SOUTHTRUST CORP, S-4/A, 1996-02-23

SOUTHTRUST CORP
S-4/A, 1996-02-23
STATE COMMERCIAL BANKS

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 23, 1996
Registration No. 333-00939

================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------

AMENDMENT NO. 1
TO

FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-----------------------

SOUTHTRUST CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 6711 63-0574085
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

420 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
(205) 254-5000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------------
AUBREY D. BARNARD
SOUTHTRUST CORPORATION
420 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
(205) 254-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

With copies to:
C. LARIMORE WHITAKER JAMES S. FLEISCHER, P.C.
BRADLEY, ARANT, ROSE & WHITE SILVER, FREEDMAN & TAFF, L.L.P.
2001 PARK PLACE SEVENTH FLOOR
SUITE 1400 1100 NEW YORK AVENUE, N.W.
BIRMINGHAM, ALABAMA 35203 WASHINGTON, D.C. 20005
(205) 521-8000 (202) 414-6100
-------------------- --------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
<PAGE> 2

SOUTHTRUST CORPORATION

CROSS-REFERENCE SHEET SHOWING THE LOCATION IN THE
PROXY STATEMENT/PROSPECTUS OF INFORMATION REQUIRED
BY PART I OF FORM S-4 PURSUANT TO ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
Location or Heading In Proxy
Item Statement/Prospectus
---- ----------------------------
<S> <C> <C>
1. Forepart of Registration Statement and Forepart of Registration Statement and Outside Front Cover Page of
Outside Front Cover Page of Prospectus Prospectus

2. Inside Front and Outside Back Cover Pages of Available Information; Incorporation of Certain Documents by Reference;
Prospectus Table of Contents

3. Risk Factors, Ratio of Earnings to Fixed Summary
Charges and Other Information

4. Terms of the Transaction Summary; The Merger; Description of Capital Stock of SouthTrust; Comparison
of the Common Stock of SouthTrust and FFE; Certain Federal Income Tax
Considerations

5. Pro Forma Financial Information Summary; Pro Forma Financial Information

6. Material Contacts with the Company Being Summary; The Merger
Acquired

7. Additional Information Required for *
Reoffering by Persons and Parties Deemed to
be Underwriters

8. Interests of Named Experts and Counsel Legal Matters

9. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities

10. Information With Respect to S-3 Registrants Summary

11. Incorporation of Certain Information by Incorporation of Certain Documents by Reference
Reference

12. Information With Respect to S-2 or S-3 *
Registrants

13. Incorporation of Certain Information by *
Reference

14. Information With Respect to Registrants *
Other Than S-3 or S-2 Registrants

15. Information With Respect to S-3 Companies *

16. Information With Respect to S-2 or S-3 *
Companies

17. Information With Respect to Companies Other Summary; Certain Information Concerning the Business of FFE and the Bank;
than S-2 or S-3 Companies Incorporation of Certain Documents by Reference

18. Information if Proxies, Consents or Introduction; Summary; The Merger; Additional Information
Authorizations are to be Solicited

19. Information if Proxies, Consents or *
Authorizations are not to be Solicited, or
in an Exchange Offer
</TABLE>
___________________________________________________
* Not Applicable
<PAGE> 3

FFE FINANCIAL CORP.
1160 SOUTH MCCALL ROAD
ENGLEWOOD, FLORIDA 34223
______________________________________________________________________________

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
______________________________________________________________________________

Notice is hereby given that the Annual Meeting of Stockholders of FFE
Financial Corp., a Delaware corporation ("FFE"), will be held on March 28,
1996, at _____ a.m., local time, at the principal executive offices of FFE at
1200 South McCall Road, Englewood, Florida 34223 for the following purposes
(the "Annual Meeting"):

1. To elect two (2) persons to the Board of Directors of FFE,
each person to serve a three-year term and until such person's successor
is duly elected and qualified; and

2. To consider and vote upon the Agreement and Plan of Merger
dated as of November 3, 1995 (the "Merger Agreement"), a copy of which is
annexed as Exhibit A to the accompanying Proxy Statement/Prospectus, by
and among FFE, SouthTrust Corporation, a Delaware corporation
("SouthTrust"), and SouthTrust of Florida, Inc. ("ST-Sub"), a Florida
corporation and wholly-owned subsidiary of SouthTrust, whereby FFE will be
merged with and into ST-Sub and the stockholders of FFE will receive cash
in the amount of $10.80 and 0.645 shares of common stock of SouthTrust
(both subject to possible adjustment in the event of certain occurrences),
with cash being paid in lieu of any fractional shares of common stock of
SouthTrust, pursuant to and in accordance with the terms and conditions of
the Merger Agreement, all as more fully described in the accompanying
Proxy Statement/Prospectus;

3. To ratify and approve the selection of KPMG Peat Marwick LLP
as the independent certified accountants of FFE for the fiscal year ended
September 30, 1996.

4. To consider and act upon such other matters as may properly
come before the Annual Meeting or any adjournment or adjournments thereof.

Only those persons who were holders of record of the common stock of FFE
at the close of business on February 21, 1996, are entitled to notice of and to
vote at the Annual Meeting and any adjournment thereof.

Pursuant to Section 262 of the General Corporation Law of the State of
Delaware (the "DGCL"), stockholders of FFE are entitled to dissent from the
transactions contemplated by the Merger Agreement. A copy of the Section 262 of
the DGCL regarding such rights of dissent is annexed as Exhibit E to the
accompanying Proxy Statement/Prospectus.

The Annual Meeting may be adjourned from time to time without notice other
than announcement at the Annual Meeting, or at any adjournment thereof, and any
business for which notice is hereby given may be transacted at any such
adjournment.

A Proxy Card and a Proxy Statement/Prospectus for the Annual Meeting are
enclosed.

By Order of the Board of Directors

Eunice G. Albritton
Secretary

Englewood, Florida
February {__}, 1996
<PAGE> 4

WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY SO THAT FFE MAY BE ASSURED OF THE PRESENCE OF A
QUORUM AT THE ANNUAL MEETING. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE> 5

PROXY STATEMENT/PROSPECTUS

PROXY STATEMENT OF

FFE FINANCIAL CORP.

FOR AN ANNUAL MEETING OF ITS STOCKHOLDERS
TO BE HELD MARCH 28, 1996

___________________________________________________________

THIS PROXY STATEMENT INCLUDES THE PROSPECTUS OF

SOUTHTRUST CORPORATION

RELATING TO UP TO 331,761 SHARES OF COMMON STOCK
(PAR VALUE $2.50 PER SHARE)

TO BE ISSUED IN CONNECTION WITH A PROPOSED MERGER OF
FFE FINANCIAL CORP. INTO SOUTHTRUST OF
FLORIDA, INC., A WHOLLY-OWNED SUBSIDIARY OF
SOUTHTRUST CORPORATION
___________________________________________________________

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IN CONNECTION
WITH THE OFFER MADE HEREBY. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY SOUTHTRUST
CORPORATION OR FFE FINANCIAL CORP. THIS PROXY STATEMENT/PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE SHARES TO WHICH IT RELATES
OR AN OFFER OF ANY KIND TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER
WOULD BE UNLAWFUL. NEITHER DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF. ALL INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS RELATING
TO SOUTHTRUST CORPORATION AND ITS SUBSIDIARIES HAS BEEN SUPPLIED BY SOUTHTRUST
CORPORATION AND ALL INFORMATION RELATING TO FFE FINANCIAL CORP. AND ITS
SUBSIDIARIES HAS BEEN SUPPLIED BY FFE FINANCIAL CORP.

THIS PROXY STATEMENT/PROSPECTUS AND THE ACCOMPANYING FORM OF PROXY ARE
FIRST BEING MAILED TO STOCKHOLDERS OF FFE FINANCIAL CORP. ON OR ABOUT FEBRUARY
{__}, 1996.

_________________________________________________

THE SECURITIES OF SOUTHTRUST CORPORATION OFFERED IN CONNECTION WITH THE
MERGER DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR BANK DEPOSITS,
ARE NOT OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENTAL AGENCY

The date of this Proxy Statement/Prospectus is February {__}, 1996.
<PAGE> 6

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ELECTION OF DIRECTORS OF FFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
BENEFICIAL OWNERSHIP OF FFE COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
DESCRIPTION OF SOUTHTRUST CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
MARKET AND DIVIDEND INFORMATION RESPECTING THE
COMMON STOCK OF SOUTHTRUST AND FFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
COMPARISON OF THE COMMON STOCK
OF SOUTHTRUST AND FFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SUPERVISION AND REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
CERTAIN INFORMATION CONCERNING THE BUSINESS OF FFE AND THE BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Exhibit A - Agreement and Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Subsidiary Agreement and Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C - Opinion of Hovde Financial, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Exhibit D - SouthTrust Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
Exhibit E - Delaware Dissent Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
</TABLE>

AVAILABLE INFORMATION

SouthTrust Corporation, a Delaware corporation ("SouthTrust"), is
subject to the informational requirements of the Securities Exchange Act of
1934 (the "Exchange Act") and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, Suite 1400,
500 West Madison Street, Chicago, Illinois 60661-2511. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.

SouthTrust has filed a Registration Statement on Form S-4 (herein,
together with all amendments thereto, called the "Registration Statement") with
the Commission under the Securities Act of 1933 (the "Securities Act") with
respect to the shares of Common Stock of SouthTrust offered hereby. This Proxy
Statement/Prospectus does not contain all of the information and undertakings
set forth in the Registration Statement and the exhibits and schedules thereto.
For further information with respect to SouthTrust and the shares of Common
Stock of SouthTrust, reference is made to the Registration Statement and the
exhibits and schedules thereto. Statements contained in this Proxy
Statement/Prospectus as to the contents of any contract or other document
referred to are not necessarily complete, and in each instance reference is
made to a copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. The Registration Statement and the exhibits and schedules
thereto may be inspected at the Commission's office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies thereof may be obtained from the Public
Reference Section of the Commission at such address at prescribed rates.

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THE DOCUMENTS RELATING
TO SOUTHTRUST (OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH EXHIBITS ARE NOT
SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS) ARE AVAILABLE ON
REQUEST WITHOUT CHARGE FROM AUBREY D. BARNARD, SOUTHTRUST CORPORATION, 420
NORTH 20TH STREET, BIRMINGHAM, ALABAMA 35203, TELEPHONE NUMBER (205) 254-5000.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
BY MARCH 21, 1996. SEE "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."

2
<PAGE> 7

INTRODUCTION

GENERAL

This Proxy Statement/Prospectus is being furnished to the holders of
the common stock, par value $.01 per share ("FFE Common Stock"), of FFE
Financial Corp., a Delaware corporation ("FFE"), in connection with the
solicitation of proxies by the Board of Directors of FFE for use at the annual
meeting of stockholders of FFE to be held on March 28, 1996, at {______} a.m.,
local time, at the principal executive offices of FFE at 1200 South McCall
Road, Englewood, Florida 34223, and at any adjournment thereof (the "Annual
Meeting").

The only matters to be considered at the Annual Meeting are (i) the
election two (2) persons to serve on the Board of Directors of FFE, (ii) the
consideration and vote upon that certain Agreement and Plan of Merger dated as
of November 3, 1995 (the "Merger Agreement") among FFE, SouthTrust Corporation,
a Delaware corporation ("SouthTrust"), and SouthTrust of Florida, Inc., a
Florida corporation and a wholly-owned subsidiary of SouthTrust ("ST-Sub"), and
(iii) the ratification and approval of the selection of KPMG Peat Marwick LLP
as the independent certified accountants of FFE for the fiscal year ended
September 30, 1996.

The Restated Certificate of Incorporation and the Bylaws of FFE
provide that the number of directors of FFE shall be fixed from time to time
pursuant to a resolution adopted by the Board of Directors of FFE. As of the
date of this Proxy Statement/Prospectus, the Board of Directors of FFE consists
of six persons. The Restated Certificate of Incorporation and the Bylaws of
FFE further provide that the members of the Board of Directors of FFE shall be
divided into three classes, one class to be elected at each annual meeting of
stockholders and to serve for a term of three years. See "ELECTION OF
DIRECTORS."

The Merger Agreement provides for the merger of FFE into ST-Sub (the
"Merger") and the exchange in the Merger of each outstanding share of FFE
Common Stock for cash in the amount of $10.80 (the "Cash Consideration") and
0.645 shares (the "Exchange Ratio") of common stock, par value $2.50 per share,
of SouthTrust, together with the associated rights to purchase shares of the
Series A Junior Participating Preferred Stock of SouthTrust (collectively, the
"SouthTrust Common Stock"), which Cash Consideration and Exchange Ratio may be
adjusted pursuant to the terms of the Merger Agreement. See "THE MERGER -
Effect of Merger on FFE Common Stock and FFE Stock Options." The Cash
Consideration and the shares of SouthTrust Common Stock issued pursuant to the
Exchange Ratio are collectively referred to herein as the "Merger
Consideration."

No fractional shares of SouthTrust Common Stock will be issued in the
Merger, and, in lieu thereof, each holder of shares of FFE Common Stock that
otherwise would have been entitled to receive a fractional share of SouthTrust
Common Stock will be entitled to receive a cash payment in an amount equal to
the product of (i) the fractional interest of a share of SouthTrust Common
Stock to which such holder otherwise would have been entitled and (ii) the last
sales price of one share of SouthTrust Common Stock at the Effective Time of
the Merger (as defined below), as reported by the Nasdaq National Market
("Nasdaq"). At or following the Effective Time of the Merger, First of
Englewood, FSB, a federal savings bank and a wholly-owned subsidiary of FFE
(the "Bank"), will be merged into SouthTrust Bank of Florida, National
Association, a wholly-owned subsidiary of ST-Sub ("ST-Bank").

The Cash Consideration for which each share of FFE Common Stock may be
exchanged in the Merger is subject to adjustment under certain circumstances.
The Merger Agreement provides that the Cash Consideration shall be decreased in
an amount equal to 50% of the after-tax cost to the Bank of certain restitution
payments made or to be made to customers of the Bank following a review of the
Bank's adjustable rate mortgages, as required by the Merger Agreement, to the
extent that such restitution payments exceed $125,000, and 100% of the
after-tax cost to the Bank to the extent that such payments exceed $250,000,
divided in both cases by the number of outstanding shares of FFE Common Stock
and the number of shares of FFE Common Stock subject to outstanding options
immediately prior to the Effective Time of the Merger. Such

3
<PAGE> 8

Cash Consideration shall be increased (at the rate of 8% per annum) to the
extent that the Effective Time of the Merger occurs after April 30, 1996.

The number of shares of SouthTrust Common Stock for which each share
of FFE Common Stock may be exchanged in the Merger is also subject to
adjustment under certain circumstances. The Merger Agreement provides that if
0.645, when multiplied by the average last sales price of SouthTrust Common
Stock for the later to occur of the twenty (20) trading days immediately
preceding the date of the meeting of stockholders of FFE at which the Merger is
to be considered or the twenty (20) trading days immediately following the date
that the last regulatory approval relating to the Merger is received (and all
waiting periods applicable thereto have expired), as reported by Nasdaq,
results in the aggregate of the amount attributable to each share of FFE Common
Stock, after taking into account all adjustments, being less than $22.95
(including the Cash Consideration, as the same may be adjusted), SouthTrust
shall adjust the Exchange Ratio so that the aggregate of the amount
attributable to each share of FFE Common Stock, after all adjustments, shall
equal $22.95 (including the Cash Consideration, as the same may be adjusted),
and if 0.645, when multiplied by the average last sales price of SouthTrust
Common Stock, as defined above, results in the aggregate of the amount
attributable to each share of FFE Common Stock being more than $31.05
(including the Cash Consideration, as the same may be adjusted), SouthTrust
shall adjust the Exchange Ratio so that the aggregate of the amount
attributable to each share of FFE Common Stock, after taking into account all
adjustments, shall equal $31.05 (including the Cash Consideration, as the same
may be adjusted).

Based upon the last sales price of SouthTrust Common Stock on
______________, 1996, of $________ and after adjusting for the Cash
Consideration, the aggregate value of the consideration to be exchanged for
each share of FFE Common Stock was $_____. See "DESCRIPTION OF SOUTHTRUST
CAPITAL STOCK - SouthTrust Common Stock" and "MARKET AND DIVIDEND INFORMATION
RESPECTING THE COMMON STOCK OF SOUTHTRUST AND FFE." Within the limits
described in the preceding paragraph, the number of shares of SouthTrust Common
Stock to be received for each share of FFE Common Stock in the Merger is fixed,
and therefore, within such limits, a change in the market price of SouthTrust
Common Stock before the Merger would affect the value of the SouthTrust Common
Stock to be received in the Merger.

Subject to the approval of the Merger Agreement by the stockholders of
FFE and the satisfaction or waiver of all conditions contained in the Merger
Agreement, the Merger will become effective upon the filing of Certificates or
Articles of Merger with the Secretary of State of the States of Florida and
Delaware (the "Effective Time of the Merger").

A copy of the Merger Agreement is attached hereto as Exhibit A, and
the description thereof contained in this Proxy Statement/Prospectus is
qualified in its entirety by reference to such Exhibit A.

VOTING AT THE ANNUAL MEETING

The Board of Directors of FFE has fixed the close of business on
February 21, 1996 as the record date (the "Record Date") for the determination
of holders of shares of FFE Common Stock entitled to notice of and to vote at
the Annual Meeting. On the Record Date, FFE had outstanding _________ shares
of FFE Common Stock, which constituted the only outstanding class of capital
stock of FFE entitled to notice of and to vote at the Annual Meeting. The
presence, in person or by proxy, of the holders of a majority of the
outstanding shares of FFE Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting. The affirmative vote of the holders
of a plurality of the outstanding shares of FFE Common Stock entitled to vote
thereon is required to elect the nominees for directors named in this Proxy
Statement/Prospectus. The affirmative vote of the holders of a majority of the
outstanding shares of FFE Common Stock entitled to vote thereon is required to
approve the Merger Agreement. Each holder of record of shares of FFE Common
Stock on the Record Date is entitled to one vote for each share of such stock
held of record.

As of the Record Date, FFE directors and executive officers (9
persons) beneficially owned a total of 87,017 shares of FFE Common Stock
(including 40,440 shares of FFE Common Stock which may be acquired by such
persons pursuant to options exercisable within 60 days of the Record Date),
representing approximately 17.7% of the shares of FFE Common Stock entitled to
vote at the Annual Meeting. All such directors and

4
<PAGE> 9

officers have informed FFE that, as of the date of the Proxy
Statement/Prospectus, they intend to vote such shares to elect the nominees for
directors named in this Proxy Statement/Prospectus and to approve the Merger
Agreement.

Hovde Financial, Inc. ("Hovde") has rendered its opinion to the Board
of Directors of FFE dated November 2, 1995, and updated as of _______________,
1996 stating that, in its opinion, the Merger is fair from a financial point of
view to the stockholders of FFE. See "THE MERGER - Opinion of Financial
Advisor."

THE BOARD OF DIRECTORS OF FFE RECOMMENDS THAT THE STOCKHOLDERS OF FFE
VOTE FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS NAMED IN THIS PROXY
STATEMENT/PROSPECTUS AND FOR APPROVAL OF THE MERGER AGREEMENT. SEE "ELECTION
OF DIRECTORS" AND "THE MERGER - BACKGROUND OF THE MERGER; REASONS FOR THE
MERGER; RECOMMENDATION OF THE BOARD OF DIRECTORS OF FFE."

A proxy in the form enclosed, properly completed and returned in time
for the voting thereof at the Annual Meeting, with instructions specified
thereon, will be voted in accordance with such instructions. Only votes FOR a
particular matter constitute affirmative votes. Votes that are withheld or
abstain, including broker non-votes, with respect to a matter are counted for
quorum purposes, but such votes have no effect on the election of directors of
FFE and will have the same effect as negative votes with respect to the
proposal regarding the Merger Agreement. If no specification is made, a signed
proxy will be voted FOR the election of the nominees for directors named in
this Proxy Statement/Prospectus and FOR approval of the Merger Agreement. A
proxy may be revoked at any time prior to its exercise (i) by filing with the
Secretary of FFE either an instrument revoking the proxy or a duly executed
proxy bearing a later date or (ii) by attending the Annual Meeting and voting
in person. Attendance at the Annual Meeting will not itself revoke a proxy.

The solicitation subject to this Proxy Statement/Prospectus is made on
behalf of the Board of Directors of FFE. In addition to the use of the mail,
proxies may be solicited by telephone, telegraph or personally by the
directors, officers and employees of FFE, who will receive no extra
compensation for their services. The expenses of such solicitation will be
paid by FFE. Regan and Associates will solicit proxies on behalf of FFE for a
fee of $3,500, plus expenses. FFE will reimburse banks, brokerage firms and
other custodians, nominees and fiduciaries for reasonable expenses incurred by
them in sending proxy soliciting material to the beneficial owners of shares of
FFE Common Stock.

STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ACCOMPANYING
PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.

5
<PAGE> 10

SUMMARY

The following is a brief summary of certain information contained in
or incorporated by reference into this Proxy Statement/Prospectus with
respect to FFE, SouthTrust and the terms of the Merger. The following
summary is not intended to be complete and is qualified in all
respects by the information appearing elsewhere herein or incorporated
by reference into this Proxy Statement/Prospectus, the Exhibits hereto
and the documents referred to herein.

ANNUAL MEETING

The Annual Meeting will be held at ______ a.m., local time, on March
28, 1996 at the principal executive offices of FFE at 1200 South McCall Road,
Englewood, Florida 34223, to elect two nominees to the Board of Directors of
FFE, to consider and vote upon the approval of the Merger Agreement and to
ratify the selection of KPMG Peat Marwick LLP as the independent certified
accountants of FFE for the fiscal year ended September 30, 1996. Only holders
of record of shares of FFE Common Stock as of the close of business on February
21, 1996 will be entitled to notice of and to vote at the Annual Meeting,
including any adjournment thereof.

ELECTION OF DIRECTORS

The Board of Directors of FFE proposes to nominate G. L. Smith and
Robert L. Bedford for election as directors of FFE, such persons to serve until
their successors have been elected and qualified.

PARTIES TO THE MERGER

SouthTrust

SouthTrust is a regional bank holding company headquartered in
Birmingham, Alabama, and engages in a full range of banking services from more
than 430 banking locations in Alabama, Florida, Georgia, Mississippi, North
Carolina, South Carolina and Tennessee. SouthTrust, through its bank-related
subsidiaries, also offers a range of other services, including mortgage banking
services, data processing services and securities brokerage services. As of
December 31, 1995, SouthTrust had consolidated total assets of approximately
$20.8 billion, which ranked it as the largest bank holding company
headquartered in Alabama. The largest bank subsidiary of SouthTrust is
SouthTrust Bank of Alabama, N.A., the oldest predecessor of which was
incorporated in 1887, and which had approximately $11.1 billion in total assets
as of December 31, 1995. Of SouthTrust's approximately $20.8 billion in assets
as of December 31, 1995, approximately $11.1 billion were in Alabama,
approximately $3.4 billion were in Florida and approximately $4.1 billion were
in Georgia.

SouthTrust has pursued a strategy of acquiring banks and financial
institutions in or near major metropolitan or growth markets in Florida,
Georgia, Mississippi, North Carolina, South Carolina and Tennessee. The
purpose of this strategy is to give SouthTrust business development
opportunities in metropolitan markets with favorable prospects for population
and per capita income growth.

During fiscal year 1995, SouthTrust effected acquisitions of 7
financial institutions, with total assets of approximately $713.0 million. The
following table presents certain information as of December 31, 1995 with
respect to transactions which are currently pending as of the date of this
Proxy Statement/Prospectus, including the Merger:

<TABLE>
<CAPTION>
Total Total Total
Institution Location Assets Deposits Loans*
- ----------------- -------- ------ -------- -----
(in millions)
<S> <C> <C> <C> <C>
FFE Financial Corp. Englewood, Florida 140.6 120.6 99.1
Bankers First Corporation Augusta, Georgia 1,061.0 769.3 885.3
Citizens Bank of MacClenny MacClenny, Florida 84.0 72.4 53.1
First State Bank of Florida Deltona, Florida 88.4 81.7 61.3
Lake State Bank Lutz, Florida 28.8 24.9 17.6
</TABLE>
___________________________
*Net of unearned income

6
<PAGE> 11

SouthTrust anticipates that the acquisitions of Bankers First
Corporation , Citizens Bank of MacClenny and Lake State Bank each will be
accounted for as a pooling of interests, and that the acquisitions of FFE and
First State Bank of Florida each will be accounted for pursuant to the purchase
method of accounting. Consummation of the pending transactions is subject, in
each case, to, among other things, approval by applicable regulatory
authorities.

As a routine part of its business, SouthTrust evaluates opportunities
to acquire bank holding companies, banks and other financial institutions.
Thus, at any particular point in time, including the date of this Proxy
Statement/Prospectus, discussions and, in some cases, negotiations and due
diligence activities looking toward or culminating in the execution of
preliminary or definitive documents respecting potential acquisitions may occur
or be in progress. These transactions may involve SouthTrust acquiring such
financial institutions in exchange for cash or capital stock, and depending
upon the terms of these transactions, they may have a dilutive effect upon the
SouthTrust Common Stock to be issued to holders of FFE Common Stock in the
Merger.

The principal executive offices of SouthTrust are located at 420 North
20th Street, Birmingham, Alabama 35203, and its telephone number is (205)
254-5000.

FFE and the Bank

FFE was organized in December 1992 at the direction of the Board of
Directors of the Bank (formerly First Federal Savings and Loan Association of
Englewood) for the purpose of becoming a savings and loan holding company to
hold all of the outstanding stock of the Bank. The Bank is a federal stock
savings bank and a wholly-owned subsidiary of FFE. FFE is primarily engaged in
the business of directing, planning and coordinating the business activities of
the Bank.

The Bank was chartered under the name of First Federal Savings and
Loan Association of Englewood in 1959 as a federal mutual savings and loan
association, offering home mortgage loans and savings accounts and primarily
serving the Englewood, Florida area. The Bank converted from mutual to stock
form in August 1993, in connection with the organization of FFE. The Bank now
operates three full-service offices. The Bank is a member of the Federal Home
Loan Bank System, and its savings deposits are insured by the Savings
Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation ("FDIC"). The Bank is subject to comprehensive regulation,
examination and supervision by the Office of Thrift Supervision ("OTS") and the
FDIC. See "CERTAIN INFORMATION CONCERNING THE BUSINESS OF FFE AND THE BANK"
and "SUPERVISION AND REGULATION."

The business of the Bank consists primarily of attracting savings and
retail deposits and using these funds, as well as loan repayments and
borrowings, to originate loans, primarily for the purchase, refinancing or
construction of residential real estate. The Bank also holds loans secured by
multi-family and commercial real estate, but does not originate such loans.
The Bank also invests in securities and mortgage-backed obligations.

The principal sources of funds for the Bank's lending and investment
activities are retail deposits and savings accounts. In addition to deposits
and savings accounts, the Bank obtains funds from loan principal repayments,
proceeds from sales or maturities of mortgage-backed securities and
investments, borrowings from the Federal Home Loan Bank of Atlanta, and funds
provided from operations. The Bank's principal expenses are interest paid on
deposits, borrowings and operating expenses.

The Bank's primary market area for loans and deposits is southwest
Sarasota and west Charlotte counties in southwestern Florida, which area had a
population of approximately 50,000 in December 1995. This market area has a
diverse economy with an emphasis on tourism. In recent periods, the Bank's
market area has been above national averages in population growth and has
experienced an above average unemployment rate.

FFE and the Bank maintain their principal executive offices at 1200
South McCall Road, Englewood, Florida 34223, and the telephone number at such
office is (813) 474-3205.

7
<PAGE> 12

SouthTrust of Florida, Inc.

ST-Sub, a Florida corporation, is a wholly-owned subsidiary of
SouthTrust. ST-Bank is a wholly-owned subsidiary of ST-Sub and currently owns
all of the banking operations of SouthTrust located in the State of Florida.

THE MERGER

Terms of the Merger

Subject to approval of the Merger Agreement by the stockholders of FFE
at the Annual Meeting, the receipt of required regulatory approval and certain
other conditions, FFE will be merged into ST-Sub pursuant to the Merger
Agreement. At the Effective Time of the Merger, each share of FFE Common Stock
which is issued and outstanding immediately prior to the Effective Time (other
than certain excluded shares as described below) shall be converted into and
represent the right to receive and be exchanged for (A) cash in the amount of
$10.80 and (B) 0.645 shares of SouthTrust Common Stock, as such Cash
Consideration and Exchange Ratio may be adjusted pursuant to the terms of the
Merger Agreement. See "THE MERGER -- Effect of Merger on FFE Common Stock and
FFE Stock Options."

The Merger Agreement provides that the Cash Consideration portion of
the Merger Consideration for which each share of FFE Common Stock may be
exchanged in the Merger is subject to being increased (at the rate of 8% per
annum) to the extent that the Effective Time of the Merger occurs after April
30, 1995. Such Cash Consideration is also subject to being decreased if
payments made or to be made to customers following a review of the Bank's
adjustable rate mortgages, as required by the Merger Agreement, exceed
$125,000. The Cash Consideration portion of the Merger Consideration for which
each share of FFE Common Stock may be exchanged shall be decreased in an amount
equal to 50% of the after-tax cost to the Bank of such restitution payments to
the extent that such payments exceed $125,000 and 100% of the after-tax cost to
the Bank of such restitution payments to the extent that such payments exceed
$250,000, divided in both cases by the number of outstanding shares of FFE
Common Stock and the number of shares of FFE Common Stock subject to
outstanding options immediately prior to the Effective Time of the Merger. See
"THE MERGER -- Effect of Merger on FFE Common Stock and FFE Stock Options."

The Exchange Ratio, which determines the number of shares of
SouthTrust Common Stock for which each share of FFE Common Stock may be
exchanged in the Merger, is also subject to adjustment under certain
circumstances. The Merger Agreement provides that if 0.645, when multiplied by
the average last sales price of SouthTrust Common Stock, as reported by Nasdaq,
for the later to occur of the twenty (20) trading days immediately preceding
the date of the meeting of stockholders of FFE at which the Merger is to be
considered or the twenty (20) trading days immediately following the date that
the last regulatory approval relating to the Merger is received (and all
waiting periods applicable thereto have expired) results in the aggregate of
the amount attributable to each share of FFE Common Stock (including the Cash
Consideration, as the same may be adjusted), after taking into account all
adjustments, being less than $22.95 , SouthTrust shall adjust the Exchange
Ratio so that the aggregate of the amount attributable to each share of FFE
Common Stock (including the Cash Consideration, as the same may be adjusted),
after all adjustments, shall equal $22.95 , and if 0.645, when multiplied by
the average last sales price of SouthTrust Common Stock, as defined above,
results in the aggregate of the amount attributable to each share of FFE Common
Stock (including the Cash Consideration, as the same may be adjusted) being
more than $31.05 , SouthTrust shall adjust the Exchange Ratio so that the
aggregate of the amount attributable to each share of FFE Common Stock
(including the Cash Consideration, as the same may be adjusted), after taking
into account all adjustments, shall equal $31.05 . The Exchange Ratio,
including the number of shares of SouthTrust Common Stock issuable in the
Merger, is also subject to appropriate adjustment in the event of certain stock
splits, stock dividends, reclassifications or similar distributions effected by
SouthTrust. Because the Exchange Ratio is subject to being adjusted under the
circumstances discussed in this paragraph, the Exchange Ratio may not be
definitively determined until immediately prior to the Effective Time of the
Merger. However, based upon the last sales price of SouthTrust Common Stock on
_________, 1996 (the last trading day immediately prior to the date of this
Proxy Statement/Prospectus), no adjustment in the Exchange Ratio would be
required. See "THE MERGER -- Effect of Merger on FFE Common Stock and FFE
Stock Options."

8
<PAGE> 13

All rights with respect to shares of FFE Common Stock issuable
pursuant to the exercise of stock options ("FFE Options") granted by FFE under
the FFE 1992 Stock Option and Incentive Plan (the "FFE Stock Option Plan"), and
held by each participant thereunder, shall be converted into, as of the
Effective Time of the Merger, the right of the holders thereof to receive
either (i) a cash payment equal to the excess, if any, of the value of the
consideration exchanged for each share of FFE Common Stock pursuant to the
terms of the Merger Agreement over the exercise price per share of such option
or (ii) at the election of such participant by written notice delivered to
SouthTrust at least five business days prior to the consummation of the Merger,
a substitute option pursuant to which such optionee may receive shares of
SouthTrust Common Stock. Each FFE Option assumed by SouthTrust may be
exercised from and after the Effective Time of the Merger solely for the number
of shares (rounded to the nearest whole share) of SouthTrust Common Stock that
would have been received by the optionee in the Merger as determined in a
manner consistent with Section 424(a) of the Internal Revenue Code had the
entire option been exercised in full for shares of FFE Common Stock immediately
before the Merger upon the same terms and conditions of the FFE Stock Option
Plan as were applicable immediately before the Effective Time of the Merger
(assuming that all unvested options were then fully vested) and that such
shares of FFE Common Stock received upon exercise had been converted in the
Merger only into shares of SouthTrust Common Stock at the full fair market
value of the Merger Consideration (as if the Cash Consideration portion thereof
was to be received in shares of SouthTrust Common Stock), with appropriate pro
rata adjustment to the relevant option price for the shares of SouthTrust
Common Stock substituted therefor so that the aggregate option exercise price
of shares of SouthTrust Common Stock subject to the option immediately
following the assumption and substitution shall be the same as the aggregate
option exercise price for the shares of FFE Common Stock relating to the
SouthTrust Stock Option immediately before such assumption and substitution.
Each outstanding share of FFE Common Stock awarded pursuant to the FFE
Management Recognition Plan (the "MRP") that is unvested immediately prior to
the Effective Time of the Merger shall be canceled in exchange for a cash
payment from SouthTrust equal to the amount of the per share consideration to
be exchanged by SouthTrust determined by application of the Exchange Ratio for
such share of FFE Common Stock pursuant to the Merger Agreement. See "THE
MERGER - Effect of Merger on FFE Common Stock and FFE Stock Options."

As promptly as practicable after the Effective Time of the Merger,
SouthTrust or its agents shall send or cause to be sent to each former holder
of record of FFE Common Stock a letter of transmittal for use in exchanging
their stock certificates formerly representing such FFE Common Stock for the
right to receive certificates representing the appropriate number of shares of
SouthTrust Common Stock determined by application of the Exchange Ratio, plus
the Cash Consideration.

As of the Effective Time of the Merger or immediately thereafter, the
Bank will be merged with and into ST-Bank (the "Subsidiary Merger"), pursuant
to that certain Subsidiary Agreement and Plan of Merger dated as of January 4,
1996, among the Bank and ST-Bank, a copy of which is annexed hereto as Exhibit
B (the "Subsidiary Merger Agreement"), with ST-Bank being the surviving
association.

Vote Required

The affirmative vote of the holders of a plurality of the shares of
FFE Common Stock present in person or by proxy at the Annual Meeting is
required to elect nominees for directors named in this Proxy
Statement/Prospectus, and the affirmative vote of the holders of a majority of
the outstanding shares of FFE Common Stock is required to approve the Merger
Agreement. As of February {___}, 1996, {_______} shares of FFE Common Stock
were outstanding. Each share of FFE Common Stock entities the holder thereof
to one vote on the matters to be considered at the Annual Meeting. Votes that
are withheld or abstain, including broker non-votes, with respect to a matter
are counted for quorum purposes, but such votes will have no effect upon the
election of directors and will have the same effect as negative votes with
respect to the proposal regarding the Merger Agreement. If no specification is
made, a signed proxy will be voted FOR the election as

9
<PAGE> 14

directors of the nominees named in the Proxy Statement/Prospectus and FOR
approval of the Merger Agreement.

Directors and executive officers of FFE, and their affiliates, owned,
as of the Record Date, directly or indirectly, 87,017 shares of FFE Common
Stock (including 40,440 shares of FFE Common Stock which may be acquired by
such persons pursuant to options exercisable within 60 days of the Record
Date), constituting approximately 17.7% of the shares of FFE Common Stock
outstanding on the Record Date for the Annual Meeting. It is anticipated that
all of such shares will be voted for approval of the Merger Agreement.

Background of the Merger; Reasons for the Merger; Recommendation of
the Board of Directors of FFE

The Board of Directors of FFE believes that the merger is in the best
interest of FFE and its stockholders. In the course of reaching its
determination to approve the Merger and recommend the approval of the Merger
Agreement to the stockholders of FFE, the Board of Directors, without assigning
any relative or specific weights, considered a number of factors, including (i)
the Cash Consideration and SouthTrust Common Stock to be received, (ii) the
other terms of the Merger Agreement and (iii) the fairness opinion of Hovde.

THE MEMBERS OF THE BOARD OF DIRECTORS OF FFE HAVE UNANIMOUSLY APPROVED
THE MERGER AGREEMENT AND DETERMINED THAT THE MERGER IS IN THE BEST INTEREST OF
FFE AND ITS STOCKHOLDERS. ACCORDINGLY, THE BOARD OF DIRECTORS OF FFE
RECOMMENDS THAT STOCKHOLDERS OF FFE VOTE IN FAVOR OF THE MERGER AGREEMENT.

SouthTrust is engaging in the transactions pursuant to the Merger
because the Merger and the Subsidiary Merger are consistent with its expansion
strategy within the southeastern United States and because the acquisition of
FFE and the Bank will augment and enhance SouthTrust's competitive position in
such market.

See "THE MERGER - Background of the Merger; Reasons for the Merger;
Recommendations of the Board of Directors of FFE."

Opinion of Financial Advisor

The Board of Directors of FFE engaged Hovde Financial, Inc. to
consider the fairness of the Merger, from a financial point of view, to the
stockholders of FFE. In connection with the consideration of the Merger
Agreement, Hovde delivered its initial opinion letter to the Board of Directors
of FFE, dated November 2, 1995, and updated on _________, 1996, a copy of which
is attached hereto as Exhibit C, stating that, based upon the information and
procedures specified therein, in its opinion the Merger is fair, from a
financial point of view, to the stockholders of FFE.

Hovde has acted as a financial advisor to FFE in connection with the
Merger and, as indicated above, was engaged to render the aforementioned
fairness opinion. FFE paid $10,000 upon engagement, plus upon the consummation
of the Merger, FFE has agreed to pay Hovde a fee equal to (a) 5.0% of the first
$1 million of the Merger Consideration; (b) 4.0% of the next $1 million of the
Merger Consideration; (c) 3.0% of the next $1 million of the Merger
Consideration; (d) 2.0% of the next $1 million of the Merger Consideration; and
either (i) 0.50% of the remaining Merger Consideration in the event total
Merger Consideration is less than or equal to $12.8 million; or (ii) 0.75% of
the remaining Merger Consideration in the event total Merger Consideration is
greater than $12.8 million and less than or equal to $14.2 million; or (iii)
1.0% of the remaining Merger Consideration in the event total Merger
Consideration is greater than $14.2 million and less than or equal to $15.5
million; and (e) In the event total Merger Consideration is greater than $15.5
million, an additional 2.0% fee is due on the Merger Consideration in excess of
$15.5 million. In addition, FFE has agreed to reimburse Hovde for its
out-of-pocket costs and expenses incurred in connection with the activities
contemplated by its engagement, regardless of whether the Merger is
consummated. FFE has further agreed to indemnify Hovde against certain
liabilities which may arise in connection with its engagement.

See "THE MERGER - Opinion of Financial Advisor."

10
<PAGE> 15

Interests of Certain Persons Named in the Merger

Certain officers and members of the Board of Directors of FFE may be
deemed to have interests in the Merger in addition to their interests, if any,
as stockholders of FFE. Among those interests are certain employment and
change in control agreements that provide for severance pay and other benefits
upon the occurrence of a change in control of FFE, the acceleration of vesting
of rights in FFE Options under the FFE Stock Option Plan, the acceleration of
incentive bonus awards under the FFE Management Recognition Plan, and an
agreement by SouthTrust to indemnify directors, officers, employees and agents
of FFE and its subsidiaries for a period of three years from and after the
Effective Time of the Merger against certain liabilities arising prior to the
Merger.

See "THE MERGER - Interests of Certain Named Persons in the Merger"
and "THE MERGER - Business and Management of FFE Following the Merger; Plans
for Business of FFE."

Effective Time of the Merger

The Merger will become effective when the Certificates or Articles of
Merger are accepted for filing with the Secretary of State of the States of
Florida and Delaware. The parties to the Merger Agreement will cause such
Certificate or Articles of Merger to be so filed, subject to the satisfaction
or waiver of each of the conditions to consummation of the Merger, on the date
of the closing of the transaction. Subject to satisfaction of the conditions
contained in the Merger Agreement, the parties currently anticipate that the
Merger will become effective during the first half of 1996, although there can
be no assurance as to whether or when the Merger will become effective. See
"THE MERGER - Effective Time of the Merger" and "THE MERGER - Regulatory
Approvals and Certain Other Conditions to the Merger; Waiver and Amendment."

NO ASSURANCE CAN BE PROVIDED THAT THE NECESSARY STOCKHOLDER AND
REGULATORY APPROVALS CAN BE OBTAINED OR THAT THE OTHER CONDITIONS PRECEDENT TO
THE MERGER CAN OR WILL BE SATISFIED. FFE AND SOUTHTRUST ANTICIPATE THAT ALL
CONDITIONS TO THE CONSUMMATION OF THE MERGER WILL BE SATISFIED SO THAT THE
MERGER CAN BE CONSUMMATED DURING THE FIRST HALF OF 1996; HOWEVER, DELAYS IN THE
CONSUMMATION OF THE MERGER COULD OCCUR.

Stock Option Agreement and Break-Up Fee

Following the execution of the Merger Agreement and as a condition to
such execution, FFE granted SouthTrust an option (the "SouthTrust Option") to
purchase, under certain circumstances, up to 104,640 shares (the "Option
Shares") of FFE Common Stock at a price equal to $27.00 per share pursuant to
the terms of a Stock Option Agreement dated November 3, 1995 between FFE and
SouthTrust (the "SouthTrust Stock Option Agreement"), but only upon the
occurrence of specified events related generally to the making by third parties
of offers to acquire FFE and the acquisition by third parties of FFE Common
Stock, which Stock Option Agreement shall expire at the Effective Time of the
Merger, upon the termination of the Merger Agreement if no event by which the
option becomes exercisable shall have occurred or one year after the
termination of the Merger Agreement if an event by which the option becomes
exercisable shall have occurred. The SouthTrust Stock Option Agreement was
approved by the Board of Directors of FFE.

If, after the date of the Merger Agreement, an offer to acquire FFE or
the Bank is presented or proposed to FFE or its stockholders and (i) thereafter
the Merger Agreement and the Merger are disapproved by the stockholders of FFE
and (ii) within one year after termination of the Merger Agreement such
acquisition is consummated or a definitive agreement is entered into by FFE
relating to such acquisition (a "Trigger Event"), then upon the occurrence of a
Trigger Event and in lieu of any other rights and remedies of SouthTrust, FFE
shall (x) reimburse SouthTrust for its third party transaction expenses in an
amount up to two hundred thousand dollars ($200,000) and (y) pay SouthTrust an
additional cash amount of four hundred thousand dollars ($400,000) as an
agreed-upon fee as the sole and exclusive remedy of SouthTrust against FFE
(collectively the "Break-Up Fee"); provided, however, that SouthTrust shall not
be entitled to any such payment if SouthTrust exercises any option granted by
the SouthTrust Stock Option Agreement or exercises any right to require FFE to
repurchase the option granted by the SouthTrust Stock Option Agreement.

11
<PAGE> 16

Regulatory Approvals and Certain Other Conditions to the Merger; Waiver and
Amendment

The respective obligations of SouthTrust and FFE to consummate the
Merger are subject to the satisfaction of certain conditions, including, among
others, (i) the receipt of all required regulatory approvals with respect to
the Merger, (ii) the approval of the Merger Agreement by the requisite vote of
the stockholders of FFE, and (iii) certain other conditions customary in
transactions of this kind.

Consummation of the Merger is subject to receipt of the prior approval
by the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") under the Bank Holding Company Act of 1956, as amended (the "Bank
Holding Company Act"). The Bank Holding Company Act prohibits the Federal
Reserve Board from approving the Merger (i) if such transaction would result in
a monopoly or be in furtherance of any combination or conspiracy to monopolize
or to attempt to monopolize the business of banking in any part of the United
States, or (ii) if the effect of such transaction in any section of the country
may be substantially to lessen competition or to tend to create a monopoly, or
if it would in any other manner be a restraint of trade, unless the relevant
regulatory agency finds that the anti-competitive effects of such merger are
clearly outweighed by the public interest and by the probable effect of the
transaction in meeting the convenience and needs of the communities to be
served. Under the Bank Holding Company Act, the Federal Reserve Board also
considers whether the proposed transaction can reasonably be expected to
produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse effects,
such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices. The Federal Reserve
Board has the authority to deny an application if it concludes that the
combined organization would have an inadequate capital position or if the
acquiring organization does not meet the requirements of the Community
Reinvestment Act of 1977. In addition, the Merger may not be consummated until
the 15th day following the dates of each of the requisite approvals, during
which periods the United States Department of Justice may comment adversely on
the transaction (which has the effect of extending the waiting period to the
30th day following approval) or challenge such merger on antitrust grounds.
The commencement of an antitrust action would stay the effectiveness of such an
approval unless a court specifically orders otherwise.

The Merger is also subject to the delivery of prior notice to the
Office of Thrift Supervision (the "OTS") neither of which require any waiting
period. In their evaluations, the Florida Department and the OTS take into
account considerations similar to those applied by the Federal Reserve Board.

On February 7, 1996, SouthTrust filed with the Federal Reserve Board
an application seeking approval to merge FFE into ST-Sub and to merge the Bank
into ST-Bank. On January 5, 1996, ST-Bank submitted to the Office of the
Comptroller of Currency (the "OCC") an application seeking approval to merge
the Bank into ST-Bank. In addition, FFE filed the required notice with OTS on
February 8, 1996. SouthTrust filed its application with the OTS on February
12, 1996.

THE MERGER CANNOT PROCEED IN THE ABSENCE OF THE REQUISITE REGULATORY
APPROVALS. THERE CAN BE NO ASSURANCE THAT SUCH REGULATORY APPROVALS WILL BE
OBTAINED OR AS TO THE TIMING OF ANY SUCH APPROVALS. THERE ALSO CAN BE NO
ASSURANCE THAT ANY SUCH APPROVALS WILL NOT IMPOSE CONDITIONS THAT ARE DEEMED BY
FFE OR SOUTHTRUST TO MATERIALLY ADVERSELY IMPACT THE ECONOMIC OR BUSINESS
ASSUMPTIONS OF THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT. THERE
CAN ALSO BE NO ASSURANCE THAT THE UNITED STATES DEPARTMENT OF JUSTICE OR A
STATE ATTORNEY GENERAL WILL NOT CHALLENGE THE MERGER OR, IF SUCH A CHALLENGE IS
MADE, AS TO THE RESULT THEREOF.

Approval by the OCC of the Subsidiary Merger is not a condition to the
obligation of SouthTrust to consummate the Merger. Accordingly, it is possible
that, if all conditions to the respective obligations of SouthTrust and FFE to
consummate the Merger are satisfied, but the OCC and all other regulatory
approvals with respect to the Subsidiary Merger have not been obtained, the
Merger could be consummated prior to the Subsidiary Merger.

At any time before the Merger becomes effective, any party to the
Merger Agreement may waive conditions contained therein to its own obligations,
to the extent that such obligations, agreements and conditions are intended for
its own benefit. In addition, the Merger Agreement may be amended by written
instrument signed on behalf of each of the parties thereto.

12
<PAGE> 17

See "THE MERGER - Regulatory Approvals and Certain Other Conditions to
the Merger; Waiver and Amendment."

13
<PAGE> 18

Termination

The Merger Agreement may be terminated in the following ways: (i) at
any time prior to the Effective Time of the Merger, by the mutual written
consent of the Boards of Directors of SouthTrust and FFE; (ii) at any time
prior to the Effective Time of the Merger, by SouthTrust or FFE if there shall
have been a final judicial or regulatory determination (as to which all periods
for appeal shall have expired and no appeal shall be pending) that any material
provision of the Merger Agreement is illegal, invalid or unenforceable (unless
the enforcement thereof is waived by the affected party) or denying any
regulatory application the approval of which is a condition precedent to either
party's obligations under the Merger Agreement; (iii) at any time on or before
June 30, 1996, by SouthTrust or FFE in the event that the Merger has not been
consummated prior to such date provided that the party seeking to terminate the
Merger Agreement is not in material breach thereof; (iv) by either party at any
time after the stockholders of FFE fail to approve the Merger Agreement by the
required vote at the Stockholders' Meeting of FFE; (v) at any time prior to the
Effective Time of the Merger, by SouthTrust or FFE, in the event of a material
breach by the other party of any representation, warranty, covenant or
agreement contained in the Merger Agreement or in any schedule or document
delivered pursuant thereto, which breach would result in the failure to satisfy
the closing conditions set forth in Section 6.1(a) or 6.1(b) of the Merger
Agreement, in the case of SouthTrust, or Section 6.2(a) or 6.2(b) of the Merger
Agreement, in the case of FFE, and which breach cannot be or is not cured
within thirty (30) days after written notice of such breach is given by the
non-breaching party to the party committing such breach; or (vi) at any time
prior to the Effective Time of the Merger, by FFE if the after-tax costs of the
restitution payments made or to be made to customers exceeds $500,000.

In the event that the Merger Agreement is terminated by a party (the
"Aggrieved Party") solely by reason of the willful material breach by the other
party ("Breaching Party") of any of its representations, warranties, covenants
or agreements contained therein then the Aggrieved Party shall be entitled to
such remedies and relief against the Breaching Party as are available at law or
in equity. Moreover, the Aggrieved Party without terminating the Merger
Agreement shall be entitled to specifically enforce the terms thereof against
the Breaching Party in order to cause the Merger to be consummated.

In the event the Merger Agreement is terminated, the Merger Agreement
will be void and have no further effect and such termination will be without
liability to any party to the Merger Agreement, except for any liability
incurred or suffered by any party as a result of the willful material breach by
the other party of any of its representations, warranties, covenants or
agreements set forth in the Merger Agreement and any liability resulting from
the occurrence of a Trigger Event as described in "THE MERGER - SouthTrust
Stock Option Agreement and Break-Up Fee."

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

FFE and SouthTrust have received an opinion of Bradley, Arant, Rose &
White to the effect that, for federal income tax purposes, (i) the Merger will
qualify as a reorganization under Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"); (ii) no gain or loss will be recognized by
holders of shares of FFE Common Stock who receive shares of SouthTrust Common
Stock in the Merger (except in connection with the receipt of the Cash
Consideration and the cash in lieu of fractional interests in shares of
SouthTrust Common Stock); (iii) gain, if any, will be recognized by holders of
FFE Common Stock with respect to the Cash Consideration received from
SouthTrust up to the amount of Cash Consideration received, and the amount of
such gain recognized that does not have the effect of a dividend (as determined
on a stockholder by stockholder basis) will be treated as gain from the
exchange of property; and (iv) cash received by holders of shares of FFE Common
Stock in lieu of fractional interests in shares of SouthTrust Common Stock will
be treated as having been received as distributions in full payment in exchange
for the fractional share interests in shares of SouthTrust Common Stock which
they would otherwise be entitled to receive. See "CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS."

THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES MAY VARY FOR EACH HOLDER
OF SHARES OF FFE COMMON STOCK. ALL HOLDERS OF SHARES OF FFE COMMON STOCK ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS.

14
<PAGE> 19

RIGHTS OF DISSENT AND APPRAISAL

A stockholder of FFE may dissent from the Merger pursuant to Section
262 of the General Corporation Law of the State of Delaware ("DGCL") and
receive cash equal to the fair value, as of immediately prior to the Effective
Time of the Merger, of the shares of FFE Common Stock held by such stockholder.
The appraisal value of the FFE Common Stock may differ from the consideration
that a stockholder of FFE is entitled to receive in the Merger.

The foregoing summary is not intended to be complete and is qualified
in all respects by reference to the text of Section 262 of the DGCL which is
attached as Exhibit E to this Proxy Statement/Prospectus.

COMPARATIVE STOCK PRICES

SouthTrust Common Stock and FFE Common Stock are traded in the
over-the-counter market through the facilities of Nasdaq.

The following table sets forth the last sales prices for SouthTrust
Common Stock and FFE Common Stock, respectively, as of selected dates, and the
pro forma equivalent market value of the 0.645 share of SouthTrust Common Stock
and the Cash Consideration to be received in the Merger for each share of FFE
Common Stock:

<TABLE>
<CAPTION>
SouthTrust FFE SouthTrust
Common Stock Common Stock Common Stock and Cash
Historical Historical Equivalent(3)
---------- ---------- ----------
<S> <C> <C> <C>
November 2, 1995 (1) . . . . . . $24.875 $18.50 $26.84
__________________ (2) . . . . . $_____ $_____ $_____
</TABLE>

__________________________
(1) Last trading day preceding the announcement of the execution of the Merger
Agreement.
(2) Most recent practicable date preceding the date of this Proxy
Statement/Prospectus.
(3) Pro forma equivalents calculated by multiplying the historical last sales
price for SouthTrust Common Stock as of the selected date by the Exchange
Ratio of 0.645 shares of SouthTrust Common Stock per share of FFE Common
Stock and adding $10.80, an amount representing the Cash Consideration
receivable in exchange for each share of FFE Common Stock. Pro forma
equivalents do not reflect possible adjustments, as provided for in the
Merger Agreement and described more fully elsewhere in this Proxy
Statement/Prospectus, to the Cash Consideration and Exchange Ratio.

FFE's stockholders are advised to obtain current market quotations for
SouthTrust Common Stock and FFE Common Stock. No assurance can be given as to
the market prices of SouthTrust Common Stock or FFE Common Stock at any time
before the Effective Time of the Merger or as to the market price of SouthTrust
Common Stock at any time thereafter. Because the Exchange Ratio of FFE Common
Stock for SouthTrust Common Stock is fixed within the limits discussed more
fully elsewhere in this Proxy Statement/Prospectus, it will not compensate
FFE's stockholders for increases or decreases in the market price of SouthTrust
Common Stock which could occur before the Effective Time of the Merger unless
the aggregate amount attributable to each share of FFE Common Stock (including
the Cash Consideration, as the same may be adjusted), after taking into account
all adjustments, would otherwise be less than $22.95 or more than $31.05
(including the Cash Consideration, as the same may be adjusted). In such
event, however, the Exchange Ratio would be adjusted so that the aggregate
amount attributable to each share of FFE Common Stock (including the Cash
Consideration, as the same may be adjusted), after taking into account all
adjustments, would not be less than $22.95 nor more than $31.05 (including the
Cash Consideration, as the same may be adjusted). As a result, in the event
the market price of SouthTrust Common Stock decreases, the value of the
SouthTrust Common Stock to be received in the Merger in exchange for FFE Common
Stock would decrease, but not to the extent that the aggregate amount
attributable to each share of FFE Common Stock (including the Cash
Consideration, as the same may be adjusted), after taking into account all
adjustments, would be less than $22.95 . Also as a result, in the event the
market price for SouthTrust Common Stock increases, the value of the SouthTrust
Common Stock to be received in the Merger in exchange for FFE Common Stock
would increase, but not to the extent

15
<PAGE> 20

that the aggregate amount attributable to each share of FFE Common Stock
(including the Cash Consideration, as the same may be adjusted), after taking
into account all adjustments, would be greater than $31.05 . See "MARKET AND
DIVIDEND INFORMATION RESPECTING THE COMMON STOCK OF SOUTHTRUST AND FFE" and
"THE MERGER - Effect of Merger on FFE Common Stock and FFE Stock Options."

RESALE OF SOUTHTRUST COMMON STOCK RECEIVED IN THE MERGER

The shares of SouthTrust Common Stock to be issued pursuant to the
Merger Agreement have been registered under the Securities Act, thereby
allowing such shares to be sold without restriction by stockholders of FFE who
are not deemed to be "affiliates" (as that term is defined under the Securities
Act) of FFE and who do not become affiliates of SouthTrust. The shares of
SouthTrust Common Stock to be issued to affiliates of FFE may be resold only
pursuant to an effective registration statement, pursuant to Rule 145 under the
Securities Act, or in transactions otherwise exempt from registration under the
Securities Act. SouthTrust will not be obligated and does not intend to
register its shares under the Securities Act for resale by stockholders of FFE
who are affiliates. Under the volume limitations of Rule 145, and based upon
the outstanding shares of SouthTrust Common Stock as of December 31, 1995, an
affiliate of FFE who otherwise complies with Rule 145, subject to the
undertaking described below, will be free to resell, during any given three-
month period, up to 879,036 shares of SouthTrust Common Stock.

FFE has agreed to use its best efforts to obtain from each individual
or entity identified by FFE as an affiliate a letter agreement pursuant to
which such affiliate agrees not to sell, pledge, transfer or otherwise dispose
of such shares of SouthTrust Common Stock in violation of the Securities Act or
the rules and regulations thereunder.

See "THE MERGER - Resale of SouthTrust Common Stock Received in the Merger."

DIFFERENCES IN RIGHTS OF FFE STOCKHOLDERS

Upon consummation of the Merger, FFE stockholders will become
SouthTrust stockholders. As a result, their rights as stockholders, which now
are governed by Delaware corporate law and FFE's Certificate of Incorporation
and Bylaws, will be governed by Delaware corporate law and SouthTrust's
Restated Certificate of Incorporation and Bylaws. Because of certain
differences between the provisions of FFE's Certificate of Incorporation and
Bylaws and SouthTrust's Restated Certificate of Incorporation and Bylaws, the
current rights of FFE stockholders will change after the Merger. Some of these
differences include certain anti-takeover provisions applicable to SouthTrust.
See "COMPARISON OF THE COMMON STOCK OF SOUTHTRUST AND FFE."

ACCOUNTING TREATMENT

The Merger will be accounted for by SouthTrust pursuant to the purchase
method of accounting. See "THE MERGER - Accounting Treatment."

16
<PAGE> 21

EQUIVALENT SHARE DATA

The following summary presents comparative historical unaudited per
share data for both SouthTrust and FFE. The pro forma amounts assume the
Merger had been effective during the periods presented and has been accounted
for pursuant to the purchase method of security. SouthTrust's pro forma
amounts represent the combined pro forma results, and FFE's pro forma
equivalent amounts are computed by multiplying the pro forma amounts by a
factor of 0.645, to reflect the Exchange Ratio in the Merger of 0.645 shares of
SouthTrust Common Stock, and adding $10.80, the amount representing the Cash
Consideration to be receivable in the Merger for each share of FFE Common
Stock. The data presented should be read in conjunction with the historical
financial statements and the related notes thereto included elsewhere herein or
incorporated by reference herein, and the pro forma financial statements
included elsewhere in this Proxy Statement/Prospectus. Results for the nine
months ended September 30, 1995, are not necessarily indicative of results
expected for the entire year.

<TABLE>
<CAPTION>
Year Ended Nine Months Ended
December 31, 1994 September 30, 1995
----------------- ------------------
<S> <C> <C>
Net income (loss) per common share:
SouthTrust $ 2.15 $ 1.75
FFE 0.77 1.36
SouthTrust pro forma combined 2.14 1.75
FFE pro forma equivalent 1.38(1) 1.13(1)

Cash dividends per common share:
SouthTrust $ 0.68 $ 0.60
FFE 0.00 0.00
SouthTrust pro forma combined(2) 0.68 0.60
FFE pro forma equivalent 0.44(1) 0.39(1)

Book value per common share (period end):
SouthTrust $13.94 $15.83
FFE 15.88 18.21
SouthTrust pro forma combined 13.98 15.87
FFE pro forma equivalent 9.02(1) 10.24(1)
</TABLE>

__________________________
(1) FFE pro forma equivalent presentation does not include any effect of
the Cash Consideration to be paid in connection with the Merger.
(2) SouthTrust pro forma combined dividends represent historical cash
dividends of SouthTrust.

SELECTED FINANCIAL DATA

The following tables set forth certain selected historical
consolidated financial information for FFE and SouthTrust. The historical
income statement data included in the selected financial data for the five most
recent fiscal years are derived from audited consolidated financial statements
of FFE and SouthTrust. The financial data for the interim periods of
SouthTrust ended September 30, 1995 and 1994 are derived from the unaudited
historical financial statements of SouthTrust and reflect, in the opinion of
the management of SouthTrust, all adjustments (consisting only of recurring
adjustments) necessary for a fair presentation of such data. This information
should be read in conjunction with the consolidated financial statements of FFE
and SouthTrust, and the related notes thereto, included in documents appearing
elsewhere herein or incorporated herein by reference and in conjunction with
the unaudited pro forma financial information, including the notes thereto,
appearing elsewhere in this Proxy Statement/Prospectus. See "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE" and "PRO FORMA FINANCIAL INFORMATION."

17
<PAGE> 22

SOUTHTRUST CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Nine Months
Years Ended December 31, Ended September 30,
-------------------------------------------------------- ------------------------
1994 1993 1992 1991 1990 1995 1994
---------- --------- --------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
(in thousands except per share data):
Interest income $1,108,612 $ 927,551 $ 828,080 $ 823,725 $776,661 $1,084,835 $ 792,108
Interest expense 501,067 397,743 382,930 474,453 498,329 578,869 345,857
---------- --------- --------- --------- -------- ---------- ----------
Net interest income 607,545 529,808 445,150 349,272 278,332 505,966 446,251
Provision for loan losses 44,984 45,032 43,305 38,042 44,635 39,489 33,272
---------- --------- --------- --------- -------- ---------- ----------
Net interest income after
provision for loan losses 562,561 484,776 401,845 311,230 233,697 466,477 412,979
Non-interest income 184,778 174,702 136,683 108,881 91,084 151,730 137,896
Non-interest expense 485,999 434,951 373,636 296,796 234,713 396,509 358,900
---------- -------- --------- --------- -------- ---------- ----------
Income before income taxes 261,340 224,527 164,892 123,315 90,068 221,698 191,975
Provision for income taxes 88,338 73,992 50,646 33,309 20,360 76,282 64,340
---------- --------- --------- --------- -------- ---------- ----------
Net income $ 173,002 $ 150,535 $ 114,246 $ 90,006 $ 69,708 $ 145,416 $ 127,635
========== ========= ========= ========= ======== ========== ==========

Net income per common share
and common share equivalent $ 2.15 $ 1.94 $ 1.66 $ 1.42 $ 1.14 $ 1.75 $ 1.59
Cash dividends declared
per common share 0.68 0.60 0.52 0.48 0.46 0.60 0.51
Average common shares and common
share equivalents outstanding 80,628 77,772 68,948 63,255 61,148 83,075 80,267

BALANCE SHEET DATA (at period end)
(in millions):
Total assets $ 17,632.1 $14,708.0 $12,714.4 $10,158.1 $9,005.9 $20,020.76 $16,955.48
Total loans net of unearned income 12,121.9 9,448.3 7,546.6 5,965.0 5,531.4 14,077.5 11,472.3
Total deposits 12,801.2 11,515.4 10,082.3 8,277.2 7,228.0 14,009.5 12,243.2
Total stockholders' equity 1,135.3 1,051.8 860.4 662.0 549.6 1,387.3 1,128.5
</TABLE>

FFE FINANCIAL CORP. AND SUBSIDIARIES

<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
Years Ended September 30, September 30, December 31,
-----------------------------------------------------------
1995 1994 1993 1992(1) 1991
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
(in thousands except per share data):
Interest income $9,649 $8,440 $9,750 $9,103 $14,664
Interest expense 5,876 4,251 5,155 5,822 10,585
------ ------ ------ ------ -------
Net interest income 3,773 4,189 4,595 3,281 4,079
Provision for loan losses 49 391 358 662 1,185
------ ------ ------ ------ -------
Net interest income after
provision for loan losses 3,724 3,798 4,237 2,619 2,894
Non-interest income 818 803 986 761 1,983
Non-interest expense 3,693 4,776 4,640 4,209 4,842
------ ------ ------ ------ -------

Net income $ 849 $ (175) $ 583 $ (344) $ 35
====== ====== ====== ====== =======

Net income per common share
and common share equivalent $ 1.74 $ (.37) NA NA NA
Cash dividends declared per common share 0.00 0.00 NA NA NA
Average common shares and common
share equivalents outstanding 487 473 NA NA NA

BALANCE SHEET DATA (at period end)
(in millions):
Total assets $140.7 $128.4 $128.6 $149.1 $ 157.8
Total loans, net 97.6 92.8 92.4 98.9 107.8
Total deposits 120.6 118.4 117.7 139.6 149.9
Total stockholders' equity 8.6 7.5 7.9 3.9 4.2
</TABLE>

___________________________________________
(1) During 1992, FFE changed its fiscal year end from December 31 to September
30.

<PAGE> 23
SELECTED PRO FORMA INFORMATION

The following table sets forth certain unaudited pro forma combined
financial information for SouthTrust and FFE giving effect to the Merger. This
information should be read in conjunction with the consolidated financial
statements of FFE and SouthTrust and the related notes thereto included
elsewhere herein or incorporated herein by reference and in conjunction with
the unaudited pro forma financial information, including the notes thereto,
appearing elsewhere in this Proxy Statement/Prospectus. Details of pro forma
and pre-acquisition adjustments affecting the historical combined amounts are
included in the Pro Forma Combining Condensed Financial Statements set forth on
pages ___ through ___, inclusive, herein. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" and "PRO FORMA FINANCIAL INFORMATION."

PRO FORMA COMBINED INFORMATION
SOUTHTRUST CORPORATION AND FFE FINANCIAL CORP.

<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
December 31, 1994 September 30, 1995
----------------- ------------------
<S> <C> <C>
INCOME STATEMENT DATA
(in thousands except per share data):
Interest Income . . . . . . . . . . . . . . . . . . . $1,116,682 $1,091,951
Interest expense . . . . . . . . . . . . . . . . . . 505,486 583,484
---------- ----------
Net interest income . . . . . . . . . . . . . . . . 611,196 508,467
Provision for loan losses . . . . . . . . . . . . . . 45,351 39,539
---------- ----------
Net interest income after provision for loan losses . 565,845 468,928
Non-interest income . . . . . . . . . . . . . . . . . 185,605 152,393
Non-interest expense . . . . . . . . . . . . . . . . 489,996 339,053
---------- ----------
Income before income taxes . . . . . . . . . . . . . 261,454 222,268
Provision for income taxes . . . . . . . . . . . . . 88,546 76,572
---------- ----------
Net income . . . . . . . . . . . . . . . . . . . . $ 172,908 $ 145,696
========== ==========

Net income per common share and
common share equivalent . . . . . . . . . . . . . . $ 2.14 $ 1.75
Average common shares and common
share equivalents outstanding . . . . . . . . . . . 80,934 83,304

BALANCE SHEET DATA
(in millions)
Total assets . . . . . . . . . . . . . . . . . . . . $ 17,770.1 $20,161.5
Total loans net of unearned income . . . . . . . . . 12,215.9 14,175.1
Total deposits . . . . . . . . . . . . . . . . . . . 12,921.1 14,130.1
Total stockholders' equity . . . . . . . . . . . . . 1,142.8 1,395.9
</TABLE>

19
<PAGE> 24

RECENT DEVELOPMENTS

SouthTrust's net income for the fourth quarter of 1995 increased to
$53.6 million up 18% from $45.4 million for the fourth quarter of 1994. For
1995, SouthTrust's net income was $199.0 million, up 15% from 1994.
SouthTrust's earnings per share for the fourth quarter of 1995 were $0.61,
compared with $0.56 for the fourth quarter of 1994. For 1995, SouthTrust's
earnings per share were $2.36, as compared to $2.15 per share for 1994, an
increase of 10%. SouthTrust's net income for 1995 resulted in a 26% increase
in stockholders' equity compared to the previous year.

SouthTrust's total assets increased 18%, reaching a level of $20.8
billion as of December 31, 1995. This compares with $17.6 billion one year
ago. SouthTrust's loans increased 21% to $14.7 billion, while deposits
increased 14% to $14.6 billion.

20
<PAGE> 25

ELECTION OF DIRECTORS OF FFE

The Certificate of Incorporation and the Bylaws of FFE provide that
the number of directors of FFE shall be fixed from time to time pursuant to a
resolution adopted by the Board of Directors of FFE. As of the date of this
Proxy Statement/Prospectus, the Board of Directors of FFE consists of six
persons. The Certificate of Incorporation and the Bylaws of FFE further
provide that the members of the Board of Directors shall be divided into three
classes, one class to be elected at each annual meeting of stockholders and to
serve for a term of three years.

CURRENT NOMINEES

The Board of Directors proposes to nominate the two persons named
below for election as directors, such persons to serve until the 1998 Annual
Meeting of Stockholders and until their successors have been elected and shall
have qualified.

The names, ages and principal occupations during the past five years
of the nominees, and the year each first became a director of FFE are as
follows:

<TABLE>
<CAPTION>
NAME, AGE AND
PRINCIPAL OCCUPATION DIRECTOR
OF NOMINEES AGE SINCE(1)
- ----------------------------------------------------------------- --- ---------------------
<S> <C> <C>
G. L. Smith 55 1991

Mr. Smith is the President and Chief Executive Officer of FFE, a
position he has held since 1991. Mr. Smith has responsibility
for the overall management and recommendations of the
establishment of the policies of the Bank. He joined the Bank in
1981 as Senior Vice President with responsibility for operations
in the Bank's financial area. Mr. Smith has over 22 years of
experience in the thrift industry.

Robert L. Bedford 55 1980

Mr. Bedford has been the Deputy Commissioner of Education for the
State of Florida since April 1994, prior to serving as Deputy
Commissioner, Mr. Bedford was the Superintendent of the Charlotte
County School Board from July 1987 until April 1994. As
Superintendent, Mr. Bedford was responsible for supervision of 22
schools and 14,000 students in Charlotte County.
</TABLE>
___________________________________________________

(1) Includes service as a director of the Bank.

Each of the nominees was elected as a director at the 1993 Annual
Meeting of Stockholders. Unless directed to the contrary, the persons acting
under the proxy solicited hereby will vote for the nominees named above.
Should any such nominee become unable to accept election, which is not
anticipated, it is intended that the persons acting under the proxy will vote
for the election in his stead of such other person as the Board of Directors
may recommend. Proxies may not be voted for more than two persons.

See "BENEFICIAL OWNERSHIP OF FFE COMMON STOCK" for information
regarding the number and percentage of shares of FFE Common Stock owned
beneficially by each of the nominees.

21
<PAGE> 26

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE NOMINEES FOR
DIRECTORS NAMED ABOVE.

CONTINUING DIRECTORS

The following tabulation sets forth with respect to those persons who
were elected as directors of FFE at previous Annual Meetings of Stockholders
(and will continue to serve as directors following the Annual Meeting) the
names, ages and principal occupations during the past five years, and the year
each person first became a director of FFE:

CURRENT
NAME, AGE AND PRINCIPAL TERM DIRECTOR
OCCUPATION AGE EXPIRES SINCE
------------------------------ --- ------- --------
<S> <C> <C> <C>
John F. Bass III 66 1998 1959

Mr. Bass is a private investor and was a founding director of the
Bank. He has served as Chairman of the Board of Directors since
1969.

Eunice G. Albritton 64 1997 1979

Ms. Albritton is the Secretary Treasurer of Big Gasparilla Corp.
d/b/a Boca Grande Fishery and Fishery Restaurant located in
Placida, Florida. She is also the President of Gasparilla
Shrimper, Inc., a shrimp boat company, and Gasparilla Diversified
Inc., a landholdings and lease-rental company, both of which are
located in Placida, Florida. She is also the owner of Mrs.
Stratton's Salads, Inc., a processor of prepared salads. Ms.
Albritton has been the Secretary of the Bank since 1979, and became
the Secretary of FFE in December 1992.

Michael J. Mosolino 45 1998 1993

Mr. Mosolino is the owner of Blue Dolphin Car Wash located in
Bradenton and Englewood, Florida, and has operated this business
since 1988. Mr. Mosolino is also a partner in Broad Avenue Realty,
a commercial rental facility, a position he has held for
approximately ten years. Broad Avenue Realty is located in New
Jersey.

Wilber A. Rapp 62 1997 1993

Mr. Rapp is a Professor Emeritus of Finance at Ohio State
University.
</TABLE>

___________________________________________________

(1) Includes service as a director of the Bank.

Of the directors named above, Ms. Albritton and Mr. Rapp were elected
at the 1994 Annual Meeting of Stockholders, and Messrs. Bass and Mosolino were
elected at the 1995 Annual Meeting of Stockholders, to serve for the terms
indicated.

22
<PAGE> 27

See "BENEFICIAL OWNERSHIP OF FFE COMMON STOCK" for information
regarding the number and percentage of shares of FFE Common Stock owned
beneficially by each of the Directors of FFE.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

Meetings of the Board of Directors of FFE are generally held on a
quarterly basis. The Board of Directors met 14 times during fiscal 1995.
During fiscal 1995, no incumbent director of FFE attended fewer than 75% of the
aggregate of the total number of board meetings and the total number of
meetings held by the committees of the Board of Directors on which he served.

The Board of Directors of FFE has standing Executive, Audit and
Compensation Committees.

The Executive Committee of the Board of Directors generally acts in
lieu of the full Board of Directors between board meetings. The members of
this committee are Directors Bass (Chairman), Smith, Bedford and Albritton.
This committee meets on an as needed basis and did not meet during the year
ended September 30, 1995.

The Audit Committee is composed of Directors Bedford (Chairman), Rapp,
Mosolino and Albritton. The Audit Committee meets in conjunction with the
Audit Committee of the Bank on a quarterly basis and is responsible for
reviewing internal audit procedures and the annual audit report and reporting
to the full Board of Directors. This committee also meets with FFE's external
auditors prior to the annual audit to review audit procedures. This committee
met three times during the year ended September 30, 1995.

The Compensation Committee administers the FFE Stock Option Plan and
the FFE Management Recognition Plan through its sub-committee, the MRP and
Stock Option Committee and makes salary and bonus recommendations to the Board
of Directors of FFE. The current members of this committee are Directors Bass,
Bedford, Mosolino, Rapp and Smith. Director Smith does not sit on the MRP and
Stock Option Sub-Committee. This committee meets at least annually or on an as
needed basis. This committee met 1 time during the year ended September 30,
1995.

COMPENSATION OF DIRECTORS

During the year ended September 30, 1995 the Board of Directors of FFE
held 5 regular and special meetings. Directors of FFE are not compensated for
their services. Directors of the Bank are paid $800 per regular meeting and
$400 per special meeting. All directors attended more than 75% of the meetings
of the Board of Directors (including any meetings of any committees thereof of
which they are members).

EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

RICHARD W. TROUTMAN, age 48, is Senior Vice President of the Bank with
responsibility for the Lending Division. Mr. Troutman recommends and
establishes lending policies and guidelines and is responsible for the Bank's
loan production function. Prior to joining the Bank in June 1992, Mr. Troutman
was employed as Senior Vice President - Lending Division Head by Coast Bank, a
federal savings bank located in Sarasota, Florida. He held this former
position for 11 years.

WALLACE D. MOSSBARGER, age 61, is Senior Vice President and Chief
Financial Officer of the Bank, a position he has held since June 1991. Mr.
Mossbarger has responsibility for the accounting Division and oversees the
Bank's audit compliance functions. Prior to joining the Bank, Mr. Mossbarger
was Senior Vice President for Barnett Bank of Southwest Florida, a commercial
bank located in Sarasota, Florida from 1971 to 1991.

23
<PAGE> 28

VIRGINIA R. DUNN, age 59, is a Vice President of the Bank a position
she has held since 1984. Mrs. Dunn is responsible for marketing, personnel and
administration of employee benefit programs and insurance coverage. Mrs. Dunn
joined the Bank in 1973, and has held a variety of positions.

SECTION 16 COMPLIANCE

Section 16(a) of the Exchange Act requires the FFE's directors and
executive officers, and persons who own more than 10% of a registered class of
FFE's equity securities, to file with the SEC initial reports of ownership and
reports of changes in ownership of FFE Common Stock and other equity securities
of FFE. Officers, directors and greater than 10% stockholders are required by
SEC regulation to furnish FFE with copies of all Section 16(a) forms they file.

To the FFE's knowledge, based solely on a review of the copies of such
reports furnished to the FFE and written representations that no other reports
were required, during the fiscal year ended September 30, 1995, all Section
16(a) filing requirements applicable to its officers, directors and greater
than 10 percent beneficial owners were complied with.

EXECUTIVE COMPENSATION

FFE has not paid any compensation to its executive officers since its
formation. FFE does not presently anticipate paying any compensation to such
persons until it becomes actively involved in the operation or acquisition of
businesses other than the Bank and FFE.

The following table sets forth information regarding compensation paid
by FFE and the Bank to their Chief Executive Officer for services rendered
during the fiscal year ended September 30, 1995. No other executive officer
received in excess of $100,000 from FFE during the fiscal year ended September
30, 1995.

<TABLE>
<CAPTION>
==============================================================================================================
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------
LONG TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------------------------------------------------------------------------------
RESTRICTED
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gail L. Smith 1995 $144,200(3) $ --- $ --- $ --- $ --- $ --- $7,950(4)
----
President and Chief
Executive Officer 1994 115,313(3) --- --- --- --- --- ---
----

1993 107,190(3) --- --- 57,284(1) 23,144(2) --- ---
----
==============================================================================================================
</TABLE>

________________________________________________________

(1) Represents the dollar value at November 30, 1994 of the award of 4,629
shares of FFE Common Stock pursuant to the MRP granted during fiscal
1993. The shares of restricted stock shall be earned in equal annual
installments over a five year period commencing one year after August
26, 1993, provided Mr. Smith maintains continuous service (as defined
in the MRP) with the Bank. During this restricted period, Mr. Smith
will be entitled to receive cash dividends (if any are paid), with
respect to the restricted shares.

(2) Represents an incentive stock option to purchase 23,144 shares of FFE
Common Stock awarded to Mr. Smith under the FFE Stock Option Plan
during fiscal 1993.

24
<PAGE> 29

(3) Amounts include directors fees of $11,200, $10,400 and $11,200 payable
to Mr. Smith during fiscal years 1995, 1994 and 1993, respectively.

(4) Matching contribution to Mr. Smith's 401(k) Plan, $7,283; life
insurance premium, $667.

The following table sets forth information regarding the number and
value of stock options at September 30, 1995 held by the Company's Chief
Executive Officer. No stock options were exercised during fiscal 1995.

===========================================================================================================
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- -----------------------------------------------------------------------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
-------------------------------------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gail L. Smith N/A N/A N/A 23,144 N/A $202,510(1)
===========================================================================================================

</TABLE>

____________________________________

(1) Represents the aggregate market value (market price of the common
stock less the exercise price) of the option granted based upon the
average of the bid and asked price of $18.75 per share of the common
stock as reported on the NASDAQ system on September 29, 1995.

EMPLOYMENT AGREEMENT

On August 26, 1993, the Bank entered into an employment agreement with
Gail L. Smith for a three year term. The employment agreement provides for an
annual base salary as determined by the Board of Directors, but not less than
Mr. Smith's then-current salary of $103,000. Salary increases are reviewed not
less often than annually thereafter, and are subject to the sole discretion of
the Board of Directors. The employment contract provides for an automatic
extension for one additional year upon authorization by the Board of Directors
at the end of each year. The contract provides for termination upon the
employee's death, for cause or upon certain events specified by OTS
regulations. The employment contract is terminable by the employee upon 90
days' notice to the Bank. The employment contract provides for payment to the
employee, in the event there is a change in control of FFE or the Bank, as
defined in such agreement, where employment terminates involuntarily in
connection with such change in control or within 12 months thereafter, of the
remaining salary payable under the contract, plus a severance payment equal to
three times his average annual compensation over the past three years of
employment. Total payments under the employment contract can not exceed three
times the employee's annual salary or an amount that would cause certain
adverse tax consequences to the Bank and the employee under Section 280G of the
Code. This employment contract may have an "anti-takeover" effect that could
affect a proposed future acquisition of control of the Bank. This agreement
was amended in 1995 to provide for continuation of health and medical insurance
and benefit coverage at the employee's expense upon termination of employment
for any reason but cause.

Based on his current salary, if Mr. Smith had been terminated as of
September 30, 1995, under circumstances entitling him to severance pay as
described above, he would have been entitled to receive a lump sum cash payment
of approximately $475,000.

25
<PAGE> 30

SEVERANCE AGREEMENT

The Board of Directors has approved a severance agreement with Mr.
Wallace D. Mossbarger to provide termination payments in the event there is a
change in control of FFE or the Bank where employment terminates involuntarily
in connection with such change of control or within 12 months thereafter. The
severance agreement provides for payment to the officer of up too 100% of "base
salary" (as defined in Section 280G(n)(3) of the Code). Assuming a change of
control were to have taken place on September 30, 1995, the amounts due and
payable to Mr. Mossbarger would be approximately $61,000.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Bank, like many financial institutions, has followed a policy of
granting to officers, directors and employees loans secured by the borrower's
residence and consumer loans. All loans to the Bank's officers and directors
are made in the ordinary course of business and on the same terms, including
interest rate and collateral, and conditions as those of comparable
transactions prevailing at the time, and do not involve more than the normal
risk of collectibility or present other unfavorable features.

All loans by the Bank to its directors and executive officers are
subject to OTS regulations restricting loans and other transactions with
affiliated persons of FFE. All loans from FFE to its officers, directors, key
employees or their affiliates are approved or ratified by a majority of the
independent and disinterested members of the FFE's Board of Directors. At
September 30, 1995, the FFE's loans to directors, officers, employees and
members of their immediate families and affiliates totalled $711,000 or 8.3% of
the FFE's stockholders' equity.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

On May 17, 1994, FFE dismissed the firm of Deloitte & Touche LLP
("Deloitte") as independent certified accountants for FFE.

The change of independent certified accountants was approved by the
Board of Directors.

Deloitte performed audits of the financial statements for the two
fiscal years ended September 30, 1993 and 1992. The reports did not contain an
adverse opinion or a disclaimer of opinion. Accountants' opinion for fiscal
year ended September 30, 1992 was unqualified and included an uncertainty
related to capital compliance. Accountants' opinion for fiscal year ended
September 30, 1993 was unqualified and included an explanatory paragraph
related to an uncertainty concerning litigation.

During the two fiscal years ended September 30, 1993, and from
September 30, 1993 through the effective date of the Deloitte termination,
there have been no disagreements between FFE and Deloitte on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements would have caused Deloitte to make
reference to the subject matter of such disagreements in connection with its
report.

During the two fiscal years ended September 30, 1993 and from
September 30, 1993 until the effective date of the dismissal of Deloitte,
Deloitte did not advise FFE of any of the following matters:

A. That the internal controls necessary for FFE to develop
reliable financial statements did not exist;

B. That information had come to Deloitte's attention that had led
it to no longer be able to rely on management's
representations, or that has made it unwilling to be
associated with the financial statements prepared by
management;

26
<PAGE> 31

C. That there was a need to expand significantly the scope of the
audit of FFE, or that information had come to Deloitte's
attention that if further investigated (i) may materially
impact the fairness or reliability of either a previously
issued audit report or underlying financial statements, or the
financial statements issued or to be issued covering the
fiscal periods subsequent to the date of the most recent
financial statements covered by an audit report (including
information that may prevent it from rendering an unqualified
audit report on those financial statements) or (ii) may cause
it to be unwilling to rely on management's representation or
be associated with the Company's financial statements and
that, due to its dismissal, Deloitte did not so expand the
scope of its audit or conduct such further investigation;

D. That information had come to Deloitte's attention that it had
concluded materially impacted the fairness or reliability of
either (i) a previously issued audit report or the underlying
financial statements or (ii) the financial statements issued
or to be issued covering the fiscal period subsequent to the
date of the most recent financial statements covered by an
audit report (including information that, unless resolved to
the accountant's satisfaction, would prevent it from rendering
an unqualified audit report on those financial statements), or
that, due to its dismissal, there were no such unresolved
issues as of the date of its dismissal.

Deloitte has furnished a letter to the Securities and Exchange
Commission dated July 27, 1994 stating that it agrees with the above
statements.

On June 21, 1994 FFE engaged the firm of KPMG Peat Marwick LLP as
independent certified accountants for the Company, and the selection of KPMG
Peat Marwick LLP to serve as the independent certified accountants for FFE
during the current fiscal year is hereby recommended to the holders of FFE
Common Stock for election, approval and ratification.

During the two fiscal years ended September 30, 1993 and from
September 30, 1993 through the engagement on June 21, 1994 of KPMG Peat Marwick
LLP as the FFE's independent accountant, neither FFE nor anyone on its behalf
had consulted KPMG Peat Marwick LLP with respect to any accounting or auditing
issues involving FFE other than discussions with regard to the engagement and
as discussed below. In particular, there were no discussions with FFE regarding
the application of accounting principles to a specific transaction, the type of
audit opinion that might be rendered on the financial statements or any related
item.

27
<PAGE> 32

BENEFICIAL OWNERSHIP OF FFE COMMON STOCK

The following table sets forth certain information as to those persons
believed by management of FFE to be beneficial owners of more than 5% of FFE's
outstanding shares of FFE Common Stock on February 10, 1996. Persons and
groups beneficially owning in excess of 5% of the FFE Common Stock are required
to file certain reports regarding such ownership with FFE and with the SEC, in
accordance with the Securities Exchange Act of 1934, as amended. Where
appropriate, historical information set forth below is based on the most recent
Schedule 13D or 13G filed on behalf of such person with the FFE. Other than
those persons listed below, management is not aware of any person or group that
owns more than 5% of the FFE Common Stock as of February 10, 1996. The holders
have sole voting and dispositive power, unless otherwise noted.

<TABLE>
<CAPTION>
Beneficial Owner Shares Beneficially Owned Percent of Class
-------------------------------------- ---------------------------------- ----------------------
<S> <C> <C>
David G. Booth (1) 28,100 5.9%
24 Monroe Place, #9A
Brooklyn, New York 11201

Estate of Oliver R. Grace (2) 35,795 7.6
Drake Associates, L.P.
c/o Thomas L. Seifert
515 Madison Avenue
Suite 2000
New York, New York 10022

First Financial Fund, Inc. (3) 34,800 7.3
Prudential Mutual Fund
Management, Inc.
One Seaport Plaza
New York, NY 10292

Wellington Management Company (4) 40,000 8.0
75 State Street
Boston, MA 02109

Gail L. Smith (5) 36,773 7.7
1160 South McCall Road
Englewood, Florida 34223
</TABLE>

_______________________

(1) The above information regarding beneficial ownership by David G. Booth
is as reported by him in a statement dated October 18, 1993 on
Schedule 13-D under the Securities and Exchange Act of 1934. Mr.
Booth reported sole voting power of 28,100 shares.

(2) The above information regarding beneficial ownership by the Estate of
Oliver R. Grace and Drake Associates, L.P. is as reported by them in
an amended statement dated November 17, 1993, under the Securities
Exchange Act of 1934. The Estate of Oliver R. Grace reported sole
voting and dispositive power of 9,295 shares. Drake Associates, L.P.
reported sole voting and dispositive power of 26,500 shares.

(3) The above information regarding beneficial ownership by First
Financial Fund, Inc. is as reported by them in a statement dated
February 10, 1994 and February 2, 1995 on Schedule 13-G under the
Securities and Exchange Act of 1934. First Financial Fund, Inc.
reported shared voting and dispositive power over 28,800 shares and
6,000 shares, respectively.

28
<PAGE> 33

(4) The above information regarding beneficial ownership by Wellington
Management Company is as reported by them in a statement dated
February 10, 1994 and February 3, 1995 on Schedule 13-G under the
Securities and Exchange Act of 1934. Wellington Management Company
reported shared dispositive power over 33,000 shares and 7,000 shares,
respectively.

(5) Includes 8,320 shares held directly, 680 shares held by Mr. Smith's
spouse, 4,629 shares awarded under the MRP over which Mr. Smith has
sole voting and dispositive power and 23,144 shares subject to options
granted to Mr. Smith under the FFE Stock Option Plan.

The following table sets forth certain information as to the common
stock of FFE owned of record or beneficially by each director and executive
officer of FFE, FFE's chief executive officer, and by all directors and
executive officers as a group.

<TABLE>
<CAPTION>
Shares Beneficially
Owned as of Percent
Name Position September 30, 1995 of Class
- ---------------------------------------- --------------------------- ------------------ --------
<S> <C> <C> <C>
Eunice G. Albritton Secretary and Director 4,166 .8%

John F. Bass, III Chairman of the Board 4,166 .8

Robert L. Bedford Vice Chairman of the Board 6,726 1.4

Michael J. Mosolino Director 4,561 .9

Wilbur A. Rapp Director 15,666 3.2

Virginia R. Dunn (1) Vice President 9,025 1.8

Directors and executive officers of the 87,017 17.7
Company and the Bank as a group (9
persons) (2)
</TABLE>
_________________________
(1) Includes 5,025 shares held directly and 4,000 shares held by family
members.

(2) Includes shares held directly, as well as, jointly with family
members, and shares held in retirement accounts in a fiduciary
capacity or by certain family members, with respect to which shares
the listed individuals or group members may be deemed to have sole
voting and investment power. This table also includes 1,666,740 and
23,144 shares subject to options granted under the FFE Stock Option
Plan to each Senior Vice President, each non- employee director and
the chief executive officer, respectively. This table excludes 2,500
and 1,111 shares subject to options granted under the FFE Stock
Option Plan to each Senior Vice President and each non-employee
director, respectively which are not exercisable within 60 days of
February 21, 1996.

29
<PAGE> 34

THE MERGER

The terms of the Merger are set forth in the Merger Agreement, and the
terms of the Subsidiary Merger are set forth in the Subsidiary Merger
Agreement. The description of the Merger which follows summarizes the
principal provisions of the Merger Agreement and the Subsidiary Merger
Agreement, is not complete and is qualified in all respects by
reference to the Merger Agreement and the Subsidiary Merger Agreement,
copies of which are attached hereto as Exhibits A and B, respectively.

GENERAL

The Merger Agreement has been approved by the Boards of Directors of
FFE, SouthTrust and ST-Sub, and by SouthTrust as the sole stockholder of
ST-Sub. No approval of the Merger by the stockholders of SouthTrust is
required. The Subsidiary Merger Agreement has been approved by the Boards of
Directors of the Bank and ST-Bank, by FFE as the sole stockholder of the Bank
and by ST-Sub as the sole stockholder of ST-Bank.

Subject to approval of the Merger Agreement by the stockholders of FFE
at the Annual Meeting, the receipt of required regulatory approval, and certain
other conditions, FFE will be merged into ST-Sub pursuant to the Merger
Agreement. At the Effective Time of the Merger, each share of FFE Common Stock
which is issued and outstanding immediately prior to the Effective Time of the
Merger (other than certain excluded shares as described below) shall be
converted into and represent the right to receive and be exchanged for (A) cash
in the amount of $10.80 and (B) 0.645 shares of SouthTrust Common Stock, as the
Cash Consideration and the Exchange Ratio may be adjusted pursuant to the terms
of the Merger Agreement. See "- Effect of Merger on FFE Common Stock and FFE
Stock Options."

The Merger Agreement provides that the Cash Consideration portion of
the Merger Consideration for which each share of FFE Common Stock may be
exchanged in the Merger is subject to being increased (at the rate of 8% per
annum) to the extent that the Effective Time of the Merger occurs after April
30, 1996. Such Cash Consideration is subject to being decreased if payments
made or to be made to customers following a review of the Bank's adjustable
rate mortgages, as required by the Merger Agreement, exceed $125,000. The Cash
Consideration portion of the Merger Consideration for which each share of FFE
Common Stock may be exchanged shall be decreased in an amount equal to 50% of
the after-tax costs to the Bank of such restitution payments to the extent that
such payments exceed $125,000 and 100% of the after- tax costs to the Bank of
such restitution payments to the extent that such payments exceed $250,000,
divided in both cases by the number of shares of FFE Common Stock and the
number of shares of FFE Common Stock subject to options immediately prior to
the Effective Time of the Merger. See "THE MERGER - Effect of Merger on FFE
Common Stock and FFE Stock Options."

The Exchange Ratio, which determines the number of shares of
SouthTrust Common Stock and associated SouthTrust rights for which each share
of FFE Common Stock may be exchanged in the Merger, is also subject to
adjustment under certain circumstances. The Merger Agreement provides that if
0.645, when multiplied by the average last sales price of SouthTrust Common
Stock, as reported by Nasdaq, for the later to occur of the twenty (20) trading
days immediately preceding the date of the annual meeting of stockholders of
FFE at which the Merger is to be considered or the twenty (20) trading days
immediately following the date that the last regulatory approval relating to
the Merger is received (and all waiting periods applicable thereto have
expired) results in the aggregate of the amount attributable to each share of
FFE Common Stock (including the Cash Consideration, as the same may be
adcjusted), after taking into account all adjustments, being less than $22.95 ,
SouthTrust shall adjust the Exchange Ratio so that the aggregate of the amount
attributable to each share of FFE Common Stock (including the Cash
Consideration, as the same may be adjusted), after all adjustments, shall equal
$22.95 , and if 0.645, when multiplied by the average last sales price of
SouthTrust Common Stock, as defined above, results in the aggregate of the
amount attributable to such share of FFE Common Stock (including the Cash
Consideration, as the same may be adjusted) being more than $31.05 , SouthTrust
shall adjust the Exchange Ratio so that the aggregate of the amount
attributable to each share of

30
<PAGE> 35

FFE Common Stock (including the Cash Consideration, as the same may be
adjusted), after taking into account all adjustments, shall equal $31.05 . The
Exchange Ratio, including the number of shares of SouthTrust Common Stock
issuable in the Merger, is also subject to appropriate adjustment in the event
of certain stock splits, stock dividends, reclassifications or similar
distributions effected by SouthTrust. Because the Exchange Ratio may be
adjusted under certain circumstances as discussed in this paragraph, the
Exchange Ratio may not be definitively determined until immediately prior to
the Effective Time of the Merger. However, based upon the last sales price of
SouthTrust Common Stock on _________, 1996 (the last trading day immediately
prior to the date of this Proxy Statement/Prospectus), no adjustment in the
Exchange Ratio would be required.

Subject to the approval of the Merger Agreement by the stockholders of
FFE, the receipt of all required regulatory approvals, and the satisfaction or
waiver of the conditions contained in the Merger Agreement, the Merger
Agreement provides that the Effective Time of the Merger will be the day on
which the Certificate of Merger shall be accepted for filing by the Secretary
of State of the States of Florida and Delaware.

As of the Effective Time of the Merger or immediately thereafter, and
pursuant to the terms of the Subsidiary Merger Agreement, the Bank, a
wholly-owned subsidiary of FFE, shall be merged with and into ST-Bank, a
wholly-owned subsidiary of ST-Sub, and ST-Bank shall be the surviving
association. Upon the consummation of the Subsidiary Merger, all of the issued
and outstanding shares of capital stock of the Bank shall be canceled, and all
of the shares of capital stock of ST-Bank outstanding immediately prior to the
consummation of the Subsidiary Merger shall constitute the only outstanding
shares of stock of the surviving association.

BACKGROUND OF AND REASONS FOR THE MERGER

Effective August 26, 1993, the Bank converted from a federally
chartered mutual savings and loan association to a federally chartered stock
savings bank. At the same time, FFE was formed as the Bank's holding company.
In connection with the conversion, FFE completed an initial public offering of
stock, selling 462,875 shares of FFE Common Stock at $10.00 per share.

Following the conversion, management of FFE focused its attention
primarily on increasing its core business while reviewing, from time to time,
its strategic alternatives in light of its size, the increasing consolidation
of the financial services industry and other relevant considerations. In early
1995, the Board of Directors of FFE determined to maintain an informed position
with respect to its strategic alternatives by, among other things, retaining a
financial advisor.

In May 1995, FFE engaged Hovde to serve as its financial advisor on
financial and strategic matters relating to the enhancement of stockholder
value, including the possible sale of FFE.

During the summer of 1995, Hovde contacted approximately 30 parties
regarding a potential transaction with FFE. After execution of confidentially
agreements and subsequent review of financial and other material concerning FFE
provided to such parties by Hovde, three parties, including SouthTrust,
expressed initial interest

31
<PAGE> 36

at approximately$27 per share; the two other potential acquirors expressed
initial interest at levels slightly above that of SouthTrust. As a result of
these initial indications of interest, Hovde conducted further negotiations and
provided further information on FFE to SouthTrust and these two other potential
acquirors.

Following these additional negotiations, one of the potential
acquirors other than SouthTrust indicated it was no longer interested in
pursuing a potential transaction with FFE. Thereafter, SouthTrust and the
other remaining interested party were invited to conduct on-site due diligence
of FFE, which occurred during the latter part of September and first half of
October, 1995. Thereafter, both SouthTrust and the other party were asked to
submit definitive proposals to acquire FFE, which proposals were to both
include comments to the form of purchase agreement prepared by FFE's counsel
and previously distributed to each party, as well as any additional
contingencies to a prompt execution of such agreement.

The remaining party other than SouthTrust submitted a proposal which
contained two alternatives. The first alternative involved an exchange of
common shares. The second alternative proposed an exchange of newly-issued,
convertible preferred shares for each share of FFE Common Stock. Because this
second proposal involved the issuance of shares for which there was no existing
market, Hovde independently evaluated such proposal based upon the issuer's
financial condition, operating performance, market area, liquidity of shares
(including both the existing common shares, as well as the proposed new issue
of convertible preferred shares) and other underlying fundamentals. Hovde also
considered the proposed dividend yield on the preferred shares, as well as the
conversion premium relative to the trading price of this party's common shares.
As a result of these analyses, Hovde valued both of this party's proposals at
levels below that offered by SouthTrust.

Both proposals made by the party other than SouthTrust were
conditioned upon additional due diligence of FFE, as well as further review and
comments to the form of definitive agreement previously provided. SouthTrust's
proposal was not contingent upon further due diligence, and was only subject to
satisfactory resolution of the comments submitted along with its final
proposal. As a result of its pricing level, definitive nature, liquidity of
the shares offered, and underlying financial condition of the issuer, the Board
of Directors of FFE determined that SouthTrust's proposal represented the
greatest opportunity to maximize shareholder value, and instructed its
management, legal counsel and financial advisors to negotiate a final
definitive purchase agreement with SouthTrust.

Subsequent discussions and negotiations between SouthTrust, FFE and
Hovde, acting on behalf of FFE, resulted in a formal offer to FFE, as set forth
in the Merger Agreement.

On November 3, 1995, at a meeting of FFE's Board of Directors that
included the participation of Hovde and Silver, Freedman & Taff, L.L.P., FFE's
outside legal counsel, FFE's Board reviewed the terms of the proposed Merger,
unanimously approved the offer from SouthTrust and authorized the execution and
delivery of the Merger Agreement.

FFE's Reasons and Board Recommendation for the Merger. The terms of
the Merger Agreement, including the consideration to be paid by FFE's
stockholders, were the result of arm's-length negotiations between the
representatives of SouthTrust and FFE. In the course of reaching its
determination to approve the Merger Agreement and recommend it to the
stockholders of FFE, the Board of Directors, without assigning any relative or
specific weights, considered a number of factors, including, among other things
(i) the financial and valuation analyses prepared by Hovde, (ii) the draft of
the fairness opinion to be rendered by Hovde, (iii) the terms of the Merger
Agreement as negotiated (including the transaction structure, the form and
amount of the Merger consideration, and the potential impact of the proposed
Merger Agreement and the Option Agreement on other institutions that might have
an interest in a business combination with FFE), and the negotiation process,
(iv) the financial condition, operations and prospects of SouthTrust and the
anticipated effect thereon of the proposed transaction, (v) industry and
economic factors, (vi) the nature and compatibility of SouthTrust's management
and business philosophy, (vii) the prospects for growth and expanded products
and services, and other anticipated impact on depositors, employees, customers
and communities served by FFE and (viii) regulatory and other factors.

32
<PAGE> 37

In approving the Merger, FFE's Board of Directors was aware that (i)
the Merger Agreement contains certain provisions prohibiting FFE from
soliciting, facilitating or accepting other offers or agreements to acquire FFE
(see "- Business Pending the Merger") and (ii) SouthTrust would be able to
exercise the SouthTrust Option or be entitled to receive the Break-Up Fee from
FFE in certain circumstances generally relating to a failure of FFE to
consummate the Merger because of another offer for FFE or a material change or
potential material change in the ownership of FFE (see "- SouthTrust Stock
Option Agreement and Break-Up Fee"). However, the Board was also aware that
such terms were specifically bargained for and insisted upon by SouthTrust as
inducements to enter into the Merger Agreement, and that the Board's
obligations under the Merger Agreement to recommend that FFE's stockholders
approve the Merger Agreement and to use its reasonable best efforts to obtain
such approval were explicitly made subject to the Board's fiduciary duties upon
written advice of counsel to FFE. Accordingly, the Merger Agreement expressly
permits the Board, in the exercise of its fiduciary duties, to withdraw or
change its recommendation of the Merger Agreement and to suspend or terminate
its efforts to obtain stockholder approval of the Merger Agreement at the
Annual Meeting (it should be notes, however, that in such circumstances
SouthTrust might still be able to exercise its rights under the Option
Agreement or be entitled to the payment of the Break-Up Fee. In addition, in
connection with its approval of the proposed Merger, the board was advised by
Hovde that the indicated value of the Merger (i) exceeded the upper end of
Hovde's range of estimates of the net present value of the discounted cash flow
attributable to each FFE common share based upon an acquisition of FFE at a
later date and (ii) Hovde believed that the process followed by FFE in
soliciting proposals and negotiating the Merger Agreement had been fair and
effective and that it had obtained as high a price for FFE as could have been
obtained through other techniques. In presenting this advice, Hovde stated
that these findings were necessarily based upon economic, market, monetary and
other conditions as they existed and could be evaluated at the time,
represented their best business judgment under the circumstances and should not
be construed in any way as a financial fairness or other form of expert
opinion. Hovde's fairness opinion is described below and included as Exhibit C
to this Prospectus/Proxy Statement. See "- Opinion of Financial Advisor."

THE FFE BOARD UNANIMOUSLY RECOMMENDS THAT FFE STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE MERGER AGREEMENT.

SouthTrust's Reasons for the Merger

OPINION OF FINANCIAL ADVISOR

FFE retained Hovde Financial, Inc. to act as its financial advisor in
connection with the Merger and related matters and requested that Hovde render
its opinion with respect to the fairness, from a financial point of view, to
the stockholders of FFE of the Merger Consideration.

FFE selected Hovde to serve as its financial advisor based upon, among
other things, Hovde's expertise in the valuation of businesses and their
securities in connection with mergers and acquisitions of financial
institutions in general, and commercial banks and thrift institutions in
particular. As part of its services, Hovde assisted FFE in evaluating its
strategic alternatives, in marketing FFE to potentially Interested Acquirors,
and in negotiating with SouthTrust relating to the Agreement and the Merger.
Hovde also provided comparative information regarding similar transactions and
provided general advisory services to FFE. See "- Background of the Merger."

Hovde has delivered to the Board of Directors of FFE its opinion that,
based upon and subject to the various considerations set forth in its written
opinion dated November 2, 1995, the Merger Consideration is fair from a
financial point of view to the stockholders of FFE as of such date. In
requesting Hovde's advice and

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<PAGE> 38

opinion, no limitations were imposed by FFE upon Hovde with respect to the
investigations made or procedures followed by it in rendering its opinion.

The full text of the opinion of Hovde, dated November 2, 1995, which
describes the procedures followed, assumptions made, matters considered and
limitations on the review undertaken, is attached hereto as Exhibit C.
Stockholders of FFE should read this opinion in its entirety.

HOVDE'S OPINION IS DIRECTED ONLY TO THE FAIRNESS, FROM A FINANCIAL
POINT OF VIEW, OF THE MERGER CONSIDERATION, AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY STOCKHOLDER OF FFE AS TO HOW SUCH STOCKHOLDER SHOULD VOTE
AT THE FFE STOCKHOLDER MEETING. THE SUMMARY OF THE OPINION OF HOVDE SET FORTH
IN THIS PROXY STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL
TEXT OF SUCH OPINION.

The following is a brief summary of the analyses performed by Hovde in
connection with its fairness opinion:

During the course of its engagement, and as a basis for arriving at
its opinion, Hovde reviewed and analyzed material bearing upon the financial
and operating condition of SouthTrust and FFE and material prepared in
connection with the Merger, including, among other things, the following: (i)
the Merger Agreement; (ii) certain publicly available information concerning
FFE, including the consolidated financial statements of FFE for each of the
three years ended September 30, 1994 and the three subsequent quarterly periods
ended December 31, 1994,March 31, andJune 30, 1995; (iv) the nature and terms
of recent acquisition and merger transactions involving thrift institutions and
thrift holding companies that Hovde considered reasonably similar to FFE in
size, financial character, operating character, historical performance and
geographic market; and (v) financial and other information provided to Hovde by
the management of SouthTrust and FFE. Hovde conducted meetings with members of
senior management of FFE for purposes of reviewing the future prospects of FFE.
Hovde also took into account its experience in other transactions, as well as
its knowledge of the commercial banking and thrift industries and its general
experience in securities valuations.

In rendering its opinion, Hovde assumed, without independent
verification, the accuracy and completeness of the financial and other
information and has relied upon the accuracy of the representations of the
parties contained in the Merger Agreement. Hovde has not made any independent
evaluation or appraisal of any properties, assets or liabilities of FFE. Hovde
assumed and relied upon the accuracy and completeness of the publicly available
and other financial and other information provided to it, relied upon the
representations and warranties of SouthTrust and FFE made pursuant to the
Merger Agreement, and did not independently attempt to verify any of such
information.

In connection with its opinion, Hovde performed various analyses with
respect to FFE. The following is a brief summary of such analyses, certain of
which were presented to the Board of Directors of FFE by Hovde on or before
November 3, 1995.

Analysis of the Merger Consideration. Hovde reviewed the value of the
Merger Consideration to be received by each FFE stockholder. Hovde calculated
that the Merger Consideration equated to approximately 155.2% of FFE's tangible
book value at September 30, 1995, a multiple of approximately 15.9X FFE's
earnings for the twelve months ended September 30,1 995, and a premium to core
deposits of approximately 4.14%.

Analysis of Selected Merger/Acquisition Transactions. Hovde reviewed
certain financial data relating to selected recently completed and pending
thrift acquisition transactions involving institutions in the State of Florida.
The selection included a total of seven transactions of which there were two
completed and five pending transactions. In each transaction, Hovde reviewed
the price as a multiple of tangible book value, as a multiple to earnings for
the last twelve reported months for each company, and as a premium to core
deposits.

In regard to the comparable transactions, the median price to tangible
book was 140.5%, and the median price to earnings multiple was 16.3x. The mean
price to book and price to earnings multiples for these

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<PAGE> 39

companies were 141.8% and 17.6x, respectively. The median and mean premium to
core deposits for the comparable group were 5.62% and 5.04%, respectively.

No company or transaction used in the above analysis as a comparison
is identical to FFE, SouthTrust or the contemplated transaction. Accordingly,
an analysis of the results of the foregoing is not mathematical; rather, it
involves complex considerations and judgments concerning differences in
financial and operating characteristics of the companies and other factors that
could affect the public trading value of the companies to which they are being
compared.

Comparison of the Merger Consideration to Selected Merger/Acquisitions
Transactions. The Merger Consideration equated to approximately 155.2% of
FFE's tangible book value at September 30,1995. This compared favorably to
both the median and mean price/tangible book multiples for the comparative
group discussed above, which medians and means were 140.4% and 141.8%,
respectively. The Merger Consideration represents a higher price to tangible
book multiple than either the median or mean price/tangible book multiples of
the group overall, and is higher than all but one of the seven transactions in
the comparable group. On a price/earnings basis, the Merger Consideration
equated to 15.8 times FFE's earnings for the twelve month period ending
September 30,1 995. This was somewhat below the median and mean price/earnings
multiple for the comparative group discussed above, which were 16.3x and 17.7x,
respectively. On a premium to core deposits basis, the Merger Consideration
equated to 4.14%, which was also somewhat below the comparable group median and
mean of 5.62% and 5.04%, respectively.

Discounted Cash Flow Analysis. Hovde performed a discounted cash flow
analysis to determine a range of present values per share of FFE Common Stock
assuming FFE continued to operate as a stand-alone entity and was acquired at a
later date. This range was determined by projecting FFE's after-tax net income
for the five years ended September 30, 1996 through 2000. Projected net income
was determined through consultation with FFE's management and generally
included modest growth in assets (4-5% yearly), as well as progressively higher
net income as a percent of average assets (increasing from 0.58% to 0.70%for
the twelve months ended September 30, 2000). Net income for the year ended
September 30, 1996 was impacted by an estimated 0.85% (based upon deposits)
pre-tax charge to recapitalize the SAIF. "Terminal values" per share of FFE
Common Stock were determined by applying ranges of price to tangible book
multiples (ranging from 1.2 time to 1.7 times) and price to earnings multiples
(ranging from 13.5 times to 16.0 times), against FFE's projected equity or
earnings (as the case may be) at dates between September 30, 1997 and September
30, 2000. Present values of the terminal values were then determined using
annual discount rates of 12% and 15%. The above calculations resulted in a
present value per share of FFE Common Stock ranging from $16.19 (based upon a
sale in five years at 1.2 times book value using a discount rate of 15%) to
$27.34 (based upon a sale in two years at 1.7 times book value using a discount
rate of 12%). The majority of the net present values per share of FFE Common
Stock were in the range of approximately $19 to $24.

Based upon the foregoing analyses and other investigations and
assumptions set forth in its opinion, without giving specific weightings to any
one factor or comparison, Hovde determined that the Merger Consideration offer
was fair from a financial point of view to the stockholders of FFE. Hovde's
fairness opinion does not take into account any adjustment to the Merger
Consideration that may be provided for in the Agreement.

THE SUMMARY OF THE PRESENTATION BY HOVDE TO THE BOARD OF DIRECTORS OF
FFE AS SET FORTH ABOVE DOES NOT PURPORT TO BE A COMPLETE DESCRIPTION OF SUCH
PRESENTATION. THE PREPARATION OF A FAIRNESS OPINION INVOLVES VARIOUS
DETERMINATIONS AS TO THE MOST APPROPRIATE AND RELEVANT METHODS OF FINANCIAL
ANALYSES AND THE APPLICATION OF THOSE METHODS TO THE PARTICULAR CIRCUMSTANCES,
AND, THEREFORE, SUCH AN OPINIONS NOT READILY SUSCEPTIBLE TO SUMMARY
DESCRIPTION. FURTHERMORE, IN ARRIVING AT ITS OPINION, HOVDE DID NOT ATTRIBUTE
ANY PARTICULAR WEIGHT TO ANY ANALYSIS OR FACTOR CONSIDERED BY IT, BUT RATHER
MADE QUALITATIVE JUDGMENTS AS TO THE SIGNIFICANCE AND RELEVANCE OF EACH
ANALYSIS AND FACTOR. ACCORDINGLY, HOVDE BELIEVES THAT ITS ANALYSES AND THE
SUMMARY SET FORTH ABOVE MUST BE CONSIDERED AS A WHOLE AND THAT SELECTING
PORTIONS OF ITS ANALYSES, WITHOUT CONSIDERING ALL FACTORS AND ANALYSES, COULD
CREATE AN INCOMPLETE VIEW OF THE PROCESS UNDERLYING THE ANALYSES SET FORTH IN
ITS REPORT TO THE BOARD OF DIRECTORS OF FFE AND ITS FAIRNESS

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<PAGE> 40

OPINION. IN PERFORMING ITS ANALYSES, HOVDE MADE NUMEROUS ASSUMPTIONS WITH
RESPECT TO INDUSTRY PERFORMANCE, GENERAL BUSINESS AND ECONOMIC CONDITIONS AND
OTHER MATTERS, MANY OF WHICH ARE BEYOND THE CONTROL OF SOUTHTRUST OR FFE. THE
ANALYSES PERFORMED BY HOVDE ARE NOT NECESSARILY INDICATIVE OF ACTUAL VALUES OR
ACTUAL FUTURE RESULTS, WHICH MAY BE SIGNIFICANTLY MORE OR LESS FAVORABLE THAN
SUGGESTED BY SUCH ANALYSES.

INTERESTS OF CERTAIN PERSONS NAMED IN THE MERGER

Certain officers of FFE and members of the FFE Board of Directors have
interests in the Merger that are in addition to any interests they may have as
stockholders of FFE generally. These interests include, among others,
provisions in the Merger Agreement relating to indemnification of FFE directors
and officers, directors' and officers' liability insurance, and certain
severance and other employee benefits, as described below.

SouthTrust has agreed in the Merger Agreement that it shall, or shall
cause ST-Sub to indemnify, defend and hold harmless the present and former
directors, officers, employees and agents of FFE and the Bank against all
losses, expenses, claims, damages or liabilities arising out of actions or
omissions occurring at or prior to the Effective Time of the Merger (including
the transactions contemplated by the Merger Agreement) to the full extent then
permitted under United States law, Delaware law and by the Certificate of
Incorporation and Bylaws of FFE and the Bank as in effect on the date of the
Merger Agreement.

Pursuant to the Merger Agreement, appropriate steps shall be taken to
terminate all employee benefit plans of FFE as of the Effective Time of the
Merger or as promptly as practicable thereafter. Following the termination of
all such employee benefit plans, SouthTrust has agreed to cover the officers
and employees of FFE and the Bank who are employed by SouthTrust or one of its
affiliates under employee benefits plans of SouthTrust (the "Continuing
Employees"), including welfare and fringe benefit plans, but excluding the
SouthTrust Corporation Revised Retirement Income Plan and the SouthTrust
Corporation Employee's Profit Sharing Plan, on the same basis as and subject to
the same conditions as are applicable to any newly-hired employee of
SouthTrust; provided, however, that (i) with respect to SouthTrust's group
medical insurance plan, SouthTrust shall credit each such Continuing Employee
for eligible expenses incurred by such employee and his or her dependents (if
applicable) under FFE's group medical benefits plan during the current calendar
year for purposes of satisfying the deductible provisions under SouthTrust's
plan for such current year, and SouthTrust shall waive all waiting periods
under said plans for pre-existing conditions; and (ii) credit for each such
employee's past service with FFE and the Bank prior to the Effective Time of
the Merger shall be given by SouthTrust to employees for purposes of: (1)
determining vacation and sick leave benefits and accruals, in accordance with
the established policies of SouthTrust; and (2) establishing eligibility for
participation in, and vesting under, SouthTrust's employee benefits plans
(including welfare and fringe benefit plans), and for purposes of determining
the scheduling of vacations and other determinations which are made based on
length of service; provided, however, such credit for past service shall not be
given to any such employee for purposes of establishing eligibility for
participation in the 1990 Discounted Stock Plan of SouthTrust or for purposes
of determining benefit accrual under the SouthTrust Corporation Employee's
Profit Sharing Plan.

The Merger Agreement further provides that, on the day prior to the
Effective Time of the Merger, each FFE employee benefit plan that is intended
to be a pension, profit sharing, stock bonus, thrift, savings plan that is
qualified under Section 401(a) of the Internal Revenue Code ("FFE Qualified
Plans") shall be terminated with full acceleration of vesting, except for any
required payment of employer-matching contributions with respect to elective
contributions made prior to the Effective Time of the Merger. As soon as
practicable after the Effective Time of the Merger, subject only to orderly
winding-up of the affairs of each such FFE Qualified Plan (excluding obtaining
a determination letter from the Internal Revenue Service as to the effect of
such termination upon such FFE Qualified Plan), the assets of each such plan
shall be distributed to the participants and beneficiaries thereof with full
right of roll-over to an individual retirement account.

The Merger Agreement also provides that at the Effective Time of the
Merger, SouthTrust shall enter into a covenant not to compete and consulting
agreement with Mr. G. L. Smith (the "Covenant Not to Compete and Consulting
Agreement"), which provides that during the one year period following Mr.
Smith's cessation of active employment with the Bank he will not engage in
competition with SouthTrust or any of its financial

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<PAGE> 41

institution Subsidiaries and he will provide transition consulting services to
SouthTrust during such one year period in exchange for $108,000 which shall be
paid to him at a rate of $9,000 per month.

SouthTrust has further agreed in the Merger Agreement that it shall
assume all of the obligations of the Bank under that certain employment
agreement between the Bank and Mr. G. L. Smith dated August 26, 1993 (the
"Employment Agreement"), and shall assume all of the obligations of the Bank
under that certain Change In Control Severance Agreement between Wallace D.
Mossbarger and the Bank dated March 21, 1995 (the "Severance Agreement").
SouthTrust acknowledges that the consummation of the Merger will constitute
both a change in control and change in circumstances under the Employment
Agreement and the Severance Agreement so as to constitute an involuntary
termination of the employment of Messrs. Smith and Mossbarger in connection
with a change in control pursuant to the terms of the Employment Agreement and
the Severance Agreement.

Pursuant to the Merger Agreement, each outstanding share of FFE Common
Stock awarded pursuant to the FFE Management Recognition Plan that is unvested
immediately prior to the Effective Time of the Merger shall be canceled in
exchange for a per share cash payment from SouthTrust at the Effective Time of
the Merger equal to the amount of the per share consideration to be exchanged
by SouthTrust for such share of FFE Common Stock pursuant to the terms of the
Merger Agreement. Each holder of such FFE Common Stock, as a condition to the
receipt of payment, shall be required to deliver his certificate or
certificates representing such shares to SouthTrust for cancellation and shall
also be required to execute a cancellation agreement. See "- Effect of Merger
on FFE Common Stock and FFE Common Stock Options."

EFFECT OF MERGER ON FFE COMMON STOCK AND FFE STOCK OPTIONS

At the Effective Time of the Merger, each share of FFE Common Stock
which is issued and outstanding immediately prior to the Effective Time (other
than certain excluded shares as described below) shall be converted into and
represent the right to receive and be exchanged for (A) cash in the amount of
$10.80 and (B) 0.645 share of SouthTrust Common Stock, as such Cash
Consideration and Exchange Ratio may be adjusted pursuant to the terms of the
Merger Agreement and as more fully described below.

The Cash Consideration portion of the Merger Consideration for which
each share of FFE Common Stock may be exchanged in the Merger is subject to
being increased (at the rate of 8% per annum) to the extent that the Effective
Time of the Merger occurs after April 30, 1996. Such Cash Consideration is
subject to being decreased if payments made or to be made to customers
following a review of the Bank's adjustable rate mortgages, as required by the
Merger Agreement, exceed $125,000. The Cash Consideration portion of the
Merger Consideration for which each share of FFE Common Stock may be exchanged
shall be decreased in an amount equal to 50% of the after-tax costs to the Bank
of such restitution payments to the extent that such payments exceed $125,000
and 100% of the after-tax costs to the Bank of such restitution payments to the
extent that such payments exceed $250,000, divided in both cases by the number
of shares of FFE Common Stock and the number of shares of FFE Common Stock
subject to options immediately prior to the Effective Time of the Merger.

The Exchange Ratio, which determines the number of shares of
SouthTrust Common Stock and associated SouthTrust rights for which each share
of FFE Common Stock may be exchanged in the Merger, is also subject to
adjustment. The Merger Agreement provides that if 0.645, when multiplied by
the average last sales price of SouthTrust Common Stock, as reported by Nasdaq,
for the later to occur of the twenty (20) trading days immediately preceding
the date of the annual meeting of stockholders of FFE at which the Merger is to
be considered or the twenty (20) trading days immediately following the date
that the last regulatory approval relating to the Merger is received (and all
waiting periods applicable thereto have expired) results in the aggregate of
the amount attributable to each share of FFE Common Stock (including the Cash
Consideration, as the same may be adjusted), after taking into account all
adjustments, being less than $22.95 , SouthTrust shall adjust the Exchange
Ratio so that the aggregate of the amount attributable to each share of FFE
Common Stock (including the Cash Consideration, as the same may be adjusted),
after all adjustments, shall equal $22.95 , and if 0.645, when multiplied by
the average last sales price of SouthTrust Common Stock, as defined above,
results in the aggregate of the amount attributable to each share of FFE Common
Stock

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<PAGE> 42

(including the Cash Consideration, as the same may be adjusted) being more than
$31.05 , SouthTrust shall adjust the Exchange Ratio so that the aggregate of
the amount attributable to each share of FFE Common Stock (including the Cash
Consideration, as the same may be adjusted), after taking into account all
adjustments, shall equal $31.05 . The Exchange Ratio, including the number of
shares of SouthTrust Common Stock issuable in the Merger, is also subject to
appropriate adjustment in the event of certain stock splits, stock dividends,
reclassifications or similar distributions effected by SouthTrust. Because the
Exchange Ratio may be adjusted under certain circumstances as discussed in this
paragraph, the Exchange Ratio may not be definitively determined until just
prior to the Effective Time of the Merger. However, based upon the last sales
price of SouthTrust Common Stock on _________, 1996 (the last trading day
immediately prior to the date of this Proxy Statement/Prospectus), no
adjustment to the Exchange Ratio would be required.

At the Effective Time of the Merger, all rights with respect to FFE
Common Stock issuable pursuant to FFE Options granted by FFE under the FFE
Stock Option Plan, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into, as of the Effective Time of the Merger,
the right of the holders thereof to receive either (i) a cash payment equal to
the excess, if any, of the value of the consideration exchanged for each share
of FFE Common Stock pursuant to the terms of the Merger Agreement over the
exercise price per share of such option or (ii) at the election of such
participant by written notice delivered to SouthTrust at least five business
days prior to the consummation of the Merger, a substitute option pursuant to
which such optionee may receive shares of SouthTrust Common Stock. Each FFE
Option assumed by SouthTrust may be exercised from and after the Effective Time
of the Merger solely for the number of shares (rounded to the nearest whole
share) of SouthTrust Common Stock that would have been received by the optionee
in the Merger as determined in a manner consistent with Section 424(a) of the
Internal Revenue Code had the entire option been exercised in full for shares
of FFE Common Stock immediately before the Merger upon the same terms and
conditions of the FFE Stock Option Plan as were applicable immediately before
the Effective Time of the Merger (assuming that all unvested options were then
fully vested) and that such shares of FFE Common Stock received upon exercise
had been converted in the Merger only into shares of SouthTrust Common Stock at
the full fair market value of the Merger Consideration (as if the Cash
Consideration portion thereof was to be received in shares of SouthTrust Common
Stock), with appropriate pro rata adjustment to the relevant option price for
the shares of SouthTrust Common Stock substituted therefor so that the
aggregate option exercise price of shares of SouthTrust Common Stock subject to
the option immediately following the assumption and substitution shall be the
same as the aggregate option exercise price for the shares of FFE Common Stock
relating to the SouthTrust Option immediately before such assumption and
substitution. Pursuant to the Merger Agreement, SouthTrust has agreed to file
with the Commission a registration statement on Form S-8 with respect to shares
of SouthTrust Common Stock to be issued pursuant to the FFE Stock Options and
such shares shall be duly authorized, issued in compliance with federal and
state securities laws, fully paid and unassessable and not subject to or in
violation of any preempted rights. At the Effective Time of the Merger,
SouthTrust shall have reserved sufficient shares of SouthTrust Common Stock for
issuance with respect to the FFE Stock Options, and SouthTrust shall take any
action required to be taken under any applicable securities law in connection
with the issuance of shares of SouthTrust Common Stock pursuant to such Stock
Options.

At the Effective Time of the Merger, each outstanding share of FFE
Common Stock awarded pursuant to the Management Recognition Plan of FFE that is
unvested immediately prior to the Effective Time of the Merger shall be
canceled in exchange for a cash payment from SouthTrust equal to the amount of
the per share consideration to be exchanged by SouthTrust for such share of FFE
Common Stock pursuant to the terms of the Merger Agreement.

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EFFECTIVE TIME OF THE MERGER

The Merger will become effective when the Certificates of Merger shall
be accepted for filing with the Secretary of State of the States of Delaware
and Florida. The parties to the Merger Agreement will cause such Certificate
of Merger to be so filed, subject to the satisfaction or waiver of each of the
conditions to consummation of the Merger, on the date of the closing of the
transaction. The Merger cannot become effective until FFE's stockholders have
approved the Merger Agreement and all required regulatory approvals and actions
have been obtained and taken.

NO ASSURANCE CAN BE PROVIDED THAT THE NECESSARY STOCKHOLDER AND
REGULATORY APPROVALS CAN BE OBTAINED OR THAT OTHER CONDITIONS PRECEDENT TO THE
MERGER CAN OR WILL BE SATISFIED. THE PARTIES CURRENTLY ANTICIPATE THAT ALL
REGULATORY APPROVALS WILL BE RECEIVED AND ALL OTHER CONDITIONS TO THE
CONSUMMATION OF THE MERGER WILL BE SATISFIED DURING THE FIRST HALF OF 1996;
HOWEVER, DELAYS IN THE CONSUMMATION OF THE MERGER COULD OCCUR.

The Board of Directors of either FFE or SouthTrust generally may
terminate the Merger Agreement if the Merger is not consummate by June 30,
1996, unless the party seeking termination is in material breach of any
representation, warranty, covenant or other agreement contained in the Merger
Agreement. See "- Regulatory Approvals and Certain Other Conditions to
Consummation of the Merger; Waiver and Amendment"; and "Termination."

EXCHANGE OF STOCK CERTIFICATES

At the Effective Time of the Merger, SouthTrust will deliver to the
Exchange Agent the total consideration to be paid by SouthTrust for the shares
of FFE Common Stock. As promptly as practicable after the Effective Time of
the Merger, the Exchange Agent shall send a letter of transmittal to each
former holder of record of shares of FFE Common Stock for use in exchanging
their certificates formerly representing shares of FFE Common Stock for shares
of SouthTrust Common Stock and Cash Consideration in accordance with the
procedures provided for herein and in the Merger Agreement. The letter of
transmittal will contain detailed instructions concerning the manner of
executing and submitting such stock certificates.

At the Effective Time of the Merger, the holders of shares of FFE
Common Stock will cease to be stockholders of FFE and will have no voting or
other rights with respect to shares of FFE Common Stock, other than the right
to receive the Merger Consideration upon surrender of the stock certificates
respecting their shares of FFE Common Stock. As of the Effective Time of the
Merger, all holders of shares of FFE Common Stock shall be deemed to be holders
of the shares of SouthTrust Common Stock into which such shares of FFE Common
Stock shall have been converted in the Merger, whether or not they surrender
the stock certificates representing their shares of FFE Common Stock. Such
holders shall be entitled to all dividends or distributions in respect of
shares of SouthTrust Common Stock where the record date for the payment of such
dividends or distributions occurs on or after the Effective Time of the Merger;
however, no such dividends or distributions shall be paid to holders of any
unsurrendered certificate or certificates representing FFE Common Stock, and
SouthTrust shall not be obligated to deliver to the holder of such
unsurrendered certificate any of the consideration to which such holder of FFE
Common Stock is entitled as a result of the Merger or any cash payment in lieu
of a fractional interest in SouthTrust Common Stock until such holder
surrenders the certificate or certificates representing FFE Common Stock as
provided for in the Merger Agreement. Until the stock certificates evidencing
the shares of FFE Common Stock are surrendered pursuant to the Merger
Agreement, no stock certificates representing shares of SouthTrust Common Stock
will be delivered or remitted to such holders. All dividends or other
distributions declared on or after the Effective Time of the Merger with
respect to the SouthTrust Common Stock and payable to the holders of record
thereof after the Effective time of the Merger which are payable to the holder
of a certificate respecting shares of FFE Common Stock not theretofore
surrendered and exchanged for SouthTrust Common Stock shall be paid or
delivered by SouthTrust to the Exchange Agent, in trust, for the benefit of
such holders. All such dividends and distributions held by the Exchange Agent
for payment or delivery to the holders of non-surrendered certificates
respecting shares of FFE Common Stock unclaimed at the end of 180 days from the
Effective Time shall be repaid or redelivered by the Exchange Agent to ST-Sub
after which time any holder of such certificates who has not theretofore
surrendered

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<PAGE> 44

such certificates to the Exchange Agent, subject to applicable law, shall look
as a general creditor only to the SouthTrust for payment or delivery of such
dividends or distributions, as the case may be. Any shares of SouthTrust
Common Stock or Cash Consideration delivered or made available to the Exchange
Agent pursuant to the terms of the Merger Agreement and not exchanged for
certificates respecting shares of FFE Common Stock within one year after the
Effective Time of the Merger pursuant to the Merger Agreement shall be returned
by the Exchange Agent to SouthTrust which shall thereafter act as Exchange
Agent subject to the rights of holders of non-surrendered certificates
respecting shares of FFE Common Stock.

In addition, holders of shares of FFE Common Stock will not be
entitled to receive any interest respecting any dividends or distributions
payable in respect of shares of SouthTrust Common Stock, and SouthTrust, after
the lapse of the appropriate time period and in accordance with the applicable
laws of escheat or abandoned property, may remit any unclaimed funds or
unclaimed stock certificates representing shares of SouthTrust Common Stock to
state officials under the applicable laws of escheat or abandoned property.

RESALE OF SOUTHTRUST COMMON STOCK RECEIVED IN THE MERGER

The shares of SouthTrust Common Stock to be issued pursuant to the
Merger Agreement have been registered under the Securities Act, thereby
allowing such shares to be sold without restriction by stockholders of FFE who
are not deemed to be "affiliates" (as that term is defined in the rules under
the Securities Act) of FFE and who do not become affiliates of SouthTrust. The
shares of SouthTrust Common Stock to be issued to affiliates of FFE may be
resold only pursuant to an effective registration statement, pursuant to Rule
145 under the Securities Act, or in transactions otherwise exempt from
registration under the Securities Act. SouthTrust will not be obligated and
does not intend to register its shares under the Securities Act for resale by
stockholders who are affiliates. Under the volume limitations of Rule 145, and
based upon the outstanding shares of SouthTrust Common Stock as of December 31,
1995 (exclusive of shares of SouthTrust Common Stock to be issued in the
Merger), each affiliate of FFE will be free to resell, during any given
three-month period, up to approximately 879,036 shares of SouthTrust Common
Stock, provided that such affiliate otherwise complies with the provisions of
Rule 145.

ACCOUNTING TREATMENT

The Merger will be accounted for by SouthTrust as a purchase
transaction in accordance with generally accepted accounting principals. One
effect of such accounting treatment is that the earnings of FFE will be
combined with the earnings of SouthTrust only from and after the Effective Date
of the Merger. Furthermore, such earnings of FFE will, for purposes of the
earnings or losses of SouthTrust, be reduced by certain depreciation and
amortization charges arising out of purchase accounting adjustments.

SOUTHTRUST STOCK OPTION AGREEMENT AND BREAK-UP FEE

Following the execution of the Merger Agreement and as a condition to
such execution, FFE granted SouthTrust an option to purchase, under certain
circumstances, up to 104,640 shares of FFE Common Stock at a price equal to
$27.00 per share pursuant to the terms of a Stock Option Agreement dated
November 3, 1995 between FFE and SouthTrust, but only upon the occurrence of
specified events related generally to the making by third parties of offers to
acquire FFE and the acquisition by third parties of FFE Common Stock, which
SouthTrust Stock Option Agreement shall expire at the Effective Time of the
Merger, upon the termination of the Merger Agreement if no event by which the
option becomes exercisable shall have occurred or one year after the
termination of the Merger Agreement if an event by which the option becomes
exercisable shall have occurred. The SouthTrust Stock Option Agreement was
approved by the Board of Directors of FFE.

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<PAGE> 45

A copy of the SouthTrust Stock Option Agreement is attached hereto as
Exhibit D, and the description thereof contained in this Proxy
Statement/Prospectus is qualified in its entirety by reference to such Exhibit
D.

If, after the date of the Merger Agreement, an offer to acquire FFE or
the Bank is presented or proposed to FFE or its stockholders and (i) thereafter
the Merger Agreement and the Merger are disapproved by the stockholders of FFE
and (ii) within one year after termination of the Merger Agreement such
acquisition is consummated or a definitive agreement is entered into by FFE
relating to such acquisition, then upon the occurrence of a Trigger Event and
in lieu of any other rights and remedies of SouthTrust, FFE shall (x) reimburse
SouthTrust for its third party transaction expenses in an amount up to two
hundred thousand dollars ($200,000) and (y) pay SouthTrust an additional cash
amount of four hundred thousand dollars ($400,000) as an agreed-upon fee as the
sole and exclusive remedy of SouthTrust against FFE; provided, however, that
SouthTrust shall not be entitled to any such payment if SouthTrust exercises
any option granted by the SouthTrust Stock Option Agreement or exercises any
right to require FFE to repurchase the option granted by the SouthTrust Stock
Option Agreement.

REGULATORY APPROVALS AND CERTAIN OTHER CONDITIONS TO THE MERGER; WAIVER AND
AMENDMENT

The respective obligations of SouthTrust and FFE to consummate the
Merger are subject to the satisfaction of certain conditions, including, among
others, (i) the receipt of all required regulatory approvals with respect to
the Merger, (ii) the approval of the Merger Agreement by the requisite vote of
FFE's stockholders, and (iii) certain other conditions as described in more
detail below.

Applications for the approvals described below have been submitted to
the appropriate regulatory agencies. There can be no assurance that such
regulatory approvals will be obtained or as to the timing of any such
approvals. There also can be no assurance that any such approvals will not
impose conditions or be restricted in a manner (including requirements relating
to the raising of additional capital or the disposition of assets) which in the
reasonable judgment of the Board of Directors of either SouthTrust or FFE would
so materially adversely impact the economic or business benefits of the
transactions contemplated by the Merger Agreement that, had such condition or
requirement been known, such party would not, in its reasonable judgment, have
entered into the Agreement.

FFE and SouthTrust are not aware of any material governmental
approvals or actions that are required for consummation of the Merger, except
as described below. Should any other approval or action be required, it
currently is contemplated that such approval or action would be sought.

Consummation of the Merger is subject to receipt of the prior approval
by the Federal Reserve Board under the Bank Holding Company Act. The Bank
Holding Company Act requires that the Federal Reserve Board take into
consideration, among other factors, the financial and managerial resources and
future prospects of the institutions and the convenience and needs of the
communities to be served. The Bank Holding Company Act prohibits the Federal
Reserve Board from approving the Merger (i) if such transaction would result in
a monopoly or be in furtherance of any combination or conspiracy to monopolize
or to attempt to monopolize the business of banking in any part of the United
States, or (ii) if the effect of such transaction in any section of the country
may be substantially to lessen competition or to tend to create a monopoly, or
if it would in any other manner be a restraint of trade, unless the relevant
regulatory agency finds that the anti-competitive effects of such merger are
clearly outweighed by the public interest and by the probable effect of the
transaction in meeting the convenience and needs of the communities to be
served. Under the Bank Holding Company Act, the Federal Reserve Board also
considers whether the proposed transaction can reasonably be expected to
produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, that outweigh possible adverse effects,
such as undue concentration of resources, decreased or unfair competition,
conflicts of interests, or unsound banking practices. The Federal Reserve
Board has the authority to deny an application if it concludes that the
combined organization would have an inadequate capital position or if the
acquiring organization does not meet the requirements of the Community
Reinvestment Act of 1977. In addition, the Merger may not be consummated until
the 15th day following the dates of each of the requisite approvals, during
which periods the United States Department of Justice may comment adversely on
the transaction (which has the effect of extending the waiting period to the
30th day following approval) or

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<PAGE> 46

challenge such Merger on antitrust grounds. The commencement of an antitrust
action would stay the effectiveness of such an approval unless a court
specifically orders otherwise.

The Merger cannot proceed in the absence of the requisite regulatory
approvals. There can be no assurance that such regulatory approvals will be
obtained, and, if the Merger is approved, there can be no assurance as to the
date of any such approval. There can also be no assurance that the United
States Department of Justice or a State Attorney General will not challenge the
Merger or, if such a challenge is made, as to the result thereof.

On February 7, 1996, SouthTrust filed with the Federal Reserve Board
an application seeking approval to merge FFE into ST-Sub and to merge the Bank
into ST-Bank.

In connection with the Merger, it is contemplated that, either
contemporaneously with or shortly following the Effective Time of the Merger,
the Bank will be merged into ST-Bank, whereupon the Bank will cease to be a
separate entity (the "Subsidiary Merger"). Because ST-Bank, the surviving bank
in the transaction, is a national bank, the merger of the banking subsidiaries
will be subject to the approval of the Office of the Comptroller of the
Currency ("OCC") under the Bank Merger Act, which prohibits the merger or
consolidation of any insured institution with any other depository institution
without the approval of the insured institution's primary supervisory federal
regulatory agency. The approval standards to be applied by the OCC under the
Bank Merger Act are identical to those applicable to the Merger under Section 3
of the Bank Holding Company Act. The merger of ST-Bank and the Bank also is
subject to prior notice to the OTS, following the receipt of which, the OTS has
authority to raise supervisory objections to such merger with the OCC.

On January 5, 1996, ST-Bank submitted to the OCC an application
seeking approval to merge the Bank into ST- Bank. In addition, FFE filed the
required notice with the OTS on February 8, 1996. SouthTrust filed its
application with the OTS on February 12, 1996.

Approval by the OCC of the Subsidiary Merger is not a condition to the
obligation of SouthTrust to consummate the Merger. Accordingly, it is possible
that, if all conditions to the respective obligations of SouthTrust and BFC to
consummate the Merger are satisfied, but the OCC and all other regulatory
approvals with respect to the Subsidiary Merger have not been obtained, the
Merger could be consummated even though consent to the Subsidiary Merger were
to be delayed.

In addition to receipt of all necessary regulatory approvals and the
expiration of all required notice and waiting periods following the granting of
such approvals, and the approval of the Merger Agreement by the requisite vote
of the stockholders of FFE, consummation of the Merger is subject to the
satisfaction of certain other conditions on or before the Effective Time of the
Merger. Such additional conditions include, among others, the following:

(a) The accuracy of the representations and warranties made by FFE
and SouthTrust in the Merger Agreement and in any documents or certificates
provided by either party, in all material respects, and the performance, in all
material respects, of their respective obligations thereunder;

(b) There shall not have been any action taken or any statute,
rule, regulation or order enacted, promulgated or issued or deemed applicable
to the Merger by any federal or state government or governmental agency or
instrumentality or court, which would prohibit SouthTrust's ownership or
operation of all or a material portion of the business or assets of FFE or the
Bank, or would compel SouthTrust to dispose of all or a material portion of the
business or assets of the Bank, as a result of the Merger Agreement, or which
would render SouthTrust or FFE unable to consummate the transactions
contemplated by the Merger Agreement;

(c) Since the date of the Merger Agreement, neither party shall
have suffered any materially adverse effect, as defined in the Merger
Agreement;

(d) SouthTrust shall have received the opinion of Silver, Freedman
& Taff L.L.P., counsel to FFE, and FFE shall have received the opinion of
Bradley, Arant, Rose & White, counsel to SouthTrust;

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<PAGE> 47

(e) SouthTrust shall have received a certificate signed by the
President and Chief Executive Officer of FFE, and FFE shall have received a
certificate signed by a senior officer of SouthTrust, both dated as of the
Effective Time of the Merger, certifying that based upon the officer's best
knowledge, the conditions regarding the accuracy of representations and
warranties, the performance of obligations under the Merger Agreement and the
absence of any materially adverse effect since the date of the Merger Agreement
have been satisfied;

(f) Mr. G. L. Smith, if he is then living, shall have executed the
Covenant Not to Compete and Consulting Agreement;

(g) As of the date of the Merger Agreement, FFE shall have
received a written fairness opinion from Hovde to the effect that the Merger
Consideration is fair to its stockholders from a financial point of view;

(h) No preliminary or permanent injunction or other order by any
federal or state court which prevents the consummation of the Merger shall have
been issued and shall remain in effect; nor shall there be any third party
proceeding pending to prevent the consummation of the Merger;

(i) The parties shall have received all applicable regulatory
approvals and consents to consummate the transactions contemplated in the
Merger Agreement and all required waiting periods shall have expired;

(j) The Registration Statement of which this Proxy
Statement/Prospectus is a part shall have been declared effective under the
Securities Act and no stop orders shall be in effect and no proceedings for
such purpose shall be pending or threatened by the SEC;

(k) Each party to the Merger Agreement shall have received a tax
opinion from Bradley, Arant, Rose & White, counsel to SouthTrust, pursuant to
the terms of the Merger Agreement substantially to the effect that the Merger
will constitute a tax-free reorganization within the meaning of Section 368(a)
of the Internal Revenue Code; and

(l) The SouthTrust Common Stock to be issued to holders of FFE
Common Stock shall have been approved for listing on the Nasdaq National Market
subject to official notice of issuance.

At any time before the Merger becomes effective, any party to the
Merger Agreement may waive conditions contained therein to its own obligations,
to the extent that such obligations, agreements and conditions are intended for
its own benefit. In addition the Merger Agreement may be amended by written
instruments signed on behalf of each of the parties thereto.

TERMINATION

The Merger Agreement may be terminated in the following ways: (i) at
any time prior to the Effective Time of the Merger, by the mutual written
consent of the Boards of Directors of SouthTrust and FFE; (ii) at any time
prior to the Effective Time of the Merger, by SouthTrust or FFE if there shall
have been a final judicial or regulatory determination (as to which all periods
for appeal shall have expired and no appeal shall be pending) that any material
provision of the Merger Agreement is illegal, invalid or unenforceable (unless
the enforcement thereof is waived by the affected party) or denying any
regulatory application the approval of which is a condition precedent to either
party's obligations under the Merger Agreement; (iii) at any time on or before
June 30, 1996, by SouthTrust or FFE in the event that the Merger has not been
consummated prior to such date provided that the party seeking to terminate the
Merger Agreement is not in material breach thereof; (iv) by either party at any
time after the stockholders of FFE fail to approve the Merger Agreement and the
Merger by the required vote at the Annual Meeting; (v) at any time prior to the
Effective Time of the Merger, by SouthTrust or FFE, in the event of a material
breach by the other party of any representation, warranty, covenant or
agreement contained in the Merger Agreement or in any schedule or document
delivered pursuant thereto, which breach would result in the failure to satisfy
the closing conditions set forth in Sections 6.1(a) or 6.1(b) of the Merger
Agreement, in the case of SouthTrust, or Sections 6.2(a) or 6.2(b) of the
Merger Agreement, in the case of FFE, and which breach cannot be or is not
cured within thirty (30) days after written

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<PAGE> 48

notice of such breach is given by the non-breaching party to the party
committing such breach; or (vi) at any time prior to the Effective Time of the
Merger, by FFE if the after-tax cost of the restitution payments made or to be
made to customers pursuant to Section 4.4(a) of the Merger Agreement exceeds
$500,000.

In the event the Merger Agreement is terminated, the Merger Agreement
will be void and have no further effect and such termination will be without
liability to any party to the Merger Agreement, except for any liability
incurred or suffered by any party as a result of the willful material breach by
the other party of any of its representations, warranties, covenants or
agreements set forth in the Merger Agreement and any liability resulting from
the occurrence of a Trigger Event as described in "- SouthTrust Stock Option
Agreement and Break-Up Fee."

CERTAIN EXPENSES

The Merger Agreement provides that, except in connection with FFE's
obligation to reimburse SouthTrust for its third party transaction expenses in
an amount up to $200,000 in connection with certain Trigger Events as discussed
more fully under "- SouthTrust Stock Option Agreement and Break-Up Fee," each
of the parties shall bear its own costs, fees and expenses incurred in
connection with the Merger Agreement and the Merger; provided however, all
application and filing fees to be paid by either party to regulatory
authorities in connection with the transactions contemplated by the Merger
Agreement will be borne and paid by SouthTrust.

RIGHTS OF DISSENT AND APPRAISAL

A stockholder of FFE may dissent from the Merger pursuant to Section
262 of the DGCL and receive cash equal to the fair value, as of immediately
prior to the Effective Time of the Merger, of the shares of FFE Common Stock
held by such stockholder. The appraisal value of the FFE Common Stock may
differ from the consideration that a stockholder of FFE is entitled to receive
in the Merger.

CONDUCT OF BUSINESS BY FFE PENDING THE MERGER

The Merger Agreement provides that, after the date of the Merger
Agreement and except with the prior written approval of SouthTrust, FFE will
not declare or pay any dividend or make any other distribution with respect to
its capital stock whether in cash, stock or other property. FFE and the Bank
shall continue to carry on, after the date of the Merger Agreement, their
respective businesses and the discharge or incurring of obligations and
liabilities, only in the usual, regular and ordinary course of business, as
heretofore conducted, and by way of amplification and not limitation, FFE and
the Bank will not, without the prior written consent of SouthTrust:

(a) issue any capital stock or any options, warrants, or other
rights to subscribe for or purchase capital stock or any securities convertible
into or exchangeable for any capital stock, except pursuant to options
outstanding on the date hereof under the FFE Stock Option Plan;

(b) directly or indirectly redeem, purchase or otherwise acquire
any capital stock or ownership interests of FFE or the Bank;

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<PAGE> 49

(c) effect a reclassification, recapitalization, split-up,
exchange of shares, readjustment or other similar change in or to any capital
stock or otherwise reorganize or recapitalize;

(d) change its Charter, Certificate of Incorporation, or Bylaws;

(e) enter into any employment agreement, severance agreement,
change of control agreement, or plan relative to the foregoing; or grant any
increase (other than ordinary and normal increases consistent with past
practices) in the compensation payable or to become payable to directors,
officers or employees except as required by law, pay or agree to pay any bonus,
or adopt or make any change in any bonus, insurance, pension, or other FFE
employee benefit plan;

(f) except for the short-term renewal of Federal Home Loan Bank
("FHLB") advances outstanding at the date of the Merger Agreement, raising
short-term funds against its existing line of credit with the FHLB and
deposit-taking in the ordinary course of its business, borrow or agree to
borrow any funds, including but not limited to repurchase transactions, or
indirectly guarantee or agree to guarantee any obligations of others;

(g) make or commit to make any new loan or letter of credit or any
new or additional discretionary advance under any existing line of credit, in a
principal amount in excess of $500,000 or that would increase the aggregate
credit outstanding to any one borrower (or group of affiliated borrowers) to
more than $500,000 (excluding for this purpose any accrued interest or
overdrafts), without the prior written consent of SouthTrust acting through a
senior officer in a written notice to FFE, which approval or rejection shall be
given on a timely basis after delivery by FFE to such officer of SouthTrust of
the complete loan package;

(h) make any changes in its policies concerning which persons may
approve loans;

(i) enter into any securities transaction for its own account or
purchase or otherwise acquire any investment security for its own account other
than U.S. Treasury obligations and deposits in an overnight account at the FHLB
of Atlanta or securities issued or guaranteed by the Government National
Mortgage Association, the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation, provided SouthTrust's consent shall not be
unreasonably withheld or delayed relating to the purchase of other readily
marketable investment securities;

(j) increase or decrease the rate of interest paid on time
deposits or on certificates of deposit, except in a manner and pursuant to
policies consistent with past practices;

(k) enter into, modify or extend any agreement, contract or
commitment out of the ordinary course of business or having a term in excess of
six months and involving an expenditure in excess of ten thousand dollars
($10,000), other than letters of credit, loan agreements, deposit agreements,
and other lending, credit and deposit documents made in the ordinary course of
business;

(l) except in the ordinary course of business, place on any of its
assets or properties any mortgage, pledge, lien, charge, or other encumbrance;

(m) cancel any material indebtedness owing to it or any claims
which it may possess or waive any rights of material value;

(n) sell or otherwise dispose of any real property or any material
amount of tangible or intangible personal property other than (a) properties
acquired in foreclosure or otherwise in the ordinary collection of indebtedness
owed to the Bank, (b) student loans or (c) loans which are held for sale by the
Bank and are sold in the secondary market within sixty (60) days of
origination;

(o) foreclose upon or otherwise take title to or possession or
control of any real property without first obtaining a phase one environmental
report thereon; provided, however, that the Bank and its subsidiaries shall not
be required to obtain such a report with respect to single family,
non-agricultural residential property

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<PAGE> 50

of one acre or less to be foreclosed upon unless it has reason to believe that
such property might contain Hazardous Substances;

(p) knowingly or willfully commit any act or fail to commit any
act which will cause a material breach of any agreement, contract or
commitment;

(q) engage in any activity which constitutes or may constitute a
material violation of any law, statute, rule, governmental regulation, or
order;

(r) purchase any real or personal property or make any capital
expenditure where the amount paid or committed therefor is in excess of
twenty-five thousand dollars ($25,000), except for outstanding commitments set
forth in the Merger Agreement;

(s) in the case of the Bank, voluntarily make any material changes
in or to its asset and deposit mix;

(t) engage in any activity or transaction outside the ordinary
course of business;

(u) enter into or acquire any derivatives contract or structured
note; or

(v) enter into any new, or modify, amend or extend the terms of
any existing, contracts relating to the purchase or sale of financial or other
futures, or any put or call option relating to cash, securities or commodities
or any interest rate swap agreements or other agreements relating to the
hedging of interest rate risk.

In addition, in the Merger Agreement, FFE has agreed that FFE and the
Bank shall not, without the prior written consent of SouthTrust, willfully
engage in any transaction or wilfully take any action that would render untrue
any of the representations and warranties of FFE contained in the Merger
Agreement, if such representations and warranties were given as of the date of
such transaction or action.

FFE has also agreed in the Merger Agreement that it will, and will
cause the Bank to, use their best efforts to maintain their respective
properties and assets in their present state of repair, order and condition,
reasonable wear and tear excepted, and to maintain and keep in full force and
effect all policies of insurance presently in effect, including the insurance
of accounts with the FDIC. FFE will, and will cause Bank to, take all
requisite action (including without limitation the making of claims and the
giving of notices) pursuant to its directors' and officers' liability insurance
policy or policies in order to preserve all rights thereunder with respect to
all matters known by FFE which could reasonably give rise to a claim prior to
the Effective Time of the Merger.

Furthermore, FFE shall promptly notify SouthTrust in writing of the
occurrence of any matter or event known to and directly involving FFE or the
Bank that is reasonably likely to result in a Material Adverse Effect (as
defined in the Merger Agreement) on FFE or impair the ability of FFE to
consummate the transactions contemplated herein.

FFE shall provide to SouthTrust such reports on litigation involving
FFE and the Bank as SouthTrust shall reasonably request, provided that FFE
shall not be required to divulge information to the extent that, in the good
faith opinion of its counsel, by doing so, it would risk waiver of the
attorney-client privilege to its detriment.

At the request of SouthTrust, FFE shall cause the Bank, immediately
prior to Closing and after satisfaction or waiver of the conditions to Closing
set forth in the Merger Agreement hereof, to establish and take such reserves
and accruals as SouthTrust reasonably shall request to conform the Bank's loan,
accrual, reserve and other accounting policies to the policies of a significant
subsidiary of SouthTrust that is a national

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<PAGE> 51

banking association, provided however, such requested conforming adjustment
shall not be taken into account in determining whether FFE has experienced a
Material Adverse Effect, as defined in the Merger Agreement.

BUSINESS AND MANAGEMENT OF FFE FOLLOWING THE MERGER; PLANS FOR BUSINESS OF FFE

Upon consummation of the Merger, FFE will be merged into ST-Sub, with
ST-Sub being the surviving corporation in the Merger (the surviving corporation
being sometimes referred to herein as the "Surviving Corporation"). As of the
Effective Time of the Merger, it is anticipated that the Board of Directors of
the Surviving Corporation shall consist of those persons who are serving as
directors of ST-Sub as of the Effective Time of the Merger, and such other
persons as may be designated in writing by SouthTrust at or prior to the
Effective Time of the Merger. It is further anticipated that the officers of
the Surviving Corporation shall be those persons serving as officers of ST-Sub
as of the Effective Time of the Merger, and such other persons as may be
designated in writing by SouthTrust at or prior to the Effective Time of the
Merger.

As of the Effective Time of the Merger or immediately thereafter, the
Bank will be merged into ST-Bank in the Subsidiary Merger. Upon consummation
of the Subsidiary Merger, it is anticipated that the Board of Directors of ST-
Bank, as the surviving association in the Subsidiary Merger, shall consist of
those persons who are serving as directors of ST-Bank as of the effective time
of the Subsidiary Merger, and such other persons as may be designated in
writing by SouthTrust at or prior to such time. It is further anticipated that
the officers of ST-Bank, as the surviving association in the Subsidiary Merger,
shall be those persons serving as officers of ST-Bank at the effective time of
the Subsidiary Merger and such other persons as may be designated in writing by
SouthTrust at or prior to the effective time of such merger.

After the Effective Time of the Merger, the Surviving Corporation will
operate as a subsidiary corporation of SouthTrust acting as a holding company
for certain of its banking operations headquartered in Florida. After the
effectiveness of the Subsidiary Merger, the operations of the Bank will be
integrated into the operations of ST-Bank, with efforts directed toward
preserving the existing customer and banking relationships of the Bank as part
of ST-Bank.

Pursuant to the Merger Agreement, appropriate steps shall be taken to
terminate all employee benefit plans of FFE as of the Effective Time of the
Merger or as promptly as practicable thereafter. Following the termination of
all such employee benefit plans, Southtrust has agreed to cover the officers
and employees of FFE and the Bank who are employed by SouthTrust or one of its
affiliates under employee benefits plans of SouthTrust, including welfare and
fringe benefit plans, but excluding the SouthTrust Corporation Revised
Retirement Income Plan and the SouthTrust Corporation Employee's Profit Sharing
Plan, on the same basis as and subject to the same conditions as are applicable
to any newly-hired employee of SouthTrust; provided, however, that (i) with
respect to SouthTrust's group medical insurance plan, SouthTrust shall credit
each such Continuing Employee for eligible expenses incurred by such employee
and his or her dependents (if applicable) under FFE's group medical benefits
plan during the current calendar year for purposes of satisfying the deductible
provisions under SouthTrust's plan for such current year, and SouthTrust shall
waive all waiting periods under said plans for pre-existing conditions; and
(ii) credit for each such employee's past service with FFE and the Bank prior
to the Effective Time of the Merger shall be given by SouthTrust to employees
for purposes of: (1) determining vacation and sick leave benefits and accruals,
in accordance with the established policies of SouthTrust; and (2) establishing
eligibility for participation in, and vesting under, SouthTrust's employee
benefits plans (including welfare and fringe benefit plans), and for purposes
of determining the scheduling of vacations and other determinations which are
made based on length of service; provided, however, such credit for past
service shall not be given to any such employee for purposes of establishing
eligibility for participation in the 1990 Discounted Stock Plan of SouthTrust
or for purposes of determining benefit accrual under the terms of the
SouthTrust Corporation Employee's Profit Sharing Plan.

The Merger Agreement further provides that, on the day prior to the
Effective Time of the Merger, each FFE Qualified Plan shall be terminated with
full acceleration of vesting, except for any required payment of employer-
matching contributions with respect to elective contributions made prior to the
Effective Time of the Merger. As soon as practicable after the Effective Time
of the Merger, subject only to orderly winding-up of the affairs of each such
FFE Qualified Plan (excluding obtaining a determination letter from the
Internal

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<PAGE> 52

Revenue Service as to the effect of such termination upon such FFE Qualified
Plan, the assets of each such plan shall be distributed to the participants and
beneficiaries thereof with full right of roll-over to an individual retirement
account.

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<PAGE> 53

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a summary of certain anticipated federal
income tax consequences of the Merger to holders of FFE Common Stock who are
citizens of the United States. It does not discuss all the tax consequences
that may be relevant to holders of FFE Common Stock entitled to special
treatment under the Code (such as insurance companies, dealers in securities,
tax-exempt organizations or foreign persons) or to holders of FFE Common Stock
who acquired their FFE Common Stock as compensation. The summary set forth
below does not purport to be a complete analysis of all potential tax effects
of the transactions contemplated by the Merger Agreement or the Merger itself.

EACH HOLDER OF FFE COMMON STOCK IS URGED TO CONSULT HIS OR HER OWN TAX
AND FINANCIAL ADVISOR AS TO THE EFFECT OF SUCH FEDERAL INCOME TAX CONSEQUENCES
ON HIS OR HER OWN PARTICULAR FACTS AND CIRCUMSTANCES, AND ALSO AS TO ANY STATE,
LOCAL, FOREIGN OR OTHER TAX CONSEQUENCES ARISING OUT OF THE MERGER.

Neither SouthTrust, ST-Sub nor FFE has requested or will receive an
advance ruling from the Internal Revenue Service ("IRS") as to any of the
federal income tax effects of the Merger to holders of FFE Common Stock or of
any of the federal income tax effects to SouthTrust, ST-Sub or FFE of the
Merger. Instead, FFE will rely upon an opinion of Bradley, Arant, Rose & White
as to the federal income tax consequences of the Merger to the holders of FFE
Common Stock. The opinion of Bradley, Arant, Rose & White is based upon the
Code, regulations now in effect thereunder, current administrative rulings and
practice, and judicial authority, all of which are subject to change. The
opinion of Bradley, Arant, Rose & White is based upon certain factual
assumptions. One such assumption is that FFE will transfer "substantially all"
of its assets to ST-Sub within the meaning of Section 368(a)(2)(D) of the Code.
Unlike a ruling from the IRS, an opinion is not binding on the IRS and there
can be no assurance, and none is hereby given, that the IRS will not take a
position contrary to one or more positions reflected herein or that the opinion
will be upheld by the courts if challenged by the IRS.

In the opinion of Bradley, Arant, Rose & White, which opinion is based
upon various representations and subject to various assumptions and
qualifications, the following federal income tax consequences to the holders of
FFE Common Stock will result from the Merger:

(i) The Merger will qualify as a reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code. FFE, SouthTrust,
and ST-Sub each will be "a party to a reorganization" within
the meaning of Section 368(b) of the Code.

(ii) FFE stockholders will recognize no gain or loss upon their
exchange of FFE Common Stock solely for SouthTrust Common
Stock.

(iii) The basis of the shares of SouthTrust Common Stock received by
the stockholders of FFE (including any fractional share
interests to which they may be entitled) will be the same as
the basis of the shares of FFE Common Stock surrendered in
exchange therefor.

(iv) The holding period of the shares of SouthTrust Common Stock
received by FFE stockholders (including any fractional share
interests to which they may be entitled) will include the
period during which the shares of FFE Common Stock surrendered
in exchange therefor was held by the FFE stockholders,
provided that the shares of FFE Common Stock surrendered were
held as a capital asset within the meaning of Section 1221 of
the Code by the FFE stockholders as of the Effective Time of
the Merger.

(v) FFE stockholders who exercise dissenters' rights, and as a
result of which receive only cash, will be treated as having
received such cash as a distribution in redemption of their
shares of

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<PAGE> 54

FFE Common Stock, subject to the provisions and limitations of
Section 302 of the Code. Those FFE stockholders who receive
only cash, and who hold no SouthTrust Common Stock, directly
or indirectly through the application of Section 318(a) of the
Code, following the Merger will be treated as having a
complete termination of their interests in FFE within the
meaning of Section 302(b)(3) of the Code, and the cash
received will be treated as a distribution in full payment in
exchange for each such stockholder's FFE Common Stock as
provided in Section 302(a) of the Code. As further provided
in Section 1001 of the Code, gain will be realized and
recognized by such stockholders measured by the difference
between the redemption price and the adjusted basis of the
shares of FFE Common Stock surrendered as determined under
Section 1011 of the Code. Provided that Section 341 of the
Code (relating to collapsible corporations) is inapplicable
and the FFE Common Stock is held as a capital asset by such
stockholders, the gain, if any, will constitute capital gain.
Such gain will constitute long-term capital gain if the
surrendered shares of FFE Common Stock were held by the
stockholder for a period greater than one year prior to the
Merger; if the surrendered shares of FFE Common Stock were
held by such stockholder for a period of one year or less, the
gain will constitute short-term capital gain.

(vi) FFE stockholders who receive the Cash Consideration will be
treated for federal income tax purposes as if SouthTrust
Common Stock having a value equal to such Cash Consideration
actually was issued as part of the Merger and then was
redeemed by SouthTrust in exchange for the Cash Consideration,
and the Cash Consideration will be treated as a distribution
in full payment in exchange for such FFE Common Stock, subject
to the provisions and limitations of Section 302 of the Code.

(vii) The receipt by a holder of FFE Common Stock of cash in lieu of
a fractional share of SouthTrust Common Stock will be treated
as though such fractional share were issued to such holder of
FFE Common Stock in the Merger and thereafter redeemed by
SouthTrust for cash. The receipt of such cash in lieu of a
fractional share by a holder of FFE Common Stock will be
treated as a distribution by SouthTrust in full payment in
exchange for the fractional share as provided in Section
302(a) of the Code.

The opinion of Bradley, Arant, Rose & White is rendered solely with
respect to certain federal income tax consequences of the Merger under the
Code, and does not extend to the income or other tax consequences of the Merger
under the laws of any State or any political subdivision of any State; nor does
it extend to any tax effects or consequences of the Merger to SouthTrust or
ST-Sub other than those expressly stated in the opinion. Furthermore, no
opinion is expressed as to the federal or state tax treatment of the
transaction under any other provisions of the Code and regulations, or about
the tax treatment of any conditions existing at the time of, or effects
resulting from, the transaction that are not specifically covered by the
opinion. Specifically, no opinion is expressed with respect to any income or
other tax consequences of transactions involving the FFE Stock Options and the
Unvested MRP Shares.

DESCRIPTION OF SOUTHTRUST CAPITAL STOCK

GENERAL

The authorized capital stock of SouthTrust consists of 200,000,000
shares of common stock, par value $2.50 per share (referred to throughout this
Proxy Statement/Prospectus as "SouthTrust Common Stock"), and 5,000,000 shares
of Preferred Stock, par value $1.00 per share ("SouthTrust Preferred Stock").
As of December 31, 1995, 87,903,683 shares of SouthTrust Common Stock were
issued and outstanding, exclusive of shares held as treasury stock, and no
shares of SouthTrust Preferred Stock were outstanding. As of December 31,
1994, 2,741,834 shares of SouthTrust Common Stock were reserved for employee
benefit plans, and 90,812 shares were reserved for the conversion of
convertible debentures assumed in connection with a 1988 acquisition

50
<PAGE> 55

by SouthTrust. In addition, 500,000 shares of SouthTrust Preferred Stock
designated as Series A Junior Participating Preferred Stock were reserved for
issuance upon the exercise of certain rights described below under "SouthTrust
Common Stock- Stockholder Rights Plan."

Since SouthTrust is a holding company, the right of SouthTrust, and
hence the right of creditors and stockholders of SouthTrust, to participate in
any distribution of assets of any subsidiary (including SouthTrust Bank of
Alabama, National Association) upon its liquidation or reorganization or
otherwise is necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that claims of SouthTrust itself as a creditor
of the subsidiary may be recognized.

The following summary does not purport to be complete and is subject
in all respects to the applicable provisions of the General Corporation Law of
the State of Delaware and SouthTrust's Restated Certificate of Incorporation,
including the Certificate of Designation describing the Series A Junior
Participating Preferred Stock.

SOUTHTRUST COMMON STOCK

Dividend Rights

Holders of SouthTrust Common Stock are entitled to dividends when, as
and if declared by SouthTrust's Board of Directors out of funds legally
available therefor. Under Delaware law, SouthTrust may pay dividends out of
surplus (whether capital surplus or earned surplus) or net profits for the
fiscal year in which declared or for the preceding fiscal year, even if its
surplus accounts are in a deficit position. The sources of funds for payment
of dividends by SouthTrust are its subsidiaries. Because its primary
subsidiaries are banks, payments made by such subsidiaries to SouthTrust are
limited by law and regulations of the bank regulatory authorities. See "MARKET
AND DIVIDEND INFORMATION RESPECTING THE COMMON STOCK OF SOUTHTRUST AND FFE."

Voting Rights and Other Matters

The holders of SouthTrust Common Stock are entitled to one vote per
share on all matters brought before the stockholders. The holders of
SouthTrust Common Stock do not have the right to cumulate their shares of
SouthTrust Common Stock in the election of directors. SouthTrust's Restated
Certificate of Incorporation provides that in the event of a transaction or a
series of transactions with an "Interested Stockholder" (generally defined as a
holder of more than 10% of the voting stock of SouthTrust or an affiliate of
such a holder) pursuant to which SouthTrust would be merged into or with
another corporation or securities of SouthTrust would be issued in a
transaction which would permit control of SouthTrust to pass to another entity,
or similar transactions having the same effect, approval of such transactions
requires the vote of the holders of 70% of the voting power of the outstanding
voting securities of SouthTrust, except in cases in which either certain price
criteria and procedural requirements are satisfied or the transaction is
recommended to the stockholders by a majority of the members of SouthTrust's
Board of Directors who are unaffiliated with the Interested Stockholder and who
were directors before the Interested Stockholder became an Interested
Stockholder.

Holders of SouthTrust Common Stock are not entitled to any preemptive
rights to subscribe for any additional securities which may be issued.

Liquidation Rights

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

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<PAGE> 56

Provisions with Respect to Board of Directors

SouthTrust's Restated Certificate of Incorporation provides that the
members of SouthTrust's Board of Directors are divided into three classes as
nearly equal in number as possible. Each class is elected for a three-year
term. At each annual meeting of stockholders of SouthTrust, one-third of the
members of SouthTrust's Board of Directors will be elected for a three-year
term, and the other directors will remain in office until their three-year
terms expire. Therefore, control of SouthTrust's Board of Directors cannot be
changed in one year, and at least two annual meetings must be held before a
majority of the members of SouthTrust's Board of Directors can be changed.

Special Vote Requirements for Certain Amendments to Restated Certificate of
Incorporation

The General Corporation Law of the State of Delaware and the Restated
Certificate of Incorporation and Bylaws of SouthTrust provide that, because the
Board of Directors of SouthTrust is classified, a director, or SouthTrust's
entire Board of Directors, may be removed by the stockholders only for cause.
The Restated Certificate of Incorporation and Bylaws of SouthTrust also provide
that the affirmative vote of the holders of at least 70% of the voting power of
the outstanding capital stock entitled to vote for the election of directors is
required to remove a director or the entire Board of Directors from office.
Certain portions of the Restated Certificate of Incorporation of SouthTrust
described in certain of the preceding paragraphs, including those related to
business combinations and the classified Board of Directors, may be amended
only by the affirmative vote of the holders of 70% of the voting power of the
outstanding voting stock of SouthTrust.

Possible Effects of Special Provisions

Certain of the provisions contained in the Restated Certificate of
Incorporation and Bylaws of SouthTrust described above have the effect of
making it more difficult to change SouthTrust's Board of Directors, and may
make SouthTrust's Board of Directors less responsive to stockholder control.
These provisions also may tend to discourage attempts by third parties to
acquire SouthTrust because of the additional time and expense involved and a
greater possibility of failure, and, as a result, may adversely affect the
price that a potential purchaser would be willing to pay for the capital stock
of SouthTrust, thereby reducing the amount a stockholder might realize in, for
example, a tender offer for the capital stock of SouthTrust.

Stockholder Rights Plan

On February 22, 1989, the Board of Directors of SouthTrust declared a
dividend to holders of SouthTrust Common Stock of record on March 6, 1989 (the
"SouthTrust Record Date") of one right (a "Right"; collectively, the "Rights")
for, and to be attached to, each share of SouthTrust Common Stock outstanding
on the SouthTrust Record Date. Each Right entitles the holder thereof to
purchase from SouthTrust one one-hundredth of a share of SouthTrust Preferred
Stock designated as the Series A Junior Participating Preferred Stock ("Series
A Preferred Stock") at a purchase price of $75.00 (the "Purchase Price"). Such
resolutions also provide that as long as the Rights are attached to shares of
SouthTrust Common Stock as provided in the Rights Agreement referred to below,
the appropriate number of Rights shall be issued with each share of SouthTrust
Common Stock issued after March 6, 1989. The number of Rights attached to or
to be issued with each share of SouthTrust Common Stock as well as the
redemption price for each such Right, were appropriately decreased as a result
of a three-for-two stock split effected by SouthTrust on January 24, 1992, and
a three-for- two stock split effected by SouthTrust on May 19, 1993.
Accordingly, at the present time four-ninths of a Right is attached to each
share of SouthTrust Common Stock and four-ninths of a Right will be issued with
each share of SouthTrust Common Stock exchanged in the Merger for FFE Common
Stock.

The Rights will expire on February 22, 1999 unless redeemed earlier
and will not be exercisable or transferable separately from the shares of
SouthTrust Common Stock until the close of business on the Distribution Date,
which will occur on the earlier of (i) the tenth day following a public
announcement that a person (an "Acquiring Person") or any associate or
affiliate of an Acquiring Person has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding SouthTrust
Common Stock (the

52
<PAGE> 57

"Stock Acquisition Date"); or (ii) the tenth day following commencement of a
tender or exchange offer which would result in the ownership of 20% or more of
the outstanding SouthTrust Common Stock; or (iii) the tenth day after
SouthTrust's Board of Directors declares, upon a determination by at least a
majority of SouthTrust's Disinterested Directors, that a person, alone or with
affiliates and associates (an "Adverse Person"), has become the beneficial
owner of a substantial amount (not to be less than 10%) of outstanding
SouthTrust Common Stock and that such person's ownership either is intended to
cause SouthTrust to take action adverse to its long-term interests or may cause
a material adverse impact on SouthTrust to the detriment of SouthTrust's
stockholders.

In the event that (i) SouthTrust's Board of Directors determines that
a person is an Adverse Person; (ii) SouthTrust is the surviving corporation in
a merger with an Acquiring Person and SouthTrust's Common Stock remains
outstanding and unchanged and is not exchanged for securities of the Acquiring
Person or other property; (iii) an Acquiring Person receives a financial
benefit or advantage, through certain self-dealing transactions involving
SouthTrust, greater than that received by other stockholders of SouthTrust or
that which would have resulted from arms-length negotiations; (iv) a person
becomes the beneficial owner of 30% or more of the outstanding SouthTrust
Common Stock (except pursuant to a "Fair Offer" as determined by the
Disinterested Directors); or (v) while there is an Acquiring Person, an event
involving SouthTrust or any of its subsidiaries occurs which results in the
Acquiring Person's proportionate ownership interest being increased by more
than 1%, each holder of a Right will have the right to receive, upon payment of
the Purchase Price, in lieu of Series A Preferred Stock, a number of shares of
SouthTrust Common Stock (or, in certain circumstances, cash or other property)
having a value equal to twice the Purchase Price. Rights are not exercisable
following the occurrence of any of the events set forth in this paragraph until
the expiration of the period during which the Rights may be redeemed by
SouthTrust as described below. Notwithstanding the foregoing, after the
occurrence of any of the events set forth in this paragraph, Rights that are
(or, under certain circumstances, Rights that were) beneficially owned by an
Acquiring Person or an Adverse Person will be null and void.

Unless the Rights are redeemed earlier, if, after the Distribution
Date, SouthTrust is acquired in a merger or other business combination in which
SouthTrust is not the surviving corporation or in which SouthTrust Common Stock
is changed into or exchanged for securities of any other person or other
property (other than a merger which follows a Fair Offer) or 50% or more of the
assets or earning power of SouthTrust and its subsidiaries (taken as a whole)
are sold or transferred, the Rights Agreement provides that each holder of
record of a Right will from and after that time have the right to receive, upon
payment of the Purchase Price, that number of shares of common stock of the
acquiring company which has value equal to twice the Purchase Price.

At any time until ten days following the Stock Acquisition Date
(subject to certain provisions requiring action by a majority of the
Disinterested Directors, as defined in the Rights Agreement), SouthTrust may
redeem the Rights in whole, but not in part, at a price of $0.01 per Right.
Prior to the Distribution Date, SouthTrust may, except with respect to the
Purchase Price, redemption price or date of expiration of the Rights, amend the
Rights in any manner. At any time after the Distribution Date, SouthTrust may
amend the Rights in any manner that does not adversely affect the interest of
holders of the Rights as such.

The Rights have certain anti-takeover effects and may adversely affect
a third party's attempt to acquire SouthTrust. The Rights will cause
substantial dilution to a person or group that attempts to acquire SouthTrust.
The Rights should not interfere with any merger or other business combination
approved by SouthTrust's Board of Directors since, among other things, the
Board of Directors may, at its option, under certain circumstances, redeem all
but not less than all of the then outstanding Rights at the redemption price,
as discussed below.

The foregoing description of the Rights and the Series A Preferred
Stock does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement between SouthTrust and Mellon Bank, N.A., as
Rights Agent, and the Certificate of Designation for the Series A Preferred
Stock, copies of each of which are filed as exhibits to the Registration
Statement of which this Proxy Statement/Prospectus forms a part.

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<PAGE> 58

Transfer Agent

The transfer agent for SouthTrust Common Stock is Mellon Securities
Trust Company.

SOUTHTRUST PREFERRED STOCK

General

Under SouthTrust's Restated Certificate of Incorporation, the Board of
Directors is authorized without further stockholder action to provide for the
issuance of up to 5,000,000 shares of SouthTrust Preferred Stock, in one or
more series, by adoption of a resolution or resolutions providing for the
issuance of such series and determining the relative rights and preferences of
the shares of any such series with respect to the rate of dividend, call
provisions, payments on liquidation, sinking fund provisions, conversion
privileges and voting rights and whether the shares shall be cumulative,
non-cumulative or partially cumulative. The holders of SouthTrust Preferred
Stock would not have any preemptive right to subscribe for any shares issued by
SouthTrust. It is not possible to state the actual effect of the authorization
and issuance of SouthTrust Preferred Stock upon the rights of holders of
SouthTrust Common Stock unless and until SouthTrust's Board of Directors
determines the price and specific rights of the holders of a series of
SouthTrust Preferred Stock. Such effects might include, however, (i)
restrictions on dividends on SouthTrust Common Stock if dividends on SouthTrust
Preferred Stock have not been paid; (ii) dilution of the voting power of
SouthTrust Common Stock to the extent that SouthTrust Preferred Stock has
voting rights, or that any SouthTrust Preferred Stock series is convertible
into SouthTrust Common Stock; (iii) dilution of the equity interest of
SouthTrust Common Stock unless the SouthTrust Preferred Stock is redeemed by
SouthTrust; and (iv) SouthTrust Common Stock not being entitled to share in
SouthTrust's assets upon liquidation until satisfaction of any liquidation
preference granted SouthTrust Preferred Stock. While the ability of SouthTrust
to issue SouthTrust Preferred Stock is, in the judgment of SouthTrust's Board
of Directors, desirable in order to provide flexibility in connection with
possible acquisitions and other corporate purposes, its issuance could impede
an attempt by a third party to acquire a majority of the outstanding voting
stock of SouthTrust.

Series A Junior Participating Preferred Stock

In connection with the adoption of the Stockholder Rights Plan
described above, SouthTrust's Board of Directors designated 500,000 shares of
SouthTrust's authorized but unissued SouthTrust Preferred Stock as Series A
Junior Participating Preferred Stock (which has been previously referred to as
the "Series A Preferred Stock"). The terms of the Series A Preferred Stock are
such that one share of Series A Preferred Stock will be approximately
equivalent in terms of dividend and voting rights, before adjustment for the
three-for-two stock split effected on January 24, 1992 and a further
three-for-two stock split effective on May 19, 1993, to 100 shares of
SouthTrust Common Stock. No shares of Series A Preferred Stock have been
issued as of the date of this Proxy Statement/Prospectus.

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<PAGE> 59

PRO FORMA FINANCIAL INFORMATION

The following pro forma combining condensed financial presentation of
SouthTrust was prepared to provide information on the combined financial
statements of SouthTrust and FFE, as well as the previously consummated
acquisitions by SouthTrust of Plant State Bank, CNB Capital Corp., Southern
Bank Group, Inc., First Commercial Financial Corporation and FBC Holding
Company, Inc., and the pending acquisitions of Citizens Bank of Macclenny,
First State Bank of Florida and Bankers' First Corporation. The pro forma
presentation assumes that these transactions had been consummated at September
30, 1995 for purposes of the balance sheet presentation and, for purposes of
the pro forma income statement, at the inception of each income statement
period. The acquisition of Bankers' First Corporation and Citizens Bank of
Macclenny will be accounted for as poolings of interests, with the remaining
transactions being accounted for under the purchase method of accounting. In
connection with the pending acquisition of FFE and First State Bank of Florida,
which transactions will be accounted for under the purchase method of
accounting, management of SouthTrust will review the carrying amounts of assets
and liabilities to be acquired to determine if any adjustment to the carrying
amounts is necessary. Actual purchase accounting adjustments will be
determined at the respective consummation dates of each transaction, and are
not expected to materially change the pro forma financial statements presented
herein. The pro forma effect of SouthTrust's acquisition of various branches
is not presented because the operations of such branches, when acquired by
SouthTrust, will differ substantially from available historical financial
information of such branches.

The unaudited pro forma combining condensed financial presentation is
presented for information purposes only and is not necessarily indicative of
the combined financial position or results of operations which would actually
have occurred if the transactions had been consummated in the past or which may
be obtained in the future and should be read in conjunction with the audited
financial statements incorporated by reference in this Proxy
Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."

See the Selected Pro Forma Information table herein on page {___},
which sets forth, for the year ended December 31, 1994, and the nine-months
ended September 30, 1995, certain unaudited pro-forma combined financial
information for SouthTrust and FFE giving effect to the Merger.

<PAGE> 60

SOUTHTRUST CORPORATION
PRO FORMA COMBINING CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1995
(IN THOUSANDS)

<TABLE>
<CAPTION>
Pro Forma
SouthTrust Purchase and Combined
Corporation Pre-Acquisition SouthTrust Other Pro Forma Pro Forma
Consolidated FFE Adjustments and FFE Acquisitions Adjustments Combined
------------ -------- ----------- ------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks . . . . $ 747,390 $ 1,769 $(5,119)(1) $ 744,040 $ 32,806 $(12,516)(2) $ 764,330
Short-term investments . . . . 242,904 3,140 0 246,044 16,966 0 263,010
Securities available for sale . 2,023,635 12,318 0 2,035,953 80,790 0 2,116,743
Investment securities . . . . . 2,036,057 19,358 0 2,055,415 70,398 0 2,125,813
Loans, net of unearned income . 14,077,496 98,467 0 14,175,963 1,009,307 0 15,185,270
Less:
Allowance for loan losses 194,962 818 0 195,780 2,012 0 197,792
----------- -------- ------- ----------- ---------- -------- -----------
Net loans . . . . . . . . 13,882,534 97,649 0 13,980,183 1,007,295 0 14,987,478
Other assets . . . . . . . . . 1,088,243 6,457 4,088(3) 1,098,788 54,018 6,528(3) 1,159,334
----------- -------- ------- ---------- -------- -----------
Total assets . . . . . . . $20,020,763 $140,691 $(1,031) $20,160,423 $1,262,273 $( 5,988) $21,416,708
=========== ======== ======= =========== ========== ======== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Interest bearing . . . . . . $11,908,785 $117,283 $ 0 $12,026,068 $ 921,839 $ 0 $12,947,907
Other . . . . . . . . . . . . 2,100,759 3,288 0 2,104,047 26,565 0 2,130,612
----------- -------- ------- ----------- ---------- -------- -----------
Total deposits . . . . . . . . 14,009,544 120,571 0 14,130,115 948,404 0 15,078,519
Federal funds purchased and
securities sold under
agreements to repurchase . . 2,661,899 0 0 2,661,899 15,612 0 2,677,511
Other borrowings . . . . . . . 751,595 9,000 0 760,595 0 0 760,595
Other liabilities . . . . . . . 319,189 2,488 0 321,677 13,535 0 335,212
Long-term debt . . . . . . . . 891,281 0 0 891,281 168,855 0 1,060,136
----------- -------- ------- ----------- ---------- -------- -----------
Total liabilities . . . . . 18,633,508 132,059 0 18,765,567 1,146,406 0 19,911,973

Stockholders' equity:
Common stock . . . . . . . . 220,289 5 759(1) 221,053 3,642 12,361(4) 237,056
Capital surplus . . . . . . 337,358 3,685 3,325(1) 344,368 61,468 (16,341)(4) 389,495
Retained earnings . . . . . . 849,031 5,115 (5,115)(1) 849,031 50,034 (2,008)(4) 897,057
Unrealized loss on securities
available for sale . . . . (13,267) (108) 0 (13,375) 723 0 (12,652)
Unearned Compensation . . . . 0 (65) 0 (65) 0 0 (65)
Treasury stock . . . . . . . (6,156) 0 0 (6,156) 0 0 (6,156)
----------- -------- ------- ----------- ---------- -------- -----------
Total stockholders' equity . . 1,387,255 8,632 (1,031) 1,394,856 115,867 (5,988) 1,504,735
----------- -------- ------- ----------- ---------- -------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY . . . $20,020,763 $140,691 $(1,031) $20,160,423 $1,262,273 $(5,988) $21,416,708
=========== ======== ======= =========== ========== ======== ===========
</TABLE>

See Notes to Pro Forma Combining Condensed Financial Statements.

56
<PAGE> 61

SOUTHTRUST CORPORATION
PRO FORMA COMBINING CONDENSED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(IN THOUSANDS)

INTEREST EXPENSE
Interest on deposits . . . . . 413,680 4,044 0 417,724 35,050 0 452,774
Interest on borrowings . . . . 165,189 571 0 165,760 10,963 0 176,723
--------- ------- ------ --------- -------- ------- ---------
Total interest expense . . . 578,869 4,615 0 583,484 46,013 0 629,497
--------- ------- ------ --------- -------- ------- ---------
Net interest income . . . . . 505,966 2,826 (325) 508,467 41,255 (1,052) 548,670
Provision for loan losses . . . 39,489 50 0 39,539 2,338 0 41,877
--------- ------- ------ --------- -------- ------- ---------
Net interest income after
provision for loan losses . 466,477 2,776 (325) 468,928 38,917 (1,052) 506,793
Non-interest income
Service charges on deposit
accounts . . . . . . . . . 68,595 273 0 68,868 5,600 0 74,468
Mortgage origination and
servicing fees . . . . . . 22,902 0 0 22,902 1,051 0 23,953
Other . . . . . . . . . . . 60,233 394 0 60,627 2,134 0 62,761
--------- ------- ------ --------- -------- ------- ---------
Total . . . . . . . . . . 151,730 667 0 152,397 8,785 0 161,182
Non-interest expense
Salaries and employee
benefits . . . . . . . . . 209,105 1,081 0 210,186 14,146 0 224,332
Net occupancy and
equipment expenses . . . . 32,047 533 0 32,580 5,614 0 38,194
Other . . . . . . . . . . . 155,357 783 153(6) 156,293 11,330 243(6) 167,866
--------- ------- ------ --------- -------- ------- ---------
Total . . . . . . . . . . 396,509 2,397 153 399,059 31,090 243 430,392
--------- ------- ------ --------- -------- ------- ---------
Income before income taxes . 221,698 1,049 (478) 222,268 16,612 (1,295) 237,583
Income tax expense . . . . . . 76,282 404 (114)(7) 76,572 6,128 (368)(7) 82,332
--------- ------- ------ --------- -------- ------- ---------
Net income . . . . . . . . $ 145,416 $ 645 $ (364) $ 145,694 $ 10,484 $ (927) $ 155,251
========= ======= ====== ========= ======== ====== =========
Earnings per share . . . . $ 1.75 $ 1.75 $ 1.71
Average common shares . . 83,075 83,304 90,638
</TABLE>

57
<PAGE> 62

SOUTHTRUST CORPORATION
PRO FORMA COMBINING CONDENSED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS)

<TABLE>
<CAPTION>
SouthTrust Pro Forma
Corporation Pro Forma SouthTrust Other Pro Forma Pro Forma
Consolidated FFE Adjustments and FFE Acquisitions Adjustments Combined
------------ ------ ----------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans . . . $ 868,461 $6,799 $ 0 $ 875,260 $90,061 $ 0 $ 965,321
Interest on securities . . . 229,568 1,500 (390)(5) 230,678 14,909 (1,262)(5) 244,325
Interest on short-term
investments . . . . . . . . . . 10,583 161 0 10,744 1,955 0 12,699
--------- ------ ----- --------- ------- ------- ---------
Total interest income . . . . 1,108,612 8,460 (390) 1,116,682 106,925 (1,262) 1,222,345
INTEREST EXPENSE
Interest on deposits . . . . . . 377,643 4,302 0 381,945 38,656 0 420,601
Interest on borrowings . . . . . 123,424 117 0 123,541 12,246 0 135,787
--------- ------ ----- --------- ------- ------- ---------
Total interest expense . . . 501,067 4,419 0 505,486 50,902 0 556,388
--------- ------ ----- --------- ------- ------- ---------
Net interest income . . . . 607,545 4,041 (390) 611,196 56,023 (1,262) 665,957
Provision for loan losses . . . . 44,984 367 0 45,351 2,569 0 47,920
--------- ------ ----- --------- ------- ------- ---------
Net interest income after . . .
provision for loan losses . . 562,561 3,674 (390) 565,845 53,454 (1,262) 618,037

NON-INTEREST INCOME
Service charges on deposit
accounts . . . . . . . . . . . 86,304 394 0 86,698 7,405 0 94,103
Mortgage origination and
service fees 27,760 0 0 27,760 1,284 0 29,044
Other . . . . . . . . . . . . . . 70,714 433 0 71,147 4,360 0 75,507
--------- ------ ----- --------- ------- ------- ---------
Total . . . . . . . . . . . . 184,778 827 0 185,605 13,049 0 198,654

NON-INTEREST EXPENSE
Salaries and employee benefits . 257,637 1,459 0 259,096 19,226 0 278,322
Net occupancy and equipment
expenses . . . . . . . . . . . 68,172 721 0 68,893 7,492 0 76,385
Other . . . . . . . . . . . . . 160,190 1,613 204(6) 162,007 16,831 401(6) 179,239
--------- ------ ----- --------- ------- ------- ---------
Total . . . . . . . . . . . . . 485,999 3,793 204 489,996 43,549 401 533,946
--------- ------ ----- --------- ------- ------- ---------
Income before income taxes . . 261,340 708 (594) 261,454 22,954 (1,663) 282,745
Income tax expense . . . . . . . 88,338 345 (137)(7) 88,546 7,826 (442)(7) $ 95,930
--------- ------ ----- --------- ------- ------- ---------
Net income . . . . . . . . . . . $ 173,002 $ 363 $(457) $ 172,908 $15,128 $(1,221) $ 186,815
========= ====== ===== ========= ======= ======== =========
Earnings per share . . . . . . . $ 2.15 $ 2.14 $ 2.09
Average common shares . . . . . . 80,628 80,934 89,493
</TABLE>

58
<PAGE> 63

NOTES TO PRO FORMA COMBINING CONDENSED FINANCIAL STATEMENTS

Note: The results of operations for SouthTrust for the nine months ended
September 30, 1995 include a charge to earnings of approximately $6.5
million $(4.0 million after tax) related to the accrual of the
proposed assessment on Savings Association Insurance Fund ("SAIF")
insured deposits. Since legislation had not been enacted to levy such
a charge, SouthTrust reversed the earlier accrual in the fourth
quarter of 1995.

(1) Reflects the purchase price of FFE which includes 305,721 shares of
SouthTrust Common Stock issued at an exchange ratio of 0.645 shares of
SouthTrust Common Stock for each share of FFE Common Stock and cash of
$10.80 per share for each of the 473,986 outstanding shares of FFE,
net of eliminated equity of FFE.

(2) Reflects the cash purchase price of First State Bank of Florida.

(3) Goodwill resulting from purchase acquisitions.

(4) Reflects the issuance of 785,000 shares of SouthTrust Common Stock for
the outstanding shares of Citizens Bank of Macclenny, 5,350,318 shares
of SouthTrust Common Stock for the outstanding shares of Bankers First
Corporation, and 265,719 shares of SouthTrust Common Stock for the
outstanding shares of Lake State Bank in transactions accounted for as
poolings-of-interests. Amounts do not reflect the conversion of
478,588 Bankers First Corporation options which will be converted into
SouthTrust options at a conversion ratio of 1.126 to 1, or the
proceeds from the exercise of such options.

(5) To reflect the loss on earning assets for the cash portion of the
purchase price on FFE and First State Bank of Florida at the weighted
average yield on earning assets of 7.62% in 1994 and 8.49% for the
nine months ended September 30, 1995.

(6) To reflect the amortization of goodwill resulting from purchase
acquisitions over a 20 year life on a straight-line basis.

(7) Tax benefit resulting from (5) above.

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<PAGE> 64

MARKET AND DIVIDEND INFORMATION RESPECTING THE
COMMON STOCK OF SOUTHTRUST AND FFE

COMPARATIVE STOCK PRICES PER SHARE

The following table sets forth certain information as to the high and
low last sales price per share of SouthTrust Common Stock and FFE Common Stock
for the calendar quarters indicated. The information listed below with respect
to the high and low last sales prices was obtained from Nasdaq, and reflects
interdealer prices, without retail markup, markdown or commissions, and may not
represent actual transactions.

<TABLE>
<CAPTION>
SouthTrust FFE
Common Stock Common Stock
--------------------- ---------------------
High Low High Low
-------- -------- --------- --------
<S> <C> <C> <C> <C>
1994:
First Calendar Quarter . . . . . . . . $ 19 5/8 $ 17 7/8 $ 11 $ 10 3/4
Second Calendar Quarter . . . . . . . 22 1/8 18 1/8 13 1/4 12 3/4
Third Calendar Quarter . . . . . . . . 21 7/8 19 5/8 13 3/4 13 1/4
Fourth Calendar Quarter . . . . . . . 20 1/4 17 14 1/4 12 1/2

1995:
First Calendar Quarter . . . . . . . . $ 21 3/8 $ 18 3/8 15 13
Second Calendar Quarter . . . . . . . 23 1/8 20 7/8 16 1/4 14 1/4
Third Calendar Quarter . . . . . . . . 27 1/8 23 9/16 19 1/2 16 7/8
Fourth Calendar Quarter . . . . . . . 25 7/8 24 1/2 [__] [__]

1996:
First Calendar Quarter
(through ________, 1996) . . . . . [--] [--] [--] [--]
</TABLE>

On November 2, 1995 and November 4, 1995 (the trading days immediately
before and after the public announcement of the proposed Merger), the last
sales prices of SouthTrust Common Stock, as obtained from Nasdaq, were $24.875
and $______, respectively, and the last sales prices of FFE Common Stock, as
obtained from Nasdaq, were $19 and $18, respectively; and on ________, 1996,
the last sales price of SouthTrust Common Stock as obtained from Nasdaq was
$______, and the last sales price of FFE Common Stock on _________, 1996, as
obtained from Nasdaq, was $_______.

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<PAGE> 65

DIVIDENDS

The following table sets forth the respective cash dividends per share
declared on SouthTrust Common Stock and FFE Common Stock during the periods
indicated:

<TABLE>
<CAPTION>
Dividends Declared Dividends Declared
per share of per share of
SouthTrust Common Stock FFE Common Stock
----------------------- ----------------
<S> <C> <C>
1994:
First Calendar Quarter . . . . . . . . . $0.17 $ 0
Second Calendar Quarter . . . . . . . . . 0.17 0
Third Calendar Quarter . . . . . . . . . 0.17 0
Fourth Calendar Quarter . . . . . . . . . 0.17 0

1995:
First Calendar Quarter . . . . . . . . . $0.20 0
Second Calendar Quarter . . . . . . . . . 0.20 0
Third Calendar Quarter . . . . . . . . . 0.20 0
Fourth Calendar Quarter . . . . . . . . . 0.20 0

1996:
First Calendar Quarter . . . . . . . . . $0.22 0
</TABLE>

Dividends paid by SouthTrust on the SouthTrust Common Stock are at the
discretion of SouthTrust's Board of Directors and depend upon the restrictions
on the payment of dividends by banks as described below, SouthTrust's earnings
and financial condition and other relevant factors. SouthTrust has increased
the dividend paid on its Common Stock for 26 consecutive years. The current
policy of SouthTrust is to pay dividends on a quarterly basis. Subject to an
evaluation of its earnings and financial condition and other factors, including
the restrictions on the payment of dividends by banks described below,
SouthTrust anticipates that it will continue to pay regular quarterly dividends
with respect to the SouthTrust Common Stock.

There are certain limitations on the payment of dividends to
SouthTrust by its subsidiary banks. The amount of dividends that each
subsidiary national bank of SouthTrust may declare in one year, without
approval of the OCC, is the sum of the bank's net profits for that year and its
retained net profits for the preceding two years. Under the rules of the OCC,
the calculation of net profits is more restrictive under certain circumstances.
The banking authorities in the states where SouthTrust owns state-chartered
banks also regulate the payment of dividends by banks organized in such states.
Under the Alabama Banking Code, a state bank may not declare or pay a dividend
in excess of 90% of the net earnings of such bank until the surplus of the bank
is equal to at least 20% of its capital, and thereafter the prior written
approval of the Superintendent of Banks is required if the total of all
dividends declared by the bank in any calendar year exceeds the total of its
net earnings for that year combined with its retained net earnings for the
preceding two years. No dividends, withdrawals or transfers may be made from
the bank's surplus without prior written approval of the Superintendent of
Banks.

Under the Florida Banking Code, a state bank may not declare or pay a
dividend in excess of 80% of the net earnings of such bank until the surplus is
equal to the amount of common stock. If the amount of the surplus is equal to
the amount of common stock, the bank may pay out an amount equal to the current
year plus the prior two years undistributed earnings.

Under the North Carolina Banking Code, a state chartered bank with
common stock in excess of $15,000 may not declare a dividend until the surplus
is equal to at least 50% of the amount of common stock.

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<PAGE> 66

The South Carolina Banking Code provides that, before a state
chartered bank can pay a dividend, approval must be obtained from the South
Carolina Commissioner of Banking.

Under the Tennessee Banking Code, a state bank may not declare
dividends in excess of 90% of the net earnings during the past year until the
surplus is equal to the amount of common stock.

Under Title 81 of the Mississippi Code of 1972 (the "Mississippi
Banking Code"), no state bank may declare or pay any dividend upon its common
stock unless it has received the written approval of the Commissioner of
Banking and Consumer Finance.

Under the foregoing laws and regulations, at September 30, 1995,
approximately $290.5 million was available for payment of dividends to
SouthTrust by its bank subsidiaries.

Dividends paid by FFE on the FFE Common Stock are at the discretion of
FFE's Board of Directors and are dependent on the restrictions on the payment
of dividends by corporations chartered in Delaware as described in "COMPARISON
OF THE COMMON STOCK OF SOUTHTRUST AND FFE -- Dividends" below, the restrictions
on the payment of dividends by federal savings banks described below, and FFE's
earnings and financial condition and other relevant factors. Under OTS
regulations, a savings association that is well capitalized is permitted to
declare dividends of up to the greater of (i) the sum of 100% of its current
net income plus one-half of its capital in excess of the minimum regulatory
requirements or (ii) 75% of its net income during the most recent four-quarter
period. FFE currently does not have a policy of paying cash dividends on its
common stock.

COMPARISON OF THE COMMON STOCK
OF
SOUTHTRUST AND FFE

The rights of FFE stockholders are governed by the Certificate of
Incorporation of FFE, the bylaws of FFE and the laws of the State of Delaware.
The rights of SouthTrust stockholders are governed by the Restated Certificate
of Incorporation of SouthTrust, the bylaws of SouthTrust and the laws of the
State of Delaware. After the Merger becomes effective, the rights of FFE
stockholders who become SouthTrust stockholders will continue to be governed by
the laws of the State of Delaware, but will be governed by SouthTrust's
Restated Certificate of Incorporation and bylaws. The following summary of the
rights of the holders of SouthTrust Common Stock and the holders of FFE Common
Stock is qualified in its entirety by reference to the Restated Certificate of
Incorporation of SouthTrust and the Certificate of Incorporation of FFE, the
bylaws of SouthTrust and FFE, and the General Corporation Law of the State of
Delaware.

DIVIDEND RIGHTS

The sources of funds for payments of dividends by SouthTrust and FFE
are their subsidiaries. Because their primary subsidiaries are financial
institutions, payments made by such subsidiaries to SouthTrust and FFE are
limited by law and regulations of the bank and thrift regulatory authorities.
See "DESCRIPTION OF SOUTHTRUST CAPITAL STOCK--SouthTrust Common--Dividends"
and "MARKET AND DIVIDEND INFORMATION RESPECTING THE COMMON STOCK OF SOUTHTRUST
AND FFE" for information concerning the effect of such limitations on
SouthTrust's ability to pay dividends. Delaware law provides that, subject to
any restrictions in the corporation's certificate of incorporation, dividends
may be declared from the corporation's surplus or, if there is no surplus, from
its net profits for the fiscal year in which the dividend is declared and the
preceding fiscal year. Dividends may not be declared, however, if the
corporation's capital has been diminished to an amount less than the aggregate
amount of all capital represented by the issued and outstanding stock of all
classes having a preference upon the distribution of assets.

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<PAGE> 67

VOTING RIGHTS AND OTHER MATTERS

The holders of shares of FFE Common Stock and the holders of shares of
SouthTrust Common Stock are each entitled to one vote per share on all matters
brought before the shareholders. Neither the holders of shares of FFE Common
Stock nor the holders of shares of SouthTrust Common Stock have the right to
cumulate their votes in the election of directors. The absence of cumulative
voting reduces the likelihood that the holders of a minority interest in a
corporation will be able to obtain representation of the board of directors of
that corporation.

The Restated Certificate of Incorporation of SouthTrust provides that
in the event of a transaction or a series of transactions with an Interested
Stockholder (generally defined as a holder of more than 10% of the voting stock
of SouthTrust or an affiliate of such a holder) pursuant to which SouthTrust
would be merged into or with another corporation or securities of SouthTrust
would be issued in a transaction which would permit control of SouthTrust to
pass to another entity, or similar transactions having the same effect,
approval of such transaction requires the vote of the holders of 70% of the
outstanding voting securities of SouthTrust, except in cases in which either
certain price criteria and procedural requirements are satisfied or the
transaction is recommended to the shareholders by a majority of the members of
the Board of Directors of SouthTrust who are unaffiliated with the Interested
Stockholder and who were directors before the Interested Stockholder became an
Interested Stockholder. The Certificate of Incorporation of FFE provides that
the affirmative vote of the holders of (i) two-thirds of the outstanding shares
of FFE Common Stock entitled to vote, and (ii) a majority of outstanding shares
not held by a "Related Person" (defined as a person or entity that beneficially
owns 10% or more of the outstanding shares of FFE Common Stock) are required to
approve certain specified significant corporate transactions between FFE and
the Related Person, including, among other things, a merger or sale of 25% or
more of total assets. The Certificate of Incorporation of FFE also provides
that in evaluating a transaction described above, in determining what is in the
best interests of FFE and its stockholders, FFE's Board of Directors may
consider all factors it deems relevant, including the social and economic
effects of the transaction on FFE and its employees and customers, the business
and financial condition and earnings prospects of the acquiring person, and the
competence, experience and integrity of the acquiror and its management.

SouthTrust and FFE are subject to Section 203 of the Delaware General
Corporation Law. That section generally provides that a corporation may not
engage in a business combination, except with extraordinary corporate approval,
with any person deemed to be an "interested stockholder" for a period of three
years following the date that the stockholder became an interested stockholder.
An "interested stockholder" is defined as any person who directly or indirectly
owns 15% or more of the outstanding voting stock of the corporation within the
three-year period beginning immediately prior to the date on which such
determination is made. The extraordinary corporate approval must consist of
board approval prior to the time the person became an interested stockholder or
approval of the transaction by the board of directors and at least two-thirds
of the outstanding voting stock which is not owned by the interested
stockholder; in the absence of such approval, the interested stockholder must
own at least 85% of the voting stock of the corporation.

The effect of the business combination and affiliated transactions
provisions, respectively, is to make more difficult the acquisition of a
majority control of a corporation or the use of its assets to finance such
acquisition.

The bylaws of SouthTrust and the bylaws of FFE each provide that the
members of the board of directors are to be divided into three (3) classes as
nearly equal as possible. Each such class is elected for a three-year term.
At each annual meeting of stockholders, one-third of the members of the board
of directors will be elected for a three-year term, and the other directors
will remain in office. Therefore, control of the board of directors cannot be
changed in one (1) year, and at least two (2) annual meetings must be held
before a majority of the members of the board of directors can be changed. But
for this provision in the bylaws, all directors of SouthTrust and FFE would
stand for election at each of their respective annual meetings.

Delaware General Corporation Law provides (unless otherwise provided
in a corporation's charter or bylaws), that a director, or the entire Board of
Directors, may be removed by the shareholders with or without cause by vote of
the holders of a majority of the shares of capital stock of the corporation
then entitled to vote

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<PAGE> 68

on the election of directors. The Restated Certificate of Incorporation and
bylaws of SouthTrust, however, provide that the affirmative vote of the holders
of at least 70% of the voting power of the outstanding capital stock entitled
to vote for the election of directors is required to remove a director or the
entire Board of Directors from the office and such removal may be effected only
for cause. The vacancy created by any such removal shall then be filled by
majority vote of the directors then in office and the successor director so
elected shall fill the unexpired term of the director removed from office. The
Certificate of Incorporation of FFE provides that directors may be removed only
for "cause" and only by the affirmative vote of the holders of a majority of
the outstanding shares of capital stock of FFE entitled to vote generally in
the election of directors.

The bylaws of SouthTrust also provide that vacancies on the Board of
Directors, caused by the death or resignation of a director or the creation of
a new directorship, may be filled by the remaining directors. A person
selected by the remaining directors to fill a vacancy will serve until the
annual meeting of stockholders at which the term of the class of directors to
which such director has been appointed expires. Therefore, if a director who
was recently elected to a three-year term resigns, the remaining directors will
be able to select a person to serve the remainder of that three-year term, and
such person will not be required to stand for election until the third annual
meeting of stockholders after such director's appointment. The bylaws of FFE
provide that vacancies created by newly created directorships or resulting from
death, resignation, retirement, disqualification, removal from office or other
cause may be filled only by a majority vote of the directors then in office,
though less than a quorum. Directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of office of
the class to which they have been elected expires, and until such director's
successor shall have been duly elected and qualified.

Under the Delaware General Corporation Law (unless otherwise provided
in a corporation's charter), any action required or permitted to be taken by
the stockholders of a corporation may be taken without a meeting and without a
stockholder vote if a written consent is signed by the holders of the shares of
outstanding stock having the requisite number of votes that would be necessary
to authorize such action at a meeting of stockholders at which all shares
entitled to vote thereon were present and voted. Under the Restated
Certificate of Incorporation of SouthTrust, action by written consent of the
stockholders is prohibited. Further, under the Restated Certificate of
Incorporation and Bylaws of SouthTrust, the stockholders are not permitted to
call a special meeting of stockholders or to require that the Board of
Directors call such a meeting. The bylaws of FFE also require that any action
required or permitted to be taken by the stockholders of FFE must be effected
at a duly called annual or special meeting of stockholders and may not be
effected by any consent in writing by such stockholders.

Certain portions of the Restated Certificate of Incorporation of
SouthTrust described in certain of the proceeding paragraphs, including those
related to business combinations and the classified Board of Directors, may be
amended only by the affirmative vote of the holders of 70% of the outstanding
voting stock of SouthTrust. FFE's Certificate of Incorporation generally may
be amended as prescribed by law. However, certain provisions of the
Certificate of Incorporation of FFE relating to calling special meetings,
limitations on voting shares held in excess of 10% of the then outstanding
shares of FFE Common Stock, stockholders consenting in writing, nominations for
directors submitted by stockholders, the classification of its board of
directors, removal of directors, evaluation and approval of certain business
combinations, approval of transactions with Interested Persons, indemnification
of directors, limitations on the liability of directors and the amendment of
the Certificate of Incorporation and bylaws of FFE may not be amended or
rescinded unless the same is approved by the affirmative vote of the holders of
not less than 80% of the outstanding shares of FFE capital stock entitled to
vote generally in the election of directors.

The provisions contained in the Restated Certificate of Incorporation
of SouthTrust described above have the effect of making it more difficult to
change the Board of Directors, and may make the Board of Directors less
responsive to shareholder control. Those provisions also may tend to
discourage attempts by third parties to acquire SouthTrust because of the
additional time and expense involved and a greater possibility of failure.
This also can affect the price that a potential purchaser would be willing to
pay for the stock of SouthTrust, thereby reducing the amount a stockholder
might realize in, for example, a tender offer for the stock of SouthTrust.

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<PAGE> 69

DISSENT AND APPRAISAL RIGHTS

Section 262 of the DGCL provides that there is no right to dissent if,
at the record date, the shares of the corporation were listed on a national
securities exchange, designated as a national market system security on Nasdaq
or held by more than 2,000 shareholders. Since the shares of SouthTrust Common
Stock are listed on Nasdaq and held by more than 2,000 stockholders of record,
holders of SouthTrust Common Stock are not entitled to dissent or appraisal
rights. Prior to the Merger, holders of the FFE Common Stock were entitled to
dissent or appraisal rights pursuant to Section 262 of the DGCL. See "THE
MERGER - Rights of Dissent and Appraisal."

RIGHTS ON LIQUIDATION

In the event of liquidation, the holders of SouthTrust Common Stock
and the holders of FFE Common Stock will be entitled to receive pro rata any
assets distributable to stockholders with respect to the shares held by them,
after payment of indebtedness and such preferential amounts as may be required
to be paid to the holders of any preferred stock presently outstanding or
hereafter issued by either corporation.

PREEMPTIVE RIGHTS

The holders of SouthTrust Common Stock and FFE Common Stock do not
have any preemptive rights to purchase additional shares of any class of
securities, including common stock, of SouthTrust or FFE, respectively, which
may hereafter be issued.

REPORTS TO STOCKHOLDERS

The SouthTrust Common Stock is registered under the Exchange Act, and,
therefore, SouthTrust is required to provide annual reports containing audited
financial statements to stockholders and to file other reports with the
Commission and solicit proxies in accordance with the rules of the Commission.
SouthTrust also provides reports to its stockholders on an interim basis
containing unaudited financial information.

The FFE Common Stock is registered under the Exchange Act, and,
therefore, FFE is required to provide annual reports containing audited
financial statements to stockholders, file other reports with the Commission
and solicit proxies in accordance with the rules of the Commission. FFE also
provides reports to its stockholders on an interim basis containing unaudited
financial information.

STOCKHOLDERS' RIGHTS PLAN

As described above under the caption "DESCRIPTION OF SOUTHTRUST
CAPITAL STOCK - SouthTrust Common Stock - Stockholder's Rights Plan," presently
attached to each share of SouthTrust Common Stock is two-thirds of a Right
issued pursuant to the Rights Agreement described under such caption. Each
Right entitles the holder thereof to purchase from SouthTrust 1/100th of a
share of the Series A Preferred Stock at the Purchase Price.

SUPERVISION AND REGULATION

HOLDING COMPANY REGULATION

SouthTrust is a bank holding company within the meaning of the Bank
Holding Company Act, and is registered with the Federal Reserve Board.
SouthTrust's banking subsidiaries are subject to restrictions under federal law
which limit the transfer of funds by the subsidiary banks to SouthTrust and its
nonbanking subsidiaries, whether in the form of loans, extensions of credit,
investments or asset purchases. Such transfers by any subsidiary bank to
SouthTrust or any non-banking subsidiary are limited in amount to 10% of the
subsidiary bank's capital and surplus and, with respect to SouthTrust and all
such nonbanking subsidiaries, to an aggregate of 20% of such bank's capital and
surplus. Furthermore, such loans and extensions of credit are required to be
secured in specified amounts. The Bank Holding Company Act also prohibits,
subject to certain

65
<PAGE> 70

exceptions, a bank holding company from engaging in or acquiring direct or
indirect control of more than 5% of the voting stock of any company engaged in
non-banking activities. An exception to this prohibition is for activities
expressly found by the Federal Reserve Board to be so closely related to
banking or managing or controlling banks as to be a proper incident thereto.

As a bank holding company, SouthTrust is required to file with the
Federal Reserve Board semi-annual reports and such additional information as
the Federal Reserve Board may require. The Federal Reserve Board may also make
examinations of SouthTrust and each of its subsidiaries.

According to Federal Reserve Board policy, bank holding companies are
expected to act as a source of financial strength to each subsidiary bank and
to commit resources to support each such subsidiary. This support may be
required at times when a bank holding company may not be able to provide such
support. Furthermore, in the event of a loss suffered or anticipated by the
FDIC -- either as a result of default of a banking or thrift subsidiary of
SouthTrust or related to FDIC assistance provided to a subsidiary in danger of
default -- the other banking subsidiaries of SouthTrust may be assessed for the
FDIC's loss, subject to certain exceptions.

Various federal and state statutory provisions limit the amount of
dividends the subsidiary banks can pay to SouthTrust without regulatory
approval. The approval of the OCC is required for any dividend by a national
bank to its holding company if the total of all dividends declared by the bank
in any calendar year would exceed the total of its net profits, as defined by
the OCC, for that year combined with its retained net profits for the preceding
two years less any required transfers to surplus or a fund for the retirement
of any preferred stock. Comparable prohibitions on the declaration of
dividends are imposed by the Alabama Banking Code, the Florida Banking Code,
the North Carolina Banking Code, the South Carolina Banking Code, the Tennessee
Banking Code, and the Mississippi Banking Code. In addition, a national bank
may not pay a dividend in an amount greater than its net profits then on hand
after deducting its loan losses and bad debts. For this purpose, bad debts are
defined to include, generally, the principal amount of loans which are in
arrears with respect to interest by six months or more or are past due as to
payment of principal (in each case to the extent that such debts are in excess
of the reserve for possible credit losses). Under the foregoing laws and
regulations, at December 31, 1995, approximately $_____ million was available
for payment of dividends to SouthTrust by its bank subsidiaries. The payment
of dividends by any subsidiary bank may also be affected by other factors, such
as the maintenance of adequate capital for such subsidiary bank. In addition
to the foregoing restrictions, the Federal Reserve Board has the power to
prohibit dividends by bank holding companies if their actions constitute unsafe
or unsound practices. The Federal Reserve Board has issued a policy statement
on the payment of cash dividends by bank holding companies, which expresses the
Federal Reserve Board's view that a bank holding company experiencing earnings
weaknesses should not pay cash dividends that exceed its net income or that
could only be funded in ways that weaken the bank holding company's financial
health, such as by borrowing. Furthermore, the OCC also has authority to
prohibit the payment of dividends by a national bank when it determines such
payment to be an unsafe and unsound banking practice.

FFE is a unitary savings bank holding company subject to regulatory
oversight by the OTS. As such, FFE is required to register and file reports
with the OTS and is subject to regulation and examination by the OTS. In
addition, the OTS has enforcement authority over FFE and any non-savings
association subsidiary, which also permits the OTS to restrict or prohibit
activities that are determined to be a serious risk to the subsidiary savings
association. As a unitary savings bank holding company, the Company generally
is not subject to activity restrictions.

FFE must obtain approval from the OTS before acquiring control of any
other SAIF-insured association. Such acquisitions are generally prohibited if
they result in a multiple savings and loan holding company controlling savings
associations in more than one state. However, such interstate acquisitions are
permitted based on specific state authorization or in a supervisory acquisition
of a failing savings association.

OTS regulations also impose various restrictions or requirements on
the ability of savings associations such as the Bank to pay dividends or make
other distributions of capital to its holding company. OTS regulations
prohibit an association from declaring or paying any dividends or from
repurchasing any of its stock

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<PAGE> 71

if, as a result, the regulatory capital of the association would be reduced
below the amount required to be maintained for the liquidation account
established in connection with its mutual to stock conversion.

The OTS utilizes a three-tiered approach to permit associations, based
on their capital level and supervisory condition, to make capital distributions
which include dividends, stock redemptions or repurchases, cash-out mergers and
other transactions charged to the capital account. Generally, Tier 1
associations, which are associations that before and after the proposed
distribution meet their fully phased-in capital requirements, may make capital
distributions during any calendar year equal to the greater of 100% of net
income for the year-to-date plus 50% of the amount by which the lesser of the
Bank's tangible, core or risk-based capital exceeds its fully phased-in capital
requirement for such capital component, as measured at the beginning of the
calendar year, or the amount authorized for a Tier 2 association. However, a
Tier 1 association deemed to be in need of more than normal supervision by the
OTS may be downgraded to a Tier 2 or Tier 3 association as a result of such a
determination. The Bank meets the requirements for a Tier 1 association and
has not been notified of a need for more than normal supervision. Tier 2
associations, which are associations that before and after the proposed
distribution meet their current minimum capital requirements, may make capital
distributions of up to 75% of net income over the most recent four quarter
period. Tier 3 associations (which are associations that do not meet current
minimum capital requirements) that propose to make any capital distribution and
Tier 2 associations that propose to make a capital distribution in excess of
the noted safe harbor level must obtain OTS approval prior to making such
distribution. Tier 2 associations proposing to make a capital distribution
within the safe harbor provisions and Tier 1 associations proposing to make any
capital distribution need only submit written notice to the OTS 30 days prior
to such distribution. As a subsidiary of FFE, the Bank is also required to
give the OTS 30 days' notice prior to declaring any dividend on its stock. The
OTS may object to the distribution during that 30-day period based on safety
and soundness concerns.

The OTS has proposed regulations that would revise the current capital
distribution restrictions. The proposal eliminates the current tiered
structure and the safe-harbor percentage limitations. No assurance may be
given as to whether or in what form the regulations may be adopted. The
proposed regulation, in its current form, is not expected to have a significant
impact on the Bank's nor FFE's operations.

The OTS also has extensive authority over the operations of savings
associations, including the Bank. As part of this authority, the Bank is
required to file periodic reports with the OTS and is subject to periodic
examinations by the OTS and the FDIC. The last regular OTS examination of the
Bank was as of June 30, 1995. The Bank has not been examined by the FDIC since
1992. The OTS, as well as the other federal banking agencies, has adopted
guidelines establishing safety and soundness standards on such matters as loan
underwriting and documentation, internal controls and audit systems, interest
rate risk exposure and compensation and other employee benefits. Any
institution which fails to comply with these standards must submit a compliance
plan. A failure to submit a plan or to comply with an approved plan will
subject the institution to further enforcement action. The OTS and other
federal banking agencies have also proposed additional guidelines on asset
quality and earnings standards. No assurance can be given as to whether or in
what form the proposed regulations will be adopted. The Bank is a member of
the Federal Home Loan Bank System and its deposit accounts are insured up to
applicable limits by the FDIC under SAIF, which insurance is backed by the full
faith and credit of the United States Government.

All savings associations, including the Bank, are required to meet a
qualified thrift lender ("QTL") test to avoid certain restrictions on their
operations. This test requires a savings association to have at least 65% of
its portfolio assets in qualified thrift investments on a monthly average for
nine out of every 12 months on a rolling basis. At December 31, 1995, the Bank
met the test and has always met the test since its effectiveness.

RISK-BASED CAPITAL GUIDELINES

Under the Federal Reserve Board's risk-based capital guidelines
applicable to SouthTrust, the minimum ratio of capital to risk-weighted assets
(including certain off-balance sheet items, such as standby letters of credit)
is 8%. To be considered a "well capitalized" bank or bank holding under the
guidelines, a bank or bank holding company must have a total risk-based capital
ratio in excess of 10%. At December 31, 1994, SouthTrust and all of
SouthTrust's subsidiary banks were sufficiently capitalized to be considered
"well

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<PAGE> 72

capitalized." See "- Recent Legislation." At least half of the total capital
is to be comprised of common equity, retained earnings and a limited amount of
perpetual preferred stock, after subtracting goodwill and certain other
adjustments ("Tier 1 capital"). The remainder may consist of perpetual debt,
mandatory convertible debt securities, a limited amount of subordinated debt,
other preferred stock not qualifying for Tier 1 capital and a limited amount of
loan loss reserves ("Tier 2 capital"). SouthTrust's national banking
subsidiaries are subject to similar capital requirements adopted by the OCC,
and its state non-member bank subsidiaries are subject to similar capital
requirements adopted by the FDIC. In addition, the Federal Reserve Board, the
OCC and the FDIC have adopted a minimum leverage ratio (Tier 1 capital to total
assets) of 3%. Generally, banking organizations are expected to operate well
above the minimum required capital level of 3% unless they meet certain
specified criteria, including that they have the highest regulatory ratings.
Most banking organizations are required to maintain a leverage ratio of 3% plus
an additional cushion of at least 1% to 2%. The guidelines also provide that
banking organizations experiencing internal growth or making acquisitions will
be expected to maintain strong capital positions substantially above the
minimum supervisory levels without significant reliance upon intangible assets.
On September 30, 1995, SouthTrust had a Tier 1 capital ratio of 7.82%, a total
risk-based capital ratio of 11.45% and a leverage ratio of 6.41%.

The following table sets forth the various regulatory capital ratios
of SouthTrust as of the periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1995 1994
---- ----
<S> <C> <C>
REGULATORY CAPITAL RATIOS:
Tier 1 risk-based capital* . . . . . . . . . . . . . . 7.82% 7.86%
Total risk-based capital . . . . . . . . . . . . . . . 11.45 12.04
Leverage ratio* . . . . . . . . . . . . . . . . . . . . 6.41 6.19
- ---------------------
</TABLE>
* Under the risk-based and leverage capital guidelines, regulatory required
minimums are 4% and 8% for Tier 1 and Total Capital ratios, respectively.
The leverage ratio must be maintained at a level generally considered to
be in excess of 3%.

Under the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, failure to meet the capital guidelines could subject a banking
institution to a variety of enforcement remedies available to federal
regulatory authorities, including the termination of deposit insurance by the
FDIC.

The OTS has also established capital standards, including a tangible
capital requirement, a leverage ratio (or core capital) requirement and a
risk-based capital requirement applicable to savings associations such as the
Bank. These capital requirements must be generally as stringent as the
comparable capital requirements for national banks. The OTS is also authorized
to impose capital requirements in excess of these standards on individual
associations on a case-by-case basis.

The capital regulations require tangible capital of at least 1.5% of
adjusted total assets (as defined by regulation). Tangible capital generally
includes common stockholders' equity and retained income, and certain
noncumulative perpetual preferred stock and related income. In addition, all
intangible assets, other than a limited amount of purchased mortgage servicing
rights, must be deducted from tangible capital.

The capital standards also require core capital equal to at least 3%
of adjusted total assets (as defined by regulation). Core capital generally
consists of tangible capital plus certain intangible assets, including a
limited amount of purchased credit card relationships.

68
<PAGE> 73

The OTS risk-based requirement requires savings associations to have
total capital of at least 8.0% of risk-weighted assets. Total capital consists
of core capital, as defined above, and supplementary capital. Supplementary
capital consists of certain permanent and maturing capital instruments that do
not qualify as core capital and general valuation loan and lease loss
allowances up to a maximum of 1.25% of risk-weighted assets. Supplementary
capital may be used to satisfy the risk-based requirement only to the extent of
core capital. The OTS is also authorized to require a savings association to
maintain an additional amount of total capital to account for concentration of
credit risk and the risk of non-traditional activities.

RECENT LEGISLATION

The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") substantially revised the depository institution regulatory and
funding provisions of the Federal Deposit Insurance Act and makes revisions to
several other federal banking statutes. Among other things, FDICIA requires
the federal banking regulators to take prompt corrective action in respect of
depository institutions that do not meet minimum capital requirements. FDICIA
establishes five capital tiers: "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized." A depository institution is well capitalized if it
significantly exceeds the minimum level required by regulation for each
relevant capital measure, adequately capitalized if it meets each such measure,
undercapitalized if it fails to meet any such measure, significantly
undercapitalized if it is significantly below such measure and critically
undercapitalized if it fails to meet any critical capital level set forth in
regulations. The critically under-capitalized level occurs where tangible
equity is less than 2% of total tangible assets or less than 65% of the minimum
leverage ratio to be prescribed by regulation (except to the extent that 2%
would be higher than such 65% level). A depository institution may be deemed
to be in a capitalization category that is lower than is indicated by its
actual capital position if it receives an unsatisfactory examination rating.

FDICIA generally prohibits a depository institution from making any
capital distribution (including payment of a dividend) or paying any management
fee to its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions became subject to
restrictions on borrowing from the Federal Reserve System, effective as of
December 19, 1993. In addition, undercapitalized depository institutions are
subject to growth limitations and are required to submit capital restoration
plans. A depository institution's holding company must guarantee the capital
plan, up to an amount equal to the lesser of 5% of the depository institution's
assets at the time it becomes undercapitalized or the amount of the capital
deficiency when the institution fails to comply with the plan. The federal
banking agencies may not accept a capital plan without determining, among other
things, that the plan is based on realistic assumptions and is likely to
succeed in restoring the depository institution's capital. If a depository
institution fails to submit an acceptable plan, it is treated as if it is
significantly undercapitalized.

Significantly undercapitalized depository institutions may be subject
to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to
reduce total assets and cessation of receipt of deposits from correspondent
banks. Critically undercapitalized depository institutions are subject to
appointment of a receiver or conservator.

FDICIA provides authority for special assessments against insured
deposits and for the development of a general risk-based deposit insurance
assessment system. The risk-based insurance assessment system would be used to
calculate a depository institution's semiannual deposit insurance assessment
based on the probability (as defined in the statute) that the deposit insurance
fund will incur a loss with respect to the institution. In accordance with
FDICIA, on September 15, 1992, the FDIC approved a transitional risk-based
insurance premium system and an increases in the deposit insurance premium for
commercial banks and thrifts to an average of 25.4 basis points, effective
January 1, 1993.

Effective with fiscal years beginning after December 31, 1992, each
insured institution having over $500 million in total assets will be required
to submit to the FDIC and make available to the public an annual

69
<PAGE> 74

report on the institution's financial condition and management. The
institution's independent public accountant will be required to audit and
attest to certain of the statements made in that annual report.

FDICIA amended the prior law with respect to the acceptance of
brokered deposits by insured depository institutions to permit only a "well
capitalized" (as defined in the statute as significantly exceeding each
relevant minimum capital level) depository institution to accept brokered
deposits without prior regulatory approval. A depository institution which has
a capital level category of "adequately capitalized" may not accept brokered
deposits without prior regulatory approval. FDICIA also established new
uniform disclosure requirements for the interest rates and terms of deposits
accounts. Based on the FDIC's most recent classification, both SouthTrust and
the Bank are classified as well-capitalized institutions.

FDICIA also contains various provisions related to an institution's
interest rate risk. Under certain circumstances, an institution may be
required to provide additional capital or maintain higher capital levels to
address interest rate risks.

The foregoing necessarily is a general description of certain
provisions of FDICIA and does not purport to be complete. Several of the
provisions of FDICIA will be implemented through the adoption of regulations by
the various federal banking agencies. FDICIA is not expected to have a
material effect on the results of operations of SouthTrust or FFE.

SOURCE OF STRENGTH

According to the Federal Reserve Board policy, bank holding companies
are expected to act as a source of financial strength to each subsidiary bank
and to commit resources to support each such subsidiary. This support may be
required at times when a bank holding company may not be able to provide such
support. In the event of a loss suffered or anticipated by the FDIC -- either
as a result of default of a banking subsidiary or SouthTrust or related to FDIC
assistance provided to a subsidiary in danger of default -- the other banking
subsidiaries of SouthTrust may be assessed for the FDIC's loss, subject to
certain exceptions.

THE RIEGLE-NEAL INTERSTATE BANKING AND BRANCHING EFFICIENCY ACT

In September 1994, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking Act") became law. The
Interstate Banking Act has two major provisions regarding the merger,
acquisition and operation of banks across state lines. First it provides that
effective September 29, 1995, adequately capitalized and managed bank holding
companies will be permitted to acquire banks in any state. State laws
prohibiting interstate banking or discriminating against out-of-state banks
will be preempted as of the effective date. States cannot enact laws opting
out of this provision; however, states may adopt a minimum restriction
requiring that target banks located with the state be in existence for a period
of years, up to a maximum of five years, before such bank may be subject to the
Interstate Banking Act. The Interstate Banking Act establishes deposit caps
which prohibit acquisitions that would result in the acquiror controlling 30%
or more of the deposits of insured banks and thrifts held in the state in which
the acquisition or merger is occurring or in any state in which the target
maintains a branch or 10% or more of the deposits nationwide. State-level
deposit caps are not preempted as long as they do not discriminate against
out-of-state acquirors, and the federal deposit caps apply only to initial
entry acquisitions.

In addition to the foregoing, the Interstate Banking Act provides that
as of June 1, 1997, adequately capitalized and managed banks will be able to
engage in interstate branching by merging banks in different states. However,
unlike the interstate banking provision, states may opt out of the application
of this provision by enacting specific legislation before June 1, 1997. If a
state does not opt-out, banks will be required to comply with the state's
provisions with respect to branching across state lines.

Proposals to change the laws and regulations governing the banking
industry are frequently introduced in Congress, in the state legislatures and
before the various bank regulatory agencies. The likelihood and timing of any
such changes and the impact such changes might have on SouthTrust and its
subsidiaries, however, cannot be determined at this time.

70
<PAGE> 75

FFE

FFE is registered with the OTS as a savings and loan holding company
and is subject to OTS regulation, examination, supervision and reporting
requirements. The Bank is a member of the Federal Home Loan Bank System and
its deposit accounts are insured up to applicable limits by the FDIC under
SAIF. The Bank is subject to regulation by the OTS, as its chartering agency,
and the FDIC, as its deposit insurer.

71
<PAGE> 76

CERTAIN INFORMATION CONCERNING THE BUSINESS OF FFE AND THE BANK

GENERAL

The principal asset of FFE is the outstanding capital stock of the
Bank, its wholly owned subsidiary, and FFE's business consists only of the
business of the Bank.

The Bank's main business consists of attracting retail deposits from
the general public and investing those funds primarily in first mortgages
secured by owner-occupied, single-family residences and mortgage-backed
securities. To a much lesser extent, the Bank also originates residential
construction and consumer loans in the Bank's market area. The Bank holds, in
its portfolio, loans secured by multi-family and non-residential real estate.
Currently, the Bank only originates multi-family and non-residential real
estate loans on a limited basis.

The Bank's revenues are derived principally from interest on mortgage
loans and mortgage-backed securities, interest and dividends on investment
securities and fee income from loan and deposit account charges.

MARKET AREA

The main office of the Bank is located in Englewood, Florida. Through
its network of three offices, the Bank currently serves southwest Sarasota and
west Charlotte counties in southwestern Florida.

The Englewood market area has a population of approximately 50,000
persons, and a diverse economy with an emphasis on tourism. In recent periods,
the Bank's market area has been above national averages in population growth
and has experienced an above average unemployment rate.

LENDING ACTIVITIES

General. Historically, the Bank originated fixed-rate mortgage loans.
Since 1980, however, the Bank has emphasized the origination and retention in
its portfolio of adjustable-rate mortgage ("ARM") loans. The Bank's strategy
has been to increase the percentage of assets in its portfolio with more
frequent repricing. In response to customer demand, however, the Bank
continues to originate some fixed-rate mortgages with terms up to 30 years.
The Bank underwrites these mortgage loans under secondary market guidelines
allowing them to be saleable in the secondary market. During fiscal 1995, the
Bank held fixed rate originations in its portfolio for investment rather than
selling them in the secondary market. The fixed rate loans are being
originated at premium rates and in order to keep its share of the construction
lending market, the Bank must portfolio those loans. At September 30, 1995,
there were no fixed rate loans for sale.

The Bank's primary focus in lending activities is on the origination
of loans collateralized by first mortgages on owner-occupied, one- to
four-family residences. The Bank also originates residential construction and
consumer loans in its market area. From 1990 until October 8, 1993, when the
OTS terminated its restrictions as a result of the successful completion of the
Bank's mutual to stock conversion, the OTS required the Bank to limit its
origination of loans secured by commercial real estate to loans which would
facilitate the sale of foreclosed assets. Despite the elimination of the
supervisory restrictions, the Bank has continued to so limit its origination of
loans secured by commercial and multi-family real estate.

All residential loans must be approved by the loan committee comprised
of the three top officers of the Bank. The lending limit currently established
by the Bank is $500,000. All loan approvals are ratified by the Board of
Directors.

72
<PAGE> 77

Loan Portfolio Composition. The following table presents information
concerning the composition of the Bank's loan portfolio in dollar amounts and
in percentages (before deductions for loans in process, deferred fees and
discounts and allowances for loan losses) as of the dates indicated.

<TABLE>
<CAPTION>
September 30,
------------------------------------------------------------------
1995 1994 1993
------------------------------------------------------------------
Amount Percent Amount Percent Amount Percent
------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real Estate Loans:
-----------------
One- to four-family . . . . . . . . . . $83,419 83.71% $77,542 78.95% $75,901 80.60%
Multi-family . . . . . . . . . . . . . 1,028 1.03 840 .86 1,270 1.35
Commercial . . . . . . . . . . . . . . 10,741 10.78 12,956 13.19 14,422 15.32
Construction or development . . . . . . 3,256 3.26 5,564 5.66 1,376 1.46
------- ------ ------- ------ ------- ------
Total real estate loans . . . . . . 98,444 98.78 96,902 98.66 92,969 98.73
------- ------ ------- ------ ------- ------
Other Loans:
-----------
Consumer Loans:
Deposit account . . . . . . . . . . . 503 .50 639 .65 812 .86
Student . . . . . . . . . . . . . . . 15 .02 20 .02 21 .02
Automobile . . . . . . . . . . . . . . --- --- --- --- 14 .02
Other . . . . . . . . . . . . . . . . --- --- --- --- --- ---
------- ------ ------- ------ ------- ------
Total consumer loans . . . . . . . . 518 .52 659 .67 847 .90
Commercial business loans . . . . . . 695 .70 655 .67 351 .37
------- ------ ------- ------ ------- ------
Total other loans . . . . . . . . . 1,213 1.22 1,314 1.34 1,198 1.27
------- ------ ------- ------ ------- ------
Total loans . . . . . . . . . . . . 99,657 100.00% 98,216 100.00% 94,167 100.00%
====== ====== ======
Plus:
----
Premiums on loans purchased . . . . . . 199 138 ---
Less:
----
Loans in process . . . . . . . . . . . 1,301 4,216 758
Deferred fees and discounts . . . . . . 88 89 110
Allowance for loan losses . . . . . . . 818 1,230 909
------- ------- -------
Total loans receivable, net . . . . $97,649 $92,819 $92,390
======= ======= =======
</TABLE>

73
<PAGE> 78

The following table shows the composition of the Bank's loan portfolio
by fixed- and adjustable-rate categories at the dates indicated.

<TABLE>
<CAPTION>
September 30
-------------------------------------------------------------
1995 1994 1993
-------------------------------------------------------------
Amount Percent Amount Percent Amount Percent
---------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Fixed-Rate Loans:
----------------
Real estate:
One- to four-family . . . . . . . . . . . . . $14,848 14.90% $15,928 16.22% $21,663 23.00%
Multi-family . . . . . . . . . . . . . . . . 118 .12 144 .14 374 .39
Commercial . . . . . . . . . . . . . . . . . 344 .35 1,184 1.21 1,062 1.13
Construction or development . . . . . . . . . 328 .32 --- --- --- ---
------- ------ ------- ------ ------- ------
Total fixed-rate real
estate loans . . . . . . . . . . . . . . 15,638 15.69 17,256 17.57 23,099 24.52
Consumer and commercial
business . . . . . . . . . . . . . . . . . . 518 .52 659 .67 858 .91
------- ------ ------- ------ ------- ------
Total fixed-rate loans . . . . . . . . . . 16,156 16.21 17,915 18.24 23,957 25.43
------- ------ ------- ------ ------- ------

Adjustable-Rate Loans:
---------------------
Real estate:
One- to four-family . . . . . . . . . . . . . 68,571 68.81 61,614 62.73 54,238 57.61
Multi-family . . . . . . . . . . . . . . . . 910 .91 696 .71 896 .95
Commercial . . . . . . . . . . . . . . . . . 10,397 10.43 11,772 11.99 13,360 14.19
Construction or development . . . . . . . . . 2,928 2.94 5,564 5.66 1,376 1.46
------- ------ ------- ------ ------- ------
Total adjustable-rate real
estate loans . . . . . . . . . . . . . . 82,806 83.09 79,646 81.09 69,870 74.21

Consumer and commercial
business . . . . . . . . . . . . . . . . . . 695 .70 655 .67 340 .36
------- ------ ------- ------ ------- ------
Total adjustable rate loans . . . . . . . 83,501 83.79 80,301 81.76 70,210 74.57
------- ------ ------- ------ ------- ------
Total loans . . . . . . . . . . . . . . . 99,657 100.00% 98,216 100.00% 94,167 100.00%
====== ====== ====== ======
Plus:
----
Premiums on loans purchased . . . . . . . . . 199 138 ---

Less:
----
Loans in process . . . . . . . . . . . . . . . 1,301 4,216 758
Deferred fees and discounts . . . . . . . . . 88 89 110
Allowance for loan losses . . . . . . . . . . 818 1,230 909
------- ------- -------

Total loans receivable, net . . . . . . . $97,649 $92,819 $92,390
======= ======= =======
</TABLE>

74
<PAGE> 79

The following schedule illustrates the interest rate sensitivity of
the Bank's loan portfolio at September 30, 1995. Mortgages which have
adjustable or renegotiable interest rates are shown as repricing in the period
during which the contract is due. The schedule does not reflect the effects of
possible prepayments or enforcement of due-on-sale clauses.

<TABLE>
<CAPTION>
Real Estate
------------------------------------------------------------------
Multi-family and Construction
One- to four-family Commercial or Development Consumer
-----------------------------------------------------------------------------------------
Weighted Weighted Weighted Weighted
Average Average Average Average
Amount Rate Amount Rate Amount Rate Amount Rate
----------------------------------------------------------------------------- -----------
(Dollars in Thousands)
Due During
Periods Ending
September 30,
- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996(1) . . . . . . . $ 2,422 7.86% $ 533 10.49% $2,576 7.47% $375 7.98%
1997 . . . . . . . . 2,703 7.87 610 10.60 12 8.42 99 8.81
1998 . . . . . . . . 2,773 7.87 766 9.78 12 8.44 4 8.00
1999 and 2000 . . . . 6,041 7.86 943 9.82 28 8.45 40 8.59
2001 to 2005 . . . . 16,476 7.79 2,711 10.18 94 8.49 --- ---

2006 to 2015 . . . . 35,669 7.52 5,817 10.16 134 8.17 --- ---

2015 and
following . . . . . 17,335 7.35 389 8.45 400 7.86 --- ---
------- ---- ------- ----- ------ ---- ---- ----

Total . . . . . . $83,419 7.60% $11,769 10.09% $3,256 7.76% $518 8.19%
======= ==== ======= ===== ====== ==== ==== ====

<CAPTION>
Commercial
Business Total
--------------------- ---------------------
Weighted Weighted
Average Average
Amount Rate Amount Rate
---------- ---------- ---------- ----------

Due During
Periods Ending
September 30,
- --------------
<S> <C> <C> <C> <C>
1996(1) . . . . . . . $319 10.79% $ 6,225 8.08%
1997 . . . . . . . . 36 10.86 3,460 8.41
1998 . . . . . . . . 33 10.88 3,588 8.31
1999 and 2000 . . . . 307 10.51 7,359 8.23
2001 to 2005 . . . . --- --- 19,281 8.13

2006 to 2015 . . . . --- --- 41,620 7.89

2015 and
following . . . . . --- --- 18,124 7.38
---- ----- ------- ----

Total . . . . . . $695 10.67% $99,657 7.92%
==== ===== ======= ====
</TABLE>

______________________

(1) Includes demand loans, loans having no stated maturity.

The total amount of loans due after September 30, 1996, which have
predetermined interest rates is $13,255,000 while the total amount of loans due
after such dates which have floating or adjustable interest rates is
$80,177,000.

75
<PAGE> 80

One- to Four-Family Residential Mortgage Lending. Residential loan
originations are generated by the Bank's marketing efforts, its present
customers, walk-in customers and referrals from real estate brokers and
builders. The Bank has focused its lending efforts primarily on the
origination of loans secured by first mortgages on owner-occupied, one- to
four-family residences in its market area. At September 30, 1995, the Bank's
one- to four-family residential mortgage loans totaled $83.4 million, or 84% of
the Bank's loan portfolio, substantially all of which are conventional loans.
This portfolio includes a substantial number of first mortgage loans
collateralized by vacation or second homes in the Bank's primary market area.

The Bank currently makes adjustable-rate one- to four-family
residential mortgage loans on primary residences in amounts up to 95% of the
appraised value, or selling price, of the security property, whichever is less.
Generally, for loans with a loan-to-value ratio in excess of 80%, the Bank
requires private mortgage insurance to reduce exposure levels below the 80%
level. The Bank currently offers one-year and three-year ARM loans at rates
determined in accordance with market and competitive factors for a term of up
to 30 years. The loans provide for a 2% annual cap and floor, and a 6%
lifetime cap and floor on the interest rate over the rate in effect at the date
of origination. These loans' annual and lifetime caps on interest rate
increases reduce the extent to which they can help protect the Bank against
interest rate risk. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS -
Asset/Liability Management."

Adjustable-rate loans decrease the risks associated with changes in
interest rates but involve other risks, primarily because as interest rates
rise, the payment by the borrower rises to the extent permitted by the terms of
the loan, thereby increasing the potential for default. At the same time, the
marketability of the underlying property may be adversely affected by higher
interest rates. The Bank believes that these risks, which have not had a
material adverse effect on the Bank to date, generally are less than the risks
associated with holding fixed-rate loans in an increasing interest rate
environment.

The Bank also originates fixed-rate mortgage loans. Most fixed-rate
loans currently originated by the Bank have a term of 30 years. In addition,
the Bank originates 15-year fixed-rate loans. Interest rates charged on these
fixed-rate loans are competitively priced according to market conditions.
Although the Bank has recently been portfolioing its fixed rate product,
management believes the risks associated with this strategy have been minimized
by the higher rates charged on these loans.

In underwriting residential real estate loans, the Bank evaluates both
the borrower's ability to make monthly payments and the value of the property
collateralizing the loan. Potential borrowers are qualified for fixed-rate
loans based upon the stated rate of the loan. On ARM loans, the borrower is
qualified based on the fully indexed rate as opposed to the initial rate of
interest charged to the borrower.

An appraisal of the security property from Board-approved independent
fee appraisers is obtained on all loan applications. The Bank generally
requires, in connection with the origination of residential real estate loans,
title, fire and casualty insurance coverage, as well as flood insurance where
required, to protect the Bank's interest. The cost of this insurance coverage
is paid by the borrower.

The Bank's residential mortgage loans customarily include due-on-sale
clauses giving the Bank the right to declare the loan immediately due and
payable in the event, among other things, the borrower sells or otherwise
disposes of the property subject to the mortgage and the loan is not repaid.
The Bank has enforced due-on-sale clauses in its mortgage contracts for the
purpose of increasing its loan portfolio yield. The yield increase is obtained
through the authorization of assumptions of existing loans at higher rates of
interest and the imposition of assumption fees. ARM loans may be assumed
provided home buyers meet the Bank's underwriting standards, upon payment of an
assumption fee.

Commercial/Multi-Family Real Estate Lending. In the past, the Bank
engaged in commercial real estate lending, including loans collateralized by
multi-family residential property, primarily in its market area. Beginning in
1990, because of newly enacted regulatory capital requirements and OTS
restrictions, the Bank stopped originating commercial real estate loans, except
for loans which facilitate the sale of foreclosed assets. As previously
indicated, these restrictions were terminated on October 8, 1993. Currently,
the Bank only

76
<PAGE> 81

originates multi-family and non-residential real estate loans on a limited
basis. At September 30, 1995 the Bank had $11.8 in commercial/multi-family
real estate loans, representing 12% of its loan portfolio as of such date. The
Bank's commercial/multi-family real estate loan portfolio is collateralized by
multi-family residential property, primarily apartment buildings and
condominiums, office buildings, retail shopping centers, motels, hotels,
churches and land. These properties are located within the State of Florida,
and are seasoned loans with the exception of loans to facilitate the sale of
real estate owned made since 1989. Because of general economic conditions and
the increased risk associated with such loans, the Bank does not anticipate any
significant non-residential real estate loan originations or purchases.

At December 31, 1995, the maximum amount which the Bank could have
lent to any one borrower and the borrower's related entities was $____ million.
[AT DECEMBER 31, 1995, THE BANK HAD ONE LOAN WITH AN OUTSTANDING BALANCE IN
EXCESS OF THIS AMOUNT. THIS LOAN WAS ORIGINATED PRIOR TO THE ADOPTION OF THE
CURRENT LIMITATIONS AND HAS BEEN GRANDFATHERED. THE LOAN HAD A PRINCIPAL
BALANCE OF [$1,633,194], IS SECURED BY A MOTEL AND WAS CURRENT AT DECEMBER 31,
1995.]

Most of the Bank's commercial/multi-family real estate loans have been
originated with adjustable-rates and have terms of 20 to 30 years. Rates on
the Bank's adjustable-rate commercial/multi-family real estate loans are
generally tied to the prime rate of interest or constant maturity indices for
U.S. Treasury securities. Loans collateralized by such properties are
generally larger and involve a greater degree of risk than one-to four-family
residential mortgage loans. Because payments on loans collateralized by
commercial/multi-family real estate properties are often dependent on the
successful operation or management of the properties, repayment of such loans
may be subject to adverse conditions in the real estate market or the economy.
If the cash flow from the project is reduced (for example, if leases are not
obtained or renewed), the borrower's ability to repay the loan may be impaired.

The Bank also maintains an escrow account for most of its loans
collateralized by real estate, in order to ensure that the borrower provides
funds to cover property taxes in advance of the required payment. These
accounts are analyzed annually to confirm that adequate funds are available.
For loans which do not include an escrow requirement, an annual review of tax
payments is performed by the Bank in order to confirm payment. In order to
monitor the adequacy of cash flows on income-producing properties, the borrower
or lead lender is contacted annually, requesting financial information
including rental rates and income, maintenance costs and an update of real
estate property tax payments.

Construction Lending. The Bank originates a limited number of loans
to finance the construction of one- to four-family residences. At September
30, 1995 the Bank had loans to finance the construction of one-to four-family
residences totaling $3.3 million or approximately 3.3% of its loan portfolio.
Substantially all of these loans are made to individuals who propose to occupy
the premises upon completion of construction. Construction loans are
structured for up to a 30 year term with a six month construction phase. Upon
completion of the construction phase, these loans continue as permanent loans
of the Bank. Loan proceeds are disbursed in increments as construction
progresses and as inspections warrant. These loans are originated using the
Bank's underwriting standards for one- to four-family residential mortgage
loans and have adjustable rates of interest. The Bank requires interest-only
payments on such loans during the construction phase.

Consumer Lending. Consumer loans do not constitute a significant part
of the Bank's loan portfolio, and the Bank is currently originating only
consumer loans secured by savings deposits.

Commercial Business Lending. Federally chartered savings
institutions, such as the Bank, are authorized to make secured or unsecured
loans and letters of credit for commercial, corporate, business and
agricultural purposes and to engage in commercial leasing activities, up to a
maximum of 10% of total assets. The Bank does not engage in commercial
leasing, but does engage, to a limited extent, in other commercial business
lending activities. At September 30, 1995, the Bank had $695,000 in commercial
business loans outstanding, or .70% of its total loan portfolio. The Bank's
commercial business lending activities encompass loans with a variety of
purposes and security. However, a majority of these loans are unsecured lines
of credit.

77
<PAGE> 82

Generally, the Bank's commercial business lending has been to borrowers
headquartered, or doing business, in the Bank's market area.

Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her employment
and other income, and which are collateralized by real property whose value
tends to be more easily ascertainable, commercial business loans are of higher
risk and typically are made on the basis of the borrower's ability to make
repayment from the cash flow of the borrower's business. As a result, the
availability of funds for the repayment of commercial business loans may be
substantially dependent on the success of the business itself. Further, the
collateral securing the loans may depreciate over time, may be difficult to
appraise and may fluctuate in value based on the success of the business.

Mortgage-Backed Securities. The Bank has a small portfolio of
mortgage-backed securities and has utilized such investments to complement its
mortgage lending activities. At September 30, 1995, mortgage-backed securities
totaled $19.4 million. For information regarding the carrying and market
values of the Bank's mortgage-backed securities portfolio, see "Item 7.
Financial Statements - Note 3 of the Notes to Consolidated Financial
Statements."

During fiscal 1995, in order to supplement it's loan originations the
Bank purchased for investment $9.8 million of mortgage-backed securities with
a fixed rate of interest of 8.5%. The Bank also holds adjustable-rate
mortgage- backed securities with an approximate balance of $3.1 million at
September 30, 1995. Mortgage-backed securities can serve as collateral for
borrowings and, through repayments, as a source of liquidity. At September 30,
1995 approximately $9.4 million, of the Bank's mortgage-backed securities are
pledged to secure advances from the Federal Home Loan Bank of Atlanta.

Under the OTS' risk-based capital requirements, Government National
Mortgage Association ("GNMA") mortgage-backed securities have a zero percent
risk weighting and Federal National Mortgage Association ("FNMA"), Federal Home
Loan Mortgage Corporation ("FHLMC") and AA-rated mortgage-backed securities
have a 20% risk weighting, in contrast to the 50% risk weighting carried by
one- to four-family performing residential mortgage loans.

The following table sets forth the contractual maturities of the
Bank's mortgage-backed securities at September 30, 1995.

Due in September 30,
---------------------------------------------------------------- 1995
6 Months 6 Months 1 to 3 to 5 5 to 10 10 to 20 Over 20 Balance
or Less to 1 Year 3 Years Years Years Years Years Outstanding
---------- ----------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Federal Home Loan
Mortgage Corporation . . . . $ 450 $ 468 $ 2,557 $ 2,308 $ 910 $ --- $ --- $ 6,693

Federal National
Mortgage Association . . . . 185 210 739 541 860 --- 742 3,277

Government National
Mortgage Association . . . . 377 588 2,838 1,867 2,358 --- 1,360 9,388
------- ------ ------- ------- ------- ------- -------

Total . . . . . . . . . $ 1,012 $ 1,266 $ 6,134 $ 4,716 $ 4,128 --- $ 2,102 $19,358
======= ======= ======= ======= ======= ========= ======= =======
</TABLE>

78
<PAGE> 83

ORIGINATIONS, PURCHASES, SALES AND REPAYMENTS OF LOANS AND MORTGAGE-BACKED
SECURITIES

As described above, the Bank originates real estate loans through
marketing efforts, the Bank's customer base, walk-in customers, and referrals
from real estate brokers and builders. The Bank originates both
adjustable-rate and fixed-rate loans. Its ability to originate loans is
dependent upon the relative customer demand for fixed-rate or ARM loans in the
origination market, which is affected by the current and expected future level
of interest rates. From time to time, the Bank has also purchased
mortgage-backed securities in accordance with its ongoing asset/liability
management objectives.

During the 1995 fiscal year, the Bank purchased a 95% participating
interest in 58 single family residential loans in the amount of $3.4 million.
All purchased loans were required to meet the Bank's underwriting guidelines.

The following table shows the loan origination, purchase, sale and
repayment activities of the Bank for the periods indicated.

<TABLE>
<CAPTION>
Year Ended
September 30
----------------------------------
1995 1994 1993
------------- --------------------
<S> <C> <C> <C>
Originations by type:
---------------------
Real estate - one- to four-family . . . $ 4,898 $ 10,674 $ 6,539
- multi-family . . . . . . . 144 --- ---
- commercial . . . . . . . . 1,250 150 994
- construction or
development . . . . . . 7,304 7,778 2,761
Non-real estate - consumer . . . . . . . . . . 127 98 240
- commercial business . . . . 631 225 ---
-------- -------- --------
Total loans originated . . . . . . . . . . . 14,354 18,925 10,534
-------- -------- --------

Purchases:
---------
Real estate - one- to four-family . . . 3,462 5,238 100
- commercial . . . . . . . . --- --- 200
Mortgage-backed securities . . . . . . . . . . 9,793 5,892 1,960
-------- -------- --------
Total loans and mortgage-
backed securities purchased . . . . . . . . 13,255 11,130 2,260
-------- -------- --------

Sales and Repayments:
--------------------
Real estate - one- to four-family . . . --- (3,741) (2,872)
- multi-family . . . . . . . --- --- ---
-------- -------- --------
Total loans sold . . . . . . . . . . . . . . --- (3,741) (2,872)
Mortgage-backed securities sold . . . . . . . . --- --- ---
-------- -------- --------
Total sales . . . . . . . . . . . . . . . . --- (3,741) (2,872)
Principal repayments . . . . . . . . . . . . . (18,101) (17,723) (15,482)
-------- -------- --------
Total reductions . . . . . . . . . . . . . . (18,101) (21,464) (18,354)
-------- -------- --------
Net increase (decrease) . . . . . . . . . . $ 9,508 $ 8,591 $ (5,560)
======== ======== ========
</TABLE>

ASSET QUALITY

When a borrower fails to make a required payment on a loan, the Bank
attempts to cause the delinquency to be cured by contacting the borrower. In
the case of real estate loans, a late notice is sent 15

79
<PAGE> 84

days after the due date, and personal contact may be made, particularly
for larger balance loans. If the delinquency is not cured by the 30th day,
contact with the borrower is made by phone. Additional written and verbal
contacts are made with the borrower to the extent the borrower appears to be
cooperative. The Bank sends a 30-day default letter and, on the 61st day,
usually institutes appropriate action to foreclose on the property. Interest
income on loans more than 90 days delinquent is reduced by the full amount of
accrued and uncollected interest. If foreclosed, the property is sold at public
auction and may be purchased by the Bank. Delinquent consumer loans are handled
in a generally similar manner. The Bank's procedures for repossession and sale
of consumer collateral are subject to various requirements under Florida
consumer protection laws.

The Bank's procedures for commercial real estate and multi-family
loans include a request for updated financial statements on an annual basis.
This information is analyzed and any changes are noted. This information is
analyzed to determine if the loan should be renewed at maturity or any
additional monies can reasonably be expected to be advanced in the future. If
the financial statement shows inherent weaknesses, the loan generally is put on
the Bank's "watch list". If the loan is also delinquent, it may be classified
as substandard and additions to the Bank's general valuation allowance
established.

80
<PAGE> 85

Delinquent Loans. The following table sets forth information
concerning delinquent mortgage and other loans at September 30, 1995. The
amounts presented represent the total remaining principal balances of the
related loans, rather than the actual payment amounts which are overdue.

<TABLE>
<CAPTION>
Loans Delinquent For:
-------------------------------------------------------------------------------
30 - 59 Days 60 - 89 Days
-------------------------------------------------------------------------------
Percent Percent Percent
of Loan of Loan of Loan
Number Amount Category Number Amount Category Category
--------- ---------- ---------- --------- --------- --------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Real Estate:
One- to four-family . . . . . . . 14 $ 866 1.04% 6 $ 104 .12% 1.69%
Multi-family . . . . . . . . . . --- --- --- --- --- --- ---
Commercial . . . . . . . . . . . --- --- --- 1 215 2.00 2.00
Commercial business . . . . . . . . --- --- --- --- --- --- ---
----- ----- ------ ------

Total . . . . . . . . . . . . 14 $ 866 .87% 7 $ 319 .32% 1.63%
===== ===== ====== ======

<CAPTION>
Loans Delinquent For:
--------------------------------
90 Days and Over Total Delinquent Loans
-------------------------------- --------------------------------
Percent Percent
of Loan of Loan
Number Amount Category Number Amount Category
---------- -------- --------- ---------- -------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real Estate:
One- to four-family . . . . . . . 9 $ 440 .53% 29 $ 1,410 1.69%
Multi-family . . . . . . . . . . --- --- --- --- --- ---
Commercial . . . . . . . . . . . --- --- --- 1 215 2.00
Commercial business . . . . . . . . --- --- --- --- --- ---
----- ------ ----- -------

Total . . . . . . . . . . . . 9 $ 440 .44% 30 $ 1,625 1.63%
===== ====== ===== =======
</TABLE>

81
<PAGE> 86

Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing assets in the Bank's loan portfolio. Since 1991,
loans are placed on non-accrual status when the collection of principal
payments and/or interest becomes doubtful or when the loan becomes delinquent
for more than 90 days. For all periods presented, the Bank has had no troubled
debt restructurings (which involve forgiving a portion of interest or principal
on any loans or making loans at a rate materially less than that of market
rates). Foreclosed assets include assets acquired in settlement of loans and
loans classified as in-substance foreclosure.

<TABLE>
<CAPTION>
September 30, December 31,
--------------------------------------------- -----------------
1995 1994 1993 1992 1991
---------- ------------ ---------- ---------- -----------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Non-accruing loans:
One- to four-family . . . . . . . . . $ 561 $ 432 $ 75 $ 18 $1,391
Commercial real estate . . . . . . . --- 1,381 --- --- 3,964
Consumer . . . . . . . . . . . . . . --- 3 3 2 208
Commercial business . . . . . . . . . --- --- 90 --- 89
------ ------- ------- ------ -------
Total . . . . . . . . . . . . . . 561 1,816 168 20 5,652
------ ------- ------- ------ -------
Foreclosed assets:
One- to four-family . . . . . . . . . 194 17 154 1,722 1,993
Multi-family . . . . . . . . . . . . --- 247 297 249 1,436
Commercial real estate . . . . . . . 1,276 1,651 2,171 4,934 5,914
------ ------- ------- ------ -------
Total . . . . . . . . . . . . . . 1,470 1,915 2,622 6,905 9,343
------ ------- ------- ------ -------
Total non-performing
assets . . . . . . . . . . . . . . . . $2,031 $ 3,731 $ 2,790 $6,925 $14,995
====== ======= ======= ====== =======
Total as a percentage of
total assets . . . . . . . . . . . . . 1.44% 2.91% 2.17% 4.64% 9.50%
====== ======= ======= ====== =======
</TABLE>

For the year ended September 30, 1995, gross interest income which
would have been recorded had the non-accruing loans been current in accordance
with their original terms amounted to $49,241. The amount that was included in
interest income on such loans was $24,538 for the year ended September 30,
1995.

Foreclosed Assets. As of September 30, 1995, the Bank had
approximately $1.5 million in carrying value of foreclosed assets. See "Item
7. Financial Statements - Note 5 of the Notes to Consolidated Financial
Statements" for a detailed discussion of the Bank's treatment of foreclosed
assets and valuation of such assets.

At December 31, 1995, the Bank had only one foreclosed asset in excess
of $250,000. This asset is improved land located in Charlotte County, Florida
which originally was part of the project developed by the Bank's subsidiary.
See "- Subsidiary and Other Activities." The land was to be the site of 66
condominium units, but development of this phase of the project was never
started. On September 30, 1991, this tract was transferred to the Bank as a
foreclosed asset in forgiveness of the debt of the subsidiary to the Bank. At
December 31, 1995, the Bank held the property at a carrying value of $878,000.

Other Loan of Concern. In addition to the non-performing assets set
forth in the table above, the Bank has one loan classified as special mention
with a principal balance $214,990 at September 30, 1995. The loan was
originated on April 23, 1986 in the amount of $248,000 for the purpose of
purchasing two small retail properties. The original appraisal in February of
1986 valued the properties at $331,000. The property was reappraised in
January of 1995 for $390,000. The loan is classified as special mention since
the borrower has

82
<PAGE> 87

filed for bankruptcy. The borrower is making payments, however the loan was 60
days delinquent at September 30, 1995. The bankruptcy court has ordered that
the borrower not pay the 60 day delinquency until the bankruptcy proceedings
are complete.

Classified Assets. Federal regulations provide for the classification
of loans and other assets, such as debt and equity securities considered by the
OTS to be of lesser quality, as "substandard," "doubtful" or "loss." An asset
is considered "substandard" if it is inadequately protected by the current net
worth and paying capacity of the obligor or of the collateral pledged, if any.
"Substandard" assets include those characterized by the "distinct possibility"
that the insured institution will sustain "some loss" if the deficiencies are
not corrected. Assets classified as "doubtful" have all of the weaknesses
inherent in those classified "substandard," with the added characteristic that
the weaknesses present make "collection or liquidation in full," on the basis
of currently existing facts, conditions, and values, "highly questionable and
improbable." Assets classified as "loss" are those considered "uncollectible"
and of such little value that their continuance as assets without the
establishment of a specific loss reserve is not warranted.

When an insured institution classifies problem assets as either
substandard or doubtful, it may establish general allowances for loan losses in
an amount deemed prudent by management. General allowances represent loss
allowances which have been established to recognize the inherent risk
associated with lending activities, but which, unlike specific allowances, have
not been allocated to particular problem assets. When an insured institution
classifies problem assets as "loss," it is required either to establish a
specific allowance for losses equal to 100% of that portion of the asset so
classified or to charge-off such amount. An institution's determination as to
the classification of its assets and the amount of its valuation allowances is
subject to review by the regulatory authorities, who may order the
establishment of additional general or specific loss allowances.

In connection with the filing of its periodic reports with the OTS and
in accordance with its classification of assets policy, the Bank regularly
reviews the problem loans in its portfolio to determine whether any loans
require classification in accordance with applicable regulations. Classified
assets of the Bank at September 30, 1995, all of which are included in the
table of non-performing assets above or are described under the caption "-
Other Loans of Concern" above, were as follows (in thousands):

<TABLE>
<S> <C>
Special Mention . . . . . . . . . . . . . . . . . . . $ 215
Substandard . . . . . . . . . . . . . . . . . . . . . 2,031
Doubtful . . . . . . . . . . . . . . . . . . . . . . ---
Loss . . . . . . . . . . . . . . . . . . . . . . . . ---
-------
Total classified assets . . . . . . . . . . . . . . $ 2,246
=======
</TABLE>

ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is
established through a provision for loan losses based on management's
evaluation of the risk inherent in its loan portfolio and changes in the nature
and volume of its loan activity. Such evaluation, which includes a review of
all loans of which full collectibility may not be reasonably assured, considers
among other matters, the estimated fair value of the underlying collateral,
economic conditions, historical loan loss experience and other factors that
warrant recognition in providing for an adequate loan allowance. Although
management believes it uses the best information available to make such
determinations, future adjustments to reserves may be necessary, and net income
could be significantly affected, if circumstances differ substantially from the
assumptions used in making the initial determinations. At September 30, 1995,
the Bank had an allowance for loan losses of $817,967. See "Item 6.

83
<PAGE> 88

Management's Discussion and Analysis or Plan of Operation - Comparison of Year
Ended September 30, 1995 and 1994 - Provision for Loan Losses."

84
<PAGE> 89

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

<TABLE>
<CAPTION>
Nine Months
Year Ended Year Ended Year Ended Ended Year Ended
September 30, September 30, September 30, September 30, December 31,
1995 1994 1993 1992 1991
-------------- --------------- -------------- --------------- -------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Balance at beginning of period . . . . . . . . . $1,230 $ 909 $ 822 $ 1,133 $ 901
------ ------ ------ ------- -------

Charge-offs:
One- to four-family . . . . . . . . . . . . . . (41) (80) (82) (290) ---
Commercial and multi-family real estate . . . . (424) --- (6) (705) (865)
Consumer . . . . . . . . . . . . . . . . . . . (3) --- (6) (42) (112)
Commercial business . . . . . . . . . . . . . . --- --- (200) --- (40)
------ ------ ------ ------- -------
Total Charge-offs . . . . . . . . . . . . . (468) (80) (294) (1,037) (1,017)
------ ------ ------ ------- -------

Recoveries:
One- to four-family . . . . . . . . . . . . . . --- --- --- 38 ---
Consumer . . . . . . . . . . . . . . . . . . . 6 10 23 15 40
Commercial business . . . . . . . . . . . . . . --- --- --- 11 24
------ ------ ------ ------- -------
Total Recoveries . . . . . . . . . . . . . 6 10 23 64 64
------ ------ ------ ------- -------

Net charge-offs recoveries . . . . . . . . . . . (462) (70) (271) (973) (953)
------ ------ ------ ------- -------
Provision charged to operations . . . . . . . . . 50 391 358 662 1,185
------ ------ ------ ------- -------
Balance at end of period . . . . . . . . . . . . $ 818 $1,230 $ 909 $ 822 $ 1,133
====== ====== ====== ======= =======

Ratio of net charge-offs (recoveries) during the
period to average loans outstanding during the
period . . . . . . . . . . . . . . . . . . . . . .47% .07% .28% .90% .75%
====== ====== ====== ======= =======
Ratio of net charge-offs (recoveries) during the
period to average non-performing assets . . . . 16.04% 2.15% 5.58% 8.88% 8.66%
====== ====== ====== ======= =======
Ratio of allowance for loan losses to total
loans . . . . . . . . . . . . . . . . . . . . . .82% 1.25% .97% .82% 1.04%
====== ====== ====== ======= =======
</TABLE>

85
<PAGE> 90

The distribution of the Bank's allowance for losses on loans at the
dates indicated is summarized as follows:

<TABLE>
<CAPTION>
September 30, December 31,
--------------------------------------------------------------------------------- -----------------
1995 1994 1993 1992 1991
------------------ ----------------- ------------------ ----------------- -----------------
Percent Percent Percent Percent Percent
of Loans of Loans of Loans of Loans of Loans
in Each in Each in Each in Each in Each
Category Category Category Category Category
to Total to Total to Total to Total to Total
Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans
------ --------- ------ --------- ------ ---------- ------ --------- ------ ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One- to four-family . . . . $ 235 83.71% $ 223 78.95% $ 203 80.60% $ 77 81.42% $ 84 78.01%
Multi-family . . . . . . . --- 1.03 --- .86 --- 1.35 --- 2.26 --- 1.90
Commercial real estate . . 551 10.78 943 13.19 688 15.32 719 13.66 1,030 17.51
Construction or development 24 3.26 56 5.66 14 1.46 7 .94 5 .51
Consumer . . . . . . . . . 1 .52 1 .67 1 .90 1 1.06 4 1.23
Commercial business . . . . 7 .70 7 .67 3 .37 18 .66 10 .84
----- ------- ------- ------- ------ ------- ------ ------- ------- ------
Total . . . . . . . . $ 818 100.00 $ 1,230 100.00% $ 909 100.00% $ 822 100.00% $ 1,133 100.00%
===== ======= ======= ======= ====== ======= ====== ======= ======= ======
</TABLE>

86
<PAGE> 91

INVESTMENT ACTIVITIES

The Bank must maintain minimum levels of investments that qualify as
liquid assets under OTS regulations. Liquidity may increase or decrease
depending upon the availability of funds and comparative yields on investments
in relation to the return on loans. Historically, the Bank has maintained
liquid assets at levels above the minimum requirements imposed by the OTS
regulations and at levels believed adequate to meet the requirements of normal
operations, including repayments of maturing debt and potential deposit
outflows. Cash flow projections are regularly reviewed and updated to assure
that adequate liquidity is maintained. At September 30, 1995, the Bank's
liquidity ratio (liquid assets as a percentage of net withdrawable savings
deposits and current borrowings) was 18.22%. See "MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS - Liquidity and Capital Resources."

Federally chartered savings institutions have the authority to invest
in various types of liquid assets, including United States Treasury
obligations, securities of various federal agencies, certain certificates of
deposit of insured banks and savings institutions, certain bankers'
acceptances, repurchase agreements and federal funds. Subject to various
restrictions, federally chartered savings institutions may also invest their
assets in commercial paper, investment grade corporate debt securities and
mutual funds whose assets conform to the investments that a federally chartered
savings institution is otherwise authorized to make directly.

Generally, the investment policy of the Bank is to invest funds among
various categories of investments and maturities based upon the Bank's
asset/liability management policies, investment quality and marketability,
liquidity needs and performance objectives.

At September 30, 1995 and December 31, 1995, the Bank's
interest-bearing deposits with banks totaled $3.1 million, or 2.2% of total
assets, respectively, and its investment securities with a carrying value
totaled $12.3 million, or 8.7% of total assets. As of such date, the Bank also
had a $1.0 million investment in Federal Home Loan Bank stock, satisfying its
requirement for membership in the FHLB of Atlanta. It is the Bank's general
policy to purchase investment securities which are U.S. Government securities
and federal agency obligations and other issues that are rated investment
grade. At September 30, 1995, the average term to maturity or repricing of
the investment securities portfolio was 1.94 years. See also "- Lending
Activities" and "- Mortgage Backed Securities," and "Note 3 of the Notes to the
Consolidated Financial Statements of FFE" for additional information regarding
the Bank's mortgage-backed securities.

87
<PAGE> 92

The following table sets forth the composition of the Bank's
investment portfolio at the dates indicated.

<TABLE>
<CAPTION>
September 30,
----------------------------------------------------------------------------
1995 1994(2) 1993
------------------------- ------------------------ -------------------------
Amortized % of Amortized % of Amortized % of
Cost Total Cost Total Cost Total
------------ ------------ ----------- ----------- ------------ -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Investment Securities:
U.S. government securities . . . . . . . . $11,492 85.09% $11,484 79.50% $10,499 59.71%
Federal agency obligations . . . . . . . . 1,000 7.40 2,000 13.66 2,011 11.44

Mutual fund(1) . . . . . . . . . . . . . . --- --- --- --- 4,143 23.56
------- ------ ------- ------ ------- ------
Subtotal . . . . . . . . . . . . . . . . 12,492 92.49 13,484 93.16 16,653 94.71

FHLB stock . . . . . . . . . . . . . . . . . 1,013 7.51 942 6.84 930 5.29
------- ------ ------- ------ ------- ------

Total investment securities and
FHLB stock . . . . . . . . . . . . . . $13,505 100.00% $14,426 100.00% $17,583 100.00%
======= ====== ======= ====== ======= ======

Weighted average remaining life of
investment securities . . . . . . . . . . . 1.94 years 2.60 years 3.35 years

Other Interest-Earning Assets:
Interest-bearing deposits with banks . . . $2,733 87.03% $ 2,037 90.49% $ 3,380 94.89%
Federal funds sold . . . . . . . . . . . . 407 12.97 214 9.51 182 5.11
------- ------ ------- ------ ------- ------
Total Other Interest-Earning Assets . . $ 3,140 100.00% $ 2,251 100.00% $ 3,562 100.00%
======= ====== ======= ====== ======= ======

Weighted average remaining life or term to
repricing of investment securities and
other
interest-earning assets excluding FHLB 1.55 years 2.21 years 2.16 years
stock . . . . . . . . . . . . . . . . . . .
</TABLE>

______________________
(1) Represents investments in mutual funds which are invested in
adjustable-rate mortgages.
(2) Effective October 1, 1993, the Company adopted SFAS No. 115. See
"Item 7. Financial Statements - Note 2 of the Notes to Consolidated
Financial Statements.

The composition and maturities of the investment securities portfolio,
excluding FHLB of Atlanta stock, are indicated in the following table as of the
date indicated:

<TABLE>
<CAPTION>
September 30, 1995
---------------------------------------------------------------------------
Less Than 1 to 5 5 to 10 Over Total Investment
1 Year Years Years 10 Years Securities
------------------------ ------------ ------------ ------------------------
Amortized Amortized Amortized Amortized Amortized Amortized
Cost Cost Cost Cost Cost Cost
------------------------ ------------ ------------ ------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. government securities . . . $4,996 $6,496 $ --- $ --- $11,492 $11,340
Federal agency obligations . . . --- 1,000 --- --- 1,000 978
------ ------ ------- ------- ------- -------

Total investment securities . . $4,996 $7,496 $ --- $ --- $12,492 $12,318
====== ====== ======= ======= ======= =======

Weighted average yield . . . . . 4.63% 5.12% ---% ---% 4.93%
</TABLE>

88
<PAGE> 93

The Bank's investment securities portfolio at September 30, 1995,
contained neither tax-exempt securities nor securities of any issuer with an
aggregate book value in excess of 10% of the Bank's stockholders' equity,
excluding securities issued by the United States Government, or its agencies.

The Bank's investment securities portfolio is managed in accordance
with a written investment policy adopted by the Board of Directors.
Investments may be made by the Bank's officers within specified limits and must
be approved in advance by the Board of Directors for transactions over certain
limits. At September 30, 1995, the Bank held no investments for trading
purposes, but did hold $12.3 million in investment securities available for
sale, which were carried at market value. Effective October 1, 1993, FFE
adopted the Financial Accounting Standards Board's newly issued Statement of
Financial Accounting Standards No. 115 "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS No. 115"). See Note 2 of the Notes to the
Consolidated Financial Statements of FFE for a discussion of SFAS No. 115 and
its effect on FFE's accounting for investments and mortgage-backed securities.

SOURCES OF FUNDS

General. The Bank's primary sources of funds are deposits,
amortization and prepayment of loan principal (including mortgage-backed
securities), sales or maturities of investment securities, mortgage-backed
securities and short-term investments, borrowings, and funds provided from
operations.

Borrowings, predominantly from the FHLB of Atlanta, may be used on a
short-term basis to compensate for reductions in deposits or deposit inflows at
less than projected levels, and have been used in the past on a longer-term
basis to support lending activities. The Bank has had no borrowings other than
FHLB advances outstanding since 1990.

Deposits. The Bank offers a variety of deposit accounts having a wide
range of interest rates and terms. The Bank's deposits consist of passbook
accounts, NOW and non-interest-bearing checking accounts, and money market and
certificate accounts. The Bank relies primarily on advertising, competitive
pricing policies and customer service to attract and retain these deposits.
The Bank solicits deposits from its market area only, and does not use brokers
to obtain deposits.

The flow of deposits is influenced significantly by general economic
conditions, changes in money market and prevailing interest rates and
competition. The variety of deposit accounts offered by the Bank has allowed
it to be competitive in obtaining funds and to respond with flexibility to
changes in consumer demand. The Bank has become more susceptible to short-term
fluctuations in deposit flows, as customers have become more interest rate
conscious. The Bank manages the pricing of its deposits in keeping with its
asset/liability management and profitability objectives. Based on its
experience, the Bank believes that its passbook, NOW and non-interest-bearing
checking accounts are relatively stable sources of deposits. However, the
ability of the Bank to attract and maintain certificates of deposit, and the
rates paid on these deposits, has been and will continue to be significantly
affected by market conditions.

89
<PAGE> 94

The following table sets forth the dollar amount of savings deposits
in the various types of deposit programs offered by the Bank for the periods
indicated.

<TABLE>
<CAPTION>
At At At
September 30, 1995 September 30, 1994 September 30, 1993
--------------------- --------------------- ---------------------
Percent Percent Percent
Amount of Total Amount of Total Amount of Total
-------- ---------- -------- ---------- -------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Transactions and Savings Deposits:
---------------------------------

Non-Interest Bearing Demand Deposits . . $ 3,288 2.72% $ 3,597 3.04% $ 3,679 3.13%
NOW Accounts (1.75%, 1.75%
and 1.75%) . . . . . . . . . . . . . . . 11,802 9.79 10,785 9.11 9,240 7.85
Money Market Checking (1.75%,
1.75%, and 2.40%) . . . . . . . . . . . 867 .72 1,482 1.25 2,753 2.34
Money Market Plus (3.26%, 2.47%, and
2.40%) Weighted Average Rate . . . . . . 14,517 12.04 16,259 13.73 17,997 15.29
Passbook and Statement Savings
(2.20, 2.20% and 2.00%) . . . . . . . . 9,032 7.49 10,569 8.92 12,795 10.87
--------- ------- --------- ------ --------- ------
Total Non-Certificates . . . . . . . . . 39,506 32.76 42,692 36.05 46,464 39.48
--------- ------ --------- ------ --------- ------

Certificates:
------------

0.00 - 3.99% . . . . . . . . . . . . . 142 .12 11,096 9.37 15,266 12.97
4.00 - 6.99% . . . . . . . . . . . . . 80,923 67.12 64,637 54.58 50,015 42.51
7.00 - 8.99% . . . . . . . . . . . . . --- --- --- --- 5,934 5.04
--------- ------ --------- ------ --------- ------
Total Certificates . . . . . . . . . . . 81,065 67.24 75,733 63.95 71,215 60.52
--------- ------ --------- ------ --------- ------
Total Deposits . . . . . . . . . . . . . $ 120,571 100.00% $ 118,425 100.00% $ 117,679 100.00%
========= ====== ========= ====== ========= ======
</TABLE>

The following table sets forth the savings flows at the Bank during
the periods indicated. Deposit flows at savings institutions may also be
influenced by external factors such as governmental credit policies and,
particularly in recent periods, depositors' perceptions of the adequacy of
federal insurance of accounts. The net decrease in deposits for the year ended
September 30, 1993 was primarily a result of the Bank's planned shrinkage to
improve its capital ratios and the then current level of market interest rates.

<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
September 30, September 30, September 30,
1995 1994 1993
---------------- ---------------- ----------------
(Dollars in Thousands)
<S> <C> <C> <C>
Opening balance . . . . . . . . . . $ 118,425 $ 117,679 $ 139,572
Deposits . . . . . . . . . . . . . 256,253 268,007 279,079
Withdrawals . . . . . . . . . . . . (257,866) (270,127) (304,380)
Interest credited . . . . . . . . . 3,759 2,866 3,408
--------- --------- ---------
Ending balance . . . . . . . . . . $ 120,571 $ 118,425 $ 117,679
========= ========= =========

Net increase (decrease) . . . . . . $ 2,146 $ 746 $ (21,893)
========= ========= =========

Percent increase (decrease) . . . . 1.81% .63% (15.69)%
========= ========= =========
</TABLE>

90
<PAGE> 95

The following table shows rate and maturity information for the Bank's
certificates of deposit as of September 30, 1995.

<TABLE>
<CAPTION>
0.00- 6.00- Percent
5.99% 7.99% Total of Total
-------- ------- ------- --------
(Dollars in Thousands)
Certificate accounts maturing
in quarter ending:
-------------------------------
<S> <C> <C> <C> <C>
December 31, 1995 . . . . . . . . . . . . . . $4,692 $ 17 $ 4,709 5.81%
March 31, 1996 . . . . . . . . . . . . . . . 5,080 60 5,140 6.34
June 30, 1996 . . . . . . . . . . . . . . . . 8,080 7,781 15,861 19.57
September 30, 1996 . . . . . . . . . . . . . 6,775 1,282 8,057 9.94
December 31, 1996 . . . . . . . . . . . . . . 1,296 11,233 12,529 15.46
March 31, 1997 . . . . . . . . . . . . . . . 66 5,698 5,764 7.11
June 30, 1997 . . . . . . . . . . . . . . . . 1,402 6,895 8,297 10.23
September 30, 1997 . . . . . . . . . . . . . 2,164 3,302 5,466 6.74
December 31, 1997 . . . . . . . . . . . . . . 2,153 2,745 4,898 6.04
March 31, 1998 . . . . . . . . . . . . . . . 2,845 438 3,283 4.05
June 30, 1998 . . . . . . . . . . . . . . . . 1,305 59 1,364 1.68
September 30, 1998 . . . . . . . . . . . . . 287 --- 287 .35
Thereafter . . . . . . . . . . . . . . . . . 2,011 3,399 5,410 6.68
------- ------- -------- -------
Total . . . . . . . . . . . . . . . . . . $38,156 $42,909 $81,065 100.00
======= ======= ======= ======
Percent of total . . . . . . . . . . . . . 47.09% 52.93% 100.00%
======= ======= =======
</TABLE>

The following table indicates the amount of the Bank's certificates of
deposit by time remaining until maturity as of September 30, 1995.

<TABLE>
<CAPTION>
Maturity
--------
Over Over
3 Months 3 to 6 6 to 12 Over
or Less Months Months 12 Months Total
---------- -------- -------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Certificates of deposit less than $100,000 . $ 4,407 $ 5,140 $22,490 $43,643 $75,680

Certificates of deposit of $100,000 or more . 302 --- 1,428 3,655 5,385
------- ------- ------- ------- -------

Total certificates of deposit . . . . . . . . $ 4,709 $ 5,140 $23,918 $47,298 $81,065
======= ======= ======= ======= =======
</TABLE>

Borrowings. Although deposits are the Bank's primary source of funds,
the Bank's policy has been to utilize borrowings when they are a less costly
source of funds or can be invested at a positive rate of return.

The only borrowings utilized by the Bank in recent periods have been
advances from the FHLB of Atlanta. The Bank may obtain advances from the FHLB
of Atlanta upon the security of its capital stock of the FHLB of Atlanta and
certain of its mortgage loans and mortgage-backed securities. Such advances
may be made pursuant to several different credit programs, each of which has
its own interest rate and range of maturities.

91
<PAGE> 96

The following table sets forth the maximum month-end balance and
average balance of FHLB advances for the periods indicated.

<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
September 30, September 30, September 30,
1995 1994 1993
------------ ------------- -------------
(In Thousands)
<S> <C> <C> <C>
Maximum Balance:
---------------
FHLB advances . . . . . . . . . $ 12,500 $ 4,000 $ 2,500

Average Balance:
---------------
FHLB advances . . . . . . . . . $ 8,898 $ 527 $ 199
</TABLE>

The following table sets forth certain information as to the Bank's
FHLB advances at the dates indicated.

<TABLE>
<CAPTION>
September 30, September 30, September 30,
1995 1994 1993
------------- ------------ -------------
(In Thousands)
<S> <C> <C> <C>
FHLB advances . . . . . . . . . . . . $9,000 $ --- $ ---
Other borrowings . . . . . . . . . . --- --- ---
------ ------- ------
Total borrowings . . . . . . . . 9,000 $ --- $ ---
====== ======= ======
Weighted average interest rate of
FHLB advances . . . . . . . . . . . 7.57% ---% ---%
</TABLE>

Under a specific collateral agreement with the FHLB of Atlanta, the
Bank is required to collateralize its outstanding advances. At September 30,
1995, the Bank had pledged first mortgage loans with an approximate principal
balance of $10.6 million, and mortgage-backed securities with an approximate
principal balance of $9.5 million to secure its outstanding advances.

SUBSIDIARY AND OTHER ACTIVITIES

As a federally chartered savings bank, the Bank is permitted by OTS
regulations to invest up to 2% of its assets in the stock of, or unsecured
loans to, service corporation subsidiaries. The Bank may also make conforming
loans, in an amount up to 50% of its total capital, to service corporation
subsidiaries in which it owns at least 10% of the capital stock. The Bank may
invest an additional 1% of its assets in service corporations where such
additional funds are used for inner-city or community development purposes and
may invest, without limitation, in subsidiaries that are solely engaged in
activities that the Bank could directly engage.

The Bank had one wholly owned subsidiary, Gasparilla Service
Corporation ("GSC"), which previously engaged in the development and sale of
real estate. GSC entered into a joint venture in 1982 for the purpose of
developing 196 residential condominium units on property located in Charlotte
County, Florida. As of September 30, 1994, the Bank ceased operation of its
service corporation and has no investment in or loans to its service
corporation. At December 31, 1995, there are 4 undeveloped building sites for
66 condominium units and the joint venturer is no longer involved in the
project. The building sites are included as foreclosed assets of the Bank, and
the Bank is attempting to sell the undeveloped sites instead of completing the
development. See "- Asset Quality - Foreclosed Assets."

92
<PAGE> 97
COMPETITION

The Bank faces strong competition, both in originating real estate and
other loans and in attracting deposits. Competition in originating real estate
loans comes primarily from other savings institutions, commercial banks, credit
unions and mortgage bankers making loans secured by real estate located in the
Bank's market area.

The Bank attracts all of its deposits through its branch offices,
primarily from the communities in which those branch offices are located;
therefore, competition for those deposits is principally from other savings
institutions, commercial banks and investment brokers located in the same
communities. There was one thrift and six banks in the market area as of
December 31, 1995. The Bank competes for these deposits by offering a variety
of deposit accounts at competitive rates, convenient business hours, and
convenient branch locations with interbranch deposit and withdrawal privileges
at each, plus access to the "Honor" and "Presto" ATM network systems. The Bank
estimates its share of the savings market in its primary market area to be
approximately 18.4% as of December 31, 1995.

EMPLOYEES

At September 30, 1995, the Bank had a total of 36 full-time employees
and 6 part-time employees. None of the Bank's employees are represented by any
collective bargaining group. Management considers its employee relations to be
good.

DESCRIPTION OF PROPERTY

The main office of FFE is located at 1200 South McCall Road, Englewood,
Florida.

The following table sets forth information relating to each of the
Bank's offices, all of which were owned by the Bank as of September 30, 1995.
The total net book value of the Bank's premises and equipment at September 30,
1995, was $2.8 million.

<TABLE>
<CAPTION>
Date Net Book Value at
Location Acquired September 30, 1995
- -------------------- ---------- --------------------
(In Thousands)
<S> <C> <C>
Main Office:

1200 South McCall Road 1969 $ 809
Englewood, Florida

Branch Offices:

686 N. Indiana Avenue 1984 479
Englewood, Florida

2691 Placida Road 1974 287
Grove City, Florida

Executive Office and Loan Operational
Center:

1160 South McCall Road 1990 1,235
Englewood, Florida
</TABLE>

93
<PAGE> 98

The Bank maintains depositor and borrower customer files on an on-line
basis with Fiserv, Inc., Tampa, Florida. The net book value of the data
processing and computer equipment utilized by the Bank at September 30, 1995
was $9,614.

LEGAL PROCEEDINGS

FFE and the Bank are involved as plaintiff or defendant in various
legal actions arising in the normal course of business. While the ultimate
outcome of these proceedings, cannot be predicted with certainty, it is the
opinion of management, after consultation with counsel representing FFE and the
Bank in the proceedings, that the resolution of these proceedings should not
have a material effect on the consolidated results of operations or financial
condition of FFE or the Bank.

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

GENERAL

The Bank's net income is primarily dependent upon the difference (or
"spread") between the average yield earned on loans, mortgage-backed securities
and investments and the average rate paid on deposits and borrowings, as well
as the relative amounts of such assets and liabilities. The interest rate
spread is affected by regulatory, economic, and competitive factors that
influence interest rates, loan demand and deposit flows. The Bank, like other
thrift institutions, is subject to interest rate risk to the degree that its
interest-bearing liabilities mature or reprice at different times, or on a
different basis than interest-earning assets.

The Bank's results of operations are also affected by, among other
things, provisions for loan losses, writedowns of real estate owned, employee
salaries and benefits, occupancy costs, federal insurance premiums, marketing
expenses and other expenses.

In addition, the Bank's operating results are affected by customer
service charges. The Bank's operating results have also been historically
affected by gains or losses on the sales of investment and mortgage-backed
securities and other income.

The Bank's operating results in recent years have been adversely
affected by loss provisions on loans and real estate owned and losses on the
sale of real estate owned. Such provisions and losses on sales have resulted
primarily from commercial real estate loans and commercial real estate owned
which have been adversely affected by an uncertain real estate economic outlook
which has inhibited economic activity and depressed real estate values in
national and local markets.

FINANCIAL CONDITION DATA

At December 31, 1995, FFE had total assets of $139.4 million, a
decrease of $1.2 million from September 30, 1995. This decrease resulted
primarily from the decline in the principal balance of loans and
mortgage-backed securities. Deposits increased approximately $2.1 million as a
result of FFE offering higher rates on deposit accounts in order to remain
competitive. Advances by borrowers for taxes and insurance declined
approximately $1,357,000 due to the normal payment of property taxes on behalf
of borrowers in November of 1995. Stockholders' equity increased approximately
$264,000 for the three months ended December 31, 1995. This increase was a
combination of FFE's net income of $165,000 for the three months ended December
31, 1995 and an increase in stockholders' equity due to a positive adjustment
of investments available-for-sale to fair value of approximately $93,000. In
addition, stockholders' equity was increased by approximately $6,000 as a
result of the amortization of unearned compensation in connection with the MRP.
See Note 7 to the condensed consolidated financial statements of FFE.

Beginning in 1989, management of the Bank took actions to restrict
growth and shrink the size of the institution. This planned shrinkage was
undertaken to assist the Bank in complying with regulatory capital

94
<PAGE> 99

ratios. Prior to the formation of FFE, the Bank was not in compliance with its
required capital ratios. Substantially all of the proceeds of the initial
public offering of the FFE Common Stock were transferred to the capital of the
Bank in order to bring the Bank into compliance with the regulatory capital
requirements.

ASSET QUALITY

In accordance with the Bank's internal classification of assets
policy, management evaluates the loan portfolio on a monthly basis to identify
loss potential and determine the adequacy of the allowance for estimated loan
losses. The following table sets forth the amounts and categories of the
Bank's non-performing assets as of the dates indicated.

<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
------------ -------------
(Dollars in Thousands)
<S> <C> <C>
Non-accruing loans:
One-to-four family $ 416 $ 561
Commercial real estate -- --
Consumer -- --
------ ------

Total 416 561
------ ------

Foreclosed assets:
One-to-four family 313 194
Multi-family -- --
Commercial real estate 1,272 1,276
------ ------

Total 1,585 1,470
------ ------

Total non-performing assets $2,001 $2,031
====== ======

Total as a percentage of total
assets 1.43% 1.44%
====== ======
</TABLE>

Non-Accruing Loans. Generally when a loan becomes delinquent 90 days
or more, the Bank will place the loan on a non-accrual status and, as a result,
accrued interest is taken out of income. Future interest income is recognized
on the cash basis. The loan will remain on a non-accrual status until the
borrower has brought the loan current.

Foreclosed Assets. As of December 31, 1995, the Bank had
approximately $1.5 million in carrying value of foreclosed assets. Only one of
the foreclosed assets exceeds $250,000 in carrying value. This property is
improved land which originally was part of a 196 unit condominium project to be
developed by the Bank's subsidiary (which subsidiary ceased operations on
September 30, 1994) in a joint venture. This land was to be the site of 66
condominium units, but development of this phase of the project was never
started. On September 30, 1991, this tract was transferred to the Bank as a
foreclosed asset in forgiveness of the debt of the subsidiary to the Bank. At
December 31, 1995, the property has a carrying value of approximately $878,000.

Other Loan of Concern. In addition to the non-performing assets set
forth in the table above, the Bank has one loan classified as special mention
with a principal balance of $213,612 at December 31, 1995. The loan originated
on April 23, 1986 in the amount of $248,000 for the purpose of purchasing two
small retail properties. The original appraisal in February of 1986 valued the
properties at $331,000. The property was reappraised in January of 1995 for
$390,000. The loan is classified as special mention since the borrower has

95
<PAGE> 100

filed for bankruptcy. The borrower is making payments, however the loan was 60
days delinquent at December 31, 1995. The bankruptcy court has ordered that
the borrower not pay the 60 day delinquency until the bankruptcy proceedings
are complete.

Classified Assets. In connection with the filing of its periodic
reports with the OTS and in accordance with its classification of assets
policy, the Bank regularly reviews its portfolio to determine whether any loans
require classification in accordance with the applicable regulations.
Classified assets of the Bank at December 31, 1995, all of which are included
in the table of non-performing assets above or are described under the caption
"Other Loan of Concern" above, were as follows (in thousands):

<TABLE>
<S> <C>
Special Mention $ 214
Substandard 2,001
------

Total Classified Assets $2,215
======
</TABLE>

Allowance For Loan Losses. The allowance for loan losses is
established through a provision for loan losses based on management's
evaluation of the risks inherent in its portfolio and changes in the nature and
volume of its loan activity. Such evaluation which includes a review of all
loans of which full collectability may not be reasonably assured, considers
among other matters, the estimated fair value of the underlying collateral,
economic conditions, historical loan loss experience and other factors that
warrant recognition in providing for an adequate loan loss allowance. Although
management believes that it uses the best information available to make such
determinations future adjustment to reserves may be necessary, and net income
could be significantly affected, if circumstances differ from the assumptions
used in making the initial determinations.

The distribution of the Bank's allowance for losses on loans at the
dates indicated is summarized as follows:

<TABLE>
<CAPTION>
At December 31, At September 30,
1995 1995
--------------- ----------------
(Dollars in Thousands)
Percent Percent
of Loans of Loans
in Each in Each
Category Category
to Total to Total
Amount Loans Amount Loans
------ -------- ------ --------
<S> <C> <C> <C> <C>
One-to-four family $208 85.80% $235 83.71%
Multi-family -- 1.05% -- 1.03%
Commercial real estate 569 10.88% 551 10.78%
Construction or development 10 1.10% 24 3.26%
Consumer 1 .55% 1 .52%
Commercial business 6 .62% 7 .70%
---- ------- ---- -------

Total $794 100.00% $818 100.00%
==== ======= ==== =======
</TABLE>

96
<PAGE> 101

The following table sets forth information with respect to activity in the
Bank's allowance for losses on loans during the periods indicated.

<TABLE>
<CAPTION>
Three Months Ended
------------------
December 31,
------------------
1995 1994
---- ----
<S> <C> <C>
Balance at beginning of period $818 $1,230
---- ------

Charge-offs:
One-to-four family (25) (12)
Consumer -- ( 3)
---- ------
Total Charge-offs (25) (15)
---- ------

Recoveries:
Consumer loans 1 3
---- ------

Net (charge-offs) recoveries (24) (12)

Provision charged to operations -- --
---- ------

Balance at end of period $794 $1,218
==== ======

Ratio of net charge-offs during
the period to average loans
outstanding during the period .01% .01%
==== ======
Ratio of net charge-offs during
the period to average non-
performing assets 1.19% .33%
==== ======
Ratio of allowance for loan
losses to total loans .81% 1.25%
==== ======
</TABLE>

COMPARISON OF THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994

Results of Operations

FFE's results of operations are dependant on the operating results of
its main operating subsidiary, the Bank. The Bank's net income is primarily
dependent upon the difference (or "spread") between the average yield earned on
loans, mortgage-backed securities and investments and the average rate paid on
deposits and borrowings, as well as the relative amounts of such assets and
liabilities.

General. The Bank had net income of approximately $165,000 for the
three months ended December 31, 1995 compared to net income of approximately
$203,000 for the three months ended December 31, 1994. The decrease in net
income was primarily due to a decline in the Bank's net interest income of
approximately $26,000 and a decline in other income of approximately $20,000.

Net Interest Income. Net interest income decreased $26,000 from
$947,000 for the three months ended December 31, 1994 compared to $921,000 for
the comparable period in 1995. Interest income increased $327,000 for the
three months ended December 31, 1995 compared to the three months ended
December 30, 1994 primarily due to an increase in interest earning assets of
$7.9 million and an increase of 57 basis points in the average interest rate
earned on interest earning assets as the adjustable-rate portion of the Bank's
loans and mortgage-backed securities responded to changes in market interest
rates and the indices upon which they are priced. Interest expense increased
$352,000 for the three months ended December 31, 1995 compared to the three
months ended December 31, 1994 primarily due to a $ 5.6 million increase in the
average balance of interest bearing liabilities and a 91 point basis increase
in the average interest rate paid on interest bearing liabilities.

Provision for loan losses. The Bank's had no provision for loan
losses during the three months ended December 31, 1995 and 1994. The Bank uses
all information available in determining its level of reserves for

97
<PAGE> 102

loan losses, however, there can be no assurance that future losses will not
exceed the estimated amounts thereby adversely affecting future results of
operations.

Provision for losses on real estate owned. The Bank's provision for
losses on real estate owned increased $8,000 during the three months ended
December 31, 1995 as compared to the same period during 1994. The Bank uses
all information available in determining its level of reserves for loss on real
estate owned, however, there can be no assurance that future losses will not
exceed the reserves originally provided as properties held respond to changes
in market conditions.

Losses on sales of real estate owned. Losses on the sale of real
estate owned declined from a loss of approximately $6,000 during the three
months ended December 31, 1994 to a gain of $7,000 for the three months ended
December 31, 1995. The reduced loss was the result of the marketability of the
properties sold during the three months ended December 31, 1995. The volume of
sales of real estate owned has declined and leveled off on a basis consistent
with the Bank's foreclosure activity and market conditions.

Other income. Other income declined $27,000 during the three months
ended December 31, 1995 as compared to the same period during 1994. The
decrease was primarily the result of miscellaneous non-operating recoveries of
approximately $36,000 which were received during the quarter ended December 31,
1994.

Other expenses. Employee compensation and benefits declined
approximately $9,000 for the three months ended December 31, 1995 as compared
to the same period ended in 1994. Compensation and benefits have been
controlled through a decline in the number of personnel which was partially
offset by increases in rates made to salaries of remaining employees.
Occupancy and equipment expense remained constant at $160,000 for the three
months ended December 31, 1995 as compared to the same period in 1994. Deposit
insurance premium also remained constant at approximately $79,000 for the three
months ended December 31, 1995 as compared to the three months ended December
31, 1994. Examination and professional fees increased approximately $6,000 for
the three months ended December 31, 1995 as compared to the same period in
1994. Real estate owned operating expense increased approximately $22,000 for
the three months ended December 31, 1995 as compared to the three months ended
December 31, 1994. Such increase is attributable to the nature and the number
of the properties held. Other expenses increased approximately $2,000 for the
three months ended December 31, 1995 as compared to the three months ended
December 31, 1994.

98
<PAGE> 103

Average Balances, Interest Rates and Yields. The following table
presents for the periods indicated the Bank's total dollar amount of interest
income from average interest earning assets and the resultant yields, as well
as the interest expense on average interest-bearing liabilities, expressed in
both dollars and rates, and the net interest margin. No tax equivalent
adjustments were made. All average balances are monthly average balances and
include the balances of non-accruing loans.

<TABLE>
<CAPTION>
(Dollars in Thousands)
--------------------------------------------------------------------------------
Three Months Ended Three Months Ended
December 31, 1995 December 31, 1994
------------------------------------ --------------------------------------
Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
----------- --------- -------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets:
Loans receivable $ 97,033 $1,961 8.08% $ 93,110 $1,734 7.45%
Mortgage-backed
securities 19,079 334 7.00% 15,703 233 5.94%
Investment securities
and other interest-
earnings assets 16,906 221 5.23% 16,362 224 5.48%
FHLB stock 1,013 19 7.50% 942 17 7.22%
-------- ------ ----- -------- ------ -----

Total interest-earning
assets $134,031 2,535 7.57% $126,117 2,208 7.00%
======== ------ ----- ======== ------ -----

Interest-Bearing
Liabilities:
Deposits $121,935 $1,456 4.78% $119,852 1,168 3.90%
FHLB advances 8,333 158 7.58% 4,817 93 7.72%
-------- ------ ----- -------- ------ -----

Total interest-bearing
liabilities $130,268 1,614 4.96% $124,669 1,261 4.05%
======== ------ ----- ======== ------ -----

Net Interest Income $ 921 $ 947
====== ======

Net Interest Rate Spread 2.61% 2.95%
===== =====

Net Earning Assets $ 3,763 $ 1,448
======== ========

Net Yield on Average
Interest-Earning Assets 2.75% 3.00%
===== =====

Average Interest-Earning
Assets to Average
Interest-Bearing
Liabilities 1.02x 1.01x
===== =====
</TABLE>

ASSET/LIABILITY MANAGEMENT

99
<PAGE> 104

maintaining acceptable levels of net interest income. During periods of
changing rates, if the rates on the Bank's deposits rise more quickly than its
rates on loans, or if rates on loans fall more quickly than its rates on
deposits, the Bank's earnings may be adversely affected. The Bank, however,
has sought to control the historic gap between the long terms to maturity or
repricing on its interest-earning assets and the short terms on its
interest-bearing liabilities, while continuing to satisfy its interest rate
spread objectives, by engaging in the following asset/liability management
strategies:

o Adjustable Rate Mortgage Loans - In an attempt to hedge against
interest rate fluctuations, the Bank began originating adjustable
rate mortgage loans in 1983. ARM's reprice to the terms of the market
(subject to the time periods, floors and caps contained in the
instruments) and as of December 31, 1995 comprise approximately $80.5
million of the Association's portfolio or 82.8%. The Bank currently
uses two indices to price its ARM's which are both based on the
Treasury Bill rate.

o Saleable Loan Products - All loan originations, both adjustable and
fixed rate products, are underwritten to FHLMC standards so that
originations can be readily converted to cash through sales as the
need arises.

o Deposit Composition - The Bank has adopted a cost effective pricing
strategy which emphasizes short-term low cost deposits. In addition,
the Bank actively promotes what it considers to be its core deposits
of passbook, demand deposit, non-interest bearing checking, money
market and NOW accounts. Such deposits tend to generate long- term
banking relationships with customers and historically have not been
rate driven accounts.

Each of the above steps, and the Bank's progress in controlling its
exposure to interest rate risk while satisfying its interest rate spread
objectives, is regularly reviewed by management. The GAP between the Bank's
assets which mature or reprice within one year and its liabilities which mature
or reprice during the same period was a negative $1,773,000 or 1.27% of total
assets at December 31, 1995. During periods of falling interest rates, a
negative GAP would tend to result in a increase in net interest income and
during periods of rising interest rates a negative GAP would tend to result in
decreasing net interest income.

The table below sets forth certain information relating to the
repricing of the Bank's interest-earning assets, interest-bearing liabilities
and the resulting interest rate sensitivity GAP. The interest rate sensitivity
GAP is defined as the amount by which assets repricing within the respective
periods exceed liabilities repricing within such periods. One-to-four family
fixed-rate mortgage loans are assumed to prepay at an annual rate of 18%.
Adjustable rate loans are shown based on their repricing dates. Passbook
accounts are assumed to be withdrawn at annual rates of 16%, 26%, 17% and 41%,
respectively, during the periods shown. Money market deposit accounts are
assumed to decay at the annual rates of 63%, 19%, 7% and 11%, respectively, in
each of the periods shown.

The effect of these assumptions is to quantify the dollar amount of
items that are interest-sensitive and can be repriced within each of the
periods specified. Such repricing can occur in one of three ways: (1) the rate
of interest to be paid on an asset or liability may adjust periodically on the
basis of an index; (2) an asset or liability such as a mortgage may amortize,
permitting reinvestment of cash flows at the then prevailing interest rates; or
(3) an asset or liability may mature, at which time the proceeds can be
reinvested at current market rates.

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<PAGE> 105

The following table sets forth the interest rate sensitivity of the
Bank's assets and liabilities at December 31, 1995, on the basis of factors set
forth above.

<TABLE>
<CAPTION>
One Year Over 1-3 Over 3-5 Over
or Less Years Years 5 Years Total
--------- -------- ----------- --------- ----------
Amount Amount Amount Amount Amount
--------- -------- ----------- --------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Fixed rate one-to-four family
(including mortgage-backed
securities), commercial real
estate and construction loans $ 5,588 $11,176 $11,176 $ 3,103 $ 31,043
Adjustable rate one-to-four
family (including mortgage-
backed securities), commercial
real estate and construction
loans 67,571 7,806 8,251 103 83,731
Commercial business loans 579 -- 22 -- 601
Consumer loans 426 64 43 -- 533
Investment securities and
other 9,776 4,483 2,994 -- 17,253
------- ------- ------- ------- --------

Total interest-earning
assets 83,940 23,529 22,486 3,206 133,161
------- ------- ------- ------- --------

Savings deposits 1,414 2,360 1,540 3,693 9,007
Demand and now deposits 20,618 6,215 2,136 3,399 32,368
Certificates 59,931 16,127 5,246 -- 81,304
FHLB advances 3,750 3,250 -- -- 7,000
------- ------- ------- ------- --------

Total interest-earning
liabilities 85,713 27,952 8,922 7,092 129,679
------- ------- ------- ------- --------

Interest-earning assets less
interest-bearing liabilities $(1,773) $(4,423) $13,564 $(3,886) $ 3,482
======= ======= ======= ======= ========
Cumulative interest rate
sensitivity GAP $(1,773) $(6,196) $ 7,368 $ 3,482
======= ======= ======= =======
Cumulative interest rate
GAP as a percentage of total
assets at December 31, 1995 (1.27%) (4.44%) 5.28% 2.50%
======= ======= ======= =======
</TABLE>

Certain shortcomings are inherent in the method of analysis presented in the
foregoing table. For example, although certain assets and liabilities may have
similar maturities or periods to repricing, they may react in different degrees
to changes in market interest rates. Also, the interest rates on certain types
of assets and liabilities may fluctuate in advance of changes in market
interest rates, while interest rates on other types may lag behind changes in
market rates. Additionally, certain assets, such as "ARM" loans, have features
which restrict changes in interest rates on a short term basis and over the
life of the asset. Further, in the event of a change in interest rates,
prepayment and early withdrawal levels would likely deviate significantly from
those assumed in calculating the table. Finally, the ability of many borrowers
to service their debt may decrease in the event of an interest rate increase.

101
<PAGE> 106

LIQUIDITY AND CAPITAL RESOURCES

The Bank is required under applicable federal regulations to maintain
specified levels of liquid investments in qualifying types of U.S. Government
securities, federal agency securities, and other investments. Regulations
currently in effect require the Bank to maintain liquid assets of not less than
5% of its average daily balance of its net withdrawable accounts plus
short-term borrowings during the preceding calendar month; short-term liquid
assets must consist of not less than 1% of that amount. The Bank has
consistently exceeded these requirements. The Bank's liquidity ratio was
19.17% at December 31, 1995.

The Bank's primary sources of cash are proceeds from the sales of
loans and mortgage-backed securities, payments of loan principal (including
mortgage-backed securities), maturity and sale of investment securities, and
operations. The Bank uses these sources of cash primarily to meet ongoing
commitments to fund maturing savings certificates, savings withdrawals and
existing loan commitments, and to maintain its liquidity. In addition, the
Bank also uses FHLB advances as a source of funds when such advances can be
invested in instruments that provide yields which are consistent with the
Bank's interest rate spread objectives.

Federally Insured savings institutions, such as the Bank, are required
to maintain a minimum level of regulatory capital. FIRREA and FDICIA have
significantly affected savings institutions in several ways. Adverse effects
include higher deposit insurance premiums, more stringent capital requirements,
more stringent investment limitations and restrictions, and the possible
reduction of future dividend payments on Federal Home Loan Bank stock owned by
savings institutions. In addition, the legislation enhances federal regulatory
enforcement powers.

FIRREA requires institutions not meeting all of the capital standards
to submit to the OTS a capital plan outlining the institutions' plans for
attaining the required levels of regulatory capital. Failure to obtain
approval of its capital plan or to maintain compliance with an approved capital
plan could result in the OTS limiting an institution's asset growth and
imposing other sanctions and enforcement actions, including regulatory takeover
of the institution. An institution not in compliance with FIRREA's capital
standards or its capital plan also will be subject to more severe asset growth
limitations.

Regulations implementing the prompt corrective action provisions of
FDICIA became effective on December 19, 1992. These prompt corrective action
regulations define specific capital categories based on an institution's
capital ratios. The capital categories, in declining order, are "well
capitalized," "adequately capitalized," "under capitalized," and "critically
undercapitalized." Institutions categorized as "undercapitalized" or worse are
subject to certain restrictions, including the requirement to file a capital
plan with the OTS, prohibitions on the payment of dividends and management
fees, restrictions on executive compensation, and increased supervisory
monitoring. Other restrictions may be imposed on the institution by the
Federal Deposit Insurance Corporation, including the requirements to raise
capital, to sell assets, or to sell the entire institution. Once an
institution becomes "critically undercapitalized," it must generally be placed
in receivership or conservatorship within 90 days.

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<PAGE> 107

As of December 31, 1995, regulatory requirements are to maintain a
tangible capital ratio of 1.5%, a leverage capital ratio of 3%, and a
risk-based capital ratio of 8%. The following table summarizes the Bank's
compliance with current capital requirements at December 31, 1995:

<TABLE>
<CAPTION>
Excess of
Required Actual Required Actual Required
% % Amount Amount Minimum
-------- -------- -------- -------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Tangible capital 1.5% 6.3% $2,094 $8,839 $6,745
Core capital 3.0% 6.3% 4,188 8,839 4,651
Core/leverage capital 4.0% 6.3% 5,584 8,839 3,255
Tier 1 risk-based capital 4.0% 13.9% 2,546 8,839 6,293
Total risk-based capital 8.0% 15.0% 5,091 9,579 4,488
</TABLE>

The following table summarizes the capital thresholds for each prompt
corrective action capital categories. An institution's capital category is
based on whether it meets the threshold for all three capital ratios within the
category.

<TABLE>
<CAPTION>
Tier 1 Total
Leverage risk-based risk-based
Categories ratio ratio ratio
- ----------------------------------------------- ----------------- ----------------- ------------------
<S> <C> <C> <C>
"Well capitalized" 5% or higher 6% or higher 10% or higher
"Adequately capitalized" 4% or higher 4% or higher 8% or higher
"Under capitalized" less than 4% less than 4% less than 8%
"Significantly under capitalized" less than 3% less than 3% less than 6%
"Critically under capitalized" An institution is considered "critically under capitalized" if its
ratio of tangible equity to total assets is 2% or less
</TABLE>

As of December 31, 1995, the Bank was in compliance with all current
requirements and was classified as a "well capitalized" institution.

EFFECT OF NEW ACCOUNTING STANDARDS

The FASB has issued Statement of Financial Accounting Standard No.
122, "Accounting for Mortgage Servicing Rights" ("SFAS No. 122"), which
becomes effective for years beginning after December 15, 1995. SFAS No. 122
amends FASB Statement No. 65, "Accounting for Certain Mortgage Banking
Activities," to require that a mortgage banking enterprise recognize as
separate assets rights to service mortgage loans for others, however those
rights are acquired. A mortgage banking enterprise that acquires mortgage
servicing rights through either the purchase or organization of mortgage loans
and sells or securitizes those loans with servicing rights retained should
allocate the total cost of the mortgage loans to the mortgage servicing rights
and the loans (without the mortgage servicing rights) based on their relative
fair values. If it is not practicable to estimate the fair values separately,
the entire cost of purchasing or originating the loans should be allocated to
the mortgage loans (without the servicing rights) and no cost should be
allocated to the mortgage servicing rights. SFAS No. 122 also requires that a
mortgage banking enterprise assess its capitalized mortgage servicing rights
for impairment based on the fair value of those rights. Management does not
believe that this statement will have a material impact on its consolidated
results of operations.

FINANCIAL ACCOUNTING STANDARDS NO. 114 AND 118

Effective October 1, 1995, FFE adopted Statement of Financial
Accounting Standards No. 114 (FAS 114), "Accounting by Creditors for Impairment
of a Loan," and Statement of Financial Accounting Standards No. 118 (FAS 118),
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures." These statements require creditors account for impaired loans,
except for those loans that are accounted for at fair value or at the lower of
cost or fair value, at the present value of the expected future cash flows
discounted at the loan's effective interest rate. A loan is impaired when,
based on current information and events, it is probable that a creditor will be
unable to collect all principal and interest amounts due according to the
contractual terms of the loan agreement. FFE's adoption of these accounting
standards did not have a material effect on the operations or financial
condition of FFE.

RESULTS OF OPERATIONS

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<PAGE> 108

borrowings, as well as the relative amounts of such assets and liabilities.
The interest rate spread is affected by regulatory, economic, and competitive
factors that influence interest rates, loan demand and deposit flows. The
Company and the Bank, like other thrift institutions and their holding
companies, are subject to interest rate risk to the degree that their
interest-bearing liabilities mature or reprice at different times, or on a
different basis than interest-earning assets.

The Bank's interest expense has been a product of the interest paid on
deposits and borrowed funds. The Bank emphasizes and promotes its passbook,
demand deposit, money market and NOW accounts in its market area.

The Bank's results of operations are also affected by, among other
things, provisions for loan losses, write downs of real estate owned, employee
salaries and benefits, occupancy costs, federal insurance premiums, marketing
expenses and other expenses.

In addition, the Bank's operating results are affected by customer
service charges and other income. The Bank's operating results have been
affected by gains or losses on the sale of investment securities and
mortgage-backed securities.

The Bank's operating results in recent years have been adversely
affected by loss provisions on loans, write-downs of real estate owned, and
losses on the sales of real estate owned. Such provisions, write-downs and
losses on sales have resulted primarily from commercial real estate loans and
commercial real estate owned which have been adversely affected by an uncertain
national real estate economic outlook which has inhibited economic activity and
depressed real estate values in national and local markets.

The results of operations have also been adversely impacted by losses
on a real estate venture conducted through the Bank's wholly owned subsidiary,
Gasparilla Service Corporation. As of September 30, 1994, Gasparilla Service
Corporation ceased operations and has no remaining assets or liabilities,
accordingly, no additional losses are anticipated.

The Bank's results of operations, prior to its conversion to stock
form, were influenced by the Bank's failure to meet its regulatory capital
requirements which resulted in the Bank entering into a supervisory agreement
with the OTS effective as of October 31, 1990. In addition, a capital plan was
filed in June of 1990 with the OTS, which detailed the Bank's strategies to
achieve capital compliance. The supervisory agreement required the Bank to
reduce its asset base, refrain from deposit growth and restrict certain types
of lending.

On August 26, 1993, the Bank completed a conversion from a Federal
mutual savings and loan to a Federal stock savings bank pursuant to its plan of
conversion adopted on May 27, 1993. All stock of the Bank was issued to the
Company, the holding company formed in connection with the conversion.
Substantially all of the proceeds from the stock offering were transferred to
the capital of the Bank in order to bring the Bank into compliance with the
regulatory capital requirements. As a result of the compliance with regulatory
capital requirements, the capital plan and supervisory agreement were lifted on
October 1, 1993. Management of the Bank does not expect any material change in
the operations of the Bank as a result of the lifting of the capital plan and
the supervisory agreement.

COMPARISON OF YEARS ENDED SEPTEMBER 30, 1995 AND 1994

General. The Bank had net income of $848,000 for the year ended
September 30, 1994 compared to a net loss of $175,000 for the year ended
September 30, 1994. As discussed in more detail below, results of operations
for the year ended September 30, 1995 were negatively impacted by a decline in
net interest income of $416,000. This decline was offset by a favorable
decline in the provision for loan losses of $341,000. In addition, the results
of operations for the year ended September 30, 1994 were adversely impacted by
a provision for loss on litigation of $685,000.

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<PAGE> 109

Net Interest Income. Net interest income decreased $416,000 from
$4,189,000 for the year ended September 30, 1994 compared to $3,773,000 for the
year ended September 30, 1995. Such decline was primarily attributed to
interest income increasing at a slower rate than the increase in interest
expense. The slower rise in interest income was due to the Bank's use of
lagging market indexed adjustable rate mortgage products. The average balances
of interest-earning assets increased by $10.3 million due to an increase in the
average balance of mortgage-backed securities of $8.4 million resulting from
the purchase of $9.8 million of 8.5% fixed rate mortgage-backed securities and
an increase in loans of $6.7 million due to a purchase of a 95% participation
interest totalling $3.4 million in 58 loans which were partially offset by the
decrease in the average balance of investment securities and other
interest-bearing assets of $4.9 million resulting from the sale of mutual
funds. The average balances of interest bearing liabilities also increased
$10.5 million. The average balance of FHLB advances increased $8.4 million to
fund the increase in assets. The average balance of deposits also increased
$2.1 due to the general increase in market rates. Interest income increased
$1,208,000 for the year ended September 30, 1995 compared to the year ended
September 30, 1994 primarily due to a $6.7 million increase in the average
balance of loans and a $8.4 million increase in the average balance of
mortgage-backed securities. In addition, interest income was positively
impacted by an 11 basis point increase in the average interest rate earned on
loans as the adjustable-rate portfolio of the Bank began to respond to
increases in market interest rates. Interest expense increased $1,624,000 for
the year ended September 30, 1995. Interest on savings increased $984,000 and
interest on advances from the FHLB increased $640,000 for the year ended
September 30, 1995. These increases were due to the increase in the average
cost of deposits and to increased average advance balances outstanding during
the year ended September 30, 1995. The weighted average rate paid on
interest-bearing liabilities increased from 3.65% for the year ended September
30, 1994 to 4.90% for the year ended September 30, 1995. The principal reason
for the increase in the average balance of advances outstanding was the Bank
invested $9.0 million of advances in mortgage-backed securities yielding 8.5%.
This decision also impacted the Bank's weighted average rate paid on interest-
bearing liabilities.

Provision for Loan Losses. The Bank's provision for loan losses
decreased $341,000 during the year ended September 30, 1995 as compared to
fiscal 1994. This decline was due to a reduction in non-performing assets from
approximately $3,730,000 at September 30, 1994 to $2,031,000 at September 30,
1995. The decline in non-performing assets diminished the need for large
additions to the provision for loan losses during fiscal 1995. The provision
for loan losses for fiscal 1994 was adversely impacted by a provision of
approximately $424,000 which was made for a loan collateralized by a business
rental property located in Venice, Florida which was in receivership and
foreclosure during fiscal 1994. This loan was foreclosed upon and the related
property was sold during the year ended September 30, 1995.

The allowance for loan losses reflects what the Bank believes is an
adequate level of reserves under its circumstances, although there can be no
assurance that future losses will not exceed the estimated amounts thereby
adversely affecting future results of operations.

Provision for Losses on Real Estate Owned. The Bank's provision for
losses on real estate owned decreased $470,000 during the year ended September
30, 1995 as compared to fiscal 1994. This decline was due to a decline in real
estate owned of approximately $445,000 from September 30, 1994 to September 30,
1995. In addition, the provision for fiscal 1994 was adversely impacted by a
provision of approximately $502,000 which was provided on a piece of real
estate owned which was formally part of a project to be developed by the Bank's
subsidiary. This provision was made based on a reappraisal of the property
which was received during the year ended September 30, 1994. Management
periodically obtains reappraisals on properties which are held for extended
periods of time.

Gains On Sales of Real Estate Owned. Gains on the sale of real estate
owned increased $34,000 during the year ended September 30, 1995 as compared to
fiscal 1994. The increase was primarily affected by the number and
marketability of the properties available in the Bank's portfolio of real
estate owned.

Provision for Loss on Litigation. As more fully discussed in Note 11
of the Notes to the Consolidated Financial Statements of FFE, the Bank settled
a lawsuit during the year ended September 30, 1994 which

105
<PAGE> 110

reduced net income by $685,000. No such litigation loss was experienced during
the year ended September 30, 1995.

Other Income. Other income increased $14,000 during the year ended
September 30, 1995 as compared to the year ended September 30, 1994. This
increase was primarily the result of a decline in gain on the sale of
available-for-sale assets (loans and investment securities) of approximately
$303,000 which was offset by an increase in other miscellaneous income of
approximately $300,000. The decline in gain on sale of available-for-sale
assets in fiscal 1995 was the result of no such assets being sold during fiscal
1995. The increase in other miscellaneous income was the result of a $44,000
gain on the sale of stock of a former data processing service bureau, a $56,000
gain which was recognized when the Bank received an adequate down payment
relating to a previous sale of real estate owned on which the profit (and
interest on the loan to facilitate) was previously deferred, a $78,000 recovery
from the State of Florida relating to environmental cleanup costs on a former
parcel of real estate owned, and other miscellaneous non-operating recoveries
of approximately $104,000. In addition, other income was negatively impacted
by a decrease in customer service charges of $22,000 which occurred as result
of a decline in the Bank's checking transactional accounts.

Other Expenses. The Bank's employee compensation and benefits
decreased $21,000 for the year ended September 30, 1995 as compared to the year
ended September 30, 1994. Compensation and benefits costs have been controlled
through a decline in the number of personnel which was partially offset by
increases in salaries paid to remaining employees. Occupancy and equipment
expenses declined from $743,000 to $694,000 for the year ended September 30,
1995 as compared to the year ended September 30, 1994. The decline in
occupancy and equipment expense relates to portions of the Bank's property and
equipment becoming fully depreciated and accordingly, no longer impacting
operations through depreciation expense. Occupancy and equipment expense,
other than depreciation, has been maintained at a consistent level since the
Bank ceased its planned program of shrinkage in fiscal 1994. Advertising and
promotion expense decreased approximately $26,000 for the year ended September
30, 1995 since portions of fiscal 1994 included an expanded advertising program
relating to the Bank's name change as a result of the Conversion. Deposit
insurance premiums declined approximately $39,000 for the year ended September
30, 1995 as compared to the year ended September 30, 1994 due to an improvement
in the Bank's rating category which reduced premiums. Examination and
professional fees decreased $208,000 for the year ended September 30, 1995 as
compared to the same period ended September 30, 1994. Examination fees
declined approximately $113,000 as a result of a continued decline in the level
of real estate owned and non-performing loans which directly impacted the level
of examination fees. In addition, certain legal fees declined approximately
$49,000 as a result of the Bank entering into a settlement agreement in
connection with litigation which arose out of the construction of a condominium
project by the Bank's former subsidiary. See Note 11 of the Notes to the
Consolidated Financial Statements of FFE. The settlement agreement allowed the
Bank to reduce the amount of attorney's fees which were being incurred to
defend itself in such litigation. Real estate owned operating expense declined
$20,000 for the year ended September 30, 1995 as compared to 1994 as a result
of a decline in the overall level of real estate owned. Other miscellaneous
expenses decreased $52,000 for the year ended September 30, 1995 as compared to
the year ended September 30, 1994 primarily due to reduced expenses and losses
from the Bank's service corporation which was scaling down its operations in
1994 (and ceasing operations on September 30, 1994).

The deposits of savings associations such as the Bank are presently
insured by the Savings Association Insurance Fund, which, along with the Bank
Insurance Fund (the "BIF"), is one of the two insurance funds administered by
the FDIC. Financial institutions which are members of the BIF are experiencing
substantially lower deposit insurance premiums because the BIF has achieved its
required level of reserves while the SAIF has not yet achieved its required
reserves. A recapitalization plan for the SAIF under consideration by Congress
provides for a special assessment of 0.80% to 0.90% of deposits to be imposed
on all SAIF insured institutions to enable the SAIF to achieve its required
level of reserves. If the proposed assessment of 0.80% to 0.90% was effected
based on deposits as of March 31, 1995 (as proposed), the Bank's special
assessment would amount to approximately $644,000 to $724,000, before taxes,
respectively. Accordingly, this special assessment would significantly
increase non-interest expense and adversely effect the Bank's results of
operations. Conversely, depending upon the Bank's capital level and
supervisory rating, and assuming the

106
<PAGE> 111

insurance premium levels for BIF and SAIF members are again equalized, future
deposit insurance premiums are expected to decrease significantly, to as low as
.04% from the .23% of deposits currently paid by the Bank, which would reduce
non- interest expense for future periods.

COMPARISON OF YEAR ENDED SEPTEMBER 30, 1994 AND 1993

General. The Bank had a net loss of $175,000 for the year ended
September 30, 1994 compared to net income of $583,000 for the year ended
September 30, 1993. As discussed in more detail below, results of operations
for the year ended September 30, 1994 were negatively impacted by a decline in
net interest income of $406,000, an increase in the provision for loan losses
of approximately $33,000, a decline in the gain on sales of office property and
equipment of $189,000, and a provision for litigation loss in 1994 of $685,000.

Net Interest Income. Net interest income decreased $406,000 from
$4,595,000 for the year ended September 30, 1993 compared to $4,189,000 for the
comparable period in 1994. Interest income decreased $1,310,000 for the year
ended September 30, 1994 compared to the year ended September 30, 1993
primarily due to a $7.3 million decrease in the average balance of loans and a
$4.0 million increase in mortgage-backed securities and an 81 basis point
decrease in the average interest rate earned on loans as the adjustable-rate
portfolio of the Bank responded to decreases in market interest rates.
Interest expense decreased $903,000 for the year ended September 30, 1994
compared to the year ended September 30, 1993 primarily due to a $8.9 million
decrease in the average balance of deposits and a 46 basis point decrease in
the average rate paid on deposits caused by decreases in market interest rates.

The reduction in market interest rates, combined with management's
decision to, at times, pay rates which were at the lower end of the competitive
scale, has resulted in decreases in the Bank's level of deposits since 1989.
In addition, management has also emphasized money market, passbook and NOW
accounts as opposed to trying to attract long- term certificates of deposit.
The decrease in deposits has been consistent with and required by the Bank's
determination to shrink its asset size. See "Business Strategy." Management
believes that customers continue to place a value on federal insurance on
deposit accounts and that, to the extent the Bank pays competitive rates on
deposits, it will be able to maintain its deposit levels and liquidity.

Provision for loan losses. The Bank's provision for loan losses
increased $33,000 during the year ended September 30, 1994 as compared to
fiscal 1993. This increase was due to a provision of approximately $424,000
made on a loan collateralized by a business rental property located in Venice,
Florida which is in receivership and foreclosure. The allowance for loan
losses reflects what the Bank believes was an adequate level of reserves under
its circumstances, although there can be no assurance that future losses will
not exceed the estimated amounts thereby adversely affecting future results of
operations.

Provisions for losses on real estate owned. The Bank's provision for
losses on real estate owned increased $15,000 during the year ended September
30, 1994 as compared to fiscal 1993. The increase was the result of a
provision of approximately $502,000 made on a piece of real estate owned which
was formerly part of a project to be developed by the Bank's subsidiary. This
provision was made based on a reappraisal of the property which was received
during the year ended September 30, 1994. Management periodically obtains
reappraisals on properties which are held for extended periods of time.
Without the provision of $502,000 discussed above, the provision for losses on
real estate owned would have declined substantially which is consistent with
the overall reduction in real estate owned.

Losses on sales of real estate owned. Losses on the sale of real
estate owned decreased $140,000 during the year ended September 30, 1994 as
compared to the same period during 1993. The decease was the result of a
decrease in the level of real estate owned, due to management's efforts to
reduce non-performing assets.

Provision for loss on litigation. As more fully discussed in Note 11
of the Notes to the Consolidated Financial Statements of FFE, the Bank and its
subsidiary settled a lawsuit during the year ended September 30, 1994 which
reduced net income by $685,000.

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<PAGE> 112

Other income. Other income declined $182,000 during the year ended
September 30, 1994 as compared to the same period ended September 30, 1993.
The decrease was primarily the result of a non-recurring gain of $195,000
during the year ended September 30, 1993 from the Bank's sale of a former
branch location. In addition, other income was positively impacted by an
increase in customer service charges of $23,000 which occurred as a result of
an expanded marketing program for demand deposit accounts and an increase in
the Bank's fee schedule. Other income was also negatively impacted by a
decrease in other miscellaneous income of $5,000 for the year ended September
30, 1994 as compared to the year ended September 30, 1993. The decrease in
other miscellaneous income was primarily due to sales of loans which resulted
in losses of $64,000 during the year ended September 30, 1994 as compared to
gains of $56,000 during the year ended September 30, 1993. The losses on loan
sales were the result of less favorable market rates which adversely affected
loans held for sale. The losses from loan sales were partially offset by the
reversal of a reserve in the amount of $50,000 for potential environmental
cleanup costs for a parcel of former real estate owned. This reserve (which
was established in 1992) was reversed after the Bank was notified by the State
of Florida that the cost of the cleanup would be paid for by the State.

Other expenses. The Bank's employee compensation and benefits
increased $261,000 for the year ended September 30, 1994 as compared to the
year ended September 30, 1993. Such increase was primarily due to a credit
adjustment of $153,000 which was realized during the year ended September 30,
1993 relating to health insurance. This credit was realized on the Bank's
self-insured portion of the health plan when the Bank changed its insurance
carrier. In addition, the Bank experienced increased costs in 1994 for group
insurance and the amortization of the deferred compensation relating to the
MRP. Occupancy and equipment expenses declined from $840,000 to $743,000 for
the year ended September 30, 1994 as compared to the year ended September 30,
1993. Such decline is primarily due to a renegotiation of the Bank's contract
for data processing services. Advertising and promotion expense increased
approximately $21,000 for the year ended September 30, 1994 as a result of
expanded advertising relating to the Bank's name change as well as additional
promotion of deposit programs. Deposit insurance premiums declined
approximately $40,000 for the year ended September 30, 1994 as compared to the
year ended September 30, 1993 due to an improvement in the Bank's rating
category which reduced premiums. Examination and professional fees increased
$39,000 for the year ended September 30, 1994 as compared to the same period
ended September 30, 1993 since the costs incurred in the 1994 period were at
increased levels as a result of examination and legal fees associated with a
publicly owned holding company. Legal fees resulting from litigation also
contributed to the increase in examination and professional fees. Real estate
owned operating expense declined $146,000 for the year ended September 30, 1994
as compared to 1993 as a result of a decline in the overall level of real
estate owned. Other miscellaneous expenses decreased $154,000 for the year
ended September 30, 1994 as compared to the year ended September 30, 1993
primarily due to reduced expenses and losses from the Bank's service
corporation which was scaling down its operations in 1994 (and ceased
operations on September 30, 1994). In addition, other miscellaneous expenses
for the year ended September 30, 1993, included several miscellaneous
non-recurring non-operating expenses.

ANALYSIS OF NET INTEREST INCOME

Net interest income represents the difference between income on
interest-earning assets and expense on interest- bearing liabilities. Net
interest income depends upon the volume of interest-earning assets and
interest-bearing liabilities and the interest rate earned or paid on them.

108
<PAGE> 113

AVERAGE BALANCES, INTEREST RATES AND YIELDS

The following table presents for the periods indicated the Bank's
total dollar amount of interest income from average interest-earning assets and
the resultant yields, as well as the interest expense on average
interest-bearing liabilities, expressed both in dollars and rates, and the net
interest margin. No tax equivalent adjustments were made. All average
balances are monthly average balances and include the balances of non-accruing
loans.

<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------------------------------------------
1995 1994 1993
---------------------------------------------------------------------------------------
Average Interest Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate Balance Paid Rate
----------- -------- ------ ----------- -------- ------ ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST-EARNING ASSETS:
Loans receivable . . . . . . $ 96,657 $7,468 7.73% $ 89,965 $6,857 7.62% $ 97,235 $8,198 8.43%
Mortgage-backed securities . 18,760 1,259 6.71 10,328 477 4.62 6,444 300 4.66
Investment securities and
other interest- bearing assets 15,787 851 5.39 20,648 1,054 5.10 20,898 1,194 5.71

FHLB stock . . . . . . . . . 981 71 7.24 939 53 5.64 1,028 58 5.64
-------- ------ -------- ------ -------- ------
Total interest-earning assets(1) $132,185 9,649 7.30 $121,880 8,441 6.93 $125,605 9,750 7.76
======== ------ ======== ------ ======== ------

INTEREST-BEARING LIABILITIES:
Deposits . . . . . . . . . . 121,192 5,212 4.30 119,044 4,228 3.55 $127,977 5,136 4.01
FHLB advances . . . . . . . 8,898 664 7.46 527 24 4.55 188 19 10.10
-------- ------ -------- ------ -------- ------
Total interest-bearing
liabilities . . . . . . $130,090 5,876 4.52 $119,571 4,252 3.56 $128,165 5,155 4.02
======== ------ ======== ------ ======== ------

Net interest income . . . . . $4,189 $4,595
====== ======
Net interest rate spread . . $3,773 2.78% 3.37% 3.74%
====== ==== ==== =====
Net earning assets . . . . . $ 2,095 $ 2,309 $ (2,560)
======== ======== ========
Net yield on average interest-
earning assets . . . . . . . 2.85% 3.44% 3.66%
==== ==== =====
Average interest-earning assets
to average interest-bearing
liabilities . . . . . . . . 1.02x 1.02x .98x
==== ====== ======
</TABLE>
___________________
(1) Calculated net of deferred loan fees, loan discounts, loans in process
and loss reserves.

109
<PAGE> 114

<TABLE>
<CAPTION>
At At At
September 30, September 30, September 30,
1995 1994 1993
---------------- ---------------- ----------------
<S> <C> <C> <C>
Weighted average yield on:
Loans receivable . . . . . . . . . . . . . . . . 7.91% 7.40% 8.06%
Mortgage-backed securities . . . . . . . . . . . 6.87 4.81 4.55
Investment securities . . . . . . . . . . . . . 4.93 5.07 5.88
Other interest-earning assets . . . . . . . . . 6.20 5.71 3.97
Combined weighted average yield on
interest-earning assets . . . . . . . . . . 7.44 6.90 7.42
Weighted average rate paid on:
Savings deposits . . . . . . . . . . . . . . . . 2.22 2.20 2.00
Demand and NOW deposits . . . . . . . . . . . . 2.28 1.92 1.90
Certificates . . . . . . . . . . . . . . . . . . 5.89 4.63 4.92
FHLB Advances . . . . . . . . . . . . . . . . . 7.57 --- ---
Combined weighted average rate paid on
interest-bearing liabilities . . . . . . . . 4.90 3.65 3.73

Spread . . . . . . . . . . . . . . . . . . . . . 2.54% 3.25% 3.69%
</TABLE>

110
<PAGE> 115

RATE/VOLUME ANALYSIS OF NET INTEREST INCOME

The following schedule presents the dollar amount of changes in interest
income and interest expense for major components of interest-earning assets and
interest-bearing liabilities. It distinguishes between the increase related to
higher outstanding balances and that due to the levels and volatility of
interest rates. For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable
to (i) changes in volume (i.e., changes in volume multiplied by old rate) and
(ii) changes in rate (i.e., changes in rate multiplied by old volume). For
purposes of this table, changes attributable to both rate and volume, which
cannot be segregated have been allocated proportionately to the change due to
volume and the change due to rate.

<TABLE>
<CAPTION>
Year Ended Year Ended
September 30 September 30
1995 vs. 1994 1994 vs. 1993
--------------------------------------------------------------
Increase Increase
(Decrease) (Decrease)
Due to Total Due to Total
------------------ Increase ------------------ Increase
Volume Rate (Decrease) Volume Rate (Decrease)
------------------ ------------------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable . . . . . . . . . . . . $ 512 $ 99 $ 611 $(587) $(754) $(1,341)

Mortgage-backed securities . . . . . . . 504 278 782 180 (3) 177
Investments and other interest-
earning assets . . . . . . . . . . . . (268) 65 (203) (14) (126) (140)
FHLB stock . . . . . . . . . . . . . . . 2 16 18 (5) -- (5)
----- ----- ------ ----- ----- -------

Total interest-earning assets . . . . . 750 458 1,208 (426) (883) (1,309)
----- ----- ------ ----- ----- -------

Interest-bearing liabilities:
Deposits . . . . . . . . . . . . . . . . 77 907 984 (343) (565) (908)
FHLB advances . . . . . . . . . . . . . 615 25 640 7 (2) 5
----- ----- ------ ----- ----- -------

Total interest-bearing liabilities . . 692 932 1,624 (336) (567) (903)
----- ----- ------ ----- ----- -------

Net interest income . . . . . . . . . . . $ 58 $(474) $ (416) $ (90) $(316) $ (406)
===== ===== ====== ===== ===== =======
</TABLE>

ASSET/LIABILITY MANAGEMENT

The Bank, like other thrift institutions, is subject to interest rate
risk to the extent that its interest-bearing liabilities with short and medium
terms mature or reprice more rapidly, or on a different basis, than its
interest-earning assets, a significant portion of which consist of long-term
fixed rate loans. As a continuing part of its strategy, the Bank considers
methods of managing this asset/liability mismatch, consistent with maintaining
acceptable levels of net interest income. During periods of changing rates, if
the rates on the Bank's deposits rise more quickly than its rates on loans, or
if rates on loans fall more quickly than its rates on deposits, the Bank's
earnings may be adversely affected. The Bank, however, has sought to control
the historic gap between the long terms to maturity or repricing on its
interest-earning assets and the short terms on its interest-bearing
liabilities, while continuing to satisfy its interest rate spread objectives,
by engaging in the following asset/liability management strategies:

o Adjustable Rate Mortgage Loans - In an attempt to hedge
against interest rate fluctuations, the Bank began originating
adjustable rate mortgage loans in 1983. ARM's reprice to the
terms of

111
<PAGE> 116

the market and as of September 30, 1995 comprise approximately
$82.8 million of the Bank's portfolio or 83%. The Bank
currently uses two indices to price its ARM's which are both
based on the Treasury Bill rate.

o Saleable Loan Products - All loan originations, both
adjustable and fixed rate products, are underwritten to FHLMC
standards so that originations can be readily converted to
cash through sales as the need arises.

o Deposit Composition - As previously discussed, the Bank has
adopted a cost effective pricing strategy which emphasizes
short-term low cost deposits. In addition, the Bank actively
promotes what it considers to be its core deposits of
passbook, demand deposit, non-interest bearing checking, money
market and NOW accounts. Such deposits tend to generate
long-term banking relationships with customers and
historically have not been rate driven accounts.

Each of the above steps, and the Bank's progress in controlling its
exposure to interest rate risk while satisfying its interest rate spread
objectives, is regularly reviewed by management. As a result, the gap between
the Bank's assets which mature or reprice within one year and its liabilities
which mature or reprice during the same period was $6,839,000 or 4.86% of total
assets at September 30, 1995. This relatively matched gap position at
September 30, 1995, mitigates the extent to which the Bank's operations are
affected by fluctuations in interest rates. During periods of falling interest
rates a positive gap position would tend to result in a decrease in net
interest income and during periods of rising interest rates a positive gap
would tend to result in increasing net interest income.

The following table sets forth the repricing dates of the Bank's
interest-earning assets and interest-bearing liabilities at September 30, 1995,
and the Bank's interest rate sensitivity "gap" percentages at the dates
indicated. The interest rate sensitivity gap is defined as the amount by which
assets repricing within the respective periods exceed liabilities repricing
within such periods. One- to four-family fixed-rate mortgage loans are assumed
to prepay at an annual rate of 15%. Adjustable-rate mortgage loans and all
other loans are assumed to prepay at a rate of 15% per year. Passbook accounts
are assumed to be withdrawn at annual rates of 16%, 26%, 17%, and 41%,
respectively, during the periods shown. Demand deposit accounts are assumed to
decay at annual rates of 64%, 19%, 6%, and 11%, respectively, in each of the
periods shown.

The effect of these assumptions is to quantify the dollar amount of
items that are interest-sensitive and can be repriced within each of the
periods specified. Such repricing can occur in one of three ways: (1) the
rate of interest to be paid on an asset or liability may adjust periodically on
the basis of an index; (2) an asset or liability such as a mortgage loan may
amortize, permitting reinvestment of cash flows at the then-prevailing interest
rates; or (3) an asset or liability may mature, at which time proceeds can be
reinvested at current market rates.

112
<PAGE> 117

The following table sets forth the interest rate sensitivity of the
Bank's assets and liabilities at September 30, 1995, on the basis of the
factors and assumptions set forth above.

<TABLE>
<CAPTION>
MATURING OR REPRICING
---------------------------------------------------------------------
One Year Over 1-3 Over 3-5 Over
or Less Years Years 5 Years
----------- -------------- ------------- -------------- Total
Amount Amount Amount Amount Amount
----------- -------------- ------------- ----------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Fixed rate one- to four-family (including
mortgage-backed securities), commercial real
estate and construction loans . . . . . . . . $ 4,758 $ 9,516 $ 9,516 $7,930 $ 31,720
Adjustable rate one- to four-family, commercial
real estate and construction loans . . . . . . 70,484 8,731 6,566 301 86,082
Commercial business loans . . . . . . . . . . . 672 -- 23 -- 695
Consumer loans . . . . . . . . . . . . . . . . 368 98 51 1 518
Investment securities and other . . . . . . . . 9,125 2,457 4,888 -- 16,470
------- -------- ------- ------ --------

Total interest-earning assets . . . . . . . 85,407 20,802 21,044 8,232 135,485
------- -------- ------- ------ --------

Savings deposits . . . . . . . . . . . . . . . 1,418 2,366 1,545 3,703 9,032
Demand and NOW deposits . . . . . . . . . . . . 19,412 5,851 2,011 3,200 30,474
Certificates . . . . . . . . . . . . . . . . . 55,738 19,916 5,411 -- 81,065
FHLB Advances . . . . . . . . . . . . . . . . . 2,000 7,000 -- -- 9,000
------- -------- ------- ------ --------

Total interest-bearing liabilities . . . . . 78,568 35,133 8,967 6,903 129,571
------- -------- ------- ------ --------

Interest-earning assets less interest-bearing
liabilities . . . . . . . . . . . . . . . . . $ 6,839 $(14,331) $12,077 $1,329 $ 5,914
======= ======== ======= ====== ========
Cumulative interest-rate sensitivity gap . . . $ 6,839 $ (7,492) $ 4,585 $5,194
======= ======== ======= ======
Cumulative interest-rate gap as a percentage of
total assets at September 30, 1995 . . . . . . 4.86% (5.33%) 3.26% 4.20%
======= ======== ======= ======
Cumulative interest-rate gap as a percentage of
interest-earning assets at September 30, 1994 5.02%
=======
Cumulative interest-rate gap as a percentage of
interest-earning assets at September 30, 1993 17.08%
=======
</TABLE>

Certain shortcomings are inherent in the method of analysis presented
in the foregoing table. For example, although certain assets and liabilities
may have similar maturities or periods to repricing, they may react in
different degrees to changes in market interest rates. Also, the interest
rates on certain types of assets and liabilities may fluctuate in advance of
changes in market interest rates, while interest rates on other types may lag
behind changes in market rates. Additionally, certain assets, such as "ARM"
loans, have features which restrict changes in interest rates on a short-term
basis and over the life of the asset. Further, in the event of a change in
interest rates, prepayment and early withdrawal levels would likely deviate
significantly from those assumed in calculating the table. Finally, the
ability of many borrowers to service their debt may decrease in the event of an
interest rate increase.

At September 30, 1995, the Bank had interest-earning assets of
approximately $135,485,000 having a weighted average effective yield of 7.4%,
and a duration of 2.6 years; and interest-bearing liabilities of approximately
$129,571,000 having a weighted average effective interest rate of 3.65%, and a
duration of 0.98 years. The durations are based on the contractual maturities
or terms to repricing for both the interest-earning assets and interest-bearing
liabilities. The shorter duration of the interest-sensitive liabilities
indicates that the Bank is exposed to interest rate risk because, in a rising
rate environment, liabilities will be repricing faster at higher interest
rates, thereby reducing net interest income.

113
<PAGE> 118

The Bank originates and purchases both adjustable and fixed interest
rate loans. At September 30, 1995, the composition of these loans was as
follows:

<TABLE>
<CAPTION>
FIXED RATE
----------

TERM TO MATURITY APPROXIMATE BOOK VALUE
---------------- ----------------------
<S> <C>
1 month - 1 year $ 1,562,000
1 year - 3 years 314,000
3 years - 5 years 577,000
5 years - 10 years 2,114,000
Over 10 years 11,589,000
-----------

Total Fixed Rate Loans $16,156,000
-----------
</TABLE>

<TABLE>
<CAPTION>
ADJUSTABLE RATE
---------------

TERM TO RATE ADJUSTMENT
-----------------------
<S> <C>
1 month - 1 year $67,903,000
1 year - 3 years 8,731,000
3 years - 5 years 6,867,000
-----------

Total Adjustable $83,501,000
-----------
Rate Loans
Total Loans $99,657,000
-----------
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

The Bank is required under applicable federal regulations to maintain
specified levels of liquid investments in qualifying types of U.S. Government
securities, federal agency securities, and other investments. Regulations
currently in effect require First Federal to maintain liquid assets of not less
than 5% of its average daily balance of its net withdrawable accounts plus
short-term borrowings during the preceding calendar month; short-term liquid
assets must consist of not less than 1% of that amount. The Bank has
consistently exceeded these requirements. The Bank's liquidity ratio was
18.22% and 18.92%, respectively, at September 30, 1995 and 1994.

The Bank's primary sources of cash are proceeds from the sales of
loans and mortgage-backed securities, payments of loan principal (including
mortgage-backed securities), maturity and sale of investment securities, and
operations. The Bank uses these sources of cash primarily to meet ongoing
commitments to fund maturing savings certificates, savings withdrawals and
existing loan commitments, and to maintain its liquidity. In addition the Bank
is able to obtain advances from the FHLB, in the event funds are needed to meet
ongoing funding commitments. At September 30, 1995 and 1994, respectively, the
Bank had outstanding commitments to originate approximately $318,300 and
$657,700 of loans. The Bank believes that it has adequate liquidity to fund
these commitments.

The Bank completed its initial public offering on August 26, 1993 with
the sale of 462,875 shares at $10.00 per share. Substantially all of the net
proceeds, of approximately $3.5 million was invested in all of the common stock
of the Bank issued in its conversion from a mutual to a stock savings bank.

114
<PAGE> 119

The Bank is a member of SAIF and the deposits of the Bank are insured
by the Federal Deposit Insurance Corporation. As more fully discussed in Note
11 of the Notes to the Consolidated Financial Statements of FFE, Congress is
considering legislation on the issue of a one-time assessment to all members of
the SAIF to capitalize and increase SAIF's reserves. The plan that has been
proposed would require a one-time fee of approximately 85 to 90 basis points of
SAIF-insured deposits. This would mean an assessment to the Bank of
approximately $1,050,000, which would reduce the Bank's capital by the amount
of the fee less any related tax-effect. Management of the Bank is unable to
predict whether this proposal or any similar proposal will be enacted. See
Note 12 of the Notes to the Consolidated Financial Statements of FFE.

IMPACT OF INFLATION AND CHANGING PRICES

The Consolidated Financial Statements and notes thereto presented
herein have been prepared in accordance with generally accepted accounting
principles, which require the measurement of financial position and operating
results in terms of historical dollars without considering the changes in the
relative purchasing power of money over time due to inflation. The impact of
inflation is reflected in the increased cost of the Bank's operations. Unlike
most industrial companies, nearly all the assets and liabilities of the Bank
are monetary in nature. As a result, interest rates have a greater impact on
the Bank's performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or to the same
extent as the prices of goods and services.

IMPACT OF NEW ACCOUNTING STANDARDS

The Financial Accounting Standards Board ("FASB") has issued several
new accounting standards which have impacted the accounting for transactions of
the Bank. The new standards are discussed in detail at Note 13 of the Notes to
Consolidated Financial Statements of FFE.

LEGAL MATTERS

Certain legal matters in connection with the SouthTrust Common Stock
being offered hereby will be passed upon by Bradley, Arant, Rose & White, 2001
Park Place, Suite 1400, Birmingham, Alabama, counsel for SouthTrust. As of
September 30, 1995, the partners and associates of the firm of Bradley, Arant,
Rose & White beneficially owned approximately 2,034,000 shares of SouthTrust
Common Stock. Certain tax consequences of the Merger also have been passed
upon by Bradley, Arant, Rose & White.

EXPERTS

The consolidated financial statements of SouthTrust and subsidiaries
incorporated by reference in this Proxy Statement/Prospectus and elsewhere in
the Registration Statement, have been audited by Arthur Andersen LLP,
independent public accountants, for the periods indicated in their reports
thereon and are incorporated herein by reference in reliance upon the authority
of said firm as experts in giving said reports.

The consolidated financial statements of FFE and its subsidiary as of
and for the fiscal year ended September 30, 1993 included in this Proxy
Statement/Prospectus have been audited by Deloitte & Touche LLP, independent
certified public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing.

The consolidated financial statements of FFE and its subsidiary
as of and for the years ended September 30, 1995 and 1994, have been included
in this Proxy Statement/Prospectus in relieance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing.

Representatives of KPMG Peat Marwick LLP are expected to be present at
the Annual Meeting with the opportunity to make a statement if they desire to
do so and to respond to appropriate questions.

115
<PAGE> 120

ADDITIONAL INFORMATION

AVAILABLE INFORMATION; DELISTING AND DEREGISTRATION

FFE is subject to the information requirements of the Exchange Act
and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Such reports, proxy statement and other
information can be inspected and copies made at the public reference facilities
of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and are also available for inspection and copying at the regional offices of
the Commission located at 75 Park Place, New York, New York 10007; and
Northwestern Atrium Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such materials can be obtained by mail on payment of
the Commission's customary fees by writing to its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549.

After the Effective Time of the Merger, the FFE Common Stock will not
be registered pursuant to the Exchange Act, and FFE will not be subject to the
information requirements of the Exchange Act. Accordingly, FFE will no longer
be required to file periodic reports, proxy statements and other information
with the Commission or to transmit certain documents to its stockholders.

OTHER BUSINESS

The Board of Directors of FFE does not know of any matter to be
brought before the Annual Meeting other than as described in the Notice of
Annual Meeting accompanying this Proxy Statement. If any other matter comes
before the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote the proxy in accordance with their best judgment
with respect to such other matters.

STOCKHOLDER PROPOSALS

No proposals to be presented at the Annual Meeting were received by
FFE prior to November 28, 1995, the date on which, under the rules of the
Commission, such proposals were required to be submitted to FFE in order for a
stockholder of FFE to have the right to have such proposal included in FFE's
proxy materials for such annual meeting.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

INFORMATION WITH RESPECT TO SOUTHTRUST

The following documents filed by SouthTrust with the Commission are
incorporated by reference herein:

(i) SouthTrust's Annual Report on Form 10-K for the year ended
December 31, 1994 (including therein SouthTrust's Proxy
Statement for its Annual Meeting of Stockholders held April
19, 1995) (Commission File No. 0-3613);

(ii) SouthTrust's Quarterly Reports on Form 10-Q for the quarters
ended September 30, 1995, June 30, 1995 and March 31, 1995,
(Commission File No. 0-3613); and

(iii) SouthTrust's Current Report on Form 8-K dated January 10, 1996
(Commission File No. 0-3613).

All documents filed by SouthTrust pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Proxy Statement/Prospectus
and prior to final adjournment of the Annual Meeting, shall be

116
<PAGE> 121

deemed to be incorporated by reference into this Proxy Statement/Prospectus
from the date of the filing of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement/Prospectus to the extent that a statement
contained herein or in any other subsequently filed document 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 Proxy
Statement/Prospectus.

The audited financial statements of SouthTrust incorporated herein by
reference should only be read in conjunction with the discussion of consummated
and pending acquisitions set forth under the caption "SUMMARY - Parties to the
Merger - SouthTrust."

Copies of all documents with respect to SouthTrust incorporated by
reference (not including exhibits to the documents incorporated by reference
unless such exhibits are specifically incorporated into the documents
incorporated by reference) will be provided without charge to each person to
whom a copy of this Proxy Statement/Prospectus is delivered upon written or
oral request. Requests for such copies should be directed to Mr. Aubrey D.
Barnard, Secretary, SouthTrust Corporation, 420 North 20th Street, Birmingham,
Alabama 35203, telephone number (205) 254-5000.

117
<PAGE> 122

INDEX TO THE FINANCIAL STATEMENTS
OF FFE FINANCIAL CORP.

<TABLE>
<S> <C>
Audited Financial Statements:

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Balance Sheets as of
September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Operations for the years
ended September 30, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Consolidated Statements of Stockholders' Equity for the
years ended September 30, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Consolidated Statements of Cash Flows for the years ended
September 30, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9
Notes to Consolidated Financial Statements
for the years ended September 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . F-11

Interim Unaudited Financial Statements:

Condensed Consolidated Statement of Financial Condition as of December 31, 1995 and September 30, 1995 . . F-32
Condensed Consolidated Statements of Operations for the three month period ended December 31, 1995
and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-34
Condensed Consolidated Statements of Stockholders' Equity for the three month period ended December
31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-36
Condensed Consolidated Statements of Cash Flows for the three month period ended December 31, 1995 and
1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-37
Notes to Condensed Consolidated Financial Statements as of December 31, 1995 and 1994. . . . . . . . . . . F-39

</TABLE>

<PAGE> 123

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
FFE Financial Corp. and Subsidiary:

We have audited the accompanying consolidated balance sheets of FFE
Financial Corp. and subsidiary as of September 30, 1995 and 1994, and
the related consolidated statements of operations, stockholders'
equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of FFE Financial Corp. and subsidiary as of September 30, 1995 and
1994, and the results of their operations and their cash flows for the
years then ended in conformity with generally accepted accounting
principles.

/s/ KPMG Peat Marwick LLP

Tampa, Florida
October 20, 1995, except as to Note 16,
which is as of November 3, 1995

F-2

<PAGE> 124

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
FFE Financial Corp.:

We have audited the accompanying consolidated statements of operations,
stockholders' equity and cash flows of FFE Financial Corp. and subsidiary (the
"Company") for the year ended September 30, 1993. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the results of operations and cash flows of the Company for
the year ended September 30, 1993 in conformity with generally accepted
accounting principles.

As discussed in Note 11 to the consolidated financial statements, the Company's
subsidiary (the "Bank") is a defendant in lawsuits claiming the Bank is a
responsible party in relation to alleged damages resulting from certain defects
in the construction of a condominium project developed by the Bank's
subsidiary. The ultimate outcome of the litigation cannot presently be
determined. Accordingly, no provision for any loss that may result upon
resolution of this matter has been made in the accompanying consolidated
financial statements for the year ended September 30, 1993.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP

November 24, 1993

F-3

<PAGE> 125

FFE FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1995 AND 1994

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

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
ASSETS:
CASH $ 1,768,929 $ 2,378,826

INTEREST-BEARING DEPOSITS 3,139,569 2,251,232
------------- ------------
Total cash and cash equivalents 4,908,498 4,630,058

GOVERNMENT SECURITIES AVAILABLE FOR SALE -
at market (Note 3) 12,318,125 12,825,000

MORTGAGE-BACKED SECURITIES HELD-TO-
MATURITY - market values of $19,628,167 and
$10,589,622, respectively (Note 3) 19,358,405 11,290,647

LOANS RECEIVABLE - net of allowance for losses of
$817,967 and $1,229,670, respectively (Note 4) 97,648,773 92,818,760

ACCRUED INTEREST RECEIVABLE:
Investments 135,331 107,450
Loans 585,174 448,382
Mortgage-backed securities 114,401 49,650

REAL ESTATE OWNED (Note 5) 1,469,989 1,914,660

OFFICE PROPERTIES AND EQUIPMENT - net (Note 6) 2,810,487 3,004,056

FEDERAL HOME LOAN BANK STOCK - at cost (Note 8) 1,012,700 941,900

OTHER ASSETS 329,509 406,358
------------- ------------
TOTAL $ 140,691,392 $128,436,921
============= ============
</TABLE>

(Continued)

See notes to consolidated financial statements.

F-4

<PAGE> 126

FFE FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1995 AND 1994

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

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY:

DEPOSIT ACCOUNTS (Note 7) $120,570,957 $118,425,082

ADVANCES FROM FEDERAL HOME LOAN BANK (Note 8) 9,000,000 -

ADVANCES BY BORROWERS FOR TAXES
AND INSURANCE 1,714,227 1,726,527

OTHER LIABILITIES 514,695 736,361

DEFERRED INCOME TAXES (Note 10) 259,099 87,695
------------ -----------
Total liabilities 132,058,978 120,975,665
------------ -----------
COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS' EQUITY (Note 12):
Preferred stock $.01 par value; authorized 500,000 shares;
none outstanding - -
Common stock $.01 par value; authorized 2,000,000 shares;
issued and outstanding 473,986 shares 4,740 4,740
Additional paid-in capital 3,685,222 3,685,222
Retained earnings - substantially restricted 5,114,858 4,266,944
Unrealized losses on investments available for sale - net (Note 2) (107,583) (408,609)
Unearned compensation (Note 9) (64,823) (87,041)
------------ -----------
Total stockholders' equity 8,632,414 7,461,256

------------ -----------
TOTAL $140,691,392 $128,436,921
============ ===========

</TABLE>

F-5

<PAGE> 127

FFE FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993

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

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $ 7,468,349 $ 6,857,193 $ 8,198,175
Interest on mortgage-backed securities 1,258,704 476,914 300,271
Interest and dividends on investments 717,389 963,871 1,140,222
Interest on interest-bearing deposits 204,891 142,698 111,835
------------- --------------- ----------------
Total 9,649,333 8,440,676 9,750,503
------------- --------------- ----------------
INTEREST EXPENSE:
Interest on deposit accounts (Note 7) 5,212,038 4,228,035 5,136,433
Interest on borrowings 664,413 23,924 18,701
------------- --------------- ----------------
Total 5,876,451 4,251,959 5,155,134
------------- --------------- ----------------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 3,772,882 4,188,717 4,595,369

PROVISION FOR LOAN LOSSES (Note 4) 49,545 391,408 358,307
------------- --------------- ----------------

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,723,337 3,797,309 4,237,062
------------- --------------- ----------------
OTHER INCOME:
Gain on sale of available for sale assets, net - 303,392 55,829
Gains on sales of investments and
mortgage-backed securities - net - - 279,573
Gains on sales of real estate owned - net 44,992 11,343 -
Customer service charges 369,612 391,750 368,792
Gains on sales of office properties and
equipment - net - 1,585 191,336
Other 403,760 95,841 90,146
------------- --------------- ----------------
Total 818,364 803,911 985,676
------------- --------------- ----------------
(Continued)
</TABLE>

F-6

<PAGE> 128

FFE FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993

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

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
OTHER EXPENSES:
Employee compensation and benefits (Note 9) $ 1,437,604 $ 1,458,727 $ 1,198,319
Occupancy and equipment 693,772 742,970 840,253
Advertising and promotion 69,985 96,349 75,391
Deposit insurance premium 311,450 350,200 389,890
Examination and professional fees 149,546 357,400 318,651
Real estate owned operating expense - net 52,645 72,335 218,454
Losses on sales of real estate owned - net - - 140,007
Provision for loss on litigation (Note 11) - 684,700 -
Provision for losses on real estate owned 104,962 575,493 560,730
Other 344,749 396,449 549,750
--------------- -------------- ---------------
Total 3,164,713 4,734,623 4,291,445
--------------- -------------- ---------------
INCOME (LOSS) BEFORE INCOME TAXES 1,376,988 (133,403) 931,293
--------------- -------------- ---------------
INCOME TAX PROVISION (BENEFIT):
Current 357,670 136,178 166,762
Deferred 171,404 (94,178) 181,873
--------------- -------------- ---------------
Total 529,074 42,000 348,635
--------------- -------------- ---------------
NET INCOME (LOSS) $ 847,914 $ (175,403) $ 582,658
=============== ============== ===============

WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES 487,003 473,986
=============== ==============

WEIGHTED AVERAGE COMMON AND
COMMON EQUIVALENT SHARES,
ASSUMING FULL DILUTION 492,221 473,986
=============== ==============

EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE:
Primary $ 1.74 $ (.37)
=============== ==============

Fully diluted $ 1.72 $ (.37)
=============== ==============
</TABLE>

See notes to consolidated financial statements.

F-7

<PAGE> 129

FFE FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
Unrealized Loss
Common Stock Additional on Investments
---------------- Paid-In Retained Available Unearned
Shares Amount Capital Earnings for Sale Compensation Total
------ ------ ------- -------- -------- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1992 -- $ -- $ -- $3,859,689 $ -- $ -- $ 3,859,689
Proceeds from sale of common stock
(net of offering expenses of $1,131,864) 462,875 4,629 3,492,257 -- -- -- 3,496,886
Issuance of MRP stock (Note 9) 10,185 102 101,748 -- -- (101,850) --
Expenses related to MRP stock program (Note 9) -- -- -- -- -- 1,851 1,851
Net income for year ended September 30, 1993 -- -- -- 582,658 -- -- 582,658

------- ------ ---------- ---------- --------- --------- ------------
Balance, September 30, 1993 473,060 4,731 3,594,005 4,442,347 -- (99,999) 7,941,084
Adjustment to conversion expenses -- -- 81,966 -- -- -- 81,966
Issuance of MRP stock 926 9 9,251 -- -- (9,260) --
Expense related to MRP stock program (Note 9) -- -- -- -- -- 22,218 22,218
Adjustment of investments available for sale
to fair value - net (Note 2) -- -- -- -- (408,609) -- (408,609)
Net loss for the year ended September 30, 1994 -- -- -- (175,403) -- -- (175,403)

------- ------ ---------- ---------- --------- --------- ------------
Balance, September 30, 1994 473,986 4,740 3,658,222 4,266,944 (408,609) (87,041) 7,461,256
Expense related to MRP stock program (Note 9) -- -- -- -- -- 22,218 22,218
Adjustment of investments available for sale
to fair value - net (Note 2) -- -- -- -- 301,026 -- 301,026
Net income for the year ended September 30, 1995 -- -- -- 847,914 -- -- 847,914

------- ------ ---------- ---------- --------- --------- ------------
Balance, September 30, 1995 473,986 $4,740 $3,685,222 $5,114,858 $(107,583) $ (64,823) $ 8,632,414
======= ====== ========== ========== ========= ========= ============
</TABLE>

See notes to consolidated financial statements.

F-8
<PAGE> 130

FFE FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993

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

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 847,914 $ (175,403) $ 582,658
ADJUSTMENTS TO RECONCILE NET INCOME
(LOSS) TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Provision for loan losses 49,545 391,408 358,307
Provision for losses on real estate owned 104,962 575,493 560,730
Depreciation and amortization 271,806 328,883 341,832
FHLB stock dividends - (11,700) (57,784)
Gains on sales of investments and mortgage-backed
securities - net - - (279,573)
Gains on sales of assets available for sale - net - (303,392) (55,829)
Losses (gains) on sales of office properties
and equipment - net 4,270 (1,585) (191,336)
Losses (gains) on sales of real estate owned - net (44,992) (11,343) 140,007
(Increase) decrease in accrued interest receivable (229,424) 152,619 306,759
(Increase) decrease on other assets (107,651) (37,930) 35,194
Decrease in other liabilities (221,666) (116,813) (440,173)
Increase (decrease) in deferred taxes 171,404 (94,178) 181,873
------------- ------------ ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 846,168 696,059 1,482,665
------------- ------------ ------------
INVESTING ACTIVITIES:
Purchases of investments and mortgage-
backed securities held to maturity (9,792,547) (23,990,809) (9,541,247)
Proceeds from sales of investments and
mortgage-backed securities - - 15,348,437
Proceeds from maturities of investments and
principal reductions on mortgage-backed
securities held to maturity 1,686,679 1,300,619 3,376,619
Proceeds from sales of assets available for sale 1,000,000 25,313,436 2,930,365
Net (increase) decrease in loans (2,911,463) 405,618 4,273,600
Purchases of property and equipment (44,623) (464,971) (36,220)
Purchases of loans (3,462,295) (5,238,000) -
Proceeds from sales of real estate owned 1,868,746 396,447 2,632,288
Proceeds from sales of property and equipment 25,000 2,746 390,457
Sale (purchase) of FHLB stock (70,800) - 249,684
------------- ------------ ------------
NET CASH PROVIDED BY (USED
IN) INVESTING ACTIVITIES (11,701,303) (2,274,914) 19,623,983
(Continued)
</TABLE>

F-9

<PAGE> 131

FFE FINANCIAL CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993

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

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
FINANCING ACTIVITIES:
Proceeds from sale of common stock $ - $ - $ 3,496,906
Net decrease in checking transactional accounts (1,649,549) (1,545,995) (8,327,929)
Net decrease in savings deposits (1,536,633) (2,226,041) (1,857,842)
Net increase (decrease) in certificate accounts 5,332,057 4,517,808 (11,706,985)
Net increase (decrease) in advances from FHLB 9,000,000 - (2,500,000)
Refund of conversion expenses - 81,966 -
Net increase (decrease) in advances
by borrowers for taxes and insurance (12,300) (63,588) 57,683
--------------- ------------- ----------------
NET CASH PROVIDED BY (USED
IN) FINANCING ACTIVITIES 11,133,575 764,150 (20,838,167)
--------------- ------------- ----------------

INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 278,440 (814,705) 268,481

CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 4,630,058 5,444,763 5,176,282
--------------- ------------- ----------------
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 4,908,498 $ 4,630,058 $ 5,444,763
=============== ============= ================

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Income taxes paid $ 54,500 $ 186,500 $ 225,000
=============== ============= ================

Interest paid $ 5,872,157 $ 4,252,495 $ 5,178,680
=============== ============= ================

SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Loans settled by acquisition of real estate $ 1,644,046 $ 271,130 $ 483,144
=============== ============= ================

Unrealized loss on mortgage-backed securities
available for sale, net of deferred taxes of
$65,938 and $250,438 $ (107,583) $ (408,609) $ -
=============== ============= ================

Issuance of MRP stock $ - $ 9,260 $ 1,851
=============== ============= ================
</TABLE>

See notes to consolidated financial statements.

F-10

<PAGE> 132

FFE FINANCIAL CORP. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

1. BASIS OF PRESENTATION

Conversion - FFE Financial Corp., a newly formed holding corporation,
completed an initial public offering on August 26, 1993, consisting of
462,875 shares of $.01 par value common stock (the "offering"). The
gross proceeds of the offering totaled $4,628,750, of which $4,629 was
allocated to common stock and $3,492,257, which is net of conversion
costs of $1,131,864, was allocated to additional paid-in capital.
Simultaneous to the offering, First of Englewood Federal Savings Bank
(the "Bank") formerly known as First Federal Savings and Loan Association
of Englewood, converted from a federal mutual savings and loan
association to a federal stock savings bank as approved by members of the
Bank (the "conversion"). Substantially all of the net proceeds from the
offering were used to acquire 100% of the common stock of the Bank.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a description of the significant accounting and
reporting policies which FFE Financial Corp. follows in preparing and
presenting its consolidated financial statements. The Bank's primary
market is the Southwest Coast of Florida.

Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of FFE Financial Corp. and the Bank and
its Subsidiary (collectively, the "Company"). The accounts of FFE
Financial Corp. consist of its investment in the Bank, an immaterial
amount of cash and expenses necessary to operate a public holding
company. Significant intercompany balances and transactions have been
eliminated in consolidation.

Investments and Mortgage-Backed Securities - The Company accounts for
investments and mortgage-backed securities in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS No. 115"). Under SFAS No. 115, investments in debt
and equity securities are required to be classified into: 1) trading
securities, 2) held-to-maturity securities, or 3) available-for-sale
securities. Investments available-for- sale are reported at fair value,
with unrealized gains and losses excluded from earnings and reported as a
separate component of stockholders' equity. Investments classified as
held-to-maturity are reported at amortized cost. Pursuant to the
statement, as of September 30, 1995, the Company's net unrealized losses
on the investments available-for-sale of $107,583 (which is net of the
related income tax effect of $65,938) has been reported as a separate
component of stockholders' equity in the accompanying consolidated
financial statements. Gains or losses on the disposition of securities
available-for-sale are based on the specific identification method.

Allowance for Loan Losses - A provision for loan losses is charged to
operations based on management's evaluation of the estimated loss in the
loan portfolio. Such evaluation, which includes a review of all loans of
which full collectibility may not be reasonably assured, considers, among
other matters, the fair value of the underlying collateral, economic
conditions, historical loan loss experience, and comments made by
regulatory agencies as a result of examinations. Although management
believes it uses the best information available to make such
determinations, future adjustments to reserves may be necessary if
circumstances differ substantially from the assumptions used in making
the determinations.

F-11

<PAGE> 133

Loans - Loans receivable are stated at unpaid principal balances, less
the allowance for loan losses, loans in process, and net of deferred
loan-origination fees and discounts. Loans receivable also include
premiums on loans purchased.

Real Estate Owned - Real estate owned includes properties acquired
through foreclosure and properties for which a deed of the underlying
collateral was accepted in lieu of foreclosure. Real estate acquired in
settlement of loans is initially recorded at the lower of cost or
estimated fair value minus estimated selling costs. Based on period
evaluations by management, the carrying values are reduced when they
exceed net realizable value.

Land held for sale, which is included in real estate owned, is carried at
cost, but not in excess of estimated fair value. The amounts the Company
ultimately recovers from real estate owned could differ materially from
the amounts used in arriving at the net carrying value of the assets
because of future market factors beyond the Company's control or changes
in the Company's strategy for recovering its investment. Costs relating
to the acquisition, development and improvement of property are
capitalized, but not in excess of net realizable value, whereas those
relating to holding the property are charged to expense.

Office Properties and Equipment - Office properties and equipment are
carried at cost less accumulated depreciation. Depreciation is computed
on the straight-line method over the estimated useful lives of the
assets, ranging from 5 to 40 years.

Uncollected Interest - The Company reverses all previously accrued
interest and ceases accruing interest on certain loans which may become
uncollectible and/or on which are more than 90 days past due. Such
interest, if ultimately collected, is credited to income in the period of
recovery.

Loan Fees and Premiums and Discounts on Loans and Mortgage-Backed
Securities - Loan fees (including commitment fees), net of certain direct
costs of origination, are deferred and amortized into income over the
contractual life of loans using the level yield method. If a commitment
expires unexercised, the commitment fee is recognized into income upon
expiration of the commitment.

Premiums and discounts on loans and mortgage-backed securities purchased
are amortized to income using the level yield method over the estimated
life of the loan or mortgage-backed security.

Income Taxes - The Company files consolidated federal and state income
tax returns. Income taxes are allocated to FFE Financial Corp., and to
the Bank and its subsidiary as though separate tax returns were being
filed.

Deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates
applicable to future years to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities.
As specifically related to financial institutions, the statement also
provides that a deferred tax liability, generally, will not be recognized
for bad debt reserves that arose in tax years beginning before December
31, 1987; however, a deferred tax liability shall be recognized for such
reserves arising in tax years beginning after December 31, 1987. At
September 30, 1995 and 1994, the Bank's tax bad debt reserves that arose
prior to December 31, 1987 were approximately $1.1 million. The effect
on deferred taxes of a change in tax rates is recognized in income in the
period that includes the enactment date. The Company periodically
evaluates the collectibility of deferred tax assets and provides a
valuation allowance for the portion of such assets not considered
realizable.

Off-Balance Sheet Risk - The Bank is a party to financial instruments
with off-balance sheet risk such as commitments to extend credit and
purchase loans. Management assesses the risk related to these
instruments for potential loss, and at September 30, 1995, no significant
losses are expected.

Cash and Cash Equivalents - Cash and cash equivalents include cash and
amounts due from depository institutions, interest-bearing deposits in
banks, and Federal funds sold with initial maturities of less than three
months. Federal Reserve Board regulations require savings institutions
to maintain noninterest-earning reserves against their transactions
accounts, nonpersonal time deposits with an original maturity of less
than one-half year,

F-12

<PAGE> 134

and certain money market deposit accounts. At September 30, 1995, the
reserve requirement amounted to $333,000 and was exceeded by vault cash.

Earnings Per Common Share - Earnings per common share is calculated using
the weighted average number of common stock and common stock equivalent
(stock options) shares outstanding. Earnings per share information is not
presented for the year ended September 30, 1993 because the Company's stock
was issued on August 26, 1993.

Reclassifications - Certain amounts in the 1994 and 1993 consolidated
financial statements have been reclassified to conform to the 1995
presentation.

F-13

<PAGE> 135

3. INVESTMENTS, MORTGAGE-BACKED AND GOVERNMENT SECURITIES

The amortized cost and market values of investments and mortgage-backed
securities at September 30, 1995 and 1994 are as follows:

<TABLE>
<CAPTION>
1995
------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--- --- --- ---
<S> <C> <C> <C> <C>
U.S. GOVERNMENT &
AGENCY SECURITIES
AVAILABLE-FOR-SALE $12,491,646 - (173,521) $12,318,125
----------- --------- --------- -----------
MORTGAGE-BACKED
SECURITIES HELD-TO-
MATURITY:

GNMA PASS-THROUGH
CERTIFICATES 9,388,983 511,527 - 9,900,510

FHLMC PASS-THROUGH
CERTIFICATES 6,692,736 - (163,051) 6,529,685

FNMA - ARMS
PASS-THROUGH
CERTIFICATES 3,276,686 - (78,714) 3,197,972
----------- --------- --------- -----------
MORTGAGE-BACKED
SECURITIES 19,358,405 511,527 (241,765) 19,628,167
----------- --------- --------- -----------
TOTAL $31,850,051 511,527 (415,286) $31,946,292
=========== ========= ========= ===========

</TABLE>

F-14

<PAGE> 136

<TABLE>
<CAPTION>
1994
------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--- --- ---- ---
<S> <C> <C> <C> <C>
U.S. GOVERNMENT &
AGENCY SECURITIES
AVAILABLE-FOR-SALE $13,484,047 - (659,047) $12,825,000
----------- --------- --------- -----------
MORTGAGE-BACKED
SECURITIES HELD-TO-
MATURITY:

GNMA PASS-THROUGH
CERTIFICATES 58,709 369 (1,937) 57,141

FHLMC PASS-THROUGH
CERTIFICATES 7,542,249 - (477,134) 7,065,115

FNMA - ARMS
PASS-THROUGH
CERTIFICATES 3,689,689 - (222,283) 3,467,406
----------- --------- --------- -----------
MORTGAGE-BACKED
SECURITIES 11,290,647 369 (701,354) 10,589,662
----------- --------- --------- -----------
TOTAL $24,774,694 369 (1,360,401) $23,414,662
========== ======== =========== ===========

</TABLE>

F-15

<PAGE> 137

The amortized cost and estimated market value of mortgage-backed and
government securities at September 30, 1995, by contractual maturity, are
as follows:

<TABLE>
<CAPTION>
AMORTIZED MARKET
COST VALUE
--- ----
<S> <C> <C>
Due in one year or less $ 4,995,912 $ 4,973,438
Due after one year through five years 7,495,734 7,344,687
Mortgage-backed securities 19,358,405 19,628,167
----------- -----------
$31,850,051 $31,946,292
=========== ===========
</TABLE>

Proceeds from the sale of investments and government securities available
for sale for the years ended September 30, 1995, 1994 and 1993 were
$1,000,000, $21,635,992 and $15,348,437, respectively, resulting in gross
losses of $0, $60,343 and $0, respectively, and gross gains of $0,
$427,740, $279,573, respectively.

There were no sales of investments or securities classified as held to
maturity during 1995 or 1994. There were no sales of mortgage-backed
securities during the years ended September 30, 1995, 1994 and 1993.

At September 30, 1995, the Company has pledged mortgage-backed securities
with a carrying value of approximately $9,457,240 to secure its advances
from the Federal Home Loan Bank (see Note 8).

4. LOANS RECEIVABLE

Loans receivable-net consist of the following at September 30:

<TABLE>
<CAPTION>
1995 1994
--- ---
<S> <C> <C>
Real estate loans:
Residential mortgage - one to four units $83,419,251 $77,541,808
Other mortgage loans 11,769,608 13,795,754
Construction 3,255,742 5,563,898
Other loans:
Commercial lines of credit 695,046 655,480
Loans on savings accounts 502,656 638,743
Education 14,985 19,714
----------- -----------
99,657,288 98,215,397
Add:
Premiums on purchased loans 198,734 138,748
Deduct:
Undisbursed portion of loans in process 1,301,744 4,216,233
Allowance for loan losses 817,967 1,229,670
Deferred loan fees, net 87,538 89,482

----------- -----------
$97,648,773 $92,818,760
=========== ===========
</TABLE>

F-16

<PAGE> 138

The Company is engaged principally in providing first mortgage loans to
individuals and commercial enterprises primarily in the Englewood area.
At September 30, 1995, the Company's assets consist primarily of assets
that earned interest at adjustable interest rates. Those assets were
funded primarily with short- term liabilities that have interest rates
that vary with market rates over time.

The Company sells the fixed rate loans that are originated in the
secondary market as market conditions permit. During the years ended
September 30, 1994 and 1993, proceeds from loan sales approximated
$3,677,444 and $2,930,365, respectively, resulting in losses (gains) of
$64,007 and ($55,829), respectively. No loans were sold in the year
ended September 30, 1995 and were available for sale at September 30,
1995.

The adjustable rate loans have interest rate adjustment limitations and
are generally indexed to the median annualized cost of funds for
OTS-insured savings and loans. Future market factors may affect the
correlation of interest rate adjustment with the rates the Company pays
on the short-term deposits that have been primarily utilized to fund
these loans.

At September 30, 1995 and 1994, the Company was servicing loans for
others amounting to approximately $11,754,141 and $12,948,000,
respectively. Servicing loans for others generally consists of
collecting mortgage payments, maintaining escrow accounts, disbursing
payments to investors, and processing of foreclosures. Loan servicing
income is recorded on the cash basis and includes servicing fees from
investors and certain charges collected from borrowers, such as late
payment fees. In connection with these loans serviced for others, the
Company held borrowers' escrow balances of approximately $219,000 and
$242,000, respectively.

The activity in the allowance for loan losses is as follows:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Balance -
Beginning of Year $ 1,229,670 $ 908,811 $ 821,751
Provision 49,545 391,408 358,307
-------------- -------------- --------------
Total 1,279,215 1,300,219 1,180,058
-------------- -------------- --------------
Charge-offs (467,316) (80,711) (293,505)
Recoveries 6,068 10,162 22,258
-------------- -------------- --------------
Net charge-offs (461,248) (70,549) (271,247)
-------------- -------------- --------------
Balance -
End of Year $ 817,967 $ 1,229,670 $ 908,811
============== ============== ==============
</TABLE>

Provisions for loan losses include charges to reduce the recorded
balances of mortgage loans receivable to their estimated fair value.
Such provisions are based on management's estimate of fair value of the
collateral, considering the current and currently anticipated future
operating or sales conditions, thereby causing these estimates to be
particularly susceptible to changes that could result in a material
adjustment to results of operations in the near term. Recovery of the
carrying value of such loans is dependent to a great extent on economic,
operating and other conditions that may be beyond the Company's control.
While the Company believes its allowance for loan losses at September 30,
1995 and 1994 is adequate in light of present economic conditions, there
can be no assurances that the Company will not be required to make
additional provisions for loan losses in the future in response to
changing economic conditions or regulatory guidelines.

F-17

<PAGE> 139

Included in the Company's loan portfolio are various loans identified as
non-performing loans (loans that have ceased to accrue interest income).
A summary of these types of loans is as follows:

<TABLE>
<CAPTION>
At September 30,
-----------------------------------------------------------
1995 1994 1993
--- --- ---
<S> <C> <C> <C>
Non-Performing Loans $ 561,000 $1,816,000 $168,000
========== ========== ========
</TABLE>

The increase in non-performing loans in 1994 is primarily due to one
loan, with a book value of approximately $1,400,000, secured by a
commercial office property.

The following table summarized the interest income which would have been
recorded under the original terms of non-performing loans at September
30, 1995, 1994 and 1993 and the interest income actually recognized for
the periods indicated.

<TABLE>
<CAPTION>
1995 1994 1993
--- --- ---
<S> <C> <C> <C>
Interest income which would
have been recorded $ 49,241 $ 172,615 $14,506
Interest income recognized (24,538) (58,450) (5,381)
---------- ---------- -------
Interest income foregone $ 24,703 $ 114,165 $ 9,125
========== ========== =======
</TABLE>

The aggregate amount of loans outstanding to executive officers and
directors and any associates of such persons as of September 30, 1995 and
1994 was approximately $711,152 and $731,531, respectively. The schedule
below summarizes the activity of loans to executive officers, directors
and associates of the Company at September 30, 1995:

<TABLE>
<S> <C>
Balance, beginning of period $731,531
Repayments (20,379)
--------
Balance, end of period $711,152
========
</TABLE>

The Company has originated or purchased commercial real estate mortgage
loans, the remaining outstanding balances of which totaled $11,769,608
and $13,795,754 at September 30, 1995 and 1994, respectively. These
loans are considered by management to be of somewhat greater risk of
uncollectibility due to the dependency on income production or future
development of the real estate. These loans are collateralized by the
following types of real estate at September 30:

<TABLE>
<CAPTION>
1995 1994
--- ---
<S> <C> <C>
Apartments - 5 or more units $ 1,028,260 $ 839,841
Motel/Hotel 2,004,088 2,067,334
Mobile Home Park - 47,686
Church 836,064 1,068,640
Other Commercial (office buildings, land, retail
shopping, condominiums and other) 7,901,196 9,772,253
--------- ---------
$11,769,608 $13,795,754
========== ==========

</TABLE>

F-18

<PAGE> 140

All of the Company's commercial real estate loans are collateralized by
real estate in the State of Florida.

Under the Financial Institutions Reform, Recovery and Enforcement Act of
1989 ("FIRREA"), a federally- chartered savings and loan association's
aggregate commercial real estate loans may not exceed 400% of its capital
as determined under the capital standards provisions of FIRREA. The Bank
is federally-chartered and subject to this limitation. FIRREA does not
require divestiture of any loan that was lawful when it was originated.
In order to comply with this limitation, the Bank may not originate
additional commercial real estate loans until such time as its aggregate
commercial loan portfolio falls below 400% of capital. At September 30,
1995, the Bank's limitation was approximately $35,219,000; no such
originations or purchases of commercial real estate loans were made by
the Bank during fiscal 1995, 1994 and 1993.

The OTS regulatory capital regulations, issued November 6, 1989, require
that the portion of nonresidential construction and land loans in excess
of 80% loan-to-value ratio be deducted from total capital for purposes of
the risk-based capital standard over a 5-year phase-in period commencing
July 1, 1990. At September 30, 1995, the Bank had no loans which were
subject to this deduction.

Also, under FIRREA, the Bank may not, after August 9, 1989, make real
estate loans to one borrower in excess of 15% of its unimpaired capital
and surplus, unless such loans do not exceed $500,000. This 15%
limitation results in a dollar limitation of approximately $1,285,000 and
$1,111,000 at September 30, 1995 and 1994, respectively.

5. REAL ESTATE OWNED

Real estate owned ("REO") consists of the following at September 30:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Acquired by foreclosure $ 554,371 $ 789,560
Acquired for development and sale 878,000 878,000
Under contract to sell 37,618 247,100
----------- -----------
Total real estate owned $ 1,469,989 $ 1,914,660
=========== ===========
</TABLE>

The real estate owned acquired for development represents the undeveloped
land acquired from the Bank's subsidiary. The ability of the Company to
recover the carrying value of real estate held for sale is based upon the
future sale of the land. The ability to effect such sale is subject to
market conditions and other factors, all of which are beyond the
Company's control.

The Company markets certain of its REO properties under a program that
includes favorable financing incentives such as not requiring any down
payment and, on adjustable-rate loans, an initial interest rate which is
below then current market rates. Of the properties sold under this
program, $120,000 and $247,100 in outstanding loans at September 30, 1995
and 1994, respectively, received 100% financing from the Company. Until
received, profits, if any, resulting from such sales are deferred;
losses, if any, are recognized immediately. These loans are currently
performing but are included in the calculation of non-performing assets
because they are loans to facilitate the sale of REO without sufficient
down payments to constitute classifying the transactions as sales.

F-19

<PAGE> 141

6. OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment-net are summarized as follows at
September 30:

<TABLE>
<CAPTION>
1995 1994
--- ---
<S> <C> <C>
Land $ 785,141 $ 810,141
Buildings and improvements 3,129,008 3,108,527
Furniture and equipment 843,318 916,017
----------- -----------
Total 4,757,467 4,834,685

Less accumulated depreciation (1,946,980) (1,830,629)
----------- -----------
$ 2,810,487 $ 3,004,056
=========== ===========

</TABLE>

The Company currently owns all of its office properties.

7. DEPOSIT ACCOUNTS

Deposit accounts are summarized as follows at September 30:

<TABLE>
<CAPTION>
1995 1994
--- ---
<S> <C> <C>
NOW accounts (weighted average rate of
1.75% at September 30, 1995 and 1994) $ 11,801,576 $ 10,784,517
Noninterest-bearing demand deposits 3,288,011 3,597,201
Money market checking (weighted average
rate of 1.75% at September 30, 1995
and 1994) 867,352 1,481,740
Money market plus (weighted average rates of
3.26% and 2.47% at September 30, 1995
and 1994, respectively) 14,516,560 16,259,590
Passbook and statement savings (weighted
average rate of 2.20% at September 30,
1995 and 1994) 9,032,209 10,568,842

Certificate accounts:
2.0% - 2.99% 142,086 -
3.0% - 4.99% 4,076,425 50,539,475
5.0% - 6.99% 76,846,738 25,193,717
---------- ---------
Total certificate accounts 81,065,249 75,733,192
---------- ---------
$120,570,957 $118,425,082
=========== ===========

Weighted average interest rate 4.70% 3.69%
=========== ===========
</TABLE>

F-20

<PAGE> 142

The amounts of scheduled maturities of certificate accounts are as
follows:

At September 30, 1995 and 1994, the Bank had $5,385,000 and $4,802,000 of
certificate accounts of $100,000 and over. The Bank had no public funds
at September 30, 1995 and 1994.

Interest on deposits is summarized as follows:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Interest on checking accounts $ 724,579 $ 663,799 $ 805,920
Interest on passbook and
statement savings 211,094 230,250 341,994
Interest on certificate accounts 4,306,297 3,368,638 4,017,762
Less early withdrawal
penalties (29,932) (34,652) (29,243)
------------ ------------- --------------
Balance, end of year $ 5,212,038 $ 4,228,035 $ 5,136,433
============ ============= ==============
</TABLE>

8. ADVANCES FROM FEDERAL HOME LOAN BANK

The Company obtains advances from the Federal Home Loan Bank ("FHLB") as
necessary to fund its lending and other cash flow obligations. At
September 30, 1995, the Company had $9,000,000 of advances outstanding
which mature as follows:

<TABLE>
<CAPTION>
YEAR ENDING WEIGHTED
SEPTEMBER 30, AMOUNT AVERAGE RATE
-------- ----- ------
<S> <C> <C>
1996 $2,000,000 7.33%
1997 3,750,000 7.79
1998 3,250,000 7.46
---------- ----
$9,000,000 7.57%
========== ====
</TABLE>

Under a specific collateral agreement with the Federal Home Loan Bank of
Atlanta, the Company is required to collateralize its outstanding
advances. The collateral consists of residential first mortgages,
mortgage- backed securities, and all of its FHLB stock. At September 30,
1995, the Company had pledged first mortgage loans with an approximate
principal balance of $10,640,000, and mortgage-backed securities with an
approximate principal balance of $9,457,000, to secure the advances.

F-21

<PAGE> 143

9. EMPLOYEE BENEFIT AND MANAGEMENT RECOGNITION PLANS

The Company has a qualified plan under Section 401(K) of the Internal
Revenue Code which allows employees to make contributions from pretax
earnings for which it contributes an amount equal to an employee's
contribution but not in excess of 6% of the participating employee's
compensation. Contributions for the years ended September 30, 1995, 1994
and 1993 were approximately $64,000, $56,000 and $38,000, respectively.

Subsequent to the offering (see Note 1), the Company adopted a stock
incentive plan (the "Plan") for key officers, members of the Board of
Directors, and employees. In accordance with the terms of the
Conversion, 46,288 shares of common stock were reserved for issuance
under the Plan. During the year ended September 30, 1994, 40,731 options
were granted to officers and the Board of Directors of the Company. The
exercise price of the options granted ranged from $10 to $11.75 per share
(with an average price of $10.08 and aggregate of $410,549). The options
granted are to vest at a rate of 20% per year of continuous service from
the date of grant. At September 30, 1995, 8,146 of the options are
vested. There were no options exercised or canceled during the years
ended September 30, 1995 or 1994.

Subsequent to the offering (see Note 1), the Company adopted a Management
Recognition Plan ("MRP") for key officers and members of the Board of
Directors. In accordance with the terms of the Conversion, 13,886 shares
of common stock were reserved for issuance under the MRP. On the date of
Conversion, 10,185 shares were granted to officers and the Board of
Directors of the Bank with a fair market value of $10 a share reflecting
unearned compensation expense of $101,850. During the year ended
September 30, 1994, an additional 926 shares were granted under this plan
with a fair value of $10 a share reflecting unearned compensation of
$9,260. The shares granted are to vest over a five-year period, which is
the amortization period for the unearned compensation. The amortization
expense of unearned compensation for the years ended September 30, 1995
and 1994 was $22,218.

10. INCOME TAXES

The Company's effective tax rate differs from the statutory federal
income tax rate for the following reasons:

<TABLE>
<CAPTION>
1995 1994 1993
--- --- ---
<S> <C> <C> <C>
Statutory rate applied to earnings
(loss) before income taxes $ 468,176 $ (45,357) $ 316,640
Increase (decrease) resulting from:
Provision for state
income taxes 49,985 17,579 19,060
Change in deferred tax
asset valuation allowance - - (55,657)
Reduction in base year tax
bad debt reserves - 69,778 34,480
Other 10,913 - 34,112
--------- --------- ---------
$ 529,074 $ 42,000 $ 348,635
========= ========= =========
</TABLE>

F-22

<PAGE> 144

Income tax provision (benefit) consists of the following components for
the years ended September 30, 1995, 1994 and 1993:

<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1995 September 30, 1994
------------------------------------------ ------------------------------------------
Federal State Total Federal State Total
---- --- --- ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
Current tax
provision $ 323,167 $ 34,503 $ 357,670 $ 121,944 $ 14,234 $ 136,178
Net deferred tax
(benefit) expense 154,869 16,535 171,404 (80,453) (13,725) (94,178)
----------- ----------- ----------- ----------- ----------- -----------
$ 478,036 $ 51,038 $ 529,074 $ 41,491 $ 509 $ 42,000
=========== =========== =========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
Year Ended
September 30, 1993
-----------------------------------------
Federal State Total
---- --- ---
<S> <C> <C> <C>
Current tax
provision $ 165,552 $ 1,210 $ 166,762
Net deferred tax
(benefit) expense 164,023 17,850 181,873

---------- ---------- ----------
$ 329,575 $ 19,060 $ 348,635
========== ========== ==========
</TABLE>

The components of the deferred tax assets and liabilities under SFAS No.
109 consist of the following at September 30:

<TABLE>
<CAPTION>
1995
--------------------------------------------------
Assets Liabilities Total
----- ----- -----
<S> <C> <C> <C>
Accelerated depreciation for
tax purposes $ 155,549 $ - $ 155,549
Basis difference on land held
for sale 21,490 - 21,490
Book bad debt allowance 315,052 - 315,052
Loan points recognized for
income tax less than amounts
reported in financial statements - (186,909) (186,909)
FHLB stock dividends not
included in taxable income - (120,584) (120,584)
Capitalized interest on investment
not yet deducted for book
purposes - (451,871) (451,871)
Other 8,174 - 8,174
--------- --------- ---------
$ 500,265 $(759,364) $(259,099)
========= ========= =========
</TABLE>

F-23

<PAGE> 145

<TABLE>
<CAPTION>
1994
--------------------------------------------------
Assets Liabilities Total
----- ----- -----
<S> <C> <C> <C>
Accelerated depreciation for
tax purposes $ 172,346 $ - $172,346
Basis difference on land held
for sale 21,490 - 21,490
Book bad debt allowance 489,190 - 489,190
Loan points recognized for income
tax less than amounts reported
in financial statements - (224,539) (224,539)
FHLB stock dividends not
included in taxable income - (120,697) (120,697)
Capitalized interest on investment
not yet deducted for book
purposes - (451,871) (451,871)
Other 26,386 - 26,386
--------- --------- --------
$ 709,412 $(797,107) $(87,695)
========= ======== ========

</TABLE>

11. COMMITMENTS AND CONTINGENCIES

Financial Instruments With Off-Balance Sheet Risk - The Bank is a party
to financial instruments with off-balance sheet risk in the normal
course of business to meet the financing needs of its customers. These
agreements involve, to varying degrees, elements of risk in excess of the
amount recognized in the consolidated balance sheets. The Bank does not
use financial instruments with off-balance sheet risk as part of its own
asset/liability management program or for trading purposes.

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

Off-balance sheet financial instruments whose contract amounts represent
credit risk at September 30 are as follows:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Commitments to extend credit under:
Commitments to originate fixed rate loans $ 318,300 $ -
Commitments to originate adjustable
rate loans - 657,700
Undisbursed loan funds 1,301,744 4,216,233
Unused lines of credit 23,385 31,620

---------- ----------
$1,643,429 $4,905,553
========== ==========
</TABLE>

F-24

<PAGE> 146

Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and any required payment of a fee. The Bank evaluates each
customer's creditworthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Bank upon the extension
of credit, is based on management's credit evaluation of the other party.
Such collateral consists primarily of residential properties.

Leases - The Company leases various equipment. Rental expense under
operating leases for property for the year ended September 30, 1995, 1994
and 1993 amounted to approximately $15,600, $16,800 and $19,700,
respectively. At September 30, 1995 and 1994, no significant
noncancelable leases with initial or remaining terms of more than one
year were in effect.

Contingencies - The Bank and its subsidiary were two of several
defendants named in lawsuits by a condominium association claiming
defects in the construction of a condominium project developed by the
Bank's subsidiary and its former joint venture partners. These lawsuits
claimed that the Bank was a responsible party because the Bank made
decisions on behalf of its subsidiary. Damages sought were approximately
$2,000,000. The litigation was ordered to arbitration by the court, and
on January 11, 1994, the Bank and other defendants offered a settlement
to the condominium association. The Bank's portion of the settlement was
approximately $754,000. The Bank provided a reserve for loss in the
amount of $754,000 during the three months ended December 31, 1993. On
March 15, 1994, the Bank entered into a final settlement and its loss
approximated the reserve previously established. During the three months
ended September 30, 1994, the Bank received $69,300 in settlement of
various counter claims against subcontractors which were involved in the
condominium project.

At September 30, 1995, the Company and the Bank are involved in routine
legal proceedings occurring in the ordinary course of business, which
will not have a material effect on the consolidated financial statements.

Congress is considering legislation on the issue of a one-time Savings
Association Insurance Fund ("SAIF") assessment sufficient to capitalize
SAIF and increase its reserve ratio to 1.25% of SAIF-insured deposits.
If the assessment is put into place, it would be approximately 85 to 90
basis points of SAIF-insured deposits. This would mean an assessment of
approximately $1,050,000 to the Bank likely to be due on or about January
1, 1996.

12. RETAINED INCOME AND REGULATORY CAPITAL REQUIREMENTS

REGULATORY CAPITAL REQUIREMENTS
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989
("FIRREA") and the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA") have significantly affected savings institutions in
several ways. Adverse effects include higher deposit insurance premiums,
more stringent capital requirements, more stringent investment
limitations and restrictions, and the possible reduction of future
dividend payments on Federal Home Loan Bank stock owned by savings
institutions. In addition, the legislation enhances federal regulatory
enforcement powers.

FIRREA requires institutions not meeting all of the capital standards to
submit to the OTS a capital plan outlining the institutions' plans for
attaining the required levels of regulatory capital. Failure to obtain
approval of its capital plan or to maintain compliance with an approved
capital plan could result in the OTS limiting an institution's asset
growth and imposing other sanctions and enforcement actions, including
regulatory takeover of the institution. An institution not in compliance
with FIRREA's capital standards or its capital plan also will be subject
to more severe asset growth limitations.

F-25

<PAGE> 147

Regulations implementing the prompt corrective action provisions of
FDICIA became effective on December 19, 1992. These prompt corrective
action regulations define specific capital categories based on an
institution's capital ratios. The capital categories, in declining
order, are "well capitalized," "adequately capitalized,"
"undercapitalized," and "critically undercapitalized." Institutions
categorized as "undercapitalized" or worse are subject to certain
restrictions, including the requirement to file a capital plan with the
OTS, prohibitions on the payment of dividends and management fees,
restrictions on executive compensation, and increased supervisory
monitoring. Other restrictions may be imposed on the institution by the
Federal Deposit Insurance Corporation, including requirements to raise
additional capital, to sell assets, or to sell the entire institution.
Once an institution becomes "critically undercapitalized," it must
generally be placed in receivership or conservatorship within 90 days.

As of September 30, 1995, regulatory requirements are to maintain a
tangible capital ratio of 1.5%, a leverage capital ratio of 3%, and a
risk-based capital ratio of 8%. Due to the Company's financial condition
and its inability to meet the required regulatory capital ratios prior to
the Conversion, the Company was operating under an OTS-approved capital
plan and supervisory agreement at September 30, 1992. Subsequent to the
Conversion and Offering (see Note 1), the Company met all regulatory
capital ratios and was released from their capital plan and supervisory
agreement on October 1, 1993 and October 8, 1993, respectively.

The following table summarizes the Bank's compliance with current capital
requirements at September 30, 1995:

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
-----------------------------------------------------------------------------
EXCESS OF
REQUIRED ACTUAL REQUIRED ACTUAL REQUIRED
PERCENTAGE PERCENTAGE AMOUNT AMOUNT MINIMUM
------ ------ ---- ---- ------
<S> <C> <C> <C> <C> <C>
Tangible capital 1.5% 6.2% $ 2,111 8,675 6,564
Core capital 3.0% 6.2% 4,222 8,675 4,453
Core/leverage capital 4.0% 6.2% 5,629 8,675 3,046
Tier 1 risk-based capital 4.0% 13.5% 2,579 8,675 6,096
Total risk-based capital 8.0% 14.6% 5,144 9,414 4,270
==== ===== ======= ======= ======
</TABLE>

The following table summarizes the capital thresholds for each prompt
corrective action capital categories. An institution's capital category
is based on whether it meets the threshold for all three capital ratios
within the category.

<TABLE>
<CAPTION>
TIER 1 TOTAL
LEVERAGE RISK-BASED RISK-BASED
CATEGORIES RATIO RATIO RATIO
------ --- --- ---
<S> <C> <C> <C>
"Well capitalized" 5% or higher 6% or higher 10% or higher
"Adequately capitalized" 4% or higher 4% or higher 8% or higher
"Under capitalized" less than 4% less than 4% less than 8%
"Significantly under capitalized" less than 3% less than 3% less than 6%
"Critically under capitalized" An institution is considered "critically under capitalized" if its ratio of
tangible equity to total assets is 2% or less
</TABLE>

As of September 30, 1995, the Bank was in compliance will all current
requirements and was classified as a "well capitalized" institution.

F-26

<PAGE> 148

LIQUIDATION ACCOUNT
At the time of conversion from a mutual to a stock institution, the Bank
established a liquidation account in an amount equal to the Bank's net
worth as reflected in its latest consolidated balance sheets contained in
the final offering circular. The liquidation account will be maintained
for the benefit of eligible deposit account holders who continue to
maintain their deposit accounts in the Bank after conversion. In the
event of a complete liquidation, and only in such an event, each eligible
account holder will be entitled to receive a distribution of a
proportionate share of the liquidation account before liquidation
distributions may be made with respect to the stockholders. The total
amount of the liquidation account will be decreased in an amount
proportionately corresponding to decreases in the deposit account
balances of eligible account holders on each subsequent annual
determination date. At September 30, 1995, the remaining balance of the
liquidation account was approximately $2.54 million. Except for the
repurchase of stock and payment of dividends by the Bank, the existence
of the liquidation account will not restrict the use or application of
such net worth.

DIVIDEND RESTRICTIONS
The Bank may not declare or pay a cash dividend on its capital stock if
the effect thereon would cause its net worth to be reduced below either
the amount required for the liquidation account or the imposed regulatory
capital requirements. While the regulations would permit the payment of
limited dividends by the Bank, it is expected that earnings will be
retained to support operations and the regulatory capital requirement.

STOCKHOLDERS' EQUITY RECONCILIATION
The following table is a reconciliation of stockholders' equity reported
in the audited financial statements with regulatory capital reported in
the September 30, 1995 Thrift Financial Report (TFR) to the OTS:
<TABLE>
<CAPTION>
(In Thousands)
<S> <C>
Stockholders' equity reported on audited financial statements $8,632
Parent company only net loss (cumulative) 52
Proceeds of offering retained by Parent company (117)
------
September 30, 1995, TFR schedule SC, line 80 $8,567
======
</TABLE>

At periodic intervals, both the OTS and the Federal Deposit Insurance
Corporation ("FDIC") routinely examine the Company's financial statements
as part of their legally prescribed oversight of the savings and loan
industry.

13. FASB STATEMENTS

The Financial Accounting Standards Board ("FASB") has issued Statements
of Financial Accounting Standards No. 114, "Accounting by Creditors for
Impairment of Loan" ("SFAS No. 114") and No. 118, "Accounting by
Creditors of Impairment of a Loan - Income Recognition and Disclosures"
("SFAS No. 118"). These pronouncements are applicable to all creditors
and to all loans that are individually and specifically evaluated for
impairment, uncollateralized, as well as collateralized, except large
groups of smaller-balance homogeneous loans that are collectively
evaluated for impairment, and those loans that are accounted for at fair
value or at the lower of cost or fair value. They require that impaired
loans be measured at the present value of expected future cash flows by
discounting those cash flows at the loans' effective interest rate. They
also require the Company to account for a trouble debt restructuring
involving a modification of terms at fair value as of the date of the
restructuring, and apply to financial statements for fiscal years
beginning after December 15, 1994 and will become effective for the
Company in fiscal 1996. Management does not believe that the
implementation of these statements will have a material effect on its
consolidated financial statements.

F-27

<PAGE> 149

The FASB has issued Statement of Financial Accounting Standards No. 122,
"Accounting for Mortgage Servicing Rights" ("SFAS No. 122"), which
becomes effective for years beginning after December 15, 1995. SFAS No.
122 amends FASB Statement No. 65, "Accounting for Certain Mortgage
Banking Activities," to require that a mortgage banking enterprise
recognize as separate assets rights to service mortgage loans for others,
however those rights are acquired. A mortgage banking enterprise that
acquires mortgage servicing rights through either the purchase or
organization of mortgage loans and sells or securitizes those loans with
servicing rights retained should allocate the total cost of the mortgage
loans to the mortgage servicing rights and the loans (without the
mortgage servicing rights) based on their relative fair values. If it is
not practicable to estimate the fair values separately, the entire cost
of purchasing or originating the loans should be allocated to the
mortgage loans (without the mortgage servicing rights) and no cost should
be allocated to the mortgage servicing rights. SFAS No. 122 also
requires that a mortgage banking enterprise assess its capitalized
mortgage serving rights for impairment based on the fair value of those
rights. Management does not believe that this statement will have a
material impact on the consolidated financial statements.

14. SUMMARY FINANCIAL DATA OF FFE FINANCIAL CORP.
(PARENT COMPANY ONLY)

Summary financial data of FFE Financial Corp. (Parent company only) is as
follows:

<TABLE>
<CAPTION>
Condensed Balance Sheets September 30,
------------------------ ------------------------------------
1995 1994
---- ----
<S> <C> <C>
Assets:
Cash $ 2,959 $ 16,540
Investments in subsidiary 8,739,819 7,902,366
Other 62,042 38,000

----------- ------------
Total assets $ 8,804,820 $ 7,956,906
=========== ============

Liabilities and stockholders' equity:
Liabilities $ - $ -
Stockholders' equity 4,740 4,740
Additional paid-in capital 3,685,222 3,685,222
Retained earnings 5,114,858 4,266,944

----------- ------------
Total stockholders' equity 8,804,820 7,956,906

----------- ------------
Total liabilities and stockholders' equity $ 8,804,820 $ 7,956,906
=========== ============
</TABLE>

F-28

<PAGE> 150

<TABLE>
<CAPTION>
Condensed Income Statements Year Ended
--------------------------- September 30,
------------------------------------
1995 1994
--- ---
<S> <C>
Dividends from Bank subsidiary $ 65,000 $ -
----- -----
Operating expenses 78,581 100,348
----- -----
Loss before income tax benefit and equity in
undistributed loss of subsidiary (13,581) (100,348)
Income tax benefit 24,042 38,000
----- -----
Income (loss) before equity in undistributed loss 10,461 (62,348)

Equity in undistributed income (loss) 837,453 (113,055)
----- -----
Net income (loss) $ 847,914 $ (175,403)
========== ==========
</TABLE>

Condensed Statements of Cash Flows Year Ended
---------------------------------- September 30,
------------------------------------
1995 1994
---- ----
<S> <C> <C>
Cash used in operating activities:
Net income (loss) $ 847,914 $(175,403)
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in loss (earnings) of subsidiary (837,453) 113,055
Increase in other assets (24,042) (38,000)
---------- ---------
Net cash used in operating activities (13,581) (100,348)
---------- ---------
Cash flow provided by financing activities:
Stock proceeds invested in subsidiary - 11
Refund of conversion expenses - 81,966
---------- ---------
Net cash provided by financing activities - 81,977
---------- ---------
Net increase (decrease) in cash $ (13,581) $ (18,371)
========== =========
</TABLE>

The major source of funds available to FFE Financial Corp. for payment of
dividends is the earnings of the Bank. The ability of the Bank to pay
dividends to the holding company is restricted (see Note 12).

F-29

<PAGE> 151

15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables present selected quarterly financial data for the
two more recent fiscal years (dollars in thousands):
<TABLE>
<CAPTION>
Year Ended September 30, 1995
------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income $2,208 $2,424 $2,508 $2,509
Interest Expense 1,261 1,475 1,560 1,580
------ ------ ------ ------
Net interest income before provision
for loan losses 947 949 948 929

Provision for (recovery of) loan losses - 2 25 23
------ ------ ------ ------
Net interest income after provision
for loan losses 947 947 923 906

Other income 149 187 241 242
Other expenses 768 837 844 716
------ ------ ------ ------
Income (loss) before income taxes 328 297 320 432

Applicable income taxes 125 113 127 164
------ ------ ------ ------
Net income (loss) per share $ 203 $ 184 $ 193 $ 268
====== ====== ====== ======

Earnings per common and common
equivalent share:
Primary $ .42 $ .38 $ .40 $ .54
====== ====== ====== ======

Fully diluted $ .42 $ .38 $ .39 $ .54
====== ====== ====== ======

Weighted average common and common
equivalent shares 483,449 484,859 486,655 491,639
======= ======= ======= =======
Weighted average common and common
equivalent shares, assuming full
dilution 483,449 484,859 489,058 492,221
======= ======= ======= =======
</TABLE>

F-30

<PAGE> 152

<TABLE>
<CAPTION>
Year Ended September 30, 1994
----------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income $2,189 $2,093 $2,081 $2,078
Interest Expense 1,094 1,050 1,044 1,064
------ ------ ------ ------
Net interest income before provision
for loan losses 1,095 1,043 1,037 1,014

Provision for (recovery of) loan losses 24 367 (4) 4
------ ------ ------ ------
Net interest income after provision
for loan losses 1,071 676 1,041 1,010

Other income 133 449 99 123
Other expenses 1,717 844 1,357 817
------ ------ ------ ------
Income (loss) before income taxes (513) 281 (217) 316

Applicable income taxes (178) 107 (82) 195
------ ------ ------ ------
Net income (loss) $ (335) $ 174 $ (135) $ 121
====== ====== ====== ======

Earnings (loss) per common and common
equivalent share:
Primary $ (.71) $ .37 $ (.28) $ .23
====== ====== ====== ======

Fully diluted $ (.71) $ .37 $ (.28) $ .23
====== ====== ====== ======

Weighted average common and common
equivalent shares 473,060 473,523 473,986 473,986
======= ======= ======= =======
Weighted average common and common
equivalent shares, assuming full
dilution 473,060 473,523 473,986 473,986
======= ======= ======= =======
</TABLE>

16. PENDING BUSINESS COMBINATION

On November 3, 1995, the Company entered into an Agreement and Plan of
Merger (the "Agreement") with SouthTrust Corporation ("SouthTrust")
pursuant to which the Company will be merged with and into SouthTrust of
Florida, a wholly-owned subsidiary of SouthTrust. With approval from the
Company's stockholders and various regulatory agencies, each share of
common stock of the Company shall be converted into the right to receive
$10.80 in cash, subject to potential downward adjustment as provided in
the Agreement, as well as .645 shares of SouthTrust common stock, also
subject to either an upward or downward adjustment based upon
fluctuations in the price of SouthTrust's common stock. Certain key
officers and members of the Board of Directors of the Company may receive
certain employment and change in control agreements. Such agreements
provide severance pay and other benefits upon the completion of the
acquisition of the Company by SouthTrust. In addition, those
participating in the Plan and MRP would become fully vested for all
options and shares issued under those agreements. SouthTrust would also
indemnify all directors, officers and employees for a period of three
years from the closing date of the Agreement against certain liabilities
arising prior to the merger.

F-31

<PAGE> 153

FFE FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1995 AND SEPTEMBER 30, 1995

(Unaudited)

<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
------------ -------------
<S> <C> <C>
ASSETS:
CASH $ 2,231,593 $ 1,768,929

INTEREST-BEARING DEPOSITS 4,769,721 3,139,569
------------ -------------
Total cash and cash equivalents 7,001,314 4,908,498

GOVERNMENT SECURITIES AVAILABLE FOR
SALE - at market (Note 4) 11,469,999 12,318,125

MORTGAGE-BACKED SECURITIES HELD-TO-
MATURITY - market values of
$19,224,609 and $19,628,167,
respectively (Notes 4 and 8) 18,729,867 19,358,405

LOANS RECEIVABLE - net of allowance for
losses of $794,609 and $817,967,
respectively (Note 8) 95,802,931 97,648,773

ACCRUED INTEREST RECEIVABLE 862,373 834,906

REAL ESTATE OWNED 1,585,202 1,469,989

OFFICE PROPERTIES AND EQUIPMENT - Net 2,763,302 2,810,487

FEDERAL HOME LOAN BANK STOCK - at cost 1,012,700 1,012,700

OTHER ASSETS 266,592 329,509
------------ -------------
TOTAL $139,494,280 $ 140,691,392
============ =============

</TABLE>

(Continued)

See notes to condensed consolidated financial statements.

F-32
<PAGE> 154

FFE FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1995 AND SEPTEMBER 30, 1995

(Unaudited)

<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
------------ -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY:

DEPOSIT ACCOUNTS $122,679,297 $ 120,570,957

ADVANCES FROM FEDERAL HOME LOAN
BANK (Note 8) 7,000,000 9,000,000

ADVANCES BY BORROWERS FOR TAXES AND
INSURANCE 357,149 1,714,227

OTHER LIABILITIES 561,883 773,794
------------ -------------
Total liabilities 130,598,329 132,058,978

COMMITMENTS AND CONTINGENCIES (Note 6)

STOCKHOLDERS' EQUITY (Note 7):
Preferred stock $.01 par value;
authorized 500,000 shares; none
outstanding
Common stock $.01 par value; authorized
2,000,000 shares; issued and
outstanding 473,986 shares 4,740 4,740
Additional paid-in capital 3,685,222 3,685,222
Retained earnings - substantially
restricted 5,279,858 5,114,858
Unrealized losses on investments
available for sale - net (Note 4) ( 14,601) ( 107,583)
Unearned compensation (Note 7) ( 59,268) ( 64,823)
------------ -------------
Total stockholders' equity 8,895,951 8,632,414
------------ -------------
TOTAL $139,494,280 $ 140,691,392
============ =============

</TABLE>

See notes to condensed consolidated financial statements.

F-33
<PAGE> 155

FFE FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
December 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME:
Interest and fees on loans $ 1,961,244 $ 1,734,164
Interest on mortgage-backed
securities 333,997 233,122
Interest and dividends on
investments 172,390 189,664
Interest on interest-bearing
deposits 67,443 51,386
------------ ------------
Total 2,535,074 2,208,336
------------ ------------
INTEREST EXPENSE:
Interest on deposit accounts 1,455,824 1,168,323
Interest on borrowings 158,184 93,335
------------ ------------
Total 1,614,008 1,261,658
------------ ------------
NET INTEREST INCOME BEFORE PROVISION
FOR LOAN LOSSES 921,066 946,678

PROVISION FOR LOAN LOSSES --- ---
------------ ------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 921,066 946,678
------------ ------------
OTHER INCOME:
Gains on sales of real estate
owned - net 7,059 ---
Customer service charges 95,426 96,654
Other 31,620 58,288
------------ ------------
Total 134,105 154,942
------------ ------------
(Continued)

</TABLE>

See notes to condensed consolidated financial statements.

<PAGE> 156

FFE FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
December 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
OTHER EXPENSES:
Employee compensation and benefits 347,809 356,715
Occupancy and equipment 159,938 160,719
Advertising and promotion 24,834 26,618
Deposit insurance premium 78,645 76,683
Examination and professional fees 54,187 47,979
Real estate owned operating
expense - net 23,029 1,187
Losses on sales of real estate
owned - net --- 6,051
Provision for losses on real estate
owned 24,774 16,698
Other 83,090 80,915
--------- ---------
Total 796,306 773,565
--------- ---------
INCOME BEFORE INCOME TAXES 258,865 328,055

INCOME TAX PROVISION 93,865 124,661
--------- ---------
NET INCOME $ 165,000 $ 203,394
========= =========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES (Note 5) 495,841 483,449
========= =========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES, ASSUMING FULL
DILUTION (Note 5) 498,129 483,449
========= =========
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE (Note 5):
Primary $ .33 .42
========= =========
Fully diluted $ .33 $ .42
========= =========
</TABLE>

See notes to condensed consolidated financial statements.

F-35
<PAGE> 157

FFE FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED DECEMBER 31, 1995

(Unaudited)
<TABLE>
<CAPTION>

Unrealized
Additional Loss on
Common Paid-In Retained Investments Unearned
Stock Capital Earnings For Sale Compensation Total
------ ----------- ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Balance, September
30, 1995 $4,740 $ 3,685,222 $5,114,858 $ (107,583) $(64,823) $8,632,414

Amortization of
unearned compensation --- --- --- --- 5,555 5,555

Adjustment of
investments available
for sale to fair
value - net (Note 4) --- --- --- 92,982 --- 92,982

Net Income --- --- 165,000 --- --- 165,000
------ ----------- ---------- ----------- --------- ----------
Balance, December
31, 1995 $4,740 $ 3,685,222 $5,279,858 $ ( 14,601) $(59,268) $8,895,951
====== =========== ========== =========== ========= ==========

</TABLE>

See notes to condensed consolidated financial statements.

F-36
<PAGE> 158

FFE FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Three Months
Ended Ended
December 31, December 31,
1995 1994
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES:
NET INCOME $ 165,000 $ 203,394

ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATING
ACTIVITIES:
Provision for losses on real estate
owned 24,774 ---
Depreciation and amortization 53,912 72,046
Losses (gains) on sales of real
estate owned - net ( 7,059) 6,051
Increase in accrued interest
receivable ( 27,467) ( 241,446)
(Increase) decrease in other assets 5,927 ( 850,060)
Decrease in other liabilities ( 211,911) ( 595,953)
------------ ------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 3,176 ( 1,405,968)
------------ ------------
INVESTING ACTIVITIES:
Purchases of investments and
mortgage-backed securities --- ( 9,792,547)
Proceeds from maturities of
investments and principal reductions
on mortgage-backed securities 1,626,949 381,040
Net (increase) decrease in loans 1,603,313 ( 162,985)
Purchases of property and equipment --- ( 29,514)
Proceeds from sales of real estate
owned 108,116 28,282
------------ ------------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 3,338,378 ( 9,575,724)
------------ ------------
(Continued)
</TABLE>

See notes to condensed consolidated financial statements.

F-37
<PAGE> 159

FFE FINANCIAL CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
December 31, December 31,
1995 1994
------------- ------------
<S> <C> <C>
FINANCING ACTIVITIES:
Net increase in checking
transactional accounts 1,895,630 1,296,837
Net decrease in savings deposits ( 25,625) ( 467,328)
Net increase in certificate
accounts 238,335 666,202
Net increase (decrease)in advances
from FHLB ( 2,000,000) 10,000,000
Net decrease in advances by
borrowers for taxes and insurance ( 1,357,078) ( 1,281,975)
------------- ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ( 1,248,738) 10,213,736
------------- ------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 2,092,816 ( 767,956)

CASH AND CASH EQUIVALENTS - BEGINNING
OF PERIOD 4,908,498 4,630,058
------------- ------------
CASH AND CASH EQUIVALENTS - END OF
PERIOD $ 7,001,314 $ 3,862,102
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Income taxes paid (refunded)- net $ 266,270 $( 1,873)
============ ============
Interest paid $ 1,617,008 $ 1,294,499
============ ============
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Loans settled by acquisition of real
estate $ 242,529 $ 158,276
============ ============
Unrealized loss on investments
available for sale, net of deferred
taxes of $8,949 and $336,943 $( 14,601) $( 549,749)
============ ============

</TABLE>

See notes to condensed consolidated financial statements.

F-38
<PAGE> 160
FFE FINANCIAL CORP. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended December 31, 1995 and 1994

(Unaudited)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and
therefore, do not include all information and disclosures which are
necessary for a fair presentation of financial condition, results of
operations and cash flows in accordance with generally accepted accounting
principles. However, in the opinion of management, all adjustments (which
consist of normal recurring accruals) which are necessary for a fair
presentation of the consolidated financial statements have been included.
The interim consolidated results of operations for the three months ended
December 31, 1995 are not necessarily indicative of the results which may
be expected for the entire year.

Certain amounts in the financial statements for the three months ended
December 31, 1994 have been reclassified to conform with the 1995
presentation.

NOTE 2. PRINCIPLES OF CONSOLIDATION

The accompanying condensed consolidated financial statements include the
accounts of FFE Financial Corp. (the "Holding Company") and its
wholly-owned subsidiary First of Englewood F.S.B. (the "Bank")
collectively, the ("Company"). All significant intercompany balances and
transactions have been eliminated in consolidation.

NOTE 3. STOCK CONVERSION

FFE Financial Corp., a newly formed holding corporation, completed an
initial public offering on August 26, 1993, consisting of 462,875 shares
of $.01 par value common stock (the "Offering")and 10,185 shares issued
pursuant to the Bank's Management Recognition Plan. The gross proceeds of
the Offering totaled $4,628,750 of which $4,629 was allocated to
common stock and $3,492,257 (which is net of conversion costs of
$1,131,864) was allocated to additional paid-in

F-39
<PAGE> 161

FFE FINANCIAL CORP. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended December 31, 1995 and 1994

(Unaudited)

capital. Simultaneous to the Offering, the Bank, formerly known
as First Federal Savings and Loan of Englewood, converted from a federal
mutual savings and loan association to a federal stock savings bank as
approved by members of the Bank (the "Conversion"). Substantially all of
the net proceeds of the Offering were used to acquire 100% of the common
stock of the Bank.

NOTE 4. INVESTMENTS AND MORTGAGE-BACKED SECURITIES

The Company accounts for investments and mortgaged-backed securities in
accordance with the Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 115 "Accounting for Certain
Investments in Debt and Equity Securities" ("SFAS No.115"). Under SFAS
No. 115 investments in debt and equity securities are required to be
classified into: 1) trading securities, 2) held-to-maturity securities or
3) available-for-sale securities. Pursuant to SFAS No. 115, at December
31, 1995, the Company has classified $11,469,999 of investments in U.S.
Government and agency obligations as investments available-for-sale.
Such investments available-for-sale are reported at fair value, with
unrealized gains and losses excluded from earnings and reported as a
separate component of stockholders' equity. In addition, the Company has
classified its investments in mortgage-backed securities of $18,729,867
as held-to-maturity. Investments classified as held-to-maturity are
reported at amortized cost. Pursuant to the statement, as of December
31, 1995, the Company's net unrealized losses on the investments
available-for-sale of $14,601 (which is net of the related income tax
effect of $8,949) has been reported as a separate component of
stockholders' equity in the accompanying condensed consolidated financial
statements.

NOTE 5. EARNINGS PER COMMON SHARE

Earnings per common share is calculated by dividing net income by the
weighted average number of common stock and common stock equivalent
(stock options) shares outstanding.

F-40
<PAGE> 162

FFE FINANCIAL CORP. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended December 31, 1995 and 1994

(Unaudited)

NOTE 6. COMMITMENTS AND CONTINGENCIES

Commitments
At December 31, 1995, the Company had no commitments outstanding to
originate loans.

Contingencies
At December 31, 1995, the Company and the Bank are involved in routine
legal proceedings occurring in the ordinary course of business, which
will not have a material effect on the condensed consolidated financial
statements.

NOTE 6. COMMITMENTS AND CONTINGENCIES (CONT.)

A number of proposals are being considered by the Treasury Department,
the FDIC, the OTS, and Congress to recapitalize the Savings Association
Insurance Fund ("SAIF"). Most of the proposals provide for a one-time
assessment of .85% to .90% of SAIF insured deposits, which would mean an
assessment of approximately $1,015,000 to the Bank. The ultimate
resolution of these proposals is uncertain at this time.

NOTE 7. STOCK INCENTIVE AND MANAGEMENT RECOGNITION PROGRAMS

On January 25, 1994, the Company's shareholders approved a stock
incentive plan (the "Plan") for key officers, members of the Board of
Directors and employees. In accordance, with the terms of the
Conversion, 46,288 shares of common stock were reserved for issuance
under the Plan. As of December 31, 1994 and 1995, the Company has
granted 40,731 options under the Plan. The exercise price of the options
granted ranges from $10 to $11.75 per share. The options granted vest
at a rate of 20% per year of continuous service from the date of grant.
There have been no options exercised or canceled.

Subsequent to the Offering (see Note 3), the Company adopted a Management
Recognition Plan ("MRP") for key officers and members of the Board of
Directors. In accordance with the

F-41
<PAGE> 163

FFE FINANCIAL CORP. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended December 31, 1995 and 1994

(Unaudited)

terms of the Conversion, 13,886 shares of common stock were reserved for
issuance under the MRP. As of December 31, 1995, 11,111 shares of common
stock were granted to officers and the Board of Directors. The unearned
compensation for the shares granted aggregated $110,999 and is being
amortized over the vesting period of five years.

NOTE 8. ADVANCES FROM THE FEDERAL HOME LOAN BANK

The Company obtains advances from the Federal Home Loan Bank ("FHLB") as
necessary to fund its lending and other cash flow obligations.

At December 31, 1995, the Company has $7,000,000 of advances outstanding
as follows:

Maturity Interest
Date Rates Amount
---------------- -------- -----------

October 19, 1996 7.21% $ 750,000
December 1, 1996 7.93 3,000,000
October 19, 1997 7.46 3,250,000
-----------
Total $ 7,000,000
===========

Under a specific collateral agreement with the FHLB, the Company is
required to collateralize its outstanding advances. The collateral
consists of residential first mortgages, mortgage-backed securities, and
all of its FHLB stock. At December 31, 1994, the Company had pledged
first mortgage loans with an approximate principal balance of
$10,786,000, and mortgage-backed securities with an approximate principal
balance of $9,078,000, to secure the advances.

NOTE 9. PENDING BUSINESS COMBINATION

F-42

<PAGE> 164
ADOPTION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS
NO. 114 AND 118

Effective October 1, 1995, FFE adopted Statement of Financial
Accounting Standards No. 114 (FAS 114), "Accounting by Creditors for
Impairment of a Loan," and Statement of Financial Accounting Standards
No. 118 (FAS 118), "Accounting by Creditors for Impairment of a Loan -
Income Recognition and Disclosures." These statements require creditors
account for impaired loans, except for those loans that are accounted for
at fair value or at the lower of cost or fair value, at the present value
of the expected future cash flows discounted at the loan's effective
interest rate. A loan is impaired when, based on current information and
events, it is probable that a creditor will be unable to collect all
principal and interest amounts due according to the contractual terms of
the loan agreement. FFE's adoption of these accounting standards
did not have a material effect on the operations or financial condition
of FFE.

F-43
<PAGE> 165
EXHIBIT A

===============================================================================

AGREEMENT AND PLAN OF MERGER

BETWEEN

SOUTHTRUST CORPORATION

SOUTHTRUST OF FLORIDA, INC.

AND

FFE FINANCIAL CORP.

================================================================================

<PAGE> 166

AGREEMENT AND PLAN OF MERGER

TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
ARTICLE I

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Section 1.1 Effects of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
---------------------
Section 1.2 Conversion of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
-------------------
Section 1.3 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
-------------------------
Section 1.4 Exchange of FFE Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
----------------------------
Section 1.5 Conversion of First of Englewood, F.S.B. . . . . . . . . . . . . . . . . . . . . . . . . . A-5
----------------------------------------
Section 1.6 Execution of Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-5
-----------------------------------

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SOUTHTRUST . . . . . . . . . . . . . . . . . A-5
Section 2.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-5
------------
Section 2.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
-------------
Section 2.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
---------
Section 2.4 Anti-takeover Provisions Inapplicable . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
-------------------------------------
Section 2.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
--------------
Section 2.6 SouthTrust Financial Statements; Material Changes . . . . . . . . . . . . . . . . . . . . . A-7
-------------------------------------------------
Section 2.7 SouthTrust Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7
-----------------------
Section 2.8 SouthTrust Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7
------------------
Section 2.9 SouthTrust Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7
------------------
Section 2.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
--------------------
Section 2.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
----------
Section 2.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
----------
Section 2.13 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
--------
Section 2.14 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
-------------------------
Section 2.15 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
--------
Section 2.16 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
-----------------------
Section 2.17 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
------

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF FFE . . . . . . . . . . . . . . . . . . A-10
Section 3.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
------------
Section 3.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
-------------
Section 3.3 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
---------
Section 3.4 Anti-takeover Provisions Inapplicable . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
-------------------------------------
Section 3.5 Capitalization and Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
-------------------------------
Section 3.6 FFE Financial Statements; Material Changes . . . . . . . . . . . . . . . . . . . . . . . . A-11
------------------------------------------
Section 3.7 FFE Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
----------------
Section 3.8 FFE Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
-----------
Section 3.9 FFE Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
-----------
Section 3.10 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
--------------------
Section 3.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
----------
Section 3.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
----------
Section 3.13 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-13
--------
Section 3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
-----
Section 3.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
---------
Section 3.16 Loans; Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
------------------
Section 3.17 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
----------------------------------

</TABLE>

A-i
<PAGE> 167

<TABLE>
<S> <C> <C>
Section 3.18 FFE Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
-----------------
Section 3.19 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-17
----------------------------------
Section 3.20 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-18
-------------------------
Section 3.21 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
--------
Section 3.22 Operations Since September 30, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
-----------------------------------
Section 3.23 Corporate Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-21
-----------------
Section 3.24 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
-----------------------
Section 3.25 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
------
Section 3.26 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
-----------------
Section 3.27 Registration Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
------------------------
Section 3.28 Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
------------------

ARTICLE IV

COVENANTS OF FFE . . . . . . . . . . . . . . . . . . . . . . . . A-23
Section 4.1 Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
---------------------------
Section 4.2 Conforming Accounting and Reserve Policies; Restructuring Expenses . . . . . . . . . . . . A-25
------------------------------------------------------------------
Section 4.3 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
---------------
Section 4.4 Curative and Compliance Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
-------------------------------

ARTICLE V

ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . A-27
Section 5.1 Inspection of Records; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
--------------------------------------
Section 5.2 Registration Statement; Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . A-27
--------------------------------------------
Section 5.3 Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
-----------------
Section 5.4 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
-------
Section 5.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
-----------
Section 5.6 Regulatory Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
-----------------------
Section 5.7 Financial Statements and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
--------------------------------
Section 5.8 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-28
-------------
Section 5.9 Delivery of Supplements to Disclosure Schedules . . . . . . . . . . . . . . . . . . . . . . A-28
-----------------------------------------------
Section 5.10 Litigation Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-29
------------------
Section 5.11 Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-29
-----------
Section 5.12 Options; MRP; Employment Agreements; Benefits and Related Matters . . . . . . . . . . . . . A-29
-----------------------------------------------------------------
Section 5.13 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-31
-------------
Section 5.14 Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-31
----------------------
Section 5.15 Directors' and Officers' Indemnification Insurance . . . . . . . . . . . . . . . . . . . . A-31
--------------------------------------------------

ARTICLE VI

CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . A-31
Section 6.1 Conditions to the Obligations of SouthTrust . . . . . . . . . . . . . . . . . . . . . . . . A-31
-------------------------------------------
Section 6.2 Conditions to the Obligations of FFE . . . . . . . . . . . . . . . . . . . . . . . . . . . A-32
------------------------------------
Section 6.3 Conditions to the Obligations of the Parties . . . . . . . . . . . . . . . . . . . . . . . A-32
--------------------------------------------

ARTICLE VII

TERMINATION; AMENDMENT; WAIVER . . . . . . . . . . . . . . . . . . . . A-33
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-33
-----------
Section 7.2 Liabilities and Remedies; Break-Up Fee . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
--------------------------------------
Section 7.3 Survival of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
----------------------
Section 7.4 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
---------
Section 7.5 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
------

ARTICLE VIII

GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . A-35

</TABLE>

A-ii
<PAGE> 168

<TABLE>
<S> <C> <C>
Section 8.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35
--------
Section 8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35
-------
Section 8.3 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
--------------
Section 8.4 Headings, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
-------------
Section 8.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-36
------------
Section 8.6 Entire Agreement; Binding Effect; Non-Assignment; Counterparts . . . . . . . . . . . . . . A-36
--------------------------------------------------------------
</TABLE>

A-iii
<PAGE> 169

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (the "Agreement") being made and
entered into as of the 3rd day of November, 1995, by and between SouthTrust of
Florida, Inc., a Florida Corporation ("ST-Florida") and a wholly owned
subsidiary of SouthTrust Corporation, a Delaware corporation ("SouthTrust"),
and FFE Financial Corp., a Delaware corporation ("FFE"), which Agreement is
joined into by SouthTrust.

WITNESSETH THAT:

WHEREAS, SouthTrust is a registered bank holding company under the
Bank Holding Company Act of 1956, as amended ("BHC");

WHEREAS, FFE is a registered savings and loan holding company under
the Home Owner's Loan Act, as amended ("HOLA");

WHEREAS, the Boards of Directors of SouthTrust, ST-Florida and FFE
deem it advisable and in the best interests of the stockholders of SouthTrust,
ST-Florida and FFE that SouthTrust and FFE become affiliated by causing FFE to
be merged with and into, and under the charter of, ST-Florida in accordance
with the applicable corporation law of the States of Florida and Delaware
("Corporate Law") with ST-Florida deemed to be the continuing and surviving
entity (the "Merger"), pursuant to which the stockholders of FFE will receive
shares of common stock, $2.50 par value per share, of SouthTrust ("SouthTrust
Common Stock") and cash as provided herein in exchange for their shares of
common stock, $.01 par value per share, of FFE ("FFE Common Stock"); and

WHEREAS SouthTrust, ST-Florida and FFE desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also desire to set forth various conditions precedent to the Merger;
and

WHEREAS it is contemplated that SouthTrust and FFE will enter into a
stock option agreement (the "Stock Option Agreement") in substantially the form
of Exhibit 1.6, pusuant to which FFE is granting SouthTrust an option to
purchase shares of FFE Common Stock.

NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:

ARTICLE I

THE MERGER

Section 1.1 Effects of the Merger.

(a) Surviving Corporation. Subject to the terms and
conditions of this Agreement, FFE shall be merged with and into, and under the
charter of, ST-Florida at the Effective Time (as defined below) in accordance
with the Corporate Law with ST-Florida being the continuing and surviving
corporation (sometimes referred to hereinafter as the "Surviving Corporation"),
and the separate existence of FFE shall cease.

(b) Effective Time. The Merger shall become effective
when the Certificate or Articles of Merger shall be accepted for filing by the
Secretaries of State of the States of Florida and Delaware (the "Effective
Time"). On the Closing Date (as defined in Section 1.3(a), the parties shall
execute, acknowledge and file, in accordance with the Corporate Law, the
Certificate or Articles of Merger.

A-1
<PAGE> 170

(c) Rights and Liabilities. The Surviving Corporation
shall be called "SouthTrust of Florida, Inc.", and shall possess all of the
properties privileges, immunities, powers, franchises and rights of a public as
well as a private nature and be subject to all of the liabilities, restrictions
and duties of ST-Florida and FFE and be governed by the laws of the State of
Florida.

(d) Certificate or Articles of Incorporation. The
Certificate or Articles of Incorporation of ST- Florida shall be the
Certificate or Articles of Incorporation of the Surviving Corporation until
amended in accordance with the provisions thereof and the applicable Corporate
Law.

(e) Bylaws. The Bylaws of ST-Florida in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation until altered, amended or repealed as provided therein, or in the
Certificate or Articles of Incorporation of the Surviving Corporation or the
applicable Corporate Law.

(f) Directors and Officers. The directors of the
Surviving Corporation shall be the persons who were directors of ST-Florida
immediately prior to the Effective Time. The officers of the Surviving
Corporation shall be the persons who were officers of ST-Florida immediately
prior to the Effective Time.

Section 1.2 Conversion of Stock. At the Effective Time:

(a) SouthTrust Common Stock. Each share of Common Stock
of ST-Florida and each share of SouthTrust Common Stock (and the rights (the
"SouthTrust Rights") associated with the SouthTrust Common Stock issued
pursuant to a Rights Agreement dated February 2, 1989 between SouthTrust and
Mellon Bank, N.A.)(the "Right Agreement"), which is issued immediately prior
thereto (whether then outstanding or held in the treasury of ST-Florida or
SouthTrust), shall continue to be issued without any change therein, and each
outstanding share of Common Stock of ST-Florida shall continue as one share of
Common Stock of the Surviving Corporation.

(b) FFE Common Stock. Each share of FFE Common Stock
which is issued and outstanding immediately prior to the Effective Time (other
than "Excluded Shares" which shall mean (i) shares of FFE Common Stock held by
FFE, SouthTrust, ST-Florida and their respective Significant Subsidiaries as
defined in Rule 1.2 of Regulation S-X of the Securities and Exchange Commission
("SEC") which shall be canceled, but not those held in a fiduciary capacity or
in satisfaction of debts previously contracted, (ii) Dissenting Shares as
defined in Section 1.2(d) hereof and (iii) shares awarded pursuant to the FFE
Management Retention Plan ("MRP") prior to the date hereof that are unvested
immediately prior to the Effective Time) shall be converted into and represent
the right to receive and be exchangeable into (A) cash in the amount of $10.80,
as adjusted pursuant to the next sentence of this Section 1.2(b), provided that
if the Effective Time takes place after April 30, 1996, then the stated cash
amount shall be increased at the rate of 8% per annum calculated from and
including May 1, 1996 through the date on which the Effective Time occurs and
(B) a number of shares of SouthTrust Common Stock (and associated SouthTrust
Rights) equal to the Exchange Ratio (as herein defined). If the after-tax cost
to FFE Bank of restitution payments made or to be made to customers pursuant to
Section 4.4(a) of this Agreement exceeds $125,000 (the "Threshold Amount"), the
cash amount set forth in part (A) of this Section 1.2(b) shall be decreased in
an amount equal to the sum of 50% of the first $125,000 in after-tax cost of
such restitution which is in excess of the Threshold Amount and 100% of the
after-tax cost of such restitution in excess of $250,000, divided by the number
of shares of FFE Common Stock outstanding immediately prior to the Effective
Time and the number of shares FFE Common Stock subject to outstanding options
immediately prior to the Effective Time. The "Exchange Ratio" shall be equal
to .645 of a share of SouthTrust Common Stock and associated SouthTrust Rights.
However, notwithstanding the foregoing, if .645, when multiplied by the average
last sales price of SouthTrust Common Stock for the later to occur of the
twenty (20) trading days immediately preceding the date of the special meeting
of stockholders of FFE at which the Merger is to be considered or the twenty
(20) trading days immediately following the date that the last regulatory
approval relating to the Merger is received (and all waiting periods applicable
thereto have expired), as reported by the Automated Quotation System of the
National Association of Securities Dealers, Inc.-National Market System

A-2
<PAGE> 171

("NASDAQ"), results in the aggregate of the amount attributable to each share
of FFE Common Stock, after taking into account all adjustments, pursuant to (A)
and (B) above being less than $22.95, SouthTrust shall adjust the Exchange
Ratio so that the aggregate of the amount attributable to each share of FFE
Common Stock, after all adjustments, pursuant to (A) and (B) above, shall equal
$22.95, and if .645, when multiplied by the average last sales price of
SouthTrust Common Stock, as determined above, results in the aggregate of the
amount attributable to each share of FFE Common Stock, after taking into
account all adjustments, pursuant to (A) and (B) above, being more than $31.05,
SouthTrust shall adjust the Exchange Ratio so that the aggregate of the amount
attributable to each share of FFE Common Stock, after taking into account all
adjustments, shall equal $31.05.

(c) Actions Affecting SouthTrust Common Stock. If, prior
to the Effective Time, shares of SouthTrust Common Stock shall be changed into
a different number of shares or a different class of shares by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares
or readjustment, or there occurs a distribution of warrants or rights with
respect to SouthTrust Common Stock, or a stock dividend, stock split or other
general distribution of SouthTrust Common Stock is declared with a record date
prior to the Effective Time, then in any such event the Exchange Ratio, as well
as the number of SouthTrust Rights issuable in the Merger, shall be
appropriately adjusted.

(d) Dissenting Shares. Any shares of FFE Common Stock
held by a holder who dissents from the Merger in accordance with the Corporate
Law of the State of Delaware and becomes entitled to obtain payment for the
fair value of such shares of FFE Common Stock pursuant to the applicable
provisions of the Corporate Law of the State of Delaware shall be herein called
"Dissenting Shares." Notwithstanding any other provision of this Agreement,
any Dissenting Shares shall not, after the Effective Time, be entitled to vote
for any purpose or receive any dividends or other distributions and shall be
entitled only to such rights as are afforded in respect of Dissenting Shares
pursuant to the Corporate Law of the State of Delaware. All payments in
respect of Dissenting Shares shall be from funds of SouthTrust and not from the
acquired assets of FFE.

Section 1.3 Time and Place of Closing.

(a) Closing; Closing Date. The closing of the
transactions contemplated by this Agreement (the "Closing") will be held on a
date mutually agreed upon by SouthTrust and FFE (the "Closing Date"). In the
absence of such agreement, and subject to the satisfaction or waiver of all
covenants and conditions contained in this Agreement on behalf of each party,
the Closing shall be held on the tenth business day after the last to occur of:
(i) the receipt of all consents and approvals of government regulatory
authorities as legally required to consummate the Merger and the expiration of
all applicable waiting periods; and (ii) the requisite approval of the Merger
by the stockholders of FFE. Provided however, if the record date for a cash
dividend on SouthTrust Common Stock is scheduled or contemplated to occur
within said ten business day period then the Closing Date and the Effective
Time will take place prior to such dividend record date.

(b) Closing Location. The closing shall take place at
the offices of SouthTrust or such other place as SouthTrust and FFE may
mutually agree prior to the Closing Date.

Section 1.4 Exchange of FFE Common Stock.

(a) Exchange Procedures. As soon as practicable after
the Effective Time, the Exchange Agent, who shall be appointed by SouthTrust,
shall mail to each holder of record of a certificate or certificates (other
than certificates representing Excluded Shares) which as of the Effective Time
represented outstanding shares of FFE Common Stock (the ("Certificates"): (i) a
form letter of transmittal which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery
of the Certificates (or a lost certificate affidavit and bond in a form
reasonably acceptable to the Exchange Agent); and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for

A-3
<PAGE> 172

the Merger Consideration (as herein defined). The "Merger Consideration" shall
mean the number of whole shares of SouthTrust Common Stock and the amount of
cash into which the FFE Common Stock shall have been converted by virtue of the
Merger as provided above and the cash value of any fraction of a share of
SouthTrust Common Stock as provided below. Upon surrender of a Certificate for
cancellation to the Exchange Agent (or a lost certificate affidavit and bond in
a form reasonably acceptable to the Exchange Agent), together with such letter
of transmittal, duly executed, the holder of such Certificate shall be entitled
to receive as promptly as practicable thereafter the Merger Consideration into
which the shares of FFE Common Stock represented by the Certificate so
surrendered shall have been converted pursuant to the provisions of this
Agreement and the Certificate so surrendered shall forthwith be delivered to
the Surviving Corporation for cancellation. In the event of a transfer of
ownership of FFE Common Stock which is not registered in the transfer records
of FFE, the Merger Consideration may be issued to a transferee if the
Certificate representing such FFE Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by any applicable stock transfer taxes. No interest shall be
payable on or with respect to the cash portion of the Merger Consideration.

(b) Delivery of Merger Consideration to Exchange Agent.
At the Effective Time, SouthTrust shall deliver to the Exchange Agent the
aggregate Merger Consideration to be paid for all of the issued and outstanding
shares of FFE Common Stock other than Excluded Shares. On an as-required
basis, SouthTrust shall promptly and timely tender to the Exchange Agent
additional cash funds required for the payment of cash in lieu of fractional
shares. The Merger Consideration remaining in the hands of the Escrow Agent
for non-surrendered Certificates shall be returned to SouthTrust at the
expiration of 180 days from the Effective Time as provided in Section 1.4(c)
below.

(c) Failure to Exchange FFE Common Stocks. No dividends
or other distributions declared on or after the Effective Time with respect to
SouthTrust Common Stock payable to the holders of record thereof on or after
the Effective Time shall be paid to the holder of any non-surrendered
Certificate with respect to SouthTrust Common Stock represented thereby until
the holder of record shall surrender such Certificate. Subject to the effect,
if any, of applicable law, after the subsequent surrender and exchange of a
Certificate, the holder thereof shall be entitled to receive any such dividends
or distributions, without interest thereon, which became payable on or after
the Effective Time with respect to the SouthTrust Common Stock represented by
such Certificate. All dividends or other distributions declared on or after
the Effective Time with respect to the SouthTrust Common Stock and payable to
the holders of record thereof after the Effective Time which are payable to the
holder of a Certificate not theretofore surrendered and exchanged for
SouthTrust Common Stock pursuant to this Section 1.4 shall be paid or delivered
by Surviving Corporation to the Exchange Agent, in trust, for the benefit of
such holders. All such dividends and distributions held by the Exchange Agent
for payment or delivery to the holders of non-surrendered Certificates
unclaimed at the end of 180 days from the Effective Time shall be repaid or
redelivered by the Exchange Agent to the Surviving Corporation after which time
any holder of Certificates who has not theretofore surrendered such
Certificates to the Exchange Agent, subject to applicable law, shall look as a
general creditor only to the Surviving Corporation for payment or delivery of
such dividends or distributions, as the case may be. Any Merger Consideration
delivered or made available to the Exchange Agent pursuant to this Section 1.4
and not exchanged for Certificates within one year after the Effective Time
pursuant to this Section 1.4 shall be returned by the Exchange Agent to the
Surviving Corporation which shall thereafter act as Exchange Agent subject to
the rights of holders of non-surrendered Certificates.

(d) Full Payment. All shares of SouthTrust Common Stock
issued upon the surrender for exchange of FFE Common Stock shall thereupon be
validly issued and outstanding, fully paid and non-assessable, and shall not be
liable to any further call, nor shall the holder thereof be liable for any
further payments with respect thereto.

(e) Fractional Shares. No certificates or scrip
representing fractional shares of SouthTrust Common Stock shall be issued upon
the surrender for exchange of Certificates, no dividend or distribution of the
Surviving Corporation shall relate to any factional share, and such fractional
share interests will not entitle the owner thereof to vote or to any other
rights of a stockholder of the Surviving Corporation. In lieu of any
fractional share, the Exchange Agent or the Surviving Corporation as the case

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may be, shall pay to each holder of shares of FFE Common Stock who otherwise
would be entitled to receive a fractional share of SouthTrust Common Stock an
amount of cash (without interest) equal to the product achieved when such
fraction is multiplied by an amount equal to the last sales price of SouthTrust
Common Stock, as reported by NASDAQ, as of the trading day immediately
preceding the Effective Time, rounded to the nearest cent.

(f) List of FFE Stockholders. At the Effective Time, FFE
shall deliver a certified copy of a list of its stockholders to the Exchange
Agent, after which there shall be no further registrations or transfers on the
stock transfer books of FFE of the shares of FFE Common Stock that were
outstanding immediately prior thereto. If, after the Effective Time,
Certificates representing such shares are presented to FFE or SouthTrust, they
shall be canceled and exchanged as provided in this Article I.

Section 1.5 Conversion of First of Englewood, F.S.B.. The
parties understand that it is the present intention of SouthTrust to convert
First of Englewood, F.S.B. ("FFE Bank"), a wholly owned subsidiary of FFE, into
a national banking association at or after the Effective Time, to relocate FFE
Bank's main office to a place to be designated by SouthTrust at or after the
Effective Time, and to merge FFE Bank into one of SouthTrust's national bank
Subsidiaries (retaining FFE Bank's existing offices as branches) at or after
the Effective Time. FFE shall take all such actions as are reasonably
requested by SouthTrust so that SouthTrust may accomplish such conversion,
relocation and merger as aforesaid. Nothing contained in this Section 1.5 is
intended to impose an obligation on SouthTrust to alter the manner in which
SouthTrust or any SouthTrust Subsidiary conducts business.

Section 1.6 Execution of Stock Option Agreement. It is
contemplated that SouthTrust and FFE will enter into the Stock Option Agreement
in the form as set forth in Exhibit 1.6.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SOUTHTRUST

SouthTrust represents and warrants to FFE that:

Section 2.1 Organization. (a) SouthTrust is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority, corporate and otherwise, to
own, operate and lease its assets, properties and business and to carry on its
business substantially as it has been and is now being conducted. SouthTrust
is duly qualified to do business and is in good standing in each jurisdiction
where the character of the assets or properties owned or leased by it or the
nature of the business transacted by it requires that it be so qualified,
except where the failure to so qualify would not have a Material Adverse Effect
(as herein defined) on SouthTrust or its ability to consummate the transactions
contemplated herein. SouthTrust has all requisite corporate power and
authority to enter into this Agreement and, subject to the receipt of all
requisite regulatory approvals and the expiration of applicable waiting
periods, to consummate the transactions contemplated hereby SouthTrust is duly
registered as a bank holding company under BHC.

(b) As used in this Agreement, the term "Material Adverse
Effect" with respect to an entity means any condition, event, change or
occurrence that has or may reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), properties, business,
operations or results of operations, of such entity on a consolidated basis; it
being understood that a Material Adverse Effect shall not include: (i) a change
with respect to, or effect on, such entity and its Subsidiaries resulting from
a change in law, rule, regulation, generally accepted accounting principles or
regulatory accounting principles, including but not limited to, a change that
would require the bad debt reserve of a thrift institution to be restored to
income; (ii) a change with respect to, or effect on, such entity and its
Subsidiaries resulting from expenses (such as legal, accounting and investment
bankers' fees) incurred in connection with this Agreement; (iii) a change with
respect to, or effect on, such entity and its Subsidiaries resulting from any
other matter affecting depository institutions generally including, without
limitation, changes in general economic conditions and

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changes in prevailing interest and deposit rates; (iv) any one-time special
insurance premium assessed by the Federal Deposit Insurance Corporation
("FDIC") on deposits insured by the Savings Association Insurance Fund
("SAIF"); (v) in the case of FFE, any financial change resulting from
adjustments taken pursuant to Section 4.2 hereof; or (vi) the costs and
expenses of the audits and other corrective actions taken pursuant to Section
4.4 and the amount of the restitution payments, if any to be made in connection
therewith.

Section 2.2 Authorization. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly approved and authorized by SouthTrust's
Board of Directors or the Executive Committee thereof, and no other corporate
action on the part of SouthTrust is required to be taken. This Agreement has
been duly executed and delivered by SouthTrust and constitutes the valid and
binding obligation of SouthTrust and is enforceable against SouthTrust (except
to the extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles and doctrines).

Section 2.3 Conflicts. Subject to the second sentence of this
Section 2.3, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with or
result in any violation, breach or termination of, or default or loss of a
material benefit under, or permit the acceleration of any obligation under, or
result in the creation of any material lien, charge or encumbrance on any of
the property or assets under, any provision of the Certificate [Articles] of
Incorporation or Bylaws of SouthTrust or similar documents of any SouthTrust
Subsidiary (as defined in Section 2.7 hereof) or any mortgage, indenture,
lease, agreement or other instrument, permit, concession, grant, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to SouthTrust or any SouthTrust Subsidiary or their respective
properties, other than any such conflicts, violations or defaults which (i)
will not have a Material Adverse Effect on SouthTrust or (ii) are disclosed in
Section 2.3 of that certain confidential writing delivered by SouthTrust to FFE
within two business days prior to the date hereof (the "SouthTrust Disclosure
Schedule"). No consent, approval, order or authorization of, or registration,
declaration or filing with, any federal or state governmental authority is
required by or with respect to SouthTrust in connection with the execution and
delivery of this Agreement or the consummation by SouthTrust of the
transactions contemplated hereby except for: (a) the filing of all applicable
regulatory applications by SouthTrust, FFE and/or their respective Subsidiaries
for approval of the transactions contemplated by this Agreement; (b) the filing
by SouthTrust of the registration statement relating to the SouthTrust Common
Stock to be issued pursuant to this Agreement (the "Registration Statement")
with the SEC and various blue sky authorities, which Registration Statement
shall include the prospectus/proxy statement for use in connection with the FFE
Stockholders' Meeting (the "Proxy Statement"); (c) the filing of the
Certificate or Articles of Merger with respect to the Merger with the Secretary
of State of the States of Florida and Delaware; (d) any filings, approvals or
no-action letters with or from state securities authorities; and (e) any
anti-trust filings, consents, waivers or approvals.

Section 2.4 Anti-takeover Provisions Inapplicable. No "business
combination," "moratorium," "control share" or other state anti-takeover
statute or regulation (i) prohibits or restricts SouthTrust's ability to
perform its obligations under this Agreement or its ability to consummate the
transactions contemplated hereby, (ii) would have the effect of invalidating or
voiding this Agreement or any provision hereof, or (iii) would subject FFE to
any material impediment or condition in connection with the exercise of any of
its rights under this Agreement.

Section 2.5 Capitalization. (a)As of the date hereof, the
authorized capital stock of SouthTrust consists of (i) 200,000,000 shares of
SouthTrust Common Stock, $2.50 par value per share, of which, as of October 17,
1995, 87,763,319 shares were issued and outstanding (ii) 5,000,000 shares of
preferred stock, $1.00 par value per share, of which none are issued and
outstanding. All of the issued and outstanding shares of SouthTrust Common
Stock have been, and all of the shares of SouthTrust Common Stock to be issued
in the Merger will be, at the Effective Time, duly and validly authorized and
issued, and are or will be, as the case may be, fully paid and non-assessable.
None of the outstanding shares of SouthTrust Common Stock has been issued in
violation of any preemptive rights of the current or past stockholders of
SouthTrust and none of the outstanding shares of SouthTrust Common Stock is or
will be entitled to any preemptive rights in respect of the Merger or any of
the other transactions contemplated by this Agreement.

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(b) As of September 30, 1995, SouthTrust does not have
outstanding any securities or rights convertible into or exchangeable for
SouthTrust Common Stock or any commitments, contracts, understandings or
arrangements by which SouthTrust is or may be bound to issue additional shares
of SouthTrust Common Stock, except for SouthTrust Common Stock issuable in
connection with past or pending acquisitions or employee benefit plans and
except for transactions pursuant to the Rights Agreement.

Section 2.6 SouthTrust Financial Statements; Material Changes.
SouthTrust has heretofore delivered to FFE its audited consolidated financial
statements for fiscal years ended 1993 and 1994 and its unaudited consolidated
financial statements as of June 30, 1995 (together the "SouthTrust Financial
Statements"). The SouthTrust Financial Statements (x) are true and correct in
all material respects; (y) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto, and except in the
case of unaudited consolidated financial statements for the absence of
footnotes and for normal recurring year-end adjustments which are not
material); and (z) fairly present the consolidated financial position of
SouthTrust as of the dates thereof and the consolidated results of its
operations, stockholders' equity, cash flows and changes in financial position
for the periods then ended. Since June 30, 1995 to the date hereof, SouthTrust
and the SouthTrust Subsidiaries have not undergone or suffered any changes in
their respective condition (financial or otherwise), properties, business or
operations which have been, in any case or in the aggregate, materially adverse
to SouthTrust on a consolidated basis except as disclosed in Section 2.6 of the
SouthTrust Disclosure Schedule.

Section 2.7 SouthTrust Subsidiaries. (a) SouthTrust owns
directly or indirectly all of the issued and outstanding shares of capital
stock of the SouthTrust Subsidiaries. No capital stock of any of the
SouthTrust Subsidiaries is, or may become required to be, issued (other than to
SouthTrust) by reason of any options, warrants, scrip, right to subscribe to,
calls, or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital stock of any
SouthTrust Subsidiary. All of the shares of capital stock of each SouthTrust
Subsidiary held by SouthTrust or a SouthTrust Subsidiary are fully paid and
non-assessable and are owned free and clear of any claim, lien or encumbrance,
except as disclosed on Section 2.7 of the SouthTrust Disclosure Schedule.

(b) Each SouthTrust Subsidiary is either a financial
institution or a corporation and is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated or
organized, and is duly qualified to do business and in good standing in each
jurisdiction where the character of the assets or properties owned or leased by
it or the nature of the business transacted by it requires it to be so
qualified, except where the failure to so qualify, either individually or in
the aggregate, would not have a Material Adverse Effect on SouthTrust or the
ability of SouthTrust to consummate the transactions contemplated herein. Each
SouthTrust Subsidiary has the corporate power and authority necessary for it to
own, operate or lease its assets, properties and business and to carry on its
business as it has been and is now being conducted.

(c) For purposes of this Agreement, a "SouthTrust
Subsidiary" or a "Subsidiary" of SouthTrust shall mean SouthTrust of Florida,
Inc., SouthTrust of Georgia, Inc., SouthTrust Bank of Alabama, N.A., SouthTrust
Bank of Georgia, N.A., and SouthTrust Bank of (Florida).

Section 2.8 SouthTrust Filings. SouthTrust has previously made
available, or will make available prior to the Effective Time, to FFE true and
correct copies of its (i) proxy statements relating to all meetings of its
stockholders (whether special or annual) during calendar years 1994 and 1995
and (ii) all other reports, as amended, or filings, as amended, required to be
filed under the Securities Exchange Act of 1934, as amended (the "Securities
Exchange Act") by SouthTrust with the SEC since January 1, 1994 including
without limitation on Forms 10-K, 10-Q and 8-K.

Section 2.9 SouthTrust Reports. Since January 1, 1994, each of
SouthTrust and the SouthTrust Subsidiaries has filed, and will continue to
file, all reports and statements, together with any amendment required to be
made with respect thereto, that it was, or will be required to file with the
SEC, the Federal

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Reserve Board, the Office of the Comptroller of the Currency ("OCC"), the FDIC,
the NASD and other applicable banking, securities and other regulatory
authorities (except filings which are not material). As of their respective
dates (and without giving effect to any amendments or modifications filed after
the date of this Agreement with respect to reports and documents filed before
the date of this Agreement), each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all of the statutes, rules and regulations enforced or
promulgated by the authority with which they were filed and did not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Except for normal
examinations conducted by the Internal Revenue Service, state and local taxing
authorities, the Federal Reserve Board, the OCC or the FDIC in the regular
course of the business of SouthTrust or the SouthTrust Subsidiaries, no
federal, state or local governmental agency, commission or other entity has
initiated any proceeding or, to the best knowledge of SouthTrust, investigation
into the business or operations of SouthTrust or the SouthTrust Subsidiaries
within the past two (2) years except as set forth in Section 2.9 of the
SouthTrust Disclosure Schedule. There is no unresolved violation, criticism or
exception by the SEC, Federal Reserve Board, OCC, FDIC or other agency,
commission or entity with respect to any report or statement referred to herein
that is material to SouthTrust on a consolidated basis.

Section 2.10 Compliance with Laws. (a) Except as disclosed in
Section 2.10 of the SouthTrust Disclosure Schedule, the businesses of
SouthTrust and the SouthTrust Subsidiaries are not being conducted in violation
of any law, ordinance or regulation of any governmental entity, including,
without limitation, any laws affecting financial institutions (including those
pertaining to the Bank Secrecy Act, the investment of funds, the lending of
money, the collection of interest and the extension of credit), federal and
state securities laws, laws and regulations relating to financial statements
and reports, truth-in-lending, truth-in-savings, usury, fair credit reporting,
consumer protection, occupational safety, fair employment practices, fair labor
standards and laws and regulations relating to employee benefits, and any
statutes or ordinances relating to the properties occupied or used by
SouthTrust or any SouthTrust Subsidiary, except for possible violations which
either singly or in the aggregate do not and, insofar as reasonably can be
foreseen in the future, will not have a Material Adverse Effect on SouthTrust.

(b) Except as disclosed in Section 2.10 of the SouthTrust
Disclosure Schedule, no investigation or review by any governmental entity with
respect to SouthTrust or any SouthTrust Subsidiary is pending or, to the best
knowledge of SouthTrust, threatened, nor has any governmental entity indicated
to SouthTrust an intention to conduct the same, other than normal financial
institution regulatory examinations and those the outcome of which will not
have a Material Adverse Effect on SouthTrust.

(c) As of the date of this Agreement, all SouthTrust
Subsidiaries that are financial institutions have a rating under the Community
Reinvestment Act of 1977 from the applicable regulatory authority or
authorities which is at least "satisfactory."

Section 2.11 Disclosure. None of the written information supplied
by SouthTrust for inclusion in the Proxy Statement relating to the FFE
Stockholders' Meeting or the information relating to SouthTrust and the
SouthTrust Subsidiaries in the Registration Statement, will, in the case of the
Proxy Statement or any amendments thereof or supplements thereto, at the time
of mailing of the Proxy Statement and at the FFE Stockholders' Meeting or, in
the case of the Registration Statement, at the time it becomes effective and at
the time of the FFE Stockholder's Meeting, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Registration Statement at the time it becomes effective
and at the time of the FFE Stockholder's Meeting will comply as to form in all
material respects with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "Securities Act").

Section 2.12 Litigation. Except as disclosed in Section 2.12 of
the SouthTrust Disclosure Schedule, there is no suit, action, investigation or
proceeding, legal, quasi-judicial administrative or otherwise, pending or, to
the best knowledge of SouthTrust threatened, against or affecting SouthTrust or
any SouthTrust Subsidiary, or any of their respective officers, directors,
employees or agents, in their capacities as

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such, that is reasonably expected to have, a Material Adverse Effect on
SouthTrust or which would materially affect the ability of SouthTrust to
consummate the transactions contemplated herein or which is seeking to enjoin
consummation of the transactions provided for herein or to obtain other relief
in connection with this Agreement or the transactions contemplated hereby, nor
is there any judgment, decree, injunction, rule or order of any court,
governmental department, commission agency, instrumentality or arbitrator
outstanding against SouthTrust or any SouthTrust Subsidiary or any of their
respective officers, directors, employees or agents, in their capacities as
such, having, or which, insofar as reasonably can be foreseen in the future,
would have any such effect.

Section 2.13 Licenses. SouthTrust and the SouthTrust Subsidiaries
hold all licenses, certificates, permits, franchises and all patents,
trademarks, service marks, trade names, copyrights or rights thereto, and
required authorizations, approvals, consents, licenses, clearances and orders
or registrations with all appropriate federal, state or other authorities that
are material to the conduct of their respective businesses as now conducted and
as presently proposed to be conducted.

Section 2.14 Contracts and Commitments. Section 2.14 of the
SouthTrust Disclosure Schedule contains, and shall be supplemented by
SouthTrust, as required by Section 5.9 hereof, so as to contain at the Closing
Date copies of each of the following documents, certified by an officer of
SouthTrust to be true and correct copies of such documents on the dates of such
certificates.

(a) The Restated Certificate of Incorporation, and
Restated Bylaws of SouthTrust and the Charter and Bylaws of the banking
affiliate of SouthTrust into which FFE Bank will be merged.

(b) All judgments, orders, injunctions, court decrees or
settlement agreements arising out of or relating to the labor and employment
practices or decisions of SouthTrust or any SouthTrust Subsidiary which, by
their terms, continue to bind or affect SouthTrust or any SouthTrust
Subsidiary.

(c) All orders, decrees, memorandums agreements or
understandings with regulatory agencies binding upon or affecting the current
operations of SouthTrust or any SouthTrust Subsidiary or any of their directors
or officers in their capacities as such.

Section 2.15 Defaults. There have been no defaults in the
obligations to be performed by SouthTrust or any SouthTrust Subsidiary under
contracts or commitments which are reasonably likely to result in a Material
Adverse Effect on SouthTrust.

Section 2.16 Undisclosed Liabilities. All of the material
obligations or liabilities (whether accrued, absolute, contingent, unliquidated
or otherwise, whether due or to become due, and regardless of when asserted)
arising out of transactions or events heretofore entered into, or action or
inaction, including taxes with respect to or based upon transactions or events
heretofore occurring ("Liabilities") have, in the case of SouthTrust and the
SouthTrust Subsidiaries, been reflected, disclosed or reserved against in the
SouthTrust Financial Statements dated December 31, 1994, or in the notes
thereto, which were prepared in accordance with the second sentence of Section
2.6, and SouthTrust and SouthTrust Subsidiaries have no other Liabilities
except (a) Liabilities incurred since December 31, 1994 in the ordinary course
of business, (b) as disclosed in SouthTrust Financial Statements delivered to
FFE prior to the date of this Agreement, or (c) as disclosed in Section 2.16 of
the SouthTrust Disclosure Schedule.

Section 2.17 Assets. (a) SouthTrust and the SouthTrust
Subsidiaries have good, and marketable title to their real properties including
leaseholds, and their other assets and properties, all as reflected as owned or
held by SouthTrust in the SouthTrust Financial Statements, dated as of June 30,
1995, and those acquired since such date, except for (i) assets and properties
disposed of since such date in the ordinary course of business and (ii) liens,
none of which, in the aggregate, except as set forth in Section 2.17 of the
SouthTrust Disclosure Schedule, are material to the assets of SouthTrust on a
consolidated basis. All buildings, structures, fixtures and appurtenances
comprising part of the real properties of SouthTrust and the SouthTrust
Subsidiaries (whether owned or leased) are in good operating condition and have
been well maintained, reasonable wear and tear excepted. Title to all real
property owned by SouthTrust and the

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SouthTrust Subsidiaries is held in fee simple, except as otherwise noted in the
SouthTrust Financial Statements as of June 30, 1995 or as set forth in Section
2.17 of the SouthTrust Disclosure Schedule. SouthTrust and the SouthTrust
Subsidiaries have title or other rights to its assets sufficient in all
material respects for the conduct of their respective businesses as presently
conducted, and except as set forth in the SouthTrust Financial Statements,
dated as of June 30, 1995, or in Section 2.17 of the SouthTrust Disclosure
Schedule, free, clear and discharged of and from any and all liens, charges,
encumbrances, security interests and/or equities which are material to
SouthTrust or any SouthTrust Subsidiary.

(b) All leases pursuant to which SouthTrust or any
SouthTrust Subsidiary, as lessee, leases real or personal property which are
material to the business of SouthTrust on a consolidated basis are, to the best
knowledge of SouthTrust, valid, effective, and enforceable against the lessor
in accordance with their respective terms.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF FFE

FFE represents and warrants to SouthTrust that:

Section 3.1 Organization. FFE is a corporation duly organized,
validity existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority, corporate and otherwise, to own,
operate and lease its assets, properties and business and to carry on its
business substantially as it has been and is now being conducted. FFE is duly
qualified to do business and is in good standing in each jurisdiction where the
character of the assets or properties owned or leased by it or the nature of
the business transacted by it requires that it be so qualified except where the
failure to so qualify would not have a Material Adverse Effect on FFE or its
ability to consummate the transactions contemplated herein. FFE has all
requisite corporate power and authority to enter into this Agreement and,
subject to the approval of this Agreement and the Merger by its stockholders
and the receipt of all requisite regulatory approvals and the expiration of any
applicable waiting periods, to consummate the transactions contemplated hereby.
FFE is duly registered as a savings and loan holding company under HOLA.

Section 3.2 Authorization. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and unanimously approved and authorized by
FFE's Board of Directors, and all necessary corporate action on the part of FFE
has been taken, subject to the approval of this Agreement and the Merger by the
stockholders of FFE. This Agreement has been duly executed and delivered by
FFE and constitutes the valid and binding obligation of FFE and is enforceable
against FFE (except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization moratorium or similar laws or
equitable principles or doctrines).

Section 3.3 Conflicts. Subject to the second sentence of this
Section 3.3, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with or
result in any violation, breach or termination of, or default or loss of a
material benefit under, or permit the acceleration of any obligation under, or
result in the creation of any material lien, charge or encumbrance on any
property or assets under, any provision of the Certificate or Articles of
Incorporation or Bylaws of FFE or similar documents of any FFE Subsidiary (as
defined in Section 3.7 hereof), or any mortgage, indenture, lease, agreement or
other instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to FFE or
any FFE Subsidiary or their respective properties, other than any such
conflicts, violations or defaults which (i) are not material to the conduct of
business or operations of FFE or any FFE Subsidiary; or (ii) are disclosed in
Section 3.3 of that certain confidential writing delivered by FFE to SouthTrust
within two business days prior to the date hereof (the "FFE Disclosure
Schedule"). No consent, approval, order or authorization of, or registration,
declaration or filing with any federal or state governmental authority is

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required by or with respect to FFE in connection with the execution and
delivery of this Agreement or the consummation by FFE of the transactions
contemplated hereby except for: (a) the filing of all applicable regulatory
applications by SouthTrust, FFE and/or their respective Subsidiaries for
approval of the transactions contemplated by this Agreement; (b) the filing by
SouthTrust of the Registration Statement and the Proxy Statement with the SEC
and various blue sky authorities; (c) the filing of a Certificate or Articles
of Merger with respect to the Merger with the Secretaries of State of the
States of Florida and Delaware; (d) any filings, approvals or nonaction letters
with or from state securities authorities; and (e) any anti-trust filings,
consents, waivers or approvals.

Section 3.4 Anti-takeover Provisions Inapplicable. No "business
combination," "moratorium," "control share" or other state anti-takeover
statute or regulation, or any charter provision, bylaw, instrument or other
agreement to which FFE is a party (i) prohibits or restricts FFE's ability to
perform its obligations under this Agreement, or its ability to consummate the
transactions contemplated hereby, (ii) would have the effect of invalidating or
voiding this Agreement or any provision hereof, or (iii) would subject
SouthTrust to any material impediment or condition in connection with the
exercise of any of its right under this Agreement.

Section 3.5 Capitalization and Stockholders. (a) As of the date
hereof, the authorized capital stock of FFE consists of (i) 2,000,000 shares of
FFE Common Stock, $0.01 par value, of which 473,986 shares were issued and
outstanding and no shares were held as treasury shares as of September 30, 1995
and (ii) 500,000 shares of preferred stock, $0.01 par value, of which none are
issued and outstanding. All of the issued and outstanding shares of FFE Common
Stock have been duly and validly authorized and issued, and are fully paid and
non-assessable. None of the outstanding shares of FFE Common Stock has been
issued in violation of any preemptive rights of current or past stockholders or
are subject to any preemptive rights of the current or past stockholders of
FFE. All of the issued and outstanding shares of FFE Common Stock will be
entitled to vote to approve this Agreement and the Merger.

(b) As of September 30, 1995, FFE had 46,288 shares of
FFE Common Stock reserved for issuance under the FFE 1992 Stock Option and
Incentive Plan (the "FFE Stock Option Plan") for the benefit of employees and
directors of FFE and FFE Bank, pursuant to which options covering 40,731 shares
of FFE Common Stock were outstanding as of such date (the "FFE Stock Options").
As of September 30, 1995, 11,111 shares of FFE Common Stock were outstanding
under the MRP. Except as set forth in this Section, there are no shares of
capital stock or other equity securities of FFE outstanding and no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of FFE, or contracts,
commitments, understandings, or arrangements by which FFE is or may be bound to
issue additional shares of its capital stock or options, warranties, or rights
to purchase or acquire any additional share of its capital stock. The FFE
Stock Options have an average exercise price of $10.08 per share.

Section 3.6 FFE Financial Statements; Material Changes. FFE has
heretofore delivered to SouthTrust its audited, consolidated financial
statements for fiscal years ended September 30, 1994 and September 30, 1993 and
its unaudited consolidated financial statements for the quarters ended December
31, 1994, March 31, 1995 and June 30, 1995 (together the "FFE Financial
Statements"). The FFE Financial Statements (x) are true and correct in all
material respects; (y) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto and, except in the case of the
unaudited consolidated financial statements for the absence of footnotes and
for normal and recurring year-end adjustments which are not material); and (z)
fairly present the consolidated financial position of FFE as of the dates
thereof and the consolidated results of its operations, stockholders' equity,
cash flows and changes in financial position for the periods then ended. Since
September 30, 1994 to the date hereof, FFE and the FFE Subsidiaries have not
undergone or suffered any changes in their respective condition (financial or
otherwise), properties, business or operations which have been, in any case or
in the aggregate, materially adverse to FFE on a consolidated basis except as
disclosed in Section 3.6 of the FFE Disclosure Schedule or any FFE Financial
Statement dated subsequent to such date hereof and delivered to SouthTrust as
of the date hereof.

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Section 3.7 FFE Subsidiaries. (a) All of the FFE Subsidiaries
as of the date of this Agreement are listed in Section 3.7 of the FFE
Disclosure Schedule. FFE owns directly or indirectly all of this issued and
outstanding shares of capital stock of the FFE Subsidiaries. Section 3.7 of
the FFE Disclosure Schedule sets forth the number of shares of authorized and
outstanding capital stock of the FFE Subsidiaries. No capital stock of any of
the FFE Subsidiaries is or may become required to be issued (other than to FFE)
by reason of any options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of any FFE
Subsidiary. There are no contracts, commitments, understandings or
arrangements relating to the rights of FFE to vote or to dispose of shares of
the capital stock of any FFE Subsidiary. All of the shares of capital stock of
each FFE Subsidiary held by FFE or any FFE Subsidiary are fully paid and
non-assessable and are owned free and clear of any claim, lien or encumbrance,
except as disclosed in Section 3.7 of the FFE Disclosure Schedule.

(b) Each FFE Subsidiary is either a federally chartered
stock savings institution or a corporation and is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, and is duly qualified to do business and in good
standing in each jurisdiction where the character of the assets or properties
owned or leased by it or the nature of the business transacted by it requires
it to be so qualified except where the failure to so qualify, either
individually or in the aggregate, would not have a Material Adverse Effect on
FFE or its ability to consummate the transactions contemplated herein. Each
FFE Subsidiary has the corporate power and authority necessary for it to own,
operate or lease its assets, properties and business and to carry on its
business substantially as it has been and is now being conducted.

(c) For purposes of this Agreement, an "FFE Subsidiary"
or a "Subsidiary" of FFE shall mean each corporation, savings bank,
association, and other entity in which FFE owns or controls directly or
indirectly 10% or more of the outstanding equity securities; provided, however,
there shall not be included any such entity acquired in good faith through
foreclosure, or any such entity to the extent that the equity securities of
such entity are owned or controlled in a bona fide fiduciary capacity.

(d) FFE Bank is a member in good standing of the Federal
Home Loan Bank System. All eligible deposit accounts issued by FFE Bank are
insured by the FDIC through the SAIF in accordance with the provisions of the
Federal Deposit Insurance Company Act (the "Act"). FFE Bank has paid all
regular premiums and special assessments and filed reports required under the
Act. FFE Bank is, and at all times since June 1, 1990 has been, a "domestic
building and loan association" as defined in Section 7701(a)(19) of the Code
and a "qualified thrift lender" as defined in Section 10(m) of HOLA. The
liquidation account established by FFE Bank in connection with its conversion
from mutual to stock form has been maintained since its establishment in
accordance with applicable laws and the records with respect to said account
are complete and accurate in all material respects.

Section 3.8 FFE Filings. FFE has previously made available, or
will make available prior to the Effective Time, to SouthTrust true and
complete copies of the (i) proxy statements relating to all meetings of
stockholders (whether special or annual) of FFE during calendar years 1993 and
1994 and (ii) all other reports, as amended, or filings, as amended, required
to be filed under the Securities Exchange Act by FFE with the SEC since January
1, 1994 including without limitation Forms 10-K, 10-Q and 8-K.

Section 3.9 FFE Reports. Since January 1, 1994, each of FFE and
the FFE Subsidiaries has filed, and will continue to file, all reports and
statements, together with any amendment required to be made with respect
thereto, that it has, or will be, required to file with the SEC, the OTS, the
FDIC, and the NASD, and other applicable banking, securities and other
regulatory authorities (except filings which are not material). As of their
respective dates (and without giving effect to any amendments or modifications
filed after the date of this Agreement with respect to reports and documents
filed before the date of this Agreement), each of such reports and documents,
including the financial statements, exhibits, and schedules thereto, complied
in all material respects with all of the statutes, rules and regulations
enforced or promulgated by the authority with which they were filed and did not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in

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light of the circumstances under which they were made, not misleading. Except
for normal examinations conducted by the Internal Revenue Service, state and
local taxing authorities, the OTS or the FDIC in the regular course of the
business of FFE or the FFE Subsidiaries, no federal, state or local
governmental agency, commission or other entity has initiated any proceeding
or, to the best knowledge of FFE, investigation into the business or operations
of FFE or the FFE Subsidiaries within the past two (2) years except as set
forth in Section 3.9 of the FFE Disclosure Schedule. There is no unresolved
violation, criticism or exception by the SEC, OTS, FDIC or other agency,
commission or entity with respect to any report or statement referred to herein
that is material to FFE or any FFE Subsidiary.

Section 3.10 Compliance With Laws. (a) Except as disclosed in
Section 3.10 of the FFE Disclosure Schedule, the businesses of FFE and the FFE
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental entity, including without limitation, any laws
affecting financial institutions (including those pertaining to the Bank
Secrecy Act, the investment of funds, the lending of money, the collection of
interest and the extension of credit), federal and state securities laws, laws
and regulations relating to financial statements and reports, truth-in-lending,
truth-in-savings, usury, fair credit reporting, consumer protection,
occupational safety, fair employment practices, fair labor standards and laws
and regulations relating to employee benefits, and any statutes or ordinances
relating to the properties occupied or used by FFE or any FFE Subsidiary,
except for possible violations which either singly or in the aggregate do not
and, insofar as reasonably can be foreseen in the future, will not have a
Material Adverse Effect on FFE.

(b) Except as disclosed in Section 3.10 of the FFE
Disclosure Schedule, no investigation or review by any governmental entity with
respect to FFE or any FFE Subsidiary is pending or, to the best knowledge of
FFE, threatened, nor has any governmental entity indicated to FFE an intention
to conduct the same, other than normal thrift regulatory examinations and those
the outcome of which will not have a Material Adverse Effect on FFE.

(c) As of the date of this Agreement, Bank's rating under
the Community Reinvestment Act of 1977, as assigned to Bank by its applicable
regulatory authority, is at least "satisfactory."

Section 3.11 Disclosure. None of the information supplied by FFE
for inclusion in the Proxy Statement or in the Registration Statement, will, in
the case of the Proxy Statement or any amendments thereof, or supplements
thereto, at the time of the FFE Stockholders' Meeting or, in the case of the
Registration Statement, at the time it becomes effective and at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.

Section 3.12 Litigation. Except as disclosed in Section 3.12 of
the FFE Disclosure Schedule, there is no suit, action, investigation or
proceeding, legal, quasi-judicial, administrative or otherwise, pending or, to
the best knowledge of FFE threatened, against or affecting FFE or any FFE
Subsidiary, or any of their respective officers, directors, employees or
agents, in their capacities as such, which is seeking equitable relief or
damages against FFE, any FFE Subsidiary, or any of their respective officers,
directors, employees or agents, in their capacities as such, in excess of
$10,000, or which would materially affect the ability of FFE to consummate the
transactions contemplated herein or which is seeking to enjoin consummation of
the transactions provided for herein or to obtain other relief in connection
with this Agreement or the transactions contemplated hereby, nor is there any
judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against FFE or any FFE Subsidiary or any of their respective officers,
directors, employees or agents, in their capacities as such, having, or which,
insofar as reasonably can be foreseen in the future, would have any such
effect.

Section 3.13 Licenses. FFE and the FFE Subsidiaries hold all
licenses, certificates, permits, franchises and all patents, trademarks,
service marks, trade names, copyrights or right thereto, and required
authorizations, approvals, consents, licenses, clearances and orders or
registrations with all appropriate federal, state or other authorities that are
material to the conduct of their respective businesses as now conducted and as
presently proposed to be conducted.

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Section 3.14 Taxes. (a) Except as disclosed in Section 3.14 of
the FFE Disclosure Schedule, FFE and the FFE Subsidiaries have each timely
filed all tax and information returns required to be filed and have paid (or
FFE has paid on behalf of its Subsidiaries), or have accrued on their
respective books and set up an adequate reserve for the payment of, all taxes
required to be paid and have accrued on their respective books and set up an
adequate reserve for the payment of all income and other taxes payable in
respect of periods through the end of the calendar month next preceding the
date hereof. Neither FFE nor any FFE Subsidiary is delinquent in the payment
of any tax, assessment or governmental charge. No deficiencies for any taxes
have been proposed, asserted or assessed against FFE or any FFE Subsidiary that
have not been resolved or settled and no requests for waivers of the time to
assess any such tax are pending or have been agreed to. The income tax returns
of FFE and FFE Subsidiaries have not been audited by the Internal Revenue
Service, state, municipal or other taxing authority for any of the last 10
years. Neither FFE nor any FFE Subsidiary is a party to any action or
proceeding by any governmental authority for the assessment or the collection
of taxes. Deferred taxes of FFE and the FFE Subsidiaries have been accounted
for in accordance with generally accepted accounting principles.

(b) FFE has not filed any consolidated federal income tax
return with an "affiliated group" (within the meaning of Section 1504 of the
Code) where FFE was not the common parent of the group. Neither FFE nor any
FFE Subsidiary is, or has been, a party to any tax allocation agreement or
arrangement pursuant to which it has any contingent or outstanding liability to
anyone other than FFE or any FFE Subsidiary.

(c) FFE and the FFE Subsidiaries have each withheld
amounts from its employees, stockholders, or holders of public deposit accounts
in compliance with the tax withholding provisions of applicable federal, state
and local laws, have filed all federal, state and local returns and reports for
all periods for which such returns or reports would be due with respect to
income tax withholding, social security, unemployment taxes, income and other
taxes and all payments or deposits with respect to such taxes have been timely
made and except as set found in Section 3.14 of the FFE Disclosure Schedule,
have notified all employees, stockholders and holders of public deposit
accounts of their obligations to file all forms, statements or reports with it
in accordance with applicable federal, state and local tax laws and have taken
reasonable steps to insure that such employees, stockholders and holders of
public deposit accounts have filed all such forms statements and reports with
it.

Section 3.15 Insurance. FFE and the FFE Subsidiaries maintain
insurance with insurers which in the best judgment of management of FFE are
sound and reputable, on their respective assets, and upon their respective
businesses and operations, against loss or damage, risks, hazards and
liabilities as in their judgment they deem appropriate. FFE and the FFE
Subsidiaries are presently insured, and during the past three (3) years have
been insured, for reasonable amounts against such risks as companies or
institutions engaged in a similar business would, in accordance with prudent
business practices, be insured. All material claims under all policies of
insurance maintained by FFE and the FFE Subsidiaries have been filed in due and
timely fashion.

Section 3.16 Loans; Investments. (a) Except as otherwise
disclosed in Section 3.16 of the FFE Disclosure Schedule, each loan reflected
as an asset on the FFE Financial Statement, dated as of June 30, 1995, is
evidenced by appropriate and sufficient documentation and constitutes, to the
best knowledge of FFE, the legal, valid and binding obligation of the obligor
named therein, and is enforceable in accordance with its terms except to the
extent that the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
or doctrines. Except as set forth in Section 3.16 of the FFE Disclosure
Schedule, all such loans are, and at the Effective Time will be, free and clear
of any security interest, lien, encumbrance or other charge. Except as set
forth in Section 3.16 of the FFE Disclosure Schedule, there is no loan or other
asset of FFE or of any FFE Subsidiary that has been classified by examiners or
others as "Other Loans of Concern," "Substandard," "Doubtful" or "Loss" as of
September 30, 1995. Set forth in Section 3.16 of the FFE Disclosure Schedule
is a complete list of the REO of FFE and the FFE Subsidiaries as of September
30, 1995.

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(b) All guarantees of indebtedness owed to FFE or any FFE
Subsidiary, including but not limited to those of the Federal Housing
Administration, the Small Business Administration, and other state and federal
agencies, are, to the best knowledge of FFE, valid and enforceable, except to
the extent enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
or doctrines and except as would not be material to FFE on a consolidated
basis.

(c) All interest rate swaps, caps, floors and option
agreements and other interest rate risk management arrangements to which FFE or
any FFE Subsidiary is a party or by which any of their properties or assets may
be bound were entered into in the ordinary course of business and, to the best
knowledge of FFE, in accordance with then-customary practice and applicable
rules, regulations and policies of thrift regulatory authorities and with
counterparties believed to be financially responsible at the time and are
legal, valid and binding obligations and are in full force and effect. FFE and
the FFE Subsidiaries have duly performed in all material respects all of their
respective obligations thereunder to the extent that such obligations to
perform have accrued, and to the best knowledge of FFE, there are no material
breaches, violation of defaults or allegation or assertions of such by any
party thereunder. None of the transactions contemplated by this Agreement
would permit: (i) a counterparty under any interest rate swap, cap, floor and
option agreement or any other interest rate risk management agreement; or (ii)
any party to any mortgage-backed security financing arrangement, to accelerate,
discontinue, terminate or otherwise modify any such agreement or arrangement or
would require FFE or any FFE Subsidiary to recognize any gain or loss with
respect to such arrangement.

(d) Except as set forth in Section 3.16 of the FFE
Disclosure Schedule and except for pledges to secure public and trust deposits,
none of the investments reflected in the FFE Financial Statements, dated as of
September 30, 1994, under the heading "Investment Securities," and none of the
investments made by FFE and the FFE Subsidiaries since September 30, 1994, is
subject to any restriction, whether contractual or statutory, which materially
impairs the ability of FFE or any FFE Subsidiary to freely dispose of such
investment at any time. With respect to all material repurchase agreements to
which FFE or any FFE Subsidiary is a party, FFE or such Subsidiary has a valid,
perfected first lien or security interest in the government securities or other
collateral securing each such repurchase agreement, and the value of the
collateral securing each such repurchase agreement equals or exceeds the amount
of the debt secured by such collateral under such agreement. Except as set
forth in the Disclosure Schedule of FFE and except for a transaction involving
less than $100,000, neither FFE nor any FFE Subsidiary has sold or otherwise
disposed of any assets in a transaction in which the acquiror of such assets or
other person has the right, either conditionally or absolutely, to require FFE
or any FFE Subsidiary to repurchase or otherwise reacquire any such assets.
Set forth in Section 3.16 of the FFE Disclosure Schedule is a complete and
accurate list of each investment and debt security, mortgage-backed and related
securities, marketable equity securities and securities purchased under
agreements to resell owned by FFE or any FFE Subsidiary, showing as of
September 30, 1995, the carrying values and estimated fair values of investment
and debt securities, the gross carrying value and estimated fair value of the
mortgage-backed and related securities and the estimated cost and estimated
fair value of the marketable equity securities.

(e) All United States Treasury securities, obligations of
other United States Government agencies and corporations, obligations of States
of United States and their political subdivisions, and other investment
securities classified as "held to maturity" and "available for sale" held by
FFE and the FFE Subsidiaries, as reflected in the FFE Financial Statements,
dated June 30, 1995, were classified and accounted for in accordance with
F.A.S.B. 115 and the intentions of management.

Section 3.17 Allowance for Possible Loan Losses. The allowance
for possible loan losses shown the FFE Financial Statements as of June 30, 1995
(and as shown on any financial statements to be delivered by FFE to SouthTrust
pursuant to Section 5.7 hereof), as of such date was (and will be as of such
subsequent financial statement dates) adequate in all respects to provide for
possible or specific losses, net of recoveries relating to loans previously
charged off, on loans outstanding, and contained (or that will be contained) an
additional amount of unallocated reserves for unanticipated future losses at a
level considered adequate in each case, under the standards applied by
applicable federal regulatory authorities and based upon generally

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accepted practices applicable to FFE Bank. To the best knowledge of FFE, the
aggregate principal amount of loans contained (or that will be contained) in
the loan portfolio of FFE and the FFE Subsidiaries as of September 30, 1995
(and as of the dates of any financial statements to be delivered by FFE to
SouthTrust pursuant to Section 5.7 hereof), in excess of such reserve, was (and
will be) fully collectible.

Section 3.18 FFE Benefit Plans. (a) Section 3.18 of the FFE
Disclosure Schedule contains a list and a true and correct copy (or, a
description with respect to any oral employee benefit plan, practice, policy or
arrangement), including all amendments thereto, of each compensation,
consulting, employment, termination or collective bargaining agreement, and
each stock option, stock purchase, stock appreciation right, MRP, life, health,
accident or other insurance, bonus, deferred or incentive compensation,
severance or separation agreement or any agreement providing any payment or
benefit resulting from a change in control, profit sharing, retirement, or
other employee benefit plan, practice, policy or arrangement of any kind, oral
or written, covering employees, former employees, directors or former directors
of FFE or any FFE Subsidiary or their respective beneficiaries, including, but
not limited to, any employee benefit plans within the meaning of Section 3(3)
of ERISA, which FFE or any FFE Subsidiary maintains, to which FFE or any FFE
Subsidiary contributes, or under which any employee, former employee, director
or former director of FFE or any FFE Subsidiary is covered or has benefit
rights and pursuant to which any liability of FFE or any FFE Subsidiary exists
or is reasonably likely to occur (the "FFE Benefit Plans"). Except as set
forth in Section 3.18 of the FFE Disclosure Schedule, FFE and the FFE
Subsidiaries are not bound by any FFE Benefit Plan or other document, plan or
agreement which contains any provisions which would cause an increase or
acceleration of benefits or benefit entitlements to employees or former
employees of FFE or any FFE Subsidiary or their respective beneficiaries, or
other provisions, which would cause an increase in the liability of FFE or any
FFE Subsidiary or to SouthTrust or any SouthTrust Subsidiary as a result of the
transactions contemplated by this Agreement or any related action thereafter (a
"Change in Control Benefit"). The term "FFE Benefit Plans" as used herein
refers to all plans contemplated under the preceding sentences of this Section
3.18, provided that the term "Plan" or "Plans" is used in this Agreement for
convenience only and does not constitute an acknowledgment that a particular
arrangement is an employee benefit plan within the meaning of Section 3(3) of
ERISA. Except as disclosed in the Disclosure Schedule of FFE, no Benefit Plan
is a multi-employer plan within the meaning of Section 3(37) of ERISA.

(b) Each of the FFE Benefit Plans that is intended to be
a pension, profit sharing, stock bonus, thrift, savings plan that is qualified
under Section 401(a) of the Code ("FFE Qualified Plans") has been determined by
the Internal Revenue Service to qualify under Section 401(a) of the Code, or an
application for determination of such qualification has been timely made to the
Internal Revenue Service prior to the end of the applicable remedial amendment
period under Section 401(b) of the Code (a copy of each such determination
letter or pending application is included in Section 3.18 of the FFE Disclosure
Schedule) and, to the best of FFE's knowledge, there exist no circumstances
likely to materially adversely affect the qualified status of any such FFE
Qualified Plan. All such FFE Qualified Plans established or maintained by FFE
or any of the FFE Subsidiaries or to which FFE or any of the FFE Subsidiaries
contribute are in compliance in all material respects with all applicable
requirements of ERISA, and are in compliance in all material respects with all
applicable requirements (including qualification and non-discrimination
requirements in effect as of the Effective Time) of the Code for obtaining the
tax benefits the Code thereupon permits with respect to such FFE Qualified
Plans. Neither FFE nor any FFE Subsidiary is a plan sponsor of, or contributes
to, a defined benefit pension plan which is subject to Title IV of ERISA. All
accrued contributions and other payments required to be made by FFE or any FFE
Subsidiary to any FFE Benefit Plan through June 30, 1995, have been made or
reserves adequate for such purposes as of June 30, 1995, have been set aside
therefor and will be reflected in the FFE Financial Statements, dated as of
June 30, 1995. Neither FFE nor any FFE Subsidiary is in material default in
performing any of its respective contractual obligations under any of the FFE
Benefit Plans or any related trust agreement or insurance contract, and there
are no material outstanding liabilities of any such Plan other than liabilities
for benefits to be paid to participants in such Plan and their beneficiaries in
accordance with the terms of such Plan.

(c) There is no pending or, to the best knowledge of FFE,
threatened litigation or pending claim (other than benefit claims made in the
ordinary course) by or on behalf of or against any of the FFE Benefit Plans (or
with respect to the administration of any such Plans) now or heretofore

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maintained by FFE or any FFE Subsidiary which allege violations of applicable
state or federal law which are reasonably likely to result in a liability on
the part of FFE or any FFE Subsidiary or any such Plan.

(d) FFE and the FFE Subsidiaries and all other person
having fiduciary or other responsibilities or duties with respect to any FFE
Benefit Plan are and have since the inception of each such Plan been in
substantial compliance with, and each such Plan is and has been operated in
substantial accordance with, its provisions and in substantial compliance with
the applicable laws, rules and regulations governing such Plan, including,
without limitation, the rules and regulations promulgated by the Department of
Labor, the PBGC and the Internal Revenue Service under ERISA, the Code or any
other applicable law. No "reportable event" (as defined in Section 4043(b) of
ERISA) has occurred with respect to any FFE Benefit Plan. No FFE Benefit Plan
has engaged in or been a party to a "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975(c) of the Code). All FFE Benefit Plans
that are group health plans have been operated in compliance with the group
health plan continuation requirements of Section 4980B of the Code and Section
601 of ERISA.

(e) Neither FFE nor any FFE Subsidiary has made any
payments, or is or has been a party to any agreement or any FFE Benefit Plan,
that under any circumstances could obligate it to make payments that are or
will not be deductible because of Sections 162(m) or 280G of the Code.

(f) Section 3.18 of the FFE Disclosure Schedule describes
any obligation that FFE or any FFE Subsidiary has to provide health or welfare
benefits to retirees or other former employees, directors or their dependents
(other than rights under Section 4980B of the Code or Section 601 of ERISA),
including information as to the number of retirees, other former employees or
directors and dependents entitled to such coverage and their ages.

(g) Section 3.18 of the FFE Disclosure Schedule lists:
(i) each officer and director of FFE and any FFE Subsidiary who is eligible to
receive a Change in Control Benefit, showing the amount of each such Change in
Control Benefit, estimated compensation for 1995 based upon compensation
received to the date of this Agreement, the individual's participation in any
bonus or other employee benefit plan, and such individual's compensation from
FFE or any FFE Subsidiary for each of the calendar years 1990 through 1994 as
reported by FFE or a FFE Subsidiary on Form W-2 or Form 1099; (ii) each other
employee of FFE or the FFE Subsidiaries who may be eligible for a Change in
Control Benefit, showing the number of years of service of each such employee
together with his or her estimated compensation for 1995; (iii) a listing of
each FFE Stock Option, showing the holder thereof, the number of shares, the
exercise price per share, the vesting dates thereof and a copy of the option
agreements relating thereto; and (iv) a listing of each MRP Agreement, and the
participants therein, showing the number of outstanding shares of FFE Common
Stock credited to each participant and the vesting dates thereof.

(h) FFE and the FFE Subsidiaries have filed or caused to
be filed, and will continue to file or cause to be filed, in a timely manner
all filings pertaining to each FFE Benefit Plan with the Internal Revenue
Service and the Department of Labor, as prescribed by the Code or ERISA, or
regulations issued thereunder. All such filings, as amended, were complete and
accurate in all material respects as of the dates of such filings, and there
were no misstatements or omissions in any such filing which would be material
to the financial condition of FFE on a consolidated basis.

Section 3.19 Compliance with Environmental Laws. (a) Except as
set forth in Section 3.19 of the FFE Disclosure Schedule: (i) the operations of
FFE and each of the FFE Subsidiaries comply in all material respects with all
applicable past and present Environmental Laws; (ii) none of the operations of
FFE or any FFE Subsidiary, no assets presently or formerly owned or leased by
FFE or any FFE Subsidiary and no Mortgaged Premises or Participating Facility
(as defined below) are subject to judiciary or administrative proceedings
alleging the violation of any past or present Environmental Law, nor are they
the subject of any claims alleging damages to health or property, pursuant to
which FFE, any FFE Subsidiary or any owner of a Mortgaged Premises or a
Participating Facility would be liable in law or equity; (iii) none of the
operations of FFE or any FFE Subsidiary, no assets presently owned or, to the
best knowledge of FFE, formerly owned by FFE or any FFE Subsidiary, and to the
best knowledge of FFE, no Mortgaged Premises

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or a Participating Facility, exclusive of FFE and the FFE Subsidiary are the
subject of any federal, state or local investigation evaluating whether any
remedial action is needed to respond to a release or threatened release of any
Hazardous Substance, or any other substance into the environment, nor has FFE
or any FFE Subsidiary, or, to the best knowledge of FFE, any owner or a
Mortgaged Premises or a Participating Facility exclusive of FFE or any FFE
Subsidiary, been directed to conduct such investigation, formally or
informally, by any governmental agency, nor have any of them agreed with any
governmental agency or private person to conduct any such investigation; and
(iv) neither FFE nor any FFE Subsidiary, nor, to the best knowledge of FFE, any
owner of a Mortgaged Premises or a Participating Facility has filed any notice
under any Environmental Law indicating past or present treatment, storage of
disposal of a Hazardous Substance or reporting a spill or release of a
Hazardous Substance, or any other substance into the environment.

(b) With respect to (i) the real property owned
(including REO) or leased by FFE or any FFE Subsidiary as of the date hereof;
and (ii) to the best knowledge of FFE, any real property formerly owned
(including REO) or leased by FFE or any FFE Subsidiary (collectively referred
to as the "FFE Premises"), (x) no part of the FFE Premises has been used for
the generation, manufacture, handling, storage, or disposal of Hazardous
Substances; (y) except as disclosed in Section 3.19 of the FFE Disclosure
Schedule, the FFE Premises do not contain, and have never contained, an
underground storage tank; and (z) the FFE Premises do not contain and are not
contaminated by any quantity of a Hazardous Substance from any source. With
respect to any underground storage tank listed in Section 3.19 of the FFE
Disclosure Statement as an exception to the foregoing, such underground storage
tank presently or previously located on a FFE Premises is or has been
maintained or removed, as applicable, in compliance with the Environmental
Laws, and has not been the source of any release of a Hazardous Substance into
the environment, unless otherwise set forth in Section 3.19 of the FFE
Disclosure Schedule.

(c) For purposes of this Section, "Mortgaged Premises"
shall mean each (i) real property interest (including without limitation any
fee or leasehold interest) which is encumbered of affected by any mortgage,
deed of trust, deed to secure debt or other similar document or instrument
granting to FFE or any FFE Subsidiary a lien on or security interest in such
real property interest and (ii) any other real property interest upon which is
situated assets or other property affected or encumbered by any document or
instrument granting to FFE or any FFE Subsidiary a lien thereon or security
interest therein; provided, however, that the term "Mortgaged Premises" shall
not include one- to four-unit, single-family residences. For purposes of this
Section, "Participating Facility" means any property in which FFE or any FFE
Subsidiary participates in the management of such property and, where the
context requires, includes the owner or operator of such property.

Section 3.20 Contracts and Commitments. Section 3.20 of the FFE
Disclosure Schedule contains, and shall be supplemented by FFE, as required by
Section 5.9 hereof, so as to contain at the Closing Date copies of each of the
following documents, certified by an officer of FFE to be true and correct
copies of such documents on the dates of such certificates:

(a) A list and description of each outstanding loan
agreement, mortgage, pledge agreement or other similar document or commitment
to extend credit to any officer or director of FFE or any FFE Subsidiary, as
well as a listing of all deposits or deposit surrogates, including the amount,
type and interest being paid thereon, to which FFE or any FFE Subsidiary is a
party under which it may (contingently or otherwise) have any liability
involving any officer or director of FFE or any FFE Subsidiary;

(b) A list and description of each outstanding letter of
credit and each commitment to issue a letter of credit in excess of $50,000 to
which FFE or any FFE Subsidiary is a party and/or under which it may
(contingently or otherwise) have any liability;

(c) A list and description of each contract or agreement
(not otherwise included in the FFE Disclosure Schedule or specifically excluded
therefrom in accordance with the terms of this Agreement) involving goods,
services or occupancy and which (i) has a term of more than six months; (ii)
cannot be terminated on thirty days (or less) written notice without penalty;
and (iii) involves an annual expenditure by FFE or any FFE Subsidiary in excess
of $25,000;

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(d) A list and description of each contract or commitment
(other than FFE Permitted Liens as defined in Section 3.22(c)) hereof affecting
ownership of, title to, use of, or any interest in real property which is
currently owned by FFE or any FFE Subsidiary, and a list and description of all
real property owned, leased or licensed by FFE or any FFE Subsidiary.

(e) A list of all fees, salaries, bonuses and other forms
of compensation including but not limited to, country club memberships,
automobiles available for personal use, and credit cards available for personal
use, provided by FFE or any FFE Subsidiary to any employee, officer, or
director or former employee, officer or director of FFE or any FFE Subsidiary
who earns in excess of $50,000 annually.

(f) A list and description of each commitment made by FFE
or any FFE Subsidiary to or with any of its officers, directors or employees
extending for a period of more than six months from the date hereof or
providing for earlier termination only upon the payment of a penalty or
equivalent thereto.

(g) The Certificate [Articles] of Incorporation, Charters
and Bylaws and specimen certificates of each type of security issued by FFE and
each FFE Subsidiary.

(h) A list and description of each other contract or
commitment providing for payment based in any manner upon outstanding loans or
profits of FFE or any FFE Subsidiary.

(i) A list and description of all powers of attorney
granted by FFE or any FFE Subsidiary which are currently in force.

(j) A list and description of all policies of insurance
currently maintained by FFE or any FFE Subsidiary and a list and description of
all unsettled or outstanding claims of FFE or any FFE Subsidiary which have
been, or to the best knowledge of FFE, will be, filed with the companies
providing insurance coverage for FFE or any FFE Subsidiary (except for routine
claims for health benefits).

(k) Each collective bargaining agreement to which FFE or
any FFE Subsidiary is a party and all affirmative action plans or programs
covering employees of FFE or any FFE Subsidiary, as well as all employee
manuals and human resource management policies promulgated or adopted by FFE or
any FFE Subsidiary.

(l) Each lease or license with respect to real or
personal property, whether as lessor, lessee, licensor or licensee, with annual
rental or other payments due thereunder in excess of $10,000 to which FFE or
any FFE Subsidiary is a party, which does not expire within six months from the
date hereof and cannot be terminated upon thirty days (or less) written notice
without penalty.

(m) All employment, consulting and professional services
contracts to which FFE or any FFE Subsidiary is a party.

(n) All judgments, orders, injunctions, court decrees or
settlement agreements rising out of or relating to the labor and employment
practices or decisions of FFE or any FFE Subsidiary which, by their terms,
continue to bind or affect FFE or any FFE Subsidiary.

(o) All orders, decrees, memorandums, agreements or
understandings with regulatory agencies binding upon or affecting the current
operations of FFE or any FFE Subsidiary or any of their directors of officers
in their capacities as such.

(p) All material trademarks, trade names, service marks,
patents, or copyrights, whether registered or the subject of an application for
registration, which are owned by FFE or any FFE Subsidiary or licensed from a
third party.

(q) All policies formally adopted by the Board of
Directors of FFE or any FFE Subsidiary as currently in effect with respect to
environmental matters and copies of all policies that have

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been in effect during the last five (5) years regarding the performance of
environmental investigations of properties accepted as collateral for loans,
including the effective dates of all such policies.

(r) Each other agreement to which FFE or any FFE
Subsidiary is a party (which does not expire within six months from the date
hereof and cannot be terminated upon thirty days (or less) written notice
without penalty) which individually during its term could commit FFE or any FFE
Subsidiary to an expenditure (either individually or through a series of
installments) in excess of $25,000 or which creates a material right or benefit
to receive payments, goods or services not referred to elsewhere in this
Section 3.20 including without limitation:

(i) each agreement of guaranty or indemnification
running to any person;

(ii) each agreement containing any covenant
limiting the right of FFE or any FFE
Subsidiary to engage in any line of business
or to compete with any person;

(iii) each agreement with respect to any license,
permit and similar matter that is necessary
to the operations of FFE or any FFE
Subsidiary;

(iv) each agreement that requires the consent or
approval of any other party in order to
consummate the Merger;

(v) each agreement relating to the servicing of
loans and each mortgage forward commitment
and similar agreement pursuant to which FFE
or any FFE Subsidiary sells to others
mortgages which it originates;

(vi) each contract relating to the purchase or
sale of financial or other futures, or any
put or call option relating to cash,
securities or commodities and each interest
rate swap agreement or other agreement
relating to the hedging of interest rate
risks and each agreement or arrangement
described in Section 3.16(d) hereof; and

(vii) each contract or agreement (with the
exception of the Federal National Mortgage
Association or Federal Home Loan Mortgage
Corporation Seller's Guide), including but
not limited to each contract or agreement
pursuant to which FFE or any FFE Subsidiary
has sold, transferred, assigned or agreed to
service any loan, which provides for any
recourse or indemnification obligation (as
opposed to general representations and
warranties) on the part of FFE or any FFE
Subsidiary; the name and address of each
person which might or could have been
entitled to recourse against or
indemnification from FFE or any FFE
Subsidiary; and the monetary amount of each
actual or potential recourse or
indemnification obligation under each such
contract or agreement.

Section 3.21 Defaults. There has not been any default in any
material obligation to be performed by FFE or any FFE Subsidiary under any
material contract or commitment, and neither FFE or any FFE Subsidiary has
waived, and will not waive prior to the Effective Time, any material right
under any material contract or commitment. To the best knowledge of FFE, no
other party to any material contract or commitment is in default in any
material obligation to be performed by such party.

Section 3.22 Operations Since September 30, 1994. Between
September 30, 1994, and the date hereof, except as set forth in Section 3.22 of
the FFE Disclosure Schedule, there has not been:

(a) any increase in the compensation payable or to become
payable by FFE or any FFE Subsidiary to any executive officer or director;

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(b) any payment of dividends or other distributions by
FFE to its stockholders or any redemption by FFE of its capital stock;

(c) any mortgage, pledge or subjection to lien, charge or
encumbrance of any kind of or on any asset, tangible or intangible, of FFE or
any FFE Subsidiary, except for pledges and liens given to secure deposits and
other liabilities of FFE or andy FFE Subsidiary arising in the ordinary course
of banking business;

(d) any creation or assumption of indebtedness (including
the extension or renewal of any existing indebtedness, or the increase
thereof), by FFE or any FFE Subsidiary for borrowed money, or otherwise, other
than in the ordinary course of business, none of which (except those which are
being disputed in good faith) is in default;

(e) the establishment of any new, or increase in the
formula for contributions to or benefits under any existing, retirement,
pension, profit sharing, stock bonus, savings or thrift plan, or any similar
plan, whether funded or unfunded and whether qualified or unqualified (within
the meaning of the Code) by FFE or any FFE Subsidiary;

(f) any action by FFE or any FFE Subsidiary seeking any
cancellation of, or decrease in the insured limit under, or increase in the
deductible amount or the insured's retention (whether pursuant to coinsurance
or otherwise) of or under, any policy of insurance maintained directly or
indirectly by FFE or any FFE Subsidiary on any of their respective assets or
businesses, including but not by way of limitation, fire and other hazard
insurance on its assets, automobile liability insurance, general public
liability insurance, and directors' and officers' liability insurance; and if
an insurer takes any such action, FFE shall promptly notify SouthTrust;

(g) any change in FFE's independent auditors, historic
methods of accounting (other than as required by generally accepted accounting
principles or regulatory accounting principles), or in its system for
maintaining its equipment and real estate;

(h) any purchase, whether for cash or secured or
unsecured obligations (including finance leases) by FFE or any FFE Subsidiary
of any fixed asset which either (i) has a purchase price individually or in the
aggregate in excess of $50,000 or (ii) is outside of the ordinary course of
business;

(i) any sale or transfer of any asset in excess of
$50,000 of FFE or any FFE Subsidiary or outside of the ordinary course of
business with the exception of loans and marketable securities that are held
for sale and sold in the ordinary course of business at market prices;

(j) any cancellation or compromise of any debt to, claim
by or right of, FFE or any FFE Subsidiary except in the ordinary course of
business;

(k) any amendment or termination of any material contract
or commitment to which FFE or any FFE Subsidiary is a party, other than in the
ordinary course of business;

(l) any material damage or destruction to any assets or
property of FFE or any FFE Subsidiary whether or not covered by insurance; or

(m) any event or condition of any character (other than
changes in legal, economic or other conditions which are not specially or
uniquely applicable to FFE or any FFE Subsidiary) materially adversely
affecting the business, operations or financial condition of FFE on a
consolidated basis.

Section 3.23 Corporate Records. The corporate record books,
transfer books and stock ledgers of FFE and each FFE Subsidiary are complete
and accurate in all material respects and reflect all meetings, consents and
other material actions of the organizers, incorporators, stockholders, Boards
of Directors and

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committees of the Boards of Directors of FFE and each such Subsidiary, and all
transactions in their respective capital stocks, since their respective
inceptions.

Section 3.24 Undisclosed Liabilities. All of the Liabilities
have, in the case of FFE and the FFE Subsidiaries, been reflected, disclosed or
reserved against in the FFE Financial Statements dated September 30, 1994 or in
the notes thereto, and FFE and the FFE Subsidiaries have no other Liabilities
except (a) Liabilities incurred since September 30, 1994 in the ordinary course
of business, (b) as disclosed in FFE Financial Statements delivered to
SouthTrust prior to the date of the Agreement, or (c) as disclosed in Section
3.24 of the FFE Disclosure Schedule.

Section 3.25 Assets. (a) FFE and the FFE Subsidiaries have good
and marketable title to their real properties, including any leaseholds and
ground leases, and their other assets and properties, all as reflected as owned
or held by FFE or any FFE Subsidiary in the FFE Financial Statements dated as
of June 30, 1995, and those acquired since such date, except for (i) assets and
properties disposed of since such date in the ordinary course of business and
(ii) FFE Permitted Liens none of which, in the aggregate, except as set forth
in Section 3.25 of the FFE Disclosure Schedule; are material to the assets of
FFE on a consolidated basis. All buildings, structures, fixtures and
appurtenances comprising part of the real properties of FFE and the FFE
Subsidiaries (whether owned or leased) are in good operating condition and have
been well maintained, reasonable wear and tear excepted. Title to all real
property owned by FFE and the FFE Subsidiaries is held in fee simple, except as
otherwise noted in the FFE Financial Statements as of June 30, 1995, or as set
forth in Section 3.25 of the FFE Disclosure Schedule. FFE or any FFE
Subsidiary have title or other rights to its assets sufficient in all material
respect for the conduct of their respective businesses as presently conducted,
and except as set forth in the FFE Financial Statements as of June 30, 1995 or
in Section 3.25 of the FFE Disclosure Schedule, free, clear and discharged of
and from any and all liens, charges, encumbrances, security interests and/or
equities which are material to FFE or any FFE Subsidiary.

(b) All leases pursuant to which FFE or any FFE
Subsidiary, as lessee, leases real or personal property which are material to
the business of FFE on a consolidated basis are valid, effective, and
enforceable against the lessor in accordance with their respective terms.
There is not under any of such leases any existing default, or any event which
with notice or lapse of time or both would constitute a default, with respect
to either FFE or any FFE Subsidiary, or to the best knowledge of FFE, the other
party. Except as disclosed in Section 3.25 of the FFE Disclosure Schedule,
none of such leases contains a prohibition against assignment by FFE or any FFE
Subsidiary, by operation of law or otherwise, or any other provision which
would preclude the Surviving Corporation or any FFE Subsidiary from possessing
and using the leased premises for the same purposes and upon the same rental
and other terms upon the consummation of the Merger as are applicable to the
use by FFE or any FFE Subsidiary as of the date of this Agreement.

Section 3.26 Insider Interests. All outstanding loans and other
contractual arrangements (including deposit relationships) between FFE or any
FFE Subsidiary and any officer, director or employee of FFE or any FFE
Subsidiary conform to the applicable rules and regulations and requirements of
all applicable regulatory agencies which were in effect when such loans and
other contractual arrangements were entered into. Except as set forth in
Section 3.26 of the FFE Disclosure Schedule, no officer, director or employee
of FFE or any FFE Subsidiary has any interest in any property, real or
personal, tangible or intangible, used in or pertaining to the business of FFE
or any FFE Subsidiary.

Section 3.27 Registration Obligations. None of FFE or any FFE
Subsidiary is under any obligation contingent or otherwise which will survive
the Merger to register any of its securities under the Securities Act of 1933
or any state securities laws.

Section 3.28 Regulatory Matters. None of FFE or any FFE
Subsidiary has agreed to take any action or has any knowledge of any fact or
has agreed to any circumstance that would materially impede or delay receipt of
any Consents of any Regulatory Authorities referred to in this Agreement
including, matters relating to the Community Reinvestment Act of 1977 and
protests thereunder.

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ARTICLE IV

COVENANTS OF FFE

Section 4.1 Business in Ordinary Course.

(a) Without the prior written consent of SouthTrust, FFE
shall not declare or pay any dividend or make any other distribution with
respect to its capital stock whether in cash, stock or other property, after
the date of this Agreement.

(b) FFE and the FFE Subsidiaries shall continue to carry
on, after the date hereof, their respective businesses and the discharge or
incurring of obligations and liabilities, only in the usual, regular and
ordinary course of business, as heretofore conducted, and by way of
amplification and not limitation, FFE and each of the FFE Subsidiaries will
not, without the prior written consent of SouthTrust:

(i) issue any capital stock or any options,
warrants, or other rights to subscribe for or
purchase capital stock or any securities
convertible into or exchangeable for any
capital stock, except pursuant to options
outstanding on the date hereof under the FFE
Stock Option Plan;

(ii) directly or indirectly redeem, purchase or
otherwise acquire any capital stock or
ownership interests of FFE or any of the FFE
Subsidiaries;

(iii) effect a reclassification, recapitalization,
split-up, exchange of shares, readjustment or
other similar change in or to any capital
stock or otherwise reorganize or
recapitalize;

(iv) change its Charter, Certificate [Articles] of
Incorporation, or Bylaws;

(v) enter into any employment agreement,
severance agreement, change of control
agreement, or plan relative to the foregoing;
or grant any increase (other than ordinary
and normal increases consistent with past
practices) in the compensation payable or to
become payable to directors, officers or
employees except as required by law, pay or
agree to pay any bonus, or adopt or make any
change in any bonus, insurance, pension, or
other FFE Benefit Plan;

(vi) except for the short-term renewal of Federal
Home Loan Bank ("FHLB") advances outstanding
at the date of this Agreement, raising
short-term funds against its existing line of
credit with the FHLB and deposit-taking in
the ordinary course of its business, borrow
or agree to borrow any funds, including but
not limited to repurchase transactions, or
indirectly guarantee or agree to guarantee
any obligations of others;

(vii) make or commit to make any new loan or letter
of credit or any new or additional
discretionary advance under any existing line
of credit, in a principal amount in excess of
$500,000 or that would increase the aggregate
credit outstanding to any one borrower (or
group of affiliated borrowers) to more than
$500,000 (excluding for this purpose any
accrued interest or overdrafts), without the
prior written consent of SouthTrust acting
through a senior officer in a written notice
to FFE, which approval or rejection shall be
given on a timely basis after delivery by FFE
to such officer of SouthTrust of the complete
loan package;

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(viii) make any changes in its policies concerning
which persons may approve loans;

(ix) enter into any securities transaction for its
own account or purchase or otherwise acquire
any investment security for its own account
other than U.S. Treasury obligations and
deposits in an overnight account at the FHLB
of Atlanta or securities issued or guaranteed
by the Government National Mortgage
Association, the Federal National Mortgage
Association or the Federal Home Loan Mortgage
Corporation, provided SouthTrust's consent
shall not be unreasonably withheld or delayed
relating to the purchase of other readily
marketable investment securities;

(x) increase or decrease the rate of interest
paid on time deposits or on certificates of
deposit, except in a manner and pursuant to
policies consistent with past practices;

(xi) enter into, modify or extend any agreement,
contract or commitment out of the ordinary
course of business or having a term in excess
of six months and involving an expenditure in
excess of ten thousand dollars ($10,000),
other than letters of credit, loan
agreements, deposit agreements, and other
lending, credit and deposit documents made in
the ordinary course of business;

(xii) except in the ordinary course of business,
place on any of its assets or properties any
mortgage, pledge, lien, charge, or other
encumbrance;

(xiii) cancel any material indebtedness owing to it
or any claims which it may possess or waive
any rights of material value;

(xiv) sell or otherwise dispose of any real
property or any material amount of tangible
or intangible personal property other than
(a) properties acquired in foreclosure or
otherwise in the ordinary collection of
indebtedness owed to FFE Bank, (b) student
loans or (c) loans which are held for sale by
FFE Bank and are sold in the secondary market
within sixty (60) days of origination;

(xv) foreclose upon or otherwise take title to or
possession or control of any real property
without first obtaining a phase one
environmental report thereon; provided,
however, that FFE Bank and its subsidiaries
shall not be required to obtain such a report
with respect to single family,
non-agricultural residential property of one
acre or less to be foreclosed upon unless it
has reason to believe that such property
might contain Hazardous Substances;

(xvi) knowingly or willfully commit any act or fail
to commit any act which will cause a material
breach of any agreement, contract or
commitment;

(xvii) engage in any activity which constitutes or
may constitute a material violation of any
law, statute, rule, governmental regulation,
or order;

(xviii) purchase any real or personal property or
make any capital expenditure where the amount
paid or committed therefor is in excess of
twenty-five thousand dollars ($25,000),
except for outstanding commitments set forth
in Section 3.20 of the FFE Disclosure
Schedule;

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(xix) in the case of FFE Bank, voluntarily make any
material changes in or to its asset and
deposit mix;

(xx) engage in any activity or transaction outside
the ordinary course of business;

(xxi) enter into or acquire any derivatives
contract or structured note; or

(xxii) enter into any new, or modify, amend or
extend the terms of any existing, contracts
relating to the purchase or sale of financial
or other futures, or any put or call option
relating to cash, securities or commodities
or any interest rate swap agreements or other
agreements relating to the hedging of
interest rate risk.

(c) FFE and the FFE Subsidiaries shall not, without the
prior written consent of SouthTrust, wilfully engage in any transaction or
wilfully take any action that would render untrue any of the representations
and warranties of FFE contained in Article III hereof, if such representations
and warranties were given as of the date of such transaction or action.

(d) FFE will, and will cause the FFE Subsidiaries to, use
their best efforts to maintain their respective properties and assets in their
present state of repair, order and condition, reasonable wear and tear
excepted, and to maintain and keep in full force and effect all policies of
insurance presently in effect, including the insurance of accounts with the
FDIC. FFE will, and will cause the FFE Subsidiaries to, take all requisite
action (including without limitation the making of claims and the giving of
notices) pursuant to its directors' and officers' liability insurance policy or
policies in order to preserve all rights thereunder with respect to all matters
known by FFE which could reasonably give rise to a claim prior to the Effective
Time,

(e) FFE shall promptly notify SouthTrust in writing of
the occurrence of any matter or event known to and directly involving FFE or
any FFE Subsidiary that is reasonably likely to result in a Material Adverse
Effect on FFE or impair the ability of FFE to consummate the transactions
contemplated herein.

(f) FFE shall provide to SouthTrust such reports on
litigation involving FFE and each of the FFE Subsidiaries as SouthTrust shall
reasonably request, provided that FFE shall not be required to divulge
information to the extent that, in the good faith opinion of its counsel, by
doing so, it would risk waiver of the attorney-client privilege to its
detriment.

Section 4.2 Conforming Accounting and Reserve Policies;
Restructuring Expenses. At the request of SouthTrust, FFE shall cause FFE
Bank, immediately prior to Closing and after satisfaction or waiver of the
conditions to Closing set forth in Article VI hereof, to establish and take
such reserves and accruals as SouthTrust reasonably shall request to conform
FFE Bank's loan, accrual, reserve and other accounting policies to the policies
of an SouthTrust Significant Subsidiary that is a national banking association,
provided however, such requested conforming adjustment shall not be taken into
account in determining whether FFE has experienced a Material Adverse Effect.

Section 4.3 Certain Actions. (a) Neither FFE (nor any of its
Subsidiaries) (i) shall solicit, initiate, participate in discussions of, or
encourage or take any other action to facilitate (including by way of the
disclosing or furnishing of any information) any inquiry or the making of any
proposal relating to any Acquisition Transaction (as defined below) or a
potential Acquisition Transaction with respect to itself or any of its
Subsidiaries or (ii) shall (A) solicit, initiate, participate in discussions
of, or encourage or take any other action to facilitate any inquiry or
proposal, or (B) enter into any agreement, arrangement, or understanding
(whether written or oral) regarding any proposal or transaction providing for
or requiring it to abandon, terminate or fail to consummate this Agreement, or
compensating it or any of its Subsidiaries under any of the instances described
in this clause. FFE shall immediately instruct and otherwise use its best

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efforts to cause its directors, officers, employees, agents, advisors
(including, without limitation, any investment banker, attorney, or accountant
retained by it or any of its Subsidiaries), consultants and other
representatives to comply with such prohibitions. FFE shall immediately cease
and cause to be terminated any existing activities, discussions, or
negotiations with any parties conducted heretofore with respect to such
activities. Notwithstanding the foregoing, FFE may provide information at the
request of or enter into negotiations with a third party with respect to an
Acquisition Transaction if the Board of Directors of FFE determines, in good
faith after consultation with counsel, that the exercise of its fiduciary
duties to FFE's stockholders under applicable law requires it to take such
action, and, provided further, that FFE may not, in any event, provide to such
third party any information which it has not provided to SouthTrust. FFE shall
promptly notify SouthTrust orally and in writing in the event it receives any
such inquiry or proposal and shall provide reasonable detail of all relevant
facts relating to such inquiries. This Section shall not prohibit accurate
disclosure by FFE in any document (including the Proxy Statement and the
Registration Statement) or other disclosure under applicable law if in the
opinion of the Board of Directors of FFE, disclosure is appropriate under
applicable law.

(b) "Acquisition Transaction" shall, with respect to FFE,
mean any of the following: (i) a merger or consolidation, or any similar
transaction (other than the Merger) of any company with either FFE or any
Significant Subsidiary of FFE, (ii) a purchase, lease or other acquisition of
all or substantially all the assets of either FFE or any Significant Subsidiary
of FFE, (iii) a purchase or other acquisition of "beneficial ownership" by any
"person" or "group" (as such terms are defined in Section 13(d)(3) of the
Securities Exchange Act) (including by way of merger, consolidation, share
exchange, or otherwise) which would cause such person or group to become the
beneficial owner of securities representing 19.9% or more of the voting power
of either FFE or any Significant Subsidiary of FFE, but excluding the
acquisition of beneficial ownership by any employee benefit plan maintained or
sponsored by FFE, (iv) a tender or exchange offer to acquire securities
representing 19.9% or more of the voting power of FFE, (v) a public proxy or
consent solicitation made to stockholders of FFE seeking proxies in opposition
to any proposal relating to any of the transactions contemplated by this
Agreement that has been recommended by the Board of Directors of FFE, (vi) the
filing of an application or notice with the Federal Reserve Board, the OCC, the
OTS, or any other federal or state regulatory authority (which application has
been accepted for processing) seeking approval to engage in one or more of the
transactions referenced in clauses (i) through (iv) above, or (vii) the making
of a bona fide offer to the Board of Directors FFE by written communication,
that is or becomes the subject of public disclosure, to engage in one or more
of the transactions referenced in clauses (i) through (v) above.

Section 4.4 Curative and Compliance Matters. Prior to the
Effective Time, FFE and FFE Subsidiary, at their expense, shall:

(a) Permit a comprehensive audit by one or more third parties
selected by FFE and approved by SouthTrust to be made of the adjustable rate
mortgage loans of FFE Subsidiary, including the practices, procedures and
policies of FFE Subsidiary relating thereto, and FFE Subsidiary shall, at its
expense, take such corrective action with respect to any deficiencies or
defects regarding such accounts, practices, policies or procedures as such
third parties may reasonable recommend, including, without limitation, making
appropriate restitution payments to its customers;

(b) Use reasonable efforts to ensure that (i) all loans
requiring flood and hazard insurance have appropriate and customary flood and
hazard insurance in full force and effect and (ii) all loans that were
originated as construction loans, but were changed to permanent loans, have
up-dated and appropriate and customary title insurance in full force and
effect;

(c) Use reasonable efforts to ensure that all due and unpaid
real estate taxes with respect to all real estate loans as to which escrow
accounts are not maintained have been paid in full; and

(d) Use reasonable efforts to undertake any technical
corrections as SouthTrust may reasonably specify.

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ARTICLE V

ADDITIONAL AGREEMENTS

Section 5.1 Inspection of Records; Confidentiality. (a)
SouthTrust and FFE shall each afford to the other and to the other's
accountants, counsel and other representatives (and their Subsidiaries) full
access during normal business hours during the period prior to the Effective
Time to all of their respective properties, books, contracts, commitments and
records, including all attorneys' responses to auditors' requests for
information, and accountants' work papers, developed by either of them or their
respective Subsidiaries or their respective accountants or attorneys, and will
permit each other and their respective representatives to discuss such
information directly with each other's officers, directors, employees,
attorneys and accountants. SouthTrust and FFE shall each use their best
efforts to furnish to the other all other information concerning its business,
properties and personnel as such other party may reasonably request. Any
failure to comply with this covenant shall be disregarded if promptly corrected
without material adverse consequences to the other party. The availability or
actual delivery of information shall not affect the representations,
warranties, covenants, and agreements of the party providing such information
that are contained in this Agreement or in any certificates or other documents
delivered pursuant hereto.

(b) In the event that this Agreement is terminated, each
party shall return all non-public documents furnished hereunder, shall destroy
all documents or portions thereof prepared by such other party that contain
non-public information furnished by the other party pursuant hereto and, in any
event, shall hold all non-public information confidential unless or until such
information is or becomes a matter of public knowledge or is or becomes known
to the party receiving the information through persons other than the party
providing such information.

Section 5.2 Registration Statement; Stockholder Approval.
SouthTrust shall file the Registration Statement with the SEC, and FFE and
SouthTrust shall use their best efforts to cause the Registration Statement to
become effective under the Securities Act. SouthTrust will take any action
required to be taken under the applicable blue sky or securities laws in
connection with the issuance of the shares of SouthTrust Common Stock in the
Merger. Each party shall Furnish all information concerning it and the holders
of its capital stock as the other party may reasonably request in connection
with such action. FFE shall call the FFE Stockholders' Meeting as soon as
appropriate after the date of this Agreement for the purpose of voting upon
this Agreement and the Merger. In connection with the FFE Stockholders'
Meeting, (i) SouthTrust and FFE shall jointly prepare the Proxy Statement as
part of the Registration Statement and FFE shall mail the Proxy Statement to
its stockholders and (ii) the Board of Directors of FFE shall recommend to its
stockholders the approval of this Agreement and the Merger; provided, however,
that such recommendation may be withdrawn, modified, or amended, or not made at
all, after the receipt by FFE of an offer to effect an Acquisition Transaction
(as defined in Section 4.3 hereof) with FFE to the extent the Board of
Directors of FFE reasonably determines that, in the exercise of its fiduciary
obligations after consultation with counsel, it has a duty to do so.

Section 5.3 Affiliate Letters. FFE shall use best efforts to
obtain and deliver to SouthTrust as promptly as practicable after (and shall
use its reasonable best efforts to obtain and deliver within five (5) business
days after) the date hereof a signed representation letter substantially in the
form of Exhibit 5.3 hereto from each executive officer and director of FFE and
each stockholder of FFE who FFE reasonably believes is an "affiliate" of FFE
within the meaning of such term as used in Rule 145 under the Securities Act
and shall use its best efforts to obtain and deliver to SouthTrust a signed
representation letter substantially in the form of Exhibit 5.3 from any person
who becomes an executive officer or director of FFE or any stockholder who
becomes such an "affiliate" after the date hereof as promptly as practicable
after (and shall use its reasonable best efforts to obtain and deliver within
five business days after) such person achieves such status.

Section 5.4 Brokers. Each of SouthTrust and FFE represents, as
to itself and its Subsidiaries, that no agent, broker, investment banker or
other firm or person or officer or director of either is or will be entitled to
any broker's or finder's fee or any other commission, bonus or similar fee in
connection with any

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of the transactions contemplated by this Agreement, other than Hovde Financial,
Inc., which has provided advice to FFE at its request in connection with the
Merger.

Section 5.5 Cooperation. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement at the earliest practicable time. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of SouthTrust
or FFE, as the case may be, shall take all such necessary action.

Section 5.6 Regulatory Applications. SouthTrust, FFE and/or
their respective Subsidiaries shall file all necessary applications with all
applicable regulatory authorities, and shall use their best efforts to respond
as promptly as practicable to all inquiries received concerning said
applications. SouthTrust undertakes to file such applications so that the
transactions contemplated by the Agreement will be consummated on or prior to
the date specified in Section 7.1(f) hereof. In the event the Merger is
challenged or opposed by any administrative or legal proceeding, whether by the
United States Department of Justice or otherwise, the determination of whether
and to what extent to seek appeal or review, administrative or otherwise, or
other appropriate remedies shall be made by SouthTrust. The party filing an
application shall deliver a copy thereof to the other party in advance of
filing and copies of all responses from or written communications from
regulatory authorities relating to the Merger or this Agreement (to the extent
permitted by law), and the filing party shall also deliver a final copy of each
regulatory application to the other party promptly after it is filed with the
appropriate regulatory authority. Each party shall advise the other party
periodically of the status of each regulatory application.

Section 5.7 Financial Statements and Reports. From the date of
this Agreement and prior to the Effective Time: (a) each party will deliver to
the other, not later than ninety (90) days after the end of any fiscal year,
its Annual Report on Form 10-K (and all schedules and exhibits thereto) for the
fiscal period then ended prepared in conformity with generally accepted
accounting principles; (b) FFE will deliver to SouthTrust not later than
forty-five (45) days after the end of any fiscal quarter, the Report of
Condition and Income filed by FFE Bank with the OTS; (c) each party will
deliver to the other not later than forty-five (45) days after the end of each
quarter, its Report on Form 10-Q for such quarter as filed with the SEC which
shall be prepared in conformity with generally accepted accounting principles
and the rules and regulations of the SEC; and (d) each party will deliver to
the other any and all other material reports filed with the SEC, the Federal
Reserve Board, the OCC, the FDIC, the OTS, or any other regulatory agency
within five (5) business days of the filing of any such report.

Section 5.8 Press Release. Except as provided in Section 4.3(a)
or as otherwise reasonably determined by a party to comply with its legal
obligations, at all times prior to the Effective Time, each party shall
mutually agree with the other prior to the issuance of any press release or
other information to the press or any third party for general circulation with
respect to this Agreement or the transactions contemplated hereby.

Section 5.9 Delivery of Supplements to Disclosure Schedules.
Five (5) business days prior to the Effective Time, each party will supplement
or amend its Disclosure Schedule with respect to any matter hereafter arising
which, if existing or occurring at or prior to, the date of this Agreement,
would have been required to be set forth or described in such Disclosure
Schedule or which is necessary to correct any information in the Disclosure
Schedule or in any representation and warranty made by the disclosing party
which has been rendered inaccurate thereby. For purposes of determining the
accuracy of the representations and warranties of SouthTrust and FFE contained,
respectively, in Articles II and III hereof in order to determine the
fulfillment of the conditions set forth in Section 6.1(a) and 6.2(a) hereof as
of the date of this Agreement, the Disclosure Schedule of each party shall be
deemed to include only that information contained therein on the date it is
initially delivered to the other party.

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Section 5.10 Litigation Matters. FFE will consult with SouthTrust
about any proposed settlement, or any disposition of, any litigation involving
amounts in excess of $10,000.

Section 5.11 Tax Opinion. SouthTrust agrees to obtain a written
opinion of Bradley, Arant, Rose & White, addressed to SouthTrust and FFE, dated
the Closing Date, subject to the representations and assumptions referred to
therein, and substantially to the effect that the Merger will constitute a
tax-free reorganization within the meaning of Section 368(a) of the Code and
that SouthTrust and FFE will each be a party to the reorganization.

Section 5.12 Options; MRP; Employment Agreements; Benefits and
Related Matters.

(a) FFE Stock Options. Except as otherwise provided in
this Section 5.12(a) with respect to FFE Stock Options, each holder of an FFE
Stock Option outstanding on the date hereof and remaining outstanding
immediately prior to the Effective Time shall receive from SouthTrust at the
Effective Time, whether or not the option is then exercisable or vested, a cash
payment in an amount equal to the product of (i) the number of shares of FFE
Common Stock subject to such option immediately prior to the Effective Time and
(ii) the excess, if any, of the consideration to be exchanged by SouthTrust for
each share of FFE Common Stock pursuant to Section 1.2(b) hereof, over the
exercise price per share of such option, net of any cash which must be withheld
under federal and state income and employment tax requirements. Such cash
payments shall be in consideration of, and shall result in, the settlement and
cancellation of all such options. As a condition to the receipt of a cash
payment in cancellation of options, each option holder shall execute a
cancellation agreement in the form attached hereto as Exhibit 5.12(a). Each
holder of a FFE Stock Option shall, by written notice to SouthTrust delivered
at least five business days prior to the Closing Date, be entitled to have all
of his or her Stock Options assumed by SouthTrust in accordance with the terms
and provisions of the FFE Stock Option Plan, in which case said Stock Option
shall become fully exercisable and vested and continue outstanding as an option
to purchase, in the place of the purchase of shares of FFE Common Stock, the
number of shares (rounded to the nearest whole share) of SouthTrust Common
Stock that would have been received by the optionee in the Merger as determined
in an manner consistent with Section 4.24(a) of the Code had the entire Stock
Option been exercised in full for shares of FFE Common Stock immediately before
the Merger upon the same terms and conditions under the relevant Stock Option
as were applicable immediately before the Effective Time (assuming that all
unvested options were then fully vested) and that such shares of FFE Common
Stock received upon exercise had been converted in the Merger only into shares
of SouthTrust Common Stock at the full fair market value of the Merger
Consideration (as if the cash portion thereof was to be received in shares of
SouthTrust Common Stock), with appropriate pro rata adjustment to the relevant
option price for the shares of SouthTrust Common Stock substituted therefor so
that the aggregate option exercise price of shares of SouthTrust Common Stock
subject to the option immediately following the assumption and substitution
shall be the same as the aggregate option exercise price for the shares of FFE
Common Stock relating to the Stock Option immediately before such assumption
and substitution. The shares of SouthTrust Common Stock to be issued pursuant
to the FFE Stock Options shall be registered pursuant to the registration
statement on Form S-8 filed with the SEC and such shares shall be duly
authorized, issued in compliance with federal and state securities laws, fully
paid and unassessable and not subject to or in violation of any preempted
rights. At the Effective Time, SouthTrust shall have reserved sufficient shares
of SouthTrust Common Stock for issuance with respect to the FFE Stock Options
and SouthTrust shall take any action required to be taken under any applicable
securities law in connection with the issuance of the shares pursuant to such
Stock Options.

(b) Unvested MRP Shares. Each outstanding share of FFE
Common Stock awarded pursuant to the MRP that is unvested immediately prior to
the Effective Time shall be canceled in exchange for a per share cash payment
from SouthTrust at the Effective Time equal to the amount of the per share
consideration to be exchanged by SouthTrust for such share of FFE Common Stock
pursuant to Section 1.2(b) hereof. Each holder of such restricted shares, as a
condition to the receipt of payment, shall be required to deliver his
certificate or certificates representing such restricted shares to SouthTrust
for cancellation and shall also be required to execute a cancellation agreement
in the form attached hereto as Exhibit 5.12(b).

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(c) Written Agreements with Employees. SouthTrust shall
assume all of the obligations of FFE Bank under that certain employment
agreement between FFE Bank and G. L. Smith dated August 26, 1993 (the
"Employment Agreement"), and shall assume all of the obligations of FFE Bank
under that certain Change In Control Severance Agreement between Wallace D.
Mossbarger and FFE Bank dated March 21, 1995 (the "Severance Agreement").
SouthTrust acknowledges that the consummation of the Merger will constitute
both a change in control and change in circumstances under the Employment
Agreement and the Severance Agreement so as to constitute an involuntary
termination of the employment of Messrs. Smith and Mossbarger in connection
with a change in control pursuant to the terms of the Employment Agreement and
the Severance Agreement.

(d) Covenant Not to Compete and Consulting Agreement. At
the Effective Time, SouthTrust shall enter into a covenant not to compete and
consulting agreement with Mr. G. L. Smith in the form attached hereto as
Exhibit 5.12(d) (the "Covenant Not to Compete and Consulting Agreement"), which
provides that during the one year period following Mr. Smith's cessation of
active employment with FFE Bank he will not engage in competition with
SouthTrust or any of its financial institution Subsidiaries and he will provide
post-Merger transition consulting services to SouthTrust during such one year
period in exchange for $108,000 which shall be paid to him at a rate of $9,000
per month.

(e) FFE Qualified Plans. All contributions to the FFE
Qualified Plans shall terminate as of the Effective Time, except for any
required payment of employer-matching contributions with respect to elective
contributions made prior to the Effective Time. On the day prior to the
Effective Time, all such Qualified Plans shall be terminated with full
acceleration of vesting. As soon as practicable after the Effective Time,
subject only to orderly winding-up of the affairs of each such Qualified Plan
(excluding obtaining a determination letter from the Internal Revenue Service
as to the effect of such termination upon such Qualified Plan, the assets of
each Qualified Plan shall be distributed to the participants and beneficiaries
thereof with full right of roll-over to an individual retirement account.

(f) Continuing Employees. To the extent permitted by
applicable law, from and after the Effective Time, the former employees of FFE
and the FFE Significant Subsidiaries who are continuing employees of SouthTrust
or any SouthTrust Significant Subsidiary including FFE Bank or its successor
(the "Continuing Employees") shall be entitled to participate in SouthTrust's
employee benefit plans, including welfare and fringe benefit plans but
excluding the SouthTrust Corporation Revised Retirement Income Plan (the "ST
Retirement Plan") and the SouthTrust Corporation Employees' Profit Sharing Plan
(the "ST PS Plan"), on the same basis and subject to the same conditions as are
applicable to any newly employed, comparably situated employee of SouthTrust;
provided, however, that

(i) with respect to SouthTrust's group medical benefits
plan, each Continuing Employee shall be credited for eligible expenses
incurred by such Continuing Employee and his or her dependents (if
applicable) under the FFE group medical benefits plan during the
calendar year including the Effective Date for purposes of satisfying
the deductible provisions under SouthTrust's group medical benefits
plan for such current year, and all waiting periods under said plans
and preexisting conditions shall be waived with respect to all
Continuing Employees and their dependents; and

(ii) credit for each such Continuing Employee's past
service with FFE and the FFE Significant Subsidiaries prior to the
Effective Time ("Past Service Credit") shall be given for purposes of:

(1) determining vacation and sick leave
benefits and accruals in accordance with the
established policies of SouthTrust; and

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(2) establishing eligibility for participation in
such employee benefit plans and for purposes of determining
the scheduling of vacations and other determinations which are
based on length of service; provided, however, notwithstanding
anything contained in this Agreement to the contrary, Past
Service Credit shall not be given to any such employee for
purposes of establishing eligibility in the 1990 discounted
stock plan of SouthTrust.

From and after January 1 following the Effective Time, for purposes of
determining eligibility to participate in, and vesting in accrued benefits
under, both the ST Retirement Plan and the ST PS Plan, employment of a
Continuing Employee by FFE and the FFE Significant Subsidiaries shall be
credited as if it were employment by SouthTrust, but such service shall not be
credited for purposes of determining benefit accrual under the ST Retirement
Plan.

Section 5.13 Tax Treatment. Neither FFE or any of the FFE
Subsidiaries, nor SouthTrust or any of the SouthTrust Subsidiaries, shall
voluntarily take any action which would disqualify the transaction contemplated
in this Agreement as a "reorganization" pursuant to Section 368(a) of the Code.

Section 5.14 Stock Exchange Listing. SouthTrust shall use its
best efforts to list on the NASDAQ/National Market, subject to official notice
of issuance, the shares of SouthTrust Common Stock to be issued in the Merger.

Section 5.15 Directors' and Officers' Indemnification Insurance.
For three (3) years after the Effective Time, SouthTrust shall, and shall cause
SouthTrust Subsidiary, to indemnify, defend and hold harmless the present
directors, employees and agents of FFE and FFE Subsidiary against all
liabilities arising out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement) to the full extent permitted under United States Law, Delaware
law and the Certificate [Articles] of Incorporation, Charter or Bylaws of FFE
and FFE Subsidiary in the form in effect at the date of this Agreement.
Without limiting the foregoing, in any case in which approval by the surviving
entity is required to effectuate any indemnification, SouthTrust shall cause
the surviving entity to direct, at the election of FFE, that the determination
of any such approval shall be made by independent counsel mutually agreed upon
between SouthTrust and FFE.

ARTICLE VI

CONDITIONS

Section 6.1 Conditions to the Obligations of SouthTrust.
Notwithstanding any other provision of this Agreement, the obligations of
SouthTrust to consummate the Merger are subject to the following conditions
precedent (except as to those which SouthTrust may choose to waive):

(a) All of the representations and warranties made by FFE
in this Agreement and in any documents or certificates provided by FFE shall
have been true and correct in all material respects as of the date of this
Agreement and as of the Effective Time as though made on and as of the
Effective Time, except for information contained in a subsequent Disclosure
Schedule of FFE relating to an event or series of events arising after the date
hereof which does not have a Material Adverse Effect on FFE or as otherwise
contemplated by this Agreement;

(b) FFE shall have performed in all material respects all
obligations and shall have complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by it prior to or at the Effective Time;

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(c) There shall not have been any action taken or any
statute, rule, regulation or order enacted, promulgated or issued or deemed
applicable to the Merger by any federal or state government or governmental
agency or instrumentality or court, which would prohibit SouthTrust's ownership
or operation of all or a material portion of the business or assets of FFE or
FFE Bank, or would compel SouthTrust to dispose of all or a material portion of
the business or assets of FFE Bank, as a result of this Agreement, or which
would render SouthTrust or FFE unable to consummate the transactions
contemplated by this Agreement;

(d) Since the date hereof, FFE shall not have suffered
Material Adverse Effect;

(e) SouthTrust shall have received the opinion of Silver,
Freedman & Taff L.L.P., counsel to FFE, in the form of the attached Exhibit
6.1(e);

(f) Mr. G. L. Smith, if he is then living, shall have
executed the Covenant Not to Compete and Consulting Agreement; and

(g) SouthTrust shall have received a certificate signed
by the President and Chief Executive Officer of FFE, dated as of the Effective
Time, certifying that based upon his best knowledge, the conditions set forth
in Sections 6.1(a), (b), and (d) hereof have been satisfied.

Section 6.2 Conditions to the Obligations of FFE.
Notwithstanding any other provision of this Agreement, the obligations of FFE
to consummate the Merger are subject to the following conditions precedent
(except as to those which FFE may chose to waive);

(a) All of the representations and warranties made by
SouthTrust in this Agreement and in any documents or certificates provided by
SouthTrust shall have been true and correct in all material respects as of the
date of this Agreement and as of the Effective Time as though made on and as of
the Effective Time, except for information contained in a subsequent Disclosure
Schedule of SouthTrust relating to an event or series of events arising after
the date hereof which does not have a Material Adverse Effect on SouthTrust or
as otherwise contemplated by this Agreement;

(b) SouthTrust shall have performed in all material
respects all obligations and shall have complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by it prior to or at the Effective Time;

(d) FFE shall have received the opinion of Bradley,
Arant, Rose & White, counsel to SouthTrust, in the form attached hereto as
Exhibit 6.2(d); and

(e) FFE shall have received a certificate signed by a
senior officer of SouthTrust, dated as of the Effective Time, that based upon
his best knowledge, the conditions set forth in Sections 6.2(a), (b) and (c)
have been satisfied.

Section 6.3 Conditions to the Obligations of the Parties.
Notwithstanding any other provision of this Agreement, the obligations of
SouthTrust on the one hand and FFE on the other hand, to consummate the Merger
are subject to the following conditions precedent (except as to those which
SouthTrust or FFE may choose to waive):

(a) As of the date of this Agreement, FFE shall have received a written
fairness opinion from its financial advisor to the effect that the Merger
Consideration is fair to its stockholders from a financial point of view;

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(b) No preliminary or permanent injunction or other order
by any federal or state court which prevents the consummation of the Merger
shall have been issued and shall remain in effect; nor shall there be any third
party proceeding pending to prevent the consummation of the Merger;

(c) The parties shall have received all applicable
regulatory approvals and consents to consummate the transactions contemplated
in this Agreement and all required waiting periods shall have expired;

(d) The Registration Statement shall have been declared
effective under the Securities Act and no stop orders shall be in effect and no
proceedings for such purpose shall be pending or threatened by the SEC;

(e) Each party shall have received the tax opinion
addressed to it referred to in Section 5.11 of this Agreement; and

(f) The SouthTrust Common Stock to be issued to holders
of FFE Common Stock shall have been approved for listing on the NASDAQ/National
Market subject to official notice of issuance.

ARTICLE VII

TERMINATION; AMENDMENT; WAIVER

Section 7.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time:

(a) By the mutual written consent of the Boards of
Directors of SouthTrust and FFE;

(b) At any time prior to the Effective Time, by
SouthTrust or FFE if there shall have been a final judicial or regulatory
determination (as to which all periods for appeal shall have expired and no
appeal shall be pending) that any material provision of this Agreement is
illegal, invalid or unenforceable (unless the enforcement thereof is waived by
the affected party) or denying any regulatory application the approval of which
is a condition precedent to either party's obligations hereunder;

(c) At any time on or before the date specified in 7.1(f)
hereof, by SouthTrust or FFE in the event that any of the conditions precedent
to the obligations of the other party to the Merger are rendered impossible to
be satisfied or fulfilled by said date (other than by reason of a breach by the
party seeking to terminate);

(d) By either party at any time after the stockholders of
FFE fail to approve this Agreement and the Merger by the required vote at the
FFE Stockholders' Meeting;

(e) By SouthTrust or FFE, in the event of a material
breach by the other party of any representation, warranty, covenant or
agreement contained herein or in any schedule or document delivered pursuant
hereto, which breach would result in the failure to satisfy the closing
condition set forth in Section 6.1(a) or 6.1(b), in the case of SouthTrust, or
Section 6.2(a) or 6.2(b), in the case of FFE, and which breach cannot be or is
not cured within thirty (30) days after written notice of such breach is given
by the non-breaching party to the party committing such breach; or

(f) By either party on or after June 30, 1996 (or August
31, 1996 in the event a protest is filed with regulatory authorities alleging
the failure of either party or either party's Subsidiaries to comply with the
Community Reinvestment Act of 1977), in the event the Merger has not been
consummated by such date (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained herein).

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(g) By FFE if the after-tax cost of the restitution
payments made or to be made to customers pursuant to Section 4.4(a) of this
Agreement exceeds $500,000.

In the event either party elects to effect any termination
pursuant to Section 7.1(b) through 7.1 (g) above, it shall give written notice
to the other party hereto specifying the basis for such termination and
certifying that such termination has been approved by the vote of a majority of
the members of its Board of Directors.

Section 7.2 Liabilities and Remedies; Break-Up Fee. (a) In the
event that this Agreement is terminated by a party (the "Aggrieved Party")
solely by reason of the willful material breach by the other party ("Breaching
Party") of any of its representations, warranties, covenants or agreements
contained herein then the Aggrieved Party shall be entitled to such remedies
and relief against the Breaching Party as are available at law or in equity.
Moreover, the Aggrieved Party without terminating this Agreement shall be
entitled to specifically enforce the terms hereof against the Breaching Party
in order to cause the Merger to be consummated. Each party acknowledges that
there is not an adequate remedy at law to compensate the other party relating
to the non-consummation of the Merger. To this end, each party, to the extent
permitted by law, irrevocably waives any defense it might have based on the
adequacy of a remedy at law which might be asserted as a bar to specific
performance, injunctive relief or other equitable relief.

(b) If, after the date of this Agreement, an Acquisition
Transaction is offered, presented or proposed to FFE or its stockholders and
(i) thereafter this Agreement and the Merger are disapproved by the
stockholders of FFE and (ii) within one year after termination of this
Agreement an Acquisition Transaction is consummated or a definitive agreement
is entered into by FFE relating to an Acquisition Transaction (a "Trigger
Event"), then upon the occurrence of a Trigger Event and in lieu of any other
rights and remedies of SouthTrust, FFE shall (x) reimburse SouthTrust for its
third party transaction expenses in an amount up to two hundred thousand
dollars ($200,000) and (y) pay SouthTrust an additional cash amount of four
hundred thousand dollars ($400,000) as an agreed-upon break-up fee as the sole
and exclusive remedy of SouthTrust against FFE; provided, however, that
SouthTrust shall not be entitled to any payment under this Section 7.2(b) if
SouthTrust exercises any option granted by the Stock Option Agreement or
exercises any right to require FFE to repurchase the option granted by the
Stock Option Agreement.

(c) Except as provided in Sections 7.2(a) and (b) of this
Agreement, each of the parties shall bear its own costs, fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby; provided however, all application and filing fees to be paid by either
party to regulatory authorities in connection with the transactions
contemplated by this Agreement shall be borne and paid by SouthTrust.

Section 7.3 Survival of Agreements. In the event of termination
of this Agreement by either SouthTrust or FFE as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect except that the
agreements contained in Sections 5.1(b), 5.5, and 7.2 hereof shall survive the
termination hereof

Section 7.4 Amendment. This Agreement may be amended by the
parties hereto by action taken by their respective Boards of Directors at any
time before or after approval hereof by the stockholders of FFE but, after such
approval, no amendment shall be made which changes the form of consideration or
the value of the consideration to be received by the stockholders of FFE
without the approval of the stockholders of FFE. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. SouthTrust and FFE may, without approval of their respective
Boards of Directors, make such technical changes to this Agreement, not
inconsistent with the purposes hereof as may be required to effect or
facilitate any regulatory approval or acceptance of the Merger or of this
Agreement or to effect or facilitate any regulatory or governmental filing or
recording required for the consummation of any of the transactions contemplated
hereby.

Section 7.5 Waiver. Any term, provision or condition of this
Agreement (other than the requirement of FFE stockholder approval) may be
waived in writing at any time by the party which is

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entitled to the benefits hereof. Each and every right granted to any party
hereunder, or under any other document delivered in connection herewith or
therewith, and each and every right allowed it by law or equity, shall be
cumulative and may be exercised from time to time. The failure of either party
at any time or times to require performance of any provision hereof shall in no
manner affect such party's right at a later time to enforce the same. No
waiver by any party of a condition or of the breach of any term, covenant,
representation or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of the breach of any other term, covenant, representation or
warranty of this Agreement. No investigation, review or audit by SouthTrust of
FFE or FFE of SouthTrust prior to or after the date hereof shall estop or
prevent either party form exercising any right hereunder or be deemed to be a
waiver of any such right.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.1 Survival. All representations, warranties, covenants
and agreements of the parties in this Agreement or in any instrument delivered
by the parties pursuant to this Agreement (other than the agreements, covenants
and obligations set forth herein which are contemplated to be performed after
the Effective Time) shall not survive the Effective Time, provided that no such
representations, warranties or covenants shall be deemed to be terminated or
extinguished so as to deprive SouthTrust or FFE (or any of their respective
directors, officers, employees or agents) of any defense in law or equity which
otherwise would be available against the claims of any person, including,
without limitation, any stockholder or former stockholder of either SouthTrust
of FFE, the aforesaid representations, warranties, and covenants being material
inducements to consummation by SouthTrust, FFE and the Surviving Corporation of
the transactions contemplated hereby.

Section 8.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, by facsimile transmission or by registered or certified mail to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice) and shall be deemed to be delivered on the
date so delivered:

(a) if to SouthTrust:

SouthTrust Corporation
420 North 20th Street
Birmingham, AL 35203
Attention: Mr. Frederick W. Murray, Jr.
Fax (205)254-5022

copy to:

Bradley, Arant, Rose & White
2001 Park Place, Suite 1400
Birmingham, AL 35203
Attention: C. Larimore Whitaker, Esq.
Fax (205)252-0264

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<PAGE> 204

(b) if to FFE:

FFE Financial Corp.
1160 South McCall Road
Englewood, Florida 34223
Attention: G.L. Smith

copy to:

Silver, Freedman & Taff, L.L.P.
Seventh Floor
1100 New York Avenue, N.W.
Washington, D.C. 20005
Attention: Barry P. Taff, Esq.

Section 8.3 Applicable Law. This Agreement shall be construed
and interpreted according to the laws of the State of Delaware without regard
to conflicts of laws principles thereof, except to the extent that the federal
laws of the United States apply.

Section 8.4 Headings, Etc. The article headings and section
headings contained in this Agreement are inserted for convenience only and
shall not affect in any way the meaning or interpretation of this Agreement.

Section 8.5 Severability. If any term, provision, covenant, or
restriction contained in this Agreement is held by a final and unappealable
order of a court of competent jurisdiction to be invalid, void, or
unenforceable, then the remainder of the terms, provisions, covenants, and
restrictions contained in this Agreement shall remain in full force and effect,
and shall in no way be affected, impaired, or invalidated unless the effect
would be to cause this Agreement to not achieve its essential purposes.

Section 8.6 Entire Agreement; Binding Effect; Non-Assignment;
Counterparts. Except as otherwise expressly provided herein, this Agreement
(including the documents and instruments referred to herein) (a) constitutes
the entire agreement between the parties hereto and supersedes all other prior
agreements and undertakings, both written and oral, between the parties, with
respect to the subject matter hereof; and (b) is not intended to confer upon
any other person any rights or remedies hereunder except as specifically
provided herein. This Agreement shall be binding upon and inure to the benefit
of the parties named herein and their respective successors. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any party hereto without the prior written consent of the other
party hereto (other than by SouthTrust to a subsidiary or affiliate of
SouthTrust in order that SouthTrust may undertake any actions necessary to
effect conversion of FFE Bank in accordance with Section 1.5 of this
Agreement). This Agreement may be executed in two or more counterparts which
together shall constitute a single agreement.

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<PAGE> 205

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.

SOUTHTRUST CORPORATION

By: /s/ ALTON E. YOTHER
--------------------------------------
Senior Vice-President
/s/ AUBREY D. BARNARD
- -----------------------------------
Secretary

SOUTHTRUST OF FLORIDA, INC.

By: /s/ ALTON E. YOTHER
-------------------------------------
Senior Vice-President
/s/ AUBREY D. BARNARD
- ----------------------------------
Secretary

FFE FINANCIAL CORP.

By: /s/ GAIL L. SMITH
--------------------------------------
President
/s/ SANDRA L. FRASER
- ----------------------------------
Secretary

A-37
<PAGE> 206
EXHIBIT B

SUBSIDIARY AGREEMENT AND
PLAN OF MERGER

SUBSIDIARY AGREEMENT AND PLAN OF MERGER (the "Agreement")
dated as of this 4th day of January, 1996 between FIRST OF ENGLEWOOD, FSB, a
federally chartered stock savings bank (the "Bank"), and a wholly-owned
subsidiary of FFE FINANCIAL CORP. ("FFE"), and SOUTHTRUST BANK OF FLORIDA,
NATIONAL ASSOCIATION, a national banking corporation ("ST-Bank") and a
wholly-owned subsidiary of SOUTHTRUST OF FLORIDA, INC. ("ST-Florida"), which in
turn is a wholly-owned subsidiary of SOUTHTRUST CORPORATION ("SouthTrust").

W I T N E S S E T H:

WHEREAS, the Boards of Directors of ST-Florida, FFE, and
SouthTrust have approved, and deem it advisable and in the best interests of
their respective shareholders to consummate, the transactions set forth in the
Agreement and Plan of Merger dated as of November 3, 1995 among SouthTrust,
ST-Florida, and FFE (the "Parent Merger Agreement") pursuant to which FFE will
merge with and into ST-Florida (the "Parent Merger");

WHEREAS, the Boards of Directors of the Bank and ST-Bank have
approved, and deem it advisable to consummate, the transactions provided for
herein pursuant to which the Bank will merge with and into ST-Bank, subject to
and as soon as practicable following the consummation of the Parent Merger; and

WHEREAS, the parties to this Agreement contemplate that the
transactions set forth herein shall qualify pursuant to Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"), and that this Agreement
constitutes a plan of reorganization pursuant to Section 368 of the Code.

NOW, THEREFORE, in consideration of the foregoing and the
respective covenants and agreements set forth herein and in the Parent Merger
Agreement, the parties hereto agree as follows:

ARTICLE I

THE MERGER

1.1 Merger. (a) Subject to the provisions hereof, Bank
shall be merged with and into ST-Bank (the "Merger") under the charter of
ST-Bank, and ST-Bank shall be the surviving association (sometimes hereinafter
referred to as the "Association" when reference is made to it after the
Effective Time of the Merger (as defined below)). The name of the surviving
association shall be SouthTrust Bank of Florida, National Association, and the
business of the Association shall be that of a national banking association.
This business shall be conducted by the Association at its main office, which
shall be located in St. Petersburg, Florida and at its legally established
branches. The address of the main office and of such branches existing as of
the Effective Time of the Merger is set forth in Annex A hereto.

(b) The Merger shall occur immediately following
the consummation of the Parent Merger (the "Effective Time of the Merger"), or
at such other date and time as ST-Bank and Bank may mutually designate,
provided, however, that the Merger shall not occur and shall not be effective
unless and until approved by the Office of the Comptroller of the Currency, the
Office of Thrift Supervision and the Board of Governors of the Federal Reserve
System.
<PAGE> 207

1.2 Effect of Merger. At the Effective Time of the
Merger, Bank shall be merged with and into ST-Bank and the separate existence
of Bank shall cease. All of the shares of capital stock of the Bank issued and
outstanding as of the Effective Time of the Merger, and all rights in respect
thereof, shall be canceled. The shares of capital stock of ST-Bank outstanding
immediately prior to consummation of the Merger shall constitute the only
outstanding shares of capital stock of the Association following consummation
of the Merger.

1.3 Conveyance. All assets of Bank and ST-Bank as they
exist at the Effective Time of the Merger shall pass to and vest in the
Association without any conveyance or other transfer. The Association shall be
responsible for all the liabilities of every kind and description of each of
ST-Bank and Bank existing as of the Effective Time of the Merger, including the
liabilities arising from the operation of a trust department, and including the
liabilities arising from the liquidation account of the Bank.

1.4 Board of Directors; Articles of Association; Bylaws.
The present Board of Directors of ST-Bank shall continue to serve as the Board
of Directors of the Association until the next annual meeting or until such
time as their successors have been elected and have qualified. The number,
names and residence addresses, and the terms of the members of the Board of
Directors, are set forth in Annex B hereto. Effective as of the time this
Merger shall become effective, the Articles of Association and the Bylaws of
the Association shall be the Articles of Association and Bylaws of ST-Bank as
in effect immediately prior to the Merger.

1.5 Savings Accounts. From and after the Effective Time
of the Merger, savings accounts of the Association shall be issued in a manner
consistent with the issuance of savings accounts by ST-Bank prior to the
Effective Time of the Merger.

ARTICLE II

CAPITALIZATION

2.1 Capitalization of Bank and ST-Bank. As of September
30, 1995, Bank had a total capital of $8,567,000. There were 473,986 shares of
Common Stock, each of $0.01 par value. As of September 30, 1995, ST-Bank had
total capital of $299,301,000. There were 1,000,000 shares of Common Stock,
each of $10.00 par value.

2.2 Capitalization of Association. The amount of capital
stock of the Association shall be $10,000,000, divided into 1,000,000 shares of
Common Stock, each of $10.00 par value. The combined surplus of the
Association shall be $243,168,000.

ARTICLE III

COVENANTS

3.1 Covenants of Bank and ST-Bank. During the period
from the date of this Agreement and continuing until the Effective Time, each
of the parties hereto agrees to observe and perform all agreements and
covenants in the Parent Merger Agreement that pertain or are applicable to Bank
and ST-Bank, respectively. Each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, subject to and in accordance with the
applicable provisions of the Parent Merger Agreement.

B-2
<PAGE> 208

ARTICLE IV

CONDITIONS PRECEDENT

4.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction prior to the Effective Time of the following
conditions:

(a) Effective Time of the Parent Merger. The
Effective Time (as defined in the Parent Merger Agreement) of the Parent Merger
shall have occurred.

(b) No Injunctions or Restraints; Illegality. No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect.
There shall not be any action taken, or any statute, rule, regulation or order
enacted, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger illegal as of the Effective Time.

(c) Shareholder Approval. The sole shareholder
of ST-Bank and the sole shareholder of the Bank each shall have voted
affirmatively to approve the Merger by not less than two-thirds of the
outstanding voting stock of ST-Bank and the Bank, respectively.

(d) Other Approvals. All requisite regulatory
approvals relating to the Merger shall have been obtained and continue to be in
full force and effect, and all waiting and notice periods under applicable law
shall have expired.

ARTICLE V

TERMINATION AND AMENDMENT

5.1 Termination. This Agreement shall be terminated
immediately and without any action on the part of the Bank or ST-Bank upon any
termination of the Parent Merger Agreement.

5.2 Effect of Termination. In the event of termination
of this Agreement as provided in Sections 4.1 or 5.1 hereof, this Agreement
shall forthwith become void and there shall be no liability or obligation on
the part of the Bank or ST-Bank or their respective officers or directors.

5.3 Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.

ARTICLE VI

GENERAL PROVISIONS

6.1 Nonsurvival of Agreements. None of the agreements in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time.

6.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to the Bank or ST-Bank, respectively, at the
addresses for notices to FFE or

B-3
<PAGE> 209

ST-Florida, respectively, as set forth in the Parent Merger Agreement, with
copies to the persons referred to therein.

6.3 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."

6.4 Counterparts. This Agreement may be executed in two
counterparts, both of which shall be considered one and the same agreement and
shall become effective when both counterparts have been signed by each of the
parties and delivered to the other party, it being understood that both parties
need not sign the same counterpart.

6.5 Entire Agreement. Except as otherwise set forth in
the Parent Merger Agreement, this Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof. This Agreement shall be
subject to the terms and conditions of the Parent Merger Agreement.

6.6 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party.

B-4
<PAGE> 210

IN WITNESS WHEREOF, the signatures and seals of the Bank and
ST-Bank this 4th day of January, 1996, each set by its president or a vice
president and attested to by its cashier or secretary, pursuant to a resolution
of its board of directors, acting by a majority, and witness the signature of a
majority of each of the board of directors:

FIRST OF ENGLEWOOD, FSB

Attest: By /s/ GAIL L. SMITH
----------------------------------------
Its President and Chief Executive Officer
/s/ SANDRA L. FRASER
- -------------------------
Assistant Secretary

(Seal of Bank)

SOUTHTRUST BANK OF FLORIDA,
NATIONAL ASSOCIATION

Attest: By /s/ CHARLES E. HUGHES
-------------------------------------------------
Its Chairman President and Chief Executive Officer
/s/ ROGER G. CLARKE
- -------------------------
Cashier

(Seal of Bank)

B-5
<PAGE> 211

STATE OF FLORIDA )
) SS:
COUNTY OF DUVAL )

On this 3rd day of January, 1996, before me, a notary public
for this state and county, personally came Charles E. Hughes, Jr., as
president, and Roger G. Clarke as cashier, of SouthTrust Bank of Florida,
National Association, and each in his/her said capacity acknowledged this
instrument to be the act and deed of the association and the seal affixed to it
to be its seal.

WITNESS my official seal and signature this day and year.

/s/ MARY E. ZVEARE
----------------------------------------
(Seal of Notary) Notary Public, Duval County.
My commission expires January 19, 1998

STATE OF FLORIDA )
) SS:
COUNTY OF CHARLOTTE )

On this 4th day of January, 1996, before me, a notary public
for this state and county, personally came Gail L. Smith, as president, and
Sandra L. Fraser, as assistant secretary, of First of Englewood, FSB, and each
in his/her said capacity acknowledged this instrument to be the act and deed of
the association and the seal.

WITNESS my official seal and signature this day and year.

/s/ JANINE LIVESEY
---------------------------------------
(Seal of Notary) Notary Public, Charlotte County
My commission expires February 9, 1996

B-6
<PAGE> 212
EXHIBIT C

HOVDE FINANCIAL, INC.
INVESTMENT BANKERS & FINANCIAL ADVISORS

November 2, 1995

Board of Directors
FFE Financial Corp.
1160 South McCall Road
Englewood, Florida 34223

Members of the Board:

We have reviewed the Agreement and Plan of Merger ("Agreement") previously
provided to SouthTrust Corporation ("SouthTrust"). As is set forth in the
Agreement, each outstanding share of FFE common stock will be automatically
converted into .645 shares of common stock of SouthTrust and $10.80 in cash,
subject to certain adjustments and limitations as provided in the Agreement
("Merger Consideration"). In connection therewith, you have requested our
opinion as to the fairness of the proposed transaction, from a financial point
of view, to the stockholders of FFE.

Hovde Financial, Inc. ("Hovde") specializes in providing investment banking
and financial advisory services to commercial bank and thrift institutions. Our
principals are experienced in the independent valuation of securities in
connection with negotiated underwritings, subscription and community offerings,
private placements, merger and acquisition transactions and recapitalizations.
Pursuant to a Consulting Agreement dated May 24, 1994 between FFE and Hovde,
Hovde was engaged to assist FFE in exploring various strategic options,
including a potential affiliation of FFE with a larger financial institution.
Therefore, we are familiar with FFE, having acted as its financial advisor in
connection with the proposed transaction, and having participated in the
negotiations leading to the Agreement.

During the course of our engagement, we reviewed and analyzed material
bearing upon the financial and operating conditions of FFE and SouthTrust and
material prepared in connection with the proposed transaction, including the
following: the Agreement; certain publicly available information concerning FFE
and SouthTrust, including consolidated financial statements for each of the
three years ended September 30, 1994 and December 31, 1994, respectively, as
well as subsequent quarterly statements for the periods ended March 15 and
June 30, 1995; the nature and terms of recent sale and merger transactions
involving thrifts and thrift holding companies that we consider relevant;
historical and current market data for the common stock of FFE and SouthTrust;
and financial and other information provided to us by the management of FFE
and SouthTrust.

C-1
<PAGE> 213

Board of Directors
FFE Financial Corp.
November 2, 1995
Page Two

In addition, we have conducted meetings with members of the senior
management of FFE for the purpose of reviewing the future prospects of FFE. In
this regard, we considered the net present value of future cash flows
attributable to each share of FFE and compared this to the per share value of
the Merger Consideration. We also took into account our assessment of general
economic, market and financial conditions and our experience in other similar
transactions, as well as our overall knowledge of the thrift industry and our
general experience in securities valuations.

In rendering this opinion, we have assumed, without independent
verification, the accuracy and completeness of the financial and other
information and representations contained in the materials provided to us by FFE
and SouthTrust, and in the discussions with FFE's management.

Based on the foregoing and our experience as investment bankers, we are of
the opinion that, as of the date hereof, the Merger Consideration to be received
by the shareholders of FFE as described in the Agreement is fair from a
financial point of view.

Sincerely,

/s/ Hovde Financial, Inc.
-------------------------
HOVDE FINANCIAL, INC.

C-2
<PAGE> 214
EXHIBIT D

STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT, dated as of November 3, 1995 (the
"Agreement"), is by and between FFE Financial Corp., a Delaware corporation
("Issuer"), and SouthTrust Corporation, a Delaware corporation ("Grantee").

WHEREAS, Issuer and SouthTrust of Florida, Inc., a Florida
corporation and a wholly-owned subsidiary of Grantee ("ST-Sub"), have entered
into an Agreement and Plan of Merger dated as of November 3, 1995 and joined in
by Grantee (the "Merger Agreement"), providing for, among other things, the
merger of FFE with and into ST-Sub, with ST-Sub as the surviving corporation;
and

WHEREAS, as a condition and inducement to Grantee's execution
of the Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);

NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein and in the Merger Agreement, and intending to be legally bound hereby,
Issuer and Grantee agree as follows:

1. Defined Terms. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the Merger
Agreement.

2. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 104,640 shares (the "Option Shares") of Common Stock of Issuer,
par value $0.1 per share ("Issuer Common Stock"), at a purchase price per
Option Share (the "Purchase Price") equal to $27.00; provided, however, that in
no event shall the number of shares of Issuer Common Stock for which this
Option is exercisable exceed 19.9% of the Issuer's issued and outstanding
shares of Common Stock. The number of shares of Issuer Common Stock that may
be received upon the exercise of the Option and the Purchase Price are subject
to adjustment as herein set forth.

3. Exercise of Option.

(a) Provided that (i) Grantee shall not be in material breach of
the agreements or covenants contained in this Agreement or the Merger
Agreement, and (ii) no preliminary or permanent injunction or other order
against the delivery of the Option Shares issued by any court of competent
jurisdiction in the United States shall be in effect, Grantee may exercise the
Option, in whole or in part, at any time and from time to time, but only
following the occurrence of a Purchase Event (as defined below); provided that
the Option shall terminate and be of no further force or effect upon the
earlier to occur of (A) the Effective Time of the Merger, (B) termination of
the Merger Agreement in accordance with the terms thereof before the occurrence
of a Purchase Event or Preliminary Purchase Event (other than a termination of
the Merger Agreement by Grantee pursuant to Section 7.1(e) (an "Issuer Default
Termination")); (C) the close of business on the 365th day after the occurrence
of an Issuer Default Termination; and (D) the close of business on the 365th
day after termination of the Merger Agreement (other than an Issuer Default
Termination) following the occurrence of a Purchase Event or a Preliminary
Purchase Event (hereinafter sometimes referred to as the "Termination Date");
provided that any purchase of Option Shares upon exercise of the Option shall
be subject to compliance with applicable law, including, without limitation,
the Home Owner's Loan Act (the "HOLA"). The rights set forth in Section 8
shall terminate when the right to exercise the Option terminates (other than as
a result of a complete exercise of the Option) as set forth herein.

(b) As used herein, a "Purchase Event" means any of the following
events:

(i) Without Grantee's prior written consent, Issuer shall
have authorized, recommended, publicly proposed or publicly announced
an intention to authorize, recommend or propose, or entered into a
agreement with any person (other than Grantee or any subsidiary of
Grantee) to effect an

D-1
<PAGE> 215

Acquisition Transaction (as defined below). As used herein, the term
"Acquisition Transaction" shall mean (A) a merger, consolidation or
similar transaction involving Issuer or any of its subsidiaries (other
than transactions solely between Issuer's subsidiaries), (B) the
disposition, by sale, lease, exchange or otherwise, of assets of
Issuer or any of its subsidiaries representing in either case 15% or
more of the consolidated assets of Issuer and its subsidiaries or (C)
the issuance, sale or other disposition of (including by way of
merger, consolidation, share exchange or any similar transaction)
securities representing 20% or more of the voting power of Issuer or
any of its significant subsidiaries; or

(ii) any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of, or the right to acquire
beneficial ownership of, or any "group" (as such term is defined under
the Exchange Act) shall have been formed which beneficially owns or
has the right to acquire beneficial ownership of, 20% or more (or, if
such person or group is the beneficial owner of 20% or more on the
date hereof, such person or group acquires an additional 5% or more)
of the voting power of Issuer or any of its significant subsidiaries.

(i) any person (other than Grantee or any subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2
under the Exchange Act) or shall have filed a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to a tender offer or exchange offer to purchase any
shares of Issuer Common Stock such that, upon consummation of such
offer, such person would own or control 20% or more of the then
outstanding shares of Issuer Common Stock (such an offer being
referred to herein as a "Tender Offer" or an "Exchange Offer",
respectively); or

(ii) the holders of Issuer Common Stock shall not have
approved the Merger Agreement at the meeting of such shareholders held
for the purpose of voting on the Merger Agreement, such meeting shall
not have been held or shall have been canceled prior to termination of
the Merger Agreement or Issuer's Board of Directors shall have
withdrawn or modified in a manner adverse to Grantee the
recommendation of Issuer's Board of Directors with respect to the
Merger Agreement, in each case, after it shall have been publicly
announced that any person (other than Grantee or any subsidiary of
Grantee) shall have (A) made, or disclosed an intention to make, a
proposal to engage in an Acquisition Transaction, (B) commenced a
Tender Offer or filed a registration statement under the Securities
Act with respect to an Exchange Offer or (C) filed an application (or
given a notice), whether in draft or final form, under South Carolina
banking or corporate law, the BHC Act, the Bank Merger Act or the
Change in Bank Control Act of 1978 for approval to engage in an
Acquisition Transaction.

As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.

(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Preliminary Purchase Event or Purchase Event, it being
understood that the giving of such notice by Issuer shall not be a condition to
the right of Grantee to exercise the Option.

(e) In the event Grantee wishes to exercise the Option, it shall
send to Issuer a written notice (the date of which being herein referred to as
the "Notice Date") specifying (i) the total number of Option Shares it intends
to purchase pursuant to such exercise and (ii) subject to the next sentence, a
place and date not earlier than three business days nor later than 15 business
days after the Notice Date for the closing (the "Closing") of such purchase
(the "Closing Date"). If prior notification to or consent of any regulatory
authority is required in connection with such purchase, then, notwithstanding
the prior occurrence of the Termination Date, the Closing Date shall be
extended for such period as shall be necessary to enable such prior
notification or consent to occur

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or to be obtained (and the expiration of any mandatory waiting period). Issuer
shall cooperate with Grantee in the filing of any applications or documents
necessary to obtain any required consent or in connection with any required
prior notification and the Closing shall occur immediately following receipt of
such consent (or the filing of any such prior notification and the expiration
of any mandatory waiting periods).

4. Payment and Delivery of Certificates.

(a) On each Closing Date, Grantee shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of
Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer specified
herein.

(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a) above, (i) Issuer shall deliver to Grantee (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever and subject to no preemptive rights, and
(B) if the Option is exercised in part only, an executed, new Stock Option
Agreement with the same terms as this Agreement evidencing the right to
purchase the balance of the shares of Issuer Common Stock purchasable
hereunder, and (ii) Grantee shall deliver to Issuer a letter agreeing that
Grantee shall not offer to sell or otherwise dispose of such Option Shares in
violation of applicable federal and state law or of the provisions of this
Agreement.

(c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:

THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF NOVEMBER ___, 1995. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.

It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Grantee shall have
delivered to Issuer a copy of a letter from the staff of the Securities and
Exchange Commission (the "SEC"), or an opinion of counsel in form and substance
reasonably satisfactory to Issuer and its counsel, to the effect that such
legend is not required for purposes of the Securities Act.

(d) Upon the giving by Grantee to Issuer of the written notice of
exercise of the Option provided for under Section 3(e), the tender of the
applicable purchase price in immediately available funds and the tender of this
Agreement to Issuer, Grantee shall be deemed to be the holder of record of the
shares of Issuer Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of Issuer shall then be closed or that certificates
representing such shares of Issuer Common Stock shall not then be actually
delivered to Grantee. Issuer shall pay all expenses, and any and all United
States federal, state, and local taxes and other charges that may be payable in
connection with the preparation, issuance and delivery of stock certificates
under this Section in the name of the Grantee or its assignee, transferee, or
designee.

(e) Issuer agrees (i) that it shall at all times maintain, free
from preemptive rights, sufficient authorized but unissued or treasury shares
of Issuer Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock, (ii) that it will not, by amendment to its Certificate or Articles of
Incorporation or Bylaws or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observance or performance of any of the

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covenants, stipulations or conditions to be observed or performed hereunder by
Issuer, (iii) promptly to take all action as may from time to time be required
(including (A) complying (if applicable) with all premerger notification,
reporting and waiting period requirements specified in 15 U.S.C. Section 18a
and regulations promulgated thereunder and (B) in the event, under any federal
law, including, without limitation, the HOLA, or under any state law, prior
notice to or consent of any regulatory authority is necessary before the Option
may be exercised, cooperating fully with Grantee in preparing any required
application or notice and providing such information to such regulatory
authority as such regulatory authority may require) in order to permit Grantee
to exercise the Option and Issuer duly and effectively to issue shares of the
Issuer Common Stock pursuant hereto, and (iv) promptly to take all action
provided herein to protect the rights of Grantee against dilution.

5. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:

(a) Due Authorization. Issuer has all requisite corporate power
and authority to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer. This Agreement has been duly executed
and delivered by Issuer.

(b) Authorized Stock. Issuer has taken all necessary corporate and
other action to authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver Issuer Common Stock
upon the exercise of the Option terminates, will have reserved for issuance,
upon exercise of the Option, the number of shares of Issuer Common Stock
necessary for Grantee to exercise the Option, and Issuer will take all
necessary corporate action to authorize and reserve for issuance all additional
shares of Issuer Common Stock or other securities which may be issued pursuant
to Section 7 upon exercise of the Option. The shares of Issuer Common Stock to
be issued upon due exercise of the Option, including all additional shares of
Issuer Common Stock or other securities which may be issuable pursuant to
Section 7, upon issuance pursuant hereto, shall be duly and validly issued,
fully paid and nonassessable, and shall be delivered free and clear of all
liens, claims, charges and encumbrances of any kind or nature whatsoever,
including any preemptive right of any shareholder of Issuer, but subject to the
voting restrictions contained in the Certificate of Incorporation of Issuer.

(c) No Violation. Except as disclosed pursuant to the Merger
Agreement, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with,
or result in any violation pursuant to any provisions of the Certificate of
Incorporation or by-laws of Issuer or any subsidiary of Issuer or, subject to
obtaining any approvals or consents contemplated hereby, result in any
violation of any loan or credit agreement, note, mortgage, indenture, lease,
plan or other agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Issuer or any subsidiary of Issuer or their respective properties
or assets which violation would have a material adverse effect on the Condition
of Issuer on a consolidated basis.

6. Representations and Warrants of Grantee. Grantee hereby
represents and warrants to Issuer that:

(a) Due Authorization. Grantee has all requisite corporate power
and authority to enter to this Agreement and, subject to any approvals or
consents referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the translations contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been duly executed
and delivered by Grantee.

(b) Purchase Not for Distribution. This Option is not being, and
any Option Shares or other securities acquired by Grantee upon exercise of the
Option will not be, acquired with a view to the public

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distribution thereof and will not be transferred or otherwise disposed of
except in a transaction registered or exempt from registration under the
Securities Act.

7. Adjustment upon Changes in Capitalization, etc.

(a) In the event of any change in Issuer Common Stock by reason of
a stock dividend stock split, split-up, recapitalization, combination, exchange
of shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Grantee shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Grantee
would have received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event, or the record date therefor, as
applicable. If any additional shares of Issuer Common Stock are issued after
the date of this Agreement (other than pursuant to an event described in the
first sentence of this Section 7(a)), the number of shares of Issuer Common
Stock subject to the Option shall be adjusted so that, after such issuance, it,
together with any shares of Issuer Common Stock previously issued pursuant
hereto, equals 19.9% of the number of shares of Issuer Common Stock then issued
and outstanding, without giving effect to any shares subject to or issued
pursuant to the Option.

(b) In the event that, prior to the Termination Date, Issuer shall
enter in an agreement: (i) to consolidate with or merge into any person, other
than Grantee or one of its subsidiaries, and shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or one of its subsidiaries, to merge into Issuer and
Issuer shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Issuer Common Stock shall be
changed into or exchanged for stock or other securities of Issuer or any other
person or cash or any other property or the outstanding shares of Issuer Common
Stock immediately prior to such merger shall after such merger represent less
than 50% of the outstanding shares and share equivalents of the merged company,
or (iii) to sell or otherwise transfer all or substantially all of its assets
to any person, other than Grantee or one of its subsidiaries, then, and in each
such case, the agreement governing such transaction shall make proper
provisions so that, upon the consummation of any such transaction and upon the
terms and conditions set forth herein, the Option, notwithstanding the fact
that as of the date of consummation of such transaction the Termination Date
shall have occurred, shall be converted into, or exchanged for, an option (the
"Substitute Option"), at the election of Grantee, of either (x) the Acquiring
Corporation (as defined below), (y) any person that controls the Acquiring
Corporation, or (z) in the case of a merger described in clause (ii), the
Issuer (in each case, such entity being referred to as the "Substitute Option
Issuer").

(c) The Substitute Option shall have the same terms as the Option,
provided that, if the terms of the Substitute Option cannot, because of the
applicability of any law or regulation, have the exact terms as the Option,
such terms shall be as similar as possible and in no event less advantageous to
Grantee. The Substitute Option Issuer shall also enter into an agreement with
the then-holder or holders of the Substitute Option in substantially the same
form as this Agreement, which shall be applicable to the Substitute Option.

(d) The Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as hereinafter defined) as is equal to
the Assigned Value (as hereinafter defined) multiplied by the number of shares
of the Issuer Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of
each share of Substitute Common Stock subject to the Substitute Option (the
"Substitute Purchase Price") shall be equal to the Purchase Price multiplied by
a fraction in which numerator is the number of shares of the Issuer Common
Stock for which the Option was theretofore exercisable and the denominator is
the number of shares for which the Substitute Option is exercisable.

(e) The following terms have the meanings indicated:

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(i) "Acquiring Corporation" shall mean (x) the continuing
or surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (y) the Issuer in a consolidation or merger or in
which the Issuer is the continuing or surviving person, and (z) the
transferee of all or any substantial part of the Issuer's assets (or
the assets of its subsidiaries).

(ii) "Substitute Common Stock" shall mean the common stock
issued by the Substitute Option Issuer upon exercise of the Substitute
Option.

(iii) "Assigned Value" shall mean the highest of (x) the
price per share of the Issuer Common Stock at which a Tender Offer or
Exchange Offer therefor has been made by any person (other than
Grantee), (y) the price per share of the Issuer Common Stock to be
paid by any person (other than the Grantee) pursuant to an agreement
with Issuer, and (z) the highest last sales price per share of Issuer
Common Stock quoted on the NASDAQ/NMS (or if Issuer Common Stock is
not quoted on the NASDAQ/NMS, the highest bid price per share on any
day as quoted on the principal trading market or securities exchange
on which such shares are traded as reported by a recognized source
chosen by Grantee) within the six-month period immediately preceding
the agreement described in Section 7(b) above; provided, however, that
in the event of a sale of less than all of Issuer's assets, the
Assigned Value shall be the sum of the price paid in such sale for
such assets and the current market value of the remaining assets of
Issuer as determined by a nationally recognized investment banking
firm selected by Grantee, divided by the number of shares of the
Issuer Common Stock outstanding at the time of such sale. In the
event that a Tender Offer or Exchange Offer is made for the Issuer
Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of
the securities or other property issuable or deliverable in exchange
for the Issuer Common Stock shall be determined by a nationally
recognized investment banking firm mutually selected by Grantee and
Issuer (or if applicable, Acquiring Corporation), provided that if a
mutual selection cannot be made as to such investment banking firm, it
shall be selected by Grantee.

(iv) "Average Price" shall mean the average last sales
price or closing price of a share of the Substitute Common Stock for
the one year immediately preceding the consolidation, merger or sale
in question, but in no event higher than the last sales price or
closing price of the shares of the Substitute Common Stock on the day
preceding such consolidation, merger, or sale; provided that if
Issuer is the issuer of the Substitute Option, the Average Price shall
be computed with respect to a share of common stock issued by Issuer,
the person merging into Issuer or by any company which controls or is
controlled by such person, as Grantee may elect.

(f) In no event pursuant to any of the foregoing paragraphs shall
the Substitute Option be exercisable for more than 19.9% of the aggregate of
the shares of the Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be
exercisable for more than 19.9% of the aggregate of the shares of Substitute
Common Stock but for this clause (f), the Substitute Option Issuer shall make a
cash payment to Grantee equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in this clause (f) over (ii) the
value of the Substitute Option after giving effect to the limitation in this
clause (f). This difference in value shall be determined by a nationally
recognized investment banking firm selected by Grantee.

(g) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assumes in writing all of the
obligations of Issuer hereunder and takes all other actions that may be
necessary so that the provisions of this Section 7 are given full force and
effect (including, without limitation, any action that may be necessary so that
the shares of Substitute Common Stock are in no way distinguished from or have
lesser economic value (other than any diminution resulting from the fact that
the Substitute Common Stock is "restricted securities" within the

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meaning of Rule 144 under the Securities Act) than other shares of common stock
issued by the Substitute Option Issuer).

(h) The provisions of Sections 8, 9, and 10 shall apply, with
appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in such
sections to "Issuer," "Option," "Purchase Price," and "Issuer Common Stock"
shall be deemed to be references to "Substitute Option Issuer," "Substitute
Option," "Substitute Purchase Price," and "Substitute Common Stock,"
respectively.

8. Repurchase at the Option of Grantee.

(a) Subject to the last sentence of Section 3(a), at the request
of Grantee at any time commencing upon the first occurrence of a Repurchase
Event (as defined in Section 8(d)) and ending at the close of business 365 days
thereafter, Issuer shall repurchase from Grantee the Option and all shares of
Issuer Common Stock purchased by Grantee pursuant hereto with respect to which
Grantee then has beneficial ownership. The date on which Grantee exercises its
rights under this Section 8 is referred to as the "Request Date". Such
repurchase shall be at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:

(i) the aggregate Purchase Price paid by Grantee for any
shares of Issuer Common Stock acquired pursuant to complete or partial
exercise of the Option with respect to which Grantee then has
beneficial ownership;

(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the
Purchase Price (subject to adjustment pursuant to Section 7),
multiplied by the number of shares of Issuer Common Stock with respect
to which the Option has not been exercised; and

(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or,
in the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Grantee
for each share of Issuer Common Stock with respect to which the Option
has been exercised and with respect to which Grantee then has
beneficial ownership, multiplied by the number of such shares.

(b) If Grantee exercises its rights under this Section 8, Issuer
shall, within ten (10) business days after the Request Date, pay the Section 8
Repurchase Consideration to Grantee in immediately available funds, and
contemporaneously with such payment Grantee shall surrender to Issuer the
Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever. Notwithstanding
the foregoing, to the extent that prior notification to or consent of any
regulatory authority is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, or Issuer is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from repurchasing the Option and/or the Option Shares in full, Issuer
shall immediately so notify Grantee and thereafter deliver from time to time,
and as permitted by applicable law or regulation, that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from paying within
five business days after the date on which Issuer is no longer prohibited;
provided, however, that if Issuer at any time is prohibited under applicable
law or regulation, or as a consequence of administrative policy, from
delivering to the Grantee the Section 8 Repurchase Consideration, in full (and
Issuer hereby undertakes to use its best efforts to obtain all required
consents of regulatory authorities and to file any required notices as promptly
as practicable in order to accomplish such repurchase), the Grantee may, at its
option, revoke its request that Issuer repurchase the Option or the Option
Shares either in whole or to the extent of the prohibition, whereupon, in the
latter case, Issuer shall promptly (i) deliver to the Grantee that portion of
the Section 8 Repurchase Consideration that

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Issuer is not prohibited from delivering; and (ii) deliver, to the Grantee
either (A) a new Stock Option Agreement evidencing the right of Issuer to
purchase that number of shares of Common Stock obtained by multiplying the
number of shares of Common Stock for which the surrendered Stock Option
Agreement was exercisable at the time of delivery of the notice of repurchase
by a fraction, the numerator of which is the Section 8 Repurchase Consideration
less the portion thereof theretofore delivered to the Grantee and the
denominator of which is the Section 8 Repurchase Consideration, or (B) a
certificate for the Option Shares it is then prohibited from repurchasing.

Notwithstanding anything herein to the contrary, all of Grantee's
rights under this Section 8 shall terminate on the date of termination of this
Option pursuant to Section 3(a).

(c) For purposes of this Agreement, the "Applicable Price" means
the highest of: (i) the highest price per share of Issuer Common Stock paid
for any such share by the person or groups described in Section 8(d)(i) below;
(ii) the price per share of Issuer Common Stock received by holders of Issuer
Common Stock in connection with any merger or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) above; or (iii)
the highest last sales price per share of Issuer Common Stock quoted on the
NASDAQ/NMS (or if Issuer Common Stock is not quoted on the NASDAQ/NMS, the
highest bid price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a recognized
source chosen by Grantee) during the sixty (60) business days preceding the
Request Date; provided, however, that in the event of a sale of less than all
of Issuer's assets, the Applicable Price shall be the sum of the price paid in
such sale for such assets and the current market value of the remaining assets
of Issuer as determined by a nationally recognized investment banking firm
selected by Grantee, divided by the number of shares of the Issuer Common Stock
outstanding at the time of such sale. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking form selected
by Grantee and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.

(d) As used herein, a "Repurchase Event" shall occur if (i) any
person (other than Grantee or any subsidiary of Grantee) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire beneficial ownership
of, 50% or more of the then outstanding shares of Issuer Common Stock, or (ii)
any of the transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii)
above shall be consummated.

9. Registration Rights.

(a) Demand Registration Rights. Issuer shall, subject to the
conditions of subparagraph (c) below, if requested by Grantee, as expeditiously
as possible prepare and file a registration statement under the Securities Act
(or similar document under analogous bank securities regulations) if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities that have been
acquired by or are issuable to Grantee upon exercise of the Option in
accordance with the intended method of sale or other disposition stated by
Grantee in such request, including without limitation a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities for sale under any applicable state securities laws.

(b) Additional Registration Rights. If Issuer at any time after
the exercise of the Option proposes to register any shares of Issuer Common
Stock under the Securities Act in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly give written notice
to Grantee (and any permitted transferee) of its intention to do so and, upon
the written request of Grantee (or any such permitted transferee of Grantee)
given within 30 days after receipt of any such notice (which request shall
specify the number of shares of Issuer Common Stock intended to be included in
such underwritten public offering by

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Grantee (or such permitted transferee)), Issuer will cause all such shares, the
holders of which shall have requested participation in such registration, to be
so registered and included in such underwritten public offering; provided, that
the Issuer may elect not to cause all of the shares for which the Grantee has
requested participation in such registration to be registered and included in
such underwritten public offering if the underwriters, for good business
reasons and in good faith, object to such inclusion.

(c) Conditions to Required Registration. Issuer shall use all
reasonable efforts to cause each registration statement referred to in
subparagraph (a) above to become effective and to obtain all consents or
waivers of other parties which are required therefor and to keep such
registration statement effective, provided, however, Issuer shall not be
required to register Option Shares under the Securities Act pursuant to
subparagraph (a) above:

(i) prior to the earliest of (a) termination of the
Merger Agreement, and (b) a Purchase Event or a Preliminary Purchase
Event;

(ii) on more than two occasions;

(iii) more than once during any calendar year; and

(iv) within 90 days after the effective date of a
registration referred to in subparagraph (b) above pursuant to which
the holder or holders of the Option Shares concerned were afforded the
opportunity to register such shares under the Securities Act and such
shares were registered as requested.

In addition to the foregoing, Issuer shall not be required to maintain
the effectiveness of any registration statement after the expiration of 180
days from the effective date of such registration statement. Issuer shall use
all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares.

(d) Expenses. Except where applicable state law prohibits such
payments, Issuer will pay all of its expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses, legal
expenses, printing expenses and the costs of special audits or "cold comfort"
letters, expenses of underwriters, excluding discounts and commissions but
including liability insurance if Issuer so desires or the underwriters so
require, and the reasonable fees and expenses of any necessary special experts)
in connection with each registration pursuant to subparagraph (a) or (b) above
(including the related offerings and sales by holders of Option Shares) and all
other qualifications, notifications or exemptions pursuant to subparagraph (a)
or (b) above; provided, however, that fees and expenses of counsel to the
Grantee and any other expenses incurred by the Grantee in connection with such
registration shall be borne by the Grantee.

(e) Indemnification. In connection with any registration under
subparagraph (a) or (b) above Issuer hereby indemnifies the holder of the
Option Shares, and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement of a material fact contained
in any registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission, or alleged omission, to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such expenses, losses, claims,
damages or liabilities of such indemnified party are caused by any untrue
statement or alleged untrue statement that was included by Issuer in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon and in
conformity with, information furnished in writing to Issuer by such indemnified
party expressly for use therein, and Issuer and each officer, director and
controlling person of Issuer

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shall be indemnified by such holder of the Option Shares, or by such
underwriter, as the case may be, for all such expenses, losses, claims, damages
and liabilities caused by any untrue, or alleged untrue, statement, that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may be,
expressly for such use.

Promptly upon receipt by a party indemnified under this subparagraph
(e) of notice of the commencement of any action against such indemnified party
in respect of which indemnity or reimbursement may be sought against any
indemnifying party under this subparagraph (e), such indemnified party shall
notify the indemnifying party in writing of the commencement of such action,
but the failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
subparagraph (e). In case notice of commencement of any such action shall be
given to the indemnifying party as above provided, the indemnifying party shall
be entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the
indemnifying party either agrees to pay the same, (ii) the indemnifying party
fails to assume the defense of such action with counsel satisfactory to the
indemnified party, or (iii) the indemnified party has been advised by counsel
that one or more legal defenses may be available to the indemnifying party that
may be contrary to the interest of the indemnified party, in which case the
indemnifying party shall be entitled to assume the defense of such action
notwithstanding its obligation to bear fees and expenses of such counsel. No
indemnifying party shall be liable for any settlement entered into without its
consent, which consent may not be unreasonably withheld.

If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by Issuer, the selling shareholders and the underwriters from
the offering of the securities and also the relative fault of Issuer, the
selling shareholders and the underwriters in connection with the statements or
omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The amount
paid or payable by a party as a result of the expenses, losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim; provided, however, that in no
case shall the holders of the Option Shares be responsible, in the aggregate,
for any amount in excess of the net offering proceeds attributable to its
Option Shares included in the offering. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any obligation by any holder to indemnify shall
be several and not joint with other holders.

In connection with any registration pursuant to subparagraph (a) or
(b) above, Issuer and each holder of any Option Shares (other than Grantee)
shall enter into an agreement containing the indemnification provisions of this
subparagraph (e).

(f) Miscellaneous Reporting. Issuer shall comply with all
reporting requirements and will do all such other things as may be necessary to
permit the expeditious sale at any time of any Option Shares by the holder
thereof in accordance with and to the extent permitted by any rule or
regulation promulgated by the SEC from time to time. Issuer shall at its
expense provide the holder of any Option Shares with any information necessary
in connection with the c1ompletion and filing of any reports or forms required
to be filed by them under the

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Securities Act or the Exchange Act, or required pursuant to any state
securities laws or the rules of any stock exchange.

(g) Issue Taxes. Issuer will pay all stamp taxes in connection
with the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save Grantee harmless, without limitation as
to time, against any and all liabilities, with respect to all such taxes.

10. Quotation; Listing. If Issuer Common Stock or any other
securities to be acquired upon exercise of the Option are then authorized for
quotation or trading or listing on the NASDAQ/NMS or any securities exchange,
Issuer, upon the request of Grantee, will promptly file an application, if
required, to authorize for quotation or trading or listing the shares of Issuer
Common Stock or other securities to be acquired upon exercise of the Option on
the NASDAQ/NMS or such other securities exchange and will use its best efforts
to obtain approval, if required, of such quotation or listing as soon as
practicable.

11. Division of Option. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Grantee, upon
presentation and surrender of this Agreement at the principal office of Issuer
for other Agreements providing for Options of different denominations entitling
the holder thereof to purchase in the aggregate the same number of shares of
Issuer Common Stock purchasable hereunder. The terms "Agreement" and "Option"
as used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.

12. Miscellaneous.

(a) Expenses. Except as otherwise provided in Section 9, each of
the parties hereto shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.

(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision if such waiver is in writing. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.

(c) Entire Agreement; No Third-Party Beneficiary; Severability.
This Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto (other than any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 12(h)) any rights or
remedies hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a federal or state
regulatory agency to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
If for any reason such court or regulatory agency determines that the Option
does not permit Grantee to acquire, or does not require Issuer to repurchase,
the full number of shares of Issuer Common Stock as provided in Sections 3 and
8 (as adjusted pursuant to Section 7), it is the express intention of Issuer to
allow Grantee to acquire or to require Issuer to repurchase such lesser number
of shares as may be permissible without any amendment or modification hereof.

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(d) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Florida without regard to any
applicable conflicts of law rules.

(e) Descriptive Heading. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.

(f) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or a such other address
for a party as shall be specified by like notice):

If to Issuer to: FFE Financial Corp.
1160 South McCall Road
Englewood, Florida 34223
Telecopy Number: (813) 474-3509

Attention: G. L. Smith

with a copy to: Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W.
Washington, D.C. 20005
Telecopy Number: (205) 682-0354

Attention: Barry P. Taff, Esq.

If to Grantee to:SouthTrust Corporation
420 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 254-6695

Attention: Frederick W. Murray, Jr.
Executive Vice President

with a copy to: Bradley, Arant, Rose & White
1400 Park Place Tower
2001 Park Place
Birmingham, Alabama 35203
Telecopy Number: (205) 251-8611

Attention: C. Larimore Whitaker, Esq.

(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the
same agreement and shall become effective when both counterparts have been
signed, it being understood that both parties need not sign the same
counterpart.

(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee and Grantee may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.

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(i) Further Assurances. In the event of any exercise of the Option
by Grantee, Issuer and Grantee shall execute and deliver all other documents
and instruments and take all other action that may be reasonably necessary in
order to consummate the transactions provided for by such exercise.

(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may have for any
failure to perform this Agreement.

IN WITNESS WHEREOF, Issuer and Grantee have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.

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<PAGE> 227

ATTEST: FFE FINANCIAL CORP.

By: /s/ EUNICE G. ALBRITTON By: /s/ G. L. SMITH
------------------------------- ------------------------------
Its Secretary -------------------
Its President

[CORPORATE SEAL]

ATTEST: SOUTHTRUST CORPORATION

By: /s/ A. D. BARNARD By: /s/ ALTON E. YOTHER
------------------------------- ----------------------------------
Its Secretary Alton E. Yother
Its Senior Vice President

[CORPORATE SEAL]

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<PAGE> 228

Exhibit E

Section 262 of the
Delaware General Corporation Law

Section 262. Appraisal Rights.

(a) Any stockholder of a corporation of this State who holds
shares of stock on the date of the making of a demand pursuant to subsection
(d) of this section with respect to such shares, who continuously holds such
shares through the effective date of the merger or consolidation, who has
otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to Section 228 of this title shall be entitled to an appraisal by the
Court of Chancery of the fair value of his shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation.

(b) Appraisal rights shall be available for the shares of any
class or series of stock of a constituent corporation in a merger or
consolidation to be effected pursuant to Section 251, 252, 254, 257, 258, 263
or 264 of this title:

(1) Provided, however, that no appraisal rights under
this section shall be available for the shares of any class or series
of stock which, at the record date fixed to determine the
stockholders entitled to receive notice of and to vote at the meeting
of stockholders to act upon the agreement of merger or consolidation,
were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers,
Inc. or (ii) held of record by more than 2,000 stockholders; and
further provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a merger if
the merger did not require for its approval the vote of the
stockholders of the surviving corporation as provided in subsection
(f) of Section 251 of this title.

(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the shares
of any class or series of stock of a constituent corporation if the
holders thereof are required by the terms of an agreement of merger
or consolidation pursuant to Sections 251, 252, 254, 257,
258, 263 and 264 of this title to accept for such stock anything
except:

a. Shares of stock of the corporation surviving
or resulting from such merger or consolidation;

b. Shares of stock of any other corporation
which at the effective date of the merger or consolidation
will be either listed on a national securities exchange or
designated as a national market system security on an
interdealer

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quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000
stockholders;

c. Cash in lieu of fractional shares of the
corporations described in the foregoing subparagraphs a. and
b. of this paragraph; or

d. Any combination of the shares of stock and
cash in lieu of fractional shares described in the foregoing
subparagraphs a., b. and c. of this paragraph.

(3) In the event all of the stock of a subsidiary
Delaware corporation party to a merger effected under Section 253 of
this title is not owned by the parent corporation immediately prior
to the merger, appraisal rights shall be available for the shares of
the subsidiary Delaware corporation.

(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be available for
the shares of any class or series of its stock as a result of an amendment to
its certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or substantially
all of the assets of the corporation. If the certificate of incorporation
contains such a provision, the procedures of this section, including those set
forth in subsections (d) and (3) of this section, shall apply as nearly as is
practicable.

(d) Appraisal rights shall be perfected as follows:

(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be submitted
for approval at a meeting of stockholders, the corporation, not less
than 20 days prior to the meeting, shall notify each of its
stockholders who was such on the record date for such meeting with
respect to shares for which appraisal rights are available pursuant
to subsection (b) or (c) hereof that appraisal rights are available
for any or all of the shares of the constituent corporations, and
shall include in such notice a copy of this section. Each
stockholder electing to demand the appraisal of his shares shall
deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his
shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of his shares. A
proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action
must do so by a separate written demand as herein provided. Within
10 days after the effective date of such merger or consolidation, the
surviving or resulting corporation shall notify each stockholder of
each constituent corporation who has complied with this subsection
and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or

(2) If the merger or consolidation was approved pursuant
to Section 228 or 253 of this title, the surviving or resulting
corporation, either before the effective date of

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<PAGE> 230

the merger or consolidation or within 10 days thereafter, shall
notify each of the stockholders entitled to appraisal rights of the
effective date of the merger or consolidation and that appraisal
rights are available for any or all of the shares of the constituent
corporation, and shall include in such notice a copy of this section.
The notice shall be sent by certified or registered mail, return
receipt requested, addressed to the stockholder at his address as it
appears on the records of the corporation. Any stockholder entitled
to appraisal rights may, within 20 days after the date of mailing of
the notice, demand in writing from the surviving or resulting
corporation the appraisal of his shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity
of the stockholder and that the stockholder intends thereby to demand
the appraisal of his shares.

(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with subsections (a) and (d) hereof and who is otherwise entitled
to appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the
merger or consolidation, any stockholder who has complied with the requirements
of subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10
days after his written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.

(f) Upon the filing of any such petition by a stockholder, service
of a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If the
petition shall be filed by the surviving or resulting corporation, the petition
shall be accompanied by such a duly verified list. The Register in Chancery,
if so ordered by the Court, shall give notice of the time and place fixed for
the hearing of such petition by registered or certified mail to the surviving
or resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.

(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The

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Court may require the stockholders who have demanded an appraisal for their
shares and who hold stock represented by certificates to submit their
certificates of stock to the Register in Chancery for notation thereon of the
pendency of the appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to such
stockholder.

(h) After determining the stockholders entitled to an appraisal,
the Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to be
paid upon the amount determined to be the fair value. In determining such such
fair value, the Court shall take into account all relevant factors. In
determining the fair rate of interest, the Court may consider all relevant
factors, including the rate of interest which the surviving or resulting
corporation would have had to pay to borrow money during the pendency of the
proceeding. Upon application by the surviving or resulting corporation or by
any stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to subsection
(f) of this section and who has submitted his certificates of stock to the
Register in Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that he is not entitled to appraisal
rights under this section.

(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and the
case of holders of shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The Court's decree
may be enforced as other decrees in the Court of Chancery may be enforced,
whether such surviving or resulting corporation be a corporation of this State
or of any state.

(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.

(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded his appraisal rights as provided
in subsection (d) of this section shall be entitled to vote such stock for any
purpose or to receive payment of dividends or other distributions on the stock
(except dividends or other distributions payable to stockholders of record at a
date which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal of
his demand for an appraisal and an

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acceptance of the merger or consolidation, either within 60 days after the
effective date of the merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the corporation, then
the right of such stockholder to an appraisal shall cease. Notwithstanding the
foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed
as to any stockholder without the approval of the Court, and such approval may
be conditioned upon such terms as the Court deems just.

(l) The shares of the surviving or resulting corporation to which
the shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.

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<PAGE> 233

FFE FINANCIAL CORP.
1200 SOUTH MCCALL ROAD
ENGLEWOOD, FLORIDA 34223

PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS HELD MARCH 28, 1996

(THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF FFE FINANCIAL CORP.)

The undersigned stockholder of FFE Financial Corp. ("FFE") hereby
appoints the Board of Directors of FFE and the survivors of them, with full
power of substitution, to act as attorneys and proxies for the undersigned
to vote all shares of common stock which the undersigned could vote if
personally present at the Annual Meeting of Stockholders of FFE to be held at
1200 South McCall Road, Englewood, Florida 34223 on March 28, 1996 at
{__________} a.m., local time, or at any adjournment thereof:

1. PROPOSAL TO ELECT DIRECTORS

FOR [____] AGAINST [_____] ABSTAIN [_____] with
respect to the proposal to elect G. L. Smith and Robert L. Bedford as Directors
of FFE;

2. PROPOSAL TO MERGE FFE WITH AND INTO SOUTHTRUST OF FLORIDA,
INC.

FOR [____] AGAINST [_____] ABSTAIN [_____] with
respect to approval of the Agreement and Plan of Merger dated as of November
3, 1995 (the "Merger Agreement") by and among FFE, SouthTrust Corporation, a
Delaware corporation ("SouthTrust"), and SouthTrust of Florida, Inc., a
Florida corporation and a wholly-owned subsidiary of SouthTrust ("ST-Sub"),
pursuant to which FFE will be merged with and into ST-Sub and each share of
the common stock of FFE outstanding at the Effective Time of the Merger (as
such term is defined in the Merger Agreement) will be cancelled and converted
into the right to receive the Merger Consideration (as such term is defined
in the Merger Agreement), all as described in more detail in the Proxy
Statement/Prospectus of FFE and SouthTrust dated February {___}, 1996;

3. PROPOSAL TO APPROVE THE SELECTION OF KPMG PEAT MARWICK
L.L.P.

FOR [____] AGAINST [_____] ABSTAIN [_____] with
respect to the proposal to ratify and approve the selection of KPMG Peat
Marwick L.L.P. as the independent certified accountants of FFE; and

4. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS, INCLUDING,
IN PARTICULAR, ADJOURNMENT OF THE ANNUAL MEETING TO ALLOW FURTHER SOLICITATION
OF PROXIES IF NECESSARY, AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF
STOCKHOLDERS OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.

UNLESS OTHERWISE SPECIFIED, THE PROXY WILL BE VOTED FOR PROPOSALS (1), (2) and
(3).

Dated:______________________, 1996 ____________________________________
(Signature(s) of Stockholder)

Please date and sign exactly as name appears hereon. If shares are
held jointly, each shareholder should sign. Agents, executors, administrators,
guardians, trustees, etc., should use full title, and, if more than one, all
should sign. If the shareholder is a corporation, please sign full corporate
name by an authorized officer.
<PAGE> 234

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Restated Certificate of Incorporation and the Bylaws of
Registrant provide that Registrant shall indemnify its officers,
directors, employees and agents to the extent permitted by the
General Corporation Law of the State of Delaware, which permits a
corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by reason of the fact that he
is or was a director, officer, employee or agent of the
corporation, against expenses (including attorney's fees),
judgments, fines and settlements incurred by him in connection
with any such suit or proceeding, if he acted in good faith and in
a manner reasonably believed to be in or not opposed to the best
interests of the corporation, and, in the case of a derivative
action on behalf of the corporation, if he not be adjudged to be
liable for negligence or misconduct.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following exhibits are filed as part of this
Registration Statement:

** 2 Agreement and Plan of Merger by and among FFE
Financial Corp., SouthTrust Corporation and
SouthTrust of Florida, Inc. (included as Exhibit A to
the Proxy Statement/Prospectus filed as part of this
Registration Statement).

* 3(a) Composite Restated Bylaws of SouthTrust Corporation.
* 3(b) Composite Restated Certificate of Incorporation of
SouthTrust Corporation.
* 4(a) Certificate of Adoption of Resolutions designating
Series A Junior Participating Preferred Stock,
adopted February 22, 1989, which was filed as
Exhibit 1 to SouthTrust Corporation's Registration
Statement on Form 8-A (File No. 1-3613).
* 4(b) Stockholders' Rights Agreement, dated as of February
22, 1989, between SouthTrust Corporation and Mellon
Bank, N.A., Rights Agent, which was filed as Exhibit 1
to SouthTrust Corporation's Registration Statement on
Form 8-A (File No. 1-3613).
* 4(c) Indenture, dated as of May 1, 1987 between
SouthTrust Corporation and National Westminster Bank
USA, which was filed as Exhibit 4(a) to SouthTrust
Corporation's Registration Statement on Form S-3
(Registration No. 33-13637).
* 4(d) Subordinated Indenture, dated as of May 1, 1992,
between SouthTrust Corporation and Chemical Bank,
which was filed as Exhibit 4(1)(ii) to the
Registration Statement on Form S-3 of SouthTrust
Corporation (Registration No. 33-44857).
* 4(e) Composite Restated Bylaws of SouthTrust Corporation.
* 4(f) Composite Restated Certificate of Incorporation of
SouthTrust Corporation.
5 Opinion of Bradley, Arant, Rose & White as to the
legality of the securities being registered.
8 Opinion of Bradley, Arant, Rose & White regarding
certain tax matters.

** 23(a) Consent of Arthur Andersen LLP.
23(b) Consent of KPMG Peat Marwick LLP

23(c) Consent of Bradley, Arant, Rose & White (included in
Exhibit 5).

23(d) Consent of Hovde Financial, Inc.
23(e) Consent of Deloitte & Touche LLP
** 24 Powers of Attorney.

______________________________________
* Incorporated by reference.

** Previously filed.

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<PAGE> 235

ITEM 22. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

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

(i) To include any prospectus required
by Section 10(a)(3) of the
Securities Act of 1933;

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

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

(2) That, for the purpose of determining any
liability under the Securities Act of
1933, each such post-effective amendment
shall be deemed to be a new
Registration Statement relating to the
securities offered therein, and the
offering of such securities at that
time shall be deemed to be the initial
bona fide offering thereof;

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

(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the
Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be
a new registration statement relating to the
securities offered therein, and the offering of
such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(c) (1) The undersigned registrant hereby
undertakes as follows: that prior to any
public reoffering of the securities
registered hereunder through use of a
prospectus which is a part of this
Registration Statement, by any person or
party who is deemed to be an underwriter
within the meaning of Rule 145(c), the
issuer undertakes that such reoffering
prospectus will contain the information
called for by the applicable registration
form with respect to reofferings by
persons who may be deemed underwriters,
in addition to the information called for
by the other items of the applicable form.

(2) The registrant undertakes that every
prospectus: (i) that is filed pursuant
to paragraph (1) immediately preceding, or
(ii) that purports to meet the
requirements of Section 10(a)(3) of the
Act and is used in connection with an
offering of securities subject to Rule
415, will be filed as a part of an
amendment to the Registration Statement
and will not be used until such amendment
is effective, and that, for purposes of
determining any liability under the
Securities Act of 1933, each such
post-effective amendment shall be
deemed to be a new Registration

Statement relating to the securities
offered therein, and the offering of
such securities at that time shall be
deemed to be the initial bona fide
offering thereof.

(d) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted
to directors, officers and controlling persons of
the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is
against public policy as expressed in the Act
and is, therefore, unenforceable. In the event
that a claim for indemnification against such
liabilities (other than the payment by the
Registrant

II-2
<PAGE> 236

of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.

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

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

II-3
<PAGE> 237

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Birmingham, State of Alabama, on February 22, 1996.

SOUTHTRUST CORPORATION

By: /s/ Wallace D. Malone
--------------------------------

Its Chairman of the Board of
Directors, President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Wallace D. Malone, Jr. Chairman, President, Chief Executive February 22, 1996
---------------------------------- Officer, Director
Wallace D. Malone, Jr.

/s/ Aubrey D. Barnard Secretary, Treasurer and February 22, 1996
---------------------------------- Controller (Principal
Aubrey D. Barnard Accounting and
Financial Officer)

Director February __, 1996
----------------------------------
Allen J. Keesler, Jr.

* Director February 22, 1996
----------------------------------
Herbert Stockham

* Director February 22, 1996
----------------------------------
T. W. Mitchell

Director February __, 1996
----------------------------------
Charles G. Taylor

* Director February 22, 1996
----------------------------------
William C. Hulsey

</TABLE>

II-4

<PAGE> 238

<TABLE>
<S> <C> <C>
* Director February 22, 1996
----------------------------------
John M. Bradford

* Director February 22, 1996
----------------------------------
Wm. Kendrick Upchurch, Jr.

Director February __, 1996
----------------------------------
H. Allen Franklin

* Director February 22, 1996
----------------------------------
F. Crowder Falls

* /s/ William L. Prater February 22, 1996
----------------------------------
William L. Prater
Attorney-in-fact

</TABLE>

II-5
<PAGE> 239

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
PAGE IN
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION FILING
--- ----------- ------
<S> <C> <C>
** 2 Agreement and Plan of Merger by and among FFE Financial Corp., SouthTrust
Corporation and SouthTrust of Florida, Inc. (included as Exhibit A to the Proxy
Statement/Prospectus filed as part of this Registration Statement).
* 3(a) Composite Restated Bylaws of SouthTrust Corporation.
* 3(b) Composite Restated Certificate of Incorporation of SouthTrust Corporation.
* 4(a) Certificate of Adoption of Resolutions designating Series A Junior Participating
Preferred Stock, adopted February 22, 1989, which was filed as Exhibit 1 to
SouthTrust Corporation's Registration Statement on Form 8-A (File No. 1-3613).
* 4(b) Stockholders' Rights Agreement, dated as of February 22, 1989, between SouthTrust
Corporation and Mellon Bank, N.A., Rights Agent, which was filed as Exhibit 1 to
SouthTrust Corporation's Registration Statement on Form 8-A (File No. 1-3613).
* 4(c) Indenture, dated as of May 1, 1987 between SouthTrust Corporation and National
Westminster Bank USA, which was filed as Exhibit 4(a) to SouthTrust Corporation's
Registration Statement on Form S-3 (Registration No. 33-13637).
* 4(d) Subordinated Indenture, dated as of May 1, 1992, between SouthTrust Corporation
and Chemical Bank, which was filed as Exhibit 4(1)(ii) to the Registration
Statement on Form S-3 of SouthTrust Corporation (Registration No. 33-44857).
* 4(e) Composite Restated Bylaws of SouthTrust Corporation.
* 4(f) Composite Restated Certificate of Incorporation of SouthTrust Corporation.
5 Opinion of Bradley, Arant, Rose & White as to the legality of the securities
being registered.
8 Opinion of Bradley, Arant, Rose & White regarding certain tax matters.
** 23(a) Consent of Arthur Andersen LLP.
23(b) Consent of KPMG Peat Marwick LLP
23(c) Consent of Bradley, Arant, Rose & White (included in Exhibit 5).
23(d) Consent of Hovde Financial, Inc.
23(e) Consent of Deloitte & Touche LLP
** 24 Powers of Attorney.
</TABLE>

* Incorporated by reference.

** Previously filed.

<PAGE> 1

EXHIBIT 5

February 22, 1996

SouthTrust Corporation
420 North 20th Street
Birmingham, Alabama 35203

Ladies and Gentlemen:

In our capacity as counsel for SouthTrust
Corporation, a Delaware corporation ("SouthTrust"), we have examined
the Registration Statement on Form S-4 (the "Registration
Statement"), in form as proposed to be filed by SouthTrust with the
Securities and Exchange Commission under the provisions of the
Securities Act of 1933, relating to the proposed merger (the
"Merger") of FFE Financial Corp., a Delaware corporation ("FFE") with
and into SouthTrust of Florida, Inc., a Florida corporation, and the
issuance of up to 331,761 shares of common stock, par value $2.50 per
share, of SouthTrust (the "Shares") and up to 147,450 rights to
purchase 1/100th of one share of Series A Junior Participating
Preferred Stock (the "Rights") in connection with the Merger.
Pursuant to the Merger, each holder of shares of common stock of FFE
will receive shares of SouthTrust common stock. In this connection,
we have examined such records, documents and proceedings as we have
deemed relevant and necessary as a basis for the opinions expressed
herein.

Upon the basis of the foregoing, we are of the
opinion that:

(i) the Shares and Rights to be offered under
the Registration Statement, to the extent actually issued
pursuant to the Merger, will have been duly and validly
authorized and issued and will be fully paid and
nonassessable; and

(ii) under the laws of the State of Delaware, no
personal liability will attach to the ownership of the
Shares and Rights.

We hereby consent to the filing of this opinion with
the Securities and Exchange Commission as an exhibit to the
Registration Statement. In addition, we hereby consent to the
inclusion of the statements made in reference to our firm under the
caption Legal Matters in the Proxy Statement/Prospectus which is a
part of the Registration Statement.

Very truly yours,

/s/ Bradley, Arant, Rose & White

<PAGE> 1
EXHIBIT 8

February 22, 1996

FFE Financial Corp.
1200 South McCall Road
Englewood, Florida 34223

Re: Agreement and Plan of Merger by and among SouthTrust
Corporation, SouthTrust of Florida, Inc., and FFE Financial
Corp.

Ladies and Gentlemen:

You have requested the opinion of Bradley, Arant, Rose &
White, as counsel to SouthTrust Corporation, a Delaware corporation and a bank
holding company registered pursuant to the Bank Holding Company Act (12 USC
Section 1841, et seq.) and Regulation Y promulgated thereunder ("SouthTrust"),
regarding the transactions contemplated by that certain Agreement and Plan of
Merger dated November 3, 1995 (the "Merger Agreement"), by and between
SouthTrust of Florida, Inc., a Florida corporation and a wholly-owned
subsidiary of SouthTrust ("ST-Sub"), and FFE Financial Corp., a Delaware
corporation ("FFE"), and joined in by SouthTrust. Specifically, you have
requested us to opine that the merger of FFE with and into ST-Sub (the
"Merger") pursuant to the Merger Agreement will constitute a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and that no gain or loss will be recognized by the
stockholders of FFE upon the receipt solely of SouthTrust common stock in
exchange for their FFE common stock upon consummation of the Merger.

This opinion is being rendered pursuant to the requirements of
Item 21(a) of the registration statement on Form S-4 (the "Registration
Statement") which is being filed today on SouthTrust's behalf with the
Securities Exchange Commission under the Securities Act of 1933, as amended,
and pursuant to Section 5.11 of the Merger Agreement. Capitalized terms used
<PAGE> 2
FFE Financial Corp.

February 22, 1996

Page 2
- ----------------------------

herein and not otherwise defined herein have the meanings given to them in the
Merger Agreement.

In rendering the opinion set forth below, we have examined and
relied upon originals or copies of the Merger Agreement, and such other
documents and materials as we have deemed necessary as a basis for such
opinion. In connection with such examination, we have assumed the genuineness
of all signatures, the authenticity of all documents, agreements and
instruments submitted to us as originals, the conformity to original documents,
agreements and instruments of all documents, agreements and instruments
submitted to us as copies or specimens and the authenticity of the originals of
such documents, agreements and instruments submitted to us as copies or
specimens, and, as to factual matters, the veracity of written statements made
by officers and other representatives of FFE and SouthTrust included in the
Merger Agreement. In addition, in rendering this opinion we have made certain
assumptions as set forth below.

The opinion stated below is based upon the relevant provisions
of the Code, regulations promulgated pursuant thereto by the Department of the
Treasury and the Internal Revenue Service (the "IRS"), current administrative
rulings and applicable judicial decisions, all of which are subject to change.
Neither SouthTrust, ST-Sub nor FFE has requested or will receive an advance
ruling from the IRS as to any of the federal income tax effects to holders of
FFE Common Stock of the Merger, or of any of the federal income tax effects to
SouthTrust, ST-Sub or FFE of the Merger. Our opinion set forth below is not
binding upon the IRS, and there can be no assurance, and none hereby is given,
that the IRS will not take a position contrary to one or more of the positions
reflected herein, or that our opinion will be upheld by the courts if
challenged by the IRS.

FACTS

SouthTrust is a registered bank holding company and is the
common parent of an affiliated group of corporations, including ST-Sub, that
file consolidated federal income tax returns on the calendar year basis. The
authorized capital stock of SouthTrust consists of 200,000,000 shares of common
stock, par value $2.50 per share (the "SouthTrust Common Stock"), of which a
total of 87,903,683 shares were issued and outstanding as of December 31, 1995,
and 5,000,000 shares of preferred stock, par value $1.00 per share, none of
which is issued and outstanding as of the date hereof. SouthTrust Common Stock
is publicly held and publicly traded through the Automated Quotation System of
the Nasdaq Stock Market ("NASDAQ").

ST-Sub is a corporation organized pursuant to the laws of the
state of Florida. Immediately prior to the Merger, SouthTrust will own 100% of
the capital stock of ST-Sub, and ST-Sub will own 100% of the capital stock of
SouthTrust Bank of Florida, N.A., a national
<PAGE> 3
FFE Financial Corp.

February 22, 1996

Page 3
- ----------------------------

banking corporation ("ST-Bank"). Both of ST-Sub and ST-Bank are included in
the consolidated federal income tax return of SouthTrust.

FFE is a corporation organized pursuant to the laws of the
State of Delaware. As of November 3, 1995, the authorized capital stock of FFE
consisted of (i) 2,000,000 shares of common stock, par value $0.01, of which
473,986 shares were issued and outstanding (the "FFE Common Stock"), and (ii)
500,000 shares of preferred stock, $0.01 par value per share, of which none
were issued and outstanding (together with the FFE Common Stock, the "FFE
Capital Stock"), and there has been no change in the number of shares of FFE
Capital Stock outstanding as of the date hereof. FFE directly or indirectly
owns 100% of the issued and outstanding capital stock of several subsidiary
corporations (the "FFE Subsidiaries"), including First of Englewood, FSB, a
federal savings bank (the "Bank"). FFE is an accrual method taxpayer using a
calendar year accounting period.

As of September 30, 1995, FFE had 46,288 shares of FFE Common
Stock reserved for issuance under the FFE 1992 Stock Option and Incentive
Option Plan for the benefit of employees and directors of FFE and the Bank,
pursuant to which options to purchase 40,731 shares of FFE Common Stock were
outstanding as of such date (the "FFE Stock Options"). The average exercise
price of the FFE Stock Options was $10.08 per share. Also as of September 30,
1995, 11,111 shares of FFE Common Stock were issued and outstanding under the
FFE Management Retention Plan (the "MRP"), a restricted stock arrangement.

THE PROPOSED TRANSACTIONS

Pursuant to the Merger Agreement as amended, the following
transactions will take place:

(1) FFE will merge with and into ST-Sub in accordance
with the applicable corporation laws of the States of Florida and Delaware (the
"Corporate Laws"), after which ST-Sub will be the surviving corporation.
ST-Sub will acquire all of the assets and assume all of the liabilities of FFE.
ST-Sub will be the surviving corporation and the separate corporate existence
of FFE will terminate.

(2) As a result of the Merger, each share of FFE Common
Stock issued and outstanding, except for those shares of FFE Common Stock with
respect to which the holder exercises rights of dissent, will be exchanged for:
(i) cash in the amount of $10.80, subject to adjustment as provided in Section
1.2(b) of the Merger Agreement (the "Cash Consideration"), and (ii) 0.645
shares of SouthTrust Common Stock, with such number subject to adjustment, all
as set forth in the Merger Agreement.
<PAGE> 4
FFE Financial Corp.

February 22, 1996

Page 4
- ----------------------------

(3) No fractional shares of SouthTrust Common Stock will
be issued in the Merger; each holder of FFE Common Stock who would otherwise be
entitled to receive a fractional share interest, if any, will receive cash in
lieu of a fractional share.

(4) Any holder of shares of FFE Common Stock who dissents
from the Merger will be entitled to receive from the surviving corporation the
appraisal value of his or her shares in cash.

(5) Immediately following the consummation of the Merger,
and the receipt of required regulatory approvals, the Bank will be merged with
and into ST-Bank in accordance with the provisions of the Corporate Laws, and
ST-Bank shall be the surviving bank.

(6) Each holder of an FFE Stock Option which was
outstanding as of November 3, 1995, and which remains outstanding immediately
prior to the Effective Time, will receive from SouthTrust at the Effective
Time, in settlement and cancellation of such FFE Stock Options, an amount of
cash equal to the product of (i) the number of shares of FFE Common Stock
subject to such option, and (ii) the excess, if any, of the total value of the
consideration to be exchanged by SouthTrust for each share of FFE Common Stock
to be surrendered pursuant to the Merger Agreement, net of any amount which is
required to be withheld under applicable state and federal income and
employment tax laws; or, at the election of each optionholder, an FFE Stock
Option will be assumed by SouthTrust and will become an option to purchase
shares of SouthTrust Common Stock, all as described in Section 5.12(a) of the
Merger Agreement.

(7) Each outstanding share of FFE Common Stock awarded
pursuant to the MRP that is unvested immediately prior to the Effective Time
shall be cancelled in exchange for a per share cash payment from SouthTrust at
the Effective Time equal to the total value of the per share consideration to
be exchanged by SouthTrust for each share of FFE Common Stock pursuant to the
Merger Agreement, net of any amount which is required to be withheld under
applicable state and federal income and employment tax laws.

REPRESENTATIONS

Officers of FFE and SouthTrust each have made certain written
representations to us on behalf of their respective institutions by letters
each of even date herewith (the "Representation Letters"), and with your
consent, we have relied upon the accuracy and validity of these representations
provided in the Representation Letters in offering the opinions expressed
below.
<PAGE> 5
FFE Financial Corp.

February 22, 1996

Page 5
- ----------------------------

OPINION

Upon the basis of the foregoing facts, assumptions and
representations, and solely for purposes of the Code, we are of the opinion
that:

(i) The Merger will qualify as a reorganization under
Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. FFE, SouthTrust, and
ST-Sub each will be "a party to a reorganization" within the meaning of Section
368(b) of the Code.

(ii) FFE stockholders will recognize no gain or loss upon
their exchange of FFE Common Stock solely for SouthTrust Common Stock.

(iii) The basis of the shares of SouthTrust Common Stock
received by the stockholders of FFE (including any fractional share interests
to which they may be entitled) will be the same as the basis of the shares of
FFE Common Stock surrendered in exchange therefor.

(iv) The holding period of the shares of SouthTrust Common
Stock received by FFE stockholders (including any fractional share interests to
which they may be entitled) will include the period during which the shares of
FFE Common Stock surrendered in exchange therefor was held by the FFE
stockholders, provided that the shares of FFE Common Stock surrendered were
held as a capital asset within the meaning of Section 1221 of the Code by the
FFE stockholders as of the Effective Time.

(v) FFE stockholders who exercise dissenters' rights, and
as a result of which receive only cash, will be treated as having received such
cash as a distribution in redemption of their shares of FFE Common Stock,
subject to the provisions and limitations of Section 302 of the Code. Those
FFE stockholders who receive only cash, and who hold no SouthTrust Common
Stock, directly or indirectly through the application of Section 318(a) of the
Code, following the Merger will be treated as having a complete termination of
their interests in FFE within the meaning of Section 302(b)(3) of the Code, and
the cash received will be treated as a distribution in full payment in exchange
for each such stockholder's FFE Common Stock as provided in Section 302(a) of
the Code. As further provided in Section 1001 of the Code, gain will be
realized and recognized by such stockholders measured by the difference between
the redemption price and the adjusted basis of the shares of FFE Common Stock
surrendered as determined under Section 1011 of the Code. Provided that
Section 341 of the Code (relating to collapsible corporations) is inapplicable
and the FFE Common Stock is held as a capital asset by such stockholders, the
gain, if any, will constitute capital gain. Such gain will constitute
long-term capital gain if the surrendered shares of FFE Common Stock were held
by the stockholder for a period greater than one year prior to the Merger; if
the surrendered shares of FFE Common Stock were held by such stockholder for a
period of one year or less, the gain will constitute short-term capital gain.
<PAGE> 6
FFE Financial Corp.

February 22, 1996

Page 6
- ----------------------------

(vi) FFE stockholders who receive the Cash Consideration
will be treated for federal income tax purposes as if SouthTrust Common Stock
having a value equal to such Cash Consideration actually was issued as part of
the Merger and then was redeemed by SouthTrust in exchange for the Cash
Consideration, and the Cash Consideration will be treated as a distribution in
full payment in exchange for such FFE Common Stock, subject to the provisions
and limitations of Section 302 of the Code.

(vii) The receipt by a holder of FFE Common Stock of cash
in lieu of a fractional share of SouthTrust Common Stock will be treated as
though such fractional share were issued to such holder of FFE Common Stock in
the Merger and thereafter redeemed by SouthTrust for cash. The receipt of such
cash in lieu of a fractional share by a holder of FFE Common Stock will be
treated as a distribution by SouthTrust in full payment in exchange for the
fractional share as provided in Section 302(a) of the Code.

This opinion is rendered solely with respect to certain
federal income tax consequences of the Merger under the Code, and does not
extend to the income or other tax consequences of the Merger under the laws of
any state or any political subdivision of any state; nor does it extend to any
tax effects or consequences of the Merger to SouthTrust or ST-Sub other than
those expressly stated in the above opinion.

Our opinion, as stated above, is based upon our analysis of
the current Internal Revenue Code of 1986, as amended, the regulations issued
thereunder, current case law and published rulings of the Internal Revenue
Service; the foregoing are subject to change, and such changes may be given
retroactive effect. In the event of such changes, our opinion set forth above
may be affected and may not be relied upon.

Furthermore, no opinion is expressed as to the federal or
state tax treatment of the transaction under any other provisions of the Code
and regulations, or about the tax treatment of any conditions existing at the
time of, or effects resulting from, the transaction that are not specifically
covered by the above opinions. We specifically express no opinion with respect
to the income or other tax consequences of transactions affecting the FFE Stock
Options and the unvested shares held under the MRP.

We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. We also consent to the references to this firm
under the heading "Certain Federal
<PAGE> 7
FFE Financial Corp.

February 22, 1996

Page 7
- ----------------------------

Income Tax Consequences" in the Registration Statement and in the proxy
statement/prospectus which is included as part of the Registration Statement.

Yours very truly,

/s/ Bradley, Arant, Rose & White

<PAGE> 1
EXHIBIT 23(b)

CONSENT OF KPMG PEAT MARWICK LLP

Board of Directors
FFE Financial Corp. and Subsidiary:

We consent to the use in the Registration Statement on Form S-4 of SouthTrust
Corporation and in the Proxy-Prospectus Statement of FFE Financial Corp. and
Subsidiary of our report dated October 20, 1995, except as to Note 16, which is
as of November 3, 1995, relating to the consolidated balance sheet of FFE
Financial Corp. and Subsidiary as of September 30, 1995 and 1994, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years then ended, and to the reference to our firm under the
heading "Experts" in the Registration Statement and Proxy-Prospectus included
therein.

/s/ KPMG Peat Marwick LLP

Tampa, Florida

February 22, 1996

<PAGE> 1

EXHIBIT 23(d)

February 13, 1995

The Board of Directors
FFE Financial Corp.
1160 South McCall Road
Englewood, FL 34223

Dear Board Members:

We hereby consent to the reference to our firm in the Form S-4 to be
filed by SouthTrust Corporation ("SouthTrust") with the Securities and Exchange
Commission in connection with the acquisition of FFE Financial Corp. and
further consent to the incorporation of our Fairness Opinion, including
excerpts therefrom, in such Form S-4. Further, we consent to the
aforementioned inclusion and references in the Proxy Statement/Prospecuts to be
issued in connection with the acquisition of FFE by SouthTrust.

Sincerely,

/s/ Hovde Financial, Inc.
----------------------------
HOVDE FINANCIAL, INC.

<PAGE> 1
EXHIBIT 23(e)

INDEPENDENT AUDITIORS' CONSENT

We consent to the use in this Registration Statement of SouthTrust Corporation
on Form S-4 to be filed on or about February 14, 1996, of our report dated
November 24, 1993, on the Consolidated Statement of Operations, Stockholders'
Equity and Cash Flows of FFE Financial Corp. and subsidiary (which report
expresses an unqualified opinion and includes an explanatory paragraph related
to an uncertainty concerning litigation), appearing in the Proxy
Statement/Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Proxy Statement/Prospectus.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Tampa, Florida
February 14, 1996