997 (the
"Agreement"), is entered into by and between First Bank of Schaumburg
("Covenantor") and BanPonce Corporation, a Puerto Rico corporation
("BanPonce").

W I T N E S S E T H
- - - - - - - - - -

WHEREAS, Covenantor is an affiliated institution of NBI and, pursuant to
Section 6.16 of the Acquisition Agreement, hereby enters into this Non-
Competition Agreement; and

WHEREAS, Covenantor acknowledges that as an affiliated institution of
NBI, he has become familiar with the customers and related customer
information of NBI.

1. Covenants.

(i) solicit or cause to be solicited retail or commercial
banking business or related business from any of AmMid's customers
existing on the signing hereof and AmMid's customers existing on the
Closing Date; provided, however, that nothing in this Section 1(a)(i)
shall be deemed or construed to prevent general advertisement, mass
mailings or other marketing efforts soliciting retail or commercial
banking business provided that such advertisement, mass mailings or
other marketing efforts are not specifically targeted at customers of
AmMid; and provided, further, that nothing contained in this Section
1(a)(i) shall prevent, or be deemed to prevent, the rendering of, or the
making of a proposal to render, retail or commercial banking services by
Covenantor to any customer of AmMid in response to an unsolicited
request from such customer therefor, or prevent the withdrawal of any
account or termination of relationship of any entity owned or controlled
by Covenantor or in which Covenantor is a general partner; or
<PAGE>

<PAGE>

(i) placing in any mass media any general advertisement
for prospective employees, provided that such advertisement is not
specifically targeted at employees of AmMid; or

(ii) employing a person whose employment was terminated by
BanPonce.

(c) Covenantor agrees that it shall not disclose to others or
use, or allow others to use, for business solicitation purposes, whether
directly or indirectly, any information about AmMid's customers, including but
not limited to the identity thereof and loan and account balances, which is
not available to the general public and was learned by Covenantor as a
consequence of its relationship with NBI or AmMid. Covenantor acknowledges
that such information is specialized, unique in nature and of great value to
BanPonce, as purchaser of NBI.

-2-
<PAGE>

<PAGE>

6. Notice. Any notice or other communication required or permitted
to be given hereunder shall be determined to have been duly given to any party
or parties:

If to Covenantor:

First Bank of Schaumburg
__________________________________
__________________________________
__________________________________
Attention: ______________________

-3-
<PAGE>

<PAGE>

with a copy to:

Burke, Warren & MacKay, P.C.
330 North Wabash Avenue
22nd Floor
Chicago, Illinois 60611-3607
Attention: Thomas H. Jacobs, Esq.

If to BanPonce:

BanPonce Corporation
__________________________________
__________________________________
__________________________________
Attention: _______________________

with a copy to:

Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Suite 2600
Chicago, Illinois 60601-1003
Attention: Robert J. Stucker, Esq.
Douglas M. Hambleton, Esq.

7. Waiver of Breach. The waiver by either party hereto of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach.

-4-
<PAGE>

<PAGE>

11. Binding Effect. This Agreement shall be binding upon Covenantor's
successors and assigns and the successors and permitted assigns of BanPonce.

IN WITNESS WHEREOF, the party has executed this Non-Competition
Agreement on the date first above written.

FIRST BANK OF SCHAUMBURG

By:______________________________
Its:_____________________________

BANPONCE CORPORATION

By:______________________________
Its:_____________________________

-5-
<PAGE>

<PAGE>
EXHIBIT 7.5

[Opinion of Counsel for BanPonce Corporation]

_______________, 1997

Board of Directors
National Bancorp, Inc.
1600 West Lake Street
Melrose Park, Illinois 60160

Re: BanPonce Corporation's Acquisition of National Bancorp, Inc.

Ladies and Gentlemen:

We have acted as counsel to BanPonce Corporation, a Puerto Rico
corporation (the "Purchaser") in connection with that certain Stock Purchase
Agreement dated as of ____________________, 199__ (the "Stock Purchase
Agreement") by and among Purchaser, National Bancorp, Inc., a Delaware
corporation (the "Seller") and the stockholders of Seller, relating to the
acquisition by Purchaser of all of the outstanding shares of capital stock of
Seller. This opinion is furnished to you pursuant to Section 7.5 of the Stock
Purchase Agreement. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings assigned to them in the Stock Purchase
Agreement.

In rendering this opinion, we have examined:

a. the Stock Purchase Agreement;
b. the Non-Competition Agreements;
c. the Certificate of Incorporation of Purchaser;
d. the By-laws of Purchaser;
e. a Certificate of Good Standing as of a recent date from the
Secretary of State of Illinois and the Secretary of the Department
of State of Puerto Rico with respect to Purchaser;
f. resolutions of the Board of Directors of Purchaser approving the
Stock Purchase Agreement and the transactions contemplated
thereby; and
g. such other documents as we, in our professional judgment, have
deemed necessary or appropriate as a basis for the opinions set
forth below (items a-b above are referred to herein collectively
as the "Transaction Documents").

independent confirmation) upon the representations contained in the
Transaction Documents and on certificates and other communications from public
officials, officers and transfer agents of Purchaser. We have also assumed
that each of the Transaction Documents has been duly authorized, executed and
delivered by, and constitutes the legal and valid obligation of each party
thereto (other than Purchaser), and is enforceable thereagainst in accordance
with its terms. With respect to matters stated to be based on our knowledge,
our opinion is based on such information as has come to the actual attention
of the attorneys in our firm who have represented Purchaser in connection with
the transactions contemplated by the Transaction Documents and we have made no
special investigation or inquiries with respect thereto.

We express no opinion as to the laws of any jurisdiction other than the
laws of the Commonwealth of Puerto Rico (except that we express no opinion as
to any choice of law provisions thereof) and the Federal laws of the United
States of America and, for purposes of this opinion, we have assumed that the
laws of the State of Illinois, if applicable, are identical in all relevant
respects to the laws of the Commonwealth of Puerto Rico, as to which
assumption we express no opinion.

Based on the foregoing, and subject to the qualifications, assumptions
and limitations set forth herein, we are of the opinion that:

1. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of Puerto Rico. Purchaser is registered and is
in good standing with the Federal Reserve as a bank holding company under the
Bank Holding Company Act of 1956. Purchaser is duly qualified to do business
and in good standing as a foreign corporation in the State of Illinois.
Purchaser has adequate corporate power and authority to conduct its business
as it is now being conducted.

2. Purchaser has adequate corporate power and authority to execute,
deliver and perform its obligations under the Transaction Documents.

3. The execution and delivery by Purchaser of the Transaction
Documents and the performance by Purchaser of its agreements under such
documents have been duly authorized by all requisite corporate action on the
part of Purchaser. Purchaser has duly executed and delivered the Transaction
Documents.

4. The Transaction Documents constitute the legal, valid and binding
obligations of Purchaser and are enforceable against it in accordance with
their respective terms.

5. The execution and delivery by Purchaser of the Transaction
Documents, and the performance by Purchaser of its agreements under such
documents, do not (a) violate Purchaser's Certificate of Incorporation or By-
laws, (b) result in a breach of, constitute a default under, or result in the
creation of any lien, charge or other encumbrance upon any of assets or
properties of Purchaser or its subsidiaries or Purchaser's capital stock
under, any material contract, agreement or instrument known to us to which

2
<PAGE>
<PAGE>

Purchaser is a party or by which any of its respective properties is bound, or
(c) violate any applicable statutory law, rule or regulation of the United
States of America or the Commonwealth of Puerto Rico or any material judgment,
decree or order of the United States of America or the Commonwealth of Puerto
Rico known to us to which Purchaser is a party or is named.

6. No approval, consent or authorization of, or filing with, any
governmental agency or authority of the United States of America or the
Commonwealth of Puerto Rico, is required on the part of Purchaser to make
valid and legally binding the execution, delivery and performance by Seller of
the Transaction Documents, except for approvals, consents, authorizations and
filings (a) specified in the Transaction Documents or (b) already obtained or
made.

7. [Insert Securities Opinion].

The foregoing opinions are subject to the following qualifications:

(a) With respect to our opinions in paragraph 1 above regarding
the valid existence and good standing of Purchaser, and Purchaser's due
qualification to do business as a foreign corporation, we have relied
solely on Certificates of Good Standing issued by the Secretary of State
of Illinois and the Secretary of the Department of State of Puerto Rico.

(b) The enforceability of any obligation of Purchaser may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, rehabilitation, moratorium, marshalling or other laws
affecting the enforcement generally of creditors' rights and remedies.

(c) The enforceability of any obligation of Purchaser is subject
to principles of equity (regardless of whether considered and applied in
a proceeding in equity or at law), public policy, applicable law
relating to fiduciary duties, and judicial imposition of an implied
covenant of good faith and fair dealing.

(d) No opinion is given herein as to the availability of
specific performance or equitable relief of any kind.

(e) We express no opinion as to compliance by Purchaser with any
federal or state securities laws or regulations.

(f) The opinions expressed herein relate only to laws which are
specifically referred to in this opinion and which laws, in our
experience, are normally directly applicable to transactions of the type
provided for in the Transaction Documents (other than by reason of
Seller's legal or regulatory status or because of any other facts
specifically pertaining to Seller).

3
<PAGE>
<PAGE>

(g) We express no opinion as to the validity, binding effect or
enforceability of (i) purported waivers of any statutory or other
rights, court rules or defenses to obligations or consents to any
actions where such waivers or consents (A) are against public policy or
(B) constitute waivers of rights or consents to actions which by law,
regulation or judicial decision may not otherwise be waived or given,
(ii) provisions indemnifying any person against, or relieving any person
of liability for, that person's own negligent or wrongful acts or in any
other circumstances where enforcement of such provisions would be
against public policy or limited or prohibited by applicable law,
(iii) any provisions which purport to authorize or permit any person to
act in a manner which is determined not to be in good faith or
commercially reasonable or any provisions which purport to waive any
rights in respect of such acts, (iv) any provisions which purport to
authorize or permit any person to exercise any right or remedy upon any
nonmaterial breach or default, (v) any forum selection provision, (vi)
any powers of attorney to the extent that they purport to grant rights
and powers that may not be granted under applicable law, (vii) any
provisions that purport to permit the exercise of "self-help" remedies,
including, without limitation, the exercise of rights of setoff or
purported rights to enter onto the property of any person or take
physical possession of any property, (viii) any right or obligation to
the extent that the same may be varied by course of dealing or
performance, (ix) any provision which may provide for the compounding of
interest or the payment or accrual of interest on interest, or (x) any
provision that is subject to any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence.

(h) The opinions expressed herein are matters of professional
judgment and are not a guarantee of result.

Very truly yours,

4
<PAGE>
<PAGE>
EXHIBIT 7.7

VPKK DRAFT

Gentlemen:

In rendering this opinion, we have reviewed and relied upon
representations made to us by certain officers of BanPonce and NBI and by
certain shareholders of NBI in certificates dated _______________, 19___,
which representations are incorporated herein by reference. We have also
examined such other agreements, documents, and corporate records that have
been made available to us and such other matters as we have deemed relevant
for purposes of this opinion. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of the signatories to such
certificates, agreements, and other documents, the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies and the authenticity of the originals of
such copies.

<PAGE>

BanPonce Corporation
National Bancorp, Inc.
_____________, 1996
Page 2

For the purposes indicated above, and based upon the facts, assumptions
and conditions as set forth herein, it is our opinion that:

<PAGE>

BanPonce Corporation
National Bancorp, Inc.
_____________, 1996
Page 3

This opinion is addressed to and is only for the benefit of BanPonce and
NBI. It is furnished to you pursuant to sections 6.11 and 7.7 of the
Agreement and may not be used or relied upon for any other purpose and may not
be circulated or otherwise referred to for any other purpose without our
express written consent. Our opinion is limited to those federal income tax
issues specifically considered herein. We do not express any opinion as to
any other federal income tax issues, or any foreign, state or local law
issues, arising from the transactions contemplated by the Agreement. Although
the discussion herein is based upon our best interpretation of existing
sources of law and expresses what we believe a court would properly conclude
if presented with these issues, no assurance can be given that such
interpretations would be followed if they were to become the subject of
judicial or administrative proceedings.

Very truly yours,

VEDDER, PRICE, KAUFMAN & KAMMHOLZ
<PAGE>
<PAGE>

EXHIBIT 8.3

CROWE CHIZEK

December 9, 1996

Associate Chief Counsel (Domestic)
Internal Revenue Service
1111 Constitution Avenue N.W.
Washington, D.C. 20224

Attn: CC:IND:S:3
Room 6545

RE: National Bancorp, Inc.
FEIN: 36-3166798

Dear Sir:

A ruling is respectfully requested on behalf of the captioned taxpayer
with respect to the Federal Income tax consequences to the taxpayer and its
shareholders on the distribution of the shares of the taxpayer's wholly-owned
subsidiary, American National Bank of DeKalb County, pursuant to Section 355
of the Internal Revenue Code of 1986, as amended ("Code"). The facts are
substantially as set forth below. In addition, pursuant to Rev. Proc. 96-30,
I.R.B. 1996-19, 8, a detailed response to the Section 355 checklist
questionnaire is attached hereto marked Exhibit A.

I. THE PARTIES

1. National Bancorp, Inc.

National Bancorp, Inc. ("NBI"), employer identification number
36-3166798, is a Delaware corporation incorporated in 1980. NBI has its
principal place of business at 1300 E. Irving Park Road, Suite 200,
Streamwood, Illinois 60107, and its telephone number is (630) 372-3240. NBI
is a multi-bank holding company and the common parent of an affiliated group
of corporations that files a federal consolidated income tax return for a
taxable year ending December 31 with the Internal Revenue Service Center,
Kansas City, Missouri. The District Director of Internal Revenue, Chicago,
Illinois, has audit jurisdiction over the NBI consolidated income tax return.

NBI had outstanding at December 31, 1995, 86.87116 shares of $10,000 par
value common stock. At that date, NBI also had outstanding convertible
subordinated debentures in the aggregate principal amount of $3,950,000.
NBI's Series III debentures were issued on September 6, 1991, bore interest at
9%, matured on September 30, 1996, and were converted into shares of common
stock at $150,000 per share. NBI's Series IV debentures were issued on
August 1, 1995, bear interest at 10%, mature on September 30, 2001, and are
convertible into common stock at $220,000 per share at any time prior

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 2

to maturity. The only shareholders beneficially owning 5 percent or more of
the NBI stock are Robert W. Svendsen, Sr., Valda M. Svendsen and Thomas H.
Roth.

NBI is a registered bank holding company with 6 employees. It is not
directly involved in the conduct of an active trade or business. It is
engaged in the banking and financial service businesses through its
wholly-owned subsidiaries.

2. AmericanMidwest Bank and Trust

AmericanMidwest Bank and Trust ("Midwest"), employer identification
number 36-0790290, is a state banking association established in 1914 and
currently chartered as a state bank under the laws of the state of Illinois.
Its principal place of business is at 1600 W. Lake Street, Melrose Park,
Illinois 60160, and its telephone number is (630) 681-8600.

Midwest has outstanding 200,000 shares of $10.00 par value voting common
stock. All of the outstanding stock of Midwest is owned by NBI, which
purchased the stock of Midwest in 1981. Midwest is a commercial bank
providing a full line of financial services to retail and commercial customers
in Melrose Park, Illinois and its adjacent suburban area.

3. American National Bank of DeKalb County

American National Bank of DeKalb County ("DeKalb"), employer
identification number 36-2778575, is a national banking association
established in 1973 and currently chartered under the laws of the United
States. Its principal place of business is at 124 South Main Street,
Sycamore, Illinois 60178, and its telephone number is (815) 756-1444.

DeKalb has outstanding 58,000 shares of $10.00 par value voting common
stock. All of the outstanding stock of DeKalb is owned by NBI, which
purchased the stock of DeKalb in 1987. DeKalb is a commercial bank providing
a full line of financial services to corporate and retail customers in DeKalb
County, Illinois.

4. Northwest Community Bank

Northwest Community Bank ("Northwest"), employer identification number
36-4011679, is a state banking association established in 1995 and currently
chartered under the laws of the state of Illinois. Its principal place of
business is at 1845 E. Rand Road, Arlington Heights, Illinois 60004, and its
telephone number is (847) 870-6300.

Northwest has outstanding 100,000 shares of $10.00 par value voting
common stock. All of the outstanding stock of Northwest is owned by NBI,
which acquired the stock of Northwest in the formation of Northwest on

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 3

May 3, 1995. Northwest is a commercial bank providing a full line of
financial services to corporate and retail customers in the Northwest suburban
area of Cook County, Illinois.

5. First Lake Corporation

First Lake Corporation ("FLC"), employer identification number
36-3679442, is a corporation organized under the laws of the state of Delaware
in 1989. Its principal place of business is at 1300 E. Irving Park Road,
Suite 200, Streamwood, Illinois 60107, and its telephone number is
(630) 372-3240.

FLC has outstanding 100 shares of $10.00 par value voting common stock.
All of the outstanding stock of FLC is owned by NBI which acquired the FLC
stock in the formation of FLC in 1989. FLC is engaged in the business of
acquiring loan portfolios from the Federal Deposit Insurance Corporation
("FDIC"), Resolution Trust Corporation ("RTC") and other sources at
substantial discounts from principal amounts outstanding and liquidating the
portfolios through collection efforts or through bulk sales to financial
institutions.

6. Suburban Lands Corporation

Suburban Lands Corporation ("Suburban"), employer identification number
36-3695770, is a corporation organized under the laws of the state of Illinois
in 1986. Suburban has been inactive since 1994. All of the outstanding stock
of Suburban is owned by Midwest.

7. National Bancorp Data Systems L.L.C.

National Bancorp Data Systems L.L.C. ("Systems"), employer
identification number 36-4019485, is an Illinois limited liability company
formed on May 19, 1995. Its principal place of business is at 1300 E. Irving
Park Road, Streamwood, Illinois 60107, and its telephone number is
(630) 372-3277. Systems is owned 34 percent by Midwest, 33 percent by DeKalb
and 33 percent by First Bank of Schaumburg ("Schaumburg"), a corporation owned
by certain NBI shareholders.

Systems provides electronic data processing services for its member
banks and affiliates under contractual fee arrangements. Systems is taxable
as a partnership for federal income tax purposes. It files a partnership
income tax return, Form 1065, with the Internal Revenue Service Center, Kansas
City, Missouri. Systems is within the audit jurisdiction of the District
Director of Internal Revenue, Chicago, Illinois.

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 4

The books of account for NBI, Midwest, DeKalb, Northwest, FLC, Suburban
and Systems are each maintained on the basis of a calendar year, and each
entity uses the accrual method of accounting. Separate balance sheets for
each active business, including Systems, for the period ending December 31,
1995, are attached hereto marked Exhibit B. In addition, separate profit and
loss statements for each of the past five calendar years for each active
business are attached hereto marked Exhibit C.

II. THE PROPOSED TRANSACTION

1. Background and Business Reasons for the Transaction

During the past year, NBI's management has been exploring various
banking and other business opportunities for NBI and its subsidiaries. The
management of Midwest has considered expanding its banking business by
building a branch bank on property located in Bolingbrook, Illinois at a cost
in excess of $2 million. The management of DeKalb believes that to compete
more actively with local banks it needs to expand through acquisitions of
other banking institutions in its market area. At the same time, the
management of Northwest, a de novo bank organized in 1995, has determined that
Northwest must move out of its temporary leased quarters and acquire land and
build its own banking facilities if it is to compete effectively in its market
area.

Each of the ventures being considered by the management of NBI and its
subsidiaries would require several million dollars in funding. Alternatives
that have been considered by management to obtain such funding include
obtaining additional equity or debt capital and providing internal funding by
discontinuing further dividend payments to the NBI shareholders. During its
consideration of these various funding alternatives, NBI management was
approached by BanPonce Corporation ("BP"), a publicly-held bank holding
company organized as a Puerto Rico corporation. BP made an offer to NBI and
its shareholders to acquire NBI and Midwest; however, BP has no interest in
acquiring the stock or assets of NBI's other subsidiaries and requires that
NBI dispose of its other subsidiaries before acquiring NBI and Midwest.

BP, or a wholly-owned Puerto Rico subsidiary of BP, Popular
International ("Popular"), proposes to acquire the stock of NBI in exchange
for approximately 1.1 million shares of BP voting common stock in a
transaction qualifying as a reorganization within the meaning of Section
368(a)(1)(B) of the Code. BP has substantial funding sources which NBI's and
Midwest's managements believe will better enable Midwest to achieve its
expansion plans. At the same time, following the acquisition of NBI and
Midwest, the managements of DeKalb and Northwest believe that they should be
better positioned to pursue their expansion plans which will be necessary for
these banks to remain competitive in their respective marketplaces.

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 5

BP wishes to acquire Midwest because, among other things, Midwest serves
one of the largest Hispanic communities in the Chicago Metropolitan area.
However, BP proposes to acquire NBI to avoid having a significant block of its
publicly-traded stock held by a single institutional investor that is a
regulated bank holding company. By acquiring NBI stock directly from the NBI
shareholders, the 1.1 million shares of BP stock will be owned by individual
investors and not an institutional investor subject to regulatory oversight.
Therefore, it is more likely that these shares of BP stock will be put in
circulation through trades on the open market.

The NBI Board of Directors has determined that the holding of 1.1
million shares of BP also would be imprudent and ill advised from the
perspective of NBI. Accordingly, NBI has informed BP that it will agree to
the acquisition by BP only if the NBI stock is acquired directly from the NBI
shareholders. NBI was organized as a bank holding company in 1980 and it
currently owns three banking subsidiaries. It provides auditing, loan review
and bond portfolio investment services to its banking subsidiaries. NBI
currently does not have the expertise to manage a $30 million equity
investment that would represent more than 50 percent of its asset value.
Banks are required to limit their investment portfolios to debt securities
and, therefore, NBI would need to recruit and hire staff with the requisite
expertise and experience to manage its equity investments in the best
interests of its shareholders. Among other things, NBI would need to properly
insure its officers and directors who are rightly concerned that they lack the
expertise necessary to make prudent investment decisions in fulfilling their
fiduciary responsibility to the NBI shareholders. Put simply, the acquisition
of 1.1 million BP shares would dramatically change the character and
orientation of NBI, which has operated since inception solely as a bank
holding company. The acquisition of such a significant investment asset would
fundamentally alter the focus and direction of NBI and it would be entirely
inconsistent with its historic business.

The NBI directors and officers also are concerned that NBI's status as a
bank holding company may unduly restrict its ownership of the BP stock. As a
bank holding company, NBI is, and would continue to be, subject to regulatory
oversight by the Board of Governors of the Federal Reserve ("Federal
Reserve"). The Federal Reserve's Policy Statement on the Responsibility of
Bank Holding Companies to Act as Sources of Strength to Their Subsidiary
Banks, and the Federal Reserve's Policy Statement on Cash Dividend Payments,
copies of which are attached hereto marked Exhibit D, reflect the Federal
Reserve's policy that bank holding companies must act as a source of strength
to their subsidiary banks and not pay dividends if in a weak financial
condition or if doing so would result in a weak financial condition. NBI's
holding of the BP stock could be adversely affected under these policies in
several ways. For example, should one of NBI's subsidiary banks experience a
loan loss or other capital problem, the Federal Reserve could require NBI to
liquidate its BP stock holdings to generate cash to increase the bank's
capital account. Such a sale could be required at a time that otherwise would
be disadvantageous from an investment standpoint.

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 6

Moreover, if BP were to acquire the Midwest stock directly from NBI, NBI
subsequently would be classified as a personal holding company under
Section 541 of the Code. NBI's ability to distribute dividends to avoid the
imposition of the personal holding company tax could similarly be restricted
by the Federal Reserve's policy requiring bank holding companies to strengthen
the financial position of their subsidiary banks. Thus, NBI could be subject
to the penalty tax imposed on personal holding companies because it might be
restricted from making dividend distributions by the Federal Reserve's
policies.

The cross guaranty provisions of the Federal Deposit Insurance Act, a
copy of which is attached hereto marked Exhibit E, could have a similar
effect. These provisions provide that bank affiliates of a failed bank are
obligated to pay the FDIC any amount the FDIC expends in repaying depositors.
The holding company is liable to the extent of the lesser of five percent of
such amount or five percent of its assets. Thus, weakness in subsidiary banks
could result in weakness at the holding company level, thereby limiting
dividends.

Therefore, to facilitate BP's acquisition of NBI and Midwest, NBI
proposes to divest its interests in the stock and/or assets of its
subsidiaries other than Midwest. NBI's principal shareholder, Robert
Svendsen, and certain members of his family (the "Svendsen Family"), who have
been in the banking business for many years, have expressed an interest in
retaining interests in NBI's other banking subsidiaries, DeKalb and Northwest
as well as in FLC. Except for Richard Willey, an officer of DeKalb, other NBI
shareholders have advised NBI management that they do not wish to retain a
minority interest in these subsidiaries.

2. Description of the Proposed Plan of Reorganization and
Distribution

To achieve all of the foregoing objectives, the proposed transactions
will be structured as follows.

1. The stock of Northwest will be sold for cash to Robert
Svendsen.

2. The stock or assets of FLC will be sold for a cash payment
and the assumption of debt owed to FLC's president (a minority NBI
shareholder) to either a third party or to a limited liability company
owned by one or more of the NBI shareholders.

3. To obtain the financing and other benefits available to
banks in a holding company structure, NBI will transfer all of its stock
in DeKalb to a new holding company ("Holdco") in exchange for all of the
issued and outstanding stock of Holdco.

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 7

4. NBI will distribute all of its Holdco stock to Robert
Svendsen, Richard Willey, and certain members of the Svendsen Family in
exchange for a certain number of shares of NBI common stock held by
them.

5. Pursuant to a Stock Purchase Agreement (the "Exchange
Agreement"), a copy of which is attached hereto marked Exhibit F, BP, or
Popular, a wholly-owned subsidiary of BP, will acquire all of the
outstanding stock of NBI solely for shares of voting common stock of BP
in a transaction qualifying as a reorganization within the meaning of
Section 368(a)(1)(B) of the Code. BP will pay cash in lieu of issuing
fractional shares to NBI shareholders entitled to receive fractional
shares.

III. REPRESENTATIONS AND STATEMENTS

1. The investment tax credit, if any, previously computed with
respect to Section 38 property which NBI will transfer to Holdco will be
adjusted in the year of transfer to reflect the early disposition of such
property pursuant to Section 47(a)(1) and (5) of the Code.

2. No two parties to the transaction are investment companies as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.

3. NBI, Holdco, DeKalb and the NBI shareholders will each pay their
own expenses, if any, incurred in connection with the proposed transactions.

4. No part of the consideration to be distributed by NBI will be
received by a shareholder as a creditor, employee, or in any capacity other
than that of a shareholder of NBI.

5. Following the proposed transaction, NBI, Midwest and DeKalb will
each continue the active conduct of their respective businesses independently
and with their own separate employees.

6. Following the proposed transaction, at least 90 percent of the
fair market value of the gross assets of NBI and Holdco will consist of the
stock and securities of controlled corporations that are engaged in the active
conduct of a trade or business as defined in Section 355(b)(2) of the Code.

7. No intercorporate debt will exist between NBI and DeKalb or Holdco
at the time of, or subsequent to, the distribution of the Holdco stock.

8. The five years of financial information submitted on behalf of
NBI, Midwest, DeKalb and other corporations is representative of each

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 8

corporation's present operations, and, with regard to each corporation, there
have been no substantial operational changes since the date of the last
financial statements submitted.

9, There is no plan or intention to liquidate either NBI or Holdco,
to merge either corporation with any other corporation, or to sell or
otherwise dispose of the assets of either corporation subsequent to the
proposed transaction, except in the ordinary course of business.

10. Payments made in connection with all continuing transactions, it
any, between NBI and Holdco will be for fair market value based on terms and
conditions arrived at by the parties bargaining at arm's length.

11. There is no plan or intention by the shareholders of NBI to sell,
exchange, transfer by gift, or otherwise dispose of a number of shares of
Holdco or NBI (or BP after the contemplated acquisition is effected) that will
violate the 50 percent in value continuing interest in stock ownership
requirement as provided in Section 3.02 of Rev. Proc. 77-37, 1977-2 C.B. 568.

12. The fair market value of the Holdco stock to be distributed to the
NBI shareholders will be approximately equal to the fair market value of the
NBI stock to be surrendered by them in exchange therefor.

IV. RULINGS REQUESTED

In connection with the proposed transactions, the following rulings are
respectfully requested.

1. The transfer by NBI to Holdco of DeKalb stock, as described above,
solely in exchange for all of the outstanding stock of Holdco, followed by the
distribution of the Holdco stock to the NBI shareholders, as described above,
will be a reorganization within the meaning of Section 368(a)(1)(D) of the
Code. NBI and Holdco will each be "a party to a reorganization" within the
meaning of Section 368(b) of the Code.

2. No gain or loss will be recognized to NBI upon the transfer of its
DeKalb stock to Holdco in exchange for Holdco stock, as described above
(Section 361(a)).

3. No gain or loss will be recognized by Holdco upon the receipt of
the stock of DeKalb in exchange for Holdco stock, as described above (Section
1032(a)).

4. The basis of the stock of DeKalb received by Holdco will be the
same as the basis of such stock in the hands of NBI immediately prior to the
transaction (Section 362(b)).

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 9

5. The holding period of DeKalb stock received by Holdco will include
the period during which the stock was held by NBI (Section 1223(2)).

6. No gain or loss will be recognized to, and no amount will be
included in the income of, the NBI shareholders upon the receipt of the Holdco
stock in exchange for their NBI stock (Section 355(a)(1) of the Code).

7. The basis of Holdco stock in the hands of the NBI shareholders
will be the same as the basis of the NBI stock exchanged therefor (Section
358(b)(1) of the Code).

8. The holding period of the Holdco stock received by the NBI
shareholders will include the holding period of the NBI stock exchanged
therefor, provided the stock of NBI is held as a capital asset on the date of
the exchange (Section 1223(1) of the Code).

9. No gain or loss will be recognized to NBI on the distribution of
all of its Holdco stock to the NBI shareholders. Section 311 has no
application to the distribution (Section 355(c) of the Code).

10. The subsequent exchange of BP stock for NBI stock will not
adversely affect the qualification of the distribution of Holdco stock under
Section 355 of the Code. See Rev. Rul. 68-603, 1968-2 C.B. 148.

V. STATEMENT OF AUTHORITIES

1. Under the provisions of Section 368(a)(1)(D) of the Code, a
transfer by one corporation of part of its assets to a controlled corporation,
followed by a distribution of the controlled corporation's stock in a spin-off
under Section 355 of the Code, qualifies as a reorganization within the
meaning of said Section.

In the proposed transaction, NBI will transfer part of its assets (the
DeKalb stock) to Holdco, a wholly-owned subsidiary. Then NBI will distribute
its Holdco stock to certain of its shareholders, in exchange for a number of
their shares in NBI, who will "control" Holdco within the meaning of Section
304(c) of the Code. Accordingly, if this subsequent distribution qualifies
under Section 355 of the Code, the transfer by NBI of the DeKalb stock to
Holdco will qualify as a reorganization under Section 368(a)(1)(D). The
application of Section 355 is discussed below.

2. Under the general rule of Section 361(a), no gain or loss will be
recognized if a corporation a party to reorganization exchanges property in
pursuance of a plan of reorganization, solely for stock or securities in
another corporation a party to a reorganization. Accordingly, no gain or

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 10

loss will be recognized by NBI upon the transfer of its DeKalb stock to Holdco
in exchange for Holdco stock.

3. Under Section 1032(a) of the Code, no gain or loss is recognized
by a corporation on the receipt of money or other property in exchange for
stock of such corporation. Accordingly, no gain or loss will be recognized by
Holdco on the receipt of the DeKalb stock.

4. Under Section 362(b) of the Code, if property is acquired by a
corporation in connection with a reorganization (as defined in Section
368(a)(1) of the Code), the basis of the property shall be the same as it
would be in the hands of the transferor, increased by the amount of gain
recognized to the transferor on such transfer. Since there will be no gain
recognized on the transfer, the basis of the DeKalb stock in the hands of
Holdco will be the same as the basis of such stock in the hands of NBI
immediately prior to the transfer.

5. Under Section 1223(2) of the Code, in determining the period for
which a taxpayer has held property however acquired there shall be included
the period for which such property was held by any other person, if such
property has, for the purposes of determining gain or loss from the sale or
exchange, the same basis in whole or in part in his hands as it would have in
the hands of such other person. Since the DeKalb stock will have the same
basis in the hands of Holdco as such stock has in the hands of NBI, the
holding period of such stock in the hands of Holdco will include the period in
which such stock was held by NBI.

6. Section 355 of the Code permits the tax-free distribution by one
corporation (the "distributing corporation") of stock and securities in
another corporation (the "controlled corporation") if the following conditions
are satisfied:

(i) Immediately before the distribution, the distributing
corporation must control the controlled corporation within the meaning
of Section 368(c) of the Code.

(ii) Immediately after the distribution, both the distributing
corporation and the controlled corporation must be engaged in the active
conduct of a trade or business, and each trade or business (a) was
actively conducted throughout the five-year period ending on the date of
distribution; (b) was not acquired within the five-year period in a
taxable transaction; and (c) was not conducted by another corporation
the control of which was acquired during the five-year period in a
taxable transaction.

(iii) The distributing corporation must either (a) distribute all
of its stock and securities in the controlled corporation or
(b) distribute enough stock to constitute "control" as defined in
Section 368(c) and establish that the retention of stock or stock
securities in the controlled corporation is not part of a tax-avoidance
plan; and

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 11

(iv) The transaction must not be used principally as a device for
the distribution of earnings and profits.

The proposed distribution clearly satisfies condition (i) and (iii)
above, as NBI will own 100 percent of the outstanding stock of Holdco
immediately prior to the proposed distribution and it will distribute all of
its Holdco stock to the NBI shareholders.

With respect to condition (ii) above, Section 1.355-3(b)(2)(ii) of the
Income Tax Regulations states that a trade or business consists of a specific
group of activities being carried on for the purpose of earning income or
profit from only such group of activities and the activities included in such
group must include every operation which forms a part of, or a step in, the
process of earning income or profit from such group. Such group activities
must ordinarily include the collection of income and the payment of expenses.
Rev. Rul. 73-235, C.B. 1973-1, 183, holds that the conduct of a trade or
business will be deemed "active" if the corporation itself directly performs
substantial management and operational functions in conducting the trade or
business.

Section 1.355-3(b)(1) of the Income Tax Regulations provides that a
parent corporation may satisfy the active trade or business requirement if
substantially all of its assets consist of the stock of one or more
corporations that meet the active business test. It is thus submitted that
the facts set forth in Section II, above, and the information submitted with
Exhibit A, clearly establish that Midwest and DeKalb have conducted for the
past five years activities which constitute the conduct of an active trade or
business. The employees of each corporation have performed substantial
management and operational functions for their respective separate businesses.
Moreover, it is represented that at least 90 percent of the fair market value
of the gross assets of NBI and Holdco will consist of the stock and securities
of controlled corporations engaged in the active conduct of a trade or
business.

The "device" restriction of Section 355(a)(1)(B) is intended to prevent
the conversion of dividend income into capital gains. See Rev. Rul. 71-383,
1971-2 C.B., 180. This generally occurs if there is a prearranged sale or
exchange of the stock by the shareholders of the distributing corporation or
by shareholders of the controlled corporation after the distribution. Other
than the acquisition of NBI by BP, or Popular, a wholly-owned subsidiary of
BP, in a transaction qualifying as a reorganization within the meaning of
Section 368(a)(1)(B) of the Code, there is no prearranged sale or otherwise
intended sale or exchange of stock of either NBI or Holdco by the NBI or
Holdco shareholders after the distribution. The transfer to BP or Popular in
a tax-free reorganization is not considered evidence of a device. See Rev.
Rul. 68-603, 1968-2, C.B. 148.

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 12

The requirement under Section 1.355-2(b) of the Income Tax Regulations
that the distribution is carried out for one or more corporate business
purposes is clearly satisfied. The distribution is being undertaken to
facilitate the tax-free acquisition of NBI. See Rev. Rul. 68-603, 1968-2,
C.B. 148. Furthermore, as discussed more fully in Section II of this ruling
request, the corporate business purpose cannot be achieved through a
nontaxable transaction that does not involve the distribution of Holdco stock
and which is neither impractical nor unduly expensive.

The continuity of interest requirement of Section 1.355-2(c) of the
Income Tax Regulations will be satisfied. One or more of the NBI shareholders
after the distribution of the Holdco stock will own, in the aggregate, an
amount of stock establishing a continuity of interest in each of the modified
corporate forms in which the enterprise is conducted after the separation.

7. Under the general rule of Section 358(a) of the Code, in the case
of exchanges to which Section 354 or Section 355 applies, the basis of the
property permitted to be received without the recognition of gain or loss will
be the same as that of the property exchanged, decreased by the amount of
money or other property received, and increased by the amount of gain
recognized in such exchange.

No money or other property will be received by the NBI shareholders and
no gain will be recognized by them in the distribution. Accordingly, the
basis of the stock of Holdco to be received by the NBI shareholders will be
the same as the basis of the NBI stock exchanged therefor.

8. Section 1223(1) provides that in determining the period for which
a taxpayer has held property received in an exchange, there shall be included
the period for which he held the property exchanged, if the property has, for
the purpose of determining gain or loss on the sale or exchange, the same
basis in whole or in part in his hands as the property exchanged, and, in the
case of such exchanges after March 1, 1954, the property exchanged at the time
of such exchange was a capital asset as defined in Section 1221 or property
described in Section 1231. Accordingly, the holding period of the Holdco
stock to be received by the NBI shareholders will include the holding period
of the NBI stock exchanged by them therefor immediately prior to the
distribution, provided that the NBI stock was held as a capital asset on the
date of the distribution.

9. Under Section 355(c), Section 311(b) does not apply to the
distribution of the DeKalb stock as the distribution of the Holdco stock is a
distribution to a shareholder of stock in the "controlled corporation" within
the meaning of Section 355(a)(1) of the Code. Accordingly, no gain or loss
will be recognized to NBI on the distribution of its stock in Holdco to the
NBI shareholders.

<PAGE>

Associate Chief Counsel (Domestic)
Internal Revenue Service
RE: National Bancorp, Inc.
December 9, 1996
Page 13

VI. PROCEDURAL STATEMENTS

1. Please address your reply and ruling letter to:

National Bancorp, Inc.
1300 E. Irving Park Road
Suite 200
Streamwood, Illinois 60107

2. If additional information is required, please contact the
undersigned at (630) 574-1619.

3. A conference is hereby requested if any decision should be under
consideration which is inconsistent with any of the foregoing requested
rulings, before any such decision is actually made.

4. To the best of the knowledge of the taxpayers and the taxpayers'
representative, the identical issues presented herein are not in a return of
any of the taxpayers (or of a related taxpayer within the meaning of
Section 267 of the Code, or of a member of an affiliated group of which any of
the taxpayers is also a member within the meaning of Section 1504 of the
Code). Further, to the best of the knowledge of the taxpayers and taxpayers'
representatives, the identical or similar issues raised herein have not been
submitted to the Service, but withdrawn before a ruling was issued, or ruled
on by the Internal Revenue Service to any of the taxpayers or to any of the
taxpayers' predecessors, nor are they currently being considered by any field
office of the Internal Revenue Service or an Appeals Office.

Sincerely yours,

CROWE, CHIZEK & COMPANY LLP

By:_______________________________
Frank J. O'Connell, Jr.
FJO:lmd
Attachments

<PAGE>

EXHIBIT A

Checklist for Ruling Request Under Section 355
Rev. Proc. 96-30, I.R.B. 1996-19,8

4.01 - 1, 2, 3 - Information on the Distributing and Controlled Corporations.

Distributing Corporation

National Bancorp, Inc. ("NBI")
1300 E. Irving Park Road, Suite 200
Streamwood, IL 60107
FEIN: 36-3166798
Incorporated in Delaware in 1980
Taxable year ends December 31
IRS District Office: Chicago, Illinois

Controlled Corporation

Holdco is a corporation to be formed under the laws of the state of
Delaware to effectuate the proposed transaction. It will have a taxable
year ending December 31 and it will be within the audit jurisdiction of
the Chicago District Director.

4.02 - 1 and 2 - Ownership of Interests in Distributing and Controlled.

(a) Distributing

Distributing is authorized to issue 150,000 shares of $10,000
voting common stock and 10,500 shares of $10.00 par value, 8%
cumulative Class A preferred stock and 89,500 shares of $1.00 par
value preferred stock. Immediately prior to the distribution,
Distributing will have approximately 105.81585 shares of $10,000
voting common stock outstanding and no shares of its Class A
preferred stock or $1.00 par value preferred stock outstanding.
There are approximately 29 shareholders who own all of the
outstanding shares, which shareholders and the number of shares
they own are listed in the attached Schedule I to this Exhibit A.
Distributing has no foreign shareholders and there are no
existing, planned, or intended agreements, such as a voting trust,
affecting the rights of its shareholders.

(b) Controlled

Controlled will be authorized to issue 100,000 shares of common
stock having a $10.00 par value of which __________ shares will be
issued and outstanding. Distributing, prior to the distribution,
will own 100% of the outstanding stock of Controlled.

<PAGE>

4.02 - 3 - Description of Stock and Securities to be Distributed and Retained.

(a) Stock - All __________ of the common shares of Controlled that
will be owned by Distributing will be distributed to shareholders
of Distributing.

(1) Preferred stock - N.A. - No preferred stock exists in
Controlled

(b) Securities - N.A. - No securities issues exist.

(d) Timing - All stock will be distributed on the same date, which
will be shortly after receiving favorable rulings from the
Internal Revenue Service and the Federal Reserve Board of
Governors.

(e) Planned stock issuance, etc. - N.A. - There are no planned or
intended stock issuances, redemptions, or dispositions of
Controlled stock.

(f) Obtaining control - Controlled is a new corporation to be formed
for the purpose of effecting the proposed transaction.

4.02 - 4 - Ownership of Stock and Securities Immediately after the
Distribution.

All of the shares of Controlled will be distributed solely to certain of
the Distributing shareholders in exchange for their surrender of a
certain number of their Distributing shares.

Immediately after the distribution of the shares of Controlled, the
shares of Distributing will be owned as set forth in the attached
Schedule I to this Exhibit A.

4.02 - 4(a)(i) - Retention of Stock or Securities.

No stock or securities in Controlled will be retained by Distributing.

4.02 - 4(a)(ii) - Retention of Debt.

Controlled will not be indebted to Distributing after the distribution
of Controlled stock.

4.02 - 4(a)(iii) - Purpose for Distributing Holding a Stock or Security
Interest in Controlled.

After the distribution, Distributing will hold no stock or security
interest in Controlled.

4.02 - (b)(i) - Distribution or Exchange.

The distribution of Controlled stock will be non prorata with respect to
the shareholders of Distributing. The details of the transaction are
described in Section II of the narrative.

4.02 - (b)(ii) - Stock Ownership.

The ownership interests in Distributing and Controlled following the
transaction will be as set forth in the attached Schedule I to this
Exhibit A.

4.02 - 4(b)(iii) - Securities.

No shareholder of Distributing will receive securities of Controlled in
the proposed transaction.

4.02 - 4(b)(ii) - Surrender of Stock.

The fair market value of the controlled corporation stock and other
consideration to be received by each shareholder of the distributing
corporation will be approximately equal to the fair market value of the
distributing corporation stock surrendered by the shareholder in the
exchange.

4.02 - (c) - Securities.

No securities are being exchanged in the proposed transaction.

4.02 - (d)(i), (ii) & (iii) - Receipt of Consideration other than with Respect
to Stock.

No part of the consideration to be distributed by Distributing will be
received by a shareholder as a creditor, employee, or in any capacity
other than that of a shareholder of the corporation.

The shareholders of Distributing will not transfer or surrender any
property in the transaction other than shares in Distributing.

4.03 - Information Concerning the Businesses of Distributing and Controlled.

4.03 - 1 - Description of Businesses.

See discussion in Sections I and II of the narrative portion of the
ruling request.

4.03 - 2 - Distributing's Active Businesses.

See discussion in Sections I and II of the narrative.

<PAGE>

4.03 - 2(a) - Active Conduct During the Preceding 5-Year Period.

See discussion in Section I and II of the narrative.

4.03 - 2(b) - Employee Information.

See Schedule II attached to this Exhibit A.

4.03 - 2(c) - Nonemployee Information.

Distributing's banking subsidiaries employ independent contractors in
areas such as advertising, legal, accounting and other various
consulting arrangements. It is estimated that these services represent
less than 10 percent of the activities performed for the Active
Businesses.

4.03 - 2(d) - Continuous Ownership of an Active Business During the Preceding
5-Year Period.

The Active Businesses of Distributing's banking subsidiaries, with the
exception of Northwest Community Bank, have been continuously conducted,
within the meaning of Regs. Sec. 1.355-3(b), by such banking
subsidiaries for the 5-year period ending on the date of distribution.
See Section I of the narrative regarding the dates these businesses
commenced or were acquired by Distributing.

4.03 - 2(e) - Change of Business.

There have been no substantial changes during the preceding 5-year
period in the type of business activity conducted or the method of
conducting business.

4.03 - 2(f) - Separation of Real Property, Intellectual Property, or Other
Intangible Property from User.

Except for the sale of Midwest's credit card division to DeKalb and the
redemption of Midwest's 34 percent interest in Systems, no real
property, intellectual property, or other intangible property
historically occupied or used by one business will be separated in the
proposed transactions from that business.

4.03 - 2(g) - Balance Sheets.

A copy of Distributing's balance sheet as of December 31, 1995, as well
as a consolidated balance sheet that includes Distributing is attached
as Exhibit B to the ruling request.

4
<PAGE>

<PAGE>

4.03 - 2(h) - Profit and Loss Statements.

Separate unconsolidated profit and loss statements (including all
applicable notes) for each of the past 5 years for each Active Business
of Distributing is attached as Exhibit C to the ruling request.

4.03 - 2(h) - Profit and Loss Statements. (Continued)

The 5 years of financial information submitted on behalf of the
distributing corporation is representative of the corporation's present
operation, and with regard to such corporation, there have been no
substantial operational changes since the date of the last financial
statements submitted.

4.03 - 2(e) - Change of Business.

There have been no substantial changes during the preceding 5-year
period in the type of business activity conducted or the method of
conducting business.

4.03 - 2(f) - Separation of Real Property, Intellectual Property, or Other
Intangible Property from User.

No real property, intellectual property, or other intangible property
historically occupied or used by Controlled in its Active Business will
be separated in the proposed transaction from that business.

4.03 - 2(g) - Balance Sheets.

Controlled is a corporation to be formed to effect the proposed
transaction. The balance sheet as of December 31, 1995, of its
controlled subsidiary is attached as Exhibit B to the ruling request.

4.03 - 2(h) - Profit and Loss Statement.

Separate unconsolidated profit and loss statements (including all
applicable notes) for each of the past 5 years for the Active Businesses
of Controlled's controlled corporation is attached as Exhibit C to the
ruling request.

The 5 years of financial information submitted on behalf of the
controlled corporation is representative of the corporation's present
operation, and with regard to such corporation, there have been no
substantial changes since the date of the last financial statements
submitted.

5
<PAGE>

<PAGE>

4.03 - 3 - Description of Active Businesses Being Transferred by Distributing
to Controlled.

Distributing will transfer the stock of its wholly-owned subsidiary,
DeKalb, to Controlled.

4.03 - 4(a) - Pre-existing Controlled's Active Businesses During the Preceding
5-Year Period.

See discussion in Sections I and II of the narrative.

4.03 - 4(b) - Employee Information.

See Schedule II attached to this Exhibit A.

4.03 - 4(c) - Nonemployee Information.

Controlled employs independent contractors in areas such as advertising,
legal, accounting and other various consulting arrangements. It is
estimated that these services represent less than 10 percent of the
activities performed for its Active Business.

4.03 - 4(d) - Continuous Ownership of an Active Business During the Preceding
5-Year Period.

The Active Business of Controlled has been continuously conducted,
within the meaning of Regs. Sec. 1.355-3(b), by Controlled for the
5-year period ending on the date of the distribution. See Section I of
the narrative regarding the date this Active Business commenced or was
acquired by Controlled.

4.03 - 5 - Indirect Conduct of Trade or Business through Ownership of Stock in
Other Corporations.

Distributing and Controlled are not directly engaged in an Active
Business. The information required by this section is provided in
Section 4.03 - (2)(a) through (h) of this Exhibit A.

Immediately after the distribution, at least 90 percent of the fair
market value of the gross assets of both NBI and Controlled will consist
of the stock and securities of controlled corporations that are engaged
in the active conduct of a trade or business as defined in Section
355(b)(2).

4.03 - 6 - Changes in Ownership of an Active Business During the 5-Year Period
Ending on the Date of Distribution.

Except for the business of Northwest Community Bank, none of the Active
Businesses conducted by Distributing, Controlled, or an Other
Corporation have been acquired by that corporation during the 5-year
period ending on the date of distribution.

<PAGE>

4.03 - 7(a) - Stock of Controlled or Other Corporations Continuously Owned
During the Preceding 5-Year Period.

Except for the stock of Controlled and Northwest, the stock of Midwest,
DeKalb and FLC will have been continuously held by Distributing during
the 5-year period ending as of the date of the distribution.

4.03 - 7(b)(i) - Identity.

The stock of Controlled will have been acquired by Newco in the 5-year
period ending on the date of the distribution.

4.03 - 7(b)(ii) - Date and Consideration.

The stock of Controlled will be acquired by Holdco shortly before the
date of the distribution and subsequent to the receipt of a favorable
tax ruling and approval of the Board. The stock of Holdco will be the
sole consideration given in exchange for the acquisition of the
Controlled stock.

4.03 - 7(b)(iii) - Transaction.

The stock of Controlled will be acquired in a transaction qualifying as
a reorganization within the meaning of Section 368(a)(1)(D) of the Code.

No cash or other assets will be involved in the transaction.

4.03 - 7(b)(iv) - Gain or Loss.

No gain or loss will be recognized, in whole or in part, to any party to
the transaction, and the basis of the stock acquired will be determined
by reference to the basis of the assets transferred.

4.03 - 7(c) - Other Changes in Ownership During the 5-Year Period.

There have been no other changes in the ownership of the stock of
Controlled or the Other Corporations during the 5-year period ending on
the date of the distribution. The changes in ownership in the stock of
Distributing since January 1, 1992, are listed on Schedule IV attached
to this Exhibit A.

4.03 - 8 - Continuation of Business.

Following the transaction, the Controlled corporations will each
continue the active conduct of its business, independently and with its
separate employees. Following the transaction, Distributing, Controlled
and the Controlled corporations will not share any employees.

<PAGE>

There is no planned or intended substantial reduction in the business
activity of any Active Business.

4.04 - 1 - Detailed Description.

A detailed description of the corporate business purpose for the
distribution of the stock of Controlled is set forth in Section II of
the narrative.

4.04 - 2 - Corporate Business Purpose.

An explanation of the corporate business purpose motivating this
transaction, why it is a real and substantial nonfederal tax purpose
germane to the business of Distributing and Controlled, and why business
exigencies require the distribution at this time are discussed in
Section II of the narrative.

The distribution of the stock of the controlled corporation is carried
out for the following corporate business purpose: to facilitate a
subsequent tax-free acquisition of Distributing by BP which will occur
within one year of the distribution. The distribution of the stock of
the controlled corporation is motivated, in whole or substantial part,
by this corporate business purpose.

4.04 - 3 - Alternative Transactions.

An explanation of why the corporate business purpose cannot be achieved
through a nontaxable transaction that does not involve the distribution
of stock of Controlled, and which is neither impractical nor unduly
expensive, is set forth in Section II of the narrative.

4.04 - 4 - Cross Reference to Appendix A.

The corporate business purpose for the proposed transaction is described
in Section 2.07 of Appendix A.

4.04 - 5(a) - Noncorporate Business Purposes; In General.

The transaction is being effected solely to achieve the corporate
business purpose.

4.04 - 5(b) - Shareholder Planning.

The purpose for the distribution is not to facilitate the personal
planning of any shareholder.

8
<PAGE>

<PAGE>

4.04 - 5(c) - Special Tax Status.

The distributing corporation is not an S corporation (within the meaning
of Section 1361(a)), and immediately before the distribution, the
distributing corporation will not be eligible to make an S corporation
election. The distributing and controlled corporations will not elect
to be an S corporation pursuant to Section 1362(a) following the
proposed transaction.

4.04 - 5(d) - Reduction in Federal Taxes.

No reduction in federal taxes, other than the benefits to the
shareholders and Distributing resulting from the application of
Section 355, can reasonably be expected to result from the transaction.

4.04 - 5(e) - Representation.

Not applicable.

4.04 - 6(a) - Substantiation of Business Purpose; Documentation.

See Exhibit F attached to this ruling request.

4.04 - 6(b) - Third Party Documentation.

Not applicable.

4.04 - 7(a) - Regulatory Filings.

Distributing will file applications with the Board and the Illinois
Commissioner of Banks and Real Estate in connection with the proposed
transaction.

4.04 - 7(b) - Material Prepared for Directors.

Attached as Schedule VI to this Exhibit A is a copy of materials that
relate to the purpose of the distribution that were prepared for and
presented to Distributing's Board of Directors, as well as any relevant
portions of the Board's minutes.

4.04 - 7(c) - Communications to Shareholders and Employees.

The taxpayer has prepared no press releases or written communications to
employees that discuss the purpose of the distribution. The materials
attached sent to the taxpayer's shareholders are attached as Exhibit G
to this ruling request.

9
<PAGE>

<PAGE>

4.05 - 1(a) - Dispositions of Stock or Securities; Representation.

Other than the proposed BP transaction, there is no plan or intention by
the shareholders or security holders of the distributing corporation to
sell, exchange, transfer by gift, or otherwise dispose of any of their
stock in, or securities of, either the distributing or controlled
corporation after the transaction.

4.05 -1(b) - Permitted Purchases.

Not applicable.

4.05 - 1(c)(i) - Other Disposition - Detailed Description.

It is proposed that all of the outstanding stock of Distributing be
acquired by BP following the distribution in a transaction qualifying as
a reorganization within the meaning of Section 368(a)(1)(B) of the Code.

4.05 - 1(c)(ii) - Consideration.

The sole consideration for the acquisition of the Distributing stock
will be voting common stock of BP.

4.05 - (c)(iii) - Evidence of Nondevice.

See Rev. Rul. 68-603, 1968-2 C.B. 148 and Rev. Rul. 70-434, 1970-2 C.B.
83.

4.05 - (c)(2) - Absence of Earnings and Profits.

Not applicable.

4.05 - (c)(3) - Nonprorata Distribution.

The distribution, if considered taxable, would qualify as an exchange
under Section 302(a) or 303(a).

4.05 - (c)(4) - Investment and Inactive Assets.

Distributing, Controlled and the Other Corporations do not presently
hold investment or other assets that are not related to the reasonable
needs of the Active Businesses of Distributing, Controlled, or the Other
Corporations.

4.05 - (c)(5) - Liquidation or Sale of Assets.

There is no plan or intention to liquidate either the distributing or
controlled corporation, to merge either corporation with any other
corporation, or to sell or dispose of the assets of either corporation
after the transaction, except in the ordinary course of business.

10
<PAGE>

<PAGE>

4.06 - Continuity of Shareholder Interest.

See representation number 11 in the narrative.

4.07 - Disqualified Distribution.

No distributing shareholder or shareholders will hold immediately after
the distribution disqualified stock within the meaning of Section
355(d)(3) of the Code which constitutes a 50 percent or greater interest
in the distributing or controlled corporation.

4.08 - 1(a) - Transfers and Transactions between Distributing and Controlled.

To obtain the financing and other advantages of holding bank stock
through an intervening bank holding company, Distributing will form
Controlled and transfer all of the outstanding stock of DeKalb to
Controlled prior to, and in anticipation of, the distribution of the
Controlled stock.

4.08-1(b) - Liabilities.

No Liabilities of Distributing will be assumed by Controlled in
connection with the transfer by Distributing of the DeKalb stock.

4.08 - 1(c) - Investment Credit Property.

No investment credit determined under Section 46 of the Code has been
(or will be) claimed with respect to the property to be transferred by
Distributing to Controlled.

4.08 - 1(d) - Matching of Income and Deductions.

Distributing and Controlled both use the accrual method of accounting.
The transactions will not involve and will not result in a situation in
which one party recognizes income but another party recognizes the
deductions associated with such income or one party owns property but
another party recognizes the income associated with the property.

4.08 - 2(a) - Cancellation of Indebtedness.

No indebtedness has been or will be canceled in connection with the
transaction.

4.08 - 2(b) - Continuing Indebtedness.

No intercorporate debt will exist between the distributing corporation
and the controlled corporation at the time of, or subsequent to, the
distribution of the controlled corporation stock.

4.08 - 3 - Consolidated Transactions.

Immediately before the distribution, items of income, gain, loss,
deduction, and credit will be taken into account as required by the
applicable intercompany transaction regulations (see Section 1.1502-13
and Section 1.1502-4 as in effect before the publication of T.D. 8597,
1995-32 I.R.B. 6, and as currently in effect; Section 1.1502-13 as
published by T.D. 8597). Further, Distributing's excess loss account,
if any, with respect to the Controlled stock will be included in income
immediately before the distribution (see Section 1.1502-19).

4.08 - 4 - Continuing Transactions between Distributing and Controlled (or Two
or More Controlled Transactions).

The only continuing transactions between Distributing and Controlled
following the distribution, either directly or indirectly, or between an
Other Corporation and a corporation from which it will be separated are
_______________________.

Payments made in connection with all continuing transactions, if any,
between the distributing and controlled corporations, will be for fair
market value based on terms and conditions arrived at by the parties
bargaining at arm's length.

4.08 - 5 - Investment Company.

No two parties to the transaction are investment companies as defined in
Sections 368(a)(2)(F)(iii) and (iv).

4.08 - 6 - Transfers of Money or Property to Distributing.

The only property to be received by Distributing in the transaction will
be: (1) cash and/or assumption of liabilities in connection with the
taxable sales of Northwest and FLC stock; and (2) Controlled voting
common stock in exchange for the transfer of the DeKalb stock.

4.08 - 7 - Foreign Corporations.

Neither Distributing nor Controlled, or any Other Corporation is a
foreign corporation.

4.08 - 8 - Other Transactions.

All related transactions have been described herein. There is no plan
or intention to issue, redeem, or alter any rights in, such as voting
rights, shares of stock of Distributing, Controlled, or Other
Corporations, except as described herein.

12
<PAGE>

<PAGE>

4.08 - 9 - Plan of Reorganization and Other Relevant Documents.

The plan of reorganization is included in the materials attached as
Exhibit G to this ruling request.

4.08 - 10 - Requested Rulings.

See Section IV of the narrative.

13
<PAGE>
<PAGE>

Appendix B

PLAN OF REORGANIZATION
----------------------

THIS PLAN OF REORGANIZATION ("Plan") is made and entered into as of this
16th day of September, 1996 by and among National Bancorp, Inc., a Delaware
corporation ("NBI"), AmericanMidwest Bank and Trust, an Illinois state bank
("AmMid"), The American National Bank of DeKalb County, a national banking
association ("DeKalb"), Northwest Community Bank, an Illinois state bank
("NWC"), First Lake Corp., an Illinois corporation ("FLC") (AmMid, DeKalb, NWC
and FLC are wholly owned subsidiaries of NBI and are sometimes referred to
herein individually as a "Subsidiary," when applicable as a "Bank Subsidiary,"
and collectively as the "Subsidiaries"), and Robert W. Svendsen of Burr Ridge,
Illinois ("Svendsen").

R E C I T A L S
---------------

1. The Bank Subsidiaries are engaged in the general business of
banking, and specifically (a) AmMid is also engaged in credit card merchant
processing operations (the "AmMid Merchant Processing Business"), and (b) FLC
is engaged in the purchase and liquidation of loan pools.

2. During the past year, NBI has evaluated banking and other
opportunities facing NBI and the Subsidiaries in light of conflicting capital
utilization plans for the Subsidiaries, the changing banking environment and
the divergent interests of NBI's stockholders in NBI, generally, and in each
of the Subsidiaries. Specifically, AmMid's planned expansion into Bolingbrook
at a cost of $2 million or more, DeKalb's interests in competing more actively
with local banks and in expanding through acquisitions, the liquidation or
repositioning of FLC while available loan pool product has diminished, and a
long-term build strategy for NWC which desires to acquire land and build a new
main banking house at a cost of $2 million or more, have raised concerns that
these capital-intensive ventures will over-tax NBI's resources and cannot be
pursued simultaneously by NBI. These ventures require funding in the millions
of dollars, which funds could be raised by NBI stock sales (diluting present
stockholders' interests), the sale of debentures (convertible or not),
borrowings, discontinuation of dividend payments, or a combination of these
and other approaches. Management of NWC and DeKalb desire ownership positions
in NWC and DeKalb, which ownership positions cannot be accommodated given the
NBI ownership structure. FLC is a self-liquidating business; competition for
diminishing loan packages has reduced FLC's profitability. Many NBI
shareholders desire to continue NBI dividends as well as the investment
liquidity of a publicly-traded stock. NBI is closely-held and virtually all
NBI stock purchases over the past decade have been undertaken by NBI whose
ability to repurchase its stock will be diminished by capital-intensive
subsidiary business plans. Under these circumstances, NBI management was
directed to search for alternatives to determine whether, and how, some or all
of these ventures might be pursued. NBI's reorganization as contemplated by
this Plan was identified as the most feasible approach. After management's

search was underway, BanPonce Corporation, a Puerto Rican corporation ("BP"),
expressed an interest in acquiring NBI and AmMid, and in undertaking loan
portfolio purchases and sales, but expressed no interest in acquiring DeKalb
or NWC. Discussions are underway with BP as to its possible interest in
acquiring FLC and/or some or all of FLC's loan portfolios. In order to
complete BP's proposed acquisition, the divesture of DeKalb and NWC, and the
possible disposition of FLC or its loan portfolios, must be effected. NBI
stockholders, debentureholders and directors have been kept advised of
discussions with BP, and the ancillary transfers and sales of assets involved
in the Plan including (a) the sale of AmMid's Merchant Processing Division
to DeKalb prior to BP's acquisition of NBI in a shareholder stock exchange
or in a merger transaction involving a wholly-owned subsidiary of BP (in
either event, the "Acquisition Transaction"), (b) the sale of NWC to the
Svendsen family for an amount equal to NBI's after-tax carrying costs plus
its investment of $4 million (which sale shall enable the repayment of NBI's
$4 million loan from LaSalle Bank, N.A.), and (c) FLC's acquisition by BP,
or its spin-off to NBI's stockholders, or the sale or other disposition of
FLC's loan portfolios (the "FLC Disposition Transaction") with such
transactions (a)-(c) to take place prior to BP's acquisition of NBI as
described above. As a part of the Plan, the interests of NBI stockholders
(after conversion of NBI's Series Three and Four Debentures to NBI Common
Stock) are to be allocated by them between BP Common Stock (1.1 million
shares of which are to be received when BP acquires NBI in the Acquisition
Transaction) and DeKalb Common Stock (to be distributed to NBI stockholders
who elect to take DeKalb Common Stock in lieu of BP Common Stock). NBI
stockholders have agreed upon the valuation of NBI and its Subsidiaries
as described in this Plan and of their options with regard to the
acquisition of BP Common Stock and/or DeKalb Common Stock by, among other
communications, letters from Burke, Warren & MacKay, P.C., Chicago, Illinois,
attorneys for NBI in this matter, dated August 28, 1996, with attached
Exhibits A-F, and by letter from Thomas H. Roth, NBI President, dated
September 6, 1996 (delivered to NBI shareholders at NBI's Special Shareholders
Meeting commenced on Monday, September 9, 1996 and continued to September 16,
1996) to which letter reference is hereby made. NBI stockholders have
delivered to NBI their Investment Election Forms with regard to the allocation
of their respective "NBI Stockholder Values" as determined under Section 1.4.2
of the Plan between DeKalb and BP Common Stock to be distributed to them under
this Plan.

3. At NBI's continued Special Shareholders Meeting Monday, held on
September 16, 1996, NBI stockholders approved this Plan, subject to the
condition that NBI obtain a favorable Internal Revenue Service Private Letter
Ruling or an opinion or opinions from NBI's legal counsel or independent
accountants, as to the tax implications of the distribution of DeKalb Common
Stock pursuant to this Plan.

4. NBI's Board of Directors is authorized to determine whether FLC
and/or its loan portfolios are to be sold to BP, distributed to NBI
shareholders, or otherwise disposed of, and to enter into such contracts and
agreements with respect thereto as NBI's Board of Directors deem appropriate.

A G R E E M E N T S
-------------------

NOW, THEREFORE, in consideration of the agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

1. Divestiture of Certain Operations and Subsidiaries

1.1 Incorporation of Recitals. The foregoing recitals are
incorporated herein by reference.

1.2.1 Transfer of AmMid Merchant Processing Business. Subject to the
terms and conditions hereinafter set forth, the following actions have been or
shall be taken by the parties in connection with the transfer of the AmMid
Merchant Processing Business:

(a) On a date mutually convenient to AmMid and DeKalb after all
regulatory approvals and consents needed to complete BP's acquisition of
NBI, AmMid will transfer and assign its AmMid Merchant Processing
Business to DeKalb, and in consideration therefor, DeKalb shall pay to
AmMid the sum of Two Hundred Forty-Three Thousand Nine Hundred Fifty-
Five Dollars ($243,955). Said transfer shall include the following
assets:

(i) all fixed assets and equipment, leases, licenses,
permits, contracts, routes and other intangible assets
pertaining to or arising out of the AmMid Merchant
Processing Business as conducted directly by AmMid's
Merchant Processing Division; and

(ii) all accounts receivable and prepaid expenses
pertaining to or arising out of the AmMid Merchant
Processing Business, together with any investments or
other assets pertaining to such business.

AmMid and DeKalb agree that the assets transferred pursuant to
this Section shall include any cash on hand and held in reserve accounts
held for third parties related to the AmMid Merchant Processing
Business. AmMid and DeKalb have also agreed that such transfer shall be
subject to assumption by DeKalb of the liabilities set forth in
Section 1.2.2. AmMid shall be entitled to retain or receive from DeKalb
accrued earnings through the date of the transfer of the AmMid Merchant
Processing Business.

1.2.2 Assumption of AmMid Merchant Processing Business Liabilities by
DeKalb. In exchange for the transfer of assets described in Section 1.2.1
hereof, DeKalb agrees to save and hold AmMid harmless from and against any and
all liabilities of any kind or nature arising out of or pertaining to,

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the AmMid Merchant Processing Business on, arising from or relating to, the
performance of the AmMid Merchant Processing Business, and whether arising or
asserted before or after their assignment.

1.3.1 Sale of NWC Shares. Prior to the closing on the Acquisition
Transaction, but after all required regulatory approvals and consents, NBI
shall sell, and Svendsen, or his designee, shall purchase from NBI, for the
NWC Purchase Price (as defined in the NWC Stock Purchase Agreement attached as
Exhibit A), all 100,000 shares of NWC's $10.00 par value common stock (the
"NWC Shares"). The NWC Shares shall be transferred free and clear of any
liens, claims, security interests or other encumbrances whatsoever, on the
terms and subject to the conditions contained in the NWC Stock Purchase
Agreement which shall be substantially in the form of Exhibit A attached
hereto.

1.3.2 Use of Proceeds of Sale of NWC Shares. NBI shall use all, or a
portion, as may be required, of the proceeds of the sale of NWC Shares to
retire NBI's loan from Bank One, Milwaukee N.A., under which Four Million
Dollars ($4,000,000) in unpaid principal and interest is outstanding as of the
date of this Plan.

1.4.1 Distribution and Split-Off of DeKalb. As soon as practicable
following the approval of this Plan by NBI's stockholders, and in accordance
with their binding elections as to the allocation of their NBI stock interests
between shares of DeKalb's $10.00 par value common stock (the "DeKalb Common
Stock") and BP Common Stock, and after obtaining all necessary consents and
regulatory approvals and such tax rulings or opinion(s) as NBI's Board of
Directors deems necessary or appropriate, and when the material conditions to
the Acquisition Transaction have, in the opinion of NBI's Board of Directors,
been satisfied, NBI shall determine its value for purposes of this Plan on a
date selected by NBI's Board of Directors and shall distribute to its
stockholders who have elected to receive DeKalb Common Stock all 58,000 issued
and outstanding shares of DeKalb's Common Stock under the formula described in
Section 1.4.2 hereof (the "DeKalb Stock Distribution," the "DeKalb Stock
Distribution Formula," and the "DeKalb Distribution Date").

1.4.2 NBI Plan Value and DeKalb Stock Distribution Formula. On the
DeKalb Distribution Date, NBI stockholders who have elected to acquire DeKalb
Common Stock as a distribution reducing their NBI Common Stock shall receive
shares of DeKalb Common Stock in reduction of their NBI stockholdings,
according to the following DeKalb Stock Distribution Formula:

(a) NBI's Board of Directors shall first determine the value of
NBI for purposes of this Plan (the "NBI Plan Value") which shall be
equal to the sum of:

(i) the amount of $10,725,000.00 being DeKalb's agreed-
upon reorganization value (the "DeKalb Value"); plus

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(ii) an amount representing the value of NBI which shall be
determined by multiplying (A) the average end-of-day
sale price for BP Common Stock during the ten (10)
trading days preceding the DeKalb Distribution, by
(B) 1,100,000 (being the number of shares of BP common
stock to be issued in the Acquisition Transaction).

(b) NBI Board of Directors shall then determine the value of
each NBI Stockholder's share of the NBI Total Value by multiplying each
stockholder's percentage ownership of NBI on the Determination Date
(after giving effect to the conversion of all of NBI's Series 3 and 4
Debentures) by the NBI Plan Value determined under Section 1.4.2(a)
above (so as to determine each stockholder's "NBI Stockholder's Share of
the NBI Plan Value").

(c) To determine the number of shares of DeKalb Common Stock to
be received by each NBI stockholder who elects to receive DeKalb Common
Stock, such stockholder's NBI Stockholder's Share of the NBI Plan Value
shall be multiplied by the percentage thereof allocated to DeKalb Common
Stock by such Stockholder's Investment Election Form (the "DeKalb
Investment Amount," with the remainder, if any, being the "BP Investment
Amount"). On the DeKalb Distribution Date, each NBI stockholder shall
receive that number of full and partial shares of DeKalb Common Stock,
as shall be determined by dividing such stockholder's DeKalb Investment
Amount by the amount of $184.91 per DeKalb Common Stock share.

1.4.3 Share Delivery and Exchange. On or before the DeKalb Distribution
Date, NBI stockholders electing to receive DeKalb Common Stock shall deliver
the requisite number of shares of NBI Common Stock for cancellation in
exchange for that number of shares of DeKalb Common Stock as are determined in
accordance with such stockholder's Investment Election Form and the DeKalb
Stock Distribution Formula. All shares of NBI Common Stock so delivered must
be free and clear of all liens, claims and encumbrances and must be
accompanied by Stock Powers duly executed and endorsed in favor of NBI. The
DeKalb Common Stock to be distributed by NBI to such stockholders shall
likewise be free and clear of all liens, claims and encumbrances. Shares of
NBI Common Stock so received shall be marked "cancelled" and shall reduce the
number of outstanding shares of NBI Common Stock as each such full or partial
share is cancelled. Upon the conclusion of the transaction, all 58,000 shares
of DeKalb Common Stock shall be delivered and endorsed over to electing NBI
stockholders and shares of NBI's then outstanding 105.81585 shares of NBI
Common Stock shall be cancelled.

1.5 FLC Sale/Distribution. NBI's Board of Directors is hereby
authorized to negotiate with BP and other interested parties and to enter into
such arguments as the Board deems appropriate so as to sell FLC to BP, to sell
all or a portion of its loan portfolios, to spin or split off FLC to NBI
stockholders, or to take such other or further actions with regard to FLC as
the Board deems appropriate.

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ARTICLE II

2. Acquisition Transaction & Closing

2.1 Acquisition Transaction. NBI's Board of Directors is authorized
to negotiate and enter into an Acquisition Agreement with BP, to effect the
acquisition of NBI by BP as contemplated by this Plan. If such acquisition is
to be effected by a merger, the Merger Agreement shall subsequently be
presented to NBI stockholders for their approval. If such acquisition is to
be effected by the exchange of NBI for BP Common Stock, such Acquisition
Agreement shall be presented to NBI Stockholders for their individual
execution. In either event, the Acquisition Agreement shall implement the
Plan, and NBI's acquisition by BP, as contemplated hereby.

2.2 Closing. The closing on the Acquisition (the "Closing") shall
take place following the Dekalb Stock Distribution (the "Closing Date"), at a
place determined by mutual agreement of the parties thereto.

2.3 Distribution of Shares. On the Closing Date, the Acquisition
consideration in the form of 1.1 million shares of BP Common Stock shall be
distributed to NBI's then Common Stockholders on a pro rata basis.

ARTICLE III

3. Representations and Warranties of NBI, AmMid, NWC, DeKalb and FLC. NBI,
AmMid, DeKalb, NWC and FLC represent and warrant, jointly and severally, to
each other as follows:

3.1 NBI Organization. NBI: (a) is a corporate duly organized,
validly existing and in good standing under the laws of the State of Delaware,
is a registered bank holding company under the federal Bank Holding Company
Act of 1956, as amended, and is duly qualified to do business and is in good
standing in each other's jurisdiction in which the nature of the business
conducted or the properties or assets owned or leased by it makes such
qualification necessary and where failure to be so qualified would reasonably
be expected to have a material adverse effect on the financial condition,
assets or business of NBI or any of the Subsidiaries; (b) has full power and
authority to enter into and perform its obligations under this Plan in
accordance with its terms. NBI owns no voting stock or equity securities of
any corporations, association, partnership or other entity, other than issued
and outstanding shares of the capital stock of the Subsidiaries.

3.2 Organization of Subsidiaries. Each of (i) AmMid, an Illinois
state bank with its main offices located in Melrose Park, Illinois,
(ii) DeKalb, a national banking association with its main offices located in
Sycamore, Illinois, (iii) NWC, an Illinois state bank with its main

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offices located in Prospect Heights, Illinois, and (iv) FLC, an Illinois
corporation with its main offices located in Streamwood, Illinois, is duly
organized, validly existing and in good standing under the laws of the State
of Illinois. Each of the Subsidiaries has full power and authority, corporate
or otherwise, to carry on its business as it is now being conducted and to own
or hold under lease the properties and assets it owns or holds under lease.
FLC has full power and authority, corporate or otherwise, to carry on its
business as now being conducted. None of the Subsidiaries owns any voting
stock or equity securities of any corporation, association, partnership or
other entity, except that AmMid and DeKalb each own undivided one-third
interests in National Bancorp Data Services, L.L.C. All of the deposit
liabilities of each Bank Subsidiary are insured by the Federal Deposit
Insurance Corporation (the "FDIC") through the Bank Insurance Fund to the
fullest extent permitted by applicable law and each of the Bank Subsidiaries
pays to the FDIC the lowest deposit insurance premium assessment (currently
the minimum semi-annual statutory assessment of $1,000).

3.3 Capitalization. All outstanding shares of capital stock of each
of the Subsidiaries have been duly and validly authorized and issued, are
fully paid and nonassessable and there are no subscriptions, contracts,
conversion privileges, options, warrants, calls or other rights obligating any
Subsidiary to issue, sell or otherwise dispose of, or to purchase, redeem or
otherwise acquire, any shares of capital stock of any Subsidiary. No capital
stock of any Subsidiary has been issued in violation of, or without compliance
with, the rights of stockholders.

3.4 Share Ownership. All outstanding capital stock of each of the
Subsidiaries is owned by NBI free and clear of all liens, encumbrances and
claims, except security interests which shall be released upon implementation
of the Plan. There are no rights to acquire from the record holder(s) thereof
any shares of stock of the Subsidiaries.

3.5 Authorization. Each of the Subsidiaries has the requisite
corporate power and authority to enter into and perform its obligations under
this Plan and the execution, delivery and performance of this Plan by such
Subsidiaries, and the consummation by them of the transactions contemplated
hereby, have been authorized by all necessary corporate and/or stockholder
action. This Plan constitutes a legal, valid and binding obligation of each
Subsidiary enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization or other
laws and subject to general principles of equity.

3.6 Defaults Under Agreements. No Subsidiary is in default or alleged
to be in default, and no Subsidiary has knowledge of any event which with
notice or lapse of time or both would constitute such a default, under any
contract, agreement, instrument or commitment, which would reasonably be
expected to have a material adverse effect on the financial condition, assets
or business of any Subsidiary or the AmMid Merchant Processing Business.

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ARTICLE IV

4. Additional Covenants of all Parties.

4.1 Cooperation. Each party will fully and promptly cooperate with
each other and their respective counsel and accountants in connection with any
steps to be taken as part of their obligations under this Plan.

4.2 Expenses. Except as otherwise provided herein, all costs and
expenses incurred by a party hereto shall be borne by such party, including
the fees of their respective accountants and attorneys.

4.3 Publicity. Prior to the Closing, the parties hereto will consult
with each other before issuing any press releases or otherwise making any
public statements with respect to this Plan or the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement without the prior consent of the other parties, except as may be
required by law.

4.4 Due Diligence Review. NBI Stockholders are encouraged to perform
their own due diligence review of NBI and its Subsidiaries, to review the
books and records of NBI and its Subsidiaries and to ask questions of the
directors, officers and employees of NBI and its Subsidiaries with respect to
NBI and the Subsidiaries, their financial condition and future prospects and
other material items with respect to such entities (and in particular with
respect to AmMid and DeKalb). NBI and the Subsidiaries agree to cooperate in
good faith in connection with such stockholders' due diligence review;
provided, however, that NBI may require such stockholder to execute a
confidentiality agreement with respect to information regarding NBI and the
Subsidiaries so provided or obtained.

ARTICLE V

5. Conditions Precedent. The obligations of the parties under this Plan
are subject, unless waived, to the satisfaction of the following conditions on
or prior to the Closing (provided, that no party may assert its failure to
meet a condition herein in connection with the nonfulfillment of its
obligations hereunder):

5.1 Representations and Warranties True at Closing. The
representations and warranties made herein by the respective parties to this
Plan shall be true and correct in all material respects on and as of the
Closing with the same effect as though such representations and warranties had
been made or given on and as of the Closing, except for changes contemplated
by this Plan, and except also for representations and warranties as of a
specified time other than the Closing Date, which shall be true and correct in
all material respects at such specified time.

5.2 Compliance with Agreement. Each party to this Plan shall have
performed and complied with all of its other obligations under this Plan which
are to be performed or complied with prior to or at the Closing.

5.3 Proceedings and Documents Satisfactory. All proceedings,
corporate or other, to be taken by the parties hereto in connection with the
transactions contemplated by this Plan, and all documents incident thereto,
shall be reasonably satisfactory in form and substance to counsel for NBI, and
NBI shall have made available to the stockholders of NBI for examination the
originals or true and correct copies of all records and documents relating to
the business and affairs of NBI and the Subsidiaries which they may reasonably
request in connection with said transactions.

5.4 Statutory Requirements. This Plan shall have been duly and
validly authorized by the Board of Directors and the stockholders of NBI.
Such stockholder approval shall have been obtained in conformity with all
applicable laws at a special meeting of stockholders or by a unanimous written
consent of all of NBI's stockholders.

5.5 Regulatory Approvals. The parties shall have received any and all
required approvals from the Federal Reserve, the Federal Office of the
Comptroller of Currency ("OCC"), the Commissioner of Banks and Real Estate of
the State of Illinois (the "Commissioner"), the FDIC and any other necessary
governmental authority for the consummation of the transactions contemplated
hereby.

5.6 Absence of Certain Changes or Events. From the date hereof to the
Closing Date, there shall be and have been no material adverse change in the
consolidated financial condition, assets or business of NBI or any of the
Subsidiaries, except as expressly provided herein.

5.7 Litigation. Neither BP nor NBI or any Subsidiary shall be made a
party to, or to the knowledge of NBI threatened by, any actions, suits,
proceedings, litigation or legal proceedings which, in the reasonable opinion
of NBI's counsel, have or are likely to have a material adverse effect on the
financial condition, assets or business of BP, NBI or any of the Subsidiaries,
as the case may be, and no action, suit, proceeding or claim shall have been
instituted, made or threatened by any person relating to the Merger or the
validity or propriety of the transactions contemplated by this Plan.

5.8 Consents and Approvals. All actions, consents or approvals,
governmental or otherwise, required to be obtained pursuant to the terms of
this Plan or otherwise reasonably necessary in the opinion of counsel to NBI
to consummate the transactions contemplated by this Plan shall have been
obtained.

5.9 Orders, Decrees and Judgments. Consummation of the transactions
contemplated by this Plan shall not violate any order, decree or judgment of
any court or governmental body having competent jurisdiction.

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5.10 Merger Agreement. NBI shall have entered into a Merger Agreement
with BP and one of BP's subsidiaries.

5.11 DeKalb Capital Accounts. The level of DeKalb's capital accounts
at the Closing shall not be less than their levels at December 31, 1995.

ARTICLE VII

6. Regulatory Approvals.

6.1 Initial Filings. NBI shall, or shall cause one or more of the
Subsidiaries to, use all reasonable efforts to make as soon as practicable all
appropriate initial filings necessary to obtain the regulatory approvals
required in connection with the transactions contemplated hereby at such time
as it reasonably believes that such filings would be accepted and approved by
the appropriate regulatory agencies. Such parties, as the case may be, shall
in good faith pursue the regulatory approvals necessary to consummate the
transactions contemplated in this Plan. NBI shall provide BP, Svendsen (as
appropriate, after taking into consideration the transaction the subject of
the filing) and their counsel with a reasonable opportunity to review and
comment upon each such application or document to be filed with federal or
state regulatory officials to obtain such approvals, and thereafter shall
provide them (as appropriate, after taking into consideration the transaction
the subject of the filing) and their counsel with a final copy of each such
application or document as filed.

6.2 Necessary Approvals. NBI shall have primary responsibility for
preparation of all applications for regulatory approval of the transactions
contemplated in this Plan, including, but not limited to, the preparation of
an application or any amendment thereto or any other required statements or
documents filed or to be filed by any party with: (a) any Federal Reserve;
(b) the OCC; (c) the Commissioner; and (d) any other party or governmental
authority pursuant to any applicable law or regulation, for authority to
consummate the transactions contemplated by this Plan. The parties hereto
agree to cooperate with NBI and use all reasonable efforts to assist NBI in
preparing such applications and in pursuit of such approvals.

ARTICLE VII

7. Termination and Abandonment.

7.1 Reasons for Termination and Abandonment. This Plan may be
terminated and abandoned upon fifteen (15) days prior written notice to the
other party or parties before the Closing Date, notwithstanding authorization
and adoption of this Plan by the stockholders of the parties hereto:

(a) By mutual consent of the boards of directors of NBI and the
Subsidiaries;

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(b) By NBI or Svendsen at any time after April 15, 1997 (for
such later date as shall have been agreed to in writing by the parties)
(as the same may be extended, the "Termination Date"), if any of the
transactions contemplated by this Plan have not been consummated.

7.2 Effect of Termination or Abandonment. Except as expressly
provided herein, in the event of the termination of this Plan, this Plan shall
become null and void and there shall be no liability or restrictions on the
future activities on the part of any party hereto, or its directors, officers
or stockholders (other than in connection with confidentiality agreements
entered into in connection herewith).

ARTICLE VIII

8. Miscellaneous.

8.1 Governing Law. All questions concerning the construction,
validity and interpretation of this Plan and the performance of the
obligations imposed by this Plan shall be governed by the internal laws of the
State of Illinois applicable to contracts made and wholly to be performed in
such state without regard to conflicts of law.

8.2 Assignment. Neither this Plan nor any of the rights or
obligations hereunder may be assigned, in whole or in part, by any of the
parties hereto without the prior written consent of the other parties hereto
and any purported assignment in violation hereof shall be void and of no
effect.

8.3 Amendment and Modification. The parties may by written agreement
signed by all parties hereto: (a) extend the time for the performance of any
of the obligations or other acts of the parties hereto; (b) waive any
inaccuracies in the representations or warranties contained in this Plan or in
any document delivered pursuant to this Plan; and (c) waive compliance with or
modify, amend or supplement any of the conditions, covenants, agreements,
representations or warranties contained in this Plan or waive or modify
performance of any of the obligations of any of the parties hereto, which are
for the benefit of the waiving party; provided, however, that unless such
modification, amendment or supplement is approved by the holders of a majority
of the common stock of NBI, no such modification, amendment or supplement
agreed to after authorization of this Plan by the stockholders of NBI shall
affect the rights of such stockholders in any manner which is materially
adverse to such stockholders. The failure of any party hereto to enforce at
any time any provision of this Plan shall not be construed to be a waiver of
such provision, nor in any way affect the validity of this Plan or any part
hereof or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Plan shall be held to constitute a
waiver of any other or subsequent breach.

8.4 Notices. All notices, requests and other communications hereunder
shall be in writing (which shall include telecopier communications) and shall
be deemed to have been duly given if delivered by

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hand or by overnight express delivery service, mailed with first class postage
prepaid or telecopied if confirmed immediately thereafter by also mailing a
copy of any notice, request or other communication by mail with first class
postage prepaid:

(a) If to NBI or a Subsidiary to:

National Bancorp, Inc.
1300 East Irving Park Road
Suite 200
Streamwood, Illinois 60107
Attn: Thomas H. Roth
Telecopier: (630) 372-3262

with copies to:

Burke, Warren & MacKay, P.C.
22nd Floor
330 North Wabash Avenue
Chicago, Illinois 60611-3607
Attn: Thomas H. Jacobs, Esq.
Telecopier: (312) 840-7900

(b) If to Svendsen:

Robert W. Svendsen
1601 Burr Ridge Club Drive
Burr Ridge, Illinois 60521
Telecopier:

or to such other person or place as the parties shall so designate in writing
in accordance with this Section. Except as otherwise provided herein, all
such notices, requests or other communications shall be effective: (i) if
delivered by hand, when delivered; (ii) if mailed in the manner provided in
this Section, five business days after deposit with the United States Postal
Service; (iii) if delivered by overnight express delivery service, on the next
business day after deposit with such service; (iv) if by telecopier, on the
next business day if also confirmed by mail in the manner provided in this
Section.

8.5 Headings. The table of contents and the captions and headings of
articles, sections, schedules and exhibits appearing in or attached to this
Plan have been inserted solely for convenience of reference and shall not be
considered a part of this Plan nor shall any of them affect the meaning or
interpretation of this Plan or any of its provisions.

8.6 Entire Agreement. This Plan and any documents executed by the
parties pursuant to this Plan and referred to herein constitute the entire
understanding and agreement of the parties hereto and supersede all other

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prior agreements and understandings, written or oral, relating to such subject
matter between the parties. This Plan and every representation, warranty,
covenant, agreement and provision hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.

8.7 Severability. Whenever possible, each provision of this Plan
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Plan is held to be prohibited by
or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of the Plan unless the
consummation of the transactions contemplated hereby is adversely affected
thereby.

8.8 Further Instruments. The parties hereto will, at or before the
Closing Date, execute and deliver such further instruments as may be
reasonably requested by any other party which are necessary to or appropriate
with respect to the consummation of the transactions contemplated by this
Plan.

8.9 All Reasonable Efforts. Each party represents and warrants that
it will use all reasonable efforts to consummate the transactions contemplated
by this Plan as soon as practicable provided that this Section shall not
obligate the parties to remedy any breach of any of its representations,
warranties and covenants herein. In the event that any party becomes aware of
the occurrence of impending occurrence of any event which would constitute or
cause a breach by it of any of the representations or warranties herein, or
would have constituted or caused a breach by it of any of the representations
or warranties herein, had such an event occurred or been known prior to the
date hereof, said party shall immediately give detailed and written notice
thereof to the other party.

8.10 Survival of Representations and Warranties. The covenants,
representations and warranties contained in this Plan shall survive only until
the Closing.

8.11 No Third Party Beneficiaries. This Plan is not intended to and
shall not create any rights in or confer any benefits upon any person or
entity other than the parties hereto.

8.12 Counterparts. This Plan and any amendments thereto may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Plan to be
executed by their respective officers as of the day and year first written
above.

NATIONAL BANCORP, INC. AMERICANMIDWEST BANK & TRUST

By: /s/ Thomas H. Roth By: /s/ James A. Norini
----------------------- -----------------------
Thomas H. Roth James A. Norini
President President

NORTHWEST COMMUNITY BANK FIRST LAKE CORP.

By: /s/ Michael A. Speziale By: /s/ Peter F. Wais
----------------------- -----------------------
Michael A. Speziale Peter F. Wais
President President

THE AMERICAN NATIONAL BANK OF
DEKALB COUNTY

By:/s/ Robert W. Svendsen By: /s/ Richard L. Willey
----------------------- ------------------------
Robert W. Svendsen Richard L. Willey
President

14
<PAGE>
<PAGE>

AMENDMENT NO. 1
TO
PLAN OF REORGANIZATION
DATED AS OF SEPTEMBER 16, 1996 BY AND AMONG NBI, AMMID,
DEKALB, NWC AND FLC JOINED IN BY ROBERT W. SVENDSEN
-------------------------------------------------------

RECITALS
--------

A. The above-reference Plan of Reorganization (the "Plan") was approved by
all NBI shareholders at a Special Shareholders Meeting held on
September 16, 1996. Reference is made to the Plan which, along with the
definitions contained therein, is incorporated herein by reference.

B. Subsequent to that Special Shareholders Meeting, NBI and the other
parties to the Plan have pursued the implementation of the Plan which
was ratified by NBI shareholders unanimously at a Special Shareholders
Meeting held on November 22, 1996, at which meeting NBI shareholders
authorized the execution of the Merchant Processing Business Sale and
Transfer Agreement, together with a License Agreement, between AmMid and
DeKalb and the Bank Stock Sale Agreement between NBI and Svendsen
relating to NWC.

C. Subsequently, NBI management has negotiated a Stock Purchase Agreement
the parties to which are BP, NBI and all NBI stockholders and stock
interest holders to be dated as of December 6, 1996, a copy of which has
been provided to the parties signing this Amendment No. 1.

AGREEMENTS
----------

NOW, THEREFORE, in consideration of the Agreements set forth herein, and
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

1. Recitals. The foregoing Recitals are referred and are incorporated
herein by reference.

2. Amendment to Section 1.4.2 of the Plan entitled "NBI Plan Value and
DeKalb's Stock Distribution Formula." The Plan provides in
Section 1.4.2(a)(ii), as well as in Section 2.3, that the number of
shares in BP common stock to be issued in the Acquisition Transaction is
1,100,000 shares of BP common stock. Reference is hereby made to
Section 1.1 of the Stock Purchase Agreement which provides that such
shares of BP common stock may be adjusted, that is, increased or
decreased, in accordance with the formula set out in Section 1.1. NBI
and NBI's stockholders and stock interest holders, and the other parties
to the Plan, hereby agree:

<PAGE>

(a) That NBI's Executive Committee is authorized and directed to
negotiate and finalize the "formula" and the stock price "collar"
thereto for and on behalf of NBI and all NBI stock and stock
interest holders so that the number of shares of BP common stock
to be distributed under the Plan shall be that number of shares of
BP common stock determined in accordance with such formula.
Accordingly, all references in the Plan to the amount of such
shares being "1,100,000" are hereby deleted and the number of such
shares determined in accordance with the formula as finalized by
NBI's Executive Committee are hereby deemed inserted in its place
and stead; and,

(b) All parties to the Plan, including NBI's stockholders and stock
interest holders hereby reconfirm that, pursuant to the Joint
Designation executed by them on November 22, 1996, NBI's Executive
Committee to act on their behalf with regard to the change or
other amendment (if needed in their discretion) of the Stock
Purchase Agreement described above.

3. No Other Changes. Except as specifically amended hereby, the above-
referenced Plan remains in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be executed as of the 5th day of December, 1996.

NATIONAL BANCORP, INC. AMERICANMIDWEST BANK & TRUST

By:/s/ Thomas H. Roth By: /s/ James A. Norini
------------------------------ -------------------------------
THOMAS H. ROTH, President JAMES A. NORINI, President

NORTHWEST COMMUNITY BANK FIRST LAKE CORP.

By:/s/ Michael A. Speziale By: /s/ Peter F. Wais
------------------------------ -------------------------------
MICHAEL A. SPEZIALE, President PETER F. WAIS, President

THE AMERICAN NATIONAL BANK OF
DEKALB COUNTY

By:/s/ Richard L. Willey
------------------------------
RICHARD L. WILLEY, President

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

BanPonce is a Puerto Rico corporation. In accordance with the General
Corporation Law of the Commonwealth of Puerto Rico, Article Eleventh of the
Restated Certificate of Incorporation of BanPonce provides the following:

(1) The Corporation shall 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, whether civil, criminal,
administrative or investigative (other than an action by or in the right
of the Corporation) 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 written request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgements, 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. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which 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 reasonable cause to believe that his conduct was
unlawful.

(2) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment or its favor 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 written request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit 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, except that no
indemnification shall be made in respect of 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 such
action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which such court shall deem proper.

(3) To the extent that a director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in paragraph 1 or
2 of this Article ELEVENTH, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstance because he has met the applicable standard of conduct
set forth therein. Such determination shall be made (a) by the Board of
Directors by a majority

II-1
<PAGE>
<PAGE>

vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (b) if such a quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion, or (c) by the
stockholders.

(5) Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by
the Board of Directors in the specific case upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent
to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this
Article ELEVENTH.

(6) The indemnification provided by this Article ELEVENTH shall
not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any statute, by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.

(7) By action of its Board of Directors, notwithstanding any
interest of the directors in the action, the Corporation may purchase
and maintain insurance, in such amounts as the Board of Directors deems
appropriate, on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the
written request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the Corporation would have the power or would be required to
indemnify him against such liability under the provisions of this
Article ELEVENTH or of the General Corporation Law of the Commonwealth
of Puerto Rico or of any other state of the United States of foreign
country as may be applicable.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS

2.1 Stock Purchase Agreement by and among BanPonce Corporation, National
Bancorp, Inc., and the Stockholders of National Bancorp, Inc. dated as
of December 6, 1996 (filed herewith as Appendix A to the Prospectus)

2.2 National Bancorp, Inc.'s Plan of Reorganization dated September 16, 1996
and Amendment No. 1 thereto dated December 5, 1996 (filed herewith as
Appendix B to the Prospectus)

3.1 Restated Certificate of Incorporation of BanPonce Corporation.
(Incorporated by reference from Registration Statement No. 33-39028)

3.2 Bylaws of BanPonce Corporation. (Incorporated by reference from
Registration Statement No. 33-39028)

4.1 Form of certificate for common stock. (Incorporated by reference to
Exhibit 4.1 of BanPonce's Annual Report on Form 10-K for the year ended
December 31, 1990).

4.2 Certificates of Resolutions of the Board of Directors of BanPonce dated
August 11, 1988 creating a series of Preferred Stock of BanPonce
designated as Series A Participating Cumulative Preferred Stock Purchase
Rights and the designation and amount of such series, the voting power
preferences, and relative, participating, optional, or other special
rights of the shares of such series, and the qualifications, limitations
or restrictions thereof. Rights Agreement dated as of August 11, 1988
by and between BanPonce and Manufacturers Hanover Trust Company
regarding the issuance of certain rights to BanPonce's shareholders.
(Incorporated by reference to Exhibit 4.1 of Registration Statement No.
33-39028).

4.3 Amendment to Rights Agreement dated as of December 11, 1990.
(Incorporated by reference to Exhibit 4.4 of Registration Statement No.
33-39028).

5.1 Opinion of Brunilda Santos de Alvarez, Esq. regarding legality

8.1 Opinion of Vedder, Price, Kaufman & Kammholz regarding federal income
tax matters

23.1 Consent of Price Waterhouse LLC

23.2 Consent of Crowe, Chizek and Company LLP

23.3 Consent of Vedder, Price, Kaufman & Kammholz (included in Exhibit 8.1)

23.4 Consent of Brunilda Santos de Alvarez, Esq. (included in Exhibit 5.1)

24.1 Powers of Attorney (set forth on Signature pages to Registration
Statement)

II-2
<PAGE>
<PAGE>

(b) FINANCIAL STATEMENT SCHEDULES

None.

ITEM 22. UNDERTAKINGS

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.

The undersigned Registrant hereby undertakes as follows: 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.

The Registrant undertakes that every prospectus (i) that is filed
pursuant to the immediately preceding paragraph, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act of 1933 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 of 1933, 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.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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
Securities Act of 1933 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 Securities Act of 1933 and will be governed by the final
adjudication of such issue.

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 Form S-4, 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-3
<PAGE>
<PAGE>

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.

II-4
<PAGE>
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement on Form S-4 to be
signed on its behalf by the undersigned thereunto duly authorized in the City
of Hato Rey, Commonwealth of Puerto Rico, on the 15th day of April, 1997.

BANPONCE CORPORATION

BY:/s/ RICHARD L. CARRION
--------------------------------
Name: Richard L. Carrion
Title: Chairman, President and
Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard L. Carrion, Jorge A. Junquera, Orlando
Berges, Javier F. Ubarri, David H. Chafey, Jr., Alberto Paracchini and Roberto
Herencia and each of them (with full power to each of them to act alone), his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof.

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

SIGNATURE TITLE DATE

/s/ RICHARD L. CARRION
- ---------------------------- Chairman, President
Richard L. Carrion and Chief Executive Officer
(Principal Executive Officer) 4/15/97

/s/ ALFONSO F. BALLESTER
- ----------------------------
Alfonso F. Ballester Director 4/15/96

/s/ JUAN J. BERMUDEZ
- ----------------------------
Juan J. Bermudez Director 4/16/97

/s/ FRANCISCO J. CARRERAS
- ----------------------------
Francisco J. Carreras Director 4/16/97

II-5
<PAGE>
<PAGE>

/s/ DAVID H. CHAFEY, JR.
- ----------------------------- Senior Executive Vice
David H. Chafey, Jr. President and Director 4/17/97

/s/ LUIS E. DUBON, JR.
- -----------------------------
Luis E. Dubon, Jr. Director 4/15/97

/s/ ANTORIO LUIS FERRE
- -----------------------------
Antorio Luis Ferre Director 4/15/97

/s/ HECTOR R. GONZALEZ
- -----------------------------
Hector R. Gonzalez Director 4/15/97

/s/ JORGE A. JUNQUERA
- ----------------------------- Senior Executive Vice
Jorge A. Junquera President
(Principal Financial Officer) 4/18/97

/s/ JOSE E. ROSSI
- ------------------------------
Jose E. Rossi Director 4/15/97

/s/ MANUEL MORALES, JR.
- ------------------------------
Manuel Morales, Jr. Director 4/16/97

_____________________________
Alberto M. Paracchini Director ________

/s/ FRANCISCO PEREZ, JR.
- ------------------------------
Francisco Perez, Jr. Director 4/16/97

/s/ FRANCISCO M. REXACH, JR.
- ------------------------------
Francisco M. Rexach, Jr. Director 4/15/97

/s/ FELIX J. SERRALLES NEVARES
- ------------------------------
Felix J. Serralles Nevares Director 4/16/97

/s/ EMILIO JOSE VENEGAS
- ------------------------------
Emilio Jose Venegas Director 4/15/97

II-6
<PAGE>
<PAGE>

______________________________
Julio E. Vizcarrondo Director ________

/s/ AMLICAR L. JORDAN
- ------------------------------ Senior Vice President
Amilcar L. Jordan (Principal Accounting Officer) 4/17/97

II-7
<PAGE>
<PAGE>

EXHIBIT INDEX

Exhibit
- -------

2.2 National Bancorp, Inc.'s Plan of Reorganization dated September 16, 1996
and Amendment No. 1 thereto dated December 5, 1996 (filed herewith as
Appendix B to the Prospectus)

3.1 Restated Certificate of Incorporation of BanPonce Corporation.
(Incorporated by reference from Registration Statement No. 33-39028)

3.2 Bylaws of BanPonce Corporation (Incorporated by reference from
Registration Statement No. 33-39028)

4.1 Form of certificate for common stock. (Incorporated by reference to
Exhibit 4.1 of BanPonce's Annual Report on Form 10-K for the year ended
December 31, 1990).

4.3 Amendment to Rights Agreement dated as of December 11, 1990.
(Incorporated by reference to Exhibit 4.4 of Registration Statement No.
33-39028).

5.1 Opinion of Brunilda Santos de Alvarez, Esq. regarding legality

8.1 Opinion of Vedder, Price, Kaufman & Kammholz regarding federal income
tax matters

23.1 Consent of Price Waterhouse LLC

23.2 Consent of Crowe, Chizek and Company LLP

23.3 Consent of Vedder, Price, Kaufman & Kammholz (included in Exhibit 8.1)

23.4 Consent of Brunilda Santos de Alvarez, Esq. (included in Exhibit 5.1)

24.1 Powers of Attorney (set forth on Signature pages to Registration
Statement)

II-8

<PAGE>

Exhibit 5.1

April 18, 1997

BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918

Ladies and Gentlemen:

In connection with the registration under the Securities Act of 1933
(the "Act") of up to 1,267,391 shares (the "Securities") of Common Stock, par
value $6.00 per share, including attached rights to purchase Series A
Participating Cumulative Preferred Stock, of BanPonce Corporation, a Puerto
Rico corporation (the "Company"), issuable in connection with the Stock
Purchase Agreement, dated as of December 6, 1996 (the "Agreement"), by and
among the Company, National Bancorp, Inc. ("NBI") and the shareholders of NBI
(the "Sellers"), I, as your counsel, have examined such corporate records,
certificates and other documents, and such questions of law, as I have
considered necessary or appropriate for the purposes of this opinion. Upon
the basis of such examination, I advise you that, in my opinion:

When the registration statement relating to the Securities (the
"Registration Statement") has become effective under the Act, and the
Securities to be issued in connection with the Agreement have been duly issued
and delivered as contemplated by the Agreement, the Securities will be validly
issued, fully paid and nonassessable.

The foregoing opinion is limited to the Federal laws of the United
States and the laws of the Commonwealth of Puerto Rico, and I am expressing no
opinion as to the effect of the laws of any other jurisdiction.

Also, I have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by me to
be responsible.

I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Legal
Matters" in the Prospectus. 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 Act.

Cordially,
/s/ Brunilda Santos de Alvarez
Brunilda Santos de Alvarez
Senior Vice President &
Legal Counsel

<PAGE>

_____________, 1996

Gentlemen:

For the purposes indicated above, and based upon the facts, assumptions
and conditions as set forth herein, it is our opinion that:

<PAGE>

BanPonce Corporation
National Bancorp, Inc.
____________, 1996
Page 2

issues, arising from the transactions contemplated by the Agreement. Although
the discussion herein is based upon our best interpretation of existing
sources of law and expresses what we believe a

BanPonce Corporation
National Bancorp, Inc.
____________, 1996
Page 3

We hereby consent to the use of this opinion as an exhibit to the
Form S-4 Registration Statement and to the use of our name under the heading
"Legal Matters" in the Prospectus included therein.

Very truly yours,

VEDDER, PRICE, KAUFMAN & KAMMHOLZ

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

April 16, 1997

To the Board of Directors
BanPonce Corporation

We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-4 of BanPonce
Corporation of our report dated February 21, 1997, appearing on page F-35 of
BanPonce Corporation Annual Report on Form 10-K for the year ended
December 31, 1996. We also consent to the references to us under headings
"Experts" and "Selected Financial Data" in such Prospectus. However, it
should be noted that Price Waterhouse has not prepared or certified such
"Selected Financial Data."

PRICE WATERHOUSE

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this registration statement of BanPonce
Corporation on Form S-4 of our report dated February 11, 1997, on our audits
of the consolidated financial statements of National Bancorp Inc. and
Subsidiaries as of December 31, 1996 and 1995, and for each of the three years
in the period ended December 31, 1996. We also consent to the reference to
our firm under the caption "Experts."

Oak Brook, Illinois CROWE, CHIZEK AND COMPANY LLP
April 17, 1997