EXCHANGE NATIONAL BANCSHARES INC, 10KSB, 1998-03-30

EXCHANGE NATIONAL BANCSHARES INC
10KSB, 1998-03-30
NATIONAL COMMERCIAL BANKS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to
_________________.

Commission file number: 0-23636

EXCHANGE NATIONAL BANCSHARES, INC.
(Name of small business issuer in its charter)

MISSOURI 43-1626350
(State or other jurisdiction (I.R.S. Employer of
incorporation or organization) Identification No.)

132 EAST HIGH STREET, JEFFERSON CITY, MISSOURI 65101
(Address of principal executive offices) (Zip Code)

Issuer's telephone number: (573) 761-6100

SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:

Name of Each Exchange
Title of Each Class on Which Registered
None N/A

SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:
Common Stock, par value $1.00 per share
(Title of Class)

CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO
BE FILED BY SECTION 13 OR 15(D) OF THE EXCHANGE ACT DURING THE
PAST 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT
WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO[ ]

CHECK IF THERE IS NO DISCLOSURE OF DELINQUENT FILERS IN
RESPONSE TO ITEM 405 OF REGULATION S-B CONTAINED IN THIS FORM,
AND NO DISCLOSURE WILL BE CONTAINED, TO THE BEST OF REGISTRANT'S
KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-KSB OR ANY
AMENDMENT TO THIS FORM 10-KSB. [ ]

STATE ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR:
$25,473,127.

THE AGGREGATE MARKET VALUE OF THE 550,215 SHARES OF VOTING
STOCK OF THE ISSUER HELD BY NON-AFFILIATES COMPUTED BY REFERENCE
TO THE AVERAGE BID AND ASKED PRICES OF SUCH STOCK ON MARCH 17,
1998, IS $28,886,288. AS OF MARCH 17, 1998, THE ISSUER HAD
718,511 SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE,
OUTSTANDING.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by
reference into the indicated parts of this report: (1) 1997
Annual Report to Shareholders - Part II and (2) definitive Proxy
Statement for the 1998 Annual Meeting of Shareholders to be filed
with the Commission pursuant to Regulation 14A - Part III.

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ]
No [X]

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS.

GENERAL

The Company's principal executive offices are located at 132
East High Street, Jefferson City, Missouri 65101, and its
telephone number is (573) 761-6100. Except as otherwise provided
herein, references herein to "Bancshares" or the "Company"
include Bancshares and its consolidated subsidiaries, and
references herein to the "Banks" refer to ENB and USB.

DESCRIPTION OF BUSINESS

BANCSHARES. Bancshares is a bank holding company registered
under the BHC Act. The Company's activities currently are
limited to ownership of the outstanding capital stock of ENB and
Union, which in turn owns the outstanding capital stock of USB.
In addition to ownership of its subsidiaries, Bancshares could
seek expansion through acquisition and may engage in those
activities (such as investments in banks or operations closely
related to banking) in which it is permitted to engage under
applicable law. It is not currently anticipated that Bancshares
will engage in any business other than that directly related to
its ownership of ENB, Union, USB or other financial institutions.

On November 3, 1997, the Company acquired all of the issued
and outstanding capital stock of Union. Union was incorporated
under the laws of the State of Missouri on July 22, 1976 and owns
all of the issued and outstanding capital stock of USB. The
Company's acquisition of Union was effected through the merger of
a wholly-owned acquisition subsidiary of the Company with and
into Union, with Union thereupon becoming a wholly-owned
subsidiary of the Company. As a result of the Company's direct
ownership of ENB and its indirect ownership of USB, through
Union, the Company is a two-bank holding company.

UNION. Union is a bank holding company registered under the
BHC Act. Union's activities currently are limited to ownership
of the outstanding capital stock of USB. It is not currently
anticipated that Union will engage in any business other than
that directly related to its ownership of USB.

<PAGE>

ENB. ENB, located in Jefferson City, Missouri, was founded
in 1865. ENB is the oldest bank in Cole County, and became a
national bank in 1927. ENB has four banking offices: its
principal office at 132 East High Street in Jefferson City's
central business district; a facility at 217 West Dunklin near
the city's south side business district; a facility at 3701 West
Truman Boulevard adjacent to the Capitol Mall Shopping Center;
and a facility at 800 Eastland Drive near the city's east side
business district. See "Item 2. Description of Property".

ENB is a full service bank conducting a general banking and
trust business, offering its customers checking and savings
accounts, debit cards, certificates of deposit, trust services,
safety deposit boxes and a wide range of lending services,
including credit card accounts, commercial and industrial loans,
single payment personal loans, installment loans and commercial
and residential real estate loans.

ENB's deposit accounts are insured by the Federal Deposit
Insurance Corporation (the "FDIC") to the extent provided by law,
and it is a member of the Federal Reserve System. ENB's
operations are supervised and regulated by the Office of the
Comptroller of the Currency (the "OCC"), the Board of Governors
of the Federal Reserve System (the "Federal Reserve Board") and
the FDIC. A periodic examination of ENB is conducted by
representatives of the OCC. Such regulations, supervision and
examinations are principally for the benefit of depositors,
rather than for the benefit of the holders of ENB's common stock.
See "Regulation Applicable to Bancshares and Union" and
"Regulation Applicable to the Banks".

USB. USB was founded in 1932 as a Missouri bank known as
Union State Bank of Clinton. USB converted from a Missouri bank
to a Missouri trust company on August 16, 1989, changing its name
to Union State Bank and Trust of Clinton. USB has five banking
offices: its principal office at 102 North Second Street in
Clinton, Missouri; a downtown Clinton facility located at 115
North Main Street; a facility at 1603 East Ohio in Clinton; a
facility located at 4th and Chestnut in Osceola, Missouri; and a
facility located on Route 54 in Collins, Missouri. See "Item 2.
Description of Property".

USB is a full service bank conducting a general banking and
trust business, offering its customers checking and savings
accounts, debit cards, certificates of deposit, trust services,
safety deposit boxes and a wide range of lending services,
including credit card accounts, commercial and industrial loans,
single payment personal loans, installment loans and commercial
and residential real estate loans.

USB's deposit accounts are insured by the FDIC to the extent
provided by law. USB's operations are supervised and regulated
by the FDIC and the Missouri Division of Finance. Periodic
examinations of USB are conducted by representatives of the FDIC
and the Missouri Division of Finance. Such regulations,
supervision and examinations are principally for the benefit of
depositors, rather than for the benefit of the holders of USB's
common stock. See "Regulation Applicable to Bancshares and
Union" and "Regulation Applicable to the Banks".

<PAGE>

EMPLOYEES

As of December 31, 1997, Bancshares and its subsidiaries had
approximately 150 full-time and 23 part-time employees. None of
its employees is presently represented by any union or collective
bargaining group, and the Company considers its employee
relations to be satisfactory.

COMPETITION

Bank holding companies and their subsidiaries and affiliates
encounter intense competition from nonbanking as well as banking
sources in all of their activities. The Banks' competitors
include other commercial banks, savings and loan associations,
savings banks, credit unions and money market mutual funds.
Savings and loan associations and credit unions now have the
authority to offer checking accounts and to make corporate and
agricultural loans and were granted expanded investment authority
by recent federal regulations. As a result, these thrift
institutions are expected to continue to offer increased
competition to commercial banks in the future. In addition,
large national and multinational corporations have in recent
years become increasingly visible in offering a broad range of
financial services to all types of commercial and consumer
customers.

ENB experiences substantial competition for deposits and
loans within both its primary service area of Jefferson City and
its secondary service area of the nearby communities in Cole
County. ENB's principal competition for deposits and loans comes
from four other banks within its primary service area of
Jefferson City and, to an increasing extent, six other banks in
nearby communities. Based on publicly available information,
management believes that ENB is the second largest (in terms of
assets) of the banks within Cole County, behind only Central
Trust Bank. The main competition for ENB's trust services is
from other commercial banks, and in particular Central Trust
Bank.

The areas in which USB competes for deposits and loans are
its primary service areas of Clinton, Collins and Osceola,
Missouri and its secondary service area of the nearby communities
in Henry and St. Clair counties. USB's principal competition for
deposits and loans comes from eight other banks within its
primary service area and, to an increasing extent, ten other
banks in nearby communities. Based on publicly available
information, management believes that USB is the largest (in
terms of assets) of the banks within Henry and St. Clair
counties. The main competition for USB's trust services is from
the trust departments of other commercial banks in Kansas City.

REGULATION APPLICABLE TO BANCSHARES AND UNION

GENERAL. Each of Bancshares and Union is a registered bank
holding company within the meaning of the BHC Act, subject to the
supervision of the Federal Reserve Board. Each of Bancshares and
Union is required to file with the Federal Reserve Board an
annual report and such other additional information as the
Federal Reserve Board may require pursuant to the BHC Act. Also,
the Federal Reserve Board periodically examines both Bancshares
and Union. The Federal Reserve Board has authority to issue
cease and desist orders against bank holding companies if it
determines that their actions represent unsafe and unsound
practices or violations of law. In addition, the Federal Reserve
Board is empowered to impose substantial civil money <PAGE> penalties
for violations of certain banking statutes and regulations.
Regulation by the Federal Reserve Board is intended to protect
depositors of the Banks, not shareholders of Bancshares or of
Union.

SOURCE OF STRENGTH. Federal Reserve Board policy requires a
bank holding company to serve as a source of financial and
managerial strength to its subsidiary banks. Under this policy,
a bank holding company is expected to stand ready to use its
available resources to provide adequate capital funds to its
subsidiary banks during periods of financial stress or adversity,
and to maintain resources and the capacity to raise capital which
it can commit to its subsidiary banks. It is the Federal Reserve
Board's position that the failure of a bank holding company to
serve as a source of strength to a distressed subsidiary bank is
an unsafe and unsound banking practice. This has become known as
the "source of strength doctrine." It is not clear whether the
source of strength doctrine is legally enforceable by the Federal
Reserve Board.

LIMITATION ON ACQUISITIONS. The BHC Act requires every bank
holding company to obtain the prior approval of the Federal
Reserve Board before (i) taking any action that causes a bank to
become a controlled subsidiary of the bank holding company, (ii)
acquiring direct or indirect ownership or control of voting
shares of any bank or bank holding company, if the acquisition
results in the acquiring bank holding company having control of
more than 5% of the outstanding shares of any class of voting
securities of such bank or holding company and such bank or bank
holding company is not majority-owned by the acquiring bank
holding company prior to the acquisition, (iii) the acquisition
by a bank holding company or any nonbank subsidiary thereof of
all or substantially all of the assets of a bank, or (iv) a
merger or consolidation with another bank holding company.

In determining whether to approve a proposed acquisition,
merger or consolidation, the Federal Reserve Board is required to
take into account the competitive effects of the proposed
acquisition, the convenience and needs of the community to be
served, and the financial and managerial resources and future
prospects of the bank holding companies and banks concerned. If
a proposed acquisition, merger or consolidation might have the
effect in any section of the United States to substantially
lessen competition or to tend to create a monopoly, or if such
proposed acquisition, merger, or consolidation otherwise would be
in restraint of trade, then the Federal Reserve Board may not
approve it unless it finds that the anticompetitive effects are
clearly outweighed in the public interest by the probable effect
of the proposed transaction in meeting the convenience and needs
of the community to be served. Bancshares and Union may from
time to time acquire an interest in the voting stock or assets of
other banks or financial institutions.

LIMITATION ON CERTAIN ACTIVITIES. The BHC Act also
prohibits a bank holding company, with certain exceptions, from
engaging in, and from acquiring direct or indirect ownership or
control of the voting shares or assets of any company engaged in,
any activity other than banking or managing or controlling banks,
and any activity which the Federal Reserve Board determines to be
so closely related to banking, or managing or controlling banks,
as to be a proper incident thereto. In acting on an application
to engage in such an activity, the Federal Reserve Board is
required to weigh the expected benefits to the public, such as
greater convenience, increased competition or gains in
efficiency, against the risks of possible adverse effects, such
as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound <PAGE> banking practices.
This consideration includes an evaluation of the financial and
managerial resources of the applicant, including its
subsidiaries, and any company to be acquired, and the effect of
the proposed transaction on those resources.

To date, the Federal Reserve Board, by regulation, has
determined that, subject to expressed limitations, certain
activities are permissible for bank holding companies and their
subsidiaries and may be engaged in upon notice to the Federal
Reserve Board without prior approval. These permissible
activities include furnishing or providing services for the
internal operations of the bank holding company and its
subsidiaries, operating a safe deposit business, making and
servicing loans, operating an industrial bank, performing certain
trust company functions, acting as an investment or financial
advisor in certain capacities, leasing certain real or personal
property, making certain investments to promote community
development, providing certain data processing services,
performing certain insurance agency and underwriting functions,
owning, controlling and operating a savings association,
providing specified courier services, providing management
consulting advice to nonaffiliated banks and nonbank depository
institutions, selling certain money orders, United States savings
bonds and traveler's checks, performing appraisals of real and
personal property, arranging certain commercial real estate
equity financing, providing securities brokerage services,
underwriting and dealing in certain government obligations and
money market instruments, providing foreign exchange advisory and
transactional services, acting as a futures commission merchant,
providing investment advice on financial futures and options on
futures, providing consumer financial counseling, providing tax
planning and preparation services, providing certain check
guaranty services, operating a collection agency and operating a
credit bureau.

The Federal Reserve Board also has determined that certain
other activities, including real estate brokerage and
syndication, land development, property management, management
consulting, underwriting of life insurance not sold in connection
with a credit transaction, and insurance premium funding, are
improper activities for bank holding companies and their
subsidiaries. In the future the Federal Reserve Board may take
additional actions, adding and refusing to add particular
activities to the list of activities that the Federal Reserve
Board deems to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. Certain
bank holding companies and their subsidiaries possess
"grandfather rights" giving them authority to engage in one or
more of the activities which are not generally permissible
because they were engaged in such activities prior to the
adoption of legislation restricting such activities.

Under cross-guaranty provisions of the Federal Deposit
Insurance Act (the "FDIA"), bank subsidiaries of a bank holding
company are liable for any loss incurred (or reasonably
anticipated to be incurred) by the Bank Insurance Fund (the
"BIF"), the federal deposit insurance fund for banks, in
connection with the failure of any other bank subsidiary of the
bank holding company. Liability under such cross-guaranty would
be junior to deposit liabilities and most secured obligations,
but senior to obligations to shareholders and most obligations to
affiliates. The FDIC has authority to prospectively waive the
cross-guaranty provision. Currently ENB and USB are the only
bank subsidiaries of Bancshares.

A bank holding company and its subsidiaries are prohibited
from engaging in certain tie-in arrangements in connection with
the extension of credit or the lease or sale of any property or
the <PAGE> furnishing of services. Subsidiary banks of a bank holding
company are also subject to certain restrictions imposed by the
Federal Reserve Act on any extensions of credit to the bank
holding company or any of its subsidiaries, or investment in the
stock or other securities thereof, and on the taking of such
stocks or securities as collateral for loans.

REGULATORY CAPITAL REQUIREMENTS. The Federal Reserve Board
has promulgated "capital adequacy guidelines" for use in its
examination and supervision of bank holding companies. A holding
company's ability to pay dividends and expand its business
through the acquisition of new banking subsidiaries can be
restricted if its capital falls below levels established by these
guidelines. In addition, holding companies whose capital falls
below specified levels can be required to implement a plan to
increase capital.

The Federal Reserve Board's capital adequacy guidelines
provide for the following types of capital: Tier 1 capital (also
referred to as core capital), Tier 2 capital (also referred to as
supplementary capital), Tier 3 capital (consisting of short-term
subordinated debt that meets certain conditions and used only in
the measure of market risk, as discussed below) and Total
capital. A bank holding company's Tier 1 capital generally
includes the following elements: common shareholders' equity,
qualifying noncumulative perpetual preferred stock and related
surplus, qualifying cumulative perpetual preferred stock and
related surplus (limited to a maximum of 25% of Tier 1 capital
elements) and minority interests in the equity accounts of
consolidated subsidiaries. Goodwill is generally excluded from
Tier 1 capital. Most intangible assets are also deducted from
Tier 1 capital. A bank holding company's Tier 2 capital
generally includes allowances for loan and lease losses (limited
to 1.25% of risk-weighted assets), most perpetual preferred stock
and any related surplus (noncumulative and cumulative, without
percentage limits), certain hybrid capital instruments, perpetual
debt and mandatory convertible debt securities, and certain
intermediate-term preferred stock and intermediate-term
subordinated debt instruments (to a maximum of 50% of Tier 1
capital excluding goodwill, but phased-out as the instrument
matures). The maximum amount of supplementary capital that
qualifies as Tier 2 capital is limited to 100% of Tier 1 capital
(net of goodwill). For purposes of calculating the total risk-
based capital ratio, Total capital generally includes Tier 1
capital, plus qualifying Tier 2 capital, minus investments in
unconsolidated subsidiaries, reciprocal holdings of bank holding
company capital securities, certain deferred tax assets and other
deductions as determined by the Federal Reserve Board.

The Federal Reserve Board issued a regulation which limits
the amount of intangible assets which may be included in Tier 1
capital. Under the regulation, mortgage servicing rights
("MSRs") and purchased credit card relationships ("PCCRs") are
included in Tier 1 capital to the extent that, in the aggregate,
they do not exceed 50% of Tier 1 capital and, to the further
extent that PCCRs, individually, do not exceed 25% of Tier 1
capital. MSRs and PCCRs in excess of these limits, as well as
core deposit intangibles ("CDI") and all other identified
intangible assets, must be deducted in determining Tier 1
capital. As of December 31, 1997, neither Bancshares nor Union
had MSRs or PCCRs. As of December 31, 1997, Bancshares had
$1,964,000 of CDIs, $8,659,000 of goodwill and $885,000 of other
identified intangible assets.

The Federal Reserve Board's capital adequacy guidelines
require a bank holding company to satisfy a Tier 1 Leverage
Ratio, a total risk-based capital ratio and a Tier 1 risk-based
capital ratio. Under the Tier 1 Leverage Ratio capital
guideline, a bank holding company must have and <PAGE> maintain Tier 1
capital in an amount equal to at least 3.0% of its average total
consolidated assets. In general, average total consolidated
assets means the quarterly average total assets (net of the
allowance for loan and lease losses) reported on a bank holding
company's Consolidated Financial Statements (FR Y-9C Report),
minus goodwill and any other intangible assets or investments in
subsidiaries which are deducted from Tier 1 capital. The 3.0%
minimum Tier 1 Leverage Ratio is considered the absolute minimum
amount of Tier 1 capital which the most highly rated bank holding
companies (those rated composite 1 under the BOPEC rating system
for bank holding companies) is required to maintain. All other
bank holding companies must maintain a minimum Tier 1 Leverage
Ratio of 3.0% plus an additional cushion of at least 100 to 200
basis points.

Under the Federal Reserve Board's capital adequacy
guidelines, a bank holding company must have and maintain a ratio
of Total capital to risk-weighted assets of 8.00%, and a ratio of
Tier 1 capital to risk-weighted assets of 4%. The amount of a
bank holding company's risk-weighted assets is determined by
multiplying the balance sheet amount of each of the bank holding
company's consolidated assets by a specified risk-weight factor
of 0%, 20%, 50% or 100%, in accordance with the relative risk
level of the asset. In determining risk-weighted assets, off-
balance sheet items, such as standby letters of credit, are
converted to an on-balance sheet credit equivalent amount by
multiplying the face amount of the off-balance sheet item by a
credit conversion factor of 0%, 20%, 50% or 100%, in accordance
with the probability that the off-balance sheet item will become
a credit extended by the bank holding company. In general,
intangible assets and other assets which are deducted in
determining Tier 1 capital and Total capital may also be excluded
from risk-weighted assets.

The Federal Reserve Board has proposed to permit portions of
claims (including repurchase agreements) collateralized by cash
on deposit with the lending institution or by securities issued
or guaranteed by the U.S. Treasury, U.S. government agencies, or
the central governments in other OECD countries to be eligible
for a zero percent risk weight. The effect of this proposal is
to allow banks and bank holding companies to hold less capital
for these types of collateralized transactions.

Under the Federal Reserve Board's market risk rules, an
institution with significant trading activities must measure and
hold capital for exposure to general market risk arising from
fluctuations in interest rates, equity prices, foreign exchange
rates and commodity prices and exposure to specific risk
associated with debt and equity positions in the trading
portfolio. This regulation applies to any bank or bank holding
company (i) whose trading activity equals 10% or more of its
total assets or (ii) whose trading activity equals $1 billion or
more. General market risk refers to changes in the market value
of on-balance sheet assets and off-balance sheet items resulting
from broad market movements. Specific risk refers to changes in
the market value of individual positions due to factors other
than broad market movements and includes such risks as the credit
risk of an instrument's issuer. Under the Federal Reserve
Board's rules, an institution must measure its general market
risk using its internal risk measurement model to calculate a
"value-at-risk" based capital charge. An institution must also
measure its specific risk either through a valid internal model
or by a so-called standardized approach. The standardized
approach for the measurement of specific risk uses a risk-
weighing process developed by the Federal Reserve which
categorizes individual instruments and then assesses a fixed
capital charge. Until September, 1997, an institution that used
an internal model to measure specific risk, rather than the
standardized approach, was required to hold capital for specific
risk at least equal to 50 <PAGE> percent of the specific risk charge
calculated when using the standardized approach (the minimum
specific risk charge). If that portion of an institution's
"value-at-risk" capital charge which was attributable to specific
risk did not equal the minimum specific risk charge, the
institution was subject to additional charges to make up for such
difference. As of September, 1997, the Federal Reserve has
eliminated the use of the minimum specific risk charge and
consequently, the need for a dual calculation if an institution
uses its internal model to measure specific risk. Therefore, an
institution using a valid internal model to measure specific risk
may use the "value-at-risk" measures generated by its model
without being required to compare the model-generated risk charge
to the minimum specific risk charge as calculated under the
standardized approach.

The regulation supplements the existing credit risk-based
capital standards by requiring an affected institution to adjust
its risk-based capital ratio to reflect market risk. In
measuring market risk, institutions may use Tier 3 capital to
meet the market risk capital requirements. Tier 3 capital is
subordinated debt that is unsecured, fully paid up, has an
original maturity of at least 2 years, is not redeemable before
maturity without the prior approval of the institution's
supervisor, is subject to a lock-in clause that prevents the
issuer from repaying the debt even at maturity if the issuer's
capital ratio is, or with repayment, would become, less than the
minimum 8% risk-based capital ratio, and does not contain and is
not covered by any covenants, terms or restrictions that may be
inconsistent with safe and sound banking practices.

On December 31, 1997, each of Bancshares and Union was in
compliance with all of the Federal Reserve Board's capital
guidelines. On such date, Bancshares had a Tier 1 leverage ratio
of 8.14% (compared with a minimum requirement of 3%), a ratio of
total capital to risk-weighted assets of 12.25% (compared with a
minimum requirement of 8%) and a ratio of Tier 1 capital to risk-
weighted assets of 11.00% (compared with a minimum requirement of
4%), and Union had a Tier 1 leverage ratio of 11.59% (compared
with a minimum requirement of 3%), a ratio of total capital to
risk-weighted assets of 14.96% (compared with a minimum
requirement of 8%) and a ratio of Tier 1 capital to risk-weighted
assets of 13.70% (compared with a minimum requirement of 4%).

INTERSTATE BANKING AND BRANCHING. Under the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the
"Riegle-Neal Act"), bank holding companies are permitted to
acquire the stock or substantially all of the assets of banks
located in any state regardless of whether such transaction is
prohibited under the laws of any state. The Federal Reserve
Board, however, may not approve an interstate acquisition if as a
result of the acquisition the bank holding company would control
more than 10% of the total amount of insured deposits in the
United States or would control more than 30% of the insured
deposits in the home state of the acquired bank. The 30% of
insured deposits state limit does not apply if the acquisition is
the initial entry into a state by a bank holding company or if
the home state waives such limit.

Under the Riegle-Neal Act, individual states may restrict
interstate acquisitions in two ways. First, a state may prohibit
an out-of-state bank holding company from acquiring a bank
located in the state unless the target bank has been in existence
for a specified minimum period of time (not to exceed five
years). Second, a state may establish limits on the total amount
of insured deposits within the state which are controlled by a
single bank holding company (a "deposit cap"), provided that such
deposit limit does not discriminate against out-of-state bank
holding companies. In 1995, Missouri enacted legislation that
provides that a bank holding <PAGE> company whose bank subsidiaries were
conducting business in state other than the state of Missouri as
of January 1, 1995, may not charter de novo a bank or trust
company under Missouri law or a national bank located in
Missouri, and such bank holding company may not acquire any such
bank or trust company or a national bank located in Missouri that
has been in continuous existence for less than five years. This
provisions was enacted to implement a state option permitting
bank charter age requirements under the Riegle-Neal Act.
Missouri currently has a statewide deposit cap of 13%.

The Riegle-Neal Act now permits affiliated banks in
different states to act as agents for each other for purposes of
receiving deposits, renewing time deposits, closing loans,
servicing loans and receiving payments on loans and other
obligations. A bank acting as an agent for an affiliated bank is
not considered a branch of the affiliated bank.

Beginning on June 1, 1997, the Riegle-Neal Act authorized
interstate branching by a merger of banks with different home
states which results in a single bank with branches in both
states. The Riegle-Neal Act gave states the right to "opt out"
and prohibit interstate mergers by passing legislation before
June 1, 1997 that expressly prohibits all merger transactions
with out-of-state banks. The Riegle-Neal Act also gave states
the right to "opt in" and authorize early interstate mergers by
passing legislation that expressly permits interstate merger
transactions with all out-of-state banks. The Riegle-Neal Act
authorized banks to establish and operate de novo branches in a
state (other than the bank's home state) only if the host state
"opts in" to authorize de novo interstate banking by passing
legislation that expressly permits all out-of-state banks to
establish de novo branches in the state. As of June 1, 1997,
approximately 44 states acted on the Riegle-Neal Act. Only two
states, Texas and Montana, opted out. Seven states contiguous
with Missouri's borders, Arkansas, Illinois, Iowa, Kentucky,
Nebraska, Oklahoma and Tennessee, affirmatively "opted-in."
Neither Missouri nor Kansas acted by June 1, 1997 to "opt-in" or
"opt-out." Therefore, interstate branching of banks by merger is
now permitted in Missouri and its contiguous states.

Effective October 10, 1997, the Riegle-Neal Act prohibits
any bank from establishing or acquiring a branch or branches
outside its home state primarily for the purpose of deposit
production. An interstate branch must reasonably help meet the
credit needs of the communities served as determined by a loan-
to-deposit ratio screen. The FDIC and other banking agencies,
under the final rule, will determine a bank's total loan-to-
deposit ratio for all branches opened in a particular state one
year or more after the bank has established an interstate branch.
If the ratio is 50 percent of the average loan-to-deposit ratio
for all banks headquartered in that state, the banking regulators
will try to determine whether the branches are making a
"reasonable" effort to meet the needs of the community served in
that state by using six mitigating factors. The agencies may
impose sanctions on institutions found not to meet the community
credit needs. The regulators may require the bank to close
branches in the state where it has a low loan-to deposit ratio,
and may prohibit the bank from opening any new branches unless
the institution assures the agencies that it will attempt to meet
those credit needs.

MISSOURI BHC REGULATION. Under Missouri law, a bank holding
company is prohibited from acquiring control over a bank or trust
company which has its principal banking office in Missouri if
such acquisition would cause the aggregate deposits held by all
banks and trust companies in which such bank holding company has
an interest to exceed 13% of the total <PAGE> deposits of banking and
savings institutions in Missouri. Further, an acquisition by a
bank holding company of control of a bank or trust company which
has its principal banking office in Missouri requires approval of
the Missouri Director of Finance. Neither such limitation
applies, however, in situations where the acquisition was
requested by the Missouri Director of Finance, the FDIC or the
Federal Reserve Board in order to protect the public interest
against the failure or probable failure of a bank or trust
company.

REGULATION APPLICABLE TO THE BANKS

GENERAL. As a national bank, ENB is subject to regulation
and examination primarily by the OCC. ENB is also regulated by
the Federal Reserve Board and the FDIC. As a Missouri state
bank, USB is subject to regulation and examination by the
Missouri Division of Finance and the FDIC. Regulation by these
agencies is designed to protect depositors of ENB and USB rather
than shareholders of Bancshares. Each of the OCC and the FDIC
has the authority to issue cease and desist orders if it
determines that activities of ENB or USB, respectively, represent
unsafe and unsound banking practices or violations of law. In
addition, the OCC and FDIC are empowered to impose substantial
civil money penalties for violations of banking statutes and
regulations.

REGULATORY CAPITAL REQUIREMENTS. The OCC and the FDIC have
adopted minimum capital requirements applicable to national banks
and state non-member bank, respectively, which are substantially
similar to the capital adequacy guidelines established by the
Federal Reserve Board for bank holding companies. There are,
however, technical differences in the methodologies used to
calculate the capital ratios.

On December 31, 1997, ENB was in compliance with all of the
OCC's minimum capital requirements. On such date ENB had a Tier
1 Leverage Ratio of 11.88% (compared with a minimum requirement
of 3%), a ratio of Total capital to risk-weighted assets of
17.90% (compared with a minimum requirement of 8%), and a ratio
of Tier 1 capital to risk-weighted assets of 16.69% (compared
with a minimum requirement of 4%).

On December 31, 1997, USB was in compliance with all of the
FDIC's minimum capital requirements. On such date USB had a Tier
1 Leverage Ratio of 7.65% (compared with a minimum requirement of
3%), a ratio of Total capital to risk-weighted assets of 14.85%
(compared with a minimum requirement of 8%), and a ratio of Tier
1 capital to risk-weighted assets of 13.60% (compared with a
minimum requirement of 4%).

CLASSIFICATION OF BANKS. Federal banking laws classify
financial institutions in one of the following five categories,
depending upon the amount of their capital: well-capitalized,
adequately capitalized, undercapitalized, significantly
undercapitalized or critically undercapitalized. Under OCC and
FDIC regulations, a bank is deemed to be (i) "well capitalized"
if it has a total risk-based capital ratio of 10% or greater, a
Tier 1 risk-based capital ratio of 6% or greater and a Tier 1
leverage ratio of 5% or greater (and is not subject to any order
or written directive specifying any higher capital ratio), (ii)
"adequately capitalized" if it has a total risk-based capital
ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4%
or greater and a Tier 1 leverage ratio of 4% or greater (or a
Tier 1 leverage ratio of 3% or greater, if the bank has a CAMEL
rating of 1), (iii) "undercapitalized" if it has a total
risk-based capital ratio that is less than 8%, a Tier 1
risk-based capital ratio that is less than 4% or a Tier 1
leverage ratio that is less than 4% <PAGE> (or a Tier 1 leverage ratio
that is less than 3%, if the bank has a CAMEL rating of 1), (iv)
"significantly undercapitalized" if it has a total risk-based
capital ratio that is less than 6%, a Tier 1 risk based capital
ratio that is less than 3% or a Tier 1 leverage ratio that is
less than 3%, and (v) "critically undercapitalized" if it has a
Tier 1 leverage ratio that is equal to or less than 2%. Federal
banking laws require the federal regulatory agencies to take
prompt corrective action against undercapitalized financial
institutions. Under OCC regulations, ENB was a well capitalized
institution as of December 31, 1997, and under FDIC regulations,
USB was a well capitalized institution as of December 31, 1997.

Federal banking laws provide that if an insured depository
institution receives a less than satisfactory examination rating
for asset quality, management, earnings or liquidity, the
examining agency may deem such financial institution to be
engaging in an unsafe or unsound practice. The potential
consequences of being found to have engaged in an unsafe or
unsound practice are significant, because the appropriate federal
regulatory agency may: (i) if the financial institution is
well-capitalized, reclassify the financial institution as
adequately capitalized; (ii) if the financial institution is
adequately capitalized, take any of the prompt corrective actions
authorized for undercapitalized financial institutions and impose
restrictions on capital distributions and management fees; and
(iii) if the financial institution is undercapitalized, take any
of the prompt corrective actions authorized for significantly
undercapitalized financial institutions.

DEPOSIT INSURANCE AND ASSESSMENTS. The deposits of ENB and
USB are insured by the BIF administered by the FDIC, in general,
to a maximum of $100,000 per insured depositor. Under federal
banking regulations, ENB and USB are required to pay annual
assessments to the FDIC for deposit insurance. The FDIC has
adopted a risk-based assessment system. Under the risk-based
assessment system, BIF members pay varying assessment rates
depending upon the level of the institution's capital and the
degree of supervisory concern over the institution. The
assessment rates are set by the FDIC semiannually. The FDIC's
assessment rates range from zero (0) cents to 27 cents per $100
of insured deposits. Institutions qualifying for the $0
assessment rate are no longer required to pay the minimum deposit
premium payment of $2,000 annually. As of January 1, 1998, both
ENB's and USB's assessment rate was zero cents per $100 of
insured deposits. The FDIC has authority to increase the annual
assessment rate if it determines that a higher assessment rate is
necessary to increase BIF's reserve ratio. There is no cap on
the annual assessment rate which the FDIC may impose.

In addition to any assessments that may be imposed by the
FDIC as described above, the Deposit Insurance Funds Act of 1996
provides for the imposition of annual assessments by the
Financing Corporation on Savings Association Insurance Fund-
assessable deposits and BIF-assessable deposits. These
assessments are scheduled to remain in effect from January 1,
1997 through December 31, 1999. As of January 1, 1998, the
annual assessment rate applicable to both ENB and USB was
approximately 1.256 basis points of its assessable deposits.

INTEREST RATES. The rate of interest a bank may charge on
certain classes of loans is limited by state and federal law. At
certain times in the past, these limitations, in conjunction with
national monetary and fiscal policies that affect the interest
rates paid by banks on deposits and borrowings, have resulted in
reductions of net interest margins on certain classes of loans.
Such circumstances may recur in the future, although the trend of
recent federal and state legislation <PAGE> has been to eliminate
restrictions on the rates of interest which may be charged on
some types of loans and to allow maximum rates on other types of
loans to be determined by market factors.

LOANS TO ONE BORROWER. In addition to limiting the rate of
interest chargeable by banks on certain loans, federal law
imposes additional restrictions on a national bank's lending
activities. For example, under federal law the maximum amount
that a national bank may lend to one borrower (and certain
related entities of such borrower) generally is limited to 15% of
the bank's unimpaired capital and unimpaired surplus, plus an
additional 10% for loans fully secured by readily marketable
collateral. There are certain exceptions to the general rule
including loans fully secured by government securities or deposit
accounts in the bank. As of December 31, 1997, ENB's lending
limit under this regulation was approximately $5,400,000, and its
current largest loan to one borrower (aggregate loans to the
borrower and its related entities) was approximately $6,375,000.
In January 1998, ENB sold $1,200,000 of this relationship to
another financial institution so as to comply with the loan to
one borrower limitation.

Missouri banking law imposes restrictions on a state-
chartered bank's lending activities. According to Missouri law,
the maximum amount that a bank may lend to any one person or
entity is limited to 15% of the unimpaired capital of the bank
located in a city having a population of 100,000 or more, 20% of
the unimpaired capital of the bank located in a city having a
population of less than 100,000 and over 7,000, and 25% of the
unimpaired capital of the bank if located elsewhere in the state.
These restrictions have some exceptions. As of December 31,
1997, USB's lending limit under this law was approximately
$1,896,000, and its current largest loan to one borrower was
approximately $1,280,000.

PAYMENT OF DIVIDENDS. The National Bank Act restricts the
payment of dividends by a national bank as follows: (i) no
dividends may be paid if the bank has no undivided profits or
retained earnings then on hand; (ii) until the surplus fund of
the bank is equal to its capital stock, no dividends may be
declared unless there has been carried to the surplus fund not
less than one-tenth of the bank's net profits of the preceding
half-year period in the case of quarterly or semiannual
dividends, or not less than one-tenth of the net profits of the
preceding two consecutive half-year periods in the case of annual
dividends; and (iii) the approval of the OCC is required if
dividends declared by the bank in any year would exceed the total
of net profits for that year combined with retained net profits
for the preceding two years, less any required transfers to
surplus. These laws and related regulations are applicable to
ENB. ENB has obtained approval from the OCC to pay up to
$5,553,900 in dividends to Bancshares in 1998, although no
assurances can be given that such dividends will be declared.

USB, as a state non-member bank, is subject to the dividend
restrictions set forth by Missouri law and the FDIC. Under the
FDIA, a FDIC-insured institution may not pay any dividend if
payment would cause it to become undercapitalized or while it is
undercapitalized. Missouri banking law prohibits the declaration
of a dividend if the bank has not made good any existing
impairment of its capital. These laws and related regulations
are not expected to have a material effect upon USB's current
dividend policies.

COMMUNITY REINVESTMENT ACT. On May 4, 1995, the Federal
Reserve Board, the FDIC and the OCC adopted regulations relating
to the Community Reinvestment Act (the "CRA"). The purpose of
the CRA regulations is to establish the framework and criteria by
which the bank <PAGE> regulatory agencies assess an institution's record
of helping to meet the credit needs of its community, including
low- and moderate-income neighborhoods, and to provide that the
agencies' assessment shall be taken into account in reviewing
certain applications. The regulations seek to emphasize an
institution's performance rather than the process, to promote
consistency in evaluation of institutions, and to eliminate
unnecessary reporting burdens. The regulations replace the
previous twelve assessment factors for large banks with three
tests: (i) a lending test, (ii) a service test, and (iii) an
investment test. While documentation requirements have been
substantially reduced, the safe harbors from CRA protest have
also been eliminated.

OTHER REGULATORY LIMITATIONS. Bancshares, Union and the
Banks are "affiliates" within the meaning of the Federal Reserve
Act. As such, the amount of loans or extensions of credit which
ENB or USB may make to Bancshares, Union or to third parties,
secured by securities or obligations of Bancshares or Union, are
substantially limited by the Federal Reserve Act and the FDIA.
Such acts further restrict the range of permissible transactions
between a bank and an affiliated company. A bank and its
subsidiaries may engage in certain transactions, including loans
and purchases of assets, with an affiliated company only if the
terms and conditions of the transaction, including credit
standards, are substantially the same as, or at least as
favorable to the bank as, those prevailing at the time for
comparable transactions with non-affiliated companies or, in the
absence of comparable transactions, on terms and conditions that
would be offered to non-affiliated companies.

Each of ENB and USB are also authorized to invest in a
service corporation that can offer the same services as the
banking related services that bank holding companies are
authorized to provide. However, regulatory approval must
generally be obtained prior to making such an investment or the
performance of such services.

BANKING ACTIVITIES. The investments and activities of ENB
are subject to substantial regulation by the OCC and the FDIC,
including without limitation investments in subsidiaries,
investments for their own account (including limitations on
investments in junk bonds and equity securities), investments in
loans, loans to officers, directors and affiliates, security
requirements, truth-in-lending, the types of interest bearing
deposit accounts which they can offer, trust department
operations, brokered deposits, audit requirements, issuance of
securities, branching and mergers and acquisitions.

The Missouri Division of Finance and the FDIC regulate or
monitor all areas of USB's operations, including capital
requirements; issuance of stock; declaration of dividends;
interest rates; deposits; record keeping; establishment of
branches; acquisitions; mergers; loans; investments; borrowing;
security requirements, devices and procedures; employee
responsibility and conduct; and directors and affiliates. The
Missouri Division of Finance also limits the issuing of capital
notes or debentures, holding of real estate and personal property
and requires USB to maintain a certain ratio of reserves against
deposits.

MONETARY POLICY AND ECONOMIC CONDITIONS

The principal sources of funds essential to the business of
banks and bank holding companies are deposits, shareholders'
equity and borrowed funds. The availability of these various
sources of funds and other potential sources such as preferred
stock or commercial paper, <PAGE> and the extent to which they are
utilized, depends on many factors, the most important of which
are the monetary policies of the Federal Reserve Board and the
relative costs of different types of funds.

An important function of the Federal Reserve Board is to
regulate the national supply of bank credit in order to combat
recession and curb inflationary pressures. Among the instruments
of monetary policy used by the Federal Reserve Board to implement
these objectives are open market operations in United States
government securities, changes in the discount rate on bank
borrowings and changes in reserve requirements against bank
deposits.

ENB and USB are subject to regulations issued by the Federal
Reserve Board which require depository institutions to maintain
non-interest bearing reserves against their transaction accounts
and non-personal time deposits. These regulations require
depository institutions to maintain reserves equal to 3% of
transaction accounts up to $47.8 million plus 10% (subject to
adjustment by the Federal Reserve Board between 8% and 14%) of
the total over $47.8 million. In addition, reserves, subject to
adjustment by the Federal Reserve Board between 0% and 9%, must
be maintained on non-personal time deposits. This reserve
percentage is currently 0%. Depository institutions may
designate and exempt up to $4.7 million of reservable liabilities
from the above reserve requirements. Because these reserves must
generally be maintained in cash or non-interest-bearing accounts,
the effect of the reserve requirements is to increase the cost of
funds to depository institutions. As of December 31, 1997, ENB
was required to maintain a reserve balance of $1,723,000, and USB
was required to maintain a reserve balance of $935,000.

Substantially all of the restrictions on the maximum
interest rates banks are permitted to pay on deposits have been
removed, although banks are still prohibited from paying interest
on demand deposits. Consequently, banks and thrift organizations
are substantially free to pay interest at any rate. Deregulation
has increased competition among such institutions for attracting
deposits and has resulted in an overall increase in such
institutions' cost of funds.

The monetary policies of the Federal Reserve Board have had
a significant effect on the operating results of commercial banks
in the past and are expected to continue to do so in the future.
In view of the continuing changes in regulations affecting
commercial banks and other actions and proposed actions by the
Federal government and its monetary and fiscal authorities,
including proposed changes in the structure of banking in the
United States and general economic conditions, no prediction can
be made as to future changes in interest rates, credit
availability, deposit levels, loan demand or the overall
performance of banks generally and ENB, USB, Union and Bancshares
in particular.

The references in the foregoing discussion to various
aspects of statutes and regulation are merely summaries which do
not purport to be complete and which are qualified in their
entirety by reference to the actual statutes and regulations.

<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY.

Bancshares and Union neither own nor lease any property.

The principal offices of Bancshares and ENB are located at
132 East High Street in the central business district of
Jefferson City, Missouri. The building, which is owned by the
Bank, is a three-story structure constructed in 1927. It has
approximately 14,000 square feet of usable office space, all of
which is currently used for the Bank's operations. Although
management believes that the condition of this building presently
is minimally adequate for the Bank's business, an expansion and
renovation of this facility is underway as of the date of this
report in order to better serve ENB's customers. It is
anticipated that the cost of this facility's renovation and
expansion will not exceed $5,000,000 and that work on this
facility's renovation and expansion will be completed in the
first quarter of 1999. Management believes that this facility is
adequately covered by insurance.

ENB also owns a branch banking facility at 3701 West Truman
Boulevard in Jefferson City. This facility has approximately
21,000 square feet of usable office space, all of which is used
for ENB operations, and has full drive-in facilities. ENB owns a
second branch banking facility, which is located at 217 West
Dunklin Street in Jefferson City. This facility is a one-story
building which has approximately 2,400 square feet of usable
office space, all of which is used for ENB operations. In
addition, ENB has established a branch banking facility at 800
Eastland Drive in Jefferson City with approximately 4,100 square
feet of usable office space. Management believes that the
condition of these banking facilities presently is adequate for
ENB's business and that these facilities are adequately covered
by insurance.

The principal offices of Union and USB are located at 102
North Second Street in Clinton, Missouri. The bank building,
which is owned by USB, is a one-story structure constructed in
1972. It has approximately 5,000 square feet of usable office
space, all of which is currently used for UBS's operations. USB
also owns four branch banking facilities. A downtown Clinton
branch is located at 115 North Main Street. This facility has
approximately 1,500 square feet of usable office space, all of
which is used in USB operations. USB owns a second branch
banking facility, which is located at 1603 East Ohio in Clinton.
This facility is a one-story building which has approximately
5,760 square feet of usable office space, all of which is used
for USB operations. USB has one Osceola, Missouri branch banking
facility located at 4th and Chestnut. This facility is a
one-story building which has approximately 1,580 square feet of
usable office space, all of which is used for USB operations.
Finally, USB has an approximately 1,500 square foot branch
banking facility located at the intersection of Highways 13 and
54 in Collins, Missouri. Management believes that the condition
of these banking facilities presently is adequate for USB's
business and that these facilities are adequately covered by
insurance.

The Banks invest in all types of real estate mortgages,
including mortgages on single family dwellings, multi-family
dwellings, office buildings, unimproved land and land development
loans. The limits of the Banks' investment in real estate
mortgages is directed by guidelines contained in the respective
Bank's loan policy. Changes in this policy do not require a vote
of the security holders. It is the policy of each of the Banks
to invest in real estate mortgages primarily for income. In
regard to investment in real estate mortgages, the Banks intend
to originate and service real estate mortgages but do not intend
to warehouse those mortgages for possible capital <PAGE> gains. The
turnover of the respective real estate mortgage portfolios of the
Banks is greatly dependent upon interest rate trends but
generally turns at a moderate level.

ITEM 3. LEGAL PROCEEDINGS.

None of Bancshares, Union or the Banks is involved in any
material pending legal proceedings, other than routine litigation
incidental to their business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted to a vote of the holders of the
Company's Common Stock during the fourth quarter of the year
ended December 31, 1997.

PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

Pursuant to General Instruction E(2) to Form 10-KSB, the
information required by this Item is incorporated herein by
reference to the information under the caption "Market Price of
and Dividends on Equity Securities and Related Matters" in
Bancshares' 1997 Annual Report to Shareholders.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS.

Pursuant to General Instruction E(2) to Form 10-KSB, the
information required by this Item is incorporated herein by
reference to the information under the captions "Selected
Consolidated Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in
Bancshares' 1997 Annual Report to Shareholders.

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE
STATEMENTS MADE IN THIS REPORT ON FORM 10-KSB ARE FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S
ACTUAL RESULTS, FINANCIAL CONDITION OR BUSINESS COULD DIFFER
MATERIALLY FROM ITS HISTORICAL RESULTS, FINANCIAL CONDITION OR
BUSINESS, OR THE RESULTS OF OPERATIONS, FINANCIAL CONDITION OR
BUSINESS CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED BELOW UNDER THE
CAPTION "FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS,
FINANCIAL CONDITION OR BUSINESS," AS WELL AS THOSE DISCUSSED
ELSEWHERE IN THE COMPANY'S REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.

FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS, FINANCIAL
CONDITION OR BUSINESS

In order to take advantage of the safe harbor provisions for
forward-looking statements contained in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the

<PAGE>

Securities Exchange Act of 1934, as amended, added to those Acts
by the Private Securities Litigation Reform Act of 1995, the
Company is hereby identifying important risks and uncertainties
that could affect the Company's actual results of operations,
financial condition or business and that could cause the
Company's actual results of operations, financial condition or
business to differ materially from its historical results of
operations, financial condition or business, or the results of
operations, financial condition or business contemplated by
forward-looking statements made herein or elsewhere, orally or in
writing, by, or on behalf of, the Company. Factors that could
cause or contribute to such differences include, but are not
limited to, those factors described below.

ECONOMIC CONDITIONS IN THE COMPANY'S PRIMARY MARKET AREA.
The profitability of the Company is dependant on the
profitability of its banking subsidiaries, The Exchange National
Bank of Jefferson City and Union State Bank and Trust of Clinton,
which are banks operating out of central Missouri. The Banks'
financial conditions are affected by fluctuations in the economic
conditions prevailing in that portion of Missouri in which the
Banks' banking operations are located. Accordingly, the
financial conditions of both the Banks and the Company would be
adversely affected by deterioration in the general economic and
real estate climate in the State of Missouri. The Banks'
business is also subject to fluctuations in interest rates,
national and local economic conditions, monetary and regulatory
policies and consumer and institutional confidence in the Banks.
The fluctuations are neither predictable nor controllable and may
have materially adverse consequences upon the operations and
financial condition of the Banks and the Company in the future
even if other favorable events occur.

IMPORTANCE OF NET INTEREST INCOME AND SUSCEPTIBILITY TO
CHANGES IN INTEREST RATES. The primary source of earnings for
the Banks and the Company is net interest income, which is the
difference between interest and fees earned on loans and other
interest-earning assets, and the interest paid on deposits and
other interest-bearing liabilities. There may be a difference
between the amount of interest-earning assets scheduled to
reprice in any given period and the amount of interest-bearing
liabilities scheduled to reprice over the same time. Any
difference can create a lag between the time it takes the rate
the bank earns interest to respond to market fluctuations and the
time it takes the rate the bank incurs interest costs to respond
to market fluctuations, and vice-versa. Because of these
"interest sensitivity gaps," the amount of net interest income
may be affected by fluctuations in the interest rate.

ASSET QUALITY AND LENDING RISKS. Success in the banking
industry largely depends on the quality of loans and other
assets. The Banks' loan officers are actively encouraged to
identify deteriorating loans. Loans are also monitored and
categorized through an analysis of their payment status. The
Banks' failure to timely and accurately monitor the quality of
its loans and other assets could have a materially adverse effect
on the operations and financial condition of the Banks and the
Company. There is a degree of credit risk associated with any
lending activity. The Company attempts to minimize its credit
risk through loan diversification. Although the Company's loan
portfolio is varied, with no undue concentration in any one
industry, substantially all of the loans in the portfolio have
been made to borrowers in central Missouri. Therefore, the loan
portfolio is susceptible to factors affecting the central
Missouri area and the level of non-performing assets is heavily
dependant upon local conditions. See "Economic Conditions in the
Company's Primary Market Area." There can be no assurance that
the level of the Company's non-performing assets will not
increase above current levels. High levels of non-performing

<PAGE>

assets could have a materially adverse effect on the operations
and financial condition of the Banks and the Company.

PROVISIONS FOR POSSIBLE LOAN LOSSES. The Company makes a
provision for loan losses based upon management's analysis of
potential losses in the loan portfolio and consideration of
prevailing economic conditions. The Company may need to increase
the provision for loan losses through additional provisions in
the future if the financial condition of any of its borrowers
deteriorates or if real estate values decline. See "Asset
Quality and Lending Risks." Furthermore, various regulatory
agencies, as an integral part of their examination process,
periodically review the Company's loan portfolio, provision for
loan losses, and real estate acquired by foreclosure. Such
agencies may require the Company to recognize additions to the
provision for loan losses based on their judgments of information
available to them at the time of the examination. Any additional
provisions for possible loan losses, whether required as a result
of regulatory review or initiated by the Company itself, may
materially alter the financial outlook of the Banks and the
Company.

COMPETITION IN THE COMPANY'S MARKET AREA. The Banks
experience substantial competition for deposits and loans within
the Banks' service areas. The Banks' competitors include other
commercial banks, savings and loan associations, savings banks,
credit unions and money market mutual funds. Savings and loan
associations and credit unions now have the authority to offer
checking accounts and to make corporate and agricultural loans
and were granted expanded investment authority by recent federal
regulations. As a result, these thrift institutions are expected
to continue to offer increased competition to commercial banks in
the future. In addition, large national and multinational
corporations have in recent years become increasingly visible in
offering a broad range of financial services to all types of
commercial and consumer customers. Competition from larger
institutions may increase due to an acceleration of bank mergers
and consolidations in Missouri and the rest of the nation. An
increase in the intensity of competition from other banks in the
central Missouri market could have a materially adverse impact on
the operations and financial condition of the Banks and the
Company.

REGULATION. Banks and bank holding companies such as the
Company are subject to regulation by both federal and state bank
regulatory agencies. The regulations, which are designed to
protect borrowers and promote certain social policies, include
limitations on the operations of banks and bank holding
companies, such as minimum capital requirements and restrictions
on dividend payments. These regulations are not necessarily
designed to maximize the profitability of banking institutions.
Future changes in the banking laws and regulations could have a
materially adverse effect on the operations and financial
condition of the Banks and the Company.

IMPORTANCE OF EXECUTIVE OFFICERS. The success of the Banks
and the Company has been largely dependant on the efforts of
Donald Campbell, James Smith and David Turner and the other
executive officers. These individuals are expected to continue
to perform their services. However, the loss of the services of
Messrs. Campbell, Smith or Turner, or any of the other key
executive officers could have a materially adverse effect on the
Banks and the Company.

<PAGE>

YEAR 2000 COMPLIANCE. Each Bank's Year 2000 committee has
developed and presented to its respective Board of Directors its
action plan for Year 2000 compliance with the objective of
insuring that all computerized systems and software programs are
capable of functioning in the next century. The Company
anticipates that the incremental cost of ensuring that its
computer systems are Year 2000 compliant may be significant but
is not anticipated to be material to its business, financial
condition or results of operations. However, if such
modifications and conversions are not made, or are not completed
timely, the Year 2000 issue could have a materially adverse
effect on the Banks and the Company.

ADDITIONAL FACTORS. Additional risks and uncertainties that
may affect the future results of operations, financial condition
or business of the Banks and the Company include, but are not
limited to: (i) the ability to keep pace with technological
change including developing and implementing technological
advances timely and cost-effectively in order to provide better
service and remain competitive; (ii) adverse publicity, news
coverage by the media, or negative reports by brokerage firms,
industry and financial analysts regarding the Banks or the
Company; and (iii) changes in accounting policies and practices.

ITEM 7. FINANCIAL STATEMENTS.

Pursuant to General Instruction E(2) to Form 10-KSB, the
information required by this Item is incorporated herein by
reference to the report of the independent auditors and the
information under the caption "Consolidated Financial Statements"
in Bancshares' 1997 Annual Report to Shareholders.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT.

Pursuant to General Instruction E(3) to Form 10-KSB, the
information required by this Item is incorporated herein by
reference to (i) the information under the caption "Election of
Directors--The Board of Directors," (ii) the information under
the caption "Election of Directors--Nominees and Directors
Continuing in Office," (iii) the information under the caption
"Executive Officers and Compensation--Executive Officers," and
(iv) the information under the caption "Section 16(a) Beneficial
Ownership Reporting Compliance," in each case, in the
Registrant's definitive Proxy Statement for its 1998 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.

ITEM 10. EXECUTIVE COMPENSATION.

Pursuant to General Instruction E(3) to Form 10-KSB, the
information required by this Item is incorporated herein by
reference to (i) the information under the caption "Executive

<PAGE>

Officers and Compensation--Executive Compensation," (ii) the
information under the caption "Executive Officers and
Compensation--Profit-Sharing Trust," (iii) the information under
the caption "Executive Officers and Compensation--Pension Plan,"
and (iv) the information under the caption "Election of
Directors--Compensation of Directors", in each case, in the
Registrant's definitive Proxy Statement for its 1998 Annual
Meeting of Shareholders to be filed pursuant to Regulation 14A.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

Pursuant to General Instruction E(3) to Form 10-KSB, the
information required by this Item is incorporated herein by
reference to the information under the caption "Ownership of
Common Stock" in the Registrant's definitive Proxy Statement for
its 1998 Annual Meeting of Shareholders to be filed pursuant to
Regulation 14A.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Pursuant to General Instruction E(3) to Form 10-KSB, the
information required by this Item is incorporated herein by
reference to the information under the caption "Transactions with
Directors and Officers" in the Registrant's definitive Proxy
Statement for its 1998 Annual Meeting of Shareholders to be filed
pursuant to Regulation 14A.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits:

1. The following consolidated financial statements of the
Company and reports of the Company's independent
auditors, included in the Registrant's Annual Report to
Shareholders for the year ended December 31, 1997 under
the caption "Consolidated Financial Statements", are
incorporated by reference in Item 7 to this report:

Independent Auditors' Report.

Consolidated Balance Sheets as of December
31, 1997 and 1996.

Consolidated Statements of Income for each of
the years ended December 31, 1997, 1996, and
1995.

Consolidated Statements of Stockholders'
Equity for each of the years ended December
31, 1997, 1996, and 1995.

Consolidated Statements of Cash Flows for
each of the years ended December 31, 1997,
1996, and 1995.

Notes to Consolidated Financial Statements.

<PAGE>

2. Exhibits:

Exhibit No. Description

3.1 Articles of Incorporation of the Company (filed as
Exhibit 3(a) to the Company's Registration Statement on
Form S-4 (Registration No. 33-54166) and incorporated
herein by reference).

3.2 Bylaws of the Company.

4 Specimen certificate representing shares of the
Company's $1.00 par value common stock (filed as
Exhibit 4 to the Company's Registration Statement on
Form S-4 (Registration No. 33-54166 and incorporated
herein by reference).

10.1 The Exchange National Bank of Jefferson City Profit
Sharing Trust, as amended and restated (filed with the
Registrant's Annual Report on Form 10-KSB for the year
ended December 31, 1994 as Exhibit 10.1 and
incorporated herein by reference).*

10.2 Retirement Plan for Employees of The Exchange National
Bank of Jefferson City, as amended and restated
(executed October 18, 1995) (filed with the
Registrant's Annual Report on Form 10-KSB for the year
ended December 31, 1995 as Exhibit 10.2 and
incorporated herein by reference).*

10.3 The Exchange National Bank of Jefferson City Retirement
Trust, as amended and restated (filed as Exhibit 10(c)
to the Company's Registration Statement on Form S-4
(Registration No. 33-54166) and incorporated herein by
reference).*

10.3.1 Amendment to The Exchange National Bank of Jefferson
City Retirement Trust, dated April 21, 1993 (filed with
the Registrant's Annual Report on Form 10-KSB for the
year ended December 31, 1993 as Exhibit 10.3.1 and
incorporated herein by reference).*

10.4 Employment Agreement, dated November 3, 1997, between
the Registrant and James E. Smith.*

13 The Registrant's 1997 Annual Report to Shareholders
(only those portions of this Annual Report to
Shareholders which are specifically incorporated by
reference into this Annual Report on Form 10-KSB shall
be deemed to be filed with the Commission).

21 List of Subsidiaries.

27 Financial Data Schedule.
_______________________
* Management contracts or compensatory plans or arrangements
required to be identified by Item 13(a).

<PAGE>

(b) Reports on Form 8-K.

1. A Form 8-K was filed by the Company on November 11,
1997 under Item 2 announcing the Company's acquisition
of Union and USB. An audited consolidated balance
sheet as of December 31, 1996 and related consolidated
statements of income, stockholders' equity and cash
flows for Union for the year then ended and an
unaudited consolidated balance sheet as of September
30, 1997 and related consolidated statements of income
and cash flows for Union for the nine months ended
September 30, 1997 and 1996 were filed as an exhibit to
the Form 8-K.

2. A Form 8-K/A was filed by the Company on January 2,
1998 under Item 2 to file the required pro forma
financial statements in connection with the Company's
acquisition of Union and USB. An unaudited pro forma
consolidated condensed balance sheet as of September
30, 1997 and unaudited pro forma consolidated
statements of income for the nine months ended
September 30, 1997 and for the year ended December 31,
1996 were filed as an exhibit to the Form 8-K/A.

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

EXCHANGE NATIONAL BANCSHARES, INC.

Dated: March 24, 1998 By /s/ Donald L. Campbell
Donald L. Campbell, President

In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

Date Signature and Title

March 24, 1998 /s/ Donald L. Campbell
Donald L. Campbell, President
and Chairman of the Board of
Directors (Principal Executive
Officer)

March 24, 1998 /s/ Carl A. Brandenburg, Sr.
Carl A. Brandenburg, Sr.,
Treasurer and Chief Financial
Officer (Principal Financial
Officer and Principal
Accounting Officer)

March 24, 1998 /s/ David T. Turner
David T. Turner, Director

March 24, 1998 /s/ James R. Loyd
James R. Loyd, Director

March 24, 1998 /s/ Charles G. Dudenhoeffer, Jr.
Charles G. Dudenhoeffer, Jr.,
Director

March 24, 1998 /s/ David R. Goller
David R. Goller, Director

March 24, 1998 /s/ Philip D. Freeman
Philip D. Freeman, Director

March 24, 1998 /s/ Kevin L. Riley
Kevin L. Riley, Director

March 24, 1998 /s/ James E. Smith
James E. Smith, Director

<PAGE>

EXHIBIT INDEX

Exhibit No. Description Page No.

3.1 Articles of Incorporation of the Company **
(filed as Exhibit 3(a) to the Company's
Registration on Form S-4 (Registration No.
33-54166) and incorporated herein by
reference).

3.2 Bylaws of the Company. __

4 Specimen certificate representing shares of **
the Company's $1.00 par value common stock
(filed as Exhibit 4 to the Company's
Registration Statement on Form S-4
(Registration No. 33-054166 and incorporated
herein by reference).

10.1 The Exchange National Bank of Jefferson City **
Profit Sharing Trust Agreement, as amended
and restated (filed with the Registrant's
Annual Report on Form 10-KSB for the year
ended December 31, 1994 as Exhibit 10.1 and
incorporated herein by reference).*

10.2 Retirement Plan for Employees of The Exchange **
NationalBank of Jefferson City, as amended
and restated (executed October 18, 1995)
(filed with the Registrant's Annual Report on
Form 10-KSB for the year ended December 31,
1995 as Exhibit 10.2 and incorporated herein
by reference).*

10.3 The Exchange National Bank of Jefferson City **
Retirement Trust, as amended and restated
(filed as Exhibit 10(c) to the Company's
Registration Statement on Form S-4
(Registration No. 33-54166) and incorporated
herein by reference).*

10.3.1 Amendment to The Exchange National Bank of **
Jefferson City Retirement Trust, dated April
21, 1993 (filed with the Registrant's Annual
Report on Form 10-KSB for the year ended
December 31, 1993 as Exhibit 10.3.1 and
incorporated herein by reference).*

10.4 Employment Agreement, dated November 3, 1997, __
between the Registrant and James E. Smith.*

<PAGE>

Exhibit No. Description Page No.

13 The Registrant's 1997 Annual Report to __
Shareholders (only those portions of this
Annual Report to Shareholders which are
specifically incorporated by reference into
this Annual Report on Form 10-KSB shall be
deemed to be filed with the Commission)

21 List of Subsidiaries __

27 Financial Data Schedule. __
_______________________
* Management contracts or compensatory plans or
arrangements required to be identified by Item 13(a).
** Incorporated by reference from previous filings.

Exhibit 3.2

________________________________________________________________

RESTATED BYLAWS

EXCHANGE NATIONAL BANCSHARES, INC.

As adopted by the Board of Directors on February 25, 1998.

________________________________________________________________

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I OFFICES AND RECORDS. . . . . . . . . . . . . . . . . .1
1.1 Registered Office and Registered Agent . . .1
1.2 Corporate Offices. . . . . . . . . . . . . .1
1.3 Books and Records. . . . . . . . . . . . . .1
1.4 Inspection of Records. . . . . . . . . . . .1

ARTICLE II SHAREHOLDERS. . . . . . . . . . . . . . . . . . .2
2.1 Place of Meetings. . . . . . . . . . . . . .2
2.2 Annual Meetings. . . . . . . . . . . . . . .2
2.3 Special Meetings . . . . . . . . . . . . . .2
2.4 Consent of Shareholders in Lieu of Meeting .2
2.5 Notice; Waiver of Notice . . . . . . . . . .3
2.6 Presiding Officials. . . . . . . . . . . . .3
2.7 Business Which May be Transacted . . . . . .4
2.8 Quorum . . . . . . . . . . . . . . . . . . .4
2.9 Proxies. . . . . . . . . . . . . . . . . . .4
2.10 Voting . . . . . . . . . . . . . . . . . . .4
2.11 Registered Shareholders -- Exceptions --
Stock Ownership Presumed . . . . . . . . . .5
2.12 Shareholders' Lists. . . . . . . . . . . . .6

ARTICLE III BOARD OF DIRECTORS. . . . . . . . . . . . . . . .6
3.1 Number and Eligibility . . . . . . . . . . .6
3.2 Classes. . . . . . . . . . . . . . . . . . .6
3.3 Powers of the Board. . . . . . . . . . . . .7
3.4 Offices. . . . . . . . . . . . . . . . . . .7
3.5 Meetings of the Newly Elected Board. . . . .7
3.6 Notice of Meetings; Waiver of Notice . . . .7
3.7 Meetings by Conference Telephone or Similar
Communications Equipment . . . . . . . . . .8
3.8 Action Without a Meeting . . . . . . . . . .8
3.9 Quorum . . . . . . . . . . . . . . . . . . .8
3.10 Vacancies. . . . . . . . . . . . . . . . . .9
3.11 Committees . . . . . . . . . . . . . . . . .9
3.12 Compensation of Directors and Committee
Members. . . . . . . . . . . . . . . . . . .9
3.13 Removal of Directors . . . . . . . . . . . .9
3.14 Nomination of Directors and Presentation of
Business at Shareholder Meetings . . . . . .9
3.15 Advisory Directors . . . . . . . . . . . . 12

<PAGE>

ARTICLE IV OFFICERS. . . . . . . . . . . . . . . . . . . . 12
4.1 Designations . . . . . . . . . . . . . . . 12
4.2 Term of Office . . . . . . . . . . . . . . 12
4.3 Other Agents . . . . . . . . . . . . . . . 13
4.4 Removal. . . . . . . . . . . . . . . . . . 13
4.5 Salaries and Compensation. . . . . . . . . 13
4.6 Delegation of Authority to Hire, Discharge
and Designate
Duties . . . . . . . . . . . . . . . . . . 13
4.7 Chairman of the Board. . . . . . . . . . . 13
4.8 President. . . . . . . . . . . . . . . . . 14
4.9 Executive Vice President . . . . . . . . . 14
4.10 Senior Vice Presidents . . . . . . . . . . 15
4.11 Vice Presidents. . . . . . . . . . . . . . 15
4.12 Secretary. . . . . . . . . . . . . . . . . 15
4.13 Treasurer. . . . . . . . . . . . . . . . . 16
4.14 Duties of Officers May Be Delegated. . . . 16

ARTICLE V INDEMNIFICATION. . . . . . . . . . . . . . . . . . . 17
5.1 Indemnification, Generally . . . . . . . . 17

ARTICLE VI STOCK . . . . . . . . . . . . . . . . . . . . . 17
6.1 Payment for Shares of Stock. . . . . . . . 17
6.2 Certificates for Shares of Stock . . . . . 17
6.3 Transfers of Shares -- Transfer Agent --
Registrar. . . . . . . . . . . . . . . . . 17
6.4 Closing of Transfer Books. . . . . . . . . 18
6.5 Lost or Destroyed Certificates . . . . . . 18
6.6 Regulations. . . . . . . . . . . . . . . . 18

ARTICLE VII CORPORATE FINANCE . . . . . . . . . . . . . . . 19
7.1 Fixing of Capital -- Transfers of Surplus. 19
7.2 Dividends. . . . . . . . . . . . . . . . . 19
7.3 Creation of Reserves . . . . . . . . . . . 19

ARTICLE VIII GENERAL PROVISIONS. . . . . . . . . . . . . . . 20
8.1 Fiscal Year. . . . . . . . . . . . . . . . 20
8.2 Depositories . . . . . . . . . . . . . . . 20
8.3 Directors' Annual Statement. . . . . . . . 20
8.4 Contracts with Officers or Directors or Their
Affiliates . . . . . . . . . . . . . . . . 20
8.5 Amendments . . . . . . . . . . . . . . . . 21
8.6 Issuing Public Corporation; Control Share
Acquisitions . . . . . . . . . . . . . . . 21
8.7 Rules of Construction. . . . . . . . . . . 21

<PAGE>

RESTATED BYLAWS

EXCHANGE NATIONAL BANCSHARES, INC.

ARTICLE I

OFFICES AND RECORDS

1.1 Registered Office and Registered Agent. The
location of the registered office and the name of the registered
agent of the Corporation in the State of Missouri shall be as
stated in the Articles of Incorporation or as shall be determined
from time to time by the Board of Directors and on file in the
appropriate office of the State of Missouri pursuant to
applicable provisions of law. Unless otherwise permitted by law,
the address of the registered office of the Corporation and the
address of the business office of the registered agent shall be
identical.

1.2 Corporate Offices. The Corporation may have such
corporate offices anywhere within or without the State of
Missouri as the Board of Directors from time to time may
determine or the business of the Corporation may require. The
"principal place of business" or "principal business office" or
"executive office" of the Corporation may be fixed and so
designated from time to time by the Board of Directors, but the
location or residence of the Corporation in the State of Missouri
shall be deemed for all purposes to be in the county in which its
registered office in the State of Missouri is maintained.

1.3 Books and Records. The Corporation shall keep
correct and complete books and records of account, including the
amount of its assets and liabilities, minutes of its proceedings
of its shareholders and Board of Directors and the names and
places of residence of its officers. The Corporation shall keep
at its registered office of principal place of business in the
State of Missouri, or at the office of its transfer agent in the
State of Missouri, if any, books and records in which shall be
recorded the number of shares subscribed, the names of the owners
of the shares, the numbers owned by them respectively, the amount
paid for the shares, and by whom, and the transfer of such shares
with the date of transfer.

1.4 Inspection of Records. A shareholder may, upon
written demand, inspect the records of the Corporation, pursuant
to any statutory or other legal right, during the usual and
customary hours of business and in such manner as will not unduly
interfere with the regular conduct of the business of the
Corporation. A shareholder may delegate his right of inspection
to a certified or public accountant on the condition, to be
enforced at the option of the Corporation, that the shareholder
and accountant agree with the Corporation to furnish to the
Corporation promptly a true and correct copy of each report with
respect to such inspection made by such accountant. No
shareholder shall use, permit to be used or acquiesce in the use
by others of any information so obtained to the detriment
competitively of the Corporation, nor shall he furnish or <PAGE> permit
to be furnished any information so obtained to any competitor or
prospective competitor of the Corporation. The Corporation as a
condition precedent to any shareholder's inspection of the
records of the Corporation may require the shareholder to
indemnify the Corporation, in such manner and for such amount as
may be determined by the Board of Directors, against any loss or
damage which may be suffered by it arising out of or resulting
from any unauthorized disclosure made or permitted to be made by
such shareholder of information obtained in the course of such
inspection.

ARTICLE II

SHAREHOLDERS

2.1 Place of Meetings. All meetings of the
shareholders shall be held at the principal business office of
the Corporation in the State of Missouri, except such meetings as
the Board of Directors to the extent permissible by law expressly
determines shall be held elsewhere, in which case such meetings
may be held, upon notice thereof as hereinafter provided, at such
other place or places, within or without the State of Missouri,
as the Board of Directors shall have determined, and as shall be
stated in such notice.

2.2 Annual Meetings. An annual meeting of
shareholders shall be held on the second Wednesday in June of
each year, if not a bank holiday, and if a bank holiday, then on
the next banking day following, at 9:00 a.m. At each annual
meeting of shareholders, the shareholders entitled to vote
thereat shall elect directors by a majority vote to serve until
expiration of their respective term of office as specified in
Article FIFTH of the Articles of Incorporation and until their
respective successors are duly elected and qualified, or until
their respective earlier resignation or removal, and may transact
such other business as may properly be brought before the meeting
as provided in Bylaw 3.14.

2.3 Special Meetings.

(a) Special meetings of the shareholders may be
held for any purpose or purposes and may be called by the Board
of Directors, or by the holders of, or by any officer or
shareholder upon the written request of the holders of not less
than two-thirds (2/3) of all outstanding shares entitled to vote
at any such meeting, and shall be called by any officer directed
to do so by the Board of Directors.

(b) The "call" and the "notice" of any such
meeting shall be deemed to be synonymous.

2.4 Consent of Shareholders in Lieu of Meeting. Any
action required to be taken or which may be taken at a meeting of
the shareholders may be taken without a meeting if consents in
writing, setting forth the action so taken, shall be signed by
all of the shareholders <PAGE> entitled to vote with respect to the
subject matter thereof. Such consents shall have the same force
and effect as a unanimous vote of the shareholders at a meeting
duly held. The Secretary shall file such consents with the
minutes of the meetings of the shareholders.

2.5 Notice; Waiver of Notice.

(a) Written or printed notice of each meeting of
the shareholders, whether annual or special, stating the place,
day and hour of the meeting and, in case of a special meeting,
the purpose or purposes thereof, shall be delivered or given to
each shareholder entitled to vote at such meeting, as determined
in accordance with Bylaw 6.4, either personally or by mail, not
less than 10 days or more than 70 days before the date of the
meeting, either personally or by mail, by or at the direction of
the President, the Secretary, or the officer or persons calling
the meeting, to each shareholder of record entitled to vote at
such meeting, unless, as to a particular matter, other or further
notice is required by law, in which case such other or further
notice shall be given.

(b) Any notice to a shareholder of a
shareholders' meeting sent by mail shall be deemed to be
delivered when deposited in the United States mail with postage
thereon prepaid, addressed to the shareholder at his address as
it appears on the records of the Corporation.

(c) Whenever any notice is required to be given
to any shareholder under the provisions of these Bylaws, or of
the Articles of Incorporation or of any law, a waiver thereof in
writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.

(d) To the extent provided by law, attendance of
a shareholder at any meeting shall constitute a waiver of notice
of such meeting except where a shareholder attends a meeting for
the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.

2.6 Presiding Officials. Every meeting of the
shareholders, for whatever purpose, shall be convened by the
President, the Secretary or by the officer or any of the persons
who called the meeting by notice as above provided. The meeting
shall be presided over by the officers specified in Bylaws 4.7,
4.8 and 4.9; provided, however, that the shareholders at any
meeting, by a vote of two-thirds (2/3) or more of the outstanding
shares of stock of the Corporation entitled to vote, and
notwithstanding anything to the contrary contained elsewhere in
these Bylaws, may select any persons of their choosing to act as
chairman and secretary of such meeting or any session thereof.

<PAGE>

2.7 Business Which May be Transacted.

(a) At each annual meeting of the shareholders,
the shareholders shall elect directors to hold office until
expiration of such director's term of office as specified in
Article FIFTH of the Articles of Incorporation and until such
director's successor is duly elected and qualified or until such
director's earlier resignation or removal. At the annual
meeting, the shareholders may transact such other business as may
be properly brought before an annual meeting pursuant to Bylaw
3.14.

(b) Business transacted at all special meetings
of the shareholders shall be confined to the purpose or purposes
stated in the notices of such meetings.

2.8 Quorum. Unless otherwise provided by the Articles
of Incorporation or these Bylaws, a majority of the outstanding
shares entitled to vote at any meeting represented in person or
by proxy, shall constitute a quorum at all meetings of the
shareholders; provided, that in no event shall a quorum consist
of less than a majority of the outstanding shares entitled to
vote, but less than such quorum shall have the right successively
to adjourn the meeting, without notice to any shareholder not
present at the meeting, to a specified date no later than 60 days
after such adjournment. The affirmative vote of a majority of
shares entitled to vote on the subject matter and represented in
person or by proxy at a meeting at which a quorum is present
shall be valid as an act of the shareholders, unless a larger
vote is required by law, by the Articles of Incorporation or by
these Bylaws. At any subsequent session of the meeting at which
a quorum is present in person or by proxy any business may be
transacted which could have been transacted at the initial
session of the meeting if a quorum had been present.

2.9 Proxies. At any meeting of the shareholders every
shareholder having the right to vote shall be entitled to vote in
person or by proxy executed in writing by such shareholder or by
his duly authorized attorney in fact. No proxy shall be valid
after 11 months from the date of its execution, unless otherwise
provided in the proxy.

2.10 Voting.

(a) Unless otherwise provided in the Articles of
Incorporation, each shareholder shall have one vote for each
share of stock entitled to vote under the provisions of the
Articles of Incorporation and which is registered in his name on
the books of the Corporation.

(b) Unless otherwise provided in the Articles of
Incorporation, each shareholder in the election of directors
shall have one vote for each share of stock entitled to vote.

<PAGE>

(d) If the Board of Directors does not close the
transfer books or set a record date for the determination of its
shareholders entitled to notice of, and to vote at, a meeting of
shareholders, only those persons who are shareholders of record
at the close of business on the 20th day preceding the date of
such meeting shall be entitled to notice of, and to vote at, such
meeting and any adjournment of such meeting; except that, if
prior to such meeting written waivers of notice of such meeting
are signed and delivered to the Corporation by all of the
shareholders of record at the time such meeting is convened, only
those persons who are shareholders of record at the time such
meeting is convened shall be entitled to vote at such meeting,
and any adjournment thereof.

2.11 Registered Shareholders -- Exceptions -- Stock
Ownership Presumed. The Corporation shall be entitled to treat
the holders of the shares of stock of the Corporation, as
recorded on the stock record or transfer books of the
Corporation, as the holders of record and as the holders and
owners in fact thereof, and, accordingly, the Corporation shall
not be required to recognize any equitable or other claim to or
interest in any such shares on the part of any other person,
firm, partnership, corporation or association, whether or not the
Corporation shall have express or other notice thereof, except as
is otherwise expressly required by law, and the term
"shareholder" as used in these Bylaws means one who is a holder
of record of shares of the Corporation; provided, however, that
if permitted by law:

(a) shares standing in the name of another
corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the bylaws of such corporation may prescribe,
or, in the absence of such provision, as the board of directors
of such corporation may determine;

(b) shares standing in the name of a deceased
person may be voted by his personal representative, either in
person or by proxy; and shares standing in the name of a
conservator or trustee may be voted by such fiduciary, either in
person or by proxy, but no conservator or trustee shall be
entitled, as such fiduciary, to vote shares held by him without a
transfer of such shares into his name;

(c) shares standing in the name of a receiver may
be voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the
transfer thereof into his name if authority so to do be contained
in an appropriate order of the court by which such receiver was
appointed; and

(d) a shareholder whose shares are pledged shall
be entitled to vote such shares until the shares have been
transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.

<PAGE>

2.12 Shareholders' Lists.

(a) A complete list of the shareholders entitled
to vote at each meeting of the shareholders, arranged in
alphabetical order, with the address of and the number of voting
shares held by each, shall be prepared by the officer of the
Corporation having charge of the stock transfer books of the
Corporation, and shall, for a period of 10 days prior to the
meeting, be kept on file at the registered office of the
Corporation in the State of Missouri and shall at any time during
the usual hours for business be subject to inspection by any
shareholder. Such list or a duplicate thereof shall also be
produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the
whole time of the meeting. The original share ledger or transfer
book, or a duplicate thereof kept in the State of Missouri, shall
be prima facie evidence as to who are the shareholders entitled
to examine such list, share ledger or transfer book or to vote at
any meeting of shareholders.

(b) Failure to comply with the foregoing shall
not affect the validity of any action taken at any such meeting.

ARTICLE III

BOARD OF DIRECTORS

3.1 Number and Eligibility. Unless and until changed
by the Board of Directors as hereinafter provided, the number of
directors to constitute the Board of Directors shall be the same
number as that provided for the first Board in the Articles of
Incorporation or, if not so provided, shall be the same as the
number of persons named by the incorporator or incorporators to
constitute the first Board of Directors of the Corporation. Each
director shall hold such office until expiration of such
director's term of office as specified in Article FIFTH of the
Articles of Incorporation and until such director's successor is
duly elected and qualified or until such director's earlier
resignation or removal. The Board of Directors shall have the
power to change the number of directors by resolution adopted by
a majority of the whole Board, provided that, within 30 days
after any such change, the Secretary of the State of Missouri
shall be given notice of any such change. Directors need not be
shareholders of the Corporation unless the Articles of
Incorporation at any time so require. No person shall be
eligible to stand for election as a director if he or she has
been convicted of a felony by a court of competent jurisdiction
where such conviction is no longer subject to direct appeal. No
person shall serve on the Board beyond the end of the term in
which he or she attains his or her 75th birthday, nor shall any
person, following his or her 75th birthday, be eligible to stand
for election as a director.

3.2 Classes. The Board of Directors shall be divided
into three classes, in accordance with the provisions of the
Articles of Incorporation.

<PAGE>

3.3 Powers of the Board. The property and business of
the Corporation shall be controlled and managed by the directors,
acting as a Board. The Board shall have and is vested with all
powers and authorities, except as may be expressly limited by
law, the Articles of Incorporation or these Bylaws, to do or
cause to be done any and all lawful things for and in behalf of
the Corporation, to exercise or cause to be exercised any or all
of its powers, privileges and franchises, and to seek the
effectuation of its objects and purposes.

3.4 Offices. The directors may have one or more
offices, and keep the books of the Corporation (except the
original or duplicate stock ledgers, and such other books and
records as may by law be required to be kept at a particular
place) at such place or places within or without the State of
Missouri as the Board of Directors may from time to time
determine.

3.5 Meetings of the Newly Elected Board. The members
of each newly elected Board (a) shall meet at such time and
place, either within or without the State of Missouri, as shall
be suggested or provided for by resolution of the shareholders at
the annual meeting, and no notice of such meeting shall be
necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present, or
(b) if not so suggested or provided for by resolution of the
shareholders, or if a quorum shall not be present, may meet at
such time and place as shall be consented to in writing by a
majority of the newly elected directors, provided that written or
printed notice of such meeting shall be mailed, sent by telegram
or delivered to each of the other directors in the same manner as
provided in Bylaw 3.6(b) with respect to the giving of notice for
special meetings of the Board except that it shall not be
necessary to state the purpose of the meeting in such notice, or
(c) regardless of whether or not the time and place of such
meeting shall be suggested or provided for by resolution of the
shareholders at the annual meeting, may meet at such time and
place as shall be consented to in writing by all of the newly
elected directors. Each director, upon his election, shall
qualify by accepting the office of director, and his attendance
at, or his written approval of the minutes of, any meeting of the
newly elected directors shall constitute his acceptance of such
office; or he may execute such acceptance by a separate writing,
which shall be placed in the minute book.

3.6 Notice of Meetings; Waiver of Notice.

(a) Regular Meetings. Regular meetings of the
Board may be held without notice at such times and places either
within or without the State of Missouri as shall from time to
time be fixed by resolution adopted by the full Board of
Directors. Any business may be transacted at a regular meeting.

(b) Special Meetings.

(i) Special meetings of the Board may be
called at any time by the Chairman of the Board, the President,
or by any three or more of the directors. The place may be
within or without the State of Missouri as designated in the
notice.

<PAGE>

(ii) Written or printed notice of each
special meeting of the Board, stating the place, day and hour of
the meeting and the purpose or purposes thereof, shall be mailed
to each director at least three days before the day on which the
meeting is to be held, or shall be delivered to him personally or
sent to him by telegram at least two days before the day on which
the meeting is to be held. If mailed, such notice shall be
deemed to be delivered when it isdeposited in the United States
mail with postage thereon prepaid, addressed to the director at
his residence or usual place of business. If given by telegraph,
such notice shall be deemed to be delivered when it is delivered
to the telegraph company. The notice may be given by any officer
having authority to call the meeting or by any director.

(iii) "Notice" and "call" with respect to
such meetings shall be deemed to be synonymous.

(c) Waiver of Notice. Whenever any notice is
required to be given to any director under the provisions of
these Bylaws, or of the Articles of Incorporation or of any law,
a waiver thereof in writing signed by such director, whether
before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance of a
director at any meeting shall constitute a waiver of notice of
such meeting except where a director attends a meeting for the
express purposes of objecting to the transaction of any business
because the meeting is not lawfully called or convened.

3.7 Meetings by Conference Telephone or Similar
Communications Equipment. Unless otherwise restricted by the
Articles of Incorporation or these Bylaws or by law, members of
the Board of Directors of the Corporation, or any committee
designated by the Board, may participate in a meeting of the
Board or committee by means of conference telephone or similar
communications equipment whereby all persons participating in the
meeting can hear each other, and participation in a meeting in
such manner shall constitute presence in person at the meeting.

3.8 Action Without a Meeting. Any action which is
required to be or may be taken at a meeting of the directors, or
of the executive committee or any other committee of the
directors, may be taken without a meeting if consents in writing,
setting forth the action so taken, are signed by all of the
members of the Board or of the committee as the case may be. The
consents shall have the same force and effect as a unanimous vote
at a meeting duly held. The Secretary shall file such consents
with the minutes of the meetings of the Board of Directors or of
the committee as the case may be.

3.9 Quorum. At all meetings of the Board, a majority
of the full Board of Directors shall, unless a greater number as
to any particular matter is required by law, the Articles of
Incorporation or these Bylaws, constitute a quorum for the
transaction of business. The act of a majority of the directors
present at any meeting of the Board of Directors at which a
quorum is present shall be the act of the Board of Directors,
unless the act of a greater number is required by law, the
Articles of Incorporation or these Bylaws.

<PAGE>

3.10 Vacancies. Unless otherwise provided in the
Articles of Incorporation, these Bylaws or by law, vacancies on
the Board of Directors and newly created directorships resulting
from any increase in the number of directors to constitute the
Board may be filled by a majority of the directors then in
office, although less than a quorum, or by a sole remaining
director, until the next election of the class of directors for
which such directors shall have been chosen and until their
successors shall be elected and qualified or until their
respective earlier resignation or renewal.

3.11 Committees.

(a) The Board of Directors may, by resolution or
resolutions adopted by a majority of the whole Board of
Directors, designate two or more directors of the Corporation to
constitute one or more committees (including without limitation
an executive committee). Each such committee, to the extent
provided in such resolution or resolutions, shall have and may
exercise all of the authority of the Board of Directors in the
management of the Corporation; provided, however, that the
designation of each such committee and the delegation thereto of
authority shall not operate to relieve the Board of Directors, or
any member thereof, of any responsibility imposed upon it or him
by law.

(b) Each such committee shall keep regular
minutes of its proceedings, which minutes shall be recorded in
the minute book of the Corporation. The Secretary or an
Assistant Secretary of the Corporation may act as Secretary for
each such committee if the committee so requests.

3.12 Compensation of Directors and Committee Members.
Directors, including Advisory Directors, and members of all
committees shall not receive any stated salary for their services
as such, unless authorized by resolution of the Board of
Directors. Also, by resolution of the Board, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board or committee.
Nothing herein contained shall be construed to preclude any
director or committee member from serving the Corporation in any
other capacity and receiving compensation therefor.

3.13 Removal of Directors. Directors may be removed
only in the manner provided in the Corporation's Certificate of
Incorporation.

3.14 Nomination of Directors and Presentation of
Business at Shareholder Meetings.

(a) Nominations of persons for election to the
Board of Directors and the proposal of business to be considered
by the shareholders may be made at an annual meeting of
shareholders (i) pursuant to the Corporation's notice of meeting,
(ii) by or at the direction of the Board of Directors or (iii) by
any shareholder who was a shareholder of record at the time of

<PAGE>

the giving of notice provided for in this Bylaw 3.14, who is
entitled to vote thereon at the meeting and who complied with the
notice procedures set forth in this Bylaw 3.14.

(b) For nominations or other business to be
properly brought before an annual meeting by a shareholder
pursuant to clause (iii) of section (a) of this Bylaw 3.14, the
shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not less than 60 days prior
to the first anniversary of the preceding year's annual meeting,
provided that notices for nominations may be delivered to the
Secretary not less than 30 days prior to such anniversary;
provided, however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed by more than
60 days from such anniversary date, notice by the shareholder to
be timely must be so delivered not later than the close of
business on the later of (i) the 60th day (in the case of
nominations, the 30th day) prior to such annual meeting or (ii)
the 10th day following the date on which public announcement of
the date of such meeting is first made. Such shareholder's
notice shall set forth as to each person whom the shareholder
proposes to nominate for election or reelection as a Director:
(a) the name and address of the shareholder who intends to make
the nomination and of the person or persons to be nominated; (b)
a representation that such shareholder is a holder of record of
stock of the Corporation entitled to vote in the election of
directors at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified
in the notice; (c) the name and address of such shareholder, as
it appears on the Corporation's books, and of the beneficial
owner (as such term is defined in Rule 240.13d-3 of the
Securities Exchange Act of 1934, as amended, ("Exchange Act") (17
C.F.R. Section 240.13d-3)), if any, on whose behalf the nomination is
made; (d) the class and number of shares of the Corporation which
are owned beneficially (as such term is defined in Rule 240.13d-3
of the Exchange Act (17 C.F.R. Section 240.13d-3)) and of record by the
nominating shareholder and each nominee proposed by such
shareholder; (e) a description of all arrangements or
understandings between the shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the
shareholder; (f) such other information regarding each nominee
proposed by such shareholder as would have been required to be
included in a proxy statement filed pursuant to Regulation 14A
(17 C.F.R. Section 240.14a-l et seq.) as then in effect under the
Exchange Act, had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (g) the consent of each
nominee to serve as a Director of the Corporation if so elected.
As to any other business that the shareholder proposes to bring
before the meeting, a shareholder's notice to the Secretary shall
set forth as to each matter: (a) a brief description of the
business desired to be brought before the annual meeting; (b) the
information required by subsections (b), (c) and (d) above; (c)
the reason for conducting such business at the meeting and any
material interest of the shareholder or such beneficial owner in
such business; and (d) all other information with respect to each
such matter as would have been required to be included in a proxy
statement filed pursuant to Regulation 14A (17 C.F.R. Section 240.14a-l
et seq.) as then in effect under the Exchange Act, had proxies
been solicited by the Board of Directors with respect thereto.
Notwithstanding anything in this Bylaw 3.14(b) to the contrary,
in the event that the number of Directors to be elected to the
Board of Directors is <PAGE> increased and there is no public
announcement naming all of the nominees for Director or
specifying the size of the increased Board of Directors made by
the Corporation at least 40 days prior to the first anniversary
of the preceding year's annual meeting, a shareholder's notice
shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it
shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business
on the 10th day following the day on which such public
announcement is first made by the Corporation.

(c) Only such business shall be conducted at a
special meeting of shareholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may
be made at a special meeting of shareholders with regard to which
the Board of Directors has determined that Directors are to be
elected (i) pursuant to the Corporation's notice of meeting, (ii)
by or at the direction of the Board of Directors, or (iii) by any
shareholder who is a shareholder of record at the time of the
giving of notice provided for in this Bylaw 3.14, who shall be
entitled to vote for the election of Directors at the meeting and
who complies with the notice procedures set forth in the last
sentence of this section (c) of this Bylaw 3.14. In the event
the Corporation calls a special meeting of shareholders for the
purpose of electing one or more Directors to the Board, any such
shareholder may nominate a person or persons (as the case may be)
for election to such position(s) as specified in the
Corporation's notice of meeting, if the shareholder's notice
setting forth the information required by section (b) of this
Bylaw 3.14 shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of
business on the later of (i) the 30th day prior to such special
meeting or (ii) the 10th day following the day on which public
announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected
at such meeting.

(d) Only such persons who are nominated in
accordance with the procedures set forth in this Bylaw 3.14 shall
be eligible to serve as Directors and only such business shall be
conducted at a meeting of shareholders as shall have been brought
before the meeting in accordance with the procedures set forth in
this Bylaw 3.14. The chairman of the meeting of shareholders
shall have the power and duty to determine whether a nomination
or any business proposed to be brought before the meeting was
made in accordance with the procedures set forth in this Bylaw
3.14 and, if any proposed nomination or business is not in
compliance with this Bylaw 3.14, to declare that such defective
nominations or proposal shall be disregarded.

(e) For purposes of this Bylaw 3.14, "public
announcement" shall mean disclosure in a press release reported
by the Dow Jones News Service, Associated Press or comparable
national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant
to Sections 13, 14 or 15(d) of the Exchange Act.

(f) Notwithstanding the foregoing provisions of
this Bylaw 3.14, a shareholder shall also comply with all
applicable requirements of the Exchange Act and the rules and
regulations thereunder with respect to the matters set forth in
this Bylaw 3.14. To the extent <PAGE> Bylaw 3.14 shall be deemed by the
Board of Directors or the Securities and Exchange Commission, or
adjudged by a court of competent jurisdiction, to be inconsistent
with the rights of shareholders to request inclusion of a
proposal in the Corporation's proxy statement pursuant to Rule
14a-8 under the Exchange Act, such rule shall prevail.

3.15 Advisory Directors. The Board of Directors may
also include Advisory Directors chosen by a majority vote of the
Board of Directors. Advisory Directors may participate in all
meetings of the Board of Directors, but will not be entitled to
vote at such meetings. Advisory Directors shall have the right
to participate in all discussions with respect to any and all
items of business brought before the Board of Directors at such
meetings other than any matter as to which a majority of the
Board of Directors determines in good faith that consideration of
such matter should be limited to voting Directors. Compensation
of Advisory Directors shall be determined by the Board of
Directors. The term of each Advisory Director shall be
determined by the Board of Directors.

ARTICLE IV

OFFICERS

4.1 Designations.

(a) The officers of the Corporation shall be a
Chairman of the Board, a President, an Executive Vice President,
one or more Senior Vice Presidents, one or more Vice Presidents,
a Secretary and a Treasurer. The Board shall elect a President
and Secretary at its first meeting after each annual meeting of
the shareholders. The Board then, or from time to time, may also
elect one or more of the other prescribed officers as it shall
deem advisable, but need not elect any officers other than a
President and a Secretary. The Board may, if it desires, elect
or appoint additional officers and may further identify or
describe any one or more of the officers of the Corporation.

(b) The officers of the Corporation need not be
members of the Board of Directors. Any two or more offices may
be held by the same person.

(c) An officer shall be deemed qualified when he
enters upon the duties of the office to which he has been elected
or appointed and furnishes any bond required by the Board; but
the Board may also require his written acceptance and promise
faithfully to discharge the duties of such office.

4.2 Term of Office. Each officer of the Corporation
shall hold his office at the pleasure of the Board of Directors
or for such other period as the Board may specify at the time of
his election or appointment, or until his death, resignation or
removal by the Board, whichever first occurs. In any event, each
officer of the Corporation who is not reelected or reappointed at

<PAGE>

the annual election of officers by the Board next succeeding his
election or appointment shall be deemed to have been removed by
the Board, unless the Board provides otherwise at the time of his
election or appointment.

4.3 Other Agents. The Board from time to time may
appoint such other agents for the Corporation as the Board shall
deem necessary or advisable, each of whom shall serve at the
pleasure of the Board or for such period as the Board may
specify, and shall exercise such powers, have such titles and
perform such duties as shall be determined from time to time by
the Board or by an officer empowered by the Board to make such
determinations.

4.4 Removal. Any officer or agent elected or
appointed by the Board of Directors, and any employee, may be
removed or discharged by the Board whenever in its judgment the
best interests of the Corporation would be served thereby, but
such removal or discharge shall be without prejudice to the
contract rights, if any, of the person so removed or discharged.

4.5 Salaries and Compensation. Salaries and
compensation of all elected officers of the Corporation shall be
fixed, increased or decreased by the Board of Directors, but this
power, except as to the salary or compensation of the Chairman of
the Board and the President, may, unless prohibited by law, be
delegated by the Board to the Chairman of the Board, the
President or a committee. Salaries and compensation of all
appointed officers and agents, and of all employees of the
Corporation, may be fixed, increased or decreased by the Board of
Directors, but until action is taken with respect thereto by the
Board of Directors, the same may be fixed, increased or decreased
by the President or by such other officer or officers as may be
empowered by the Board of Directors to do so.

4.6 Delegation of Authority to Hire, Discharge and
Designate Duties. The Board from time to time may delegate to
the Chairman of the Board, the President or other officer or
executive employee of the Corporation, authority to hire,
discharge and fix and modify the duties and salary or other
compensation or employees of the Corporation under their
jurisdiction, and the Board may delegate to such officer or
executive employee similar authority with respect to obtaining
and retaining for the Corporation the services of attorneys,
accountants and other experts.

4.7 Chairman of the Board. If a Chairman of the Board
be elected, he shall, except as otherwise provided for in Bylaw
2.6, preside at all meetings of the shareholders and directors at
which he may be present and shall have such other duties, powers
and authority as may be prescribed elsewhere in these Bylaws.
The Board of Directors may delegate such other authority and
assign such additional duties to the Chairman of the Board, other
than those conferred by law exclusively upon the President, as
the Board may from time to time determine, and, to the extent
permissible by law, the Board may designate the Chairman of the
Board as the chief executive officer of the Corporation with all
of the powers otherwise conferred upon the President of the
Corporation under Bylaw 4.8, or the Board may, from time to time,
divide the <PAGE> responsibilities, duties and authority for the general
control and management of the Corporation's business and affairs
between the Chairman of the Board and the President. If the
Chairman of the Board is designated as the chief executive
officer of the Corporation or to have the powers of the chief
executive officer coextensively with the President, notice
thereof shall be given to the extent and in the manner as may be
required by law.

4.8 President.

(a) Unless the Board otherwise provides, the
President shall be the chief executive officer of the Corporation
with such general executive powers and duties of supervision and
management as are usually vested in the office of the chief
executive officer of a corporation, and he shall carry into
effect all directions and resolutions of the Board. Except as
otherwise provided for in Bylaw 2.6, the President, in the
absence of the Chairman of the Board or if there be no chairman
of the board, shall preside at all meetings of the shareholders
and directors.

(b) The President may execute all bonds, notes,
debentures, mortgages and other contracts requiring a seal, under
the seal of the Corporation, may cause the seal to be affixed
thereto, and may execute all other instruments for and in the
name of the Corporation.

(c) Unless the Board otherwise provides, the
President, or any person designated in writing by him, may (i)
attend meetings of shareholders of other corporations to
represent this Corporation thereat and to vote or take action
with respect to the shares of any such corporation owned by this
Corporation in such manner as he or his designee may determine,
and (ii) execute and deliver waivers of notice and proxies for
and in the name of this Corporation with respect to shares of any
such corporation owned by this Corporation.

(d) The President shall, unless the Board
otherwise provides, be an ex officio member of all standing
committees.

(e) The President shall have such other or
further duties and authority as may be prescribed elsewhere in
these Bylaws or from time to time by the Board of Directors.

(f) If a Chairman of the Board be elected and
designated as the chief executive officer of the Corporation, as
provided in Bylaw 4.7, the President shall perform such duties as
may be specifically delegated to him by the Board of Directors or
are conferred by law exclusively upon him, and in the absence or
disability of the Chairman of the Board or in the event of his
inability or refusal to act, the President shall perform the
duties and exercise the powers of the Chairman of the Board.

4.9 Executive Vice President. In the absence or
disability of the President or in the event of his inability or
refusal to act, the Executive Vice President may perform the
duties <PAGE> and exercise the powers of the President, until the Board
otherwise provides. The Executive Vice President shall perform
such other duties as the Board shall from time to time prescribe.

4.10 Senior Vice Presidents. In the absence or
disability of the Executive Vice President or in the event of his
inability or refusal to act, any Senior Vice President may
perform the duties and exercise the powers of the Executive Vice
President, until the Board otherwise provides. Senior Vice
Presidents shall perform such other duties as the Board shall
from time to time prescribe.

4.11 Vice Presidents. In the absence or disability of
any Senior Vice President or in the event of his inability or
refusal to act, any Vice President may perform the duties and
exercise the powers of the Senior Vice President, until the Board
otherwise provides. Vice Presidents shall perform such other
duties as the Board shall from time to time prescribe.

4.12 Secretary.

(a) The Secretary shall attend all meetings of
the Board and, except as otherwise provided for in Bylaw 2.6, all
meetings of the shareholders. He shall prepare minutes of all
proceedings at such meetings and shall preserve them in a minute
book of the Corporation. He shall perform similar duties for
each executive and standing committee when requested by the Board
or such committee.

(b) The Secretary shall see that all books,
records, lists and information, or duplicates, required to be
maintained at the registered or other office of the Corporation
in the State of Missouri, or elsewhere, are so maintained.

(c) The Secretary shall keep in safe custody the
seal of the Corporation and when duly authorized to do so shall
affix the seal of the Corporation to any instrument requiring a
corporate seal, and, when so affixed, he shall be authorized to
attest the seal by his signature.

(d) The Secretary shall perform such other duties
and have such other responsibility and authority as may be
prescribed elsewhere in these Bylaws or from time to time by the
Board of Directors or the chief executive officer of the
Corporation, under whose direct supervision the Secretary shall
be.

(e) The Secretary shall have the general duties,
powers and responsibilities of a secretary of a corporation.

(f) In the absence or disability of the Secretary
or in the event of his inability or refusal to act, any Assistant
Secretary may perform the duties and exercise the powers of the
Secretary until the Board of Directors otherwise provides.
Assistant Secretaries shall <PAGE> perform such other duties and have
such other authority as the Board of Directors may from time to
time prescribe.

4.13 Treasurer.

(a) The Treasurer shall have responsibility for
the safekeeping of the funds and securities of the Corporation,
shall keep or cause to be kept full and accurate accounts of
receipts and disbursements in books belonging to the Corporation
and shall keep, or cause to be kept, all other books of account
and accounting records of the Corporation. He shall deposit or
cause to be deposited all moneys and other valuable effects in
the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors or by
any officer of the Corporation to whom such authority has been
granted by the Board.

(b) The Treasurer shall disburse, or permit to be
disbursed, the funds of the Corporation as may be ordered, or
authorized generally, by the Board, and shall render to the chief
executive officer of the Corporation and the directors, whenever
they may require, an account of all his transactions as treasurer
and of those under his jurisdiction, and of the financial
condition of the Corporation.

(c) The Treasurer shall perform such other duties
and shall have such other responsibility and authority as may be
prescribed elsewhere in these Bylaws or from time to time by the
Board of Directors.

(d) The Treasurer shall have the general duties,
powers and responsibilities of a treasurer of a Corporation, and
shall, unless otherwise provided by the Board, be the chief
financial and accounting officer of the Corporation.

(e) If required by the Board, the Treasurer shall
give the Corporation a bond in a sum and with one or more
sureties satisfactory to the Board for the faithful performance
of the duties of his office and for the restoration to the
Corporation, in the case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his
control which belong to the Corporation.

(f) In the absence or disability of the Treasurer
or in the event of his inability or refusal to act, any Assistant
Treasurer may perform the duties and exercise the powers of the
Treasurer until the Board otherwise provides. Assistant
Treasurers shall perform such other duties and have such other
authority as the Board may from time to time prescribe.

4.14 Duties of Officers May Be Delegated. If any
officer of the Corporation be absent or unable to act, or for any
other reason that the Board may deem sufficient, the Board may
delegate, for the time being, some or all of the functions,
duties, powers and responsibilities of any officer to any other
officer, or to any other agent or employee of the Corporation or
other responsible person, provided a majority of the full Board
of Directors concurs.

<PAGE>

ARTICLE V

INDEMNIFICATION

5.1 Indemnification, Generally. The Corporation shall
indemnify eligible persons in accordance with Article TENTH of
the Articles of Incorporation.

ARTICLE VI

STOCK

6.1 Payment for Shares of Stock. The Corporation
shall not issue shares of stock except for money paid, labor done
or property actually received; provided, however, that shares may
be issued in consideration of valid bona fide antecedent debts.
No note or obligation given by any shareholder, whether secured
by deed of trust, mortgage or otherwise, shall be considered as
payment of any part of any share or shares, and no loan of money
for the purpose of such payment shall be made by the Corporation.

6.2 Certificates for Shares of Stock. The
certificates for shares of stock of the Corporation shall be
numbered and shall be in such form as may be prescribed by the
Board of Directors in conformity with law. The issuance of
shares shall be entered in the stock books of the Corporation as
they are issued. Such entries shall show the name and address of
the person, firm, partnership, corporation or association to whom
each certificate is issued. Each certificate shall have printed,
typed or written thereon the name of the person, firm,
partnership, corporation or association to whom it is issued and
the number of shares represented thereby. It shall be signed by
the President or a Vice President or, if permitted by law, the
Chairman of the Board and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the
Corporation, and sealed with the seal of the Corporation. Any or
all the signatures on such certificate may be facsimiles and the
seal may be facsimile, engraved or printed. In case any such
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon any such certificate
shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, such certificate may
nevertheless be issued by the Corporation with the same effect as
if such person were such officer, transfer agent or registrar at
the date of issue.

6.3 Transfers of Shares -- Transfer Agent -- -
Registrar. Transfers of shares of stock shall be made on the
stock record or transfer books of the Corporation only by the
person named in the stock certificate, or by his attorney
lawfully constituted in writing, and upon surrender of the
certificate therefor. The stock record book and other transfer
records shall be in the possession of the Secretary or of a
transfer agent for the Corporation. The Corporation, by
resolution of the Board, may from time to time appoint a transfer
agent and, if desired, a registrar, <PAGE> under such arrangements and
upon such terms and conditions as the Board deems advisable, but
until and unless the Board appoints some other person, firm or
corporation as its transfer agent (and upon the revocation of any
such appointment, thereafter until a new appointment is similarly
made) the Secretary of the Corporation shall be the transfer
agent of the Corporation without the necessity of any formal
action of the Board, and the Secretary, or any person designated
by him, shall perform all of the duties of such transfer agent.

6.4 Closing of Transfer Books. The Board of Directors
shall have power to close the stock transfer books of the
Corporation for a period not exceeding 70 days preceding the date
of any meeting of the shareholders, or the date of payment of any
dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of shares shall go into
effect; provided, however, that in lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date,
not exceeding 70 days preceding the date of any meeting of
shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or
conversion or exchange of shares shall go into effect, as a
record date for the determination of the shareholders entitled to
notice of, and to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend, or
entitled to any such allotment of rights, or entitled to exercise
the rights in respect of any such change, conversion or exchange
of shares. In such case only the shareholders who are
shareholders of record on the date of closing of the transfer
books or on the record date so fixed shall be entitled to notice
of, and to vote at, such meeting, and any adjournment thereof, or
to receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any shares on the books of the
Corporation after such date of closing of the transfer books or
such record date fixed as aforesaid.

6.5 Lost or Destroyed Certificates. In case of the
loss or destruction of any certificate for shares of stock of the
Corporation, another may be issued in its place upon proof of
such loss or destruction and upon the giving of a satisfactory
bond of indemnity to the Corporation and the transfer agent and
registrar, if any, in such sum as the Board of Directors may
provide; provided, however, that a new certificate may be issued
without requiring a bond when in the judgment of the Board it is
proper to do so.

6.6 Regulations. The Board of Directors shall have
power and authority to make all such rules and regulations as it
may deem expedient concerning the issue, transfer, conversion and
registration of certificates for shares of stock of the
Corporation, not inconsistent with the laws of the State of
Missouri, the Articles of Incorporation or these Bylaws.

<PAGE>

ARTICLE VII

CORPORATE FINANCE

7.1 Fixing of Capital -- Transfers of Surplus. Except
as may be specifically otherwise provided in the Articles of
Incorporation, the Board of Directors is expressly empowered to
exercise all authority conferred upon it or the Corporation by
any law or statute, and in conformity therewith, relative to:

(a) determining what part of the consideration
received for shares of the Corporation shall be stated capital;

(b) increasing stated capital;

(d) determining the consideration to be received
by the Corporation for its shares; and

(e) determining all similar or related matters;

provided that any concurrent action or consent by or of the
Corporation and its shareholders, required to be taken or given
pursuant to law, shall be duly taken or given in connection
therewith.

7.2 Dividends.

(a) Dividends on the outstanding shares of the
Corporation, subject to the provisions of the Articles of
Incorporation and of any applicable law, may be declared by the
Board of Directors at any meeting. Dividends may be paid in
cash, in property or in shares of the Corporation's stock.

(b) Liquidating dividends or dividends
representing a distribution of paid-in surplus or a return of
capital shall be made only when and in the manner permitted by
law.

7.3 Creation of Reserves. Before the payment of any
dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board
of Directors from time to time deems proper as a reserve fund or
funds to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for
any other purpose deemed by the Board to be conducive to the
interests of the Corporation, and the Board may abolish any such
reserve in the manner in which it was created.

<PAGE>

ARTICLE VIII

GENERAL PROVISIONS

8.1 Fiscal Year. The Board of Directors shall have
power to fix and from time to time change the fiscal year of the
Corporation. In the absence of action by the Board of Directors,
the fiscal year of the Corporation shall end each year on the
date which the Corporation treated as the close of its first
fiscal year, until such time, if any, as the fiscal year shall be
changed by the Board of Directors.

8.2 Depositories. The moneys of the Corporation shall
be deposited in the name of the Corporation in such bank or banks
or other depositories as the Board of Directors shall designate,
and shall be drawn out only by check or draft signed by persons
designated by resolution adopted by the Board of Directors,
except that the Board of Directors may delegate said powers in
the manner hereinafter provided in this Bylaw 8.2. The Board of
Directors may by resolution authorize an officer or officers of
the Corporation to designate any bank or banks or other
depositories in which moneys of the Corporation may be deposited,
and to designate the persons who may sign checks or drafts on any
particular account or accounts of the Corporation, whether
created by direct designation of the Board of Directors or by an
authorized officer or officers as aforesaid.

8.3 Directors' Annual Statement. The Board of
Directors may present at each annual meeting, and when called for
by vote of the shareholders shall present to any annual or
special meeting of the shareholders, a full and clear statement
of the business and condition of the Corporation.

8.4 Contracts with Officers or Directors or Their
Affiliates.

(a) No contract or transaction between the
Corporation and one or more of its directors or officers, or
between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its
directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at
or participates in the meeting of the Board or any committee
thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:

(i) The material facts as to his
relationship or interest and as to the contract or transaction
are disclosed or are known to the Board of Directors or such
committee, and the Board of Directors or such committee in good
faith authorized the contract or transaction by the affirmative
vote of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or

<PAGE>

(ii) The material facts as to such person's
relationship or interest and as to the contract or transaction
are disclosed or are known to the shareholders entitled to vote
thereon, and the contract or transaction is specifically approved
in good faith by vote of the shareholders; or

(iii) The contract or transaction is fair
as to the Corporation as of the time it is authorized or approved
by the Board of Directors, a committee thereof, or the
shareholders.

(b) Common or interested directors may be counted
in determining the presence of a quorum at a meeting of the Board
of Directors or a committee which authorizes the contract or
transaction.

8.5 Amendments. The Bylaws of the Corporation may
from time to time be altered, amended or repealed, or new Bylaws
may be adopted, in the manner provided in the Articles of
Incorporation, except as otherwise required by law.

8.6 Issuing Public Corporation; Control Share
Acquisitions. Unless the Articles of Incorporation otherwise
provide, this Corporation is an "issuing public corporation" for
purposes of Section 351.015 of The General and Business
Corporation Law of Missouri and control share acquisitions of the
shares of this Corporation must be made in the manner provided by
law.

8.7 Rules of Construction. All words of the masculine
gender in these Bylaws, unless the context otherwise requires,
shall be deemed and construed to include correlative words of the
feminine and neuter genders.

CERTIFICATE

The undersigned, secretary of EXCHANGE NATIONAL BANCSHARES,
INC., a Missouri corporation; hereby certifies that the foregoing
Restated Bylaws are the Bylaws of the Corporation duly adopted by
the Board of Directors.

Dated: February 25, 1998.

EXCHANGE NATIONAL BANCSHARES, INC.

By: /s/ Kathleen L. Bruegenhemke
Title: Senior Vice President

Exhibit 10.4
EMPLOYMENT AGREEMENT

THIS AGREEMENT (this "Agreement") is entered into this
3rd day of November, 1997, between Exchange National Bancshares,
Inc., a Missouri corporation (the "Company"), and James E. Smith
(the "Employee").

WITNESSETH:

WHEREAS, the Company is a bank holding company
controlling 100% of the issued and outstanding shares of common
stock of Union State Bank & Trust of Clinton, a Missouri trust
company (the "Bank"); and

WHEREAS, Employee desires to become employed by the
Company in an executive capacity as President of the Bank for a
period of at least three years, and the Company desires to employ
Employee to serve in such capacity, for the compensation and in
accordance with the terms and provisions contained herein; and

NOW, THEREFORE, in consideration of the foregoing and
the mutual promises and covenants contained herein, the Company
and Employee agree as follows:

1. Employment. The Company agrees to employ the
Employee and the Employee agrees to be employed by the Company in
an executive capacity upon the terms and conditions of this
Agreement for a period of three (3) years from and after the date
of this Agreement, and any extensions thereafter, unless earlier
terminated as provided in Section 9 hereof. At each anniversary
of the date of this Agreement prior to the sixty-second (62nd)
birthday of the Employee, this Agreement shall be automatically
extended for one additional year unless the Company or the
Employee gives the other party written notice of such party's
intention not to extend this Agreement at least thirty (30) days
prior to such anniversary date. Employee agrees that his
employment by the Bank shall satisfy the Company's employment
obligation hereunder and that he will accept employment as
President of the Bank, so long, during the term of this
Agreement, that the Bank's Board of Directors shall name him to
be elected to that position. The Employee's primary location of
employment during the term of this Agreement shall be in Clinton,
Missouri unless the Employee consents in writing to relocate to
another geographic location.

2. Compensation. For all services rendered by the
Employee to the Bank and the Company, the Bank and the Company
shall pay the Employee a salary of not less than one hundred and
ten thousand dollars ($110,000) per year, payable in accordance
with the customary payroll practices of the Bank and the Company,
but in no event less frequently than monthly. Salary payments
shall be subject to withholding and other applicable taxes.
Employee shall be eligible for merit-based increases in
compensation on terms and conditions offered to employees of the
Company generally having responsibilities commensurate to that of
Employee. Employee shall be eligible to participate in such
bonus or other incentive compensation plans as currently are or
may hereafter be established by the Company for employees
generally having responsibilities commensurate to that of

<PAGE>

Employee, and which may relate to his contribution to the
profitability of the Bank. Employee shall receive board of
directors fees for his service to the Bank's board, which in any
event shall not be less than three hundred dollars ($300.00) for
each board of directors' meeting attended. Employee shall
receive the same board of directors fees for service on the
Company's board of directors or any other affiliated board as is
customarily paid to employees of the Bank and the Company serving
in such capacity.

3. Expenses. The Company shall reimburse the Employee
for all ordinary and necessary expenses incurred and paid by the
Employee in the course of the performance of the Employee's
duties pursuant to this Agreement and consistent with the
Company's policies in effect from time to time with respect to
travel, entertainment and other business expenses, and subject to
the Company's requirements with respect to the manner of
reporting such expenses.

4. Additional Benefits. The Employee shall be
eligible for such fringe benefits, if any, by way of insurance,
hospitalization and vacations normally provided to employees of
the Company generally having responsibility commensurate to that
of the Employee and such additional benefits as may be from time
to time agreed upon in writing between the Employee and the
Company. The Company shall provide to the Employee a new Company
owned or leased automobile of a year, make and model selected by
the Company befitting the executive office held by Employee with
Bank not less than every three years, and the Company shall pay
the expenses related to the use and upkeep thereof and insurance
related thereto. The tax treatment of all fringe benefits shall
be handled in a manner consistent with the customary practices of
the Bank and the Company.

5. Duties. The Employee agrees that so long as he is
employed under this Agreement he will (i) to the satisfaction of
the Company devote his best efforts and his entire business time
to further properly the interests of the Company, which shall
include all of Employee's current activities and participation in
the American Banker's Association, Missouri Banker's Association,
CSBS and other similar industry groups and organizations (and
such other additional activities and participation in such other
organizations as may be approved by the board of directors of the
Company), and the Company and the Bank acknowledge that such
listed activities shall, together with Employee's duties to the
Bank, constitute Employee's entire business time to further the
interests of the Company and the Bank, (ii) at all times be
subject to the direction and control of the Board of Directors of
his employer (which may be the Company or the Bank, as provided
in Section 1 hereof) with respect to his activities on behalf of
such employer, (iii) comply with all rules, orders and
regulations of the Company, (iv) truthfully and accurately
maintain and preserve such records and make all reports as the
Company may require, and (v) fully account for all monies and
other property of the Company of which he may from time to time
have custody and deliver the same to the Company whenever and
however directed to do so.

6. Covenant Not to Disclose Confidential Information.
The Employee acknowledges that during the course of his
employment with the Company he has or will have access to and
knowledge of certain information and data which the Company
considers confidential and that the release of such information
or data to unauthorized persons would be extremely detrimental to
the <PAGE> Company. As a consequence, the Employee hereby agrees and
acknowledges that he owes a duty to the Company not to disclose,
and agrees that, during or after the term of his employment,
without the prior written consent of the Company he will not
communicate, publish or disclose, to any person anywhere or use
any Confidential Information (as hereinafter defined) for any
purpose other than carrying out his duties as contemplated by
this Agreement. The Employee will use his best efforts at all
times to hold in confidence and to safeguard any Confidential
Information from falling into the hands of any unauthorized
person and, in particular, will not permit any Confidential
Information to be read, duplicated or copied. The Employee will
return to the Company all Confidential Information in the
Employee's possession or under the Employee's control when the
duties of the Employee no longer require the Employee's
possession thereof, or whenever the Company shall so request, and
in any event will promptly return all such Confidential
Information if the Employee's relationship with the Company is
terminated for any or no reason and will not retain any copies
thereof. For purposes hereof the term "Confidential Information"
shall mean any information or data used by or belonging or
relating to the Company that is not known generally to the
banking community, including without limitation, any and all
proprietary data and information relating to the Company's or the
Bank's past, present or future business plans, services offered,
financial information, customer lists, and other information
concerning customers, depositors and borrowers of the Company or
any subsidiary of the Company, whether or not reduced to writing,
or information or data which the Company advises the Employee
should be treated as confidential information.

7. Covenant Not to Compete. The Employee agrees that
during the term of his employment by the Company and for a period
of two (2) years from and after the voluntary or involuntary
termination of such employment for any reason other than a
termination by the Employee pursuant to Section 9(c), he will
not, directly or indirectly, without the express written consent
of the Company:

(a) own, manage, operate, control or participate
in the ownership, management, operation , control or
financing of, or have any interest, financial or
otherwise, in or act as an officer, director, partner,
principal, employee, agent, representative, consultant
or independent contractor of, or in any way assist any
bank, savings and loan, savings bank or other financial
institution (other than the Bank) that is located or
has an office in or within fifteen (15) miles from any
boundary of Henry or St. Clair County, Missouri;

(b) solicit for employment or hire any employees
of the Bank; or

(c) solicit, or interfere with, any contracts or
business relationships with any customer, depositor or
borrower of the Bank.

8. Remedies. Recognizing that irreparable damage will
result to the Company in the event of the breach or threatened
breach of any of the foregoing covenants and assurances by the
Employee contained in Sections 6 or 7 hereof, and that the
Company's remedies at law for any such breach or threatened
breach will be inadequate, the Company and its successors and
assigns, in <PAGE> addition to such other remedies which may be
available to them, shall be entitled to an injunction, including
a mandatory injunction, to be issued by any court of competent
jurisdiction ordering compliance with this Agreement or enjoining
and restraining the Employee, and each and every person, firm or
company acting in concert or participation with him, from the
continuation of such breach and, in addition thereto, he shall
pay to the Company all ascertainable damages, including costs and
reasonable attorneys' fees sustained by the Company by reason of
the breach or threatened breach of said covenants and assurances.
The obligations of the Employee and the rights of the Company,
its successors and assigns under Sections 6 and 7 of this
Agreement shall survive the termination of this Agreement. The
covenants and obligations of the Employee set forth in Sections 6
and 7 hereof are in addition to and not in lieu of or exclusive
of any other obligations and duties of the Employee to the
Company, whether express or implied in fact or in law.

9. Termination.

(a) This Agreement shall terminate immediately
upon the death, disability or adjudication of legal
incompetence of the Employee. For purposes of this
Agreement, the Employee shall be deemed to be disabled
when the employee has become unable, by reason of
physical or mental disability, to satisfactorily
perform his essential job duties and there is no
reasonable accommodation that can be provided to enable
him to be a qualified individual with a disability
under applicable law. Such matters shall be determined
by, or to the reasonable satisfaction of, the Board of
Directors of the Company.

(b) This Agreement may be terminated by the
Company upon notice to the Employee for "Cause." For
purposes of this Agreement, "Cause" shall mean the
occurrence of any of the following events:

(i) Performance by the Employee of
illegal or fraudulent acts, criminal conduct
or willful misconduct or gross negligence
relating to the activities of the Company or
the Bank;

(ii) Performance by the Employee of any
criminal acts involving moral turpitude
having a material adverse effect upon the
Company or the Bank, including, without
limitation, upon their profitability,
reputation or goodwill;

(iii) Failure by the Employee to
perform his duties in a manner which he
knows, or has reason to know, to be in the
Company's or the Bank's best interests, which
he fails to cure promptly after receiving
written notice thereof;

(iv) Continued conduct by the Employee
that is damaging to the business, employee or
customer relations of the Company or the <PAGE> Bank
after receiving written notice from the
Company or the Bank to cease such conduct; or

(v) Any other material breach of the
Employee's obligations hereunder which is
incurable or which he fails to cure promptly
after receiving written notice thereof.

(c) This Agreement may be terminated by the
Employee upon written notice to the Company in the
event of a material breach of the Company's obligations
hereunder which is incurable or which the Company fails
to cure within 15 days after receiving written notice
thereof.

(d) In the event this Agreement is terminated,
the parties' obligations under this Agreement shall
terminate immediately (except as otherwise provided
herein), and neither the Employee nor his estate,
heirs, successors or assigns shall be entitled to any
further compensation hereunder other than payment of
any unpaid compensation that accrued prior to such
termination; provided, however, that the termination of
this Agreement pursuant to subsections (b) or (c) of
this Section shall not limit any other remedies to
which the terminating party may be entitled in law or
in equity as a result of any breach of this Agreement
by the other party hereto.

10. Waiver of Breach. Failure of the Company to
demand strict compliance with any of the terms, covenants or
conditions hereof shall not be deemed a waiver of the term,
covenant or condition, nor shall any waiver or relinquishment by
the Company of any right or power hereunder at any one time or
more times be deemed a waiver or relinquishment of the right or
power at any other time or times.

11. No Conflicts. The Employee represents and
warrants to the Company that neither the execution nor delivery
of this Agreement, nor the performance of the Employee's
obligations hereunder will conflict with, or result in a breach
of, any term, condition, or provision of, or constitute a default
under, any obligation, contract, agreement, covenant or
instrument to which the Employee is a party or under which the
Employee is bound, including without limitation, the breach by
the Employee of a fiduciary duty to any former employers.

12. Entire Agreement; Amendment. This Agreement
cancels and supersedes all previous agreements relating to the
subject matter of this Agreement, written or oral, between the
parties hereto and contains the entire understanding of the
parties hereto relating to the terms of the Employee's employment
and shall not be amended, modified or supplemented in any manner
whatsoever except as otherwise provided herein or in writing
signed by each of the parties hereto.

13. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only
and shall in no way restrict or otherwise modify any of the terms
or provisions hereof.

<PAGE>

14. Governing Law. This Agreement and all rights and
obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with, the laws of the
State of Missouri applicable to agreements made and to be
performed entirely within the State, including all matters of
enforcement, validity and performance.

15. Arbitration. Any dispute between any of the
parties hereto or claim by a party against another party arising
out of or in relation to this Agreement or in relation to any
alleged breach thereof shall be finally determined by arbitration
in accordance with the rules then in force of the American
Arbitration Association. The arbitration proceedings shall take
place in Jefferson City, Missouri or such other location as the
parties in dispute hereafter may agree upon; and such proceedings
shall be governed by the laws of the State of Missouri as such
laws are applied to agreements between residents of such State
entered into and to be performed entirely within that State.

The parties shall agree upon one arbitrator, who shall
be an individual skilled in the legal and business aspects of the
subject matter of this Agreement and of the dispute. If the
parties cannot agree upon one arbitrator, each party in dispute
shall select one arbitrator and the arbitrators so selected shall
select a third arbitrator. In the event the arbitrators cannot
agree upon the selection of a third arbitrator, the third
arbitrator shall be appointed by the American Arbitration
Association at the request of any of the parties in dispute. The
arbitrators shall, if possible, be individuals skilled in the
legal and business aspects of the subject matter of this
Agreement and of the dispute.

The decision rendered by the arbitrator or arbitrators
shall be accompanied by a written opinion in support thereof.
The decision shall be final and binding upon the parties in
dispute without right of appeal. Judgment upon the decision may
be entered into in any court having jurisdiction thereof, or
application may be made to that court for a judicial acceptance
of the decision and an order of enforcement. Costs of the
arbitration shall be assessed by the arbitrator or arbitrators
against any or all of the parties in dispute, and shall be paid
promptly by the party or parties so assessed.

16. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one
agreement which is binding upon all the parties hereto.

17. Notice. All notices, requests, demands and other
communications hereunder shall be deemed duly given if delivered
by hand or if mailed by certified or registered mail with postage
prepaid or nationally recognized express delivery service with
delivery confirmed, addressed as follows:

<PAGE>

If to the Company:

Exchange National Bancshares, Inc.
132 E. High Street
Jefferson City, MO 65010-0688
Attn: President

If to the Employee:

James E. Smith
517 South Second
Clinton, MO 64735

or to any other address as either party may provide to the other
in writing.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES.

IN WITNESS WHEREOF, the Company and Employee have
executed this Agreement as of the day and year first above
written.

COMPANY:

EXCHANGE NATIONAL BANCSHARES, INC.

By: /s/ Donald L. Campbell
Donald L. Campbell
Chairman and President

EMPLOYEE:

/s/ James E. Smith
James E. Smith

1997

ANNUAL REPORT

SHAREHOLDERS

EXCHANGE NATIONAL BANCSHARES, INC.

Jefferson City, Missouri

<PAGE>

EXCHANGE NATIONAL BANCSHARES, INC.

Jefferson City, Missouri

March 30, 1998

To Our Shareholders:

Your Board of Directors and management are pleased to report
that Exchange National Bancshares' net income for 1997 increased
2 cents per share of common stock to $5.37, an increase of 0.4%
over the $5.35 reported for 1996. Sustained growth in average
loan volume was the primary contributor to the increase.

Shareholders received dividends totaling $2.12 per share of
common stock during 1997, an increase of 28 cents or 15.2% over
the amount received during 1996. Quarterly dividends of 44 cents
per share of common stock were paid January 1 and April 1, 1997
and quarterly dividends of 50 cents per share were paid July 1
and October 1, 1997. A special dividend of 24 cents per share of
common stock was paid December 1, 1997.

Your Company's earnings performance expressed in terms of
net income divided by average total assets (or return on assets)
was 1.22% for 1997 compared to 1.39% for 1996, and return on
average total stockholders' equity was 9.15% for 1997 compared to
9.76% for 1996.

Capitalization of your Company expressed in terms of tier
one capital to adjusted total assets (leverage ratio) was 8.14%
at December 31, 1997 compared to 14.45% at December 31, 1996, and
its total capital to risk-weighted assets ratio was 12.25% at
December 31, 1997 compared to 23.14% at December 31, 1996. These
ratios continue to exceed the Federal Reserve Board's minimum
required ratios at both dates.

Your Company's increased leverage position is directly
attributed to its acquisition of 100% of the outstanding shares
of Union State Bancshares, a one-bank holding company located in
Clinton, Missouri. At the date of acquisition (November 3,
1997), Union State Bancshares had consolidated total assets and
deposits of $144.0 million and $118.5 million, respectively.
Your Board of Directors and management are very excited about the
potential of this acquisition as we look forward and move ahead.

Your Board of Directors is pleased to welcome James E. Smith
as director and Dr. Gus S. Wetzel II as Advisory Director to its
Board. Messrs. Smith and Wetzel are considered valuable
additions to Exchange National Bancshares' management team.
They, along with myself, also serve as directors on Union State
Bancshares' Board.

Your Company is also looking forward and moving ahead as
evidenced by the renovation and 14,000 square foot expansion of
its main banking facility located at 132 East High Street in
Jefferson City, Missouri. The original three-story structure
constructed in 1927 is being completely renovated and expanded to
better serve our valued customers.

Once again, we appreciate the opportunity to serve you, our
shareholders, as well as our customers and look forward to the
opportunities that await us in 1998.

Very truly yours,

DONALD L. CAMPBELL
Chairman of the Board and President

<PAGE>

EXCHANGE NATIONAL BANCSHARES, INC.

DESCRIPTION OF BUSINESS

Exchange National Bancshares, Inc. ("Bancshares" or the
"Company") is a bank holding company registered under the Bank
Holding Company Act of 1956, as amended (the "BHC Act").
Although Bancshares was incorporated under the laws of the State
of Missouri on October 23, 1992, it did not engage in any
business activity until April 7, 1993. On that date, it acquired
all of the issued and outstanding capital stock of The Exchange
National Bank of Jefferson City, a national banking association
("ENB") pursuant to a corporate reorganization involving an
exchange of shares. In addition to its acquisition of ENB, on
November 3, 1997 the Company acquired Union State Bancshares,
Inc., a bank holding company registered under the BHC Act
("Union"), and Union's wholly-owned subsidiary, Union State Bank
and Trust of Clinton, a Missouri trust company ("USB"). The
Company's activities currently are limited to ownership of the
outstanding capital stock of ENB and Union, which in turn owns
the outstanding capital stock of USB. In addition to ownership
of its subsidiaries, Bancshares could seek expansion through
acquisition and may engage in those activities (such as
investments in banks or operations closely related to banking) in
which it is permitted to engage under applicable law. It is not
currently anticipated that Bancshares will engage in any business
other than that directly related to its ownership of ENB, Union,
USB or other financial institutions. Similarly, it is not
currently anticipated that Union will engage in any business
other than that directly related to its ownership of USB. Except
as otherwise provided herein, references herein to "Bancshares"
or the "Company" include Bancshares and its consolidated
subsidiaries.

ENB, located in Jefferson City, Missouri, was founded in
1865. ENB is the oldest bank in Cole County, and became a
national bank in 1927. ENB has four banking offices; its
principal office at 132 East High Street in Jefferson City's
central business district, a facility at 217 West Dunklin near
the city's south side business district, a facility at 3701 West
Truman Boulevard adjacent to the Capitol Mall Shopping Center,
and a facility at 800 Eastland Drive near the city's east side
business district.

USB was founded in 1932 as a Missouri bank known as Union
State Bank of Clinton. USB converted from a Missouri bank to a
Missouri trust company on August 16, 1989, changing its name to
Union State Bank and Trust of Clinton. USB has five banking
offices: its principal office at 102 North Second Street in
Clinton, Missouri; a downtown Clinton facility located at 115
North Main Street; a facility at 1603 East Ohio in Clinton; a
facility located at 4th and Chestnut in Osceola, Missouri; and a
facility located on Route 54 in Collins, Missouri.

ENB and USB each is a full service bank conducting a general
banking and trust business, offering its customers checking and
savings accounts, debit cards, certificates of deposit, trust
services, safety deposit boxes and a wide range of lending
services, including credit card accounts, commercial and
industrial loans, single payment personal loans, installment
loans and commercial and residential real estate loans.

The deposit accounts of ENB and USB are insured by the
Federal Deposit Insurance Corporation (the "FDIC") to the extent
provided by law. ENB is a member of the Federal Reserve System,
and its operations are supervised and regulated by the Office of
the Comptroller of the Currency (the "OCC"), the Board of
Governors of the Federal Reserve System (the "Federal Reserve
Board") and the FDIC. USB's operations are supervised and
regulated by the FDIC and the Missouri Division of Finance. A
periodic examination of ENB is conducted by representatives of
the OCC, and periodic examinations of USB are conducted by
representatives of the FDIC and the Missouri Division of Finance.
Such regulations, supervision and examinations are principally
for the benefit of depositors, rather than for the benefit of the
holders of ENB's or USB's common stock. Bancshares and Union
are subject to supervision by the Federal Reserve Board.

<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents selected consolidated financial
information for the Company as of and for each of the years in
the five-year period ended December 31, 1997. The selected
consolidated financial data should be read in conjunction with
the Consolidated Financial Statements of the Company, including
the related notes, presented elsewhere herein.

(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)

Year Ended December 31,

1997 1996 1995 1994 1993

INCOME STATEMENT DATA
Interest income $ 23,435 20,179 18,628 16,062 16,144
Interest expense 11,645 9,784 8,649 6,847 7,051
________ _______ ________ ______ ______
Net interest
income 11,790 10,395 9,979 9,215 9,093
Provision for loan
losses 865 395 265 139 370
________ _______ ________ ______ ______
Net interest income
after provision for
loan losses 10,925 10,000 9,714 9,076 8,723
________ _______ ________ ______ ______
Security gains
(losses), net (7) -- 4 8 11
Other noninterest
income 2,045 1,890 1,745 1,749 1,652
________ _______ ________ ______ ______
Total noninterest
income 2,038 1,890 1,749 1,757 1,663
Noninterest expense 7,265 6,185 6,002 6,095 5,832
________ _______ ________ ______ ______
Income before
income taxes 5,698 5,705 5,461 4,738 4,554
Income taxes 1,842 1,862 1,772 1,474 1,383
________ _______ ________ ______ ______
Net income $ 3,856 3,843 3,689 3,264 3,171

DIVIDENDS
Declared on common
stock $ 1,566 1,365 1,200 1,092 1,030
Paid on common stock 1,523 1,322 1,164 1,092 1,010
Ratio of total
dividends declared
to net income 40.61% 35.52 32.53 33.46 32.48

PER SHARE DATA
Basic earnings per
share $ 5.37 5.35 5.13 4.54 4.40
Weighted average
shares of common
stock outstanding 718,511 718,511 718,511 718,511 720,481

<PAGE>

Year Ended December 31,
1997 1996 1995 1994 1993

BALANCE SHEET DATA
(AT PERIOD END)
Investment
securities $116,157 80,623 68,507 79,882 96,784
Loans, net of
unearned income 278,700 173,309 154,339 144,162 125,609
Total assets 450,692 284,079 257,340 262,839 266,632
Total deposits 360,387 228,024 206,815 207,021 213,187
Securities sold
under agreements
to repurchase
and other short
term borrowed
funds 25,157 13,338 10,416 19,575 18,136
Other borrowed
money 17,604 -- -- -- --
Total stockholders'
equity 43,108 40,681 38,355 34,665 33,918

EARNINGS RATIOS
Return on average
total assets 1.22% 1.39 1.42 1.24 1.21
Return on average
total stockholders'
equity 9.15 9.76 10.06 9.49 9.71

ASSET QUALITY RATIOS
Allowance for loan
losses to loans 1.40 1.33 1.41 1.35 1.49
Nonperforming loans
to loans /1/ 0.40 0.63 0.54 0.49 0.69
Allowance for loan
losses to
nonperforming
loans /1/ 350.40 211.26 260.02 275.21 214.94
Nonperforming assets
to loans and
foreclosed
assets /2/ 0.54 0.70 0.59 0.56 0.78
Net loan charge-
offs to average
loans 0.29 0.16 0.02 0.05 0.28

CAPITAL RATIOS
Average total
stockholders'
equity to average
total assets 13.29 14.28 14.15 13.09 12.42
Total risk-based
capital ratio 12.25 23.14 23.66 23.10 23.30
Leverage ratio 8.14 14.45 14.98 13.70 12.84
________
/1/ Nonperforming loans consist of nonaccrual loans and loans contractually
past due 90 days or more.
/2/ Nonperforming assets consist of nonperforming loans plus foreclosed
assets.

<PAGE>

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

EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE
STATEMENTS MADE IN THIS ANNUAL REPORT ARE FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S
ACTUAL RESULTS, FINANCIAL CONDITION OR BUSINESS COULD DIFFER
MATERIALLY FROM ITS HISTORICAL RESULTS, FINANCIAL CONDITION OR
BUSINESS, OR THE RESULTS OF OPERATIONS, FINANCIAL CONDITION OR
BUSINESS CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED UNDER THE
CAPTION "FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS,
FINANCIAL CONDITION OR BUSINESS" IN THE COMPANY'S ANNUAL REPORT
ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1997, AS WELL AS
THOSE DISCUSSED ELSEWHERE IN THE COMPANY'S REPORTS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.

GENERAL

Bancshares was organized on October 23, 1992, and on April
7, 1993, it acquired The Exchange National Bank of Jefferson City
(ENB). The acquisition of ENB represented a combination of
entities under common control and, accordingly, was accounted for
in a manner similar to a pooling of interests. On November 3,
1997, Bancshares acquired Union State Bancshares, Inc. (Union)
which owns 100% of Union State Bank and Trust of Clinton (USB).
The acquisition of Union was accounted for as a purchase
transaction. Accordingly, the results of operations of Union
have been included in the consolidated financial statements of
the Company since acquisition.

Bancshares' consolidated net income for 1997 increased
$13,000 or 0.3% over 1996 and followed a $154,000 or 4.2%
increase for 1996 compared to 1995. Earnings per common share
increased from $5.13 for 1995 to $5.35 for 1996 and to $5.37 for
1997. Return on average total assets decreased from 1.42% for
1995 to 1.39% for 1996 and to 1.22% for 1997. Return on average
total stockholders' equity decreased from 10.06% for 1995 to
9.76% for 1996 and to 9.15% for 1997.

Average loan volume, excluding bankers acceptances' and
commercial paper (money market loans) increased $36,284,000 or
22.3% to $199,308,000 for 1997 compared to $163,024,000 for 1996
and followed a $15,172,000 or 10.3% increase for 1996 compared to
1995. The acquisition of Union increased average total loans for
1997 by approximately $12,800,000. Average commercial loan
volume at ENB increased $5,458,000 or 13.9% for 1997 compared to
1996 and followed a $4,855,000 or 14.1% increase for 1996
compared to 1995. Average real estate loan volume at ENB
increased $14,975,000 or 16.5% for 1997 compared to 1996 and
followed an $8,347,000 or 10.1% increase for 1996 compared to
1995.

The increase in both commercial and real estate loan volumes
over the last two years reflected several factors. External
factors included a stable local economy and stable interest rates
which fueled increased loan demand. Internal factors included an
emphasis on Small Business Administration loans.

Average consumer loan volume at ENB increased $3,035,000 or
9.2% for 1997 compared to 1996 and followed a $1,970,000 or 6.4%
increase for 1996 compared to 1995.

Average total time deposits increased $30,048,000 or 16.1%
to $216,106,000 for 1997 compared to $186,058,000 for 1996 and
followed a $15,411,000 or 9.0% increase for 1996 compared to
1995. The acquisition of Union increased average total time
deposits for 1997 by approximately $17,700,000. The increase in
average total time deposits at ENB for 1996 primarily reflected
an increase in rates paid in order to attract additional funds,
while the increase for 1997 primarily reflected a continuation of
the rate increases instituted in 1996.

<PAGE>

Average securities sold under agreements to repurchase
increased $1,640,000 or 9.9% to $18,152,000 for 1997 compared to
$16,512,000 for 1996 and followed a $1,766,000 or 9.7% decrease
for 1996 compared to 1995. Those variances reflected competition
for institutional funds awarded based upon competitive bids.

Average interest-bearing liabilities for 1997 include
$563,000 of Federal Home Loan Bank advances and other short-term
borrowed funds and $2,981,000 of long-term debt. Both of those
categories primarily reflect liabilities associated with the
acquisition of Union.

The following table provides a comparison of fully taxable
equivalent earnings, including adjustments to interest income and
tax expense for interest on tax-exempt loans and investments.

(DOLLARS EXPRESSED IN THOUSANDS)

YEAR ENDED DECEMBER 31,

1997 1996 1995

Interest income $ 23,435 20,179 18,628
Fully taxable
equivalent (FTE)
adjustment 433 366 357

Interest income
(FTE basis) 23,868 20,545 18,985
Interest expense 11,645 9,784 8,649

Net interest income
(FTE basis) 12,223 10,761 10,336
Provision for loan
losses 865 395 265

Net interest income
after provision for
loan losses (FTE basis) 11,358 10,366 10,071
Noninterest income 2,038 1,890 1,749
Noninterest expense 7,265 6,185 6,002

Income before income taxes
(FTE basis) 6,131 6,071 5,818

Income taxes 1,842 1,862 1,772
FTE adjustment 433 366 357

Income taxes (FTE basis) 2,275 2,228 2,129

Net income $ 3,856 3,843 3,689

Average total earning
assets $297,614 261,183 245,404

Net interest margin 4.11% 4.12 4.21

The Company's primary source of earnings is net interest
income, which is the difference between the interest earned on
interest earning assets and the interest paid on interest bearing
liabilities. Net interest income on a fully taxable equivalent
basis increased $1,462,000 or 13.6% to $12,223,000 for 1997
compared to $10,761,000 for 1996, and followed a $425,000 or 4.1%
increase for 1996 compared to 1995. Measured as a percentage of
average earning assets, the net interest margin (expressed on a
fully taxable equivalent basis) decreased from 4.21% for 1995 to
4.12% for 1996 and to 4.11% for 1997.

<PAGE>

The provision for loan losses increased $470,000 or 119.0%
to $865,000 for 1997 compared to $395,000 for 1996 and followed a
$130,000 or 49.1% increase for 1996 compared to 1995. The
allowance for loan losses totaled $3,914,000 or 1.40% of loans
outstanding at December 31, 1997 compared to $2,307,000 or 1.33%
of loans outstanding at December 31, 1996 and $2,179,000 or 1.41%
of loans outstanding at December 31, 1995. The allowance for
loan losses expressed as a percentage of nonperforming loans was
260.02% at December 31, 1995; 211.26% at December 31, 1996; and
350.40% at December 31, 1997.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997 AND 1996

The Company's net income increased by $13,000 or 0.3% to
$3,856,000 for the year ended December 31, 1997 compared to
$3,843,000 for 1996. Net interest income on a fully taxable
equivalent basis increased to $12,223,000 or 4.11% of average
earning assets for 1997 compared to $10,761,000 or 4.12% for
1996. The provision for loan losses for 1997 was $865,000
compared to $395,000 for 1996. Net loans charged off for 1997
were $573,000 compared to $267,000 for 1996.

Noninterest income and noninterest expense for the years
ended December 31, 1997 and 1996 were as follows:

<TABLE>

(DOLLARS EXPRESSED IN THOUSANDS)

YEAR ENDED
DECEMBER 31, INCREASE (DECREASE)
1997 1996 AMOUNT %
<CAPTION>

<S> <C> <C> <C> <C>
NONINTEREST INCOME
Service charges on
deposit accounts $ 765 701 64 9.1%
Trust department income 291 286 5 1.7
Mortgage loan servicing
fees 323 297 26 8.8

Gain on sales of mortgage
loans 142 113 29 25.7

Loss on sales and calls of
debt securities (7) -- (7) --
Credit card fees 290 345 (55) (15.9)
Other 234 148 86 58.1
_______ ______ _____
$ 2,038 1,890 148 7.8%

Noninterest Expense
Salaries and
employee benefits $ 3,787 3,368 419 12.4 %
Occupancy expense, net 359 295 64 21.7
Furniture and
equipment expense 572 442 130 29.4
FDIC insurance assessment 35 2 33 1,650.0
Advertising and promotion 359 348 11 3.2
Postage, printing,
and supplies 371 349 22 6.3
Legal, examination,
and professional fees 342 217 125 57.6
Credit card expenses 245 299 (54) (18.1)
Credit investigation
and loan collection 191 116 75 64.7
Amortization of
intangible assets 179 43 136 316.3
Other 825 706 119 16.9

$ 7,265 6,185 1,080 17.5 %
<TABLE\>

Noninterest income increased $148,000 or 7.8% to $2,038,000
for 1997 compared to $1,890,000 for 1996. The acquisition of
Union accounted for approximately $128,000 of the increase,
primarily in the areas of service charges <PAGE> on deposit accounts and
other noninterest income. Mortgage loan servicing fees increased
$26,000 and reflected the fact that average loans serviced during
1997 increased to approximately $79,700,000 compared to
$70,900,000 for 1996. Gains on sales of mortgage loans increased
$29,000. Total loans originated and sold to the secondary market
(including refinances of existing loans previously sold) during
1997 increased to approximately $24,150,000 compared to
$21,435,000 for 1996. Credit card fees decreased $55,000 due to
a change during the fourth quarter in ENB's service provider for
merchant credit card processing, which resulted in the
elimination of both gross merchant income and the related expense
for processing.

Noninterest expense increased $1,080,000 or 17.5% to
$7,265,000 for 1997 compared to $6,185,000 for 1996. The
acquisition of Union accounted for approximately $591,000 of the
increase spread among the following categories: salaries and
employee benefits - $215,000; occupancy expense - $31,000;
furniture and equipment expense - $61,000; legal, examination,
and professional fees - $41,000; amortization of intangible
assets - $136,000; and all other categories - $107,000. The
remaining $489,000 increase in noninterest expense related to ENB
and Bancshares primarily reflected increases in the following
categories: salaries and employee benefits - $204,000; occupancy
expense - $33,000; furniture and equipment expense - $69,000;
legal, examination, and professional fees - $84,000; credit
investigation loan and collection - $75,000; and all other
categories - $24,000. The $215,000 increase in salaries and
benefits reflects $125,000 of executive bonuses approved by the
Board of Directors. The increase in occupancy expense reflected
depreciation and other costs associated with ENB's new East
Branch, while the increase in furniture and equipment expense
reflected increased maintenance agreement costs, increased
depreciation and the write-off of remaining items related to the
old East Branch. The increase in legal, examination, and
professional fees primarily reflected consulting fees for a
compensation study and legal and accounting costs associated with
unsuccessful bids to purchase additional facilities being sold by
a competitor. The increase in credit investigation and loan
collection expense reflected increased consumer and commercial
loan collection expenses plus approximately $32,000 in expense
related to other real estate owned.

YEARS ENDED DECEMBER 31, 1996 AND 1995

The Company's net income increased by $154,000 or 4.2% to
$3,843,000 for the year ended December 31, 1996 compared to
$3,689,000 for 1995. Net interest income on a fully taxable
equivalent basis increased to $10,761,000 or 4.12% of average
earning assets for 1996 compared to $10,336,000 or 4.21% for
1995. The provision for loan losses for 1996 was $395,000
compared to $265,000 for 1995. Net loans charged off for 1996
were $267,000 compared to $29,000 for 1995.

Noninterest income and noninterest expense for the years
ended December 31, 1996 and 1995 were as follows:

(DOLLARS EXPRESSED IN THOUSANDS)
YEAR ENDED
DECEMBER 31, INCREASE (DECREASE)
1996 1995 AMOUNT %

NONINTEREST INCOME
Service charges on
deposit accounts $ 701 666 35 5.3%
Trust department income 286 230 56 24.3
Mortgage loan servicing
fees 297 267 30 11.2
Gain on sales of
mortgage loans 113 129 (16) (12.4)
Gain on calls of
debt securities -- 4 (4) (100.0)
Credit card fees 345 309 36 11.7
Other 148 144 4 2.8

$ 1,890 1,749 141 8.1%

<PAGE>

YEAR ENDED
DECEMBER 31, INCREASE (DECREASE)
1996 1995 AMOUNT %

Noninterest Expense
Salaries and employee
benefits $ 3,368 3,083 285 9.2%
Occupancy expense, net 295 312 (17) (5.4)
Furniture and equipment
expense 442 448 (6) (1.3)
FDIC insurance assessment 2 234 (232) (99.1)
Advertising and promotion 348 277 71 25.6
Postage, printing,
and supplies 349 344 5 1.5
Legal, examination, and
professional fees 217 255 (38) (14.9)
Credit card expenses 299 272 27 9.9
Credit investigation and
loan collection 116 87 29 33.3
Other 749 690 59 8.6

$ 6,185 6,002 183 3.0%

Noninterest income increased $141,000 or 8.1% to $1,890,000
for 1996 compared to $1,749,000 for 1995 due to growth in most
major categories. Trust department income increased $56,000 or
24.3% due to a combination of an increase in fees charged, growth
in the market value of assets managed, and an increase in volume
of estate distribution fees. Credit card fees increased $36,000
and service charges on deposit accounts increased $35,000. Both
of those increases reflected increased volume. Mortgage loan
servicing fees, which increased $30,000, also reflected increased
volume. Average loans serviced during 1996 totaled approximately
$70,900,000 compared to $60,800,000 for 1995. Although total
loans originated and sold to the secondary market (including
refinances of existing loans previously sold) during 1996
increased to approximately $21,435,000 compared to $19,652,000
for 1995, gains on sales of mortgage loans declined $16,000.
Local competitive pressure resulted in fewer loan origination
fees.

Noninterest expense increased $183,000 or 3.0% to $6,185,000
for 1996 compared to $6,002,000 for 1995 due primarily to a
$285,000 or 9.2% increase in salaries and employee benefits and a
$71,000 or 25.6% increase in advertising and promotion. Those
increases were partially offset by a $232,000 decrease in FDIC
insurance assessment. The increase in salaries and employee
benefits reflected a combination of recruiting expense, increases
in non-officer employee salaries to respond to local market
conditions, officer merit increases of approximately 4.0%,
increases in pension and profit sharing expense, and increased
payroll taxes. The increase in advertising and promotion
reflected increased costs associated with a new logo and a
special advertising program. The decrease in FDIC insurance
assessment primarily reflected a decrease in the annual
assessment rate from 23 cents per $100 of deposits for the first
half of 1995 and 4 cents per $100 of deposits for the remainder
of 1995 to a minimum assessment of $2,000 for 1996. Credit
investigation and loan collection increased $29,000 or 33.3% due
primarily to increased cost associated with loan collections.

NET INTEREST INCOME

The acquisition of Union accounted for approximately
$796,000 of the $1,462,000 increase in fully taxable equivalent
net interest income for 1997 compared to 1996. Excluding the
effects of the acquisition of Union, increases in fully taxable
equivalent net interest income for both 1997 and 1996 reflected
the favorable effects of growth in average loan volume.

The following table presents average balance sheets (based
on daily averages), net interest income, average yields of
earning assets, and average costs of interest bearing liabilities
on a fully taxable equivalent basis for each of the years in the
three-year period ended December 31, 1997.

<PAGE>

</TABLE>
<TABLE>

(DOLLARS EXPRESSED IN THOUSANDS)

YEAR ENDED DECEMBER 31,

1997 1996 1995

INTEREST RATE INTEREST RATE INTEREST RATE
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE/1/ PAID/1 / BALANCE EXPENSE/1/ PAID/1/ BALANCE EXPENSE/1/ PAID/1/
<CAPTION>

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans: /2/
Commercial $ 51,337 4,616 8.99% $ 39,380 3,553 9.02% $ 34,525 3,307 9.58%
Real estate 111,024 9,722 8.76 90,685 8,024 8.85 82,338 7,215 8.76
Consumer 36,947 3,351 9.07 32,959 3,064 9.30 30,989 2,711 8.75
Money market /3/ 867 47 5.42 2,246 123 5.48 141 8 5.67
Investment in debt and
equity securities: /4/
U.S. Treasury and U.S.
Government agencies 67,561 4,046 5.99 58,960 3,395 5.76 59,876 3,242 5.41
State and municipal 19,097 1,477 7.73 15,740 1,222 7.76 14,499 1,137 7.84
Other 1,601 105 6.56 3,186 205 6.43 5,344 325 6.08
Federal funds sold 9,085 501 5.51 17,996 958 5.32 17,677 1,039 5.88
Interest bearing
deposits in other
financial institutions 95 3 3.16 31 1 3.23 15 1 6.67

Total interest
earning assets 297,614 23,868 8.02 261,183 20,545 7.87 245,404 18,985 7.74
All other assets 21,992 16,680 15,956
Allowance for loan
losses (2,596) (2,278) (2,085)

Total assets $317,010 $275,585 $259,275

<TABLE\>

Continued on next page

</TABLE>
<TABLE> Year Ended December 31,

1997 1996 1995

INTEREST RATE INTEREST RATE INTEREST RATE
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE/1/ PAID/1/ BALANCE EXPENSE/1/ PAID/1/ BALANCE EXPENSE/1/ PAID/1/

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
NOW accounts $ 32,165 846 2.63% $ 27,975 748 2.67% $ 28,188 752 2.67%
Savings 24,563 953 3.88 22,191 876 3.95 21,320 839 3.94
Money market 33,350 1,376 4.13 31,615 1,323 4.18 31,547 1,312 4.16
Time deposits of
$100,000 and over 15,961 864 5.41 9,914 541 5.46 5,643 287 5.09
Other time deposits 110,067 6,312 5.73 94,363 5,489 5.82 83,949 4,460 5.31

Total time deposits 216,106 10,351 4.79 186,058 8,977 4.82 170,647 7,650 4.48
Securities sold under
agreements to
repurchase 18,152 986 5.43 16,512 767 4.65 18,278 937 5.13
Interest-bearing
demand notes to
U.S. Treasury 1,087 53 4.88 760 40 5.26 1,097 62 5.65
Federal Home Loan Bank
advances and other
short-term borrowed
funds 563 38 6.75 -- -- -- -- -- --
Long-term debt 2,981 217 7.28 -- -- -- -- -- --

Total interest-
bearing liabilities 238,889 11,645 4.87 203,330 9,784 4.81 190,022 8,649 4.55

Demand deposits 33,664 31,072 30,992
Other liabilities 2,334 1,826 1,584

Total liabilities 274,887 236,228 222,598
Stockholders'
equity 42,123 39,357 36,677

Total liabilities
and stockholders'
equity $317,010 $275,585 $259,275

Net interest income $12,223 $10,761 $10,336

Net interest margin 4.11% 4.12% 4.21%

/1/ Interest income and yields are presented on a fully taxable equivalent
basis using the Federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments totaled $433,000,
$366,000, and $357,000 for the years ended December 31, 1997, 1996,
and 1995, respectively.
/2/ Nonaccruing loans are included in the average amounts outstanding.
/3/ Includes banker's acceptances and commercial paper.
/4/ Average balances based on amortized cost.

</TABLE>

<PAGE>

The following table presents, on a fully taxable equivalent
basis, an analysis of changes in net interest income resulting
from changes in average volumes of earning assets and interest
bearing liabilities and average rates earned and paid. The
change in interest due to the combined rate/volume variance has
been allocated to rate and volume changes in proportion to the
absolute dollar amounts of change in each.

<TABLE>

(DOLLARS EXPRESSED IN THOUSANDS)

YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
COMPARED TO COMPARED TO
DECEMBER 31, 1996 DECEMBER 31, 1995

TOTAL CHANGE DUE TO TOTAL CHANGE DUE TO
CHANGE VOLUME RATE CHANGE VOLUME RATE
<CAPTION>

<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME ON A FULLY
TAXABLE EQUIVALENT BASIS:
Loans: /1/
Commercial $1,063 1,075 (12) $ 246 446 (200)
Real estate /2/ 1,698 1,782 (84) 809 737 72
Consumer 287 364 (77) 353 178 175
Money market (76) (75) (1) 115 115 --
Investment in
debt and equity
securities:
U.S. Treasury and
U.S. Government
agencies 651 511 140 153 (51) 204
State and
municipal/2/ 255 260 (5) 85 96 (11)
Other (100) (104) 4 (120) (138) 18
Federal funds sold (457) (490) 33 (81) 19 (100)
Interest bearing
deposits in other
financial
institutions 2 2 -- -- 1 (1)

Total interest
income 3,323 3,325 (2) 1,560 1,403 157

Continued on next page

<TABLE\>

<PAGE>

</TABLE>
<TABLE>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
COMPARED TO COMPARED TO
DECEMBER 31, 1996 DECEMBER 31, 1995

TOTAL CHANGE DUE TO TOTAL CHANGE DUE TO
CHANGE VOLUME RATE CHANGE VOLUME RATE

<S> <C> <C> <C> <C> <C> <C>
Interest expense:
NOW accounts 98 110 (12) (4) (6) 2
Savings 77 92 (15) 37 34 3
Money market 53 72 (19) 11 3 8
Time deposits of
$100,000 and over 323 327 (4) 254 232 22
Other time
deposits 823 902 (79) 1,029 583 446
Securities sold
under agreements
to repurchase 219 81 138 (170) (86) (84)
Interest-bearing
demand notes to
U.S. Treasury 13 16 (3) (22) (18) (4)
Federal Home Loan Bank
advances and other
short-term borrowed
funds 38 38 -- -- -- --
Long-term debt 217 217 -- -- -- --

Total interest
expense 1,861 1,855 6 1,135 742 393

Net interest
income on a
fully taxable
equivalent basis $1,462 1,470 (8) $ 425 661 (236)

__________

<TABLE\>

/1/ Nonaccruing loans are included in the average amounts
outstanding.
/2/ Interest income and yields are presented on a fully taxable
equivalent basis using the federal statutory income tax rate
of 34%, net of nondeductible interest expense. Such
adjustments totaled $433,000, $366,000, and $357,000 for the
years ended December 31, 1997, 1996, and 1995, respectively.

LENDING AND CREDIT MANAGEMENT

Interest earned on the loan portfolio is a primary source of
interest income for the Company. Net loans represented 61.0% of
total assets as of December 31, 1997. Total loans net of
unearned income increased steadily from December 31, 1993 through
December 31, 1997 due to a stable local economy and reasonable
interest rates. Growth in volume of installment loans to
individuals historically has depended upon the purchase of
non-recourse contracts from automobile dealers.

Lending activities are conducted pursuant to written loan
policies approved by each Bank's Board of Directors. Larger
credits are reviewed by each Bank's Discount Committee.

<PAGE>

The following table shows the composition of the loan
portfolio by major category and each category as a percentage of
the total portfolio as of the dates indicated.

</TABLE>
<TABLE>

(Dollars expressed in thousands)

<CAPTION> December 31,

1997 1996 1995 1994 1993
Amount % Amount % Amount % Amount % Amount %

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial,
financial
and
agricultural $ 90,543 32.5% $ 40,208 23.2% $ 38,355 24.9% $ 32,912 22.8% $ 24,245 19.3%
Real estate --
construction 33,947 12.2 22,737 13.1 11,740 7.6 11,136 7.8 9,474 7.5
Real estate --
mortgage 110,012 39.5 76,071 43.9 73,029 47.3 68,940 47.8 59,969 47.8
Installment loans
to individuals 44,198 15.8 34,293 19.8 31,215 20.2 31,174 21.6 31,921 25.4

Total loans
net of
unearned
income $278,700 100.0% $173,309 100.0% $154,339 100.0% $144,162 100.0% $125,609 100.0%

<TABLE\>

Loans at December 31, 1997 mature as follows:

<TABLE

(DOLLARS EXPRESSED IN THOUSANDS)

<CAPTION>
OVER ONE YEAR
THROUGH FIVE
YEARS OVER FIVE YEARS
ONE YEAR FIXED FLOATING FIXED FLOATING
OR LESS RATE RATE RATE RATE TOTAL

<S> <C> <C> <C> <C> <C> <C>
Commercial, financial,
and agricultural $ 64,091 21,416 2,190 1,563 1,283 90,543
Real estate -- construction 33,947 -- -- -- -- 33,947
Real estate -- mortgage 37,624 49,815 10,988 11,336 249 110,012
Installment loans to
individuals 14,612 28,614 17 216 739 44,198

Total loans $150,274 99,845 13,195 13,115 2,271 278,700
<TABLE\>

The Company generally does not retain long-term fixed rate
residential mortgage loans in its portfolio. Fixed rate loans
conforming to standards required by the secondary market are
offered to qualified borrowers, but are not funded until the
Company has a non-recourse purchase commitment from the secondary
market at a predetermined price. At December 31, 1997 the
Company was servicing approximately $86,535,000 of loans sold to
the secondary market.

Mortgage loans retained in the Company's portfolio generally
include provisions for rate adjustments at one to three year
intervals. Commercial loans and real estate construction loans
generally have maturities of less than one year. Installment
loans to individuals are primarily fixed rate loans with
maturities from one to five years.

The provision for loan losses is based on management's
evaluation of the loan portfolio in light of national and local
economic conditions, changes in the composition and volume of the
loan portfolio, changes in the volume of past <PAGE> due and nonaccrual
loans, and other relevant factors. The allowance for loan losses
which is reported as a deduction from loans, is available for
loan charge-offs. This allowance is increased by the provision
charged to expense and is reduced by loan charge-offs net of loan
recoveries.

Although loans, net of unearned income, increased by
$18,553,000 during 1994, management decreased the provision in
1994 due to their belief that the quality of the loan portfolio
had improved. The provision was increased in 1995 due primarily
to loan growth, and in 1996 and 1997 due to a combination of loan
growth and increases in net loans charged off.

Management formally reviews all loans in excess of certain
dollar amounts (periodically established) at least annually. In
addition, on a monthly basis, management reviews past due,
"classified", and "watch list" loans in order to classify or
reclassify loans as "loans requiring attention," "substandard,"
"doubtful," or "loss". During that review, management also
determines what loans should be considered to be "impaired".
Management believes, but there can be no assurance, that these
procedures keep management informed of possible problem loans.
Based upon these procedures, both the allowance and provision for
loan losses are adjusted to maintain the allowance at a level
considered adequate by management for estimated losses inherent
in the loan portfolio.

<PAGE>

The following table summarizes loan loss experience for the
periods indicated:

</TABLE>
<TABLE>

(DOLLARS EXPRESSED IN THOUSANDS)

<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996 1995 1994 1993

<S> <C> <C> <C> <C> <C>
Analysis of allowance for loan losses:

Balance beginning
of period $ 2,307 2,179 1,943 1,870 1,842

Allowance for loan losses of Union

State Bank and
Trust of Clinton
at date of
acquisition 1,315 -- -- -- --

Charge-offs:
Commercial, financial,
and agricultural 120 37 7 -- 52
Real estate-construction 230 -- -- 72 --
Real estate-mortgage 17 -- -- -- --
Installment loans
to individuals 373 355 153 259 395

740 392 160 331 447

Recoveries:
Commercial, financial,
and agricultural 11 5 23 128 --
Real estate-construction -- -- -- -- --
Real estate-mortgage 14 -- -- - --
Installment loans
to individuals 142 120 108 137 105

167 125 131 265 105

Net charge-offs 573 267 29 66 342

Provision for loan losses 865 395 265 139 370

Balance at end of period $ 3,914 2,307 2,179 1,943 1,870

Loans outstanding:
Average $200,175 165,270 147,993 136,941 124,124
End of period 278,700 173,309 154,339 144,162 125,609

Ratio of allowance for loan
losses to loans outstanding:

Average 1.96% 1.40 1.47 1.42 1.51
End of period 1.40 1.33 1.41 1.35 1.49

Ratio of net charge-offs
to average loans
outstanding 0.29 0.16 0.02 0.05 0.28

</TABLE>

<PAGE>

<TABLE>

<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996 1995 1994 1993

<S> <C> <C> <C> <C> <C>
Allocation of allowance for
loan losses at end of period:

Commercial, financial, and
agricultural $ 877 827 940 500 505
Real estate-construction 554 253 84 85 45
Real estate-mortgage 1,063 401 354 337 154
Installment loans
to individuals 419 423 215 272 352
Unallocated 1,001 403 586 749 814

Total $ 3,914 2,307 2,179 1,943 1,870

Percent of categories to total loans:

Commercial, financial,
and agricultural 32.5% 23.2 24.9 22.8 19.3
Real estate-construction 12.2 13.1 7.6 7.8 7.5
Real estate-mortgage 39.5 43.9 47.3 47.8 47.8
Installment loans
to individuals 15.8 19.8 20.2 21.6 25.4

Total 100.0% 100.0 100.0 100.0 100.0

</TABLE>

The following table summarizes the Company's nonperforming
assets for the periods indicated:

<TABLE>

(DOLLARS EXPRESSED IN THOUSANDS)

<CAPTION>
DECEMBER 31,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Nonaccrual loans:
Commercial, financial,
and agricultural $111 42 75 49 73
Real estate-construction 385 327 354 385 397
Real estate-mortgage 274 268 272 140 293
Installment loans
to individuals 57 61 20 6 16

Total nonaccrual loans 827 698 721 580 779

</TABLE>

<PAGE>

<TABLE>

December 31,
1997 1996 1995 1994 1993

<S> <C> <C> <C> <C> <C>
Loans contractually past-due 90 days
or more:

Commercial, financial,
and agricultural 48 59 -- 75 70
Real estate-construction -- 122 -- -- --
Real estate-mortgage 112 186 110 43 --
Installment loans
to individuals 30 27 7 8 21

Total loans
contractually
past-due
90 days or more 190 394 117 126 91

Restructured loans 100 -- -- -- --

Total nonperforming
loans 1,117 1,092 838 706 870
Other real estate 295 22 -- 5 5
Repossessions 101 106 70 96 102

Total nonperforming
assets $ 1,513 1,220 908 807 977

Loans, net of
unearned income $278,700 173,309 154,339 144,162 125,609

Allowance for loan
losses to loans 1.40% 1.33 1.41 1.35 1.49
Nonperforming loans
to loans 0.40 0.63 0.54 0.49 0.69
Allowance for loan
losses to
nonperforming loans 350.40 211.26 260.02 275.21 214.94
Nonperforming assets
to loans and
foreclosed assets 0.54 0.70 0.59 0.56 0.78

<TABLE\>

It is the Company's policy to discontinue the accrual of
interest income on loans when the full collection of principal or
interest is in doubt, or when the payment of principal or
interest has become contractually 90 days past due unless the
obligation is both well secured and in the process of collection.
Interest on year-end nonaccrual loans, which would have been
recorded under the original terms of the loans, was approximately
$59,000, $68,000 and $62,000 for the year ended December 31,
1997, 1996, and 1995, respectively. Approximately $16,000,
$22,000 and $19,000 was actually recorded as interest income on
such loans for the year ended December 31, 1997, 1996, and 1995,
respectively.

A loan is considered impaired when it is probable a
creditor will be unable to collect all amounts due - both
principal and interest - according to the contractual terms of
the loan agreement. In addition to nonaccrual loans at December
31, 1997 included in the table above, which were considered
"impaired", management has identified additional loans totaling
approximately $7,135,000 which are not included in the nonaccrual
table above but are considered by management to be "impaired".
Management believes that the loans are well secured and all of
them performed according to their contractual terms during 1997.
The $7,135,000 of loans identified by management as being
"impaired" reflected various commercial, commercial real estate,
real estate, and consumer loans ranging in size from
approximately $8,000 to approximately $2,853,000.

Impairment reserves for the Company's "impaired" loans were
determined based on the fair value of the collateral securing
those loans, or in the case of loans guaranteed by the Small
Business Administration, the amount of that guarantee. At
December 31, 1997 approximately $225,000 of the Company's
allowance for loan losses related to "impaired" loans.

<PAGE>

As of December 31, 1997 and 1996 approximately $2,928,000
and $2,224,000, respectively, of loans not included in the
nonaccrual table above or identified by management as being
"impaired" were classified by management as having potential
credit problems which raised doubts as to the ability of the
borrower to comply with present loan repayment terms. In
addition to the "classified list", the Company also maintains an
internal loan "watch list" of loans which for various reasons,
not all related to credit quality, management is monitoring more
closely than the average loan in the portfolio. Loans may be
added to this list for reasons which are temporary and
correctable, such as the absence of current financial statements
of the borrower, or a deficiency in loan documentation. Other
loans are added as soon as any problem is detected which might
affect the borrower's ability to meet the terms of the loan.
This could be initiated by the delinquency of a scheduled loan
payment, a deterioration in the borrower's financial condition
identified in a review of periodic financial statements, a
decrease in the value of the collateral securing the loan, or a
change in the economic environment within which the borrower
operates. Once a loan is placed on the Company's "watch list",
its condition is monitored closely. Any further deterioration in
the condition of the loan is evaluated to determine if the loan
should be assigned to a higher risk category.

The allowance for loan losses in its entirety is available
to absorb loan losses regardless of the category of loan to be
charged off. However, as a part of management's evaluation of
the adequacy of the allowance for loan losses, an allocation of
the allowance by loan category is made. At December 31, 1997,
management allocated $2,913,000 of the $3,914,000 total allowance
for loan losses to specific loan categories and $1,001,000 was
unallocated. Considering the size of several of the Company's
lending relationships and the loan portfolio in total, management
believes that the December 31, 1997 allowance for loan losses is
adequate.

The Company does not lend funds for the type of transactions
defined as "highly leveraged" by bank regulatory authorities or
for foreign loans. Additionally, the Company does not have any
concentrations of loans exceeding 10% of total loans which are
not otherwise disclosed in the loan portfolio composition table.
The Company does not have any interest-earning assets which would
have been included in nonaccrual, past due, or restructured loans
if such assets were loans.

The following table sets forth the amount of the Company's
outstanding loan and similar commitments, by type, as of the end
of each of the last two fiscal years:

DECEMBER 31,
TYPE OF COMMITMENT 1997 1996

Commercial Loans $21,587,231 $13,215,265

Real Estate Loans 12,497,290 13,883,538

MasterCard/Visa Credit Lines 6,178,600 5,890,661

Other 7,287,373 5,143,564

Total Commitments /1/ $47,550,494 $38,133,028

/1/ Of the commitments shown as outstanding at December 31,
1997, management considers approximately $44,681,000 to be
"firm," and estimates that approximately $30,179,000 will be
exercised in 1998.

Of the commitments shown in the foregoing table $17,215,183
represents fixed-rate loan commitments. The remaining
commitments provide that the interest rates to be charged on
amounts borrowed thereunder will be determined by market
conditions at the time of borrowing.

<PAGE>

INVESTMENT PORTFOLIO

The Company classifies its debt and equity securities into
one of the following two categories:

Held-to-Maturity - includes investments in debt securities
which the Company has the positive intent and ability to hold
until maturity.

Available-for-Sale - includes investments in debt and equity
securities not classified as held to maturity (i.e., investments
which the Company has no present plans to sell in the near-term
but may be sold in the future under different circumstances).

Debt securities classified as held-to-maturity are carried
at amortized cost, while debt and equity securities classified as
available-for-sale are carried at estimated market value.
Unrealized holding gains and losses from available-for-sale
securities are excluded from earnings and reported as a net
amount as a separate component of stockholders' equity until
realized, net of applicable taxes, if any.

The Company does not engage in trading activities and
accordingly does not have any debt or equity securities
classified as trading securities. Historically the Company's
practice had been to purchase and hold debt instruments until
maturity unless special circumstances exist. However, since the
investment portfolio's major function is to provide liquidity and
to balance the Company's interest rate sensitivity position,
certain debt securities along with stock of the Federal Home Loan
Bank and the Federal Reserve Bank are classified as
available-for-sale.

At December 31, 1997 debt securities classified as
held-to-maturity represented 8.4% of total consolidated assets
and debt and equity securities classified as available-for-sale
represented 17.4% of total consolidated assets. Future levels of
held-to-maturity and available-for-sale investment securities can
be expected to vary depending upon liquidity and interest
sensitivity needs as well as other factors.

<PAGE>

The following table presents the composition of the investment portfolio
by major category.

</TABLE>
<TABLE>

(DOLLARS EXPRESSED IN THOUSANDS)
<CAPTION>
DECEMBER 31,

1997 1996 1995

AVAILABLE- HELD-TO- AVAILABLE- HELD-TO- AVAILABLE- HELD-TO-
FOR-SALE MATURITY TOTAL FOR-SALE MATURITY TOTAL FOR-SALE MATURITY TOTAL

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury securities $ 25,892 2,831 28,723 19,025 1,030 20,055 12,083 -- 12,083
U.S. Government agencies
and corporations:
Mortgage-backed 7,261 1,945 9,206 7,140 1,064 8,204 8,560 92 8,652
Other 34,431 14,991 49,422 19,462 13,631 33,093 22,644 6,872 29,516
States and political
subdivisions 9,507 17,767 27,274 4,533 12,289 16,822 4,431 10,615 15,046
Other debt securities -- 200 200 -- 1,585 1,585 -- 2,346 2,346

Total debt securities 77,091 37,734 114,825 50,160 29,599 79,759 47,718 19,925 67,643
Federal Home Loan Bank
stock 1,272 -- 1,272 804 -- 804 804 -- 804
Federal Reserve Bank
stock 60 -- 60 60 -- 60 60 -- 60

Total investments $ 78,423 37,734 116,157 51,024 29,599 80,623 48,582 19,925 68,507

<TABLE\>

As of December 31, 1997, the maturity of debt securities in
the investment portfolio was as follows:

</TABLE>
<TABLE>

(DOLLARS EXPRESSED IN THOUSANDS)

<CAPTION>
OVER ONE OVER FIVE OVER WEIGHTED
ONE YEAR THROUGH THROUGH TEN AVERAGE
OR LESS FIVE YEARS TEN YEARS YEARS YIELD/1/

<S> <C> <C> <C> <C> <C>
AVAILABLE-FOR-SALE
U.S. Treasury securities $ 17,548 8,344 -- -- 5.77%
U.S. Government agencies
and corporations:
Mortgage-backed /2/ 472 2,640 857 3,292 6.42
Other 5,403 25,497 3,531 -- 6.07
Total U.S. Government
agencies 5,875 28,137 4,388 3,292 6.13
States and political
subdivisions /3/ 386 5,489 2,419 1,213 6.84
Total available-for-sale
debt securities $ 23,809 41,970 6,807 4,505 6.10%

Weighted average yield /1/ 5.69% 6.15% 6.78% 6.72%

<TABLE\>

<PAGE>

</TABLE>
<TABLE>

<CAPTION>
OVER ONE OVER FIVE OVER WEIGHTED
ONE YEAR THROUGH THROUGH TEN AVERAGE
OR LESS FIVE YEARS TEN YEARS YEARS YIELD/1/

<S> <C> <C> <C> <C> <C>
HELD-TO-MATURITY
U.S. Treasury securities $ 2,581 250 -- -- 5.43%
U.S. Government agencies
and corporations:
Mortgage-backed /2/ 3 963 979 -- 6.74
Other 3,657 10,567 767 -- 6.01
Total U.S. Government
agencies 3,660 11,530 1,746 -- 6.10
States and political
subdivisions /3/ 1,369 6,340 7,294 2,764 7.62
Other debt securities 200 -- -- -- 6.36

Total held-to-maturity
debt securities $ 7,810 18,120 9,040 2,764 6.76%

Weighted average yield /1/ 5.79% 6.76% 7.34% 7.68%

<TABLE\>

/1/ Weighted average yield is based on amortized cost for both
available-for-sale and held-to-maturity securities.
/2/ Mortgage-backed securities issued by U.S. Government agencies and
corporations have been included using their final maturity. Future
repayment speeds are dependent on and subject to change based on
changing mortgage interest rates.
/3/ Rates on obligations of states and political subdivisions have been
adjusted to fully taxable equivalent rates using the statutory Federal
income tax rate of 34%.

At December 31, 1997 $4,607,000 of debt securities
classified as available-for-sale in the table above had variable
rate provisions with adjustment periods ranging from one to
twelve months.

Interest Sensitivity and Liquidity

The concept of interest sensitivity attempts to gauge
exposure of the Company's net interest income to adverse changes
in market-driven interest rates by measuring the amount of
interest sensitive assets and interest sensitive liabilities
maturing or subject to repricing within a specified time period.
Liquidity represents the ability of the Company to meet the
day-to-day withdrawal demands of its deposit customers balanced
against the fact that those deposits are invested in assets with
varying maturities. The Company must also be prepared to fulfill
the needs of credit customers for loans with various types of
maturities and other financing arrangements. The Company
monitors its interest sensitivity and liquidity through the use
of static gap reports which measure the difference between
assets and liabilities maturing or repricing within specified
time periods.

At December 31, 1997 ENB and USB each independently
monitored their static gap reports with their goals being to
limit each bank's potential change in net interest income due to
changes in interest rates to acceptable limits. Interest rate
changes used by the individual banks ranged from 1.50% to 2.00%
and the resulting net interest income changes ranged from
approximately 1.20% to 3.00%.

The following table presents the Company's consolidated
(including Parent Company debt) static gap position at December
31, 1997 for the next twelve months and the potential impact on
pro forma net interest income for 1997 of an immediate 2.00%
increase in interest rates.

<PAGE>

(DOLLARS EXPRESSED IN THOUSANDS)

CUMULATIVE
ONE THROUGH
TWELVE
MONTH
PERIOD

Assets maturing or repricing within one year $ 213,910

Liabilities maturing or repricing within one year 233,084

GAP (19,174)

Ratio of assets maturing or repricing to
Liabilities maturing or repricing 92%

Impact on net interest income of an immediate
2.00% increase in interest rates $ (383)

Pro forma net interest income for 1997 14,247

Percentage change in pro forma 1997 net interest
income due to an immediate 2.00% increase in
interest rates (2.69)%

In addition to managing interest sensitivity and liquidity
through the use of gap reports, ENB has provided for emergency
liquidity situations with informal agreements with correspondent
banks which permit it to borrow up to $30,000,000 in federal
funds on an unsecured basis and formal agreements to sell and
repurchase securities on which it may draw up to $27,000,000.
Both ENB and USB are members of the Federal Home Loan Bank which
may be used to provide a funding source for fixed rate real
estate loans and/or additional liquidity, and the Company may
borrow up to $10,000,000 under a revolving credit facility with a
correspondent bank.

At December 31, 1997 and 1996, the Company had certificates
and other time deposits in denominations of $100,000 or more
which mature as follows:

(DOLLARS EXPRESSED IN THOUSANDS)
DECEMBER 31,

1997 1996

Three months or less $ 8,076 4,558
Over three months through six months 8,572 4,865
Over six months through twelve months 5,897 4,479
Over twelve months 6,958 1,045
$ 29,503 14,947

<PAGE>

Securities sold under agreements to repurchase generally
mature the next business day; however, certain agreements with
local political subdivisions and select businesses are fixed rate
agreements with original maturities generally ranging from 30 to
120 days. Information relating to securities sold under
agreements to repurchase is as follows:

</TABLE>
<TABLE>

(Dollars expressed in thousands)

<CAPTION>
At End of Period For the Period
Ending

Weighted Weighted
Average Maximum Average
Interest Month-end Average Interest
Balance Rate Balance Balance Rate

<S> <C> <C> <C> <C> <C>
December 31,
1997 $21,494 6.39% $22,409 $18,152 5.43%
December 31,
1996 12,303 4.51 25,167 16,512 4.65
December 31,
1995 10,138 4.40 29,590 18,278 5.13

<TABLE\>

CAPITAL

Risk-based capital guidelines for financial institutions
were adopted by regulatory authorities effective January 1, 1991.
These guidelines are designed to relate regulatory capital
requirements to the risk profiles of the specific institutions
and to provide more uniform requirements among the various
regulators. The Company is required to maintain a minimum
risk-based capital to risk-weighted assets ratio of 8.00%, with
at least 4.00% being "Tier 1" capital. In addition, a minimum
leverage ratio, Tier 1 capital to adjusted total assets, of 3.00%
must be maintained. However, for all but the most highly rated
financial institutions, a leverage ratio of 3.00% plus an
additional cushion of 100 to 200 basis points is expected.

Detail concerning the Company's capital ratios at December
31, 1997 is included in note 3 of the Company's consolidated
financial statements included elsewhere in this report.

EFFECTS OF INFLATION

The effects of inflation on financial institutions are
different from the effects on other commercial enterprises since
financial institutions make few significant capital or inventory
expenditures which are directly affected by changing prices.
Because bank assets and liabilities are virtually all monetary in
nature, inflation does not affect a financial institution as much
as do changes in interest rates. The general level of inflation
does underlie the general level of most interest rates, but
interest rates do not increase at the rate of inflation as do
prices of goods and services. Rather, interest rates react more
to changes in the expected rate of inflation and to changes in
monetary and fiscal policy.

Inflation does have an impact on the growth of total assets
in the banking industry, often resulting in a need to increase
capital at higher than normal rates to maintain an appropriate
capital to asset ratio. In the opinion of management, inflation
did not have a significant effect on the Company's operations for
the three years ended December 31, 1997.

FINANCIAL INSTRUMENT MARKET VALUES

As disclosed in note 15 of the Company's consolidated
financial statements, the market values of financial instrument
assets and liabilities included in the balance sheet as of
December 31, 1997 reflect fair values of approximately $3,749,081
and $628,116, respectively, higher than the amounts recorded on
the consolidated balance sheet. Such increases reflect the
effects of a decreasing rate environment, the effects of which
are partially offset by the effectiveness of the Company's
asset/liability and credit risk management programs.

<PAGE>

YEAR 2000 COMPLIANCE

Each Bank's Year 2000 committee has developed and
presented to its respective Board of Directors its action plan
for Year 2000 compliance with the objective of insuring that all
computerized systems and software programs are capable of
functioning in the next century. The Company does not expect
that the cost of its Year 2000 compliance will be material to
its business, financial condition, or results of operations.
Significant expenditures in information systems, i.e.
enterprise server (mainframe computer) and teller systems
were anticipated as a normal expense item in the 1998 budget
year, regardless of the Year 2000 issue. Management believes
that they will achieve full compliance with respect to "core"
processing in late 1998, with lower priority items achieving
compliance during 1999. Management does not anticipate any
material disruption in operations as the result of any
failure by the Company to be in compliance.

CONSOLIDATED FINANCIAL STATEMENTS

The following consolidated financial statements of the
Company and reports of the Company's independent auditors appear
on the pages indicated.

Page

Independent Auditors' Report. 26

Consolidated Balance Sheets as of December 31, 1997 and
1996. 27

Consolidated Statements of Income for each of the years
ended December 31, 1997, 1996, and 1995. 28

Consolidated Statements of Stockholders' Equity for
each of the years ended December 31, 1997, 1996, and
1995. 29

Consolidated Statements of Cash Flows for each of the
years ended December 31, 1997, 1996, and 1995. 30

Notes to Consolidated Financial Statements. 31

<PAGE>

EXCHANGE NATIONAL BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Financial Statements

December 31, 1997, 1996, and 1995

(With Independent Auditors' Report Thereon)

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Exchange National Bancshares, Inc.
Jefferson City, Missouri:

We have audited the accompanying consolidated balance sheets of
Exchange National Bancshares, Inc. and subsidiaries (the Company)
as of December 31, 1997 and 1996, and the related consolidated
statements of income, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31,
1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated 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 Exchange National Bancshares, Inc. and subsidiaries
as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 1997, in conformity with
generally accepted accounting principles.

St. Louis, Missouri
February 6, 1998

<PAGE>

EXCHANGE NATIONAL BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 1997 and 1996

Assets 1997 1996

Loans, net of allowance for loan losses of
$3,914,383 and $2,307,068 at December 31,
1997 and 1996, respectively $274,785,516 171,001,657
Investment in debt and equity securities:
Available-for-sale, at estimated
market value 78,423,285 51,023,834
Held-to-maturity, at cost, estimated
market value of $38,046,500 and
$29,659,353 at December 31, 1997
and 1996, respectively 37,733,903 29,599,537
Total investment in debt and
equity securities 116,157,188 80,623,371
Federal funds sold 17,175,000 13,500,000
Cash and due from banks 17,177,050 11,671,641
Premises and equipment 8,654,712 3,341,650
Accrued interest receivable 4,067,232 2,543,421
Deferred tax asset -- 649,306
Intangible assets 11,508,482 53,335
Other assets 1,167,014 695,054
$450,692,194 284,079,435

Liabilities and Stockholders' Equity

Deposits:
Demand $ 50,139,102 32,834,946
NOW 53,766,106 27,742,102
Savings 33,675,913 22,736,453
Money market 37,326,945 31,308,333
Time deposits $100,000 and over 29,502,946 14,946,762
Other time deposits 155,975,783 98,455,176
Total deposits 360,386,795 228,023,772
Securities sold under agreements to
repurchase 21,493,587 12,303,391
Interest-bearing demand notes to
U.S. Treasury 3,663,581 1,034,432
Other borrowed money 17,603,568 --
Accrued interest payable 2,410,635 1,008,681
Deferred tax liability 289,340 --
Other liabilities 1,737,086 1,027,857
Total liabilities 407,584,592 243,398,133

Commitments and contingent liabilities

Stockholders' equity:
Common stock $1 par value;
1,500,000 shares authorized,
718,511 shares issued and outstanding 718,511 718,511
Surplus 1,281,489 1,281,489
Retained earnings 40,986,755 38,696,973
Unrealized holding gains (losses) on debt and
equity securities available-for-sale,
net of tax 120,847 (15,671)
Total stockholders' equity 43,107,602 40,681,302
$450,692,194 284,079,435

See accompanying notes to consolidated financial statements.

<PAGE>

EXCHANGE NATIONAL BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Income

Years ended December 31, 1997, 1996, and 1995

1997 1996 1995
Interest income:
Interest and fees on loans $17,707,139 14,728,837 13,197,335
Interest and dividends on debt
and equity securities:
U.S. Treasury securities 1,214,299 957,326 738,869
Securities of U.S. government
agencies 2,831,231 2,437,734 2,503,053
Obligations of states and
political subdivisions 1,072,331 890,505 824,046
Other securities 105,273 205,192 325,112
Interest on federal funds sold 501,140 957,598 1,039,309
Interest on time deposits with
other banks 3,307 1,323 740
23,434,720 20,178,515 18,628,464
Interest expense:
Interest on:
NOW accounts 846,274 747,952 752,286
Savings accounts 952,494 876,239 838,394
Money market accounts 1,376,048 1,322,543 1,312,169
Time deposit accounts $100,000
and over 864,126 540,455 287,194
Other time deposit accounts 6,311,606 5,489,355 4,460,013
Securities sold under
agreements to repurchase 985,848 767,154 937,020
Interest-bearing demand notes
to U.S. Treasury 52,611 39,856 62,327
Other borrowed money 255,698 -- --
11,644,705 9,783,554 8,649,403
Net interest income 11,790,015 10,394,961 9,979,061
Provision for loan losses 865,000 395,000 265,000
Net interest income after
provision for loan
losses 10,925,015 9,999,961 9,714,061
Noninterest income:
Service charges on deposit
accounts 765,186 701,378 666,252
Trust department income 290,853 286,317 229,524
Mortgage loan servicing fees 322,697 297,273 266,625
Gain on sales of mortgage loans 142,491 112,403 128,925
Gain (loss) on sales and
calls of debt securities (7,041) -- 4,502
Credit card fees 290,514 345,339 309,428
Other 233,707 147,476 143,755
2,038,407 1,890,186 1,749,011
Noninterest expense:
Salaries and employee benefits 3,786,773 3,368,169 3,083,036
Occupancy expense, net 359,261 295,521 311,631
Furniture and equipment expense 571,800 441,587 448,345
FDIC insurance assessment 34,881 2,000 234,366
Advertising and promotion 358,482 347,550 277,231
Credit card expenses 244,513 299,033 271,862
Amortization of intangible
assets 178,590 42,668 42,668
Other 1,730,986 1,389,028 1,333,247
7,265,286 6,185,556 6,002,386
Income before income taxes 5,698,136 5,704,591 5,460,686
Income taxes 1,842,000 1,862,000 1,772,000
Net income $ 3,856,136 3,842,591 3,688,686

Basic earnings per share $ 5.37 5.35 5.13

See accompanying notes to consolidated financial statements.

<PAGE>

EXCHANGE NATIONAL BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

Years ended December 31, 1997, 1996, and 1995

Unrealized
holding gains
(losses) on
debt and equity
securities Total
available- stock-
Common Retained for-sale, holders'
stock Surplus earnings net of tax equity

Balance,
December 31,
1994 $718,511 1,281,489 33,730,780 (1,065,769) 34,665,011

Net income -- -- 3,688,686 -- 3,688,686

Cash dividends
declared, $1.67
per share -- -- (1,199,913) -- (1,199,913)

Change in
unrealized
holding gains
(losses) on debt
and equity
securities
available-
for-sale,
net of tax -- -- -- 1,201,402 1,201,402

Balance,
December 31,
1995 718,511 1,281,489 36,219,553 135,633 38,355,186

Net income -- -- 3,842,591 -- 3,842,591

Cash
dividends
declared,
$1.90
per share -- -- (1,365,171) -- (1,365,171)

Change in
unrealized
holding
gains (losses)
on debt and
equity
securities
available-
for-sale,
net of tax -- -- -- (151,304) (151,304)

Balance,
December 31,
1996 718,511 1,281,489 38,696,973 (15,671) 40,681,302

Net income -- -- 3,856,136 -- 3,856,136

Cash
dividends
declared,
$2.18
per share -- -- (1,566,354) -- (1,566,354)

Change in
unrealized
holding
gains (losses)
on debt and
equity
securities
available-
for-sale,
net of tax -- -- -- 136,518 136,518

Balance,
December 31,
1997 $718,511 1,281,489 40,986,755 120,847 43,107,602

See accompanying notes to consolidated financial statements.

<PAGE>

EXCHANGE NATIONAL BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 1997, 1996, and 1995

1997 1996 1995
Cash flows from operating activities:
Net income $3,856,136 3,842,591 3,688,686
Adjustments to reconcile net
income to net cash provided by
operating activities:
Provision for loan losses 865,000 395,000 265,000
Depreciation expense 363,839 303,679 333,791
Net amortization of debt
securities premiums and
discounts 120,676 121,242 253,980
Amortization of intangible
assets 178,590 42,668 42,668
Federal Home Loan Bank
stock dividend -- -- (15,800)
Increase in accrued interest
receivable (11,888) (215,798) (134,315)
(Increase) decrease in other
assets (478,763) 406,152 (437,264)
Increase in accrued
interest payable 320,584 98,316 225,151
Increase (decrease) in
other liabilities (114,391) 184,326 (48,009)
(Gain) loss on sales and
calls of debt securities 7,041 -- (4,502)
Other, net (36,816) (107,643) (181,391)
Origination of mortgage
loans for sale (24,147,802) (21,435,514) (19,652,424)
Proceeds from the sale of
mortgage loans 24,147,802 21,435,514 19,652,424
Net cash provided by
operating activities 5,070,008 5,070,533 3,987,995

Cash flows from investing activities:
Net increase in loans (32,236,191)(20,838,529) (10,882,462)
Purchases of debt securities:
Available-for-sale (17,463,713)(43,984,364) (14,467,927)
Held-to-maturity (7,406,950)(16,371,850) (35,644,113)
Proceeds from maturities of
debt securities:
Available-for-sale 13,770,449 39,724,343 14,504,340
Held-to-maturity 4,290,105 6,453,990 41,570,580
Proceeds from calls of debt
securities:
Available-for-sale 3,245,000 1,500,000 3,000,000
Held-to-maturity 2,200,000 200,000 4,085,200
Proceeds from sales of debt securities:
Available-for-sale 5,072,832 -- --
Held-to-maturity 350,000 -- --
Purchase of Union State
Bancshares, Inc., net of cash
and cash equivalents
acquired (4,888,677) -- --
Purchases of premises and
equipment (3,221,793) (1,073,284) (247,515)
Proceeds from sales of
premises and equipment 41,500 7,547 19,613
Proceeds from sales of other
real estate owned and
repossessions 1,690,056 1,617,438 776,815
Net cash provided by (used in)
investing activities (34,557,382) (32,764,709) 2,714,531
Cash flows from financing activities:
Net increase (decrease) in
demand deposits 4,324,323 801,378 (5,160,686)
Net increase (decrease) in
interest-bearing transaction
accounts 2,907,255 4,102,103 (7,420,234)
Net increase in time deposits 6,636,535 16,304,978 12,374,736
Net increase (decrease) in
securities sold under
agreements to repurchase 9,190,196 2,165,522 (8,662,641)
Net increase (decrease) in
interest-bearing demand
notes to U.S. Treasury 2,629,149 756,420 (496,778)
Proceeds from bank debt 8,507,932 -- --
Proceeds from notes payable 11,995,636 -- --
Repayment of bank debt (6,000,000) -- --
Cash dividends paid (1,523,243) (1,322,060) (1,163,988)
Net cash provided by
(used in) financing
activities 38,667,783 22,808,341 (10,529,591)
Net increase (decrease) in
cash and cash equivalents 9,180,409 (4,885,835) (3,827,065)
Cash and cash equivalents,
beginning of year 25,171,641 30,057,476 33,884,541
Cash and cash equivalents,
end of year $34,352,050 25,171,641 30,057,476
Supplemental disclosure of
cash flow information:
Cash paid during the year for:
Interest $11,324,121 9,685,238 8,424,252
Income taxes 2,184,243 1,839,138 1,995,000
Supplemental schedule of noncash
investing activities:
Other real estate and
repossessions acquired in
settlement of loans 1,961,610 1,675,520 737,497

See accompanying notes to consolidated financial statements.

<PAGE>

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Exchange National Bancshares, Inc. (the Company) provides a
full range of banking services to individual and corporate
customers through The Exchange National Bank of Jefferson
City and Union State Bank and Trust of Clinton (the Banks)
located within the communities surrounding Jefferson City
and Clinton, Missouri. The Banks are subject to competition
from other financial and nonfinancial institutions providing
financial products. Additionally, the Company and its
subsidiaries are subject to the regulations of certain
regulatory agencies and undergo periodic examinations by
those regulatory agencies.

The consolidated financial statements of the Company have
been prepared in conformity with generally accepted
accounting principles and conform to predominant practices
within the banking industry. The preparation of the
consolidated financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions, including the
determination of the allowance for loan losses and the
valuation of real estate acquired in connection with
foreclosure or in satisfaction of loans, that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

The significant accounting policies used by the Company in
the preparation of the consolidated financial statements are
summarized below:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts
of the Company, The Exchange National Bank of Jefferson
City, Union State Bancshares, Inc. (USB), and its wholly
owned subsidiary, Union State Bank and Trust of Clinton.
All significant intercompany accounts and transactions have
been eliminated.

LOANS

Loans are stated at face amount less unearned income and the
allowance for loan losses. Income on loans is accrued on a
simple-interest basis.

Loans are placed on nonaccrual status when management
believes that the borrower's financial condition, after
consideration of business conditions and collection efforts,
is such that collection of interest is doubtful. Interest
accrued in the current year is reversed against interest
income, and prior years' interest is charged to the
allowance for loan losses. A loan remains on nonaccrual
status until the loan is current as to payment of both
principal and interest and/or the borrower demonstrates the
ability to pay and remain current.

<PAGE>

Loan origination fees and costs are deferred and recognized
over the life of the loan as an adjustment to yield.

The Exchange National Bank of Jefferson City originates
certain loans which are sold in the secondary mortgage
market to the Federal Home Loan Mortgage Corporation
(Freddie Mac). These long-term, fixed-rate loans are sold
on a note-by-note basis. Immediately upon locking in an
interest rate, the Company enters into an agreement to sell
the mortgage loan to Freddie Mac without recourse. The
Company allocates the entire cost of loans originated to the
mortgage loans, with no cost being allocated to the mortgage
servicing rights. At December 31, 1997 and 1996, no
mortgage loans were held for sale. Mortgage loan servicing
fees earned on loans sold to Freddie Mac are reported as
income when the related loan payments are collected.
Operational costs to service such loans are charged to
expense as incurred.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is increased by provisions
charged to expense and is reduced by loan charge-offs, net
of recoveries. Management utilizes a systematic, documented
approach in determining the appropriate level of the
allowance for loan losses. Management's approach, which
provides for general and specific valuation allowances, is
based on current economic conditions, past losses,
collection experience, risk characteristics of the
portfolio, assessment of collateral values by obtaining
independent appraisals for significant properties, and such
other factors which, in management's judgment, deserve
current recognition in estimating loan losses.

Management believes the allowance for loan losses is
adequate to absorb possible losses in the loan portfolio.
While management uses available information to recognize
loan losses, future additions to the allowance may be
necessary based on changes in economic conditions. In
addition, various regulatory agencies, as an integral part
of their examination process, periodically review the
allowance for loan losses. Such agencies may require the
Banks to increase the allowance for loan losses based on
their judgment about information available to them at the
time of their examination.

A loan is considered impaired when it is probable a creditor
will be unable to collect all amounts due, both principal
and interest, according to the contractual terms of the loan
agreement.

INVESTMENT IN DEBT AND EQUITY SECURITIES

At the time of purchase, debt securities are classified into
one of two categories: available-for-sale or
held-to-maturity. Held-to-maturity securities are those
securities which the Company has the ability and intent to
hold until maturity. All equity securities, and debt
securities not classified as held-to-maturity, are
classified as available-for-sale.

<PAGE>

Available-for-sale securities are recorded at fair value.
Held-to-maturity securities are recorded at amortized cost,
adjusted for the amortization of premiums or discounts.
Unrealized gains and losses, net of the related tax effect,
on available-for-sale securities are excluded from earnings
and reported as a separate component of stockholders' equity
until realized.

Premiums and discounts are amortized over the lives of the
respective securities, with consideration of historical and
estimated prepayment rates for mortgage-backed securities,
as an adjustment to yield, using the interest method.
Dividend and interest income are recognized when earned.
Realized gains and losses for securities classified as
available-for-sale are included in earnings based on the
specific identification method for determining the cost of
securities sold.

A decline in the market value of any available-for-sale or
held-to-maturity security below cost that is deemed other
than temporary results in a charge to earnings and the
establishment of a new cost basis for the security.

The Banks, as members of the Federal Home Loan Bank System
administered by the Federal Housing Finance Board, are
required to maintain an investment in the capital stock of
the Federal Home Loan Bank (FHLB) in an amount equal to the
greater of 1% of each bank's total mortgage-related assets
at the beginning of each year, 0.3% of each bank's total
assets at the beginning of each year, or 5% of advances from
the FHLB to each bank. Additionally, The Exchange National
Bank of Jefferson City is required to maintain an investment
in the capital stock of the Federal Reserve Bank. These
investments are recorded at cost which represents redemption
value.

PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less accumulated
depreciation. Depreciation applicable to buildings and
improvements and furniture and equipment is charged to
expense using straight-line and accelerated methods over the
estimated useful lives of the assets. Such lives are
estimated to be 5 to 55 years for buildings and improvements
and 3 to 15 years for furniture and equipment. Maintenance
and repairs are charged to expense as incurred.

INTANGIBLE ASSETS

The excess of cost over the fair value of net assets
acquired in the acquisition of Union State Bancshares, Inc.
is being amortized using the straight-line method over an
estimated life of 25_years. The core deposit intangible
established in the acquisition is being amortized over a
10-year period on an accelerated method of amortization.
Other intangible assets are amortized over periods up to six
years.

Periodically, the Company reviews its intangible assets for
events or changes in circumstances that may indicate that
the carrying amount of the assets may not be recoverable.

<PAGE>

OTHER REAL ESTATE

Other real estate, included in other assets in the
accompanying consolidated balance sheets, is recorded at
fair value. If the fair value of other real estate declines
subsequent to foreclosure, the difference is recorded as a
valuation allowance through a charge to expense. Subsequent
increases in fair value are recorded through a reversal of
the valuation allowance. Expenses incurred in maintaining
the properties are charged to expense.

INCOME TAXES

The Company and its subsidiaries file a consolidated federal
income tax return.

Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in
which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.

TRUST DEPARTMENT

Property held by the Banks in fiduciary or agency capacities
for customers is not included in the accompanying
consolidated balance sheets, since such items are not assets
of the Company. Trust department income is recognized on
the accrual basis.

EARNINGS PER SHARE

The Company adopted the provisions of Statement of Financial
Accounting Standards No. 128, Earnings Per Share, on
December 31, 1997. Due to the fact the Company has no
dilutive instruments, basic earnings per share and dilutive
earnings per share are equal. Earnings per share is
computed by dividing net income by 718,511, the weighted
average number of common shares outstanding during 1997,
1996, and 1995.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the purpose of the consolidated statements of cash
flows, cash and cash equivalents consist of federal funds
sold, cash, and due from banks.

RECLASSIFICATIONS

Certain amounts in the 1996 and 1995 consolidated financial
statements have been reclassified to conform with the 1997
presentation. Such reclassifications have no effect on
previously reported net income.

<PAGE>

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income (SFAS 130), which
establishes standards for reporting and display of
comprehensive income and its components in a full set of
general-purpose financial statements. SFAS 130 is
applicable to all entities that provide a full set of
financial statements consisting of a statement of financial
position, results of operations, and cash flows. SFAS 130
is effective for both interim and annual periods beginning
after December 15, 1997. Earlier application is permitted.
The Company does not believe the adoption of SFAS 130 will
have a material effect on its financial condition or results
of operations.

In February 1998, the FASB issued Statement of Financial
Accounting Standards No. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits (SFAS 132), which
revises employers' disclosures about pension and other
postretirement benefit plans. SFAS 132 does not change the
measurement or recognition of those plans and is effective
for fiscal years beginning after December 15, 1997. The
Company will present the revised information in its December
31, 1998 consolidated financial statements. The adoption of
SFAS 132 is not expected to have a material impact on the
Company's consolidated financial statements.

(2) ACQUISITION OF UNION STATE BANCSHARES, INC.

On November 3, 1997, the Company acquired 100% of the
outstanding shares of common stock of USB, a one-bank
holding company located in Clinton, Missouri. At the date
of acquisition, USB had consolidated total assets and
deposits of $144.0 million and $118.5 million, respectively.
The transaction had a total value of approximately $21.0
million, and was accounted for under the purchase method of
accounting. Accordingly, the results of operations of USB
have been included in the consolidated financial statements
of the Company since acquisition. Under this method of
accounting, the purchase price is allocated to the
respective assets acquired and liabilities assumed based on
their estimated fair values, net of applicable income tax
effects. Intangible assets of approximately $11.6 million,
including $8.8 million and $2.0 million of excess of cost
over fair value of net assets acquired and core deposit
intangibles, respectively, were created in this transaction.

A summary of unaudited pro forma combined financial
information for the years ended December 31, 1997 and 1996
for the Company and USB as if the transaction had occurred
on January 1, 1996 is as follows:

1997 1996

Net interest income $14,247,000 12,988,000
Net income 4,065,000 3,376,000
Earnings per share 5.66 4.70

<PAGE>

(3) CAPITAL REQUIREMENTS

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

Quantitative measures established by regulations to ensure
capital adequacy require the Company and its subsidiaries to
maintain minimum amounts and ratios (set forth in the
following table) of total and Tier I capital (as defined in
the regulations) to risk-weighted assets (as defined), and
of Tier I capital to adjusted average assets (as defined).
Management believes, as of December 31, 1997, the Company
and its subsidiaries meet all capital adequacy requirements
to which they are subject.

The Banks are also subject to the regulatory framework for
prompt corrective action. The Exchange National Bank of
Jefferson City's most recent notification from the Office of
the Comptroller of the Currency, dated April 28, 1997, and
Union State Bank and Trust of Clinton's most recent
notification from the Federal Deposit Insurance Corporation,
dated May 30, 1997, categorized them as well capitalized
under the regulatory framework for prompt corrective action.
To be categorized as well capitalized, the Banks must
maintain minimum total risk-based, Tier I risk-based, and
Tier I leverage ratios as set forth in the table. There are
no conditions or events since the notifications that
management believes have changed the Banks' categories.

<PAGE>

The actual and required capital amounts and ratios for the
Company and its subsidiaries as of December 31, 1997 and
1996 are as follows (dollars in thousands):

To be
well
capitalized
under
corrective
Capital action
Actual requirements provisions
Amount Ratio Amount Ratio Amount Ratio
1997

Total capital
(to risk-
weighted assets):
Company $35,062 12.25% $ 22,904 8.00% $ -- -- %
USB 10,818 14.96 5,784 8.00 -- --
Exchange
National
Bank 38,523 17.90 17,220 8.00 21,525 10.00
Union State
Bank and
Trust 10,824 14.85 5,830 8.00 7,287 10.00

Tier I capital
(to risk-
weighted assets):
Company $31,479 11.00% $ 11,452 4.00% $ -- -- %
USB 9,909 13.70 2,892 4.00 -- --
Exchange
National
Bank 35,934 16.69 8,610 4.00 12,915 6.00
Union State
Bank and
Trust 9,908 13.60 2,915 4.00 4,372 6.00

Tier I capital
(to adjusted
average assets):
Company $31,479 8.14% $ 11,603 3.00% $ -- -- %
USB 9,909 11.59 2,564 3.00 -- --
Exchange
National
Bank 35,934 11.88 9,074 3.00 15,124 5.00
Union
State
Bank and
Trust 9,908 7.65 3,885 3.00 6,476 5.00

1996
Total capital
(to risk-
weighted assets):
Company $42,951 23.14% $ 14,851 8.00% $ -- -- %
Exchange
National
Bank 42,872 23.01 14,904 8.00 18,629 10.00

Tier I capital
(to risk-
weighted assets):
Company $40,644 21.89% $ 7,426 4.00% $ -- -- %
Exchange
National
Bank 40,565 21.77 7,452 4.00 11,178 6.00

Tier I capital
(to adjusted
average assets):
Company $40,644 14.45% $ 8,439 3.00% $ -- -- %
Exchange
National
Bank 40,565 14.42 8,438 3.00 14,064 5.00

Bank dividends are the principal source of funds for payment
of dividends by the Company to its stockholders. The Banks
are subject to regulations which require the maintenance of

<PAGE>

minimum capital requirements. At December 31, 1997,
unappropriated retained earnings of $597,111 were available
for the declaration of dividends to the Company without
prior approval from regulatory authorities.

(4) LOANS

A summary of loans, by classification, at December 31, 1997
and 1996 is as follows:

1997 1996

Real estate $143,958,844 98,807,524
Commercial 90,543,151 40,208,276
Installment and other consumer 44,197,904 34,292,925
278,699,899 173,308,725
Less allowance for loan losses 3,914,383 2,307,068
$274,785,516 171,001,657

The Banks grant real estate, commercial, and installment and
other consumer loans to customers located within the
communities surrounding Jefferson City and Clinton,
Missouri. As such, the Banks are susceptible to changes in
the economic environment in these communities. The Banks do
not have a concentration of credit in any one economic
sector. Installment and other consumer loans consist
primarily of the financing of vehicles.

Following is a summary of activity in 1997 of loans made by
the Banks to executive officers and directors or to entities
in which such individuals had a beneficial interest. Such
loans were made in the normal course of business on
substantially the same terms, including interest rates and
collateral requirements, as those prevailing at the same
time for comparable transactions with other persons, and did
not involve more than the normal risk of collectibility or
present unfavorable features.

Balance at December 31, 1996 $4,671,951
New loans 3,181,183
Payments received (281,827)
Changes in executive officers and directors 407,215
Balance at December 31, 1997 $7,978,522

Loans serviced for others totaled approximately $91,221,000
and $79,455,000 at December 31, 1997 and 1996, respectively.

<PAGE>

Changes in the allowance for loan losses for 1997, 1996, and
1995 are as follows:

1997 1996 1995

Balance, beginning of year $2,307,068 2,179,009 1,943,325
Allowance for loan losses of
Union State Bank and Trust of
Clinton at date of acquisition 1,314,817 -- --
Provision charged to expense 865,000 395,000 265,000
Charge-offs (740,195) (391,813) (160,384)
Recoveries of loans previously
charged off 167,693 124,872 131,068
Balance, end of year $3,914,383 2,307,068 2,179,009

A summary of nonaccrual and other impaired loans at December
31, 1997 and 1996 is as follows:

1997 1996

Nonaccrual loans $ 827,145 698,348
Impaired loans continuing to
accrue interest 7,134,397 4,332,307
Total impaired loans $ 7,961,542 5,030,655

Allowance for loan losses on
impaired loans $ 224,949 277,149
Impaired loans with no
related allowance for
loan losses $ 7,018,672 4,191,925

The average balance of impaired loans during 1997, 1996, and
1995 was $5,852,000, $2,995,000, and $1,120,000,
respectively.

A summary of interest income on nonaccrual and other
impaired loans for 1997, 1996, and 1995 is as follows:

Impaired loans
Nonaccrual continuing to
loans accrue interest Total

1997:
Income recognized $16,196 677,422 693,618
Interest income had
interest accrued 59,080 677,422 736,502

1996:
Income recognized $22,123 380,539 402,662
Interest income had
interest accrued 68,477 380,539 449,016

1995:
Income recognized $18,984 39,417 58,401
Interest income had
interest accrued 61,921 39,417 101,338

<PAGE>

(5) INVESTMENT IN DEBT AND EQUITY SECURITIES

The amortized cost and estimated market values of debt and
equity securities classified as available-for-sale at
December 31, 1997 and 1996 are as follows:

1997

Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value

U.S. Treasury
securities $25,838,457 60,692 6,946 25,892,203
Securities of
U.S. government
agencies 41,639,559 104,333 51,957 41,691,935
Obligations of
states and
political
subdivisions 9,421,749 94,104 8,406 9,507,447
Total debt
securities 76,899,765 259,129 67,309 77,091,585
Federal Home
Loan Bank stock 1,271,700 -- -- 1,271,700
Federal Reserve
Bank stock 60,000 -- -- 60,000
$78,231,465 259,129 67,309 78,423,285

1996

Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value

U.S. Treasury
securities $18,982,950 73,866 31,896 19,024,920
Securities of
U.S. government
agencies 26,698,935 65,757 163,168 26,601,524
Obligations of
states and
political
subdivisions 4,502,624 41,193 10,627 4,533,190
Total debt
securities 50,184,509 180,816 205,691 50,159,634
Federal Home
Loan Bank stock 804,200 -- -- 804,200
Federal Reserve
Bank stock 60,000 -- -- 60,000
$51,048,709 180,816 205,691 51,023,834

<PAGE>

The amortized cost and estimated market value of debt
securities classified as available-for-sale at December 31,
1997 and 1996, by contractual maturity or call date, are
shown below. Expected maturities may differ from
contractual maturities because borrowers have the right to
prepay obligations with or without prepayment penalties.

1997 1996

Estimated Estimated
Amortized market Amortized market
cost value cost value

Due in one
year or less $23,320,357 23,336,575 9,818,069 9,845,440

Due after
one year through
five years 39,173,857 39,330,012 33,197,749 33,174,099

Due after
five years
through ten
years 5,910,985 5,951,169 -- --

Due after
ten years 1,211,911 1,213,113 -- --
69,617,110 69,830,869 43,015,818 43,019,539
Mortgage-
backed
securities 7,282,655 7,260,716 7,168,691 7,140,095
$76,899,765 77,091,585 50,184,509 50,159,634

The amortized cost and estimated market values of debt
securities classified as held-to-maturity at December 31,
1997 and 1996 are as follows:

1997

Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value

U.S. Treasury
securities $ 2,830,699 1,322 35 2,831,986
Securities of
U.S.
government
agencies 16,936,362 69,288 8,025 16,997,625
Obligations of
states and
political
subdivisions 17,766,842 298,860 49,393 18,016,309
Other debt
securities 200,000 580 -- 200,580
$37,733,903 370,050 57,453 38,046,500

1996

Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value

U.S. Treasury
securities $ 1,030,000 319 -- 1,030,319
Securities of
U.S.
government
agencies 14,695,324 40,114 76,448 14,658,990
Obligations of
states and
political
subdivisions 12,288,884 159,862 71,148 12,377,598
Other debt
securities 1,585,329 7,322 205 1,592,446
$29,599,537 207,617 147,801 29,659,353

<PAGE>

The amortized cost and estimated market value of debt securities
classified as held-to-maturity at December 31, 1997 and 1996, by
contractual maturity or call date, are shown below. Expected
maturities may differ from contractual maturities because
borrowers have the right to prepay obligations with or without
prepayment penalties.

1997 1996

Estimated Estimated
Amortized market Amortized market
cost value cost value

Due in one
year or less $7,807,018 7,806,453 3,508,941 3,510,389

Due after
one year
through
five years 17,156,855 17,279,359 16,170,528 16,215,072

Due after
five years
through
ten years 8,060,878 8,230,178 6,793,888 6,800,457

Due after
ten years 2,763,737 2,780,164 2,061,469 2,076,323
35,788,488 36,096,154 28,534,826 28,602,241
Mortgage-
backed
securities 1,945,415 1,950,346 1,064,711 1,057,112
$37,733,903 38,046,500 29,599,537 29,659,353

Interest and dividends on debt and equity securities that is
exempt from federal income taxes was $1,067,883, $890,505,
and $824,046 for 1997, 1996, and 1995, respectively.

Debt securities with carrying values aggregating
approximately $63,956,000 and $40,204,000 at December 31,
1997 and 1996, respectively, were pledged to secure public
funds, securities sold under agreements to repurchase, and
for other purposes as required or permitted by law.

Gross losses on the calls of debt securities classified as
available-for-sale were $3,657 in 1997. Gross gains of
$4,150 and gross losses of $7,534 were recorded on the sales
of debt securities classified as available-for-sale in 1997.
No gain or loss resulted from the sale of a debt security
classified as held-to-maturity in 1997. That security was
inadvertently sold due to confusion about its
classification, resulting from the conversion of the
investment accounting system. Gross gains on the calls of
debt securities classified as held-to-maturity were $4,502
in 1995. No debt securities were sold during 1996 or 1995.

<PAGE>

(6) PREMISES AND EQUIPMENT

A summary of premises and equipment at December 31, 1997 and
1996 is as follows:

1997 1996

Land $ 2,288,631 1,040,172
Buildings and improvements 5,900,314 3,570,610
Furniture and equipment 5,248,142 2,828,581
Construction in process 1,905,386 715,114
15,342,473 8,154,477
Less accumulated depreciation 6,687,761 4,812,827
$ 8,654,712 3,341,650

Depreciation expense was $363,839, $303,679, and $333,791
for 1997, 1996, and 1995, respectively.

Construction in progress at December 31, 1997 relates to an
addition to, and remodeling of, the main office of The
Exchange National Bank of Jefferson City, which is scheduled
to be completed in December 1998. At December 31, 1996,
construction in progress related to a new branch facility of
The Exchange National Bank of Jefferson City.

(7) INTANGIBLE ASSETS

A summary of intangible assets at December 31, 1997 and 1996
is as follows:

1997 1996

Excess of cost over the
fair value of net
assets acquired $ 8,658,982 --
Core deposit intangible 1,963,833 --
Consulting/noncompete agreements 875,000 --
Organizational costs 10,667 53,335

$11,508,482 53,335

<PAGE>

(8) DEPOSITS

The scheduled maturities of time deposits are as follows (in
thousands):

1997 1996

Due within:
One year $132,472 88,544
Two years 31,260 15,144
Three years 13,923 5,378
Four years 2,151 3,783
Five years 2,404 548
Thereafter 3,269 5

$185,479 113,402

(9) SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Information relating to securities sold under agreements to
repurchase is as follows:

1997 1996 1995

Average daily balance $ 18,152,000 16,512,000 18,278,000
Maximum balance at month-end
(September 1997, February 1996,
and March 1995) 22,408,559 25,166,520 29,589,525
Weighted average interest
rate at year-end 6.39% 4.51% 4.40%
Weighted average interest
rate for the year 5.43 4.65 5.13

The securities underlying the agreements to repurchase are
under the control of the Banks.

Unused agreements with unaffiliated banks to sell and
repurchase securities on which The Exchange National Bank of
Jefferson City may draw totaled $27,000,000 at December 31,
1997. Additionally, under agreements with unaffiliated
banks, The Exchange National Bank of Jefferson City may
borrow up to $30,000,000 in federal funds on an unsecured
basis at December 31, 1997.

<PAGE>

(10) OTHER BORROWED MONEY

Other borrowed money at December 31, 1997 is summarized as
follows:

The Company:
Bank debt revolving credit facility,
variable rate of interest (interest
rate of 7.5% at December 31, 1997),
matures November 3, 1999 $ 2,507,932
Notes payable, 7.00%, due November
2002, interest only until maturity 11,700,568

Union State Bank and Trust of Clinton:
Federal Home Loan Bank advances,
weighted average rate of 6.75%, due
at various dates through 2006 3,100,000

The Exchange National Bank of Jefferson City:
Note payable, 5.35%, due February 1998 295,068
$17,603,568

The Company may borrow up to $10,000,000 under the revolving
credit facility, which is secured by all issued and
outstanding shares of common stock of The Exchange National
Bank of Jefferson City. The rate of interest on the
revolving credit facility is the lower of the prime rate of
interest minus 1.00%, or the Federal Funds Base Rate plus
2.00%. Under the revolving credit agreement, the Company is
subject to certain covenants which require, among other
things, The Exchange National Bank of Jefferson City to
maintain certain levels of capital, allowance for loan
losses to loans, and earnings to average assets.
Additionally, the revolving credit agreement limits the
amount of cash dividends that can be declared by the Company
to 65% of its net income in the preceding year.

In conjunction with the acquisition of USB, the Company
issued notes payable totaling $11,700,568 to the former
stockholders of USB. The notes payable are secured by all
issued and outstanding shares of common stock of Union State
Bank and Trust of Clinton.

The advances from the Federal Home Loan Bank are secured
under a blanket agreement which assigns all investment in
Federal Home Loan Bank stock as well as mortgage loans equal
to 150% of the outstanding advance balance to secure amounts
borrowed.

<PAGE>

The scheduled principal reduction of other borrowed money at
December 31, 1997 was as follows:

1998 $ 3,453,000
1999 450,000
2000 450,000
2001 450,000
2002 12,000,568
2003 and thereafter 800,000
$17,603,568

At December 31, 1997, $2,000,000 of the amount included in
other borrowed money is owed to a member of the Company's
Board of Directors.

(11) RESERVE REQUIREMENTS AND COMPENSATING BALANCES

The Federal Reserve Bank required the Banks to maintain a
balance of $2,658,000 and $1,397,000 at December 31, 1997
and 1996, respectively, to satisfy reserve requirements.

Average compensating balances held at correspondent banks
were $2,698,846 and $1,302,817 during December 1997 and
1996, respectively. The Banks maintain such compensating
balances with correspondent banks to offset charges for
services rendered by those banks.

(12) INCOME TAXES

The composition of income tax expense for 1997, 1996, and
1995 is as follows:

1997 1996 1995
Current:
Federal $1,755,020 1,673,216 1,615,893
State 229,856 235,539 231,677
Total current 1,984,876 1,908,755 1,847,570

Deferred:
Federal (131,523) (42,964) (69,443)
State (11,353) (3,791) (6,127)
Total deferred (142,876) (46,755) (75,570)

Total income tax
expense $1,842,000 1,862,000 1,772,000

<PAGE>

Applicable income taxes for financial reporting purposes
differ from the amount computed by applying the statutory
federal income tax rate of 34% for the reasons noted in the
table below:

1997 1996 1995

Tax at statutory
federal income tax
rate $1,937,366 1,939,561 1,856,633
Decrease in tax
resulting from tax-
exempt income (286,312) (241,574) (235,783)
State income tax,
net of federal tax
benefit 153,950 151,520 146,241
Other, net 36,996 12,493 4,909
$1,842,000 1,862,000 1,772,000

The components of deferred tax assets and deferred tax
liabilities at December 31, 1997 and 1996 are as follows:

1997 1996
Deferred tax assets:
Allowance for loan losses $1,102,030 635,872
Available-for-sale securities -- 9,204
Nonaccrual loan interest 15,710 18,331
Mortgage servicing rights 148,770 123,649

Total deferred tax assets 1,266,510 787,056
Deferred tax liabilities:
Available-for-sale securities 70,973 --
Purchase accounting adjustment
to securities 130,896 --
Premises and equipment 515,585 51,348
Core deposit intangible 726,618 --
Prepaid pension expense 28,759 29,916
Loan origination costs 45,552 35,608
Other 37,867 20,878

Total deferred tax liabilities 1,555,850 137,750
Net deferred tax asset (liability) $ (289,340) 649,306

The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the
periods in which those temporary differences become
deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment.
Based upon the level of historical taxable income and
projections for future taxable income over the periods which
the deferred tax assets are deductible, management believes
it is more likely than not the Company will realize the
benefits of these temporary differences at December 31, 1997
and, therefore, has not established a valuation reserve.

<PAGE>

(13) PENSION AND RETIREMENT PLANS

The Exchange National Bank of Jefferson City provides a
noncontributory defined benefit pension plan in which all
full-time employees become participants upon the later of
the completion of one year of qualified service or the
attainment of age 21, and in which they continue to
participate as long as they continue to be full-time
employees, until their retirement, death, or termination of
employment prior to normal retirement date. The normal
retirement benefits provided under the plan vary depending
upon the participant's rate of compensation, length of
employment, and social security benefits. Retirement
benefits are payable for life, but not less than 10 years.
Plan assets consist of U.S. Treasury and government agency
securities, corporate common stocks and bonds, real estate
mortgages, and demand deposits.

The net periodic pension expense (benefit) for the plan for
1997, 1996, and 1995 is as follows:

1997 1996 1995
Service cost $ 93,205 99,979 63,881
Interest cost 183,939 171,276 156,514
Return on assets:
Actual return (670,883) (459,934) (432,302)
Excess of actual
compared to
assumed return 432,377 237,517 211,480

(238,506) (222,417) (220,822)
Net amortization of the
excess of market value
of plan assets over
projected benefit
obligation at November 1,
1988 (35,512) (35,512) (35,512)

Net periodic pension
expense (benefit) $ 3,126 13,326 (35,939)

Rates utilized for the plan years ended December 31, 1997,
1996, and 1995 are as follows:

1997 1996 1995
Assumed discount rate for
net periodic pension cost 6.70% 6.40% 8.00%
Discount rate for the funded
status 6.30 6.70 6.40
Weighted average rate of
compensation increase used
to measure the projected
benefit obligation 6.00 6.00 6.00
Expected long-term rate
of return on plan assets 7.00 7.00 7.00

<PAGE>

A summary of the funded status of the plan as of October 31,
1997 and 1996 is as follows:

1997 1996
Accumulated benefit obligation:
Vested $(2,537,482) (2,307,480)
Nonvested (2,568) (1,612)
Accumulated benefit
obligation (2,540,050) (2,309,092)
Effect of projected
compensation increases (524,147) (488,842)
Projected benefit obligation (3,064,197) (2,797,934)
Plan assets at fair market
value 4,339,279 3,773,556
Plan assets in excess of
projected benefit
obligation $1,275,082 975,622

A composition of plan assets in excess of projected benefit
obligation is as follows:

1997 1996
Unamortized excess of market
value of plan assets over
projected benefit obligation
at November 1, 1988, being
amortized over 16.75 years $ 275,216 310,728
Other unrecognized net gain from
past experience different from
that assumed and effect of
changes in assumptions 922,137 584,039
Prepaid pension asset 77,729 80,855
$1,275,082 975,622

In addition to the pension plan described above, The
Exchange National Bank of Jefferson City has a profit
sharing plan which covers all full-time employees. The
Exchange National Bank of Jefferson City makes annual
contributions in an amount equal to 6% of income before
income taxes and before contributions to the profit sharing
and pension plans for all participants, limited to the
maximum amount deductible for federal income tax purposes.
Contributions to the profit sharing plan for 1997, 1996, and
1995 were $365,266, $349,132, and $338,089, respectively.
At December 31, 1997, the profit sharing plan held 59,300
shares of the common stock of the Company.

<PAGE>

Union State Bank and Trust of Clinton has a profit sharing
plan which covers all full-time employees. Eligible
employees may defer up to 8% of his or her salary each year.
Union State Bank and Trust of Clinton matches 1/3 of each
employee's deferral. In addition, a discretionary
contribution may be made each year by Union State Bank and
Trust of Clinton. Contributions to the profit sharing plan
for the period from November 3, 1997 to December 31, 1997
were $12,503.

(14) CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

The condensed balance sheets as of December 31, 1997 and
1996 and the related condensed schedules of income and cash
flows for the years ended December 31, 1997, 1996, and 1995
of the Company are as follows:

Condensed Balance Sheets

Assets 1997 1996

Cash $ 1,039,041 397,172
Investment in subsidiaries 56,586,552 40,548,757
Consulting/noncompete agreements 875,000 --
Other assets 57,796 53,346
Total assets $58,558,389 40,999,275

Liabilities and Stockholders' Equity

Bank debt $ 2,507,932 --
Notes payable 11,700,568 --
Consulting/noncompete agreements 750,000 --
Dividends payable 359,256 316,145
Other liabilities 133,031 1,828
Stockholders' equity 43,107,602 40,681,302

Total liabilities and
stockholders' equity $58,558,389 40,999,275

<PAGE>

Condensed Schedules of Income

1997 1996 1995

Revenue dividends
received from subsidiaries $ 8,515,980 1,379,400 1,212,420
Expenses:
Interest on bank debt 87,076 -- --
Interest on notes payable 130,149 -- --
Amortization of intangible
assets 67,668 42,668 42,668
Other 81,007 16,928 12,288
365,900 59,596 54,956

Income before income tax
benefit and equity in
undistributed income
(dividends distributed in
excess of income) of
subsidiaries 8,150,080 1,319,804 1,157,464
Income tax benefit 124,000 20,000 19,000
Equity in undistributed
income (dividends
distributed in excess
of income) of
subsidiaries (4,417,944) 2,502,787 2,512,222
Net income $ 3,856,136 3,842,591 3,688,686

<PAGE>

Condensed Schedules of Cash Flows

1997 1996 1995
Cash flows from operating activities:
Net income $3,856,136 3,842,591 3,688,686
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Dividends distributed
in excess of income
(equity in
undistributed income)
of subsidiaries 4,417,944 (2,502,787) (2,512,222)
Other, net 151,752 42,980 44,727

Net cash provided by
operating activities 8,425,832 1,382,784 1,221,191

Cash flows from investing activities:
Purchase of Union State
Bancshares, Inc. (20,319,220) -- --
Other (150,000) -- --

Net cash used in investing
activities (20,469,220) -- --

Cash flows from financing activities:
Proceeds from bank debt 8,507,832 -- --
Proceeds from notes payable 11,700,568 -- --
Repayment of bank debt (6,000,000) -- --
Cash dividends paid (1,523,243) (1,322,060)(1,163,988)

Net cash provided by
(used in) financing
activities 12,685,257 (1,322,060)(1,163,988)
Net increase in cash 641,869 60,724 57,203
Cash at beginning of year 397,172 336,448 279,245

Cash at end of year $1,039,041 397,172 336,448

(15) DISCLOSURES ABOUT FINANCIAL INSTRUMENTS

The Company is a party to financial instruments with
off-balance-sheet risk in the normal course of business to
meet the financing needs of its customers. These financial
instruments include commitments to extend credit and
commercial and standby letters of credit. Those instruments
involve, to varying degrees, elements of credit and interest
rate risk in excess of the amount recognized in the
consolidated balance sheets.

The Company's exposure to credit loss in the event of
nonperformance by the other party to the financial
instrument for commitments to extend credit and commercial
and standby letters of credit is represented by the
contractual amount of those instruments. The Company uses
the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet
instruments.

<PAGE>

Off-balance-sheet financial instruments whose contractual
amounts represent credit risk at December 31, 1997 and 1996
are as follows:

1997 1996
Commitments to extend credit $44,680,693 37,160,684
Standby letters of credit 2,869,801 972,344

Commitments to extend credit are agreements to lend to a
customer as long as there is not a violation of any
condition established in the contract. Of the total
commitments to extend credit, $17,215,183 and $17,116,147
represent fixed-rate loan commitments at December_31, 1997
and 1996, respectively. Commitments generally have fixed
expiration dates or other termination clauses. Since many
of the commitments are expected to expire without being
drawn upon, the total commitment amounts do not necessarily
represent future cash requirements.

Standby and commercial letters of credit are conditional
commitments issued by the Company to guarantee the
performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the
same as that involved in extending loan facilities to
customers.

The Company evaluates each customer's creditworthiness on a
case-by-case basis. The amount of collateral obtained if
deemed necessary by the Company upon extension of credit is
based on management's credit evaluation of the counterparty.
Collateral held varies but may include accounts receivable;
inventory; property, plant, and equipment; and
income-producing commercial properties.

<PAGE>

A summary of the carrying amounts and fair values of the
Company's financial instruments at December 31, 1997 and
1996 is as follows:

1997 1996
Carrying Fair Carrying Fair
amount value amount value
Assets:
Loans $274,785,516 278,222,000 171,001,657 172,888,000
Investment in
debt and equity
securities 116,157,188 116,469,785 80,623,371 80,683,187
Federal funds sold 17,175,000 17,175,000 13,500,000 13,500,000
Cash and due from
banks 17,177,050 17,177,050 11,671,641 11,671,641
Accrued interest
receivable 4,067,232 4,067,232 2,543,421 2,543,421
$429,361,986 433,111,067 279,340,090 281,286,249

Liabilities:
Deposits:
Demand $ 50,139,102 50,139,102 32,834,946 32,834,946
NOW 53,766,106 53,766,106 27,742,102 27,742,102
Savings 33,675,913 33,675,913 22,736,453 22,736,453
Money market 37,326,945 37,326,945 31,308,333 31,308,333
Time 185,478,729 185,724,000 113,401,938 113,898,000
Securities sold
under agreements
to repurchase 21,493,587 21,794,000 12,303,391 12,296,000
Interest-bearing
demand notes to
U.S. Treasury 3,663,581 3,663,581 1,034,432 1,034,432
Other borrowed
money 17,603,568 17,686,000 -- --
Accrued interest
payable 2,410,635 2,410,635 1,008,681 1,008,681
$405,558,166 406,186,282 242,370,276 242,858,947

The following methods and assumptions were used to estimate
the fair value of each class of financial instruments for
which it is practicable to estimate such value:

LOANS

Fair values are estimated for portfolios of loans with
similar financial characteristics. Loans are segregated by
type, such as real estate, installment and other consumer,
commercial, and bankers' acceptances. Each loan category is
further segmented into fixed and adjustable interest rate
terms and by performing and nonperforming categories.

The fair value of performing loans is calculated by
discounting scheduled cash flows through estimated maturity
using estimated market discount rates that reflect the
credit and interest rate risk inherent in the loan. The
estimate of maturity is based on the Company's historical
experience with repayments for each loan classification,
modified, as required, by an estimate of the effect of
current economic and lending conditions.

<PAGE>

The fair value for significant nonperforming loans is based
on recent external appraisals. If appraisals are not
available, estimated cash flows are discounted using a rate
commensurate with the risk associated with the estimated
cash flows. Assumptions regarding credit risk, cash flows,
and discount rates are judgmentally determined using
available market and specific borrower information.

INVESTMENT IN DEBT AND EQUITY SECURITIES

Fair values are based on quoted market prices or dealer
quotes.

FEDERAL FUNDS SOLD, CASH, AND DUE FROM BANKS

For federal funds sold, cash, and due from banks, the
carrying amount is a reasonable estimate of fair value, as
such instruments reprice in a short time period.

ACCRUED INTEREST RECEIVABLE AND PAYABLE

For accrued interest receivable and payable, the carrying
amount is a reasonable estimate of fair value because of the
short maturity for these financial instruments.

DEPOSITS

The fair value of deposits with no stated maturity, such as
noninterest-bearing demand, NOW accounts, savings, and money
market, is equal to the amount payable on demand. The fair
value of time deposits is based on the discounted value of
contractual cash flows. The discount rate is estimated
using the rates currently offered for deposits of similar
remaining maturities.

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND
OTHER BORROWED MONEY

The fair value of securities sold under agreements to
repurchase and other borrowed money is based on the
discounted value of contractual cash flows. The discount
rate is estimated using the rates currently offered for
securities sold under agreements to repurchase and other
borrowed money of similar remaining maturity.

INTEREST-BEARING DEMAND NOTES TO U.S. TREASURY

For interest-bearing demand notes to U.S. Treasury, the
carrying amount is a reasonable estimate of fair value, as
such instruments reprice in a short time period.

<PAGE>

COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF
CREDIT

The fair value of commitments to extend credit and standby
letters of credit are estimated using the fees currently
charged to enter into similar agreements, taking into
account the remaining terms of the agreements, the
likelihood of the counterparties drawing on such financial
instruments, and the present creditworthiness of such
counterparties. The Company believes such commitments have
been made on terms which are competitive in the markets in
which it operates.

The fair value estimates provided are made at a point in
time based on market information and information about the
financial instruments. Because no market exists for a
portion of the Company's financial instruments, fair value
estimates are based on judgments regarding future expected
loss experience, current economic conditions, risk
characteristics of various financial instruments, and other
factors. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment
and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the fair
value estimates.

(16) LITIGATION

Various legal claims have arisen in the normal course of
business, which, in the opinion of management of the
Company, will not result in any material liability to the
Company.

<PAGE>

MARKET PRICE OF AND DIVIDENDS ON EQUITY SECURITIES
AND RELATED MATTERS

While there has been some trading activity in the Company's
common stock since April 7, 1993 (the date on which Bancshares
became a publicly held company), there is no established market
for the shares. The following table sets forth the range of high
and low bid prices of the Company's common stock by quarter for
each quarter in 1997 and 1996 in which the stock was traded, as
reported by a local broker-dealer.

1997 High Low

Fourth Quarter $50.00 50.00
Third Quarter 50.00 47.00
Second Quarter 47.00 47.00
First Quarter 47.00 47.00

1996 High Low

Fourth Quarter $47.00 44.00
Third Quarter 44.00 44.00
Second Quarter 44.00 44.00
First Quarter 44.00 41.00

As of March 17, 1998, the Company had issued and outstanding
718,511 shares of common stock, which were held of record by
approximately 570 persons. The common stock is the only class of
equity security which the Company has outstanding and the shares
are not listed on any securities exchange.

The following table sets forth information on dividends paid
by the Company in 1997 and 1996.

MONTH PAID DIVIDENDS PAID
PER SHARE

January,1997 $0.44
April, 1997 0.44
July, 1997 0.50
October, 1997 0.50
December, 1997 0.24
Total for 1997 $2.12

January, 1996 $0.38
April, 1996 0.38
July, 1996 0.44
October, 1996 0.44
December, 1996 0.20
Total for 1996 $1.84

The Company's Board of Directors intends that the Company
will continue to pay quarterly dividends at least at the current
rate. In addition, the Board of Directors intends, to the extent
appropriate, that the Company will continue to pay an additional
special dividend. The actual amount of quarterly dividends and
the payment, as well as amount, of any special dividend
ultimately will depend upon the payment of sufficient dividends
by ENB and USB to the Company. The payment by ENB and USB of
dividends to the Company will depend upon such factors as ENB's
and USB's respective financial condition, results of operations
and current and anticipated cash needs, including capital
requirements.

<PAGE>

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Position with Position with Position with Principal
Name Bancshares ENB USB Occupation

Donald L.
Campbell President, Chairman of Director Position
Chairman of the Board with
the Board and Director Bancshares,
and Director- ENB and USB
Class III

David T.
Turner Senior Vice President Position
President and Director with
and Director- Bancshares
Class III and ENB

Charles G.
Dudenhoeffer,
Jr. Senior Vice Senior Vice Position
President and President, with
Director- Trust Officer Bancshares
Class I and Director and ENB

Philip D.
Freeman Director-Class I Director Owner/
Manager,
Freeman
Mortuary,
Jefferson City,
Missouri

James E.
Smith Director- President Position
Class I and with USB
Director

David R.
Goller Director- Director Attorney
Class II with the law
firm of
Goller,
Gardner &
Feather,
P.C.,
Jefferson
City,
Missouri

James R.
Loyd Director- Director Retired
Class II

Kevin L.
Riley Director- Director Co-owner,
Calss III Riley
Chevrolet,
Inc. and
Riley
Oldsmobile,
Cadillac,
Inc.,
Jefferson
City,
Missouri

Carl A.
Brandenburg,
Sr. Treasurer and Senior Vice Position
Chief Financial President and with
Officer Chief Financial Bancshares
Officer and ENB

Kathleen L.
Bruegenhemke Senior Vice Position
President with
and Secretary Bancshares

<PAGE>

ANNUAL REPORT ON FORM 10-KSB
A copy of the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1997, as filed with the Securities and
Exchange Commission, excluding exhibits, will be furnished
without charge to shareholders entitled to vote at the 1998
annual meeting of shareholders upon written request to Donald L.
Campbell, President, Exchange National Bancshares, Inc., 132 East
High Street, Jefferson City, Missouri 65101. The Company will
provide a copy of any exhibit to the Form 10-KSB to any such
person upon written request and the payment of the Company's
reasonable expenses in furnishing such exhibits.

</TABLE>

Exhibit 21

SUBSIDIARIES

Union State Bancshares, Inc. A bank holding
company registered
under the Bank
Holding Company Act
of 1956, as amended

The Exchange National Bank of A national banking
Jefferson City association

Union State Bank and Trust of Clinton A Missouri trust
company

<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 16,673
<INT-BEARING-DEPOSITS> 504
<FED-FUNDS-SOLD> 17,175
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 78,423
<INVESTMENTS-CARRYING> 37,734
<INVESTMENTS-MARKET> 38,047
<LOANS> 278,700
<ALLOWANCE> 3,914
<TOTAL-ASSETS> 450,692
<DEPOSITS> 360,387
<SHORT-TERM> 25,157
<LIABILITIES-OTHER> 4,437
<LONG-TERM> 17,603
0
0
<COMMON> 719
<OTHER-SE> 42,389
<TOTAL-LIABILITIES-AND-EQUITY> 450,692
<INTEREST-LOAN> 17,707
<INTEREST-INVEST> 5,223
<INTEREST-OTHER> 505
<INTEREST-TOTAL> 23,435
<INTEREST-DEPOSIT> 10,351
<INTEREST-EXPENSE> 11,645
<INTEREST-INCOME-NET> 11,790
<LOAN-LOSSES> 865
<SECURITIES-GAINS> (7)
<EXPENSE-OTHER> 7,265
<INCOME-PRETAX> 5,698
<INCOME-PRE-EXTRAORDINARY> 3,856
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,856
<EPS-PRIMARY> 5.37
<EPS-DILUTED> 5.37
<YIELD-ACTUAL> 4.11
<LOANS-NON> 827
<LOANS-PAST> 190
<LOANS-TROUBLED> 100
<LOANS-PROBLEM> 10,063
<ALLOWANCE-OPEN> 2,307
<CHARGE-OFFS> 740
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<ALLOWANCE-CLOSE> 3,914
<ALLOWANCE-DOMESTIC> 2,913
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<ALLOWANCE-UNALLOCATED> 1,001

</TABLE>