ML BANCORP INC, 424B3, 1997-07-28

ML BANCORP INC
424B3, 1997-07-28
SAVINGS INSTITUTION, FEDERALLY CHARTERED

Previous: UPLAND ENERGY CORP, SC 13D, 1997-07-28

Next: PAGING PARTNERS CORP, SC 13D/A, 1997-07-28

<PAGE> 1
PROSPECTUS
ML CAPITAL TRUST I

OFFER TO EXCHANGE ITS
9.875% SERIES B CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
9.875% SERIES A CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY

ML BANCORP, INC.

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON AUGUST 25, 1997, UNLESS EXTENDED

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

ML Capital Trust I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus (as the same may be
amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $50,000,000 aggregate Liquidation Amount of its
9.875% Series B Capital Securities (the "New Capital Securities") which have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like Liquidation Amount of its outstanding
9.875% Series A Capital Securities (the "Old Capital Securities"), of which
$50,000,000 aggregate Liquidation Amount is outstanding. Pursuant to the
Exchange Offer, ML Bancorp, Inc., a Pennsylvania corporation ("ML" or the
"Corporation"), also is offering to exchange (i) its guarantee of payments of
cash distributions and payments on liquidation of the Trust or redemption of
the Old Capital Securities (the "Old Guarantee") for a like guarantee in
respect of the New Capital Securities (the "New Guarantee") and (ii) all of its
outstanding 9.875% Series A Junior Subordinated Deferrable Interest Debentures
due March 1, 2027 (the "Old Junior Subordinated Debentures") for a like
aggregate principal amount of its 9.875% Series B Junior Subordinated
Deferrable Interest Debentures due March 1, 2027 (the "New Junior Subordinated
Debentures"), which New Guarantee and New Junior Subordinated Debentures also
have been registered under the Securities Act. The Old Capital Securities, the
Old Guarantee and the Old Junior Subordinated Debentures are collectively
referred to herein as the "Old Securities" and the New Capital Securities, the
New Guarantee and the New Junior Subordinated Debentures are collectively
referred to herein as the "New Securities."

The terms of the New Securities are identical in all material respects
to the respective terms of the Old Securities, except that (i) the New
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer under federal and state
securities laws applicable to the Old Securities, (ii) the New Capital
Securities will not provide for any increase in the Distribution rate thereon
and (iii) the New Junior Subordinated Debentures will not provide for any
increase in the interest rate thereon. See "Description of New Securities" and
"Description of Old Securities." The New Capital Securities are being offered
for exchange in order to satisfy certain obligations of the Corporation and the
Trust under a Registration Rights Agreement, dated as of March 10, 1997 (the
"Registration Rights Agreement"), among the Corporation, the Trust and the
Initial Purchasers (as defined herein). In the event that the Exchange Offer
is consummated, any Old Capital Securities which remain outstanding after
consummation of the Exchange Offer and the New Capital Securities issued in the
Exchange Offer will vote together as a single class for purposes of determining
whether holders of the requisite percentage in outstanding Liquidation Amount
thereof have taken certain actions or exercised certain rights under the Trust
Agreement (as defined herein).
(Continued on the following page)

This Prospectus and the Letter of Transmittal are first being mailed
to all registered holders of Old Capital Securities as of July 25, 1997.

SEE "RISK FACTORS" COMMENCING ON PAGE 19 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD CAPITAL
SECURITIES IN THE EXCHANGE OFFER.

THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY.

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

The date of this Prospectus is July 25, 1997.
<PAGE> 2
(Continued from the previous page)

The New Capital Securities and the Old Capital Securities represent
beneficial interests in the assets of the Trust. The Corporation is the owner
of all of the beneficial interests represented by common securities of the
Trust (the "Common Securities"). The Trust exists for the sole purpose of
issuing the Capital Securities and the Common Securities and investing the
proceeds thereof in the Junior Subordinated Debentures (as defined herein).
The Junior Subordinated Debentures will mature on March 1, 2027 (the "Stated
Maturity Date"). The Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash distributions and
amounts payable on liquidation, redemption or otherwise. See "Description of
New Securities --Description of Capital Securities--Subordination of Common
Securities."

As used herein, (i) the "Indenture" means the Indenture, dated as of
March 10, 1997, between the Corporation and The Bank of New York, as Debenture
Trustee (the "Debenture Trustee"), as amended and supplemented from time to
time, and (ii) the "Trust Agreement" means the Amended and Restated Declaration
of Trust relating to the Trust among the Corporation, as Sponsor, The Bank of
New York, as Property Trustee (the "Property Trustee"), The Bank of New York
(Delaware), as the Delaware Trustee (the "Delaware Trustee"), the
Administrative Trustees named therein (collectively, with the Property Trustee
and the Delaware Trustee, the "Issuer Trustees"), and the holders, from time to
time, of undivided beneficial interests in the assets of the Trust, as amended
and supplemented from time to time. In addition, as the context may require,
unless otherwise expressly stated, (i) the term "Capital Securities" means the
Old Capital Securities and the New Capital Securities, (ii) the term "Trust
Securities" means the Capital Securities and the Common Securities, (iii) the
term "Junior Subordinated Debentures" means the Old Junior Subordinated
Debentures and the New Junior Subordinated Debentures and (iv) the term
"Guarantee" means the Old Guarantee and the New Guarantee.

Except as provided below, the Capital Securities will be represented
by a global Capital Security in fully registered form, deposited with a
custodian for and registered in the name of a nominee of The Depository Trust
Company ("DTC"). Beneficial interests in the Capital Securities will be shown
on, and transfers thereof will be effected through, records maintained by DTC
and its participants. Beneficial interests in the Capital Securities will
trade in DTC's Same-Day Funds Settlement system and secondary market trading
activity in such interests will therefore settle in immediately available
funds. The Capital Securities will be issued, and may be transferred, only in
blocks having a Liquidation Amount of not less than $100,000 (100 Capital
Securities). See "Description of New Securities -- Description of Capital
Securities -- Form, Denomination, Book-Entry Procedures and Transfer."

Holders of the Capital Securities will be entitled to receive
cumulative cash distributions arising from the payment of interest on the
Junior Subordinated Debentures, accruing from March 10, 1997, and payable
semi-annually in arrears on March 1 and September 1 of each year, commencing
September 1, 1997 at the annual rate of 9.875% of the Liquidation Amount of
$1,000 per Capital Security ("Distributions"). So long as no Debenture Event of
Default (as defined herein) has occurred and is continuing, the Corporation has
the right to defer payments of interest on the Junior Subordinated Debentures
at any time and from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each deferral period (each, an "Extension
Period"), provided that no Extension Period may end on a date other than an
Interest Payment Date (as defined herein) or extend beyond the Stated Maturity
Date. Upon the termination of any such Extension Period and the payment of all
amounts then due, the Corporation may elect to begin a new Extension Period,
subject to the requirements set forth in the Indenture. If and for so long as
interest payments on the Junior Subordinated Debentures are so deferred,
Distributions on the Trust Securities also will be deferred and the Corporation
will not be permitted, subject to certain exceptions described herein, to
declare or pay any cash distributions with respect to the Corporation's capital
stock (which includes common and preferred stock) or to make any payment with
respect to debt securities of the Corporation that rank pari passu with or
junior to the Junior Subordinated Debentures. During an Extension Period,
interest on the Junior Subordinated Debentures will continue to accrue (and the
amount of Distributions to which holders of the Trust Securities are entitled
will

2
<PAGE> 3
(Continued from the previous page)

accumulate) at the rate of 9.875% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue interest income for
United States federal income tax purposes. See "Description of New
Securities--Description of Junior Subordinated Debentures--Option to Extend
Interest Payment Date" and "Certain United States Federal Income Tax
Considerations --Interest Income and Original Issue Discount."

The Corporation has, through the Guarantee, the guarantee agreement of
the Corporation relating to the Common Securities (the "Common Guarantee"), the
Trust Agreement, the Junior Subordinated Debentures and the Indenture, taken
together, fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Trust Securities. See "Relationship Among the Capital
Securities, the Junior Subordinated Debentures and the Guarantee--Full and
Unconditional Guarantee." The Guarantee and the Common Guarantee guarantee
payments of Distributions and payments on liquidation or redemption of the
Trust Securities, but in each case only to the extent that the Trust holds
funds on hand legally available therefor and has failed to make such payments,
as described herein. See "Description of New Securities--Description of
Guarantee." If the Corporation fails to make a required payment on the Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including Distributions, on the Trust Securities. The
Guarantee and the Common Guarantee do not cover any such payment when the Trust
does not have sufficient funds on hand legally available therefor. In such
event, under the Indenture a holder of Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights in respect of
such payment. See "Description of New Securities--Description of Junior
Subordinated Debentures--Enforcement of Certain Rights By Holders of New
Capital Securities." The obligations of the Corporation under the Guarantee,
the Common Guarantee and the Junior Subordinated Debentures are unsecured and
rank subordinate and junior in right of payment to all Senior Indebtedness of
the Corporation to the extent and in the manner set forth in the Indenture.
See "Description of New Securities--Description of Junior Subordinated
Debentures--Subordination." In addition, because the Corporation is a holding
company, the Junior Subordinated Debentures and the Guarantee effectively are
subordinated to all existing and future liabilities, including deposits, of the
Corporation's subsidiaries.

The Trust Securities are subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated
Maturity Date upon repayment of the Junior Subordinated Debentures at a
redemption price equal to the principal amount of, plus accrued interest on,
the Junior Subordinated Debentures (the "Maturity Redemption Price"), (ii) in
whole but not in part, at any time before March 1, 2007 (the "Initial Optional
Prepayment Date"), contemporaneously with the optional redemption of the Junior
Subordinated Debentures, upon the occurrence and continuation of a Special
Event (as defined herein) at a redemption price equal to the Special Event
Prepayment Price (as defined below) (the "Special Event Redemption Price") and
(iii) in whole or in part, on or after the Initial Optional Prepayment Date,
contemporaneously with the optional redemption by the Corporation of the Junior
Subordinated Debentures, at a redemption price equal to the Optional Prepayment
Price (as defined below) (the "Optional Redemption Price"). Any of the
Maturity Redemption Price, the Special Event Redemption Price and the Optional
Redemption Price may be referred to herein as the "Redemption Price." See
"Description of New Securities--Description of Capital Securities--Redemption."

Subject to the Corporation having received any required regulatory
approval, the Junior Subordinated Debentures are prepayable prior to the Stated
Maturity Date at the option of the Corporation (i) on or after the Initial
Optional Prepayment Date, in whole or in part, at a price (the "Optional
Prepayment Price") equal to 104.937% of the principal amount thereof on the
Initial Optional Prepayment Date, declining ratably on each March 1 thereafter
to 100% on or after March 1, 2017, plus, in each case, accrued and unpaid
interest thereon to the date of prepayment, or (ii) at any time prior to the
Initial Optional Prepayment Date, in whole but not in part, upon the occurrence
and continuation of a Special Event, at a prepayment price (the "Special Event
Prepayment Price") equal to the Make-Whole Amount (as defined below). The
"Make-Whole Amount" shall be equal to the greater of (a) 100% of the principal
amount of the Junior Subordinated Debentures or (b) the sum,

3
<PAGE> 4
(Continued from the previous page)

as determined by a Quotation Agent (as defined herein), of the present values
of the remaining scheduled payments of principal and interest on the Junior
Subordinated Debentures, discounted to the prepayment date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate (as defined herein) plus, in the case of each of clauses
(a) and (b), accrued and unpaid interest thereon to the date of prepayment.
Either of the Optional Prepayment Price or the Special Event Prepayment Price
may be referred to herein as the "Prepayment Price." See "Description of New
Securities -- Description of Junior Subordinated Debentures -- Optional
Prepayment" and "-- Special Event Prepayment."

The Corporation has the right at any time (including without
limitation upon the occurrence of a Tax Event (as defined herein)) to terminate
the Trust and, after satisfaction of liabilities of creditors of the Trust as
required by applicable law, to cause a Like Amount of the Junior Subordinated
Debentures to be distributed to the holders of the Trust Securities in
liquidation of the Trust, subject to (i) the Corporation having received an
opinion of counsel to the effect that such distribution will not be a taxable
event to holders of Capital Securities and (ii) the receipt of any required
regulatory approval. Unless the Junior Subordinated Debentures are distributed
to the holders of the Trust Securities, in the event of a liquidation of the
Trust as described herein, after satisfaction of liabilities to creditors of
the Trust as required by applicable law, the holders of the Trust Securities
generally will be entitled to receive a Liquidation Amount of $1,000 per Trust
Security plus accumulated and unpaid Distributions thereon to the date of
payment. See "Description of New Securities -- Description of Capital
Securities -- Liquidation of the Trust and Distribution of Junior Subordinated
Debentures."

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

The Trust is making the Exchange Offer of the New Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, neither the Corporation nor the Trust has sought its own interpretive
letter and there can be no assurance that the staff of the Division of
Corporation Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject to the two immediately
following sentences, the Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in exchange for Old Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such New Capital Securities are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Capital Securities. However, any holder of Old Capital Securities who
is an "affiliate" of the Corporation or the Trust within the meaning of Rule
405 under the Securities Act (an "Affiliate") or who intends to participate in
the Exchange Offer for the purpose of distributing New Capital Securities, or
any broker-dealer who purchased Old Capital Securities from the Trust to resell
pursuant to Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption under the Securities Act, (i) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (ii) will not
be entitled to tender such Old Capital Securities in the Exchange Offer and
(iii) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or other transfer of such Old
Capital Securities (other than pursuant to the Exchange Offer) unless such sale
is made pursuant to an exemption from such requirements. In addition, as
described below, if any broker-dealer (a "Participating Broker-Dealer") holds
Old Capital Securities acquired for its own account as a result of
market-making or other trading activities and exchanges such Old Capital
Securities for New Capital Securities, then such Participating Broker-Dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Capital Securities.

4
<PAGE> 5
(Continued from the previous page)

Each holder of Old Capital Securities who wishes to exchange Old
Capital Securities for New Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an Affiliate of the Corporation or the
Trust, (ii) any New Capital Securities to be received by it are being acquired
in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Capital Securities, and (iv) if such
holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such New Capital Securities. The Letter of Transmittal contains the
foregoing representations. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility to participate
in the Exchange Offer, to furnish to the Corporation and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) on behalf of whom such holder holds Old Capital
Securities to be exchanged in the Exchange Offer. Each Participating
Broker-Dealer that receives New Capital Securities for its own account pursuant
to the Exchange Offer will be deemed to have acknowledged by execution of the
Letter of Transmittal or delivery of an Agent's Message (as defined herein)
that it acquired the Old Capital Securities for its own account as the result
of market-making activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation Finance of the Commission in
the interpretive letters referred to above, the Corporation and the Trust
believe that Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to the New Capital Securities received upon exchange
of such Old Capital Securities (other than Old Capital Securities which
represent an unsold allotment from the original sale of the Old Capital
Securities) with a prospectus meeting the requirements of the Securities Act,
which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale
of such New Capital Securities. Accordingly, this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer during the period referred to below in connection with resales of
New Capital Securities received in exchange for Old Capital Securities where
such Old Capital Securities were acquired by such Participating Broker-Dealer
for its own account as a result of market-making or other trading activities.
Subject to certain provisions set forth in the Registration Rights Agreement,
the Corporation and the Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New Capital Securities for a
period ending 90-days after the Expiration Date (as defined herein) (subject to
extension under certain limited circumstances described below) or, if earlier,
when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation or the
Trust, or cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses set forth herein
under "The Exchange Offer--Exchange Agent." Any person, including any
Participating Broker-Dealer, who is an Affiliate of the Corporation or the
Trust may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer--Resales of
New Capital Securities."

5
<PAGE> 6
(Continued from the previous page)

they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be. If the
Corporation or the Trust gives such notice to suspend the sale of the New
Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable), it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus
in connection with the resale of New Capital Securities by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales of
the New Capital Securities or to and including the date on which the
Corporation or the Trust has given notice that the sale of New Capital
Securities (or the New Guarantee or the New Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be.

Prior to the Exchange Offer, there has been only a limited secondary
market and no public market for the Old Capital Securities. The New Capital
Securities will be a new issue of securities for which there currently is no
market. There can be no assurance as to the development or liquidity of any
market for the New Capital Securities. The Corporation and the Trust currently
do not intend to apply for listing of the New Capital Securities on any
securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System.

Any Old Capital Securities not tendered and accepted in the Exchange
Offer will remain outstanding and will be entitled to all the same rights and
will be subject to the same limitations applicable thereto under the Trust
Agreement (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders of
Old Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Corporation nor the Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Old Capital Securities could be adversely affected. See
"Risk Factors--Consequences of a Failure to Exchange Old Capital Securities."

THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.

Old Capital Securities may be tendered for exchange on or prior to
5:00 p.m., New York City time, on August 25, 1997 (such time on such date
being hereinafter called the "Expiration Date"), unless the Exchange Offer is
extended by the Corporation or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on
or prior to the Expiration Date. The Exchange Offer is not conditioned upon
any minimum Liquidation Amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Corporation or the Trust and to the
provisions of the Registration Rights Agreement. Old Capital Securities may be
tendered in whole or in part having an aggregate Liquidation Amount of not less
than $100,000 (100 Capital Securities) and/or any integral

6
<PAGE> 7
(Continued from the previous page)

multiple of $1,000 Liquidation Amount (one Capital Security) in excess thereof.
The Corporation has agreed to pay all expenses of the Exchange Offer. See "The
Exchange Offer--Fees and Expenses."

Holders of Old Capital Securities as of the August 15, 1997 record
date for the initial Distribution on September 1, 1997, including such holders
who tender their Old Capital Securities pursuant to the Exchange Offer, will be
entitled to receive such Distribution. See "The Exchange Offer--Distributions
on New Capital Securities."

Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. No
dealer-manager is being used in connection with this Exchange Offer. See "Use
of Proceeds" and "Plan of Distribution."

THE NEW CAPITAL SECURITIES WILL BE ISSUED, AND CAPITAL
SECURITIES MAY BE TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF
NOT LESS THAN $100,000. ANY TRANSFER, SALE OR OTHER DISPOSITION OF CAPITAL
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH TRANSFEREE
SHALL BE DEEMED NOT TO BE ENTITLED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH
CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH CAPITAL SECURITIES.

NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")
(EACH, A "PLAN"), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE CAPITAL
SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH
RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITAL
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT IT EITHER (I) IS NOT A PLAN OR A PLAN ASSET
ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS"
OF ANY PLAN, OR (II) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE
96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.

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

7
<PAGE> 8
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THIS EXCHANGE
OFFER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE CORPORATION OR THE TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

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

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . 9

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

The Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

The Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Selected Consolidated Financial Data of
the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Description of New Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Description of Old Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Relationship Among the Capital Securities, the
Junior Subordinated Debentures and the Guarantee . . . . . . . . . . . . . . . . . . . . . . 63

Certain Federal Income Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . 65

ERISA Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Validity of New Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
</TABLE>

8
<PAGE> 9
AVAILABLE INFORMATION

The Corporation is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements and
other information with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at 7 World
Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Citicorp
Center, 14th Floor, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material also can be obtained at prescribed rates by
writing to the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such information also may be accessed through
the Commission's electronic data gathering, analysis and retrieval system
("EDGAR") via electronic means, including the Commission's web site on the
Internet (http://www.sec.gov). Such reports, proxy statements and other
information concerning the Corporation also can be inspected at the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.

No separate financial statements of the Trust have been included
herein. The Corporation and the Trust do not consider that such financial
statements would be material to holders of the Capital Securities because the
Trust is a newly-formed special purpose entity, has no operating history or
independent operations and is not engaged in and does not propose to engage in
any activity other than holding as trust assets the Junior Subordinated
Debentures and issuing the Trust Securities. See "The Trust" and "Description
of New Securities." In addition, the Corporation does not expect that the
Trust will file reports, proxy statements and other information under the
Exchange Act with the Commission.

This Prospectus constitutes a part of a registration statement on Form
S-4 (the "Registration Statement") filed by the Corporation and the Trust with
the Commission under the Securities Act. This Prospectus does not contain all
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Corporation, the
Trust and the New Securities. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following document filed by the Corporation with the Commission is
incorporated by reference in this Prospectus:

1. Annual Report on Form 10-K for the year ended March 31, 1997.

All documents subsequently filed by the Corporation pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the termination of the offering of the New Securities offered hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part of this Prospectus from the date of filing of such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

9
<PAGE> 10
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.

The Corporation will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents). Requests for such documents
should be directed to: ML Bancorp, Inc., Two Aldwyn Center, Lancaster Avenue &
Route 320, Villanova, Pennsylvania 19085, Attention: Shareholder Relations
(telephone (610) 526-6482).

10
<PAGE> 11

SUMMARY

The following is a summary of certain information contained elsewhere
in this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information and financial statements, including
the notes thereto, contained elsewhere in this Prospectus.

ML BANCORP, INC.

The Corporation is a Pennsylvania corporation which was organized in
March 1994 to acquire all of the capital stock of Main Line Bank (the "Bank")
issued in connection with the Bank's conversion from mutual to stock form in
August 1994. The Corporation is headquartered in Villanova, Pennsylvania and
its principal business currently consists of the operations of the Bank. The
Corporation reported net income of $13.8 million, or $1.22 per share, for the
year ended March 31, 1997. At March 31, 1997, the Corporation had consolidated
assets of $1.96 billion and stockholders' equity of $135.7 million.

The Bank is a federally-chartered savings bank which conducts business
from its executive offices located in Villanova, Pennsylvania, 26 full-service
offices located in Bucks, Chester, Delaware and Montgomery Counties,
Pennsylvania and 10 mortgage loan production offices which are located in
Delaware, Florida, New Jersey and Pennsylvania. The Bank is a community
oriented savings bank which has historically offered a wide variety of savings
products to its retail customers while concentrating its lending activities on
real estate loans secured by single-family residential properties, residential
construction and development projects and selected commercial properties. As a
full-service community bank, the Bank also offers consumer loans and small
business commercial loans.

ML CAPITAL TRUST I

The Trust is a statutory business trust created under Delaware
law pursuant to the filing of a certificate of trust with the Secretary of
State of the State of Delaware. The Trust's affairs are conducted by the
Issuer Trustees: The Bank of New York as Property Trustee, The Bank of New
York (Delaware) as Delaware Trustee and three individual Administrative
Trustees who are employees or officers of or affiliated with the Corporation.
The Trust exists for the exclusive purposes of (i) issuing and selling the
Trust Securities, (ii) using the proceeds from the sale of the Trust Securities
to acquire the Junior Subordinated Debentures issued by the Corporation and
(iii) engaging in only those other activities necessary, advisable or
incidental thereto. Accordingly, the Junior Subordinated Debentures are the
sole assets of the Trust, and payments under the Junior Subordinated Debentures
are the sole revenue of the Trust. All of the Common Securities are owned by
the Corporation.

THE EXCHANGE OFFER

<TABLE>
<S> <C>
The Exchange Offer . . . . . . . . . . . . . . . . Up to $50,000,000 aggregate Liquidation Amount of
New Capital Securities are being offered in exchange
for a like aggregate Liquidation Amount of Old
Capital Securities. Old Capital Securities may be
tendered for exchange in whole or in part in a
Liquidation Amount of $100,000 (100 Capital
Securities) or any integral multiple of $1,000 (one
Capital Security) in excess thereof. The
Corporation and the Trust are making the Exchange
Offer in order to satisfy their obligations under
the Registration Rights Agreement relating to the
Old Capital Securities. For a description of the
procedures for tendering Old Capital Securities, see
"The Exchange Offer--Procedures for Tendering Old
Capital Securities."

Expiration Date . . . . . . . . . . . . . . . . . . 5:00 p.m., New York City time, on August 25, 1997,
unless the Exchange Offer is extended by the
</TABLE>

11
<PAGE> 12

<TABLE>
<S> <C>
Corporation or the Trust (in which case the Expiration
Date will be the latest date and time to which the
Exchange Offer is extended). See "The Exchange Offer
--Terms of the Exchange Offer."

Conditions to the Exchange Offer . . . . . . . . . The Exchange Offer is subject to certain conditions,
which may be waived by the Corporation and the Trust
in their sole discretion. The Exchange Offer is not
conditioned upon any minimum Liquidation Amount of
Old Capital Securities being tendered. See "The
Exchange Offer--Conditions to the Exchange Offer."

Terms of the Exchange Offer . . . . . . . . . . . . The Corporation and the Trust reserve the right in
their sole and absolute discretion, subject to
applicable law, at any time and from time to time,
(i) to delay the acceptance of the Old Capital
Securities for exchange, (ii) to terminate the
Exchange Offer if certain specified conditions have
not been satisfied, (iii) to extend the Expiration
Date of the Exchange Offer and retain all Old
Capital Securities tendered pursuant to the Exchange
Offer, subject, however, to the right of holders of
Old Capital Securities to withdraw their tendered
Old Capital Securities or (iv) to waive any
condition or otherwise amend the terms of the
Exchange Offer in any respect. See "The Exchange
Offer--Terms of the Exchange Offer."

Withdrawal Rights . . . . . . . . . . . . . . . . . Tenders of Old Capital Securities may be withdrawn
at any time on or prior to the Expiration Date by
delivering a written notice of such withdrawal to
the Exchange Agent in conformity with certain
procedures set forth below under "The Exchange Offer
--Withdrawal Rights."

Procedures for Tendering Old Capital Securities . . Tendering holders of Old Capital Securities must
complete and sign a Letter of Transmittal in
accordance with the instructions contained therein
and forward the same by mail, facsimile or hand
delivery, together with any other required
documents, to the Exchange Agent, either with the
Old Capital Securities to be tendered or in
compliance with the specified procedures for
guaranteed delivery of Old Capital Securities.
Certain brokers, dealers, commercial banks, trust
companies and other nominees also may effect tenders
by book-entry transfer, including an Agent's Message
in lieu of a Letter of Transmittal. Holders of Old
Capital Securities registered in the name of a
broker, dealer, commercial bank, trust company or
other nominee are urged to contact such person
promptly if they wish to tender Old Capital
Securities pursuant to the Exchange Offer. See "The
Exchange Offer--Procedures for Tendering Old Capital
Securities." Letters of Transmittal and certificates
representing
</TABLE>

12
<PAGE> 13

<TABLE>
<S> <C>
Old Capital Securities should not be sent to the
Corporation or the Trust. Such documents should
only be sent to the Exchange Agent. See "The
Exchange Offer -- Exchange Agent."

Resales of New Capital Securities . . . . . . . . . The Corporation and the Trust are making the
Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of the
Commission as set forth in certain interpretive
letters addressed to third parties in other
transactions. However, neither the Corporation nor
the Trust has sought its own interpretive letter and
there can be no assurance that the staff of the
Division of Corporation Finance of the Commission
would make a similar determination with respect to
the Exchange Offer as it has in such interpretive
letters to third parties. Based on these
interpretations by the staff of the Division of
Corporation Finance of the Commission, and subject
to the two immediately following sentences, the
Corporation and the Trust believe that New Capital
Securities issued pursuant to this Exchange Offer in
exchange for Old Capital Securities may be offered
for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a
broker-dealer) without further compliance with the
registration and prospectus delivery requirements of
the Securities Act, provided that such New Capital
Securities are acquired in the ordinary course of
such holder's business and that such holder is not
participating, and has no arrangement or
understanding with any person to participate, in a
distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any
holder of Old Capital Securities who is an Affiliate
of the Corporation or the Trust or who intends to
participate in the Exchange Offer for the purpose of
distributing the New Capital Securities, or any
broker-dealer who purchased the Old Capital
Securities from the Trust to resell pursuant to Rule
144A or any other available exemption under the
Securities Act, (i) will not be able to rely on the
interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in
the above-mentioned interpretive letters, (ii) will
not be permitted or entitled to tender such Old
Capital Securities in the Exchange Offer and (iii)
must comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any sale or other transfer of such
Old Capital Securities unless such sale is made
pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer
holds Old Capital Securities acquired for its own
account as a result of market-making or other
trading activities and exchanges such Old Capital
Securities for New
</TABLE>

<PAGE> 14

<TABLE>
<S> <C>
Capital Securities, then such broker-dealer
must deliver a prospectus meeting the requirements
of the Securities Act in connection with any
resales of such New Capital Securities.

Each holder of Old Capital Securities who wishes to
exchange Old Capital Securities for New Capital
Securities in the Exchange Offer will be required to
represent in the Letter of Transmittal or by
transmission of an Agent's Message that (i) it is
not an "affiliate" of the Corporation or the Trust,
(ii) any New Capital Securities to be received by it
are being acquired in the ordinary course of its
business, (iii) it has no arrangement or
understanding with any person to participate in a
distribution (within the meaning of the Securities
Act) of such New Capital Securities and (iv) if such
holder is not a broker-dealer, such holder is not
engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities
Act) of such New Capital Securities. The Letter of
Transmittal contains the foregoing representations.
Each Participating Broker-Dealer that receives New
Capital Securities for its own account pursuant to
the Exchange Offer will be deemed to have
acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message (as
defined herein) that it acquired the Old Capital
Securities for its own account as the result of
market-making activities or other trading activities
and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in
connection with any resale of such New Capital
Securities. The Letter of Transmittal states that,
by so acknowledging and by delivering a prospectus,
a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning
of the Securities Act. Based on the position taken
by the staff of the Division of Corporation Finance
of the Commission in the interpretive letters
referred to above, the Corporation and the Trust
believe that Participating Broker-Dealers who
acquired Old Capital Securities for their own
accounts as a result of market-making activities or
other trading activities may fulfill their
prospectus delivery requirements with respect to the
New Capital Securities received upon exchange of
such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from
the original sale of the Old Capital Securities)
with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared
for an exchange offer so long as it contains a
description of the plan of distribution with respect
to the resale of such New Capital Securities.
Accordingly, this Prospectus, as it may be amended
or supplemented from time to time, may be used by a
Participating Broker-Dealer in
</TABLE>

14
<PAGE> 15

<TABLE>
<S> <C>
connection with resales of New Capital Securities
received in exchange for Old Capital Securities where
such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a
result of market-making or other trading activities.
Subject to certain provisions set forth in the
Registration Rights Agreement and to the limitations
described below under "The Exchange Offer--Resales
of New Capital Securities," the Corporation and the
Trust have agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection
with resales of such New Capital Securities for a
period ending 90 days after the Expiration Date
(subject to extension under certain limited
circumstances) or, if earlier, when all such New
Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of
Distribution." Any person, including any
Participating Broker-Dealer, who is an Affiliate of
the Corporation or the Trust may not rely on such
interpretive letters and must comply with the
registration and prospectus delivery requirements of
the Securities Act in connection with any resale
transaction. See "The Exchange Offer--Resales of
New Capital Securities."

Exchange Agent . . . . . . . . . . . . . . . . . . The exchange agent with respect to the Exchange
Offer is The Bank of New York (the "Exchange
Agent"). The addresses, and telephone and facsimile
numbers, of the Exchange Agent are set forth in "The
Exchange Offer--Exchange Agent" and in the Letter of
Transmittal.

Use of Proceeds . . . . . . . . . . . . . . . . . . Neither the Corporation nor the Trust will receive
any cash proceeds from the issuance of the New
Capital Securities offered hereby. See "Use of
Proceeds."

Certain Federal Income Tax Considerations;
ERISA Considerations . . . . . . . . . . . . . . Holders of Old Capital Securities should review the
information set forth under "Certain Federal Income
Tax Considerations" and "ERISA Considerations" prior
to tendering Old Capital Securities in the Exchange
Offer.
</TABLE>

THE NEW CAPITAL SECURITIES

<TABLE>
<S> <C>
Securities Offered . . . . . . . . . . . . . . . . Up to $50,000,000 aggregate Liquidation Amount of
the Trust's New Capital Securities which have been
registered under the Securities Act (Liquidation
Amount $1,000 per New Capital Security). The New
Capital Securities will be issued and the Old
Capital Securities were issued under the Trust
Agreement. The New Capital Securities and any Old
Capital Securities which remain outstanding after
</TABLE>

15
<PAGE> 16

<TABLE>
<S> <C>
consummation of the Exchange Offer will vote
together as a single class for purposes of
determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof
have taken certain actions or exercised certain
rights under the Trust Agreement. See "Description
of New Securities--Description of Capital Securities
--Voting Rights; Amendment of the Trust Agreement."
The terms of the New Capital Securities are
identical in all material respects to the terms of
the Old Capital Securities, except that the New
Capital Securities have been registered under the
Securities Act and therefore will not be subject to
certain restrictions on transfer under federal and
state securities laws and will not provide for any
increase in the Distribution rate thereon. See "The
Exchange Offer--Purpose of the Exchange Offer,"
"Description of New Securities" and "Description of
Old Securities."

Distribution Dates . . . . . . . . . . . . . . . . March 1 and September 1 of each year.

Extension Periods . . . . . . . . . . . . . . . . . Distributions on the Capital Securities will be
deferred for the duration of any Extension Period
elected by the Corporation with respect to the
payment of interest on the Junior Subordinated
Debentures. No Extension Period will exceed 10
consecutive semi-annual periods, end on a date other
than an Interest Payment Date or extend beyond the
Stated Maturity Date. See "Description of New
Securities--Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date"
and "Certain United States Federal Income Tax
Considerations--Interest Income and Original Issue
Discount."

Ranking . . . . . . . . . . . . . . . . . . . . . . The New Capital Securities will rank pari passu, and
payments thereon will be made pro rata, with the Old
Capital Securities and the Common Securities except
as described under "Description of New Securities
--Description of Capital Securities--Subordination
of Common Securities." The New Junior Subordinated
Debentures will rank pari passu with the Old Junior
Subordinated Debentures, and all other junior
subordinated debentures issued by the Corporation
(the "Other Debentures") and sold to other trusts
established or to be established by the Corporation,
in each case similar to the Trust (the "Other
Trusts"), and will be unsecured and subordinate and
junior in right of payment to all Senior
Indebtedness of the Corporation to the extent and in
the manner set forth in the Indenture. See
"Description of New Securities--Description of
Junior Subordinated Debentures." The New Guarantee
will rank pari passu with the Old Guarantee, and all
other guarantees issued by the Corporation with
respect to capital securities issued
</TABLE>

<PAGE> 17

<TABLE>
<S> <C>
or to be issued by Other Trusts (the "Other Guarantees")
and will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in
right of payment to all Senior Indebtedness of the
Corporation to the extent and in the manner set
forth in the Guarantee Agreement. See "Description
of New Securities--Description of Guarantee."

Redemption . . . . . . . . . . . . . . . . . . . . The Trust Securities are subject to mandatory
redemption in a Like Amount, (i) in whole but not in
part, on the Stated Maturity Date upon repayment of
the Junior Subordinated Debentures, (ii) in whole
but not in part, at any time before the Initial
Optional Prepayment Date contemporaneously with the
optional redemption of the Junior Subordinated
Debentures by the Corporation upon the occurrence
and continuation of a Special Event (as defined
herein) and (iii) in whole or in part, at any time
on or after the Initial Optional Prepayment Date
contemporaneously with the optional redemption by
the Corporation of the Junior Subordinated
Debentures, in each case at the applicable
Redemption Price. See "Description of New
Securities--Description of Capital Securities
--Redemption."

Rating. . . . . . . . . . . . . . . . . . . . . The New Capital Securities are expected to be rated
"BB-" by Duff & Phelps Credit Rating Co. and "BB" by
Thomson BankWatch, Inc., which are the ratings which
such agencies have given to the Old Capital Securities.
A security rating is not a recommendation to buy, sell
or hold securities and may be subject to revision or
withdrawal at any time by the assigning rating
organization.

Transfer . . . . . . . . . . . . . . . . . . . . . The New Capital Securities will be issued, and may
be transferred, only in blocks having a Liquidation
Amount of not less than $100,000 (100 New Capital
Securities). Any transfer, sale or other
disposition of New Capital Securities resulting in a
block having a Liquidation Amount of less than
$100,000 shall be deemed to be void and of no legal
effect whatsoever.

Absence of Market for the New Capital Securities . The New Capital Securities will be a new issue of
securities for which there currently is no market.
Each of Sandler O'Neill & Partners, L.P. and Janney
Montgomery Scott Inc., the initial purchasers of the
Old Capital Securities (the "Initial Purchasers"),
have informed the Corporation and the Trust that it
intends to make a market in the New Capital
Securities. However, neither Initial Purchaser is
obligated to make a market in the Old Capital
Securities or the New Capital Securities, and any
such market making may be discontinued at any time
</TABLE>

17
<PAGE> 18

<TABLE>
<S> <C>
without notice. Accordingly, there can be no
assurance as to the development or liquidity of any
market for the New Capital Securities. The Trust
and the Corporation do not intend to apply for
listing of the New Capital Securities on any
securities exchange or for quotation through the
National Association of Securities Dealers Automated
Quotation System. See "Plan of Distribution."
</TABLE>

18
<PAGE> 19
RISK FACTORS

Prospective investors should consider carefully, in addition to the
other information contained in this Prospectus, the following factors in
connection with the Exchange Offer and the New Capital Securities offered
hereby.

RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES; LIMITATIONS ON SOURCES OF FUNDS

The obligations of the Corporation under the Guarantee for the benefit
of holders of Capital Securities and under the Junior Subordinated Debentures
are unsecured and rank subordinate and junior in right of payment to all
present and future Senior Indebtedness of the Corporation to the extent and in
the manner set forth in the Indenture and the Guarantee, respectively. No
payment may be made of the principal of, or premium, if any, or interest on the
Junior Subordinated Debentures, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Junior Subordinated Debentures, at
any time when (i) there shall have occurred and be continuing a default, in any
payment in respect of any Senior Indebtedness, or there has been an
acceleration of the maturity thereof because of a default, or (ii) in the event
of the acceleration of the maturity of the Junior Subordinated Debentures until
payment has been made on all Senior Indebtedness. At March 31, 1997, the
Corporation had outstanding Senior Indebtedness. Because the Corporation is a
holding company, the right of the Corporation to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution) is subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Corporation may itself be recognized as a creditor of such subsidiary. At
March 31, 1997, the subsidiaries of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of approximately $1.77 billion,
including deposits. Accordingly, the Junior Subordinated Debentures
effectively will be subordinated to all existing and future liabilities of the
Corporation's subsidiaries, and holders of Junior Subordinated Debentures
should look only to the assets of the Corporation for payments on the Junior
Subordinated Debentures. The Guarantee constitutes an unsecured obligation of
the Corporation and ranks subordinate and junior in right of payment to all
Senior Indebtedness of the Corporation in the same manner as the Junior
Subordinated Debentures. None of the Indenture, the Guarantee or the Trust
Agreement places any limitation on the amount of secured or unsecured debt,
including Senior Indebtedness, that may be incurred by the Corporation or any
of its subsidiaries. See "Description of New Securities -- Description of
Guarantee -- Status of Guarantee" and "-- Description of Junior Subordinated
Debentures -- Subordination."

The ability of the Trust to pay amounts due on the Capital Securities
is solely dependent upon the Corporation making payments on the Junior
Subordinated Debentures as and when required.

The Corporation is a holding company and almost all of the operating
assets of the Corporation are owned by the Corporation's subsidiaries. The
Corporation relies primarily on dividends from the Bank to meet its obligations
for payment of principal and interest on its outstanding debt obligations and
corporate expenses. There are regulatory limitations on the payment of
dividends directly or indirectly to the Corporation from the Bank. As of March
31, 1997, under regulations of the Office of Thrift Supervision ("OTS"), the
total capital available for payment of dividends by the Bank to the Corporation
was approximately $29.1 million. However, the OTS has the power to prohibit any
act, including the payment of dividends, if such act would reduce the Bank's
capital to a point that, in its opinion, would render the Bank undercapitalized
and thus constitute an unsafe or unsound banking practice. In addition to
restrictions on the payment of dividends, the Bank is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the Bank unless the
loans are secured by various types of collateral. Further, such secured loans,
other transactions and investments by the Bank are generally limited in amount
as to the Corporation and as to each of such other affiliates to 10% of the

19
<PAGE> 20
Bank's capital and surplus and as to the Corporation and all of such other
affiliates to an aggregate of 20% of the Bank's capital and surplus.

OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; MARKET PRICE
CONSEQUENCES

So long as no Debenture Event of Default (as defined herein) shall
have occurred and be continuing, the Corporation has the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures
at any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period shall end on a date other than an Interest Payment Date or
extend beyond the Stated Maturity Date. As a consequence of any such deferral,
semi-annual Distributions on the Trust Securities by the Trust will be deferred
(and the amount of Distributions to which holders of the Trust Securities are
entitled will accumulate additional Distributions thereon at the rate of 9.875%
per annum, compounded semi-annually, but not exceeding the interest rate then
accruing on the Junior Subordinated Debentures) from the relevant payment date
for such Distributions during any such Extension Period. During the pendency of
any Extension Period, the Corporation generally will be prohibited from
declaring or paying dividends on the Corporation's capital stock. See
"Description of New Securities -- Description of Capital Securities --
Distributions."

Prior to the termination of any Extension Period, the Corporation may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods to end
on a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any Extension Period and the payment of
all interest then accrued and unpaid on the Junior Subordinated Debentures
(together with interest thereon at the annual rate of 9.875%, compounded
semi-annually, to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject to the above requirements. There
is no limitation on the number of times that the Corporation may elect to begin
an Extension Period. See "Description of New Securities -- Description of
Capital Securities -- Distributions" and "-- Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment Date."

The Corporation has no current plan to exercise its right to defer
payments of interest on the Junior Subordinated Debentures. However, should the
Corporation exercise its right to defer payments of interest on the Junior
Subordinated Debentures, each holder of Trust Securities will be required to
accrue income (as original issue discount ("OID")) in respect of the deferred
stated interest allocable to its Trust Securities for United States federal
income tax purposes, which will be allocated but not distributed to holders of
Trust Securities. As a result, each holder of Capital Securities will recognize
income for United States federal income tax purposes in advance of the receipt
of cash and will not receive the cash related to such income from the Trust if
the holder disposes of the Capital Securities prior to the record date for the
payment of Distributions thereafter. See "Certain Federal Income Tax
Considerations -- Interest Income and Original Issue Discount" and "-- Sales of
Capital Securities."

Should the Corporation elect to exercise its right to defer payments
of interest on the Junior Subordinated Debentures in the future, the market
price of the Capital Securities is likely to be affected. A holder that
disposes of its Capital Securities during an Extension Period, therefore, might
not receive the same return on its investment as a holder that continues to
hold its Capital Securities. In addition, the mere existence of the
Corporation's right to defer interest payments on the Junior Subordinated
Debentures may cause the market price of the Capital Securities to be more
volatile than the market prices of other securities on which OID accrues and
that are not subject to such deferrals.

20
<PAGE> 21
SPECIAL EVENT REDEMPTION

Upon the occurrence and continuation of a Special Event (including a
Tax Event or a Regulatory Capital Event (in each case as defined under
"Description of New Securities -- Description of Junior Subordinated Debentures
- -- Special Event Prepayment")) prior to the Initial Optional Prepayment Date,
the Corporation will have the right to prepay the Junior Subordinated
Debentures in whole (but not in part) at the Special Event Prepayment Price
within 90 days following the occurrence of such Special Event and therefore
cause a mandatory redemption of the Trust Securities at the Special Event
Redemption Price. The exercise of such right is subject to the Corporation
having received any required regulatory approval. See "Description of New
Securities -- Description of Capital Securities -- Redemption."

PROPOSED TAX LEGISLATION

On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that
would, among other things, deny an issuer a deduction for United States federal
income tax purposes for the payment of interest in respect of certain types of
debt obligations (the "Administration's Proposal"). The Administration's
Proposal would apply to debt obligations, such as the Junior Subordinated
Debentures, issued on or after the date of "first committee action" with
respect to the Administration's Proposal if such debt obligations have a
maximum term in excess of 15 years and are not shown as indebtedness on the
issuer's balance sheet or if such debt obligations have a maximum weighted
average maturity of more than 40 years. Under current law, the Corporation
will be able to deduct interest on the Junior Subordinated Debentures, and as
proposed the Administration's Proposal would not apply to the Junior
Subordinated Debentures because they were issued prior to the date of "first
committee action." Legislative proposals approved by the U.S. House of
Representatives and the U.S. Senate on June 26 and 27, 1997, respectively, did
not include the Administration's Proposal, and on June 30, 1997, the Clinton
Administration announced a new budget proposal which also does not appear to
include such proposal. There can be no assurance, however, that current or
future legislative proposals or final legislation will not adversely affect the
ability of the Corporation to deduct interest on the Junior Subordinated
Debentures. Accordingly, there can be no assurance that a Tax Event will not
occur. The occurrence of a Tax Event may result in the redemption of the
Junior Subordinated Debentures for cash, in which event the holders of Capital
Securities would receive cash in redemption of their Capital Securities. See
"Description of New Securities -- Description of Capital Securities --
Redemption" and "Description of Junior Subordinated Debentures -- Special Event
Prepayment." See also "Certain Federal Income Tax Considerations -- Proposed
Tax Legislation."

LIQUIDATION DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES

The Corporation has the right at any time to terminate the Trust and,
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Junior Subordinated Debentures to be distributed
to the holders of the Trust Securities in liquidation of the Trust. Such right
is subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to the holders of
Capital Securities and (ii) receipt of any required regulatory approval. Under
current United States federal income tax law, a distribution of Junior
Subordinated Debentures upon the dissolution of the Trust would not be a
taxable event to holders of the Capital Securities. Upon the occurrence of a
Special Event, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "Certain
Federal Income Tax Considerations -- Receipt of Junior Subordinated Debentures
or Cash Upon Liquidation of the Trust."

POSSIBLE ADVERSE EFFECT ON MARKET PRICES

There can be no assurance as to the market prices for Capital
Securities or Junior Subordinated Debentures that may be distributed in
exchange for Capital Securities if a termination of the Trust were to occur.

21
<PAGE> 22
Accordingly, the Capital Securities or the Junior Subordinated Debentures may
trade at a discount from the price that the investor paid to purchase the New
Capital Securities offered hereby. Because holders of Capital Securities may
receive Junior Subordinated Debentures in liquidation of the Trust and because
Distributions are otherwise limited to payments on the Junior Subordinated
Debentures, prospective purchasers of New Capital Securities are also making an
investment decision with regard to the Junior Subordinated Debentures and
should carefully review all the information regarding the New Junior
Subordinated Debentures contained herein. See "Description of New Securities --
Description of Junior Subordinated Debentures."

RIGHTS UNDER THE GUARANTEE

The Guarantee guarantees to the holders of the Capital Securities the
following payments, to the extent not paid by or on behalf of the Trust: (i)
any accumulated and unpaid Distributions required to be paid on the Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to the
Capital Securities called for redemption, to the extent that the Trust has
funds on hand legally available therefor at such time, and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of the Trust
(unless the Junior Subordinated Debentures are distributed to holders of the
Capital Securities), the lesser of (a) the aggregate of the Liquidation Amount
and all accumulated and unpaid Distributions to the date of payment, to the
extent that the Trust has funds on hand legally available therefor at such
time, and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Capital Securities at such time, after the
satisfaction of liabilities to creditors of the Trust as provided by applicable
law.

The holders of a majority in Liquidation Amount of the Capital
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect of
the Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee under the Guarantee. Any holder of the Capital Securities may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity. If the
Corporation defaults on its obligation to pay amounts payable under the Junior
Subordinated Debentures, the Trust will not have sufficient funds for the
payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and, in such event, holders of the Capital Securities
will not be able to rely upon the Guarantee for payment of such amounts.
Instead, in the event a Debenture Event of Default shall have occurred and be
continuing and such event is attributable to the failure of the Corporation to
pay the principal of (or premium, if any) or interest (including Additional
Sums (as defined below) and Compounded Interest (as defined below), if any) or
Liquidated Damages, if any, on the Junior Subordinated Debentures on the
payment date on which such payment is due and payable, then a holder of Capital
Securities may institute a legal proceeding directly against the Corporation
for enforcement of payment to such holder of the principal of (or premium, if
any) or interest (including Additional Sums and Compounded Interest, if any) or
Liquidated Damages, if any, on such Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such holder (a "Direct Action"). Notwithstanding any payments made to a holder
of Capital Securities by the Corporation in connection with a Direct Action,
the Corporation shall remain obligated to pay the principal of (and premium, if
any) and interest (including Additional Sums and Compounded Interest, if any)
or Liquidated Damages, if any, on the Junior Subordinated Debentures, and the
Corporation shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Capital Securities to the extent of
any payments made by the Corporation to such holder in any Direct Action.
Except as described herein, holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Debentures or to assert directly any other rights in respect of
the Junior Subordinated Debentures. See "Description of New Securities --
Description of Junior Subordinated Debentures -- Enforcement of Certain Rights
by Holders of Capital Securities," "-- Debenture Events of Default" and "--
Description of Guarantee." The Trust Agreement provides that each holder of
Capital Securities by acceptance thereof agrees to the provisions of the
Indenture. The Bank of New York acts as Guarantee Trustee and holds the
Guarantee for the benefit of

22
<PAGE> 23
the holders of the Capital Securities. The Bank of New York also acts as
Property Trustee and as Debenture Trustee under the Indenture. The Bank of New
York (Delaware) acts as Delaware Trustee under the Trust Agreement.

LIMITED VOTING RIGHTS

Holders of Capital Securities generally will have limited voting
rights relating only to the modification of the Capital Securities and the
exercise of the Trust's rights as holder of Junior Subordinated Debentures.
Holders of Capital Securities will not be entitled to vote to appoint, remove
or replace, or to increase or decrease the number of, the Issuer Trustees,
which voting rights are vested exclusively in the holder of the Common
Securities except upon the occurrence of certain events described herein. The
Property Trustee, the Administrative Trustees and the Corporation may amend the
Trust Agreement without the consent of holders of Capital Securities to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust, even if such action adversely affects the interests of such
holders. Holders of Capital Securities will have no voting rights with respect
to any matters submitted to a vote of the Corporation's stockholders. See
"Description of New Securities -- Description of Capital Securities -- Voting
Rights; Amendment of the Trust Agreement" and "-- Removal of Issuer Trustees."

CONSEQUENCES OF A FAILURE TO EXCHANGE OLD CAPITAL SECURITIES

The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on transfer.
In addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement. The Corporation and
the Trust do not intend to register under the Securities Act any Old Capital
Securities which remain outstanding after consummation of the Exchange Offer.

To the extent that Old Capital Securities are tendered and accepted in
the Exchange Offer, a holder's ability to sell untendered Old Capital
Securities could be adversely affected. In addition, although the Old Capital
Securities have been designated for trading in the Private Offerings, Resale
and Trading through Automated Linkages ("PORTAL") market, to the extent that
Old Capital Securities are tendered and accepted in connection with the
Exchange Offer, any trading market for Old Capital Securities which remain
outstanding after the Exchange Offer could be adversely affected.

The New Capital Securities and any Old Capital Securities which remain
outstanding after consummation of the Exchange Offer will vote together as a
single class for purposes of determining whether holders of the requisite
percentage in outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Trust Agreement. See "Description of New
Securities--Description of Capital Securities--Voting Rights; Amendment of the
Trust Agreement."

The Old Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
August 7, 1997 and declared effective by September 6, 1997, the Distribution
rate borne by the Old Capital Securities commencing on March 10, 1997 will
increase by 0.25% per annum until the Exchange Offer is consummated. Upon
consummation of the Exchange Offer, holders of Old Capital Securities will not
be entitled to any increase in the Distribution rate thereon or any further
registration rights under the Registration Rights Agreement. The New Capital
Securities will not be entitled to any such increase in the Distribution rate
thereon. See "Description of Old Capital Securities."

23
<PAGE> 24
TRADING CHARACTERISTICS OF THE CAPITAL SECURITIES

The Capital Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) and who
disposes of its Capital Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest
on the Junior Subordinated Debentures through the date of disposition in income
as ordinary income (i.e., interest or, possibly, OID), and to add such amount
to its adjusted tax basis in its share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than
the holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes. See "Certain Federal Income Tax
Considerations -- Interest Income and Original Issue Discount" and "-- Sales of
Capital Securities."

ABSENCE OF PUBLIC MARKET

The Old Capital Securities have not been registered under the
Securities Act and will continue to be subject to restrictions on
transferability under the Securities Act and applicable state securities laws
if they are not exchanged for New Capital Securities. Although the New Capital
Securities generally may be resold or otherwise transferred by the holders (who
are not Affiliates of the Corporation or the Trust) without compliance with the
registration requirements under the Securities Act, they will constitute a new
issue of securities with no established trading market. Capital Securities may
be transferred by the holders thereof only in blocks having a Liquidation
Amount of not less than $100,000 (100 Capital Securities). The Corporation and
the Trust were advised by the Initial Purchasers in connection with the
offering of the Old Capital Securities that the Initial Purchasers intend to
make a market in the Old Capital Securities. However, neither Initial
Purchaser is obligated to do so and any market-making activity with respect to
the New Capital Securities may be discontinued at any time without notice. In
addition, such market-making activity will be subject to the limits imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer. Accordingly, no assurance can be given that an active public or other
market will develop for the New Capital Securities or the Old Capital
Securities or as to the liquidity of or the trading market for the New Capital
Securities or the Old Capital Securities. If an active public market does not
develop, the market price and liquidity of the New Capital Securities may be
adversely affected.

If a public trading market develops for the New Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the Corporation's results of operations and
the market for similar securities. Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Corporation, the New Capital Securities may trade at a
discount.

Notwithstanding the registration of the New Capital Securities in the
Exchange Offer, holders who are Affiliates of the Corporation or the Trust may
publicly offer for sale or resell the New Capital Securities only in compliance
with the provisions of Rule 144 under the Securities Act.

Each Participating Broker-Dealer that receives New Capital Securities
for its own account in exchange for Old Capital Securities must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Capital Securities. See "Plan of Distribution."

24
<PAGE> 25
EXCHANGE OFFER PROCEDURES

Issuance of the New Capital Securities in exchange for Old Capital
Securities pursuant to the Exchange Offer will be made only after a timely
receipt by the Trust of such Old Capital Securities, a properly completed and
duly executed Letter of Transmittal or Agent's Message in lieu thereof and all
other required documents. Therefore, holders of the Old Capital Securities
desiring to tender such Old Capital Securities in exchange for New Capital
Securities should allow sufficient time to ensure timely delivery. None of the
Corporation, the Trust or the Exchange Agent is under any duty to give
notification of defects or irregularities with respect to the tenders of Old
Capital Securities for exchange.

THE TRUST

The Trust is a statutory business trust created under Delaware law
upon the filing of a certificate of trust with the Secretary of State of the
State of Delaware. The Trust exists for the exclusive purposes of (i) issuing
and selling the Trust Securities, which represent undivided beneficial
interests in the assets of the Trust, (ii) investing the gross proceeds from
the sale of the Trust Securities in the Junior Subordinated Debentures and
(iii) engaging in only those other activities necessary, advisable or
incidental thereto. Accordingly, the Junior Subordinated Debentures will be
the sole assets of the Trust and payments under the Junior Subordinated
Debentures will be the sole revenues of the Trust. All of the Common
Securities are owned directly by the Corporation. The Common Securities rank
pari passu, and payments will be made thereon pro rata, with the Capital
Securities, except that upon the occurrence and during the continuance of an
Event of Default, the rights of the Corporation as holder of the Common
Securities to payments in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated and rank junior to
the rights of the holders of the Capital Securities. See "Description of New
Securities -- Description of Capital Securities -- Subordination of Common
Securities." The Corporation acquired Common Securities in a Liquidation Amount
equal to 3% of the total capital of the Trust. The Trust has a term of 31
years, but may terminate earlier as provided in the Trust Agreement. The
Trust's business and affairs are conducted by trustees (the "Issuer Trustees")
appointed by the Corporation as the direct holder of the Common Securities.
The Issuer Trustees are The Bank of New York as the Property Trustee (the
"Property Trustee"), The Bank of New York (Delaware) as the Delaware Trustee
(the "Delaware Trustee") and three individual trustees (the "Administrative
Trustees"). The Bank of New York, as Property Trustee, acts as sole indenture
trustee under the Trust Agreement. The Bank of New York also acts as indenture
trustee under the Guarantee and the Indenture. See "Description of New
Securities -- Description of Guarantee" and "-- Description of Junior
Subordinated Debentures." The holder of the Common Securities or, if an Event
of Default under the Trust Agreement has occurred and is continuing, the
holders of not less than a majority in Liquidation Amount of the Capital
Securities, will be entitled to appoint, remove or replace the Property Trustee
and/or the Delaware Trustee. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees; such voting rights will be vested exclusively in the
holder of the Common Securities. The duties and obligations of each Issuer
Trustee are governed by the Trust Agreement. The Corporation will pay directly
all fees, expenses, debts and obligations (other than the Trust Securities)
related to the Exchange Offer, except as provided herein, and will pay,
directly or indirectly, all ongoing costs, expenses and liabilities of the
Trust. The principal executives office of the Trust is c/o ML Bancorp, Inc.,
Two Aldwyn Center, Lancaster Avenue & Route 320, Villanova, Pennsylvania 19085.

THE CORPORATION

The Corporation is a Pennsylvania corporation organized in March 1994
to acquire all of the capital stock of the Bank issued in connection with the
Bank's conversion from mutual to stock form in August 1994. The Corporation is
headquartered in Villanova, Pennsylvania and its principal business currently
consists of the

25
<PAGE> 26
operations of the Bank. The Corporation reported net income of $13.8 million,
or $1.22 per share, for the year ended March 31, 1997. At March 31, 1997, the
Corporation had consolidated assets of $1.96 billion and stockholders' equity
of $135.7 million.

Acquisitions have been, and are expected to continue to be, an
important part of the expansion of the Corporation's business. During the year
ended March 31, 1996, the Corporation completed the acquisition of Hart
Mortgage Co., a mortgage banking company, and Suburban Federal Savings Bank, a
community bank headquartered in Delaware County, Pennsylvania with $66.0
million in assets. On April 1, 1996, the Corporation acquired Philadelphia
Mortgage Corporation, a mortgage banking company with a $1.3 billion loan
servicing portfolio. On February 4, 1997, the Corporation entered into a
definitive agreement to acquire Penncore Financial Services Corporation
("Penncore"), the holding company for Commonwealth State Bank, a
Pennsylvania-chartered bank which conducts business from two offices located in
Newtown and Yardley, Pennsylvania, both of which are located in Bucks County,
Pennsylvania. In connection with the acquisition of Penncore, the Corporation
will pay total consideration of $14.1 million to Penncore stockholders in a
combination of cash and common stock of the Corporation. The acquisition of
Penncore will be accounted for as a purchase and is subject to the receipt of
required stockholder and regulatory approvals and other customary conditions.
It is anticipated that the acquisition will be consummated during the third
quarter of calendar 1997. At December 31, 1996, Penncore had consolidated
assets of $137.8 million and stockholders' equity of $9.6 million.

The Corporation is a registered savings and loan holding company
subject to certain regulation and examination by the OTS and the Bank is
subject to regulation and examination by the OTS, as its chartering authority,
and by the Federal Deposit Insurance Corporation ("FDIC"), which insures its
deposits to the maximum extent permitted by law through the Savings Association
Insurance Fund ("SAIF") administered by it.

The principal executive offices of the Company are located at Two
Aldwyn Center, Lancaster Avenue & Route 320, Villanova, Pennsylvania 19085 and
its telephone number is (610) 526-6482.

26
<PAGE> 27
SELECTED CONSOLIDATED FINANCIAL DATA OF THE CORPORATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The selected consolidated financial data below should be read in
connection with the financial information included in the Corporation's Annual
Report on Form 10-K for the year ended March 31, 1997.

<TABLE>
<CAPTION>
March 31,
--------------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Total assets . . . . . . . . . . . $1,959,847 $1,765,812 $1,563,452 $1,001,037 $989,308
Loans receivable, net . . . . . . 730,535 691,791 550,013 268,335 290,380
Investments and mortgage-related .
securities, net . . . . . . . 417,364 429,092 515,383 428,103 418,064
Assets available for sale . . . . 702,533 564,354 436,332 264,724 230,660
Deposit accounts . . . . . . . . . 873,357 861,016 688,678 679,525 618,693
Borrowings . . . . . . . . . . . . 893,703 778,225 710,541 256,795 304,881
Equity . . . . . . . . . . . . . . 135,704 140,337 141,300 53,978 57,056
Nonperforming assets . . . . . . . 10,724 10,445 8,931 12,360 24,658
Allowance for loan losses . . . . 14,733 13,124 9,111 7,337 7,488
Book value per share(2) . . . . . 13.03 12.24 11.15 N/A N/A
Tangible book value per share(2) . 12.77 11.93 11.10 N/A N/A
</TABLE>

<TABLE>
<CAPTION>
Year Ended March 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
---------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Operations Data:
Interest income . . . . . . . . . $137,318 $120,421 $90,233 $61,889 $70,973
Interest expense . . . . . . . . . 83,139 76,659 53,484 39,079 45,959
-------- -------- ------- ------- -------

Net interest income . . . . . . . 54,179 43,762 36,749 22,820 25,014
Provision for loan losses . . . . 5,310 4,000 3,400 1,113 3,169
-------- -------- ------- ------- -------

Net interest income after provision
for loan losses . . . . . . . . 48,869 39,762 33,349 21,707 21,845
Non-interest income . . . . . . . 15,706 7,269 3,412 8,616 7,196
Non-interest expenses(1) . . . . . 48,860 29,139 23,093 21,000 20,253
-------- -------- ------- ------- -------

Income before income taxes . . . . 15,715 17,892 13,668 9,323 8,788
Income taxes . . . . . . . . . . . 1,905 6,272 4,974 7,461 3,267
Cumulative effect of change in
accounting for income taxes. -- -- -- -- 1,967
-------- -------- ------- ------- -------
Net income . . . . . . . . . . . . $13,810 $11,620 $8,694 $1,862 $7,488
======== ======== ======= ======= =======

Per Share Data:
Earnings per share fully diluted(2) $1.22 $0.91 0.46 N/A N/A
Dividends per share(2) . . . . . . 0.38 0.26 N/A N/A N/A
</TABLE>

(Continued on next page)

27
<PAGE> 28
<TABLE>
<CAPTION>
At or For the Year Ended March 31,
-----------------------------------------------------------------
Selected Financial Ratios(3): 1997 1996 1995 1994 1993
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Return on average assets . . . . . . 0.74% 0.71% 0.66% 0.19% 0.79%
Return on average equity . . . . . . 9.73 7.88 8.22 3.17 14.81
Net interest margin . . . . . . . . . 3.06 2.79 2.90 2.39 2.74
Operating expenses as a percent of
average assets . . . . . . . . . . 2.60 1.79 1.76 2.10 2.14
Nonperforming assets as a percent of
total assets at end of period . . 0.55 0.59 0.57 1.23 2.49
Allowance for loan losses as a
percent of nonperforming loan at
end of period . . . . . . . . . . . 156.86 156.20 134.74 137.50 55.16
Dividend payout ratio . . . . . . . . 29.80 27.49 N/A N/A N/A
Regulatory capital ratios of the Bank
at end of period:
Core . . . . . . . . . . . . . . . 5.93 7.48 9.17 5.11 5.31
Tangible . . . . . . . . . . . . . 5.93 7.48 9.17 5.15 5.40
Risk-based . . . . . . . . . . . . 13.95 15.31 21.54 12.67 13.11
</TABLE>

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

(1) Results of operations for 1997 were impacted by $3.8 million of tax
benefit related to legislation which eliminated the need to recapture tax bad
debt reserves, which was substantially offset by a one-time, pre-tax charge of
$4.8 million ($3.1 million net tax) incurred in connection with the
recapitalization of the SAIF pursuant to the same legislation. The net effect
of these items was to increase net income during 1997 by $0.06 per share.

(2) Per share data is calculated since August 11, 1994, the date of the
Corporation's initial public offering, and has been adjusted for the
Corporation's two-for-one stock split effected on September 6, 1996.

(3) With the exception of end-of-period ratios, all ratios are based on
average daily balances during the indicated periods.

28
<PAGE> 29
USE OF PROCEEDS

Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the New Capital Securities offered hereby. The Old
Capital Securities surrendered in exchange for the New Capital Securities will
be retired and cancelled.

The proceeds to the Trust from the offering of the Old Capital
Securities was $50,000,000 (before giving effect to approximately $1,625,000 of
expenses of the offering payable by the Corporation). All of the proceeds from
the sale of Old Capital Securities were invested by the Trust in the Junior
Subordinated Debentures. The net proceeds were added by the Corporation to its
general corporate funds and will be available for general corporate purposes,
including contributions to the Bank to fund its operations (including its de
novo branching strategy), the funding of a portion of the consideration to be
paid in connection with the pending acquisition of Penncore, as described under
"The Corporation," the financing of one or more future acquisitions and the
funding of repurchases of the Corporation's common stock which may be made from
time to time. From time to time, the Corporation investigates and holds
discussions and negotiations in connection with possible transactions with
other financial institutions and holding companies thereof. As of the date of
this Prospectus, the Corporation has not entered into any agreements or
understandings with respect to any such acquisitions or any other material
transactions of the type referred to above, other than the agreement with
Penncore described above. Initially, the net proceeds may be used to make
short-term investments.

RATIOS OF EARNINGS TO FIXED CHARGES

The following table sets forth the ratios of earnings to fixed charges
of the Corporation on a consolidated basis for the periods indicated.

<TABLE>
<CAPTION>
Year Ended March 31,
-----------------------------------------------------------

1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratios of Earnings to Fixed Charges:

Including interest on deposits . . . 1.19x 1.23x 1.26x 1.24x 1.19x

Excluding interest on deposits . . . 1.80x 2.11x 2.41x 3.13x 3.18x
</TABLE>

For purposes of computing the ratios of earnings to fixed charges,
earnings represent net income (loss) before extraordinary items and cumulative
effect of changes in accounting principles plus applicable income taxes and
fixed charges. Fixed charges, excluding interest on deposits, include gross
interest expense (other than on deposits) and the portion deemed representative
of the interest factor of rent expense, net of income from subleases. Fixed
charges, including gross interest on deposits, include all interest expense and
the portion deemed representative of the interest factor of rent expense, net
of income from subleases.

ACCOUNTING TREATMENT

For financial reporting purposes, the Trust is treated as a subsidiary
of the Corporation and, accordingly, the accounts of the Trust are included in
the consolidated financial statements of the Corporation. The Capital
Securities are presented as a separate line item in the consolidated balance
sheets of the Corporation, entitled "Corporation-obligated, mandatorily
redeemable securities of subsidiary trust holding solely junior subordinated
debentures of the Corporation," and appropriate disclosures about the Capital
Securities, the Guarantee and the Junior Subordinated Debentures are included
in the notes to the consolidated financial statements for financial reporting
purposes. For financial reporting purposes, the Corporation records
Distributions payable on the Capital Securities as a non-interest expense in
the consolidated statements of income.

29
<PAGE> 30
CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Corporation as of March 31, 1997, which reflects the consummation of the
offering of the Capital Securities. The following data should be read in
conjunction with the financial information included in documents incorporated
herein by reference. See "Incorporation of Certain Documents by Reference."

<TABLE>
<CAPTION>
March 31,
1997
----------------------

(Dollars in Thousands)
<S> <C>
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $873,357
Advances from Federal Home Loan Bank . . . . . . . . . . . . . . . . 437,418
Securities sold under agreements to repurchase . . . . . . . . . . . 456,285
Advance payments to borrowers for taxes and insurance . . . . . . . . 3,670
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 3,413
---------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 1,774,143
---------

Corporation-obligated mandatorily redeemable capital securities of
subsidiary trust holding solely junior subordinated debentures of
the Corporation(1) . . . . . . . . . . . . . . . . . . . . . . . . 50,000
---------

Stockholders' equity:
Preferred stock, no par value, 5,000,000 shares authorized, none
issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --
Common stock, par value $0.01 per share, 30,000,000 shares
authorized, 14,547,600 shares issued . . . . . . . . . . . . . . . 73
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 97,237
Common stock acquired by stock benefit plans . . . . . . . . . . . . (7,336)
Net unrealized loss on securities available for sale . . . . . . . . (403)
Treasury stock, at cost, 3,271,046 shares . . . . . . . . . . . . . . (37,147)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 83,280
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . 135,704
----------
Total liabilities, minority interest in subsidiaries and
stockholders' equity . . . . . . . . . . . . . . . . . . . . . . $1,959,847
==========
</TABLE>

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

(1) Reflects the Capital Securities at their issue price. As described herein,
the sole assets of the Trust, which is a subsidiary of the Corporation, are the
$51,546,000 aggregate principal amount of the Junior Subordinated Debentures
(including the amounts attributable to the issuance of the Common Securities of
the Trust), which will mature on March 1, 2027. The Corporation owns all of the
Common Securities issued by the Trust.

THE EXCHANGE OFFER

PURPOSE AND EFFECT OF THE EXCHANGE OFFER

In connection with the sale of the Old Capital Securities, the
Corporation and the Trust entered into the Registration Rights Agreement with
the Initial Purchasers, pursuant to which the Corporation and the Trust agreed
to file and to use their reasonable best efforts to cause to be declared
effective by the Commission a

30
<PAGE> 31
registration statement with respect to the exchange of the Old Capital
Securities for capital securities with terms identical in all material respects
to the terms of the Old Capital Securities. A copy of the Registration Rights
Agreement has been filed as an Exhibit to the Registration Statement of which
this Prospectus is a part.

The Exchange Offer is being made to satisfy the contractual
obligations of the Corporation and the Trust under the Registration Rights
Agreement. The form and terms of the New Capital Securities are the same as
the form and terms of the Old Capital Securities except that the New Capital
Securities (i) have been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer under federal and state
securities laws and (ii) will not provide for any increase in the Distribution
rate thereon. In that regard, the Old Capital Securities provide, among other
things, that, if a registration statement relating to the Exchange Offer has
not been filed by August 7, 1997 and declared effective by September 6, 1997,
the Distribution rate borne by the Old Capital Securities, commencing on March
10, 1997 will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the Distribution rate
thereon or any further registration rights under the Registration Rights
Agreement. See "Risk Factors--Consequences of a Failure to Exchange Old
Capital Securities" and "Description of Old Capital Securities."

The Exchange Offer is not being made to, nor will the Trust accept
tenders for exchange from, holders of Old Capital Securities in any
jurisdiction in which the Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of such jurisdiction.

Unless the context requires otherwise, the term "holder" with respect
to the Exchange Offer means any person in whose name the Old Capital Securities
are registered on the books of the Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any participant in
the DTC system whose name appears on a security position listing as the holder
of such Old Capital Securities and who desires to deliver such Old Capital
Securities by book-entry transfer at DTC.

Pursuant to the Exchange Offer, the Corporation will exchange as soon
as practicable after the date hereof, the Old Guarantee for the New Guarantee
and the Old Junior Subordinated Debentures, in an amount corresponding to the
Old Capital Securities accepted for exchange, for a like aggregate principal
amount of the New Junior Subordinated Debentures. The New Guarantee and the
New Junior Subordinated Debentures have been registered under the Securities
Act.

TERMS OF THE EXCHANGE OFFER

The Trust hereby offers, upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $50,000,000 aggregate Liquidation Amount of New Capital
Securities for a like aggregate Liquidation Amount of Old Capital Securities
properly tendered on or prior to the Expiration Date and not properly withdrawn
in accordance with the procedures described below. The Trust will issue,
promptly after the Expiration Date, an aggregate Liquidation Amount of up to
$50,000,000 of New Capital Securities in exchange for a like aggregate
Liquidation Amount of outstanding Old Capital Securities tendered and accepted
in connection with the Exchange Offer. Holders may tender their Old Capital
Securities in whole or in part in a Liquidation Amount of not less than
$100,000 (100 Capital Securities) or any integral multiple of $1,000
Liquidation Amount (one Capital Security) in excess thereof, provided that if
any Old Capital Securities are tendered in exchange for part, the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in
excess thereof.

The Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Old Capital Securities being tendered. As of the date of this
Prospectus, $50,000,000 aggregate Liquidation Amount of the Old Capital
Securities is outstanding.

31
<PAGE> 32
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement. See "Risk
Factors--Consequences of a Failure to Exchange Old Capital Securities" and
"Description of Old Securities."

If any tendered Old Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.

Holders who tender Old Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Corporation will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange
Offer. See "--Fees and Expenses."

NEITHER THE BOARD OF DIRECTORS OF THE CORPORATION NOR ANY TRUSTEE OF
THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF OLD CAPITAL SECURITIES AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF THEIR OLD
CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN ADDITION, NO ONE HAS
BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD CAPITAL
SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES TO
TENDER BASED ON SUCH HOLDERS OWN FINANCIAL POSITION AND REQUIREMENTS.

EXPIRATION, DATE; EXTENSIONS; AMENDMENTS

The term "Expiration Date" means 5:00 p.m., New York City time, on
August 25, 1997 unless the Exchange Offer is extended by the Corporation or
the Trust (in which case the term "Expiration Date" shall mean the latest date
and time to which the Exchange Offer is extended).

The Corporation and the Trust expressly reserve the right in their
sole and absolute discretion, subject to applicable law, at any time and from
time to time, (i) to delay the acceptance of the Old Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) if the Corporation and
the Trust determine, in their sole and absolute discretion, that any of the
events or conditions referred to under "--Conditions to the Exchange Offer"
have occurred or exist or have not been satisfied, (iii) to extend the
Expiration Date of the Exchange Offer and retain all Old Capital Securities
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Old Capital Securities to withdraw their tendered Old Capital
Securities as described under "--Withdrawal Rights," and (iv) to waive any
condition or otherwise amend the terms of the Exchange Offer in any respect.
If the Exchange Offer is amended in a manner determined by the Corporation and
the Trust to constitute a material change, or if the Corporation and the Trust
waive a material condition of the Exchange Offer, the Corporation and the Trust
will promptly disclose such amendment by means of a Prospectus supplement that
will be distributed to the registered holders of the Old Capital Securities,
and the Corporation and the Trust will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Exchange Act.

Any such delay in acceptance, extension, termination or amendment will
be followed promptly by oral or written notice thereof to the Exchange Agent
and by making a public announcement thereof, and such announcement in the case
of an extension will be made no later than 9:00 a.m., New York City time, on
the next

32
<PAGE> 33
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Corporation and the Trust may choose to make any public
announcement and subject to applicable law, the Corporation and the Trust shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to an appropriate news
agency.

ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW CAPITAL SECURITIES

Upon the terms and subject to the conditions of the Exchange Offer,
the Trust will exchange, and will issue to the Exchange Agent, New Capital
Securities for Old Capital Securities validly tendered and not withdrawn
promptly after the Expiration Date.

In all cases, delivery of New Capital Securities in exchange for Old
Capital Securities tendered and accepted for exchange pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of (i) Old
Capital Securities or a book-entry confirmation of a book-entry transfer of Old
Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal, and (iii) any other documents required by the Letter of
Transmittal.

The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Capital Securities into the Exchange Agent's account
at DTC. The term "Agent's Message" means a message, transmitted by DTC to and
received by the Exchange Agent and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the
tendering participant, which acknowledgment states that such participant has
received and agrees to be bound by the Letter of Transmittal and that the Trust
and the Corporation may enforce such Letter of Transmittal against such
participant.

Subject to the terms and conditions of the Exchange Offer, the
Corporation and the Trust will be deemed to have accepted for exchange, and
thereby exchanged, Old Capital Securities validly tendered and not withdrawn
as, if and when the Trust gives oral or written notice to the Exchange Agent of
the Corporation's and the Trust's acceptance of such Old Capital Securities for
exchange pursuant to the Exchange Offer. The Exchange Agent will act as agent
for the Trust for the purpose of receiving tenders of Old Capital Securities,
Letters of Transmittal and related documents, and as agent for tendering
holders for the purpose of receiving Old Capital Securities, Letters of
Transmittal and related documents and transmitting New Capital Securities to
validly tendering holders. Such exchange will be made promptly after the
Expiration Date. If, for any reason whatsoever, acceptance for exchange or the
exchange of any Old Capital Securities tendered pursuant to the Exchange Offer
is delayed (whether before or after the Trust's acceptance for exchange of Old
Capital Securities) or the Corporation and the Trust extend the Exchange Offer
or are unable to accept for exchange or exchange Old Capital Securities
tendered pursuant to the Exchange Offer, then, without prejudice to the
Corporation's and the Trust's rights set forth herein, the Exchange Agent may,
nevertheless, on behalf of the Corporation and the Trust and subject to Rule
14e-1(c) under the Exchange Act, retain tendered Old Capital Securities and
such Old Capital Securities may not be withdrawn except to the extent tendering
holders are entitled to withdrawal rights as described under "--Withdrawal
Rights."

Pursuant to the Letter of Transmittal or Agent's Message in lieu
thereof, a holder of Old Capital Securities will warrant and agree in the
Letter of Transmittal that it has full power and authority to tender, exchange,
sell, assign and transfer Old Capital Securities, that the Trust will acquire
good, marketable and unencumbered title to the tendered Old Capital Securities,
free and clear of all liens, restrictions, charges and encumbrances, and the
Old Capital Securities tendered for exchange are not subject to any adverse
claims or proxies. The holder also will warrant and agree that it will, upon
request, execute and deliver any additional documents deemed by the
Corporation, the Trust or the Exchange Agent to be necessary or desirable to

33
<PAGE> 34
complete the exchange, sale, assignment and transfer of the Old Capital
Securities tendered pursuant to the Exchange Offer.

PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES

VALID TENDER. Except as set forth below, in order for Old Capital
Securities to be validly tendered pursuant to the Exchange Offer, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or (in the case of a book-entry transfer) an
Agent's Message in lieu of a Letter of Transmittal, and any other required
documents, must be received by the Exchange Agent at one of its addresses set
forth under "--Exchange Agent," and (i) tendered Old Capital Securities must be
received by the Exchange Agent, or (ii) such Old Capital Securities must be
tendered pursuant to the procedures for book-entry transfer set forth below and
a book-entry confirmation, including an Agent's Message if the tendering holder
has not delivered a Letter of Transmittal, must be received by the Exchange
Agent, in each case on or prior to the Expiration Date, or (iii) the guaranteed
delivery procedures set forth below must be complied with.

If less than all of the Old Capital Securities are tendered, a
tendering holder should fill in the amount of Old Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal and the untendered
Liquidation Amount must be $100,000 or any integral multiple of $1,000 in
excess thereof. The entire amount of Old Capital Securities delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.

THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN-RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

BOOK-ENTRY TRANSFER. The Exchange Agent will establish an account
with respect to the Old Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Old Capital Securities by
causing DTC to transfer such Old Capital Securities into the Exchange Agent's
account at DTC in accordance with DTC's procedures for transfers. However,
although delivery of Old Capital Securities may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in lieu of the Letter of
Transmittal, and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "--Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery procedure
set forth below must be complied with.

DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES
NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

SIGNATURE GUARANTEES. Certificates for the Old Capital Securities
need not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (i) a certificate for the Old Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (ii) such holder completes the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" in the Letter of Transmittal. In the case
of (i) or (ii) above, such certificates for Old Capital Securities must be duly
endorsed or accompanied by a properly executed bond power, with the endorsement
or signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an

34
<PAGE> 35
"eligible guarantor institution," including (as such terms are defined
therein): (i) a bank; (ii) a broker, dealer, municipal securities broker or
dealer or government securities broker or dealer; (iii) a credit union; (iv) a
national securities exchange, registered securities association or clearing
agency; or (v) a savings association that is a participant in a Securities
Transfer Association (an "Eligible Institution"), unless surrendered on behalf
of such Eligible Institution. See Instruction 1 to the Letter of Transmittal.

GUARANTEED DELIVERY. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such Old Capital Securities may nevertheless be tendered, provided that
all of the following guaranteed delivery procedures are complied with:

(i) such tenders are made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal, is
received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and

(iii) the certificates (or a book-entry confirmation) representing
all tendered Old Capital Securities, in proper form for transfer, together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or Agent's Message in lieu thereof, with any required signature
guarantees and any other documents required by the Letter of Transmittal, are
received by the Exchange Agent within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery.

The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.

Notwithstanding any other provision hereof, the delivery of New
Capital Securities in exchange for Old Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will in all cases be made only
after timely receipt by the Exchange Agent of Old Capital Securities, or of a
book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or Agent's Message in lieu thereof, together with any required
signature guarantees and any other documents required by the Letter of
Transmittal. Accordingly, the delivery of New Capital Securities might not be
made to all tendering holders at the same time, and will depend upon when Old
Capital Securities, book-entry confirmations with respect to Old Capital
Securities and other required documents are received by the Exchange Agent.

The Corporation's and the Trust's acceptance for exchange of Old
Capital Securities tendered pursuant to any of the procedures described above
will constitute a binding agreement between the tendering holder, the
Corporation and the Trust upon the terms and subject to the conditions of the
Exchange Offer.

DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange
of any tendered Old Capital Securities will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Trust reserve the absolute
right, in their sole and absolute discretion, to reject any and all tenders
determined by them not to be in proper form or the acceptance of which, or
exchange for, may, in the opinion of counsel to the Corporation and the Trust,
be unlawful. The Corporation and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the Exchange Offer
as set forth under "--Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Capital

35
<PAGE> 36
Securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders.

The interpretation by the Corporation and the Trust of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. None of the
Corporation, the Trust, any affiliates or assigns of the Corporation or the
Trust, the Exchange Agent or any other person shall be under any duty to give
any notification of any irregularities in tenders or incur any liability for
failure to give any such notification.

If any Letter of Transmittal, endorsement, bond power, power of
attorney or any other document required by the Letter of Transmittal is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the
Corporation and the Trust, proper evidence satisfactory to the Corporation and
the Trust, in their sole discretion, of such person's authority to so act must
be submitted.

A beneficial owner of Old Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.

RESALES OF NEW CAPITAL SECURITIES

The Trust is making the Exchange Offer for the New Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the Commission as set forth in certain interpretive letters addressed to
third parties in other transactions. However, neither the Corporation nor the
Trust sought its own interpretive letter and there can be no assurance that the
staff of the Division of Corporation Finance of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, the Corporation and the Trust believe
that New Capital Securities issued pursuant to this Exchange Offer in exchange
for Old Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Capital Securities
are acquired in the ordinary course of such holder's business and that such
holder is not participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of the Securities
Act) of such New Capital Securities. However, any holder of Old Capital
Securities who is an Affiliate of the Corporation or the Trust or who intends
to participate in the Exchange Offer for the purpose of distributing New
Capital Securities, or any broker-dealer who purchased Old Capital Securities
from the Trust to resell pursuant to Rule 144A or any other available exemption
under the Securities Act (i) will not be able to rely on the interpretations of
the staff of the Division of Corporation Finance of the Commission set forth in
the above-mentioned interpretive letters, (ii) will not be permitted or
entitled to tender such Old Capital Securities in the Exchange Offer and (iii)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old
Capital Securities, unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, Participating Broker-Dealers
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of New Capital Securities.

36
<PAGE> 37
such holder is not engaged in, and does not intend to engage in, a
distribution (within the meaning of the Securities Act) of such New Capital
Securities. The Letter of Transmittal contains the foregoing representations.
In addition, the Corporation and the Trust may require such holder, as a
condition to such holder's eligibility to participate in the Exchange Offer, to
furnish to the Corporation and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the meaning of Rule
13d-3 under the Exchange Act) on behalf of whom such holder holds the Capital
Securities to be exchanged in the Exchange Offer. Each Participating
Broker-Dealer will be deemed to have acknowledged by execution of the Letter of
Transmittal or delivery of an Agent's Message that it acquired the Old Capital
Securities for its own account as the result of market-making activities or
other trading activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. Based on the position taken by the staff of the Division
of Corporation Finance of the Commission in the interpretive letters referred
to above, the Corporation and the Trust believe that Participating
Broker-Dealers who acquired Old Capital Securities for their own accounts as a
result of market-making activities or other trading activities may fulfill
their prospectus delivery requirements with respect to the New Capital
Securities received upon exchange of such Old Capital Securities (other than
Old Capital Securities which represent an unsold allotment from the original
sale of the Old Capital Securities) with a prospectus meeting the requirements
of the Securities Act, which may be the prospectus prepared for an exchange
offer so long as it contains a description of the plan of distribution with
respect to the resale of such New Capital Securities. Accordingly, this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of New Capital Securities received in exchange for Old
Capital Securities where such Old Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth in the
Registration Rights Agreement, the Corporation and the Trust have agreed that
this Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of such New
Capital Securities for a period ending 90-days after the Expiration Date
(subject to extension under certain limited circumstances described below) or,
if earlier, when all such New Capital Securities have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in connection
with the resale of New Capital Securities received in exchange for Old Capital
Securities pursuant to the Exchange Offer must notify the Corporation or the
Trust, or cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses set forth herein
under "--Exchange Agent." Any person, including any Participating
Broker-Dealer, who is an Affiliate of the Corporation or the Trust may not rely
on such interpretive letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.

In that regard, each Participating Broker-Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have
agreed, by execution of the Letter of Transmittal or delivery of an Agent's
Message in lieu thereof, that, upon receipt of notice from the Corporation or
the Trust of the occurrence of any event or the discovery of any fact which
makes any statement contained or incorporated by reference in this Prospectus
untrue in any material respect or which causes this Prospectus to omit to state
a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under which
they were made, not misleading or of the occurrence of certain other events
specified in the Registration Rights Agreement, such Participating
Broker-Dealer will suspend the sale of New Capital Securities (or the New
Guarantee or the New Junior Subordinated Debentures, as applicable) pursuant to
this Prospectus until the Corporation or the Trust has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Corporation or the Trust has given notice that the sale of
the New Capital Securities (or the New Guarantee or the New Junior Subordinated
Debentures, as applicable) may be resumed,

37
<PAGE> 38
as the case may be. If the Corporation or the Trust gives such notice to
suspend the sale of the New Capital Securities (or the New Guarantee or the New
Junior Subordinated Debentures, as applicable), it shall extend the 90-day
period referred to above during which Participating Broker-Dealers are entitled
to use this Prospectus in connection with the resale of New Capital Securities
by the number of days during the period from and including the date of the
giving of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or supplemented
Prospectus necessary to permit resales of the New Capital Securities or to and
including the date on which the Corporation or the Trust has given notice that
the sale of New Capital Securities (or the New Guarantee or the New Junior
Subordinated Debentures, as applicable) may be resumed, as the case may be.

WITHDRAWAL RIGHTS

Except as otherwise provided herein, tenders of Old Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.

In order for a withdrawal to be effective a written or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth under "--Exchange Agent" on or
prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Capital Securities to be withdrawn, the
aggregate principal amount of Old Capital Securities to be withdrawn, and (if
certificates for such Old Capital Securities have been tendered) the name of
the registered holder of the Old Capital Securities as set forth on the Old
Capital Securities, if different from that of the person who tendered such Old
Capital Securities. If Old Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such
Old Capital Securities, the tendering holder must submit the certificate
numbers shown on the particular Old Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution, except in the case of Old Capital Securities tendered for the
account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in
"--Procedures for Tendering Old Capital Securities," the notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal will
be effective if delivered to the Exchange Agent by written or facsimile
transmission. Withdrawals of tenders of Old Capital Securities may not be
rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described above under "--Procedures for Tendering Old Capital
Securities."

All questions as to the validity, form and eligibility (including time
of receipt) of such withdrawal notices will be determined by the Corporation
and the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. None of the Corporation, the Trust, any affiliates or
assigns of the Corporation or the Trust, the Exchange Agent or any other person
shall be under any duty to give any notification of any irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which
are withdrawn will be returned to the holder thereof promptly after withdrawal.

DISTRIBUTIONS ON NEW CAPITAL SECURITIES

Holders of Old Capital Securities as of August 15, 1997, the record
date for the initial Distribution on September 1, 1997, including such holders
who tender their Old Capital Securities pursuant to the Exchange Offer, will be
entitled to receive such Distribution. Distributions on the New Capital
Securities are payable semi-annually in arrears on March 1 and September 1 of
each year, commencing March 1, 1998, at the annual rate of 9.875% of the
Liquidation Amount to the holders of the New Capital Securities on the relevant
record dates. Distributions on the New Capital Securities will accumulate from
September 1, 1997, the date of the initial Distribution on the Old Capital
Securities.

38
<PAGE> 39
CONDITIONS TO THE EXCHANGE OFFER

Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Corporation and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities for
any New Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Old Capital Securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the Exchange Offer, if
any of the following conditions have occurred or exists or have not been
satisfied:

(a) there shall occur a change in the current interpretation by the
staff of the Commission which permits the New Capital Securities issued
pursuant to the Exchange Offer in exchange for Old Capital Securities to be
offered for resale, resold and otherwise transferred by holders thereof (other
than broker-dealers and any such holder which is an Affiliate of the
Corporation or the Trust) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Capital Securities are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with any person
to participate in the distribution of such New Capital Securities; or

(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Corporation or the Trust, would
reasonably be expected to impair its ability to proceed with the Exchange
Offer;

(c) any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect to
the Exchange Offer which, in the Corporation's and the Trust's judgment, would
reasonably be expected to impair the ability of the Trust or the Corporation to
proceed with the Exchange Offer;

(d) a banking moratorium shall have been declared by United States
federal or Pennsylvania or New York state authorities which, in the
Corporation's and the Trust's judgment, would reasonably be expected to impair
the ability of the Trust or the Corporation to proceed with the Exchange Offer;

(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Corporation's and
the Trust's judgment, would reasonably be expected to impair the ability of the
Issuer or the Corporation to proceed with the Exchange Offer; or

(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration Statement
or proceedings shall have been initiated or, to the knowledge of the
Corporation or the Trust, threatened for that purpose, or any governmental
approval which either the Corporation or the Trust shall, in its sole
discretion, deem necessary for the consummation of the Exchange Offer as
contemplated hereby has not been obtained.

If the Corporation and the Trust determine in their sole and absolute
discretion that any of the foregoing events or conditions has occurred or
exists or has not been satisfied, the Corporation and the Trust may, subject to
applicable law, terminate the Exchange Offer (whether or not any Old Capital
Securities have theretofore been accepted for exchange) or may waive any such
condition or otherwise amend the terms of the Exchange Offer in any respect.
If such waiver or amendment constitutes a material change to the Exchange
Offer, the Corporation and the Trust will promptly disclose such waiver or
amendment by means of a Prospectus supplement that will be distributed to the
registered holders of the Old Capital Securities and will extend the Exchange
Offer to the extent required by Rule 14e-1 under the Exchange Act.

39
<PAGE> 40
EXCHANGE AGENT

The Bank of New York has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:

<TABLE>
<S> <C> <C>
BY REGISTERED OR CERTIFIED MAIL: BY HAND OR OVERNIGHT DELIVERY:
-------------------------------- ------------------------------

The Bank of New York The Bank of New York
101 Barclay Street - 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Section Confirm by Telephone Ground Level
Odell Romeo or for Information call: New York, New York 10286
(212) 815-6337 Attention: Reorganization Section
Odell Romeo
Facsimile Transmission:
(Eligible Institutions Only)
(212) 815-6339
</TABLE>

Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.

FEES AND EXPENSES

The Corporation has agreed to pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Corporation will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and
in handling or tendering for their customers.

Holders who tender their Old Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
New Capital Securities are to be delivered to, or are to be issued in the name
of, any person other than the registered holder of the Old Capital Securities
tendered, or if a transfer tax is imposed for any reason other than the
exchange of Old Capital Securities in connection with the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered holder
or any other persons) will be payable by the tendering holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering holder.

Neither the Corporation nor the Trust will make any payment to
brokers, dealers or other nominees soliciting acceptances of the Exchange
Offer.

DESCRIPTION OF NEW SECURITIES

DESCRIPTION OF CAPITAL SECURITIES

Pursuant to the terms of the Trust Agreement, the Trust has issued the
Old Capital Securities and the Common Securities and will issue the New Capital
Securities. The New Capital Securities will represent

40
<PAGE> 41
undivided beneficial interests in the Trust and the holders of the New Capital
Securities and the Old Capital Securities will be entitled to a preference over
the Common Securities in certain circumstances with respect to Distributions
and amounts payable on redemption of the Trust Securities or liquidation of the
Trust. See "--Subordination of Common Securities." The Trust Agreement has
been qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). This summary of certain provisions of the Capital Securities,
the Common Securities and the Trust Agreement describes the material terms of
the Capital Securities but does not purport to be complete and is subject to,
and is qualified in its entirety by reference to, all the provisions of the
Trust Agreement, including the definitions therein of certain terms.

GENERAL. The Capital Securities (including the Old Capital Securities
and the New Capital Securities) are limited to $50,000,000 aggregate
Liquidation Amount at any one time outstanding. The Capital Securities rank
pari passu, and payments thereon will be made pro rata, with the Common
Securities except as described under "--Subordination of Common Securities."
Legal title to the Junior Subordinated Debentures is held by the Property
Trustee in trust for the benefit of the holders of the Capital Securities and
the holder of the Common Securities. The Guarantee is a guarantee on a
subordinated and junior basis with respect to the Capital Securities, but does
not guarantee payment of Distributions or amounts payable on redemption of the
Capital Securities or on liquidation of the Trust when the Trust does not have
funds on hand legally available for such payments. See "--Description of
Guarantee."

DISTRIBUTIONS. Distributions on the New Capital Securities are
payable semi-annually in arrears on March 1 and September 1 of each year,
commencing March 1, 1998, at the annual rate of 9.875% of the Liquidation
Amount to the holders of the New Capital Securities on the relevant record
dates. Distributions on the New Capital Securities will accumulate from
September 1, 1997, the date of the initial Distribution on the Old Capital
Securities. The record dates are the fifteenth day of the month which proceeds
the month in which the relevant Distribution Date (as defined below) falls.
The amount of Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and, for any period of less
than one calendar month, the number of days elapsed in such month. In the
event that any date on which Distributions are payable on the Capital
Securities is not a Business Day (as defined below), payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect to any
such delay), with the same force and effect as if made on the date such payment
was originally payable (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in New York, New York or Villanova, Pennsylvania are authorized or
required by law or executive order to remain closed.

So long as no "Event of Default" (as defined in the Indenture) with
respect to the Junior Subordinated Debentures (a"Debenture Event of Default")
shall have occurred and be continuing, the Corporation has the right under the
Indenture to elect to defer the payment of interest on the Junior Subordinated
Debentures at any time or from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period may extend beyond the Stated Maturity Date. Upon any
such election, semi-annual Distributions on the Capital Securities will be
deferred by the Trust during any such Extension Period. Distributions to which
holders of the Capital Securities are entitled during any such Extension Period
will accumulate additional Distributions thereon at the rate per annum of
9.875% thereof, compounded semi-annually from the relevant Distribution Date.
The term "Distributions," as used herein, shall include any such additional
Distributions.

Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, to
end on a date other than an Interest Payment Date or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension Period and
the payment of all amounts then due

41
<PAGE> 42
on any Interest Payment Date, the Corporation may elect to begin a new
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The
Corporation must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of any such Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of (i) the
date the Distributions on the Capital Securities would have been payable except
for the election to begin such Extension Period and (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or automated quotation system or to holders of the Capital Securities of the
record date or the date such Distributions are payable, but in any event not
less than five Business Days prior to such record date. There is no limitation
on the number of times that the Corporation may elect to begin an Extension
Period. See "--Description of Junior Subordinated Debentures--Option to Extend
Interest Payment Date" and "Certain Federal Income Tax Considerations--Interest
Income and Original Issue Discount."

During any such Extension Period, the Corporation may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal of or premium, if any, or interest on or
repay, repurchase or redeem any debt securities of the Corporation (including
Other Debentures) that rank pari passu with or junior in right of payment to
the Junior Subordinated Debentures, or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the Junior Subordinated
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common stock of the
Corporation, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) as a result of a
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for
another class or series of the Corporation's capital stock, (e) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Corporation's benefit plans
for its directors, officers or employees or any of the Corporation's dividend
reinvestment plans). The Corporation has no current intention to exercise its
option to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period on the Junior Subordinated Debentures.

The revenue of the Trust available for distribution to holders of
Capital Securities will be limited to payments under the Junior Subordinated
Debentures in which the Trust has invested the proceeds from the issuance and
sale of the Trust Securities. See "--Description of Junior Subordinated
Debentures--General." If the Corporation does not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Capital Securities. The payment of
Distributions (if and to the extent the Trust has funds on hand legally
available for the payment of such Distributions) is guaranteed by the
Corporation on a limited basis as set forth herein under "--Description of
Guarantee."

REDEMPTION. Upon repayment on the Stated Maturity Date or prepayment
in whole or in part prior to the Stated Maturity Date of the Junior
Subordinated Debentures (other than following the distribution of the Junior
Subordinated Debentures to the holders of the Trust Securities), the proceeds
from such repayment or prepayment shall be applied by the Property Trustee to
redeem a Like Amount (as defined below) of the Trust Securities, upon not less
than 30 nor more than 60 days' notice of a date of redemption (the "Redemption
Date"), at the applicable Redemption Price, which shall be equal to (i) in the
case of the repayment of the Junior Subordinated Debentures on the Stated
Maturity Date, the Maturity Redemption Price (equal to the principal of, and
unpaid interest on, the Junior Subordinated Debentures), (ii) in the case of
the optional redemption of the Junior Subordinated Debentures before the
Initial Optional Prepayment Date upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment

42
<PAGE> 43
Price in respect of the Junior Subordinated Debentures) and (iii) in the case
of the optional prepayment of the Junior Subordinated Debentures on or after
the Initial Optional Prepayment Date, the Optional Redemption Price (equal to
the Optional Prepayment Price in respect of the Junior Subordinated
Debentures). See "--Description of Junior Subordinated Debentures--Optional
Prepayment" and "--Special Event Prepayment." If less than all of the Junior
Subordinated Debentures are to be prepaid on a Redemption Date, then the
proceeds of such redemption shall be allocated to the redemption pro rata of
the Capital Securities and the Common Securities.

"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.

The Corporation has the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after the Initial Optional
Prepayment Date, at the applicable Optional Prepayment Price and (ii) in whole
but not in part, at any time before the Initial Optional Prepayment Date, upon
the occurrence of a Special Event, at the Special Event Prepayment Price, in
each case subject to the receipt of any required regulatory approval.

LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED
DEBENTURES. The Corporation has the right at any time to terminate the Trust
and, after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Junior Subordinated Debentures to be distributed
to the holders of the Trust Securities in liquidation of the Trust. Such right
is subject to (i) the Corporation having received an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of Capital
Securities and (ii) the receipt of any required regulatory approval.

The Trust shall automatically terminate upon the first to occur of:
(i) certain events of bankruptcy, dissolution or liquidation of the
Corporation; (ii) the distribution of a Like Amount of the Junior Subordinated
Debentures to the holders of the Trust Securities, if the Corporation, as
Sponsor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly
within the discretion of the Corporation, as Sponsor); (iii) redemption of all
of the Trust Securities as described under "--Redemption;" (iv) expiration of
the term of the Trust; and (v) the entry of an order for the dissolution of the
Trust by a court of competent jurisdiction.

If a termination occurs as described in clause (i), (ii), (iv) or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the holders of the Trust Securities a Like Amount of the Junior
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practicable, in which event such holders will be entitled to
receive out of the assets of the Trust legally available for distribution to
holders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the aggregate of the Liquidation
Amount plus accumulated and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
on hand legally available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Trust
Securities shall be paid on a pro rata basis, except that if a Debenture Event
of Default has occurred and is continuing, the Capital Securities shall have a
priority over the Common Securities. See "--Subordination of Common
Securities."

If the Corporation elects not to prepay the Junior Subordinated
Debentures prior to maturity in accordance with their terms and either elects
not to or is unable to liquidate the Trust and distribute the Junior

43
<PAGE> 44
Subordinated Debentures to holders of the Trust Securities, the Trust
Securities will remain outstanding until the repayment of the Junior
Subordinated Debentures on the Stated Maturity Date.

After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee
will receive, in respect of each registered global certificate, if any,
representing Trust Securities and held by it, a registered global certificate
or certificates representing the Junior Subordinated Debentures to be delivered
upon such distribution and (iii) any certificates representing Trust Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Corporation will issue to such holder, and the
Debenture Trustee will authenticate, a certificate representing such Junior
Subordinated Debentures.

There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive
on dissolution and liquidation of the Trust, may trade at a discount to the
price that the investor paid to purchase the Capital Securities offered hereby.

REDEMPTION PROCEDURES. If applicable, Trust Securities shall be
redeemed at the applicable Redemption Price with the proceeds from the
contemporaneous repayment or prepayment of the Junior Subordinated Debentures.
Any redemption of Trust Securities shall be made and the applicable Redemption
Price shall be payable on the Redemption Date only to the extent that the Trust
has funds legally available for the payment of such applicable Redemption
Price. See also "--Subordination of Common Securities."

If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are legally available, with respect to the Capital Securities
held by DTC or its nominees, the Property Trustee will deposit or cause the
Paying Agent (as defined herein) to deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price. See "--Form, Denomination,
Book-Entry Procedures and Transfer." With respect to the Capital Securities
held in certificated form, the Property Trustee, to the extent funds are
legally available, will irrevocably deposit with the paying agent for the
Capital Securities funds sufficient to pay the applicable Redemption Price and
will give such paying agent irrevocable instructions and authority to pay the
applicable Redemption Price to the holders thereof upon surrender of their
certificates evidencing the Capital Securities. See "--Payment and Paying
Agency." Notwithstanding the foregoing, Distributions payable on or prior to
the Redemption Date shall be payable to the holders of such Capital Securities
on the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of the holders of the Capital Securities
called for redemption will cease, except the right of the holders of such
Capital Securities to receive the applicable Redemption Price, but without
interest on such Redemption Price, and such Capital Securities will cease to be
outstanding. In the event that any Redemption Date of Capital Securities is not
a Business Day, then the applicable Redemption Price payable on such date will
be paid on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
next succeeding Business Day falls in the next calendar year, such payment
shall be made on the immediately preceding Business Day. In the event that
payment of the applicable Redemption Price is improperly withheld or refused
and not paid either by the Trust or by the Corporation pursuant to the
Guarantee as described under "Description of Guarantee," (i) Distributions on
Capital Securities will continue to accumulate at the then applicable rate,
from the Redemption Date originally established by the Trust to the date such
applicable Redemption Price is actually paid and (ii) the actual payment date
will be the Redemption Date for purposes of calculating the applicable
Redemption Price.

44
<PAGE> 45
Subject to applicable law (including, without limitation, United
States federal securities law), the Corporation or its subsidiaries may at any
time and from time to time purchase outstanding Capital Securities by tender,
in the open market or by private agreement.

Notice of any redemption will be mailed at least 30 days but not more
than 60 days prior to the Redemption Date to each holder of Trust Securities at
its registered address. Unless the Corporation defaults in payment of the
applicable Redemption Price on, or in the repayment of, the Junior Subordinated
Debentures, on and after the Redemption Date Distributions will cease to accrue
on the Trust Securities called for redemption.

SUBORDINATION OF COMMON SECURITIES. Payment of Distributions on, and
the Redemption Price of, the Trust Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date a Debenture Event
of Default shall have occurred and be continuing, no payment of any
Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of the Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the applicable Redemption Price the
full amount of such Redemption Price, shall have been made or provided for, and
all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or Redemption Price of, the
Capital Securities then due and payable.

In the case of any Event of Default, the Corporation as holder of the
Common Securities will be deemed to have waived any right to act with respect
to such Event of Default until the effect of such Event of Default shall have
been cured, waived or otherwise eliminated. Until any such Event of Default has
been so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the holders of the Capital Securities and not on behalf of
the Corporation as holder of the Common Securities, and only the holders of the
Capital Securities will have the right to direct the Property Trustee to act on
their behalf.

EVENTS OF DEFAULT; NOTICE. The occurrence of a Debenture Event of
Default (see "--Description of Junior Subordinated Debentures--Debenture Events
of Default") constitutes an "Event of Default" under the Trust Agreement.

Within ten Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Sponsor, unless such Event of
Default shall have been cured or waived. The Corporation, as Sponsor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.

If a Debenture Event of Default has occurred and is continuing, the
Capital Securities shall have a preference over the Common Securities as
described under "--Liquidation of the Trust and Distribution of Junior
Subordinated Debentures" and "--Subordination of Common Securities."

REMOVAL OF ISSUER TRUSTEES. Unless a Debenture Event of Default shall
have occurred and be continuing, any Issuer Trustee may be removed at any time
by the holder of the Common Securities. If a Debenture Event of Default has
occurred and is continuing, the Property Trustee and the Delaware Trustee may
be removed at such time by the holders of a majority in Liquidation Amount of
the outstanding Capital Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Corporation as the holder

45
<PAGE> 46
of the Common Securities. No resignation or removal of an Issuer Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Trust Agreement.

MERGER OR CONSOLIDATION OF ISSUER TRUSTEES. Any Person into which the
Property Trustee, the Delaware Trustee or any Administrative Trustee that is
not a natural person may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Issuer Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Issuer Trustee, shall be the successor of such Issuer Trustee under the Trust
Agreement, provided such Person shall be otherwise qualified and eligible.

MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any corporation or other Person, except as
described below or as otherwise described under "--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures." The Trust may, at the request
of the Corporation, as Sponsor, with the consent of the Administrative Trustees
but without the consent of the holders of the Capital Securities, merge with or
into, consolidate, amalgamate, or be replaced by or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to a
trust organized as such under the laws of any State; provided, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Trust Securities or (b) substitutes for the Trust
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities") so long as the Successor Securities
rank the same as the Trust Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Corporation expressly appoints a trustee of such successor entity possessing
the same powers and duties as the Property Trustee with respect to the Junior
Subordinated Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Trust
Securities are then listed or quoted, if any, (iv) if the Capital Securities
(including any Successor Securities) are rated by any nationally recognized
statistical rating organization prior to such transaction, such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not cause the Capital Securities (including any Successor Securities) or, if
the Junior Subordinated Debentures are so rated, the Junior Subordinated
Debentures, to be downgraded by any such nationally recognized statistical
rating organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
identical to that of the Trust, (vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Corporation has
received an opinion from independent counsel to the Trust experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the Trust Securities
(including any Successor Securities) in any material respect (other than any
dilution of such holders' interests in the new entity), and (b) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor such successor entity will be required to register
as an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and (viii) the Corporation or any permitted
successor or assignee owns all of the common securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee and the
Common Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity not to be classified as a grantor
trust for United States federal income tax purposes. In addition,

46
<PAGE> 47
the Property Trustee will be required pursuant to the Indenture to exchange, as
part of the Exchange Offer, the Junior Subordinated Debentures for the Exchange
Debentures, which will have terms substantially identical to the Junior
Subordinated Debentures. See "Exchange Offer; Registration Rights."

VOTING RIGHTS; AMENDMENT OF THE TRUST AGREEMENT. Except as provided
below and under "--Mergers, Consolidations, Amalgamations or Replacements of
the Trust" and "--Description of Guarantee--Amendments and Assignment" and as
otherwise required by law and the Trust Agreement, the holders of the Capital
Securities will have no voting rights.

The Trust Agreement may be amended from time to time by the
Corporation, the Property Trustee and the Administrative Trustees, without the
consent of the holders of the Trust Securities (i) to cure any ambiguity,
correct or supplement any provisions in the Trust Agreement that may be
inconsistent with any other provision, or to make any other provisions with
respect to matters or questions arising under the Trust Agreement, which shall
not be inconsistent with the other provisions of the Trust Agreement, (ii) to
modify, eliminate or add to any provisions of the Trust Agreement to such
extent as shall be necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that the Trust will not be
required to register as an "investment company" under the Investment Company
Act or (iii) to modify, eliminate or add any provisions of the Trust Agreement
to such extent as shall be necessary to enable the Trust or the Corporation to
conduct an Exchange Offer in the manner contemplated by the Registration Rights
Agreement; provided, however, that in each such case such action shall not
adversely affect in any material respect the interests of the holders of the
Trust Securities. Any amendments of the Trust Agreement pursuant to the
foregoing shall become effective when notice thereof is given to the holders of
the Trust Securities. The Trust Agreement may be amended by the Issuer Trustees
and the Corporation (i) with the consent of holders representing a majority
(based upon Liquidation Amount) of the outstanding Trust Securities and (ii)
upon receipt by the Issuer Trustees of an opinion of counsel experienced in
such matters to the effect that such amendment or the exercise of any power
granted to the Issuer Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United States federal income
tax purposes or the Trust's exemption from status as an "investment company"
under the Investment Company Act, provided that, without the consent of each
holder of Trust Securities, the Trust Agreement may not be amended to (i)
change the amount or timing of any Distribution on the Trust Securities or
otherwise adversely affect the amount of any Distribution required to be made
in respect of the Trust Securities as of a specified date or (ii) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.

So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
execute any trust or power conferred on the Debenture Trustee with respect to
the Junior Subordinated Debentures, (ii) waive certain past defaults under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining
the foregoing approvals of such holders of the Capital Securities, prior to
taking any of the foregoing actions, the Issuer Trustees shall obtain an
opinion of counsel

47
<PAGE> 48
experienced in such matters to the effect that the Trust will not be classified
as an association taxable as a corporation for United States federal income tax
purposes on account of such action.

Any required approval of holders of Capital Securities may be given at
a meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the Trust
Agreement.

No vote or consent of the holders of Capital Securities will be
required for the Trust to redeem and cancel the Capital Securities in
accordance with the Trust Agreement.

Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Corporation, the Issuer Trustees or
any affiliate of the Corporation or any Issuer Trustees, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.

FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER. New Capital
Securities initially will be represented by one or more Capital Securities in
registered, global form (collectively, the "Global Capital Securities"). The
Global Capital Securities will be deposited upon issuance with the Property
Trustee as custodian for DTC, in New York, New York, and registered in the name
of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.

Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Capital Securities. Beneficial interests in the
Global Capital Securities may not be exchanged for Capital Securities in
certificated form except in the limited circumstances described below.

DTC has advised the Trust and the Corporation that DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system
also is available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own
securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership
interest of each actual purchaser of each security held by or on behalf of DTC
are recorded on the records of the Participants and Indirect Participants.

DTC also has advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital
Securities, DTC will credit the accounts of Participants with portions of the
Liquidation Amount of the Global Capital Securities and (ii) ownership of such
interests in the Global Capital Securities will be shown on, and the transfer
of ownership thereof will be effected only through, records maintained by DTC
(with respect to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial interests in the
Global Capital Securities).

48
<PAGE> 49
EXCEPT AS DESCRIBED BELOW, OWNERS OF BENEFICIAL INTERESTS IN THE
GLOBAL CAPITAL SECURITIES WILL NOT HAVE CAPITAL SECURITIES REGISTERED IN THEIR
NAME, WILL NOT RECEIVE PHYSICAL DELIVERY OF CAPITAL SECURITIES IN CERTIFICATED
FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER
THE TRUST AGREEMENT FOR ANY PURPOSE.

Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC in
its capacity as the registered holder under the Trust Agreement. Under the
terms of the Trust Agreement, the Property Trustee will treat the persons in
whose names the Capital Securities, including the Global Capital Securities,
are registered as the owners thereof for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently, neither the
Property Trustee nor any agent thereof has or will have any responsibility or
liability for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
interests in the Global Capital Securities, or for maintaining, supervising or
reviewing any of DTC's records or any Participant's or Indirect Participant's
records relating to the beneficial interests in the Global Capital Securities,
or (ii) any other matter relating to the actions and practices of DTC or any of
its Participants or Indirect Participants. DTC has advised the Trust and the
Corporation that its current practice, upon receipt of any payment in respect
of securities such as the Capital Securities, is to credit the accounts of the
relevant Participants with the payment on the payment date, in amounts
proportionate to their respective holdings in Liquidation Amount of beneficial
interests in the relevant security as shown on the records of DTC unless DTC
has reason to believe it will not receive payment on such payment date.
Payments by the Participants and the Indirect Participants to the beneficial
owners of New Capital Securities will be governed by standing instructions and
customary practices and will be the responsibility of the Participants or the
Indirect Participants and will not be the responsibility of DTC, the Property
Trustee, the Trust or the Corporation. None of the Trust, the Corporation or
the Property Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the Capital Securities,
and the Trust, the Corporation and the Property Trustee may conclusively rely
on and will be protected in relying on instructions from DTC or its nominee for
all purposes.

Beneficial interests in the Global Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market trading activity in
such interests will therefore settle in immediately available funds, subject in
all cases to the rules and procedures of DTC and its participants.

DTC has advised the Trust and the Corporation that it will take any
action permitted to be taken by a holder of Capital Securities (including,
without limitation, the presentation of Old Capital Securities for exchange
pursuant to the Exchange Offer) only at the direction of one or more
Participants to whose account with DTC interests in the Global Capital
Securities are credited and only in respect of such portion of the Liquidation
Amount of the Capital Securities as to which such Participant or Participants
has or have given such direction. However, if there is an Event of Default
under the Trust Agreement, DTC reserves the right to exchange the Global
Capital Securities for Capital Securities in certificated form and to
distribute such Capital Securities to its Participants.

So long as DTC or its nominee is the registered owner of the Global
Capital Securities, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Capital Securities represented by the Global
Capital Securities for all purposes under the Trust Agreement.

The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the Corporation
believe to be reliable, but neither the Trust nor the Corporation takes
responsibility for the accuracy thereof.

A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90 days
or (y) has ceased to be a clearing

49
<PAGE> 50
agency registered under the Exchange Act, (ii) the Corporation in its sole
discretion elects to cause the issuance of the Capital Securities in
certificated form or (iii) there shall have occurred and be continuing an Event
of Default or any event which after notice or lapse of time or both would be an
Event of Default under the Trust Agreement.

PAYMENT AND PAYING AGENCY. Payments in respect of the Capital
Securities held in global form shall be made to the Depositary, which shall
credit the relevant accounts at the Depositary on the applicable Distribution
Dates. Payments in respect of Capital Securities that are not held by the
Depositary shall be made by check mailed to the address of the holder entitled
thereto as such address shall appear on the register maintained by the
Securities Registrar appointed under the Trust Agreement. The paying agent
(the "Paying Agent") shall initially be the Property Trustee and any co-paying
agent chosen by the Property Trustee and acceptable to the Administrative
Trustees and the Corporation. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee, the
Administrative Trustees and the Corporation. In the event that the Property
Trustee shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Corporation) to act as Paying Agent.

RESTRICTIONS ON TRANSFER. The Capital Securities will be issued and
may be transferred only in blocks having a Liquidation Amount of not less than
$100,000 (100 Capital Securities) and multiples of $1,000 in excess thereof.
Any attempted sale, transfer or other disposition of Capital Securities in a
block having a Liquidation Amount of less than $100,000 shall be deemed to be
void and of no legal effect whatsoever. Any such transferee shall be deemed
not to be the holder of such Capital Securities for any purpose, including but
not limited to the receipt of Distributions on such Capital Securities, and
such transferee shall be deemed to have no interest whatsoever in such Capital
Securities.

REGISTRAR AND TRANSFER AGENT. The Property Trustee will act as
registrar and transfer agent for the Capital Securities. Registration of
transfers of the Capital Securities will be effected without charge by or on
behalf of the Trust, but upon payment of any tax or other governmental charges
that may be imposed in connection with any transfer or exchange. The Trust
will not be required to register or cause to be registered the transfer of the
Capital Securities after they have been called for redemption.

INFORMATION CONCERNING THE PROPERTY TRUSTEE. The Property Trustee,
other than during the occurrence and continuance of an Event of Default,
undertakes to perform only such duties as are specifically set forth in the
Trust Agreement and, during the existence of an Event of Default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the Property
Trustee is under no obligation to exercise any of the powers vested in it by
the Trust Agreement at the request of any holder of Trust Securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby. If no Event of Default has occurred and is
continuing and the Property Trustee is required to decide between alternative
courses of action, construe ambiguous provisions in the Trust Agreement or is
unsure of the application of any provision of the Trust Agreement, and the
matter is not one on which holders of the Capital Securities or the Common
Securities are entitled under the Trust Agreement to vote, then the Property
Trustee shall take such action as is directed by the Corporation and, if not so
directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.

MISCELLANEOUS. The Administrative Trustees are authorized and
directed to conduct the affairs of and to operate the Trust in such a way that
the Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act or classified as an association or
publicly-traded partnership taxable as a corporation for United States federal
income tax purposes and so that the Junior Subordinated

50
<PAGE> 51
Debentures will be treated as indebtedness of the Corporation for United States
federal income tax purposes. In this connection, the Corporation and the
Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Trust
Agreement, that the Corporation and the Administrative Trustees determine in
their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the holders
of the Trust Securities.

Holders of the Trust Securities have no preemptive or similar rights.

The Trust may not borrow money, issue debt, execute mortgages or
pledge any of its assets.

DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES

The Old Junior Subordinated Debentures were issued and the New Junior
Subordinated Debentures will be issued as a separate series under the
Indenture. The Indenture has been qualified under the Trust Indenture Act.
This summary of certain terms and provisions of the Junior Subordinated
Debentures and the Indenture describes the material terms thereof, but does not
purport to be complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of certain terms,
some of which are not otherwise defined herein, are qualified in their entirety
by reference to all of the provisions of the Indenture and those terms made a
part of the Indenture by the Trust Indenture Act.

GENERAL. Concurrently with the issuance of the Old Capital
Securities, the Trust invested the proceeds thereof, together with the
consideration paid by the Corporation for the Common Securities, in Old Junior
Subordinated Debentures issued by the Corporation. Pursuant to the Exchange
Offer, the Corporation will exchange the Old Junior Subordinated Debentures, in
an amount corresponding to the Old Capital Securities accepted for exchange,
for a like aggregate principal amount of the New Junior Subordinated Debentures
as soon as practicable after the date hereof.

The Junior Subordinated Debentures bear interest from March 10, 1997
at the annual rate of 9.875% of the principal amount thereof, payable
semi-annually in arrears on March 1 and September 1 of each year (each, an
"Interest Payment Date"), commencing September 1, 1997, to the person in whose
name each Junior Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the 15th day of the month preceding the
month in which the relevant payment date falls. The Junior Subordinated
Debentures will mature on March 1, 2027. It is anticipated that, until the
liquidation, if any, of the Trust, each Junior Subordinated Debenture will be
held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months and,
for any period of less than a full calendar month, the number of days elapsed
in such month. In the event that any date on which interest is payable on the
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that if such next succeeding Business Day falls in the next
succeeding calendar year, then such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of 9.875% thereof, compounded
semi-annually. The term "interest," as used herein, shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined below), as
applicable.

The New Junior Subordinated Debentures rank pari passu with the Old
Junior Subordinated Debentures and with all Other Debentures and are unsecured
and are subordinate and junior in right of payment to all Senior Indebtedness
to the extent and in the manner set forth in the Indenture. See
"--Subordination."

51
<PAGE> 52
The Corporation is a holding company and almost all of the operating
assets of the Corporation are owned by the Corporation's subsidiaries. The
Corporation is a legal entity separate and distinct from its subsidiaries.
Holders of Junior Subordinated Debentures should look only to the Corporation
for payments on the Junior Subordinated Debentures. The principal sources of
the Corporation's income are dividends, interest and fees from its
subsidiaries. The Corporation relies primarily on dividends from the Bank to
meet its obligations for payment of principal and interest on its outstanding
debt obligations and corporate expenses. There are regulatory limitations on
the payment of dividends directly or indirectly to the Corporation from the
Bank. As of March 31, 1997, under OTS regulations, the total capital available
for payment of dividends by the Bank to the Corporation was approximately $29.1
million. However, the OTS has the power to prohibit any act, including the
payment of dividends, if such act would reduce bank capital to a point that, in
its opinion, would render the Bank undercapitalized and thus constitute an
unsafe or unsound banking practice. In addition, the Bank is subject to
certain restrictions imposed by federal law on any extensions of credit to, and
certain other transactions with, the Corporation and certain other affiliates,
and on investments in stock or other securities thereof. Such restrictions
prevent the Corporation and such other affiliates from borrowing from the Bank
unless the loans are secured by various types of collateral. Further, such
secured loans, other transactions and investments by any of the Banks are
generally limited in amount as to the Corporation and as to each of such other
affiliates to 10% of the Bank's capital and surplus and as to the Corporation
and all of such other affiliates to an aggregate of 20% of the Bank's capital
and surplus.

Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of that subsidiary
(including depositors, in the case of the Bank), except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary. At
March 31, 1997, the subsidiaries of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of $1.77 billion. Accordingly,
the Junior Subordinated Debentures will be effectively subordinated to all
existing and future liabilities of the Corporation's subsidiaries (including
the subsidiaries' deposit liabilities) and all liabilities of any future
subsidiaries of the Corporation. The Indenture does not limit the incurrence
or issuance of other secured or unsecured debt of the Corporation or any
subsidiary, including Senior Indebtedness. See "--Subordination."

FORM, REGISTRATION AND TRANSFER. If the Junior Subordinated
Debentures are distributed to the holders of the Trust Securities, the Junior
Subordinated Debentures may be represented by one or more global certificates
registered in the name of Cede & Co. as the nominee of DTC. The depositary
arrangements for such Junior Subordinated Debentures are expected to be
substantially similar to those in effect for the Capital Securities. For a
description of DTC and the terms of the depositary arrangements relating to
payments, transfers, voting rights, redemptions and other notices and other
matters, see "Description of Capital Securities--Form, Denomination, Book-Entry
Procedures and Transfer."

The Junior Subordinated Debentures will be issuable only in registered
form without coupons in minimum denominations of $100,000 (100 Junior
Subordinated Debentures) and integral multiples of $1,000 in excess thereof.

PAYMENT AND PAYING AGENTS. Payment of principal of (and premium, if
any) and interest on Junior Subordinated Debentures will be made at the office
of the Debenture Trustee in the City of New York or at the office of such
Paying Agent or Paying Agents as the Corporation may designate from time to
time, except that at the option of the Corporation payment of any interest may
be made, except in the case of Junior Subordinated Debentures in global form,
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the register for Junior Subordinated Debentures or (ii)
by transfer to an account maintained by the Person entitled thereto as
specified in such register, provided that proper transfer instructions have
been received by the relevant Record Date. Payment of any interest on any
Junior Subordinated Debenture will be made to

52
<PAGE> 53
the Person in whose name such Junior Subordinated Debenture is registered at
the close of business on the Record Date for such interest, except in the case
of defaulted interest. The Corporation may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent; however the
Corporation will at all times be required to maintain a Paying Agent in each
place of payment for the Junior Subordinated Debentures.

Any moneys deposited with the Debenture Trustee or any Paying Agent,
or then held by the Corporation in trust, for the payment of the principal of
(and premium, if any) or interest on any Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the request of the Corporation,
be repaid to the Corporation and the holder of such Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Corporation for payment thereof.

OPTION TO EXTEND INTEREST PAYMENT DATE. So long as no Debenture Event
of Default has occurred and is continuing, the Corporation will have the right
under the Indenture to defer the payment of interest on the Junior Subordinated
Debentures at any time and from time to time for a period not exceeding 10
consecutive semi-annual periods with respect to each Extension Period, provided
that no Extension Period shall end on a date other than an Interest Payment
Date or extend beyond the Stated Maturity Date. At the end of such Extension
Period, the Corporation must pay all interest then accrued and unpaid (together
with interest thereon at the annual rate of 9.875%, compounded semi-annually,
to the extent permitted by applicable law ("Compounded Interest")). During an
Extension Period, interest will continue to accrue and, if the Junior
Subordinated Debentures have been distributed to holders of the Trust
Securities, holders of Junior Subordinated Debentures (or holders of the Trust
Securities while Trust Securities are outstanding) will be required to accrue
such deferred interest income for United States federal income tax purposes
prior to the receipt of cash attributable to such income. See "Certain Federal
Income Tax Considerations--Interest Income and Original Issue Discount."

During any such Extension Period, the Corporation may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation (including any
Other Debentures) that rank pari passu with or junior in right of payment to
the Junior Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt securities of any
subsidiary of the Corporation (including any Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to the Junior
Subordinated Debentures (other than (a) dividends or distributions in shares
of, or options, warrants or rights to subscribe for or purchase shares of,
common stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees or any of
the Corporation's dividend reinvestment plans).

Prior to the termination of any such Extension Period, the Corporation
may further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, end
on a date other than an Interest Payment Date or extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due on any

53
<PAGE> 54
Interest Payment Date, the Corporation may elect to begin a new Extension
Period, subject to the above requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof. The Corporation
must give the Property Trustee, the Administrative Trustees and the Debenture
Trustee notice of its election of any Extension Period (or an extension
thereof) at least five Business Days prior to the earlier of (i) the date the
Distributions on the Trust Securities would have been payable except for the
election to begin or extend such Extension Period or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or to holders of Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin or extend a new Extension Period to the holders
of the Capital Securities. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period.

OPTIONAL PREPAYMENT. The Junior Subordinated Debentures will be
prepayable, in whole or in part, at the option of the Corporation on or after
the Initial Optional Prepayment Date, subject to the Corporation having
received any required regulatory approval, at a prepayment price (the "Optional
Prepayment Price") equal to the percentage of the outstanding principal amount
of the Junior Subordinated Debentures specified below, plus, in each case,
accrued and unpaid interest thereon to the date of prepayment if prepaid during
the 12-month period beginning March 1 of the years indicated below:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------

<S> <C>
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.937%
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.443%
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.950%
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.456%
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.962%
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.469%
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.975%
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.481%
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.987%
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.494%
2017 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.000%
</TABLE>

SPECIAL EVENT PREPAYMENT. Prior to March 1, 2007, if a Special Event
shall occur and be continuing, the Corporation may, at its option and subject
to receipt of any required regulatory approval, prepay the Junior Subordinated
Debentures in whole (but not in part) at any time within 90 days of the
occurrence of such Special Event, at a prepayment price (the "Special Event
Prepayment Price") equal to the Make-Whole Amount (as defined below). The
"Make-Whole Amount" shall be equal to the greater of (x) 100% of the principal
amount of the Junior Subordinated Debentures or (y) the sum, as determined by a
Quotation Agent (as defined herein), of the present values of the remaining
scheduled payments of principal and interest on the Junior Subordinated
Debentures discounted to the prepayment date on a semi-annual basis (assuming a
360-day year consisting of 12 30-day months) at the Adjusted Treasury Rate,
plus, in the case of each of clauses (x) and (y), accrued and unpaid interest
thereon to the date of prepayment.

A "Special Event" means a Tax Event or a Regulatory Capital Event, as
the case may be.

A "Tax Event" means the receipt by the Corporation and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such

54
<PAGE> 55
pronouncement or decision is announced on or after the Issue Date, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Corporation on the Junior Subordinated
Debentures is not, or within 90 days of the date of such opinion will not be,
deductible by the Corporation, in whole or in part, for United States federal
income tax purposes or (iii) the Trust is, or will be within 90 days of the
date of such opinion, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.

A "Regulatory Capital Event" means that the Corporation shall have
become, or pursuant to law or regulation will become within 180 days, subject
to capital requirements under which, in the written opinion of independent bank
regulatory counsel experienced in such matters, the Capital Securities would
not constitute Tier 1 Capital (as that concept is used in the guidelines or
regulations issued by the Board of Governors of the Federal Reserve System as
of the date of this Offering Memorandum) applied as if the Corporation (or its
successor) were a bank holding company, or the then-equivalent of such Tier-1
Capital.

"Adjusted Treasury Rate" means, with respect to any prepayment date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date plus (i) 2.90% if such prepayment date
occurs prior to March 1, 1998 and (ii) 2.40% in all other cases.

"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Initial
Optional Prepayment Date that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Junior Subordinated Debentures.

"Quotation Agent" means the Reference Treasury Dealer appointed by the
Corporation. "Reference Treasury Dealer" means a nationally-recognized U.S.
Government securities dealer in New York City selected by the Corporation.

"Comparable Treasury Price" means, with respect to any prepayment
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such prepayment date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Debenture Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.

"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined
by the Debenture Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Debenture Trustee by such Reference Treasury Dealer at
5:00 p.m., New York City time, on the third Business Day preceding such
prepayment date.

Notice of any prepayment will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be prepaid at its registered address. Unless the Corporation
defaults in payment of the prepayment price, on and after the prepayment date
interest ceases to accrue on such Junior Subordinated Debentures called for
prepayment.

55
<PAGE> 56
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Corporation will pay as
additional amounts on the Junior Subordinated Debentures such amounts as shall
be necessary in order that the amount of Distributions then due and payable by
the Trust on the outstanding Trust Securities shall not be reduced as a result
of any additional taxes, duties and other governmental charges to which the
Trust has become subject as a result of a Tax Event ("Additional Sums").

CERTAIN COVENANTS OF THE CORPORATION. The Corporation has agreed that
it will not, (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Corporation (including Other Debentures) that rank pari passu with or junior in
right of payment to the Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation (including under Other
Guarantees) if such guarantee ranks pari passu or junior in right of payment to
the Junior Subordinated Debentures (other than (a) dividends or distributions
in shares of, or options, warrants or rights to subscribe for or purchase
shares of, common stock of the Corporation, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) as a result of a reclassification of the Corporation's capital
stock or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock,
(e) the purchase of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, and (f) purchases of common stock
related to the issuance of common stock or rights under any of the
Corporation's benefit plans for its directors, officers or employees or any of
the Corporation's dividend reinvestment plans) if at such time (1) there shall
have occurred any event of which the Corporation has actual knowledge that (a)
is, or with the giving of notice or the lapse of time, or both, would be, a
Debenture Event of Default and (b) in respect of which the Corporation shall
not have taken reasonable steps to cure, (2) the Corporation shall be in
default with respect to its payment of any obligations under the Guarantee or
(3) the Corporation shall have given notice of its election of an Extension
Period as provided in the Indenture and shall not have rescinded such notice,
and such Extension Period, or any extension thereof, shall have commenced and
be continuing.

So long as the Trust Securities remain outstanding, the Corporation
also has agreed (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities, provided, however, that any permitted
successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Common Securities, (ii) to use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with the distribution of Junior Subordinated Debentures to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Trust Agreement, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income tax purposes and
(iii) to use its reasonable efforts to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Junior
Subordinated Debentures.

MODIFICATION OF INDENTURE. From time to time the Corporation and the
Debenture Trustee may, without the consent of the holders of Junior
Subordinated Debentures, amend, waive or supplement the Indenture for specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies or enabling the Corporation and the Trust to conduct an
Exchange Offer as contemplated by the Registration Rights Agreement, provided
that any such action does not materially adversely affect the interest of the
holders of Junior Subordinated Debentures), and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Corporation and the Debenture Trustee, with
the consent of the holders of a majority in principal amount of Junior
Subordinated Debentures, to modify the

56
<PAGE> 57
Indenture in a manner affecting the rights of the holders of Junior
Subordinated Debentures; provided that no such modification may, without the
consent of the holders of each outstanding Junior Subordinated Debenture so
affected, (i) change the Stated Maturity Date, or reduce the principal amount
of the Junior Subordinated Debentures or reduce the amount payable on
redemption thereof or reduce the rate or extend the time of payment of interest
thereon except pursuant to the Corporation's right under the Indenture to defer
the payment of interest as provided therein (see "--Option to Extend Interest
Payment Date") or make the principal of, or interest or premium on, the Junior
Subordinated Debentures payable in any coin or currency other than that
provided in the Junior Subordinated Debentures, or impair or affect the right
of any holder of Junior Subordinated Debentures to institute suit for the
payment thereof, or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures, the holders of which are required to consent to any
such modification of the Indenture.

DEBENTURE EVENTS OF DEFAULT. The Indenture provides that any one or
more of the following described events with respect to the Junior Subordinated
Debentures constitutes a "Debenture Event of Default" (whatever the reason for
such Debenture Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (i) failure for 30 days to pay any
interest (including Compounded Interest and Additional Sums, if any) or
Liquidated Damages, if any, on the Junior Subordinated Debentures or any Other
Debentures, when due (subject to the deferral of any due date in the case of an
Extension Period); or (ii) failure to pay any principal or premium, if any, on
the Junior Subordinated Debentures or any Other Debentures when due whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise; or (iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days after written
notice to the Corporation from the Debenture Trustee or the holders of at least
25% in aggregate outstanding principal amount of Junior Subordinated
Debentures; or (iv)certain events in bankruptcy, insolvency or reorganization
of the Corporation.

The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures have, subject to certain exceptions, the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee. The Debenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Junior Subordinated Debentures may declare the principal due and payable
immediately upon a Debenture Event of Default. The holders of a majority in
aggregate outstanding principal amount of the Junior Subordinated Debentures
may annul such declaration and waive the default if the default (other than the
non-payment of the principal of the Junior Subordinated Debentures which has
become due solely by such acceleration) has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.

The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Junior Subordinated Debentures, waive any past default,
except a default in the payment of principal (or premium, if any) on or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest (and premium, if any) and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee)
or a default in respect of a covenant or provision which under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Junior Subordinated Debenture.

The Indenture requires the annual filing by the Corporation with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.

57
<PAGE> 58
The Indenture provides that the Debenture Trustee may withhold notice
of a Debenture Event of Default from the holders of the Junior Subordinated
Debentures if the Debenture Trustee considers it in the interest of such
holders to do so.

ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES. If a
Debenture Event of Default shall have occurred and be continuing and shall be
attributable to the failure of the Corporation to pay the principal of (or
premium, if any), or interest (including Compounded Interest and Additional
Sums, if any) or Liquidated Damages, if any, on the Junior Subordinated
Debentures on the due date, a holder of Capital Securities may institute a
Direct Action. The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Capital Securities. Notwithstanding any payments
made to a holder of Capital Securities by the Corporation in connection with a
Direct Action, the Corporation shall remain obligated to pay the principal of
(or premium, if any) or interest (including Compounded Interest and Additional
Sums, if any) or Liquidated Damages, if any, on the Junior Subordinated
Debentures, and the Corporation shall be subrogated to the rights of the holder
of such Capital Securities with respect to payments on the Capital Securities
to the extent of any payments made by the Corporation to such holder in any
Direct Action.

The holders of the Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Junior Subordinated Debentures unless there
shall have been an Event of Default under the Trust Agreement. See
"Description of Capital Securities--Events of Default; Notice."

CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS. The
Indenture provides that the Corporation shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties as an
entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Corporation or convey, transfer or lease its
properties as an entirety or substantially as an entirety to the Corporation,
unless: (i) in case the Corporation consolidates with or merges into another
Person or conveys or transfers its properties substantially as an entirety to
any Person, the successor Person is organized under the laws of the United
States or any State or the District of Columbia, and such successor Person
expressly assumes the Corporation's obligations on the Junior Subordinated
Debentures; (ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would
become a Debenture Event of Default, shall have occurred and be continuing; and
(iii) certain other conditions as prescribed in the Indenture are met.

The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving the Corporation that may adversely affect holders
of the Junior Subordinated Debentures.

SATISFACTION AND DISCHARGE. The Indenture provides that when, among
other things, all Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation (i) have become due and payable or (ii)
will become due and payable at maturity or called for redemption within one
year, and the Corporation deposits or causes to be deposited with the Debenture
Trustee funds, in trust, for the purpose and in an amount sufficient to pay and
discharge the entire indebtedness on the Junior Subordinated Debentures not
previously delivered to the Debenture Trustee for cancellation, for the
principal (and premium, if any) and interest to the date of the deposit or to
the Stated Maturity Date, as the case may be, then the Indenture will cease to
be of further effect (except as to the Corporation's obligations to pay all
other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Corporation
will be deemed to have satisfied and discharged the Indenture.

58
<PAGE> 59
SUBORDINATION. In the Indenture, the Corporation has covenanted and
agreed that any Junior Subordinated Debentures issued thereunder will be
subordinate and junior in right of payment to all Senior Indebtedness to the
extent provided in the Indenture. Upon any payment or distribution of assets
to creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of the Corporation, all Senior
Indebtedness must be paid in full before the holders of Junior Subordinated
Debentures will be entitled to receive or retain any payment in respect
thereof.

In the event of the acceleration of the maturity of Junior
Subordinated Debentures, the holders of all Senior Indebtedness outstanding at
the time of such acceleration will first be entitled to receive payment in full
of such Senior Indebtedness before the holders of Junior Subordinated
Debentures will be entitled to receive or retain any payment in respect of the
Junior Subordinated Debentures.

No payments on account of principal, or premium, if any, or interest,
if any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default.

"Indebtedness" means (i) every obligation of the Corporation for money
borrowed; (ii) every obligation of the Corporation evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses; (iii)
every reimbursement obligation of the Corporation with respect to letters of
credit, banker's acceptances or similar facilities issued for the account of
the Corporation; (iv) every obligation of the Corporation issued or assumed as
the deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of the Corporation; (vi) all
indebtedness of the Corporation whether incurred on or prior to the date of the
Indenture or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, the
Corporation has guaranteed or is responsible or liable, directly or indirectly,
as obligor or otherwise.

"Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures" means (i) Indebtedness, whether outstanding on the date of
execution of the Indenture or thereafter created, assumed or incurred, to the
extent such indebtedness by its terms ranks equally with and not prior to the
Junior Subordinated Debentures in the right of payment upon the happening of
the dissolution or winding-up or liquidation or reorganization of the
Corporation and (ii) all other debt securities, and guarantees in respect of
those debt securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Corporation that is a financing
vehicle of the Corporation (a "financing entity") in connection with the
issuance by such financing entity of equity securities or other securities
guaranteed by the Corporation pursuant to an instrument that ranks pari passu
with or junior in right of payment to the Guarantee. The securing of any
Indebtedness, otherwise constituting Indebtedness Ranking on a Parity with the
Junior Subordinated Debentures, shall not be deemed to prevent such
Indebtedness from constituting Indebtedness Ranking on a Parity with the Junior
Subordinated Debentures.

"Indebtedness Ranking Junior to the Junior Subordinated Debentures"
means any Indebtedness, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, to the extent such
indebtedness by its terms ranks junior to and not equally with or prior to the
Junior Subordinated Debentures (and any other Indebtedness Ranking on a Parity
with the Junior Subordinated Debentures) in right of payment upon the happening
of the dissolution or winding-up or liquidation or reorganization of the

59
<PAGE> 60
Corporation. The securing of any Indebtedness, otherwise constituting
Indebtedness Ranking Junior to the Junior Subordinated Debentures, shall not be
deemed to prevent such Indebtedness from constituting Indebtedness Ranking
Junior to the Junior Subordinated Debentures.

"Senior Indebtedness" means all Indebtedness, whether outstanding on
the date of execution of the Indenture or thereafter created, assumed or
incurred, except Indebtedness Ranking on a Parity with the Junior Subordinated
Debentures or Indebtedness Ranking Junior to the Junior Subordinated
Debentures, and any deferrals, renewals or extensions of such Senior
Indebtedness.

The Corporation is a holding company and almost all of the operating
assets of the Corporation are owned by the Corporation's subsidiaries. The
Corporation relies primarily on dividends from the Bank to meet its obligations
for payment of principal and interest on its outstanding debt obligations and
corporate expenses. The Corporation is a legal entity separate and distinct
from its subsidiaries. Holders of Junior Subordinated Debentures should look
only to the Corporation for payments on the Junior Subordinated Debentures.
There are regulatory limitations on the payment of dividends directly or
indirectly to the Corporation from the Bank. See "--General." In addition, the
Bank is subject to certain restrictions imposed by federal law on any
extensions of credit to, and certain other transactions with, the Corporation
and certain other affiliates, and on investments in stock or other securities
thereof. Such restrictions prevent the Corporation and such other affiliates
from borrowing from the Bank unless the loans are secured by various types of
collateral. Further, such secured loans, other transactions and investments by
the Bank are generally limited in amount as to the Corporation and as to each
of such other affiliates to 10% of the Bank's capital and surplus and as to the
Corporation and all of such other affiliates to an aggregate of 20% of the
Bank's capital and surplus. Accordingly, the Junior Subordinated Debentures
will be effectively subordinated to all existing and future liabilities of the
Corporation's subsidiaries.

RESTRICTIONS ON TRANSFER. The Junior Subordinated Debentures will be
issued, and may be transferred, only in blocks having an aggregate principal
amount of not less than $100,000 (100 Junior Subordinated Debentures) and
multiples of $1,000 in excess thereof. Any such transfer of Junior
Subordinated Debentures in a block having an aggregate principal amount of less
than $100,000 shall be deemed to be void and of no legal effect whatsoever.
Any such transferee shall be deemed not to be the holder of such Junior
Subordinated Debentures for any purpose, including but not limited to the
receipt of payments on such Junior Subordinated Debentures, and such transferee
shall be deemed to have no interest whatsoever in such Junior Subordinated
Debentures.

GOVERNING LAW. The Indenture and the Junior Subordinated Debentures
will be governed by and construed in accordance with the laws of the State of
New York.

INFORMATION CONCERNING THE DEBENTURE TRUSTEE. Following the Exchange
Offer and the qualification of the Indenture under the Trust Indenture Act, the
Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such

60
<PAGE> 61
provisions, the Debenture Trustee is under no obligation to exercise any of the
powers vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
The Debenture Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties
if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.

DESCRIPTION OF GUARANTEE

The Old Guarantee was executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Old Capital Securities for
the benefit of the holders from time to time of the Old Capital Securities. As
soon as practicable after the date hereof, the Old Guarantee will be exchanged
by the Corporation for the New Guarantee for the benefit of the holders from
time to time of the New Capital Securities. The Guarantee Agreement has been
qualified under the Trust Indenture Act. This summary of certain provisions of
the Guarantee Agreement describes the material terms of the Guarantee, but does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Guarantee Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of the
Capital Securities.

GENERAL. The Corporation has agreed to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
below) to the holders of the Capital Securities, as and when due, regardless of
any defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Capital Securities, to the extent not paid by or on behalf of the Trust (the
"Guarantee Payments"), are subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on the Capital Securities, to the
extent that the Trust has funds on hand legally available therefor at such
time, (ii) the Redemption Price with respect to any Capital Securities called
for redemption, to the extent that the Trust has funds on hand legally
available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Trust (other than in connection
with the distribution of the Junior Subordinated Debentures to holders of the
Capital Securities or the redemption of all Capital Securities), the lesser of
(a) the Liquidation Distribution, to the extent the Trust has funds legally
available therefor, and (b) the amount of assets of the Trust remaining
available for distribution to holders of Capital Securities upon liquidation of
the Trust after satisfaction of liabilities to creditors of the Trust as
required by applicable law. The Corporation's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Corporation to the holders of the Capital Securities or by causing the Trust to
pay such amounts to such holders.

The Guarantee ranks subordinate and junior in right of payment to all
Senior Indebtedness to the extent provided therein. See "--Status of
Guarantee." Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any subsidiary upon
such subsidiary's liquidation or reorganization or otherwise is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Corporation may itself be recognized as a creditor of that subsidiary.
Accordingly, the Corporation's obligations under the Guarantee effectively are
subordinated to all existing and future liabilities, including deposits, of the
Corporation's subsidiaries, and claimants should look only to the assets of the
Corporation for payments thereunder. See "--Description of Junior Subordinated
Debentures--General." The Guarantee does not limit the incurrence or issuance
of other secured or unsecured debt of the Corporation, including Senior
Indebtedness, whether under the Indenture, any other indenture that the
Corporation may enter into in the future or otherwise.

The Corporation has, through the Guarantee, the Trust Agreement, the
Trust Agreement, the Junior Subordinated Debentures and the Indenture, taken
together, fully, irrevocably and unconditionally guaranteed all of the Trust's
obligations under the Capital Securities. No single document standing alone or
operating in

61
<PAGE> 62
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debentures and the Guarantee."

STATUS OF GUARANTEE. The Guarantee constitutes an unsecured
obligation of the Corporation and ranks subordinate and junior in right of
payment to all Senior Indebtedness in the same manner as Junior Subordinated
Debentures.

The New Guarantee ranks pari passu with the Old Guarantee and with all
Other Guarantees issued by the Corporation. The Guarantee constitutes a
guarantee of payment and not of collection (i.e., the guaranteed party may
institute a legal proceeding directly against the Corporation to enforce its
rights under the Guarantee without first instituting a legal proceeding against
any other person or entity). The Guarantee will be held for the benefit of the
holders of the Capital Securities. The Guarantee will not be discharged except
by payment of the Guarantee Payments in full to the extent not paid by the
Trust or upon distribution to the holders of the Capital Securities of the
Junior Subordinated Debentures. The Guarantee does not place a limitation on
the amount of additional Senior Indebtedness that may be incurred by the
Corporation.

EVENTS OF DEFAULT. An event of default under the Guarantee will occur
upon the failure of the Corporation to perform any of its payment or other
obligations thereunder, provided, however, that except with respect to a
default in payment of any Guarantee Payment, the Corporation shall have
received notice of default and shall not have cured such default within 60 days
after receipt of such notice. The holders of not less than a majority in
Liquidation Amount of the Capital Securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the Guarantee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under the Guarantee.

Any holder of the Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.

The Corporation, as guarantor, will be required to file annually with
the Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.

AMENDMENTS AND ASSIGNMENT. Except with respect to any changes that do
not materially adversely affect the rights of holders of the Capital Securities
(in which case no vote will be required), the Guarantee may not be amended
without the prior approval of the holders of a majority of the Liquidation
Amount of outstanding Capital Securities. The manner of obtaining any such
approval will be as set forth under "--Description of Capital
Securities--Voting Rights; Amendment of the Trust Agreement." All guarantees
and agreements contained in the Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Corporation and shall
inure to the benefit of the holders of the Capital Securities then outstanding.

TERMINATION. The Guarantee will terminate and be of no further force
and effect upon full payment of the applicable Redemption Price of the Capital
Securities, upon full payment of the Liquidation Amount payable upon
liquidation of the Trust or upon distribution of Junior Subordinated Debentures
to the holders of the Capital Securities. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the Capital Securities must restore payment of any sums paid under the
Capital Securities or the Guarantee.

62
<PAGE> 63
INFORMATION CONCERNING THE GUARANTEE TRUSTEE. The Guarantee Trustee,
other than during the occurrence and continuance of a default by the
Corporation in performance of the Guarantee, will undertake to perform only
such duties as are specifically set forth in the Guarantee and, after default
with respect to the Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee will be under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Capital Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.

GOVERNING LAW. The Guarantee will be governed by and construed in
accordance with the laws of the State of New York.

DESCRIPTION OF OLD SECURITIES

The terms of the Old Securities are identical in all materials
respects to the New Securities, except that (i) the Old Securities have not
been registered under the Securities Act, are subject to restrictions on
transfer under federal and state securities laws and are entitled to certain
rights under the Registration Rights Agreement (which rights will terminate
upon consummation of the Exchange Offer), (ii) the New Capital Securities will
not provide for any increase in the Distribution rate thereon and (iii) the New
Junior Subordinated Debentures will not provide for any increase in the
interest rate thereon. The Old Securities provide that, in the event that a
registration statement relating to the Exchange Offer has not been filed by
August 7, 1997 and declared effective by September 6, 1997, or, in certain
limited circumstances, in the event a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Old Capital
Securities is not declared effective by September 6, 1997, then interest will
accrue (in addition to the stated interest rate on the Old Junior Subordinated
Debentures) at the rate of 0.25% per annum on the principal amount of the Old
Junior Subordinated Debentures and Distributions will accrue (in addition to
the stated Distribution rate on the Old Capital Securities) at the rate of
0.25% per annum on the Liquidation Amount of the Old Capital Securities, for
the period from the occurrence of such event until such time as such required
Exchange Offer is consummated or any required Shelf Registration Statement is
effective. The New Securities are not, and upon consummation of the Exchange
Offer the Old Securities will not be, entitled to any such additional interest
or Distributions. Accordingly, holders of Old Capital Securities should review
the information set forth under "Risk Factors--Consequences of a Failure to
Exchange Old Capital Securities" and "Description of New Securities."

RELATIONSHIP AMONG THE CAPITAL SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE

FULL AND UNCONDITIONAL GUARANTEE

Payments of Distributions and other amounts due on the Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) are irrevocably guaranteed by the Corporation as
and to the extent set forth under "Description of New Securities--Description
of Guarantee." Taken together, the Corporation's obligations under the Junior
Subordinated Debentures, the Indenture, the Trust Agreement and the Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the Capital Securities. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Capital Securities. If and to the extent that the Corporation does not make
the required payments on the Junior Subordinated Debentures, the Trust will not
have sufficient funds to make the related payments, including Distributions, on
the Capital Securities. The

63
<PAGE> 64
Guarantee does not cover any such payment when the Trust does not have
sufficient funds on hand legally available therefor. In such event, the remedy
of a holder of Capital Securities is to institute a Direct Action. The
obligations of the Corporation under the Guarantee are subordinate and junior
in right of payment to all Senior Indebtedness.

SUFFICIENCY OF PAYMENTS

As long as payments of interest and other payments are made when due
on the Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Capital Securities, primarily
because: (i) the aggregate principal amount or Prepayment Price of the Junior
Subordinated Debentures will be equal to the sum of the Liquidation Amount or
Redemption Price, as applicable, of the Trust Securities, (ii) the interest
rate and interest and other payment dates on the Junior Subordinated Debentures
will match the Distribution rate and Distribution and other payment dates for
the Trust Securities; (iii) the Corporation, as Sponsor, shall pay for all and
any costs, expenses and liabilities of the Trust except the Trust's obligations
to holders of Trust Securities under such Trust Securities; and (iv) the Trust
Agreement provides that the Trust is not authorized to engage in any activity
that is not consistent with the limited purposes thereof.

ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES

A holder of any Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.

A default or event of default under any Senior Indebtedness would not
constitute a default or an Event of Default under the Trust Agreement.
However, in the event of payment defaults under, or acceleration of, Senior
Indebtedness, the subordination provisions of the Indenture provide that no
payments may be made in respect of the Junior Subordinated Debentures until
such Senior Indebtedness has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on
Junior Subordinated Debentures would constitute an Event of Default under the
Trust Agreement.

LIMITED PURPOSE OF THE TRUST

The Trust exists for the sole purpose of issuing and selling the Trust
Securities, using the proceeds from the sale of the Trust Securities to acquire
the Junior Subordinated Debentures and engaging in only those other activities
necessary, advisable or incidental thereto. The Capital Securities represent
beneficial ownership interests in the Trust. A principal difference between
the rights of a holder of Capital Securities and a holder of Junior
Subordinated Debentures is that a holder of Junior Subordinated Debentures is
entitled to receive from the Corporation the principal amount of (and premium,
if any) and interest on Junior Subordinated Debentures held, while a holder of
Capital Securities is entitled to receive Distributions from the Trust (or, in
certain circumstances, from the Corporation under the Guarantee) if and to the
extent the Trust has funds on hand legally available for the payment of such
Distributions.

RIGHTS UPON TERMINATION

Unless the Junior Subordinated Debentures are distributed to holders
of the Trust Securities, upon any voluntary or involuntary termination,
winding-up or liquidation of the Trust, after satisfaction of the liabilities
of creditors of the Trust as required by applicable law, the holders of the
Trust Securities will be entitled to receive, out of assets held by the Trust,
the Liquidation Distribution in cash. See "Description of New
Securities--Description of Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of the Corporation, the Property Trustee,
as holder of the Junior Subordinated Debentures, would be a subordinated
creditor of the Corporation,

64
<PAGE> 65
subordinated in right of payment to all Senior Indebtedness as set forth in the
Indenture, but entitled to receive payment in full of principal (and premium,
if any) and interest, before any stockholders of the Corporation receive
payments or distributions. Since the Corporation is the guarantor under the
Guarantee and has agreed to pay for all costs, expenses and liabilities of the
Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of Capital Securities and a holder of
Junior Subordinated Debentures relative to other creditors and to stockholders
of the Corporation in the event of liquidation or bankruptcy of the Corporation
are expected to be substantially the same.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

GENERAL

In the opinion of Elias, Matz, Tiernan & Herrick L.L.P., special
federal income tax counsel to the Corporation and the Trust ("Tax Counsel"),
the following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Capital
Securities held as capital assets by a holder. This summary does not deal with
special classes of holders such as banks, thrifts, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, or persons that will hold the
Capital Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. This summary also does not
address the tax consequences to persons that have a functional currency other
than the U.S. dollar or the tax consequences to shareholders, partners or
beneficiaries of a holder of Capital Securities. Further, it does not include
any description of any alternative minimum tax consequences or the tax laws of
any state or local government or of any foreign government that may be
applicable to the Capital Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury regulations thereunder,
the administrative and judicial interpretations thereof, as of the date hereof,
all of which are subject to change, possibly on a retroactive basis. An
opinion of Tax Counsel is not binding on the Internal Revenue Service (the
"IRS") or the courts. No rulings have been or are expected to be sought from
the IRS with respect to any of the transactions described herein and no
assurance can be given that the IRS will not take contrary positions.
Moreover, no assurance can be given that any of the opinions expressed herein
will not be challenged by the IRS or, if challenged, that such a challenge
would not be successful.

EXCHANGE OF CAPITAL SECURITIES

The exchange of Old Capital Securities for New Capital Securities
should not be a taxable event to holders for United States federal income tax
purposes. The exchange of Old Capital Securities for New Capital Securities
pursuant to the Exchange Offer should not be treated as an "exchange" for
United States federal income tax purposes because the New Capital Securities
should not be considered to differ materially in kind or extent from the Old
Capital Securities and because the exchange will occur by operation of the
terms of the Old Capital Securities. If, however, the exchange of the Old
Capital Securities for the New Capital Securities were treated as an exchange
for United States federal income tax purposes, such exchange should constitute
a recapitalization for federal income tax purposes. Accordingly, the New
Capital Securities should have the same issue price as the Old Capital
Securities, and a holder should have the same adjusted tax basis and holding
period in the New Capital Securities as the holder had in the Old Capital
Securities immediately before the exchange.

CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES

In connection with the issuance of the Old Junior Subordinated
Debentures, Tax Counsel has rendered its opinion generally to the effect that,
under then current law and assuming full compliance with the terms of the
Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Old Junior Subordinated Debentures
will be classified for United States federal income tax purposes

65
<PAGE> 66
as indebtedness of the Corporation. The Corporation, the Trust and the holders
of the Capital Securities (by acceptance of a beneficial interest in a Capital
Security) will agree to treat the Junior Subordinated Debentures as
indebtedness for all United States federal income tax purposes.

CLASSIFICATION OF THE TRUST

In connection with the issuance of the Old Capital Securities, Tax
Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Trust Agreement
and the Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities generally will be considered the
owner of an undivided interest in the Junior Subordinated Debentures, and each
holder will be required to include in its gross income any interest (or OID
accrued) with respect to its allocable share of those Junior Subordinated
Debentures.

INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT

Under recently issued Treasury regulations (the "Regulations")
applicable to debt instruments issued on or after August 13, 1996, a "remote"
contingency that stated interest will not be timely paid will be ignored in
determining whether a debt instrument is issued with OID. The Corporation
believes that the likelihood of its exercising its option to defer payments of
interest is "remote" since exercising that option would prevent the Corporation
from declaring dividends on any class of its equity securities. Accordingly,
the Corporation intends to take the position, based on the advice of Tax
Counsel, that the Junior Subordinated Debentures will not be considered to be
issued with OID and, accordingly, stated interest on the Junior Subordinated
Debentures generally will be taxable to a holder as ordinary income at the time
it is paid or accrued in accordance with such holder's method of accounting.

Under the Regulations, if the Corporation were to exercise its option
to defer payments of interest, the Junior Subordinated Debentures would at that
time be treated as issued with OID, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the
Junior Subordinated Debentures remain outstanding. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would thereafter be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income. Consequently, a
holder of Capital Securities would be required to include in gross income OID
even though the Corporation would not make actual cash payments during an
Extension Period. Moreover, under the Regulations, if the option to defer the
payment of interest was determined not to be "remote," the Junior Subordinated
Debentures would be treated as having been originally issued with OID. In such
event, all of a holder's taxable interest income with respect to the Junior
Subordinated Debentures would be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest would not be reported as taxable income.

The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to Tax Counsel's interpretation herein.

Because income on the Capital Securities will constitute interest or
OID, corporate holders of the Capital Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Capital Securities.

66
<PAGE> 67
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST

The Corporation will have the right at any time to liquidate the Trust
and cause the Junior Subordinated Debentures to be distributed to the holders
of the Trust Securities. Under current law, such a distribution, for United
States federal income tax purposes, would be treated as a nontaxable event to
each holder, and each holder would receive an aggregate tax basis in the Junior
Subordinated Debentures equal to such holder's aggregate tax basis in its
Capital Securities. A holder's holding period in the Junior Subordinated
Debentures so received in liquidation of the Trust would include the period
during which the Capital Securities were held by such holder. If, however, the
Trust is characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of its dissolution, the
distribution of the Junior Subordinated Debentures may constitute a taxable
event to holders of Capital Securities and a holder's holding period in Junior
Subordinated Debentures would begin on the date such Junior Subordinated
Debentures were received.

Under certain circumstances described herein (see "Description of New
Securities -- Description of New Capital Securities"), the Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Capital Securities. Under
current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed Capital Securities,
and a holder could recognize gain or loss as if it sold such redeemed Capital
Securities for cash. See "--Sales of Capital Securities."

SALES OF CAPITAL SECURITIES

A holder that sells Capital Securities (including a redemption of the
Capital Securities either on the Stated Maturity Date or upon an optional
redemption of the Junior Subordinated Debentures by the Corporation) will
recognize gain or loss equal to the difference between its adjusted tax basis
in the Capital Securities and the amount realized on the sale of such Capital
Securities (other than with respect to accrued and unpaid interest which has
not yet been included in income, which will be treated as ordinary income). A
holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price increased by OID (if any) previously includable in such
holder's gross income to the date of disposition and decreased by payments (if
any) received on the Capital Securities in respect of OID. Such gain or loss
generally will be a capital gain or loss and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than one
year.

The Capital Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debentures are deemed to have been issued with OID) who disposes
of his Capital Securities between record dates for payments of distributions
thereon will be required to include accrued but unpaid interest on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income (i.e., interest or, possibly, OID), and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. To the extent the selling price is less than
the holder's adjusted tax basis (which will include all accrued but unpaid
interest), a holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.

PROPOSED TAX LEGISLATION

67
<PAGE> 68
The Administration's Proposal would apply to debt obligations, such as the
Junior Subordinated Debentures, issued on or after the date of "first committee
action" with respect to the Administration's Proposal if such debt obligations
have a maximum term in excess of 15 years and are not shown as indebtedness on
the issuer's balance sheet or if such debt obligations have a maximum weighted
average maturity of more than 40 years. Under current law, the Corporation
will be able to deduct interest on the Junior Subordinated Debentures, and as
proposed the Administration's Proposal would not apply to the Junior
Subordinated Debentures because they were issued prior to the date of "first
committee action." Legislative proposals approved by the U.S. House of
Representatives and the U.S. Senate on June 26 and 27, 1997, respectively, did
not include the Administration's Proposal, and on June 30, 1997, the Clinton
Administration announced a new budget proposal which also does not appear to
include such proposal. There can be no assurance, however, that current or
future legislative proposals or final legislation will not adversely affect the
ability of the Corporation to deduct interest on the Junior Subordinated
Debentures. Accordingly, there can be no assurance that a Tax Event will not
occur. The occurrence of a Tax Event may result in the redemption of the
Junior Subordinated Debentures for cash, in which event the holders of Capital
Securities would receive cash in redemption of their Capital Securities.

UNITED STATES ALIEN HOLDERS

For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.

A "U.S. Holder" is a holder of Capital Securities who or which is a
citizen or individual resident (or is treated as a citizen or individual
resident) of the United States for federal income tax purposes, a corporation
or partnership created or organized (or treated as created or organized for
federal income tax purposes) in or under the laws of the United States or any
political subdivision thereof, or a trust or estate the income of which is
includible in its gross income for federal income tax purposes without regard
to its source. (For taxable years beginning after December 31, 1996 (or for
the immediately preceding taxable year, if the trustee of a trust so elects), a
trust is a U.S. Holder for federal income tax purposes if, and only if, (i) a
court within the United States is able to exercise primary supervision over the
administration of the trust and (ii) one or more United States trustees have
the authority to control all substantial decisions of the trust.)

Under present United States federal income tax laws: (i) payments by
the Trust or any of its paying agents to any holder of a Capital Security who
or which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the
total combined voting power of all classes of stock of the Corporation entitled
to vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Corporation through stock ownership,
and (c) either (A) the beneficial owner of the Capital Security certifies to
the Trust or its agent, under penalties of perjury, that it is not a United
States holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity, certifies to
the Trust or its agent, under penalties of perjury, that such statement has
been received from the beneficial owner by it or by a Financial Institution
between it and the beneficial owner and furnishes the Trust or its agent with a
copy thereof; and (ii) a United States Alien Holder of a Capital Security will
not be subject to United States federal withholding tax on any gain realized
upon the sale or other disposition of a Capital Security.

As discussed above, changes in legislation affecting the United States
federal income tax treatment of the Junior Subordinated Debentures are
possible, and could adversely affect the ability of the Corporation to deduct
the interest payable on the Junior Subordinated Debentures. Moreover, any such
legislation could, as the Proposed Legislation would have, adversely affect
United States Alien Holders by characterizing income derived from the Junior
Subordinated Debentures as dividends, generally subject to a 30% income tax (on
a

68
<PAGE> 69
withholding basis) when paid to a United States Alien Holder, rather than as
interest which, as discussed above, is generally exempt from income tax in the
hands of a United States Alien Holder.

A United States Alien Holder that holds Capital Securities in
connection with the active conduct of a United States trade or business will be
subject to income tax on all income and gains recognized with respect to its
proportionate share of the Junior Subordinated Debentures.

INFORMATION REPORTING TO HOLDERS

Generally, income on the Capital Securities will be reported to
holders on Forms 1099, which forms should be mailed to holders of Capital
Securities by January 31 following each calendar year.

BACKUP WITHHOLDING

Payments made on, and proceeds from the sale of, the Capital
Securities may be subject to a "backup" withholding tax of 31 percent unless
the holder complies with certain identification requirements. Any withheld
amounts will be allowed as a credit against the holder's United States federal
income tax, provided the required information is provided to the IRS.

THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON
A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN
UNITED STATES FEDERAL OR OTHER TAX LAWS.

ERISA CONSIDERATIONS

The Corporation, the obligor with respect to the Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee may
be considered a "party in interest" (within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many employee benefit plans ("Plans") that are subject to ERISA.
Any purchaser proposing to acquire Capital Securities with assets of any Plan
should consult with its counsel. The purchase and/or holding of Capital
Securities by a Plan that is subject to the fiduciary responsibility provisions
of ERISA or the prohibited transaction provisions of Section 4975 of the Code
(including individual retirement arrangements and other plans described in
Section 4975(e)(1) of the Code) and with respect to which the Corporation, the
Property Trustee or any affiliate is a service provider (or otherwise is a
party in interest or a disqualified person) may constitute or result in a
prohibited transaction under ERISA or Section 4975 of the Code, unless such
Capital Securities are acquired pursuant to and in accordance with an
applicable exemption, such as Prohibited Transaction Class Exemption ("PTCE")
84-14 (an exemption for certain transactions determined by an independent
qualified professional asset manager), PTCE 91-38 (an exemption for certain
transactions involving bank collective investment funds), PTCE 90-1 (an
exemption for certain transactions involving insurance company pooled separate
accounts), PTCE 95-60 (an exemption for transactions involving certain
insurance company general accounts) or PTCE 95-23 (an exemption for certain
transactions determined by an in-house manager). In addition, as described
below, a Plan fiduciary considering the acquisition of Capital Securities
should be aware that the assets of the Trust may be considered "plan assets"
for ERISA purposes. In such event, service providers with respect to the
assets of the Trust may become parties in interest or disqualified persons with
respect to investing Plans, and any discretionary authority exercised with
respect to the Junior Subordinated Debentures by such persons could be deemed
to constitute a prohibited

69
<PAGE> 70
transaction under ERISA or the Code. In order to avoid such prohibited
transactions, each investing Plan, by acquiring the Capital Securities, will be
deemed to have directed the Trust to invest in the Junior Subordinated
Debentures and to have consented to the appointment of the Property Trustee.
In this regard, it should be noted that, in an Event of Default, the
Corporation may not remove the Property Trustee without the approval of a
majority of the holders of the Capital Securities.

A Plan fiduciary should consider whether the acquisition of Capital
Securities could result in a delegation of fiduciary authority to the Property
Trustee, and, if so, whether such a delegation of authority is permissible
under the Plan's governing instrument or any investment management agreement
with the Plan. In making such determination, a Plan fiduciary should note that
the Property Trustee is a U.S. bank qualified to be an investment manager
(within the meaning of section 3(38) of ERISA) to which such a delegation of
authority generally would be permissible under ERISA. Further, prior to an
Event of Default with respect to the Junior Subordinated Debentures, the
Property Trustee will have only limited custodial and ministerial authority
with respect to Trust assets.

Under the U.S. Department of Labor regulations defining "plan assets"
for ERISA purposes (the "Plan Assets Regulations"), the assets of the Trust
will be considered plan assets of Plans owning Capital Securities unless the
aggregate investment in Capital Securities by "benefit plan investors" is not
deemed "significant" or another exception in the Plan Assets Regulations was
applicable. For this purpose, equity participation by benefit plan investors
will not be considered "significant" on any date only if, immediately after the
most recent acquisition of Capital Securities, the aggregate interest in the
Capital Securities held by benefit plan investors will be less than 25% of the
value of the Capital Securities. Although it is possible that the equity
participation by benefit plan investors in Capital Securities on any date will
not be "significant" for purposes of the Plan Assets Regulations, such result
cannot be assured.

PLAN OF DISTRIBUTION

Each broker-dealer that receives New Capital Securities for its own
account in connection with the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by Participating Broker-Dealers during the period referred to
below in connection with resales of New Capital Securities received in exchange
for Old Capital Securities if such Old Capital Securities were acquired by such
Participating Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities. The Corporation and the
Trust have agreed that this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating Broker-Dealer in connection
with resales of such New Capital Securities for a period ending 90 days after
the Expiration Date (subject to extension under certain limited circumstances
described herein) or, if earlier, when all such New Capital Securities have
been disposed of by such Participating Broker-Dealer. However, a Participating
Broker-Dealer who intends to use this Prospectus in connection with the resale
of New Capital Securities received in exchange for Old Capital Securities
pursuant to the Exchange Offer must notify the Corporation or the Trust, or
cause the Corporation or the Trust to be notified, on or prior to the
Expiration Date, that it is a Participating Broker-Dealer. Such notice may be
given in the space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses set forth herein
under "The Exchange Offer--Exchange Agent." See "The Exchange Offer--Resales
of New Capital Securities."

The Corporation or the Trust will not receive any cash proceeds from
the issuance of the New Capital Securities offered hereby. New Capital
Securities received by broker-dealers for their own accounts in connection with
the Exchange Offer may be sold from time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the New Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such

70
<PAGE> 71
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Capital Securities.

Any broker-dealer that resells New Capital Securities that were
received by it for its own account in connection with the Exchange Offer and
any broker or dealer that participates in a distribution of such New Capital
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of New Capital Securities and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

VALIDITY OF NEW SECURITIES

Certain matters of Delaware law relating to the validity of the New
Capital Securities and the creation of the Trust will be passed upon on behalf
of the Trust by Skadden, Arps, Slate, Meagher & Flom LLP, special Delaware
counsel to the Trust and the Corporation. The validity of the New Guarantee
and the New Junior Subordinated Debentures will be passed upon for the
Corporation by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C. Certain
matters relating to United States federal income tax considerations will be
passed upon for the Corporation by Elias, Matz, Tiernan & Herrick L.L.P.,
Washington, D.C.

EXPERTS

The audited consolidated financial statements of the Corporation
incorporated by reference in the Corporation's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997 and incorporated by reference herein have
been incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, and upon the authority
of said firm as experts in accounting and auditing.