As Filed with the Securities and Exchange Commission on August 4, 1997January 23, 1998
Registration No. 333-___________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------------------------------------
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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PREMIER FINANCIAL BANCORP, INC.
(Exact name of registrant as specified in its charter)

Kentucky 61-1206757
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)

6022
(Primary Standard Industrial
Classification Code Number)

120 N. Hamilton Street
Georgetown, Kentucky 40324
(502) 863-7500

(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

J. Howell Kelly
President and Chief Executive Officer
Premier Financial Bancorp, Inc.
120 N. Hamilton Street
Georgetown, Kentucky 40324
(502) 863-7500
Fax: (502) 863-7503

(Name, address, including zip code, and telephone
number, including area code, of agent for service)

Copy to:
--------COPY TO:

David W. Harper, Esq.
2450 Meidinger Tower
Louisville, Kentucky 40202
(502) 583-3081
Fax: (502) 583-2418

Approximate date of commencement of proposed sale to public:

As soon as practicable after this Registration Statement becomes effective.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box [_].

___________________________________________________________________________________________________________________________________________________
CALCULATION OF REGISTRATION FEE

- -------------------------------------------------------------------------------------------------------------
Title of Each
Class of Proposed Maximum Proposed Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Registration
Registered(1) Registered Per Unit(2) Offering Price(2) Fee(2)
- -------------------------------------------------------------------------------------------------------------

Common Shares
without par
value 476,300 $9.57799706 $4,572,000 $1,385.46
- -------------------------------------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
Title of Each Proposed
Class of Proposed Maximum
Securities to Maximum Aggregate Amount of
be Amount to be Offering Price Offering Registration
Registered(1) Registered Per Unit(2) Price(2) Fee(2)
________________________________________________________________________________
Common Shares
without par
value 300,000 $14.33 $4,299,000 $1,268.21
________________________________________________________________________________
________________________________________________________________________________

(1) This Registration Statement relates to the securities of the
Registrant issuable to holders of Common SharesStock of The SabinaOhio River Bank, Sabina,Ironton, Ohio
("SabinaOhio River Bank"), an Ohio corporation, in the proposed merger of SabinaOhio River
Bank with a wholly owned subsidiary of the Registrant.

(2) Pursuant to Rule 457(f)(2), the registration fee was computed on the
basis of the book value of SabinaOhio River Bank Common SharesStock at June 30,December 31, 1997.
The registration fee payable upon the filing of this Registration Statement is
$1,385.46.
________________________________________________________________________________$1,268.21.

______________________________________________________________________________

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)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)8(A),
MAY DETERMINE.

CROSS REFERENCE SHEET

PURSUANT TO ITEM 501(b) OF REGULATION S-K
SHOWING THE LOCATION IN THE PROSPECTUS OF THE
INFORMATION REQUIRED BY PART I OF FORM S-4

FORM
S-4 ITEM HEADING PROSPECTUS LOCATION

A. INFORMATION ABOUT THE TRANSACTION

1. Forepart of Registration
Statement and Outside Front
Cover Page of Prospectus .... Forepart of Registration
Statement and Outside Front
Cover Page of Prospectus

2. Inside Front and Outside Back
Cover Pages of Prospectus ... Inside Front Page of
Prospectus

3. Risk Factors, Ratio of Earnings
to Fixed Charges and Other
Information ................. SUMMARY; SELECTED FINANCIAL DATA OF
PREMIER; SELECTED FINANCIAL DATA OF
SABINA BANK; COMPARATIVE STOCK PRICES
AND DIVIDENDS; COMPARATIVE PER SHARE
DATA; THE COMPANIES

4. Terms of the Transaction........ SUMMARY; THE MERGER;
THE MERGER AGREEMENT

5. Pro Forma Financial
Information ..................... Not Applicable

6. Material Contracts with the
Company Being Acquired .......... SUMMARY; THE MERGER;
THE MERGER AGREEMENT

7. Additional Information Required
for Reoffering by Persons and
Parties Deemed to be
Underwriters .................... Not Applicable

8. Interests of Named Experts and
Counsel ......................... Not Applicable

9. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities ..................... Not Applicable

FORM
S-4 ITEM HEADING PROSPECTUS LOCATION

B. INFORMATION ABOUT THE REGISTRANT

10. Information with Respect to
S-3 Registrants ................. Not Applicable

11. Incorporation of Certain
Information by Reference ........ Not Applicable

12. Information with Respect to
S-2 or S-3 Registrants .......... AVAILABLE INFORMATION; INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE; SUMMARY;
SELECTED FINANCIAL DATA OF PREMIER;
COMPARATIVE STOCK PRICES AND DIVIDENDS;
COMPARATIVE PER SHARE DATA; THE
COMPANIES - Premier Financial Bancorp,
Inc.; DESCRIPTION OF PREMIER CAPITAL
STOCK; EXPERTS; LEGAL MATTERS

13. Incorporation of Certain
Information by Reference ........ INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE

14. Information with Respect to
Registrants other than S-3
or S-2 Registrants .............. Not Applicable

C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED

15. Information with Respect to
S-3 companies ................... Not Applicable

16. Information with Respect to
S-2 or S-3 Companies ............ Not Applicable

17. Information with Respect to
Companies other than S-3 or
S-2 Companies ................... SUMMARY; SELECTED FINANCIAL DATA OF
SABINA BANK; COMPARATIVE STOCK PRICES
AND DIVIDEND; COMPARATIVE PER SHARE
DATA; THE COMPANIES -- Sabina Bank;
SABINA BANK MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL

FORM
S-4 ITEM HEADING PROSPECTUS LOCATION

CONDITION AND RESULTS OF OPERATIONS;
COMPARISON OF RIGHTS OF HOLDERS OF
PREMIER COMMON SHARES AND SABINA BANK
COMMON STOCK; EXPERTS; FINANCIAL
STATEMENTS OF SABINA BANK

D. VOTING AND MANAGEMENT INFORMATION

18. Information if Proxy,
Consents or Authorizations
are to be Solicited .............. SUMMARY; THE SPECIAL MEETING;
DISSENTERS' RIGHTS; THE MERGER -
Interests of Certain Persons in the
Merger; MANAGEMENT AND OPERATIONS AFTER
THE MERGER; PRINCIPAL HOLDERS OF SABINA
BANK COMMON STOCK AND OWNERSHIP OF
MANAGEMENT; INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
19. Information if Proxy,
Consents or Authorizations
are not to be Solicited in
an Exchange Offer ............... Not Applicable

THE SABINAOHIO RIVER BANK

PROXY STATEMENT

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

PREMIER FINANCIAL BANCORP, INC.

PROSPECTUS

This Proxy Statement/Prospectus is being furnished to shareholders of
The SabinaOhio River Bank, Sabina,Ironton, Ohio ("SabinaOhio River Bank"), in connection with the
solicitation of proxies by the Board of Directors of SabinaOhio River Bank for use
at its Special Meeting of Shareholders (including any adjournments or
postponements thereof) to be held on September __, 1997March ___, 1998 (the "Special Meeting").
This Proxy Statement/Prospectus relates to the proposed merger of PFBIOhio River
Interim Bank ("Merger Sub"), a wholly owned subsidiary of Premier Financial
Bancorp, Inc. ("Premier") formed for the purpose of effecting such proposed
merger, with and into SabinaOhio River Bank (the "Merger") pursuant to the Amended
and Restated Agreement and Plan of Merger dated as of May 28,November 24, 1997 among
Premier, Merger Sub and SabinaOhio River Bank (the "Merger Agreement"). Upon the
effectiveness of the Merger, SabinaOhio River Bank will be a wholly owned
subsidiary of Premier and each outstanding Common Share of SabinaOhio River Bank
will be converted into the right to receive 4.331.2 Common Shares of Premier.

This Proxy Statement/Prospectus also constitutes a prospectus of Premier
with respect to 476,300300,000 Common Shares of Premier issuable to SabinaOhio River Bank
shareholders in the Merger.

This Proxy Statement/Prospectus and the form of proxy and other
materials accompanying this Proxy Statement/Prospectus are first being mailed
to shareholders of SabinaOhio River Bank on or about AugustFebruary __, 1997.1998.

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

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

THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS AUGUSTFEBRUARY __, 19971998

TABLE OF CONTENTS

PAGE
----

Available Information. . . . . . . . . . . . . . . . . . . . . . . . .

. 4

Incorporation of Certain Documents by Reference. . . . . . . . . . . . . 6

Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 8

Selected Consolidated Financial Data of Premier. . . . . . . . . . . .

. 19

Selected Consolidated Financial Data of Sabina Bank.Ohio River Bank . . . . . . . . . . 21. . . .

Comparative Stock Prices and Dividends . . . . . . . . . . . . . . . . . 23

Comparative Per Share Data . . . . . . . . . . . . . . . . . . . . . . . 25

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 27

The Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 27

The Special Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . 30

The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 32

Management and Operations After the Merger . . . . . . . . . . . . . . . 43

The Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . .

. 43

Description of Premier Capital Stock . . . . . . . . . . . . . . . . .

. 50

Comparison of Rights of Holders of Premier Common Shares
and SabinaOhio River Bank Common Stock . . . . . . . . . . . . . . . . . .

. . . 51

SabinaOhio River Bank Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . .

. 55

Principal Holders of SabinaOhio River Bank Common Stock and Ownership of
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 78

Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 83

Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 83

Other Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. 83Index to Financial Statements of Sabina Bank. . . . . . . .Ohio River Bank . . . . . . . . . . . F-1

ANNEXES

Annex IA Agreement and Plan of Merger

Annex IIB Opinion of Professional BankAustin Financial Services, Inc.

Annex IIIC Excerpt from the Ohio General Corporation Law Relating to DissentersDissenters'
Rights (Sections 1115.19 and 1701.85)

NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
IN CONNECTION WITH THE SOLICITATION OF PROXIES OR OFFERING OF SECURITIES MADE
HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT/PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION IN WHICH, OR
TO OR FROM ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR
ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL, IN ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF SABINAOHIO
RIVER BANK OR PREMIER SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

AVAILABLE INFORMATION

Premier is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549
and at the following Regional Offices of the Commission: 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed
rates. Premier files it reports, proxy statements and other information
electronically with the Commission and such material can be found at a Web
site maintained by the Commission (http://www.sec.gov.) The Premier Common
Shares are listed on the NASDAQThe Nasdaq Stock Market, Inc's National Market System (trading
symbol PFBI) and such material relating to Premier may also be inspected at
the offices of the NASDAQThe Nasdaq Stock Market, Inc., 1735 K. Street N.W.,
Washington, D.C. 20006.

Premier has filed with the Commission a registration statement on Form
S-4 (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Premier Common Shares that will be issued
to holders of SabinaOhio River Bank Common Stock in connection with the Merger.
See "The Merger -- Conversion--Conversion of SabinaOhio River Bank Common Stock." This Proxy
Statement/Prospectus does not contain all of the information set forth in the
Registration Statement filed by Premier with the Commission, certain portions
of which are omitted in accordance with the rules and regulations of the
Commission. Such additional

4
information is available for inspection and copying at the offices of the
Commission.

Statements contained in this Proxy Statement/Prospectus or in
any document incorporated into this Proxy Statement/Prospectus by reference
as to the contents of any contract or other document referred to herein or
therein are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement or such other document, each such statement being
qualified in all respects by such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents previously filed by Premier with the Commission
under the Exchange Act, or where indicated certain portions thereof, are
incorporated herein by reference:

1. Premier's Annual Report on Form 10-K for the year ended December
31, 1996 (the "Premier Form 10-K");

2. Premier's Quarterly Reports on Form 10-Q for the periods ended
March 31, June 30 and JuneSeptember 30, 1997 (the "Premier Form 10-Qs");

3. Premier's Current ReportReports on Form 8-K dated June 13 and December
19, 1997 (the "Premier Form 8-K"8-Ks"); and

4. The information contained in Premier's Annual Report to
Shareholders for the 1996 fiscal year (the "1996 Annual Report") on pages 19
through 58 under the captions "Management's Discussion and Analysis,"
"Independent Auditor's Report" and "Audited Consolidated Financial
Statements."

5. The information contained in Premier's Proxy Statement for its
Annual Meeting of Shareholders held on March 6, 1997 (the "1997 Proxy
Statement") on pages 1 through 11 under the captions "INTRODUCTION --
Principal Shareholders"; "ELECTION OF DIRECTORS"; "CERTAIN INFORMATION
CONCERNING THE BOARD OF DIRECTORS"; "EXECUTIVE OFFICERS OF THE COMPANY";
"EXECUTIVE COMPENSATION"; and "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS."

All documents filed by Premier pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Proxy Statement/Prospectus
and prior to the Special Meeting should be deemed to be incorporated by
reference into this Proxy Statement/Prospectus and to be part hereof from the
date of filing of such documents. See "Available Information."

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

All information contained or incorporated by reference in this Proxy
Statement/Prospectus relating to Premier or Merger Sub has been supplied by
Premier, and all such information relating to SabinaOhio River Bank has been
supplied by SabinaOhio River Bank.

THIS PROXY STATEMENT/PROSPECTUS IS ACCOMPANIED BY PREMIER'S 1996 ANNUAL
REPORT, ITS 1997 PROXY STATEMENT AND ITS FORM 10-Q FOR 6

THE SIX-MONTH PERIODQUARTER ENDED
JUNESEPTEMBER 30, 1997. EXCEPT FOR THE INFORMATION PROVIDED IN PREMIER'S 1996
ANNUAL REPORT AND 1997 PROXY STATEMENT UNDER THE CAPTIONS SPECIFICALLY
IDENTIFIED ABOVE, NO INFORMATION CONTAINED ELSEWHERE IN EITHER THE 1996
ANNUAL REPORT OR THE 1997 PROXY STATEMENT IS INCORPORATED BY REFERENCE IN,
AND SUCH INFORMATION SHALL NOT CONSTITUTE A PART OF, THIS PROXY
STATEMENT/PROSPECTUS.

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE THAT
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE HEREIN) ARE AVAILABLE, WITHOUT CHARGE, UPON ORAL OR WRITTEN
REQUEST BY ANY PERSON TO WHOM THIS PROXY STATEMENT/PROSPECTUS HAS BEEN
DELIVERED FROM PREMIER FINANCIAL BANCORP, INC., 120 N. HAMILTON STREET,
GEORGETOWN, KENTUCKY 40324, ATTENTION: J. HOWELL KELLY; TELEPHONE NUMBER
(502) 863-7500. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
SUCH REQUEST SHOULD BE MADE BY AUGUSTFEBRUARY __, 1997.1998.

SUMMARY

The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus. Reference is made to, and the summary is
qualified in its entirety by, the more detailed information contained or
incorporated by reference in this Proxy Statement/Prospectus and the Annexes
hereto. Shareholders are urged to read this Proxy Statement/Prospectus and
the Annexes hereto in their entirety.

THE SPECIAL MEETING

Meeting of Shareholders.......... A special meeting of the shareholders of The
SabinaOhio River Bank ("SabinaOhio River Bank") will be
held at the executive offices of SabinaOhio River
Bank at 135
N. Howard221 Railroad Street, Sabina,Ironton, Ohio on
________,
September__________, March __, 1997,1998, at __________,______ __.m.
Eastern DaylightStandard Time.

Matters to be Considered
at the Special Meeting.......... At the Special Meeting, holders of SabinaOhio River
Bank Common Shares, par value $1$8 per share
("SabinaOhio River Bank Common Stock"), will
consider and vote upon (i) a proposal to
adopt the Agreement and Plan of Merger
attached as Annex IA to this Proxy
Statement/Prospectus (the "Merger Agreement")
providing for the merger of PFBIOhio River
Interim Bank ("Merger Sub"), a wholly owned
subsidiary of Premier Financial Bancorp, Inc.
("Premier"), into SabinaOhio River Bank (the
"Merger"), with SabinaOhio River Bank becoming a
wholly owned subsidiary of Premier, and the
issuance to SabinaOhio River Bank shareholders of
4.331.2 Premier Common Shares for each share of
SabinaOhio River Bank in connection therewith, and
(ii) any other matters that may properly come
before the Special Meeting.

Record Date..................... The record date for the Special Meeting is
AugustFebruary __, 19971998 (the "Record Date").

Vote Required..................... The affirmative vote of the holders of
two-thirds of the outstanding shares of SabinaOhio
River Bank Common Stock entitled to vote
thereon is required to adopt the Merger
Agreement. SabinaOhio River Bank has 110,000250,000
shares of SabinaOhio River Bank Common Stock
outstanding and entitled to vote on the
Merger Agreement. The directors and
executive officers of SabinaOhio River Bank, who
with their affiliates may be deemed to
beneficially own approximately 39.4%27.7% of the
outstanding SabinaOhio River Bank Common Stock,
have indicated that they intend to vote their
shares for approval of the Merger Agreement.

Voting of Proxies; Revocation.. All shares of SabinaOhio River Bank Common Stock
represented at the Special Meeting by
properly executed proxies received prior to
or at the Special Meeting, and not revoked,
will be voted in accordance with the
instructions indicated on such proxies. If
no instructions are indicated, such proxies
will be voted FOR the adoption of the Merger
Agreement

Any proxy given may be revoked by the person
giving it at any time, without affecting any
vote previously taken, by (i) giving notice
to the Secretary of SabinaOhio River Bank in
writing or in open meeting or (ii) duly
executing a later dated proxy relating to the
same 9

shares and delivering it to the
Secretary of SabinaOhio River Bank before the

taking of the vote at the Special Meeting.
Any written notice of revocation or
subsequent proxy should be sent and delivered
to The SabinaOhio River Bank, 135 N. Howard221 Railroad Street,
Sabina,Ironton, Ohio 45169,45638, Attention: Secretary,
or hand delivered to the Secretary of SabinaOhio
River Bank at or before the taking of the
vote at the Special Meeting.

Security Ownership of
Management.................... As of the Record Date, directors and
executive officers of SabinaOhio River Bank and
their affiliates may be deemed to be
beneficial owners of approximately 43,36069,189
shares of SabinaOhio River Bank Common Stock, or
approximately 39.4%27.7% of the outstanding SabinaOhio
River Bank Common Stock.

THE COMPANIES

Premier Financial
Bancorp, Inc................. Premier, a Kentucky corporation, is a bank
holding company with fivesix banking subsidiaries
(the "Banks"). At June 30,December 31, 1997, Premier
had total assets of $460.4$425.4 million, total
deposits of $251.6$324.6 million and total
shareholders' equity of $41.2$47.8 million. The
Banks are managed on a decentralized basis
that enables each Bank to offer local and
timely decision-making that provides
flexibility with respect to operating
procedures and credit policies, limited only
by a 10

framework of centralized risk controls
provided by Premier. Each Bank maintains its
community orientation by, among other things,
having selected members of its communities as

10
members of its board of directors.

On December 30, 1997, Premier entered into an
agreement with Community Trust Bancorp, Inc.,
Pikeville, Kentucky ("Community Trust") to
purchase selected assets and assume all of
the deposits of three branch banking
facilities currently operated by Bank One,
West Virginia N.A. ("Bank One") in Madison,
Philippi and Van, West Virginia immediately
following the acquisition by Community Trust
of such assets and the assumption of such
deposits pursuant to an agreement entered
into on December 30, 1997 between Community
Trust and Bank One (the "Proposed Branch
Purchases"). The Proposed Branch Purchases
will include approximately $22 million of
loans and $152.6 million of deposits.
Consummation of the Proposed Branch Purchases
is subject to receipt of regulatory approvals
and satisfaction of certain other conditions.
Premier expects to complete the Proposed
Branch Purchases in the second quarter of
1998.

The executive offices of Premier are located
at 120 N. Hamilton Street, Georgetown,
Kentucky 40324, and Premier's telephone
number is (502) 863-7500.

PFBIOhio River Interim
Bank.............. Merger Sub is a wholly owned commercial bank
subsidiary formed by Premier under the laws
of the State of Ohio for the purpose of
engaging in the transactions contemplated by
the Merger Agreement. Merger Sub does not,
and will not

11
prior to the Merger, engage in any business
activities or conduct any operations other
than in connection with the transactions
contemplated by the Merger Agreement.

Sabina Bank.................... SabinaOhio River Bank................... Ohio River Bank is an Ohio banking
corporation established in 1875. Sabina1995. Ohio River
Bank conducts a full service commercial
banking business, including the origination
of residential mortgage, commercial,
agricultural and consumer loans, and the
offering of checking, savings and money marketNOW deposit
accounts. At December 31, 1996, Sabina1997, Ohio River
Bank had assets of $36.7$39.5 million, deposits of
$31.7$34.1 million and shareholders' equity of
$4.6$4.3 million.

The executive offices of SabinaOhio River Bank are
located at 135 N. Howard221 Railroad Street, Sabina,Ironton, Ohio
45169,

45638, and SabinaOhio River Bank's telephone number
is (937) 584-2491.(614) 533-4505.

THE MERGER

Effect of Merger................ At the effective time of the Merger (the
"Effective Time"), subject to certain
exceptions as described herein with respect
to shares owned by Premier or its
subsidiaries, and shares owned by holders
properly exercising dissenters' rights
("Dissenting Shares"), each outstanding share
of SabinaOhio River Bank Common Stock will be
automatically converted (subject to certain
provisions described herein with respect to
fractional shares) into 4.331.2 Common Shares of
Premier and SabinaOhio River Bank will become a
wholly owned subsidiary of Premier.

12
Recommendation of the Board
of Directors of SabinaOhio River Bank
and Reasons for the Merger... The Board of Directors of SabinaOhio River Bank
believes that the terms of the Merger are
fair to and in the best interests of the SabinaOhio
River Bank shareholders, and has unanimously
approved the Merger Agreement. THE SABINAOHIO RIVER
BANK BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT ITS SHAREHOLDERS APPROVE AND ADOPT THE
MERGER AGREEMENT. The Board of Directors of
SabinaOhio River Bank believes that the Merger,
which will allow SabinaOhio River Bank to affiliate
with a publicly held multi-bank holding
company with a community banking philosophy
and greater financial and managerial
resources, will result in SabinaOhio River Bank
being more capable of competing effectively
in the rapidly changing marketplace for
banking and financial services and will
enable the shareholders of SabinaOhio River Bank

to
receive in a tax-free exchange Premier Common
Shares that trade in an established trading
market and, consequently, represent a more
liquid investment than shares of SabinaOhio River
Bank Common Stock.

Opinion of Financial Advisor
to Sabina Bank.............. Professional BankOhio River Bank........... Austin Financial Services, Inc., Toledo, Ohio
("PBS"AFSI") has delivered its written opinion to
the Board of Directors of SabinaOhio River Bank
that, as of May 28,November 25, 1997, and the date of this Proxy Statement/
Prospectus, the exchange
ratio (the "Exchange
Ratio") of 4.331.2 shares of Premier Common SharesStock
for each share of SabinaOhio River Bank Common
Stock was fair to the holders of SabinaOhio River
Bank Common Stock from a financial
perspective.

For information on the assumptions made,
matters considered and limits of the review
by PBS,AFSI, see "The Merger -- Opinion of
Financial Advisor to SabinaOhio River Bank."
ShareholdersareShareholders are urged to read in its
entirety the fairness opinion of PBS dated
the date of this Proxy Statement/Prospectus,AFSI
attached as Annex IIB to this Proxy
Statement/Prospectus.

Conditions to the Merger;
Termination.................. The Merger is subject to various conditions,
including: requisite shareholder and
regulatory approval; the absence of any
materially burdensome requirement or
condition imposed in connection with any
regulatory approval; approval for listing on
the Nasdaq National Market, subject to
official notice of issuance, of the Premier
Common Shares to be issued pursuant to the
Merger; receipt of opinions in 13

respect of
certain federal income tax consequences of
the Merger andMerger; receipt of a letterfromletter from
Premier's independent accountants to the
effect that the Merger qualifies for "pooling
of interests" accounting treatment;
any Dissenting Shares not constituting more than
10% of the outstanding SabinaOhio River Bank Common
Stock; and the average closing price
of a Premier Common Share during a 20
consecutive trading day period ending five
business days before the Effective Time being
at least $14.Stock.

The Merger Agreement may be terminated at any
time prior to the Effective Time by mutual
consent of Premier and SabinaOhio River Bank, or by
either party if any regulatory agency (i)
shall have denied approval of the Merger or
if any other governmental authority shall
have prohibited consummation of the Merger,
(ii) the Merger shall not have been
consummated

14
on or before December 31, 1997April 30, 1998 or
(iii) the approval of the shareholders of
SabinaOhio River Bank required for consummation of
the Merger shall not have been obtained at
the Special Meeting (although upon any such
failure to obtain such shareholder approval,
SabinaOhio River Bank will become obligated to
reimburse Premier for its out-of-pocket
expenses in connection with the Merger
Agreement and the transactions contemplated
thereby, up to a maximum amount of $100,000).
SabinaOhio River Bank also has the right to
terminate the Merger Agreement if concurrent
with such termination it enters into a
definitive agreement providing for the
imple-

mentationimplementation of another merger or other
transaction that the SabinaOhio River Bank Board of
Directors has determined is more favorable to
the shareholders of SabinaOhio River Bank than the
Merger contemplated by the Merger Agreement,
and in connection with such termination SabinaOhio
River Bank pays to Premier a fee of $350,000.

NASDAQ Listing................. It is a condition to the Merger that the
Premier Common Shares to be issued in the
Merger be authorized for listing on the
Nasdaq National Market, subject to official
notice of issuance. The Common Shares of
Premier currently outstanding are listed on
the Nasdaq National Market (trading symbol
PFBI).

Post-Merger Dividend Policy.... It is the current intention of the Board of
Directors of Premier to declarecontinue the
declaration of dividends on the Premier
Common Shares following the Merger initially
in the amount of at least $0.125$0.15 per

quarter or $0.50$0.60 per year, in each case per
share. It should be noted that no such
dividends have been declared and that future
dividends will be determined by Premier's
Board of Directors in light of the earnings
and financial condition of Premier and its
subsidiaries and other factors, including
applicable governmental regulations and
policies.

Regulatory Approvals Required.. The Merger is subject to the prior approval
by the Federal Reserve Board, the Federal
Deposit Insurance Corporation and the banking
authorities of the Commonwealth of Kentucky
and the State of Ohio.

Dissenters' Rights............. Holders of SabinaOhio River Bank Common Stock have
the right to dissent from the Merger and to
receive payment of the fair cash value of
their shares upon full compliance with
Section 1701.85 of the Ohio General
Corporation Law ("OGCL"). A copy of Section
1701.85 of the OGCL is attached to this Proxy
Statement/Prospectus as Annex III.C.

Shareholders of SabinaOhio River Bank that desire
to exercise dissenters' rights must satisfy
fully and precisely certain procedural
requirements set forth in Annex IIIC and
summarized in the "Dissenters' Rights"
section of this Proxy Statement/Prospectus,
including among other things not voting in
favor of the Merger Agreement, or else
dissenters' rights will be lost.

Certain Federal Income Tax
Consequences................. The Merger is intended to be a tax-free
reorganization so that

16
no gain or loss would be recognized by
Premier, Merger Sub or SabinaOhio River Bank, and
no gain or loss would be recognized by SabinaOhio
River Bank shareholders, except in respect
of cash received for fractional shares and
except for holders who receive cash payments
upon properly exercising dissenters' rights.
Consummation of the Merger is conditioned
upon there being delivered opinionsan opinion dated
as of the closing date of the Merger of
Eskew & Gresham, PSC, Premier's independent
accountants, to the Merger, to the effect
that the Merger will constitute a
reorganization within the meaning of
Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").

Anticipated Accounting
16

Treatment.................... The Merger is expected to qualify as a
"pooling of interests" for accounting and
financial reporting purposes. The receipt of
a letter of Eskew & Gresham, P.S.C.,PSC, the
independent accountants of Premier,
confirming that the Merger will qualify for
pooling of interests accounting treatment, is
a condition to consummation of the Merger.

MANAGEMENTS AND OPERATIONS AFTER
THE MERGER................... Following the Merger, the respective
directors, officers and employees of Premier
and SabinaOhio River Bank serving immediately prior
to consummation of the Merger are expected to
continue in such positions. However, the
number of directors of SabinaOhio River Bank may be
increased to permit J. Howell Kelly,
Premier's president and chief executive
officer, or such other person

17
as may be designated by Premier, to serve as
a director of SabinaOhio River Bank.

The Merger is not expected to substantially
alter the operations of SabinaOhio River Bank.
SabinaOhio River Bank will retain its separate
corporate existence, charter and name.
Premier has informed SabinaOhio River Bank that
following the Merger it intends for SabinaOhio
River Bank to retain its commitment to local
orientation and direction, and to be managed
on a decentralized basis conducive to local
and timely decision-making and flexibility
with respect to operating procedures and
credit policies.

SELECTED CONSOLIDATED FINANCIAL DATA,
COMPARATIVE STOCK PRICES AND
COMPARATIVE PER SHARE DATA... Set forth on the following pages are certain
selected consolidated financial data for 17

Premier and SabinaOhio
River Bank, comparative stock prices, and
comparative per share data for Premier and
SabinaOhio River Bank (including certain pro forma
data for Premier and pro forma equivalent
data for SabinaOhio River Bank).

SELECTED CONSOLIDATED FINANCIAL DATA OF PREMIER

(IN THOUSANDS EXCEPT PER SHARE AND RATIO DATA)

The following summary information regarding Premier should be read in
conjunction with the consolidated financial statements of Premier and the
notes thereto contained in its 1996 Annual Report accompanying this Proxy
Statement/Prospectus. See "Incorporation of Certain Documents by Reference."
Consolidated historical financial and other data regarding Premier at or for
the sixnine months ended JuneSeptember 30, 1997 and 1996 have been prepared by
Premier without audit and may not be indicative of results on an annualized
basis or any other period. In the opinion of management, all adjustments
(consisting of normal recurring accruals) that are necessary for a fair
presentation for such periods or dates have been made. The selected
consolidated financial data presented below has been retroactively adjusted
to reflect all prior stock splits or share dividends.dividends and has been restated to
reflect acquisitions accounted for under the pooling of interests method.

AT OR FOR THE SIXNINE
MONTHS ENDED
JUNESEPTEMBER 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ------------- ---- ---- ---- ---- ---- ----

EARNINGS

Net interest income . . . . . . , $ 7,14311,900 $ 3,9818,531 $ 10,83712,426 $ 6,0237,697 $ 5,5247,319 $ 4,9386,974 $ 4,2036,118

Provision for
possible
loan losses . . . . . . . 457 188 575 86 207 170 325. 992 407 760 196 335 389 499

Non-interest income . 1,148 652 1,484 825 684 733 592. . . . 2,948 1,222 1,721 1,018 870 936 750

Non-interest expense 4,413 2,708 6,793 4,493 4,005 3,640 3,375
-------- -------- -------- -------- -------- -------- --------expense. . . . . 8,354 5,696 8,075 5,943 5,464 5,304 4,732

Income taxes. . . . . 1,031 492 1,517 113 483 510 366
-------- -------- -------- -------- -------- -------- --------. . . . 1,646 1,066 1,588 146 567 582 501

Net income. . . . . $ 2,390 $ 1,245 $ 3,436 $ 2,156 $ 1,513 $ 1,351 $ 729
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------. . . . 3,856 2,584 3,724 2,430 1,823 1,635 1,136

FINANCIAL POSITION

Total assets. . . . . $460,368 $179,802 $292,565 $155,475 $115,443 $108,774 $100,364. . . . 504,574 323,207 329,127 192,273 154,653 151,975 145,270

Loans, net of
unearned income . . 235,869 124,518 217,787 113,064 81,276 74,450 65,159. . . . 272,263 238,514 242,625 137,550 106,431 97,521 91,968

Allowance for loan
losses . . . . . . . 2,607 1,871 2,523 1,735 886 884 938. . . . 3,133 2,868 2,854 1,997 1,172 1,192 1,349

Goodwill. . . . . . . 5,311 256. . . . 5,218 5,629 5,490 248 - - -8 16 24

Securities. . . . . . 192,185 40,935 44,363 24,929 19,688 21,864 18,965. . . . 192,978 53,740 52,660 33,919 30,619 35,582 31,324

Deposits. . . . . . . 251,627 138,607 235,574 136,246 102,839 98,846 91,704

Other borrowings. . . 135,792 1,179 14,976 1,502 - 119 230. . 285,105 264,795 267,208 168,170 136,613 137,538 132,177

Repurchase Agreements . . . . 116,023 6,163 5,599 747 -0- -0- -0-

Debt. . . . . . . . . . . . . 28,750 - --0- -0- 5,000 1,500 - --0- -0-

Stockholders' equity. 41,182 38,595 39,863 11,215 9,453 8,868 7,617equity . . . . 47,061 44,037 44,625 15,603 13,617 12,767 11,274

SHARE DATA

Net income. . . . . . 0.57 0.53 1.05 1.13 0.80 0.72 0.39. . . . 0.82 0.75 0.99 1.02 0.77 0.69 0.48

Book value. . . . . . 9.78 9.17 9.47 5.87 5.02 4.72 4.05

Cash dividend . . . . 0.25 0.25 0.50 0.45 0.36 0.28 0.2010.04 9.40 9.52 6.54 5.77 5.42 4.78

AT OR FOR THE SIXNINE
MONTHS ENDED
JUNESEPTEMBER 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ------------- ---- ---- ---- ---- ---- ----

Cash dividend . . . . . . . . 0.38 0.34 0.48 0.42 0.32 0.25 0.18

RATIOS

Return on average
assets . . . . . . . . 1.52% 1.54% 1.53% 1.69% 1.36% 1.23% 0.88%. . . 1.28% 1.42% 1.42% 1.48% 1.19% 1.06% 0.91%

Return on average
equity . . . . . . . . 11.8% 14.7% 12.2% 20.5% 16.4% 15.4% 9.97%. . . 11.26% 12.06% 11.39% 16.49% 13.70% 13.02% 10.53%

Dividend payout . . . . 44.0% 61.4% 52.9% 39.8% 45.0% 38.9% 51.3%. . . 45.84% 52.09% 53.22% 41.01% 33.60% 36.24% 38.31%

Stockholders' equity
to total assets at
period-end . . . . . . 8.95% 21.47%. . . 9.33% 13.63% 7.21% 8.19% 8.15% 7.59%13.56% 8.12% 8.80% 8.40% 7.76%

Average stockholders'
equity to average
total assets . . . . . 12.86% 10.34% 12.52% 8.25% 8.27% 8.04% 8.80%. . . 11.38% 11.90% 12.48% 8.90% 8.69% 8.14% 8.62%

CAPITAL RATIOS

Equity to assets.assets . . . . 8.95% 21.47%. . 9.33% 13.63% 7.21% 8.19% 8.15% 7.59%13.56% 8.12% 8.80% 8.40% 7.76%

Leverage ratio. . . . . . 10.72% 21.29% 12.04% 6.92% 8.42% 7.62% 7.46%. . 11.45% 12.14% 12.11% 8.13% 8.84% 8.39% 7.74%

SELECTED CONSOLIDATED FINANCIAL DATA OF SABINAOHIO RIVER BANK

(IN THOUSANDS, EXCEPT PER SHARE, RATIO AND RATIOUNIT DATA)

The following summary information regarding SabinaOhio River Bank should be
read in conjunction with the consolidated financial statements of SabinaOhio River Bank and the
notes thereto. See "Financial Statements of Sabina Bank." Consolidated
historicalOhio River Bank". Historical
financial and other data regarding SabinaOhio River Bank at or for the sixnine months
ended JuneSeptember 30, 1997 and 1996 have been prepared by SabinaOhio River Bank
without audit and may not be indicative of results on an annualized basis or
any other period. In the opinion of management, all adjustments (consisting
of normal recurring accruals) that are necessary for a fair presentation for
such periods or dates have been made.

The selected consolidated financial data presented
below has been retroactively adjusted to reflect all prior stock splits or share
dividends.

AT OR FOR THE
SIX
MONTHS ENDED
JUNE 30,PERIOD SINCE
AT OR FOR THE INCEPTION (MAY
AT OR FOR THE NINE MONTHS YEAR ENDED 22, 1995) TO
ENDED SEPTEMBER 30, DECEMBER 31, --------------------------------------------------------------------------DECEMBER 31,

1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------1995(1)

EARNINGS

Net interest income . . $ 7761,000 $ 781726 $ 1,5891,028 $ 1,674 $ 1,795 $ 2,036 $ 1,915282

Provision for
possible loan losses . 23 28 185 110 128 219 174123 134 193 118

Non-interest income . . 105 106 237 193 186 203 158108 74 114 24

Non-interest expense. . 696 613 1,282 1,450 1,459 1,664 1,357
-------- -------- -------- -------- -------- -------- --------expense 891 865 1,155 580

Income taxes. . . . . . 30 60 71 33 84 72 135
-------- -------- -------- -------- -------- -------- --------taxes 0 0 0 0
------- ------- ------- -------
Net income. . . . . .income (loss) $ 13294 $ 186(199) $ 288(206) $ 274 $ 310 $ 284 $ 407
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------(393)

FINANCIAL POSITION

Total assets. . . . . . $36,562 $36,076 $36,603 $36,798 $39,210 $43,201 $44,906assets $39,606 $32,134 $34,612 $16,229

Loans net of
unearned income. . . . 24,668 25,001 25,038 24,486 25,155 23,071 26,80926,964 21,751 22,828 9,771

Allowance for loan losses . . . . . . . . 310 270 331 262 286 308 411

Goodwill. . . . . . . .306 232 273 117

Securities 7,921 4,583 5,593 1,005

Deposits 34,479 27,850 29,908 11,622

Other short-term borrowings 695 0 415 0

0 3 9 16 24

Securities. . . . . . . 8,774 8,016 8,297 8,990 10,931 13,718 12,359

Deposits. . . . . . . . 31,662 31,171 31,634 31,924 33,774 38,692 40,473

Other borrowings. . . . 230 261 230 261 1,090 317 342

Stockholders' equity. . 4,572 4,460 4,531 4,388 4,164 3,899 3,657equity 4,176 4,068 4,069 4,280

SHARE DATA

Net income. . . . . . . 1.28 1.82 2.82 2.70 3.10 2.84 4.07

Book value. . . . . . . 44.38 43.75 43.99 43.04 41.64 38.99 36.57

Cash dividend . . . . . 0.75 0.50 1.50 1.25 0.66 0.60 0.54

RATIOS

Return on average
assets . . . . . . . . 0.73% 1.02% 0.79% 0.75% 0.74% 0.64% 0.96%income (loss) $ 0.38 $ (0.80) $ (0.82) $ (1.57)

AT OR FOR THE SIX
MONTHS ENDED
JUNE 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------

Book value $ 16.70 $ 16.27 $ 16.28 $ 17.12

Cash dividend $ 0 $ 0 $ 0 $ 0

(1) Does not include preopening expenses of $342,091 or interest income on
escrowed stock subscription funds of $41,799.

AT OR FOR THE
PERIOD FROM DATE OF
AT OR FOR THE INCEPTION (MAY
AT OR FOR THE NINE MONTHS YEAR ENDED 22, 1995) TO
ENDED SEPTEMBER 30, DECEMBER 31, DECEMBER 31,

1997 1996 1996 1995(1)

RATIOS(2)

Return on average assets 0.34% (1.08)% (0.77)% (3.72)%

Return on average equity . . . . . . . . 5.8% 8.4% 6.4% 6.5% 7.6% 7.5% 11.7%3.05% (6.41)% (4.99)% (8.83)%

Dividend payout . . . . 62.5% 29.7% 57.4% 50.1% 23.4% 23.3% 20.5%

Stockholders'0% 0% 0% 0%

Shareholders equity to total
assets at period-end . . . . . . 12.50% 12.36% 12.38% 11.92% 10.62% 9.02% 8.14%period end 10.54% 12.66% 11.76% 26.37%

Average stockholders'shareholders equity
to average total assets . . . . . 12.52% 12.14% 12.39% 11.55% 9.72% 8.58% 8.20%11.23% 16.90% 15.59% 42.10%

CAPITAL RATIOS

Equity to assets. . . . 12.50% 12.36% 12.38% 11.92% 10.62% 9.02% 8.14%assets 10.54% 12.66% 11.76% 26.37%

Leverage ratio. . . . . 12.42% 12.36% 12.38% 11.92% 10.60% 8.99% 8.10%ratio 10.39% 12.47% 11.57% 25.93%

(1) Does not include preopening expenses of $342,091 or interest income on
escrowed stock subscription funds of $41,799.

(2) Annualized where appropriate.

COMPARATIVE STOCK PRICES AND DIVIDENDS

Premier Common Shares are listed on the Nasdaq National Market under the
trading symbol "PFBI." Prior to an underwritten public offering and the
commencement of trading on the Nasdaq National Market in May 1996 pursuant
thereto (the "Premier IPO"), Premier Common Shares did not trade in any
established trading market and rarely traded. Shares of SabinaOhio River Bank
Common Stock do not trade in any established trading market and rarely trade.
The following table sets forth, for the periods indicated, the high and low
closing sales prices per Premier Common Share as reported on the Nasdaq
National Market following the Premier IPO, and the high and low sales prices
per Premier Common Share prior to the Premier IPO and per share of SabinaOhio River
Bank Common Stock in transactions of which management of Premier or SabinaOhio
River Bank, as applicable, is aware (there possibly being transactions in
Premier Common Shares or in SabinaOhio River Bank Common Stock of which management
of Premier or SabinaOhio River Bank, as applicable, is not aware). Prices per sharefor
Premier Common Shares have been retroactively adjusted to reflect all prior
stock splits or share dividends.

STOCK PRICES

Premier Common Shares Sabina Bank Common Stock
--------------------- ------------------------
High Low High Low
---- --- ---- ---PREMIER COMMON SHARES OHIO RIVER BANK COMMON STOCK

HIGH LOW HIGH LOW

1995 First Quarter $10.20 $10.20 $37.00 $35.00

Second Quarter 12.20 11.60 38.00 36.50

Third Quarter 10.20 10.20 * *

Fourth Quarter 12.00 12.00 36.50 36.50
1996 First Quarter $12.50 $12.50 $ * $ *

Second Quarter 14.25 13.50 32.00 32.0023.00 23.00

Third Quarter 14.00 12.25 35.00 30.00* *

Fourth Quarter 14.125 12.25 * *26.00 26.00

1997 First Quarter $15.625 $13.50 $ * $ *$27.00 $27.00

Second Quarter 18.25 14.25 * *

Third Quarter 21.25 17.00 27.00 27.00

Fourth Quarter 27.50 20.125 * *

1998 First Quarter $25.75 $23.125 * *
(through
July 21) 20.25 17.00 *January 20, 1998)

_____________________
*

- -----------------------
*noNo known trades

On May 27,October 30, 1997, the last trading day before the announcement of the
Merger Agreement, the last sales price of a Premier Common Share as reported
on the Nasdaq National Market was $16.25$26 per share. On August __, 1997,January 20, 1998, the
last sales price of a Premier

Common Share as reported on the Nasdaq National
Market System was $_____$23.25 per share.

The last sales price per share of SabinaOhio River Bank Common Stock in a
transaction known to management of SabinaOhio River Bank was $35.00$27.00 per share and
related to a sale of 10926 shares of SabinaOhio River Bank Common Stock on August 16, 1996.September
19, 1997.

On JulyDecember 31, 1997, there were approximately 507565 holders of record of
Premier Common Shares and approximately 89329 holders of record of SabinaOhio River
Bank Common Stock.

DIVIDENDS

The following table sets forth the cash dividends declared per share on
Premier Common Shares and SabinaOhio River Bank Common Stock for the periods
indicated. Such information regarding Premier has been retroactively
adjusted to reflect all prior stock splits or share dividends.

Premier Common Shares Sabina Bank Common Stock
--------------------- ------------------------PREMIER COMMON SHARES OHIO RIVER BANK COMMON STOCK

1995 First Quarter $0.10 $ --

Second Quarter 0.10 0.30

Third Quarter 0.125 --

Fourth Quarter 0.125 0.95
1996 First Quarter $0.125 $ --0

Second Quarter 0.125 0.500

Third Quarter 0.125 --0

Fourth Quarter 0.125 1.000

1997 First Quarter $0.125 $0.75$ 0

Second Quarter 0.125 0

Third Quarter 0.15 0

Fourth Quarter 0.15 0

1998 First Quarter -- $ 0
(through
January 20,1998)

It is the current intention of the Board of Directors of Premier to
declare dividends on the Premier Common Shares following the Merger initially
in the amount of at least $0.125$0.15 per quarter or $0.50$0.60 per year, in each case
per share. It should be noted that no such dividends have been declared and
that future dividends will be determined by Premier's Board of Directors in
light of the earnings and financial condition of Premier and its subsidiaries
and other factors, including applicable governmental regulations and policies.

COMPARATIVE PER SHARE DATA

(Unaudited)

The following table sets forth for Premier Common Shares and SabinaOhio River
Bank Common Stock certain historical, pro forma and pro forma equivalent per
share financial information for the sixnine months ended JuneSeptember 30, 1997 and
1996 and for
each of the five consecutive years ended on or prior to December 31, 1996.1996 and 1995. The information presented
herein should be read in conjunction with the other financial information for
Premier and SabinaOhio River Bank appearing elsewhere in or incorporated by
reference in this Proxy Statement/Prospectus. See, "Incorporation of Certain
Documents by Reference"; "Selected Consolidated Financial Data of Premier";
"Selected Consolidated Financial Data of SabinaOhio River Bank"; "Financial
Statements of SabinaOhio River Bank." The data presented below regarding Premier
has been retroactively adjusted to reflect all prior stock splits or share
dividends.

--------------------------------------------------------
At or for the Six
Months Ended
June 30, At or For the Year Ended December 31,
----------------- -------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----

PREMIER COMMON SHARES

Net income per share:

Historical. . . . . $0.57 $0.53 $1.05 $1.13 $0.80 $0.72 $0.39

Pro forma . . . . . 0.54 0.51 1.00 1.03 0.78 0.71 0.49

Dividends per share:

Historical. . . . . 0.25 0.25dividends and has been restated to reflect acquisitions accounted for under
the pooling of interests method.

AT OR FOR THE NINE
MONTHS ENDED AT OR FOR THE YEAR
SEPTEMBER 30, ENDED DECEMBER 31,
------------------ -------------------
1997 1996 1996 1995(d)
---- ---- ---- ------

PREMIER COMMON STOCK

Net income per share:

Historical . . . . . . . . $ 0.82 $ 0.75 $ 0.99 $ 1.02

Pro forma(a) . . . . . . . 0.77 0.64 0.87 0.76

Dividends per share:

Historical . . . . . . . . 0.38 0.34 0.48 0.42

Pro forma(b) . . . . . . . 0.38 0.34 0.48 0.42

Book value per share at
period-end:

Historical . . . . . . . . 10.04 9.40 9.52 6.54

Pro forma. . . . . . . . . 10.28 9.65 9.77 7.40

OHIO RIVER BANK COMMON
STOCK

Net income (loss) per
share:

Historical . . . . . . . . 0.38 (0.80) (0.82) (1.57)

Pro forma equivalent(c). . 0.92 0.77 1.04 0.91

Dividends per share:

Historical . . . . . . . . 0.00 0.00 0.00 0.00

Pro forma equivalent(c). . 0.46 0.41 0.58 0.50 0.45 0.36 0.28 0.20

Pro forma(a). . . . 0.25 0.25 0.50 0.45 0.36 0.28 0.20

Book value per share
at period-end:

Historical. . . . . 9.78 9.17 9.47 5.87 5.02 4.72 4.05

Pro forma . . . . . 9.77 9.19 9.47 6.54 5.77 5.42 4.78

SABINA BANK COMMON STOCK

Net income per share:

Historical. . . . . 1.28 1.82 2.82 2.70 3.10 2.84 4.07

Pro forma
equivalent(b) . . . 2.34 2.21 4.33 4.46 3.38 3.07 2.12

Dividends per share:

Historical. . . . . 0.75 0.50 1.50 1.25 0.66 0.60 0.54

Pro forma
equivalent(b) . . . 1.08 1.08 2.17 1.95 1.56 1.21 0.87

Book Value per share
at period-end:

Historical(c) . . . 41.56 40.55 41.19 39.89 37.85 35.45 33.25

Pro forma
equivalent(b) . . . 42.30 39.79 41.01 28.32 24.98 23.47 20.70

_______________
(a) The Premier pro forma dividends per share amounts represent historical
dividends per share.

(b) The Sabina Bank pro forma equivalent per share amounts are calculated by
multiplying the Premier pro forma per share amounts by the exchange ratio
of 4.33.

AT OR FOR THE NINE
MONTHS ENDED AT OR FOR THE YEAR
SEPTEMBER 30, ENDED DECEMBER 31,
------------------ -------------------
1997 1996 1996 1995(d)
---- ---- ---- ------

Book value per share at
period-end:

Historical . . . . . . . . 16.70 16.27 16.28 17.12

Pro forma equivalent(c). . 12.34 11.58 11.72 8.88

________________________
(a) Pro forma net income per share is based on pro forma consolidated combined
net income of Ohio River Bank and Premier divided by 4,985,390 and
3,750,300 weighted average shares outstanding for the nine months ended
September 30, 1997 and 1996, and 4,063,805 and 2,679,560 pro forma weighted
average shares outstanding for the years ended December 31, 1996 and 1995.

(b) The Premier pro forma dividends per share amounts represent historical
dividends per share.

(c) Ohio River Bank pro forma equivalent per share amounts are calculated by
multiplying the Premier pro forma per share amounts by the exchange ratio
of 1.2.

(d) Ohio River Bank commenced business operations on May 22, 1995.

INTRODUCTION

This Proxy Statement/Prospectus is being furnished to shareholders of
The SabinaOhio River Bank, Sabina,Ironton, Ohio ("SabinaOhio River Bank") in connection with the
solicitation of proxies by The SabinaOhio River Bank Board of Directors for use at the
Special Meeting of Shareholders of SabinaOhio River Bank (the "Special Meeting") to
be held at the principal offices of SabinaOhio River Bank at 135 N. Howard221 Railroad Street,
Sabina,Ironton, Ohio 45638, on September __, 1997,March ___, 1998, at ______ __.m. Eastern Daylight
Time, and at any adjournment or postponement thereof. At the Special
Meeting, the shareholders of SabinaOhio River Bank will be asked to adopt the
Agreement and Plan of Merger dated as of May 28,October 31, 1997 (the "Merger
Agreement") among Premier Financial Bancorp, Inc. ("Premier"), PFBIOhio River
Interim Bank, a wholly owned subsidiary of Premier ("Merger Sub"), and SabinaOhio
River Bank, a copy of which is attached as Annex IA hereto and more fully
described herein. This Proxy Statement/Prospectus and the form of proxy and
other materials accompanying this Proxy Statement/Prospectus are first being
sent to shareholders of SabinaOhio River Bank on or about August __, 1997.February ___, 1998.

THE COMPANIES

PREMIER FINANCIAL BANCORP, INC.

Premier, a Kentucky corporation, is a bank holding company headquartered
in Georgetown, Kentucky with fivesix banking subsidiaries (the "Banks"). At
June 30,December 31, 1997 Premier had total assets of $460.4$425.4 million, (including net loans of $233.3
million and investment securities of $192.2 million), total deposits
of $251.6
million, liabilities under agreements to repurchase securities of $120.3$324.6 million, and total shareholders' equity of $41.2$47.8 million. The
Banks' deposits are federally insured by the Federal Deposit Insurance
Corporation ("FDIC") through the Bank Insurance Fund ("BIF"). The principal
business of Premier is to serve as a holding company for its bank
subsidiaries. See "Available Information"; "Incorporation of Certain
Documents by Reference"; "Selected Consolidated Financial Data of Premier."

Premier was incorporated in 1991. It was organized in connection with
the reorganization of Citizens Deposit Bank and Trust Company, Vanceburg,
Kentucky (the "Vanceburg Bank") into a holding company structure. The
Vanceburg Bank is a banking corporation organized under the laws of Kentucky,
resulting from the merger in 1930 of Deposit Bank, chartered in 1894, with
Citizens Bank, chartered in 1903. In 1992, Premier acquired Bank of
Germantown, Germantown, Kentucky (the "Germantown Bank"), a banking
corporation organized under the laws of Kentucky in 1900. Premier in March,
1995 acquired Georgetown Bancorp, Inc. and its subsidiary, Georgetown Bank
and Trust Company, Georgetown, Kentucky (the "Georgetown Bank"), a banking
corporation organized under the laws of Kentucky in 1988, and in October,
1995, acquired Citizens Bank, Sharpsburg, Kentucky (the "Sharpsburg Bank"), a
banking corporation organized under the laws of Kentucky in 1903. On July

27
1, 1996,

27
Premier acquired Farmers Deposit Bank, Eminence, Kentucky (the
"Eminence Bank"), a banking corporation organized under the laws of Kentucky
in 1867. On November 14, 1997, Premier acquired The Sabina Bank, Sabina,
Ohio (the "Sabina Bank"), a banking corporation organized under the laws of
Ohio in 1875.

Premier focuses on providing quality community banking services to
individuals and small-to-medium sized businesses primarily in non-urban
areas. By seeking to provide such banking services in non-urban areas,
Premier believes that it can minimize the competitive effect of larger
financial institutions that typically are focused on large metropolitan
areas. Through its experience in acquiring the Banks, Premier has
successfully developed and implemented a strategy that allows community banks
to affiliate with it, while retaining their commitment to local orientation
and direction, and receive the benefit of Premier's capital base to promote
growth and staff assistance to promote safety, soundness and regulatory
compliance. The Banks are managed on a decentralized basis, offering
customers direct access to the Banks' presidents and other officers in an
environment conducive to friendly, informed and courteous service. This
decentralized approach also enables each Bank to offer local and timely
decision-making that provides flexibility with respect to operating
procedures and credit policies, limited only by a framework of centralized
risk controls provided by Premier to promote prudent banking practices. Each
Bank maintains its community orientation by, among other things, having
selected members of its community as members of its board of directors, who
assist in the introduction of prospective customers to the Bank and in the
development or modification of products and services to meet customer needs.
As a result of developing strong banking relationships with their customers,
through convenient and personalized service, the Banks have been successful
in funding loan demand through growth in core deposits.

The Banks provide community banking services through 12 locations in
Central Kentucky.Kentucky and Central Ohio. The Banks offer a wide variety of
consumer and commercial lending and deposit services. The loans offered by
the Banks include commercial, real estate, agricultural and consumer loans.
The Banks' range of deposit services includes checking accounts, NOW
accounts, savings accounts, money market accounts, club accounts, individual
retirement accounts, certificates of deposit and overdraft protection. The
Georgetown Bank, the Eminence Bank and the Vanceburg Bank also offer limited
trust services and act as executor, administrator, trustee and in various
other fiduciary capacities. Through Premier Data Services, Inc., Premier's
data processing subsidiary, Premier currently provides centralized data
processing services to threefive of the Banks as well as twoOhio River Bank and one
other non-affiliated banks.bank.

On December 30, 1997, Premier entered into an agreement with Community
Trust Bancorp, Inc., Pikeville, Kentucky ("Community Trust") to purchase
selected assets and assume all of the deposits of three branch banking
facilities currently operated by Bank One, West Virginia N.A. ("Bank One") in
Madison, Philippi and Van, West Virginia immediately following the
acquisition by Community Trust of such assets and the assumption of such
deposits pursuant to an agreement entered into on December 30, 1997 between
Community Trust and Bank One (the "Proposed Branch Purchases"). The Proposed
Branch Purchases will include approximately $22 million of loans and $152.6
million of deposits. Consummation of the Proposed Branch Purchases is subject
to receipt of regulatory approvals and satisfaction of certain other
conditions. Premier expects to complete the Proposed Branch Purchases in the
second quarter of 1998.

The executive offices of Premier are located at 120 N. Hamilton Street,
Georgetown, Kentucky 40324, and Premier's telephone number is (502) 863-7500.

PFBIOHIO RIVER INTERIM BANK

Merger Sub is a wholly owned commercial bank subsidiary formed by
Premier under the laws of the State of Ohio for the purpose of engaging in
the transactions contemplated by the Merger Agreement. Merger Sub does not,
and will not prior to the Merger, engage in any business activities or
conduct any operations other than in connection with the transactions
contemplated by the Merger Agreement.

THE SABINAOHIO RIVER BANK

SabinaOhio River Bank is located in Sabina, ClintonIronton, Lawrence County, Ohio and was
established in 1875. Sabina1995. Ohio River Bank is a full service commercial bank whose
principal business is the origination of 1-4 family residential mortgage
loans, commercial and agricultural loans and consumer loans. In addition,
SabinaOhio River Bank engages in an array of traditional banking activities,
including the acceptance of savings and time deposit accounts, as well as
checking and money marketNOW deposit accounts and safety deposit box rentals. SabinaOhio River
Bank's lending services include the making of secured real estate loans, home
improvement loans, agricultural loans, commercial real estate, commercial and
industrial loans, and consumer loans. Operating revenues are derived
primarily from interest and fees on lending activities, as well as interest
on municipal
obligations and securities of the United States governmentGovernment and federal agencies. See
"Sabina"Ohio River Bank Management's Discussion and Analysis of Financial Condition
and Results of Operations."

SabinaOhio River Bank owns its main office located at 135 N. Howard221 Railroad Street,
Sabina,Ironton, Ohio 4516945638 (telephone number: (937) 584-2491)(614) 533-4505). It also operates two
ATM machines in Sabina. One is located at 416 East Washington Street,
Sabina, Ohio. The other ATM was opened in February 1997 at 149 West
Washington Street, Sabina, Ohio inside the Sabina Food Mart. At December 31, 1996, Sabina1997,
Ohio River Bank had assets of $36.7$39.5 million,

deposits of $31.7$34.1 million, and shareholders' equity of $4.6$4.3 million. See "Selected
Consolidated Financial Data of Sabina Bank"; "Financial Statements of Sabina
Bank." At
December 31, 1996, Sabina1997, Ohio River Bank had 2015 full-time employees and 3two part
time employees. Management considers employee relations to be good.

SabinaOhio River Bank is a commercial bank chartered under the laws of the
State of Ohio. Ohio and is a member of the Federal Reserve System. SabinaRiver Bank's deposits are insured by the BIF of the
FDIC. As such, SabinaOhio River Bank is subject to extensive regulation by the Federal Reserve BoardFDIC and the
Ohio State
Banking Department, Division of Financial Institutions. The lending, investment and other
activities of SabinaOhio River Bank are subject to federal and state

29
laws and the
regulations and requirements of the Federal Reserve Board.
SabinaFDIC. Ohio River Bank is also required
to maintain certain minimum capital levels. The Federal Reserve BoardFDIC regularly examines SabinaOhio
River Bank for compliance, and SabinaOhio River Bank must file reports on a regular
basis with the Federal Reserve
BoardFDIC providing financial and other operating data.

SabinaOhio River Bank, isas a commercial bank, from time to time may be a party
to various legal proceedings arising in the ordinary course of business from
its operations. The management of SabinaCurrently, however, Ohio River Bank believes that the outcome of theseis not a party to any
legal proceedings individually and in the aggregate, willwhich claims have no material adverse
effect on Sabina Bank's financial position or results of operations.been asserted against Ohio River Bank.

THE SPECIAL MEETING

MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING

At the Special Meeting, holders of the Common Stock, par value $1$8 per
share, of SabinaOhio River Bank ("SabinaOhio River Bank Common Stock") will consider and
vote upon a proposal to adopt the Merger Agreement and such other matters as
may properly be brought before the Special Meeting. Management of SabinaOhio River
Bank is not aware of any other matters to be brought before the Special
Meeting.

THE BOARD OF DIRECTORS OF SABINAOHIO RIVER BANK HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND RECOMMENDS THE SHAREHOLDERS VOTE FOR ADOPTION OF THE
MERGER AGREEMENT. SEE "THE MERGER -- REASONS FOR THE MERGER; RECOMMENDATION
OF THE SABINAOHIO RIVER BANK BOARD OF DIRECTORS."

RECORD DATE; SHARES ENTITLED TO VOTE; QUORUMRecord Date; Shares Entitled to Vote; Quorum

Only shareholders of record of SabinaOhio River Bank at the close of business
on AugustFebruary __, 19971998 (the "Record Date") will be entitled to receive notice
of the Special Meeting, and only holders of record of SabinaOhio River Bank Common
Stock at that time will be entitled to vote at the Special Meeting. At the
Record Date, SabinaOhio River Bank had outstanding 110,000250,000 shares of SabinaOhio River
Bank Common Stock. A majority of the outstanding shares of SabinaOhio River Bank
Common Stock must be represented by person or by proxy at the Special Meeting
in order for a quorum to be present.

30
VOTE REQUIRED

The affirmative vote of the holders of two-thirds of the outstanding
shares of SabinaOhio River Bank Common Stock entitled to vote thereon is required
to adopt the Merger Agreement. Each share of SabinaOhio River Bank Common Stock is
entitled to one vote.

As of the Record Date, SabinaOhio River Bank's directors, executive officers
and their affiliates may be deemed to be beneficial owners of approximately
43,36069,189 shares of SabinaOhio River Bank Common Stock, or 30
approximately 39.4%27.7% of the
outstanding SabinaOhio River Bank Common Stock. The directors and executive
officers of Sabina Bank have indicated that they
intend to vote their shares for adoption of the Merger Agreement. The
directors and executive officers of SabinaOhio River Bank have indicated that they intend to vote their
shares for adoption of the Merger Agreement.

VOTING OF PROXIES

All shares of SabinaOhio River Bank Common Stock represented at the Special
Meeting by properly executed proxies received prior to or at the Special
Meeting, and not revoked, will be voted in accordance with the instructions
indicated on such proxies. If no instructions are indicated, such proxies
will be voted FOR the adoption of the Merger Agreement.

If any other matters are properly presented for consideration at the
Special Meeting, the persons named in the form of proxy and acting thereunder
will have discretion to vote on those matters in accordance with their best
judgment to the same extent as the person signing the proxy would be entitled
to vote.

REVOCABILITY OF PROXIES

Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time, without affecting any vote previously taken, by
(i) giving notice to the Secretary of SabinaOhio River Bank in writing or in open
meeting or (ii) duly executing a later dated proxy relating to the same
shares and delivering it to the Secretary of SabinaOhio River Bank before the
taking of the vote at the Special Meeting. Any written notice of revocation
or subsequent proxy should be sent and delivered to The SabinaOhio River Bank, 135 N.
Howard221
Railroad Street, Sabina,Ironton, Ohio, 45169,45638, Attention: Secretary; or hand
delivered to the Secretary of SabinaOhio River Bank at or before the taking of the
vote at the Special Meeting.

DISSENTERS' RIGHTS

Holders of SabinaOhio River Bank Common Stock have the right to dissent from
the Merger and to receive payment of the fair cash value of their shares upon
full compliance with Section 1115.19 and Section 1701.85 of the Ohio General
Corporation Law ("OGCL"). See "Dissenters' Rights." A copy of Section
1115.19 and Section 1701.85 of the OGCL is attached hereto as Annex III.C. If
holders of

more than 10% of the outstanding shares of 31

SabinaOhio River Bank Common Stock
properly demand dissenters' rights, Premier has the right to decline to
consummate the Merger. See "The Merger Agreement -- Conditions to the
Merger."

SOLICITATION OF PROXIES

All expenses of solicitation of proxies from SabinaOhio River Bank
shareholders will be borne by SabinaOhio River Bank. SabinaOhio River Bank will solicit
proxies by mail, and SabinaOhio River Bank's directors, officers and employees may
also solicit proxies by telephone, telegram, facsimile or personal interview.
These persons will receive no additional compensation for these services but
may be reimbursed for reasonable out-of-pocket expenses in connection with
such solicitation. Continuing arrangements also will be made with custodians,
nominees and fiduciaries for the forwarding of proxy solicitation materials
to beneficial owners of shares held of record by such custodians, nominees
and fiduciaries, and SabinaOhio River Bank will reimburse such custodians, nominees
and fiduciaries for reasonable expenses incurred in connection therewith.

HOLDERS OF SABINAOHIO RIVER BANK COMMON STOCK SHOULD NOT SEND ANY CERTIFICATES
REPRESENTING SHARES OF SABINAOHIO RIVER BANK COMMON STOCK WITH THE ENCLOSED PROXY
CARD. IF THE MERGER IS CONSUMMATED, A LETTER OF TRANSMITTAL WILL BE MAILED
TO EACH PERSON WHO WAS A HOLDER OF OUTSTANDING SHARES OF SABINAOHIO RIVER BANK
COMMON STOCK IMMEDIATELY PRIOR TO THE CONSUMMATION OF THE MERGER. SABINAOHIO RIVER
BANK SHAREHOLDERS SHOULD SEND CERTIFICATES REPRESENTING SABINAOHIO RIVER BANK
COMMON STOCK TO THE EXCHANGE AGENT ONLY AFTER THEY RECEIVE, AND IN ACCORDANCE
WITH THE INSTRUCTIONS CONTAINED IN, THE LETTER OF TRANSMITTAL.

THE MERGER

MERGER CONSIDERATION

Upon consummation of the Merger, each outstanding share of SabinaOhio River
Bank Common Stock will be automatically converted (subject to the provisions
with respect to fractional shares described under "Conversion of SabinaOhio River
Bank Common Stock" below) into 4.331.2 Premier Common Shares. The exchange ratio
of 4.331.2 Premier Common Shares for each share of SabinaOhio River Bank Common Stock
(the "Exchange Ratio") was determined through negotiations between Premier
and Sabina Bank,
with Sabina Bank being advised with respect to such negotiations by Professional
Bank Services, Inc. ("PBS"), its financial advisor. See "Opinion of Financial
Advisor to SabinaOhio River Bank."

Based upon the capitalization of Premier and SabinaOhio River Bank as of
June 30,
1997,December 31, the shareholders of SabinaOhio River Bank will own Premier Common
Shares representing approximately 10.2%6.02% of the outstanding voting power of
Premier following consummation of the Merger.

BACKGROUND AND REASONS FOR THE MERGER

In December, 1996, Sabinamid-July 1997, the Ohio River Bank engaged PBS to assistBoard of Directors, as part of the
Board in the
preparation of a business plan that would enable Sabina Bank to remain
independent for the foreseeable future. As theBank's strategic planning process, progressed,
it became increasingly apparentmet to discuss the Board that achieving appropriate
levels of profitability and growth necessary for independence would be
extremely difficult in viewlong-term goals of the
significant competition and increasing
regulatory burdens affecting small banks.Ohio River Bank. The Board recognized that significant changes would beto the Bank and the
manner in which it conducted business were necessary to (i) attain the Bank's
growth goals, (ii) support the Bank's customers and staff with the technology
necessary to continue offering superior products and services, (iii) produce
satisfactory returns to the returnsBank's shareholders, (iv) offer the Bank's
employees more diverse opportunities for career advancements, and (v) provide
liquidity for the shareholders' investment in the Bank's Common Stock. The
Board continued its discussions on these matters through August, 1997 and
concluded that the Board
considered adequate fordesired results could be achieved through an affiliation
with a bank holding company that shared the shareholdersBank's community banking
philosophy and one that would facilitate Ohio River Bank's continued
operations as a separate bank.

In late Summer, 1997, representatives of Sabina Bank. At the conclusionPremier approached certain
members of the strategic planning process, the Board decided to explore the benefitsmanagement of selling Sabina Bank.

The Board engaged IBS, which performed an analysis of SabinaOhio River Bank relative to comparable financial institutions and prepared a comparable
merger transaction analysis to help the Board assess Sabina Bank's valuation
in an acquisition context. In conjunction with IBS, the Board identified 21
financial institutions as potential acquirors, and IBS contacted those 21
companies to determine their interest inregarding a possible affiliation
with Sabina
Bank. FourteenPremier. Management discussed this opportunity with the Board of
Directors, and in September, 1997, the Board selected Austin Financial
Services Inc. of Toledo, Ohio ("AFSI") to act as its financial advisor and
prepare a valuation report for the Bank in anticipation of an acquisition.
At a regular Board meeting held on October 16, 1997, copies of the 21 companies contacted indicated an interest in
discussing a possible affiliation and, upon signing a confidentiality
agreement,AFSI
report were provided with information regarding Sabina Bankdistributed to assist
them in evaluating a possible affiliation. The initial evaluation process
resulted in eight companies submitting non-binding indications of interest
outlining the generalBoard.

On October 23, 1997, Ohio River Bank's Board met to consider the
proposed terms upon which they would consider an affiliation
with Sabina Bank.

On April 15, 1997, representatives of IBS met with the Sabina Bank board
to discuss the non-binding indications of interest. Three of the potential
acquirors proposedMerger. This meeting included an exchange of their shares for the Sabina Bank shares, and
fiveoral report of the
potential acquirors proposeddue diligence findings by Ohio River Bank's management as well as a cash purchase of the Sabina Bank
shares. The Board, with the assistance of IBS, evaluated the different
characteristics of each of the eight potential acquirors to determine their
suitability as merger partners. The Board considered a number of factors,
including, but not limited to, the amount and characteristicsreview of
the proposed consideration, including the market performance of the stock of each of the
four companies proposing a stock exchange, the tax consequences of the
proposed consideration, the characteristics of the markets served by the
potential acquirors, the products and services offered by the potential
acquirors and the prospects for Sabina Bank's employees.definitive agreement. After considering and weighing various
factors, the Board decided to
pursue further discussions with two ofunanimously approved the eight companies which had
submitted written proposals.Merger.

The Board met with representatives of the two
bank holding companies to further assess the merits of their respective
proposals. After these meetings had occurred, Premier, which had previously
declined to submit a written proposal, informed IBS that, upon further
consideration of its acquisition strategy and the specific characteristics of
Sabina Bank, it would like to submit a written proposal. The Board met with
representatives of Premier to evaluate Premier as a potential acquiror.
Premier and one of the other bank holding companies were then invited to
conduct a thorough due diligence review of Sabina Bank. Each of the two
potential acquirors affirmed their proposed acquisition terms at the
completion of the due diligence process. The Board met on May 15, 1997 to
consider the final proposals of Premier and the other bank holding company.

The Board favored Premier's proposal for several reasons. The Merger
presents an opportunity for the shareholders of Sabina Bank to exchange their
Sabina Bank shares in a non-taxable transaction for Premier's publicly traded
shares at a premium relative to Sabina Bank's book value per share. Based on
prevailing market values, the Premier offer had a higher aggregate value than
the other offer then under consideration, and the Board was favorably
impressed by Premier's record of profitability and growth. Since its initial
public offering price of $13 per share in May, 1996, Premier's stock had
achieved a market value of $16 per share on May 13, 1997. In conjunction with
IBS, the Board evaluated Premier's prospects for increased profitability and
growth.

In addition to the attractiveness of the offer value, Premier proposed
to keep the Sabina Bank as a separate subsidiary, whereas the other acquiror
would merge Sabina Bank into its lead bank and serve the Sabina market as a
branch of a bank located a considerable distance from Sabina. The Board
viewed the ability to continue to operate Sabina Bank as a separate bank as a
situation that would foster Sabina Bank's tradition of service to the
community and preserve opportunities for the employees of Sabina Bank.

Premier's outstanding shares, which will total more than 4.68 million
afterapproved the Merger are listed onfor a number of reasons. Among them was
the Nasdaq National Market under the symbol
"PFBI" and are held by more than 2,000 beneficial owners. These
characteristics and historical trading volumes indicate a ready market for
Sabina Bank shareholders who want to sell all or part of their Premier Common
Shares after the Merger. Those shareholders who continue to hold their
shares, however, will realize at the Effective Time of the Merger a
significant return on their investment in Sabina Bank while deferring the tax
consequences of that gain.

The asset size of Premier was another important consideration to the
Board.Premier. Premier is large enough to support the staff and
the technology necessary to offer products and services that Sabinathe Ohio River
Bank does not offer. While its size enables Premier to conduct these
activities effectively and profitably, Premier, like SabinaOhio River Bank, has
served the financial service needs of small communities, and there are many
similarities between the business philosophy and customer-service orientation
of SabinaOhio River Bank and Premier. Moreover, because of its size, Premier can
offer SabinaOhio River Bank's employees more diverse opportunities for career
advancement.

In addition, the Merger presents an opportunity to Ohio River Bank
shareholders to exchange their Ohio River Bank Common Shares in a non-taxable
transaction for Premier's publicly-traded shares at a premium relative to
Ohio River Bank's book value per share.

Also, after a review of Premier's financial information, the Board evaluated
favorably Premier's prospects for increased profitability and growth.

The Board recognized that these features would providealso considered the foundation
forproposal to maintain Ohio River Bank as a
combinationseparate subsidiary. The Board viewed the ability to operate Ohio River Bank
as a separate bank as a situation that would benefit Sabina Bank's shareholders,allow Ohio River Bank to
continue its commitment to the community and to preserve the employment
opportunities for the employees its customersof Ohio River Bank.

Premier's Common Shares are listed on the Nasdaq National Market under
the symbol "PFBI" and the communities it serves. After carefully
considering the relevant factors, the Board concluded that Premier was the
most suitable acquirorare held by over 2000 beneficial owners. These
characteristics and decided to proceed with the negotiation ofhistorical trading volumes indicate a definitive agreement with Premier. On May 28, 1997, at the conclusion of
arm's length negotiations between Sabina Bank and Premier, the Board of
Sabina Bank met to consider approval of the terms of the Merger Agreement. At
that meeting, representatives of PBS met with the Board to review the
financial components of the Merger and advised the Board that, in the opinion
of PBS, the financial consideration to be received by the Sabinaready market for
Ohio River Bank shareholders inwho want to sell all or part of their Premier
Common Shares after the merger was fair to the Sabina Bank shareholders from a
financial point of view.Merger.

Based on all of the foregoing, the directorsDirectors of SabinaOhio River Bank
concluded that the terms of the Merger, as set forth in the Merger Agreement
were in the best interests of SabinaOhio River Bank and its shareholders.

OPINION OF FINANCIAL ADVISOR TO SABINAOHIO RIVER BANK

PBS was engaged by SabinaOhio River Bank's board of directors retained Austin Financial Services,
Inc. ("AFSI") to act as exclusive financial advisor with respect to
determining the value of Ohio River Bank as it related to advise Sabina Bank's Boarda possible merger
involving all or a substantial amount of Directorsthe business, securities, or assets
of Ohio River Bank. Ohio River Bank selected AFSI as its financial advisor
because of its reputation and because AFSI has significant experience in
transactions similar to the Merger Agreement. AFSI analyzed Ohio River Bank
and its operations, historical performance and future prospects, and provided
an opinion as to the fairness, of the consideration, from a financial perspective, to be paid by Premier topoint of view, of the Sabina Bank shareholders pursuant
toterms
of the Merger Agreement. IBS, a subsidiaryAFSI, due to the nature of PBS, was retained by the Board
of Directors of Sabina Bank to evaluatethis reorganization,
also analyzed Premier and facilitate the possible sale of
Sabina Bank.

PBSits operations, historical performance and future
prospects.

AFSI is a bank consulting firm with offices in Louisville, Atlanta,
Chicago, Nashville and Washington, D.C. IBS is a registered broker/dealer.
As part of itsnationally recognized investment banking business, PBSfirm specializing in
the banking and financial services industry. AFSI is regularlycontinually engaged in
reviewing the fairnessvaluation of financial institution acquisition transactions from
a financial perspective and in valuing financial institutions and other businesses and their securities in connection with mergers and
acquisitions, private placements and valuations for estate, settlementscorporate and
other matters. Neither PBSpurposes. AFSI has not previously provided professional services
and/or products to Ohio River Bank or Premier in the ordinary course of
business. Furthermore, AFSI does not contemplate any future business with
Ohio River Bank and/or Premier arising from this engagement, nor anyhas its
opinion concerning the fairness, from a financial point of its affiliates
has a material financial interest in Sabinaview, of the terms
of the Merger Agreement been

subject to indications of future business with either Ohio River Bank or
Premier.

PBS and IBS were
selected to advise Sabina Bank's Board of Directors based upon their
familiarity with Ohio financial institutions and knowledge of the banking
industry asAFSI has rendered a whole.

PBS performed certain analyses described herein and presented the range of
values for Sabina Bank resulting from such analyses to the Board of Directors of
Sabina Bank in connection with its advice as to the fairness of the
consideration to be paid by Premier in the Merger.

A fairness opinion of PBS was delivered to the Board of Directors of
Sabina Bank on May 28, 1997, at a special meeting of the Board of Directors.
PBS has updated such fairnesswritten opinion to the BoardOhio River Bank board of
Directors of Sabina
Bankdirectors to the effect that, as of the date of this Proxy
Statement/Prospectus. A copyProspectus/Prospectus, the terms of the updated fairness opinion, which includesMerger Agreement are fair,
from a summaryfinancial point of view, to the shareholders of Ohio River Bank. No
limitations were imposed by the board of directors of Ohio River Bank upon
AFSI with respect to the investigations made or procedures followed by AFSI
in rendering its opinion. The full text of the opinion of AFSI, which sets
forth assumptions made, matters considered and information analyzed in derivinglimits on the fairness opinion,review
undertaken by AFSI, is attached as Appendix IIC. OHIO RIVER BANK STOCKHOLDERS
ARE URGED TO READ THIS OPINION IN ITS ENTIRETY.

AFSI's opinion is directed only to this Proxy Statement/Prospectus (the "Fairness Opinion")the fairness, from a financial point
of view, of the terms of the Merger Agreement and does not constitute a
recommendation to any Ohio River Bank shareholder as to how such shareholder
should be read invote at the special meeting of Ohio River Bank shareholders or any
other matter.

In connection with its entirety.

In arriving at its Fairness Opinion, PBSopinion, AFSI reviewed material bearing upon the
financial operating condition of Ohio River Bank and Premier including, but
not limited to: (1) the Annual Report of Ohio River Bank for the year ending
1996 and the Annual Report of Premier for the years ending 1995-1996; (2)
Consolidated Reports of Condition and Income of Ohio River Bank for the years
ending 1995-1996 and for September 30, 1997; (3) Consolidated Financial
Statements Form FR Y-9C of Premier for September 30, 1997; (4) SEC form 10Q
of Premier for September 30, 1997; (5) Uniform Bank Performance Report of
Ohio River Bank for June 30, 1997; (6) Bank Holding Company Performance
Report of Premier for June 30, 1997; (7) certain other public information on
Ohio River Bank and Premier; (8) other internal financial and operating
information which was provided to AFSI by Ohio River Bank and Premier; (9)
publicly available businessinformation concerning certain other banks and financial information relatingbank
holding companies, the trading markets for their securities and the nature
and terms of certain other merger and acquisition transactions believed
relevant to Sabinaits inquiry; (10) reviewed the reported price and trading
activity for Ohio River Bank Common Stock and Premier. PBS consideredPremier Common Stock, compared
certain financial and stock market data of Sabinainformation for Ohio River Bank and
Premier compared that data with similar data for certain other publicly
held bank holding companies, and considered the financial termsinformation of certain other comparable bankcompanies whose securities
are publicly traded; (11) discussed the foregoing as well as other matters
relevant to its inquiry, including the past and current business operations
and acquisitions, results of regulatory examinations, financial condition,
current loan quality and trends, and future prospects of Ohio River Bank and
Premier with certain officers and representatives of Ohio River Bank and
Premier; (12) the Merger Agreement; and (13) this Proxy Statement/Prospectus.
AFSI also took into account its assessment of general economic, market and
financial conditions and its experience in other

transactions, as well as, its experience in securities valuation and general
knowledge of the banking industry. AFSI's opinion was necessarily based upon
conditions as they existed and could be evaluated on the date of the opinion
and the information made available to AFSI through that date.

AFSI relied upon and assumed without independent verification the
accuracy and completeness of all of the financial and other information
provided to it by Ohio River Bank and Premier or from public sources. AFSI
has not made an independent evaluation of the assets of Ohio River Bank or
Premier, but has relied upon the books and records of Ohio River Bank,
Premier, and the audited financial statements as presented to AFSI as the
valuators of the fair market value of Ohio River Bank. In addition, AFSI did
not independently verify and relied on and assumed the aggregate allowances
for loan losses set forth in the statesbalance sheets of Ohio River Bank and
Indiana that had recently
been effected. PBS also consideredPremier at September 30, 1997, were adequate to cover such other information,losses and
complied fully with applicable law, regulatory policy, and sound banking
practice as of the date of such financial studies,
analyses and investigations, and financial, economic and market criteria that it
deemed relevant. In connection with its review, PBSstatements. Furthermore, AFSI did
not independently verify the foregoing informationcarrying values of other real estate owned and
relied onloans classified as in-substance foreclosures of each of Ohio River Bank and
Premier in their respective September 30, 1997, balance sheets, and AFSI
assumed that such informationcarrying values complied fully with applicable law,
regulatory policy and sound banking practice as being completeof such date. AFSI was not
retained to and
accurate in all material respects. Financial forecasts prepared by PBS were
based on assumptions believed by PBS to be reasonable and to reflect currently
available information. PBS did not conduct a physical inspection of any of the
properties of facilities of Ohio River Bank or Premier, nor did AFSI make anany
independent evaluation or appraisal of the assets, liabilities or prospects
of SabinaOhio River Bank or Premier. PBS took into accountPremier, was not furnished with any such evaluation or
appraisal, and did not review any individual credit files. AFSI also assumed
that the contacts made
by IBSMerger Agreement is, and will be, in compliance with other financial institutions concerning their interest in a possible
affiliation with Sabinaall laws and
regulations that are applicable to Ohio River Bank and reviewed all correspondence and information
received from such other financial institutions.

As part of preparing the Fairness Opinion, PBS performed a due diligence
review of Premier. As part of the due diligence, PBS reviewed the following
items: minutes of the Board of Directors meetings from January 19, 1996 through
December 10, 1996; reports filed with the Securities and Exchange Commission by
Premier on Forms 10-K, 10-Q and 8-K for the years ended December 31, 1994, 1995
and 1996 and during 1997; reports of independent auditors and management letters
and responses thereto for the year ended December 31, 1996; analysis and
calculations of allowance for loan and lease losses as of December 31, 1996;
internal loan review reports; investment portfolio activity reports; asset
quality reports; the Uniform Bank Holding Company Performance Report for Premier
as of December 31, 1996; Consolidated Reports of Condition and Income filed by
Premier's subsidiary banks for the year ended December 31, 1996; and discussion
of pending litigation and other issues with senior management of Premier.

PBS reviewed and analyzed the historical performance of Sabina Bank
contained in: Annual Reports and audited financial statements for the years
ended December, 1994, 1995 and 1996 as well as unaudited March 31, 1997
financial statements; March 31, 1996, June 30, 1996, September 30, 1996 and
December 31, 1996 Consolidated Reports of Condition and Income filed by
Sabina Bank with the Federal Reserve Board; December 31, 1996 Uniform Bank
Performance Report of Sabina Bank; historical common stock trading activity
of the Bank; and the premises and other fixed assets. PBS reviewed and
tabulated statistical data regarding the loan portfolio, securities portfolio
and other performance ratios and statistics. Financial projections were
prepared and analyzed as well as other financial studies, analyses and
investigations as deemed relevant for the purposes of

rendering the Fairness Opinion. In review of the aforementioned information,
PBS took into account its assessment of general market and financial
conditions, its experience in other similar transactions, and its knowledge
of the banking industry generally.

In connection with rendering the Fairness Opinion and preparing its written and oral presentationopinion to theOhio River Bank's Board of Directors, PBSboard,
AFSI performed a variety of financial analyses including thosewhich are summarized herein. Suchbelow.
AFSI's summary of such analyses as set forth in this Proxy
Statement/Prospectus does not purport to be a complete description of the analyses
performed by PBS in this regard. The preparation of a fairness opinion
involves various determinations as to the most appropriate and relevant
methods of financial analysis and the application of these methods to the
particular circumstances and, therefore, such
an opinion is not readily
susceptible to summary description. Accordingly, notwithstanding the separate
factors summarized below, PBSanalyses. AFSI believes that its analyses and the summary set forth in this
Proxy Statement/Prospectus must be considered as a whole and that selecting
portions of itssuch analyses orand the factors considered by it,therein, without
considering all analysesfactors and factors,analyses, could create an incomplete view of the
evaluationanalyses and the process underlying its Fairness Opinion.AFSI's opinion. The preparation of a
fairness opinion is a complex process involving AFSI's subjective judgments
and is not necessarily susceptible to partial analysis or summary
description. In
performing its analyses, PBSAFSI made numerous assumptions with respect to
industry performance, business and economic conditions, and other matters,
many of which are beyond Sabina Bank's or Premier's control. Thethe control of Ohio River Bank and Premier. Any
estimates contained in AFSI's analyses
performed by PBS are not necessarily indicative of
actual valuesfuture results or future
results,value, which may be significantly more or less

36
favorable than suggested by
such analyses. In addition, analyses relating to theestimates. AFSI's estimates of values of businessescompanies do
not purport to be appraisals or tonecessarily reflect the pricesprice at which
businessescompanies or their securities actually may be sold. ACQUISITION COMPARISON ANALYSIS: In performingNo company or
transaction utilized in AFSI's analyses was identical to Ohio River Bank or
Premier or the Merger Agreement. Accordingly, such analyses are not based
solely on arithmetic calculations; rather, they involve complex
considerations and judgments by AFSI concerning differences in financial and
operating characteristics of the relevant companies, the timing of the
relevant transactions and prospective buyer interest, as well as other
factors that could affect the public trading markets of the company or
companies to which they are being compared. None of the analyses performed
by AFSI was assigned a greater significance by AFSI than any other.

The following is a brief description of the analyses performed by AFSI
in connection with its opinion as described to Ohio River Bank's board of
directors by AFSI:

Summary: The terms of the Merger Agreement between Ohio River Bank and
Premier, each share of Ohio River Bank Common Stock outstanding immediately
prior to consummation of the reorganization will be exchanged for 1.2 shares
of Premier Common Stock. Furthermore, each share of common stock of Interim
Bank outstanding immediately prior to consummation of the reorganization will
be converted into 1,000 shares of common stock of Ohio River Bank. The
reorganization will result in the Interim Bank merging with and into Ohio
River Bank and Ohio River Bank surviving as a wholly-owned subsidiary of
Premier. Ohio River Bank will continue to carry on its banking business in
substantially the same manner as before the reorganization.

Discounted Cash Flow Analysis: AFSI utilized a discounted cash flow
analysis in order to determine the fair market value of Ohio River Bank.
AFSI projected Ohio River Bank's cash flow from September 30, 1997, through
September 30, 2002, assuming a minimum equity capital to asset ratio of
6.00%. The present value per fully diluted share of Ohio River Bank Common
Stock resulting from this analysis PBS
reviewed all bank acquisition transactionswas $29.80.

Adjusted Book Value Analysis: AFSI also determined the adjusted book
value of Ohio River Bank as an alternative valuation method. The adjusted
book value approach requires a three-step process. First, the book value is
determined. This figure is derived from the September 30, 1997, balance
sheet, and it represents the summary measure of shareholders' claims against
the assets, on a historical cost basis. Second, assets and liabilities are
restated to their fair market values. The adjusted book value calculation
considers each major asset and liability account classification. Finally,
additional "off-balance sheet" adjustments are calculated, if necessary. The
fair market value

per fully diluted share of Ohio River Bank Common Stock resulting from this
analysis was $23.68.

Weighted Value Analysis: AFSI applied a 75% weighting to the discounted
cash flow value and a 25% weighting to the adjusted book value. The
weightings were based on AFSI's review of the financial position, history and
recent performance of Ohio River Bank. The sum of the weighted values or
$28.27 per share equates to the fair market value of Ohio River Bank.

Based on the $28.27 per share value of Ohio River Bank Common Stock and
a closing price per share of $26.50 for Premier's Common Stock as of November
25, 1997, the resulting exchange ratio of each share of Ohio River Bank
Common Stock outstanding would be for 1.067 shares of Premier Common Stock.
Therefore, the exchange terms of the Merger Agreement provide an additional
0.133 shares of Premier Common Stock for each share of Ohio River Bank Common
Stock in comparison to the exchange ratio based on the value of Ohio River
Bank determined by AFSI.

Analysis of Other Merger Transactions: AFSI analyzed certain other
mergers and acquisitions that have consummated over the past twelve months in
Ohio as well as other nearby states (including the states of IndianaKentucky, West
Virginia, and Tennessee) involving financial institutions with assets less
than $250 million. AFSI compared the multiples produced by this
reorganization to the mean multiples for the transactions analyzed. AFSI's
analysis showed that the range of implied valuations of Ohio (the "Regional Area") since 1990. There were 74 bank acquisition transactions
inRiver Bank,
applying the Regional Area announced since 1990 for which detailed financial
information was available. The purpose of this analysis wasmean transaction multiples described above to obtain an
evaluation range based on these Regional Area bank acquisition transactions.
Median multiples ofOhio River Bank's
earnings and book value implied by the comparable
transactions were utilizedwas $8.63 to $32.96 per share. The results produced
in obtaining a range for the acquisition valuethis analysis do not purport to be indicative of Sabina Bank. In addition to reviewing recent Regional Area bank transactions,
PBS performed separate comparable analyses for acquisitions of banks which,
like Sabina Bank, were located in the stateactual values or expected
values of Ohio had an equity-to-asset
ratio between 10.00% and 14.00%, had a return on average equity ("ROAE")
between 6.00% and 10.00%, and had total deposits between $20.0 and $50.0
million. Median values for the 74 Regional Area acquisitions expressed as
multiples of both book value and earnings were 1.69 and 16.67, respectively.
The median multiples of book value and earnings for acquisitions of banks
located in the stateRiver Bank or shares of Ohio were 1.69 and 14.95, respectively. The median
multiples of book value and earnings for acquisitions of Regional Area banks
with equity-to-asset ratios between 10.00% and 14.00% were 1.58 and

18.34, respectively. For acquisitions of Regional Area banks with a ROAE
between 6.00% and 10.00%, the median multiples were 1.61 and 20.42,
respectively. The median multiples of book value and earnings for
acquisitions of banks with total deposits between $20.0 and $50.0 million
were 1.44 and 14.48, respectively.

In the proposed Merger, Sabina Bank shareholders will receive 4.33
Premier Common Shares for each share of Sabina Bank Common Stock outstanding.
On May 23, 1997, the average of the bid/asked price for a Premier Common
Share on the Nasdaq National Market was $16.50 per share. Using this average
price of $16.50 per Premier Common Share, the per share value to be received
by Sabina Bank shareholders would equal $71.45 per share or an aggregate
value of $7,858,950, which represents a multiple of Sabina Bank's March 31,
1997 book value and a multiple of its March 31, 1997 annualized earnings of
1.76 and 27.29 respectively.

The market value of the proposed Merger's percentile ranking was prepared
and analyzed with respect to the above Regional Area comparable group. Compared
to all Regional Area bank transactions, the acquisition value ranked in the 63rd
percentile as a multiple of book value and in the 89th percentile as a multiple
of earnings. For bank transactions in the State of Ohio, the acquisition value
ranked in the 59th percentile as a multiple of book value and in the 92nd
percentile as a multiple of earnings. Compared to Regional Area bank
transactions where the acquired institution had an equity-to-asset ratio between
10.00% and 14.00%, the acquisition value ranked in the 88th percentile as a
multiple of book value and the 83rd percentile as a multiple of earnings. For
Regional Area bank transactions where the acquired institution had a ROAE
between 6.00% and 10.00%, the acquisition value ranked in the 88th percentile as
a multiple of book value and the 93rd percentile as a multiple of earnings. For
Regional Area bank acquisitions where the acquired institution had between
$20.0 - $50.0 million in deposits, the acquisition value ranked in the 83rd
percentile as a multiple of book value and in the 96th percentile as a multiple
of earnings.

ADJUSTED NET ASSET VALUE ANALYSIS: PBS reviewed Sabina Bank's balance sheet
data to determine the amount of material adjustments required to shareholders'
equity based on differences between the market value of Sabina Bank's assets and
their value reflected on Sabina Bank's financial statements. PBS determined that
two adjustments were warranted. Equity was increased $230,000 to reflect the
assumed retirement of Sabina Bank's ESOP debt. PBS also reflected a value for
non-interest bearing demand deposits of approximately $1,712,000. The aggregate
adjusted net asset value of Sabina Bank was determined to be $6,416,000 or
$58.33 per share of SabinaRiver Bank Common Stock.

DISCOUNTED EARNINGS ANALYSIS: A dividend discount analysis was performedAnalysis of Comparable Companies: AFSI examined the operating and
trading performance of Ohio River Bank in comparison to selected publicly
traded bank/bank holding companies located in Ohio, Kentucky, West Virginia,
and Tennessee with total assets less than $250 million. AFSI analyzed the
relative performance and outlook for Ohio River Bank by PBS pursuant to which a rangecomparing certain
financial and trading market information of stand-alone valuesOhio River Bank with the group
of 36

Sabinacomparable banks. AFSI compared Ohio River Bank was determined by adding (i)with the present value of estimated
future dividend streams that Sabina Bank could generate over a five-year
period beginning incomparable banks
based upon selected operating statistics, including capitalization,
profitability and credit quality. Using data at, or near the 12 months
ended, September 30, 1997, and ending in 2001, and (ii) the present value of
the "terminal value" of Sabina Bank's earnings at the end of the year 2001.
The "terminal value" of Sabina Bank's earnings at the end of the five-year
period was determined by applying a multiple of 16.67 timesmean market price to latest 12
months earnings was 21.14 for the projected
terminal year's earnings.comparable banks. The 16.67 multiple representsmean price to stated
book value was 126.20 percent for the median price paid
as a multiple of earningscomparable banks. The implied market
trading values for all Regional Area bank transactions since 1990.

Dividend streams and terminal values were discountedOhio River Bank derived from such comparable company
analysis utilizing the resulting mean valuation ratios ranged from
approximately $7.36 to present values
using a discount rate of 12%. This rate reflects assumptions regarding the
required rate of return of holders or buyers of Sabina Bank's Common Stock. The
aggregate value of Sabina Bank, determined by adding the present value of the
total cash flows, was $6,804,000 or $61.85$21.08 per share.

In addition, using38

Ohio River Bank and AFSI have entered into an arrangement relating to
the five-year projection as a base, a twenty-year projection was prepared assuming
that an annual growth rate of 6.0% and a consistent return on assets of 1.25%
would remain in effect for the entire period, beginning in year six. Dividends
also were assumedservices to be 70% of income for all years. This long-term projection
resulted in a aggregate value of $6,190,000 or $56.28 per share of Sabina Bank
Common Stock.

SPECIFIC ACQUISITION ANALYSIS: PBS valued Sabina Bank based on an
acquisition analysis assuming a "break-even" earnings scenario to an acquiror as
to price, current interest rates and amortization of the premium paid. Based on
this analysis, an acquiring institution would pay in the aggregate $5,707,000,
or $51.88 per share, assuming it was willing to accept no impact to its net
income in the initial year. This analysis was based on a funding cost of 6.5%
adjusted for taxes, amortization of the acquisition premium over 15 years and a
March 31, 1997 annualized earnings level adjusted for the termination of the
ESOP of $308,000. This analysis was repeated assuming a potential acquiror would
attain non-interest expense reductions of 10% in the transaction. Based on this
analysis, an acquiring institution would pay in the aggregate $6,525,000 or
$59.32 per share of Sabina Bank Common Stock.

The Fairness Opinion is directed only to the question of whether the
consideration to be receivedprovided by Sabina Bank's shareholders under the Merger
Agreement is fair and equitable from a financial perspective, and it does not
constitute a recommendation to any Sabina Bank shareholder to vote in favor of
approval and adoption of the Merger Agreement. No limitations were imposed on
PBS or IBS regarding the scope of its investigation or otherwise by Sabina Bank.

Based on the results of the various analyses described above, PBS concluded
that the consideration to be received by Sabina Bank's shareholders under the
Merger Agreement was fair and

equitable from a financial perspective to the shareholders of Sabina Bank.

PBS and IBS will receive fees in the amount of $10,000 plus one percent of
the total transaction value for all services performedAFSI in connection with the Merger and renderingAgreement.
In regards to AFSI's services in determining an opinion as to the Fairness Opinion.fairness,
from a financial point of view, of the terms of the Merger Agreement, the
cost is a contractual $10,000. In addition, SabinaOhio River Bank also has agreed
to indemnify IBS, PBSAFSI and its officers, directors, officersshareholders, employees and
employees fromagents for all of its time, expenses, and any liability incurred as a result
of AFSI's proposed engagement by means of legal action, administrative
proceedings or threat thereof, unless such action, pending or threat thereof
is caused by AFSI's own unlawful conduct, breach of duty or negligence during
the course of performing AFSI's services.

AFSI, in connectionrendering its opinion, has assumed that the transaction will be
a tax-free reorganization with the Merger, and to hold IBS and PBS harmless from any losses,
actions, claims, damages, expenses or liabilities relatedno material adverse tax consequences to any of
IBS'the parties involved, or PBS'
acts or decisions made in good faith andto Ohio River Bank shareholders receiving Premier
Common Stock. In addition, AFSI has assumed that in the best interestscourse of Sabina Bank.obtaining
the necessary regulatory approvals for the transaction, no condition will be
imposed upon Ohio River Bank or Premier that will have a materially adverse
impact on the contemplated benefits of the proposed transaction to Ohio River
Bank and Premier and their shareholders.

EFFECTIVE TIME

The Merger will become effective upon the filing of a certificate of
merger with the Secretary of State of the State of Ohio (the "Effective
Time") or such later time as is specified on such certificate. The filing
with respect to the Merger will occur on the first day that is five business
days after satisfaction or waiver of the latest to occur of the conditions to
the Merger unless another date is agreed to in writing by Premier and SabinaOhio
River Bank.

The Merger Agreement may be terminated by either party if, among other
reasons, the Merger shall not have been consummated on or before December 31,
1997.April 30,
1998. See "The Merger Agreement -- Conditions to the Merger."

CONVERSION OF SABINAOHIO RIVER BANK COMMON STOCK; PROCEDURES FOR EXCHANGE OF
CERTIFICATES; FRACTIONAL SHARES

The conversion of SabinaOhio River Bank Common Stock (other than shares as to
which dissenters' rights are properly exercised ("Dissenting Shares")) into
Premier Common Shares will occur automatically at the Effective Time.

As soon as practicable after the Effective Time, Mid-America Bank of
Louisville and Trust Company, Louisville, Kentucky, or another bank or trust
company designated by Premier and reasonably

39
acceptable to SabinaOhio River Bank, in its capacity as exchange agent (the
"Exchange Agent"), will send a letter of transmittal to each SabinaOhio River Bank
shareholder. The letter of transmittal will contain instructions with
respect to the surrender of certificates representing SabinaOhio River Bank Common
Stock to be exchanged for Premier Common Shares.

SABINAOHIO RIVER BANK SHAREHOLDERS SHOULD NOT FORWARD SABINAOHIO RIVER BANK STOCK
CERTIFICATES TO THE EXCHANGE AGENT UNTIL THEY HAVE RECEIVED A LETTER OF
TRANSMITTAL. SABINAOHIO RIVER BANK SHAREHOLDERS SHOULD NOT RETURN STOCK
CERTIFICATES WITH THE ENCLOSED PROXY.

Until certificates representing SabinaOhio River Bank Common Stock are
surrendered for exchange after consummation of the Merger, holders thereof
will not be shareholders of Premier entitled to notice of or to vote on
matters submitted to the shareholders of Premier, and each outstanding
certificate representing SabinaOhio River Bank Common Stock shall represent after
consummation of the Merger only the right to receive, upon surrender of such
certificate, the merger consideration. Until the certificates representing
SabinaOhio River Bank Common Stock are surrendered for exchange after consummation
of the Merger, holders of such certificates will not be paid dividends on the
Premier Common Shares into which such shares have been converted, but any
such unpaid dividends will be paid, without interest, when such certificates
are properly surrendered.

All Premier Common Shares issued upon conversion of shares of SabinaOhio River
Bank Common Stock shall be deemed to have been issued in full satisfaction of
all rights pertaining to such shares of SabinaOhio River Bank Common Stock,
subject, however, to SabinaOhio River Bank's obligation to pay any dividends or
make any other distributions with a record date prior to the Effective Time
that may have been declared or made by SabinaOhio River Bank on SabinaOhio River Bank
Common Stock in accordance with the Merger Agreement on or prior to the
Effective Time and which remains unpaid at the Effective Time.

No fractional Premier Common Shares will be issued to any SabinaOhio River
Bank shareholder upon consummation of the Merger. For each fractional share
that would otherwise be issued, Premier will pay by check an amount equal to
the product obtained by multiplying the fractional share interest to which
such holder would otherwise be entitled by the closing price for a Premier
Common Share on the Nasdaq National Market on the business day immediately
preceding the Effective Time.

NASDAQ NATIONAL MARKET LISTING

It is a condition to the Merger that the Premier Common Shares to be
issued in the Merger be authorized for listing on the Nasdaq National Market,
subject to official notice of issuance.

40
CONDUCT OF BUSINESS PENDING MERGER

Pursuant to the Merger Agreement, SabinaOhio River Bank has agreed to carry on
its business in the usual, regular and ordinary course and substantially in
the same manner as conducted prior to the execution of the Merger Agreement.
See "The Merger Agreement -- Certain Covenants."

CONDITIONS TO THE CONSUMMATION OF THE MERGER

The obligations of Premier and SabinaOhio River Bank to consummate the Merger
are subject to various conditions, including: obtaining requisite
shareholder and regulatory approvals; the absence of any

materially
burdensome requirement or condition imposed in connection with the obtaining
of any such regulatory approvals; approval for listing on the Nasdaq National
Market, subject to official notice of issuance, of the Premier Common Shares;
receipt of opinions in respect of certain Federal income tax consequences of
the Merger and receipt of a letter from Premier's independent accountants to
the effect that the Merger qualifies for "pooling of interests" accounting
treatment; the average trading price for a Premier
Common Share during a 20 consecutive trading day period ending five business
days before the Effective Time being at least $14; and any SabinaOhio River Bank shareholders properly exercising
dissenters' rights not owning more than 10% of the outstanding SabinaOhio River
Bank Common Stock. See "The Merger Agreement -- Conditions to the Merger."

REGULATORY APPROVALS REQUIRED

The Merger is subject to the prior approval of the Federal Reserve
Board, the FDIC and the banking authorities of the Commonwealth of Kentucky
and the State of Ohio.

41
CERTAIN FEDERAL INCOME TAX CONSEQUENCES

ConsummationThe following is a summary of the material anticipated U.S. federal
income tax consequences of the Merger to holders of Ohio River Bank Common
Stock who hold such stock as a capital asset. This summary is condition upon there being delivered
opinionsbased on the
Code, Treasury regulations thereunder, and administrative rulings and court
decisions in effect as of the date hereof, all of which are subject to change
at any time, possibly with retroactive effect. This summary is not a
complete description of all of the consequences of the Merger and, in
particular, may not address U.S. federal income tax considerations applicable
to shareholders subject to special treatment under U.S. federal income tax
law (including, for example, non-U.S. persons, financial institutions,
dealers in securities, insurance companies or tax-exempt entities, holders
who acquired Ohio River Bank Common Stock pursuant to the exercise of an
employee stock option or right or otherwise as compensation, and holders who
hold Ohio River Bank Common Stock as part of a hedge, straddle or conversion
transaction). In addition, no information is provided herein with respect to
the tax consequences of the Merger under applicable foreign, state or local
laws. HOLDERS OF OHIO RIVER BANK COMMON STOCK ARE URGED TO CONSULT WITH
THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE MERGER TO THEM,
INCLUDING THE EFFECTS OF FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.

In connection with the filing of the Registration Statement, Eskew &
Gresham, P.S.C., Premier'sPSC, independent accountants to Premier, has delivered to Premier
its opinion, dated the date hereof and Vorys, Sater, Seymourbased upon certain customary
assumptions and Pease, special counselrepresentations, to Sabinathe effect that, and, at the Effective
Time Eskew & Gresham, PSC will, subject to the qualifications discussed in
the following paragraph, deliver to Premier and Ohio River Bank,
respectively, its opinion (the "Tax Opinion"), dated as of the Effective
Time, to the effect that, in each case for U.S. federal income tax purposes, under current law, assuming that the Merger and
related transactions will take place as described in the Merger Agreement,
thepurposes:

(i) The Merger will constitutebe treated as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and
Premier, Merger Sub and Sabina Bank will each be a party to the
reorganization within the meaning of Section 368(b) of the Code.

In that case, in the respective opinions of Eskew and Gresham, P.S.C., and
Vorys, Sater, Seymour and Pease, the following would be the material Federal
income tax consequences of the Merger:

(i) No gain or loss will be recognized by Sabina Bank, Premier or
Merger Sub in the Merger;Code;

(ii) No gain or loss will be recognized by Premier or Ohio River Bank as
a result of the shareholders of Sabina Bank
upon their receipt of Premier Common Shares in exchange for their Sabina Bank
Common Stock, except that shareholders who receive cash proceeds for fractional
interests in Premier Common Shares will recognize gain or loss equal to the
difference between such proceeds and the tax basis allocated to their fractional
share of interest, and suchMerger;

(iii) No gain or loss will constitute capital gain or loss if
their Sabinabe recognized by the holders of Ohio River
Bank Common Stock is held aswho exchange all of their Ohio River Bank Common Stock
solely for Premier Common Stock pursuant to the Merger (except with respect
to cash received in lieu of a capital asset at the Effective Time;

(iii)fractional share interest in Premier Common
Stock); and

(iv) The aggregate tax basis of the Premier Common Shares (including fractional
share interests)Stock received by
holders of Ohio River Bank Common Stock who exchange all of their Ohio River
Bank Common Stock solely for Premier Common Stock pursuant to the shareholders of Sabina BankMerger will
be the same as the aggregate tax basis of their Sabinathe Ohio River Bank Common Stock
exchanged therefor; and

(iv) The holding periodsurrendered in exchange

therefor (reduced by any basis amount allocable to the fractional share
interest in Premier Common Stock for which cash is received).

Each party's obligation to consummate the Merger is conditioned upon the
receipt by each of Premier Common Sharesand Ohio River Bank of its respective Tax Opinion
in form and substance reasonably satisfactory to the handsparty to whom such Tax
Opinion is addressed. Eskew & Gresham, PSC will render its Tax Opinion on
the basis of Sabina
Bank shareholders will includefacts, representations and assumptions set forth or referred to
in such opinion that are consistent with the holding periodstate of their Sabina Bank Common
Stock exchanged therefor, provided such Sabina Bank Common Stock is held as a
capital assetfacts existing at the
Effective Time. Shareholders whoIn rendering the Tax Opinion, such accounting firm may
require and rely upon representations and covenants, including those
contained in certificates of officers of Premier, Ohio River Bank and others,
reasonably satisfactory in form and substance to such firm. The Tax Opinion
is not binding on the Internal Revenue Service (the "IRS") or the courts, and
the parties do not intend to request a ruling from the IRS with respect to
the Merger. Accordingly, there can be no assurance that the IRS will not
challenge such conclusion or that a court will not sustain such challenge.

In the event that (i) either Ohio River Bank or Premier fails to receive
cash proceedsits Tax Opinion, (ii) Ohio River Bank determines to waive the condition to
its obligation to consummate the Merger relating thereto, and (iii) the
material federal income tax consequences to Ohio River Bank shareholders are
different from those described above, Ohio River Bank will resolicit the Ohio
River Bank shareholders prior to proceeding with consummation of the Merger.

Based upon the surrendercurrent ruling position of Sabinathe IRS, cash received by a
holder of Ohio River Bank Common Stock to Sabina Bank pursuant to the exercisein lieu of dissenters' rightsa fractional share interest
in Premier Common Stock will be treated as having effected a taxable sale or exchangereceived in redemption of such
shares,fractional share interest, and sucha Ohio River Bank shareholder willshould generally
recognize capital gain or loss equal tofor federal income tax purposes measured by
the difference between the amount of cash received for such shares and the shareholder'sportion of the tax
basis for such shares. Subject to the limitations imposed by Section 302 of the Code,share of Premier Common Stock allocable to such fractional share
interest. Such gain or loss will constituteshould be a long-term capital gain or loss if
the holding period for such shares
are held as a capital assetshare of Ohio River Bank Common Stock is greater
than one year at the Effective Time. THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
IT DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN TAX ASPECTS OF THE MERGER.
THE DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS OF THE CODE,
EXISTING TREASURY REGULATIONS THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS
AND COURT DECISIONS. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND ANY SUCH
CHANGE COULD AFFECT THE CONTINUING VALIDITY OF THIS DISCUSSION. EACH SABINA
BANK SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR WITH RESPECT TO
THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO HIM OR HER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.In certain circumstances, holders of
Ohio River Bank Common Stock that are individuals may be entitled to
preferential treatment for net long-term capital gains, including, as a
result of recently enacted legislation, in the case of a capital asset held
for more than 18 months at the time of the disposition. The holding period
of a share of Premier Common Stock received in the Merger (including
fractional share interests deemed received and redeemed as described above)
will include the holder's holding period in the Ohio River Bank Common Stock
surrendered in exchange therefor.

ANTICIPATED ACCOUNTING TREATMENT

The Merger is expected to qualify as a "pooling of interests" for
accounting and financial reporting purposes. Under this method of accounting,
the recorded assets and liabilities of Premier and SabinaOhio River Bank will be
carried forward to Premier at their recorded amounts;amounts, and income of Premier will
include income of Premier and SabinaOhio River Bank for the entire fiscal year in
which the Merger occurs; and theoccurs. The reported income of the separate corporations for
prior periods will be combined and may be restated as income of Premier.

The Merger Agreement provides that a condition to the consummation of the
Merger is the receipt of a letter from the independent accountants of Premier to
the effect that the Merger qualifies as a "pooling of interests" for accounting
and financial reporting purposes. In the event such condition is not met, the
Merger would not be consummated unless the condition were waived and approval of
those shareholders entitled to vote on the Merger was resolicited.

EFFECT ON SABINAOHIO RIVER BANK'S ESOP; EMPLOYEE BENEFITS

The Merger Agreement provides that Sabina Bank will terminate the Sabina
Bank Employee Stock Ownership Plan (the "ESOP") as soon as practicable following
the Merger in a manner that is consistent with the Employee Retirement Income
Security Act ("ERISA") and the ESOP's governing documents and does not result in
any unnecessary federal income tax consequences to the ESOP. Sabina Bank has
agreed not to make any further contributions to the ESOP without Premier's
written consent. Following the Merger, in addition to other employee benefits
from time to time provided by Premier directly or through its subsidiaries,
Sabina Bank employees that are participants in the ESOP will be eligible as
employees of Premier to participate in the Premier 401(k) Retirement Plan.

After the Effective Time, the officers and employees of SabinaOhio River Bank
will be provided with such employee benefits as Premier, directly or through its
subsidiaries, generally provides to officers and employees. For purposes of
providing such benefits, Premier will credit such officers and employees for
years of service at SabinaOhio River Bank prior to the Effective Time for all purposes
for which such service was recognized by SabinaOhio River Bank.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

From a period of three years from the Effective Time of the Merger, Premier
has agreed to indemnify each officer, director or employee of SabinaOhio River Bank
against losses, claims and liabilities arising out of acts or omissions
occurring prior to the Effective Time to the extent that SabinaOhio River Bank is
permitted under Ohio law and its articles of incorporation and code of
regulations to indemnify such person.

The security ownership of directors and officers of SabinaOhio River Bank is set
forth under "Principal Holders of SabinaOhio River Bank Common Stock and Ownership of
Management."

RESALE OF PREMIER COMMON SHARES

The Premier Common Shares issued pursuant to the Merger will be freely
transferable under the Securities Act except for shares issued to any SabinaOhio River
Bank shareholder who may be deemed to be an "affiliate" of SabinaOhio River Bank for
purposes of Rule 145 under the Securities Act. It is expected that each such
affiliate will

enter into an agreement with Premier providing that such affiliate will not
transfer any such Premier Common Shares received in the Merger except in
compliance with the Securities Act and accounting series
releasesAccounting Series Releases of the
Commission relating to the "pooling of interests" method of accounting. This
Proxy Statement/Prospectus does not cover resales of Premier Common Shares.

MANAGEMENT AND OPERATIONS AFTER THE MERGER

SABINAOHIO RIVER BANK

Following the Merger, the directors, officers and employees of SabinaOhio River
Bank serving immediately prior to consummation of the Merger will continue to
serve in such positions. However, the number of directors of SabinaOhio River Bank
may be increased to permit J. Howell Kelly, Premier's President and Chief
Executive Officer, or such other person as may be designated by Premier, to
serve as a director of SabinaOhio River Bank.

The Merger is not expected to substantially alter the operations of SabinaOhio
River Bank. SabinaOhio River Bank will retain its separate corporate existence,
charter and name, although it will be a wholly owned subsidiary of Premier.
Premier has informed the Board of Directors of SabinaOhio River Bank that its strategy
following the Merger is to allow SabinaOhio River Bank to retain its commitment to
local orientation and direction, while having the benefit of Premier's capital
for growth and staff assistance to promote safety, soundness and regulatory
compliance. Premier has further informed the Board of Directors of SabinaOhio River
Bank that it intends for SabinaOhio River Bank to be managed on a decentralized basis,
allowing customers direct access to SabinaOhio River Bank's officers in an environment
conducive to friendly, informed and courteous service, local and timely
decision-making, and flexibility with respect to operating procedures and credit
policies limited only by a framework of centralized risk controls provided by
Premier to promote prudent banking practices.

PREMIER

Following the Merger, the directors and executive officers of Premier
serving immediately prior to consummation of the Merger will continue to serve
in such positions. See "Incorporation of Certain Documents by Reference."

THE MERGER AGREEMENT

The following is a summary of certain provisions of the Merger Agreement, a
copy of which is Annex IA to this Proxy Statement/Prospectus. The following
summary is qualified in its entirety by reference to the complete text of the
Merger Agreement, which is incorporated herein by reference.

45
THE MERGER

Pursuant to the Merger Agreement and on the terms and subject to the
conditions set forth in the Merger Agreement, Merger Sub will be merged into
SabinaOhio River Bank. Following the Merger, SabinaOhio River Bank will be a wholly owned
subsidiary of Premier. The closing of the Merger (the "Closing") will take
place on the first day that is 43

five business days after the satisfaction or
waiver of the conditions to the Merger unless another date is agreed to in
writing by Premier and SabinaOhio River Bank (the "Closing Date"). The Effective Time
of the Merger will occur upon the filing of a certificate of merger with the
Secretary of State of the State of Ohio on the Closing Date or at such later
time as is specified on such certificate.

CONVERSION OF SABINAOHIO RIVER BANK COMMON STOCK

At the Effective Time of the Merger, pursuant to the Merger Agreement, (i)
each issued and outstanding share of SabinaOhio River Bank Common Stock, other than
shares held directly or indirectly by Premier (excluding shares in trust
accounts, managed accounts and the like held by any subsidiary of Premier that
are beneficially owned by third parties) and shares with respect to which
dissenters' rights are properly exercised, will be converted into the right to
receive 4.331.2 Premier Common Shares, and upon such conversion all such outstanding
shares of SabinaOhio River Bank Common Stock will be canceled and retired and will
cease to exist and (ii) each issued and outstanding share of Merger Sub held by
Premier will be converted into 1,000 shares of common stock of SabinaOhio River Bank,
the surviving corporation in the Merger.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains customary representations and warranties by
both Premier and SabinaOhio River Bank as to, among other things, (i) due
organization, good standing and absence of violations of constitutive documents,
(ii) ownership of subsidiaries and other investments, (iii) capital structure,
(iv) requisite corporate power and authority to enter into the Merger Agreement
and to consummate the transactions contemplated by the Merger Agreement, due
authorization, execution and delivery of the Merger Agreement, validity and
enforceability of the Merger Agreement and the compliance of the Merger with
constitutive documents, agreements and applicable laws, (v) required filings and
approvals, (vi) financial statements (in the case of SabinaOhio River Bank) and
financial and other disclosure contained in documents filed with the Commission
(in the case of Premier) and the absence of undisclosed liabilities, (vii)
absence of certain material changes or events, (viii) information to be supplied
by each in connection with the Registration Statement and this Proxy
Statement/Prospectus and (ix) corporate documents, books and records.

46
The Merger Agreement also contains representations and warranties by SabinaOhio
River Bank as to (i) its allowance for credit losses, (ii) environmental
matters, (iii) the absence of material violations or defaults under constitutive
documents, contracts, other agreements and judicial or administrative orders,
(iv) compliance with licenses, permits and applicable laws, (v) certain
litigation, (vi) tax matters, (vii) material contracts, (viii) 44

employee benefit
plans, (ix) subsidiaries, (x) agreements with bank regulators, (xi) title to
properties, (xii) insurance and (xiii) potential competing interests by any
director, officer, key employee or 10% or more shareholder of SabinaOhio River Bank.

CERTAIN COVENANTS

CONDUCT OF BUSINESS PENDING THE MERGER. Pursuant to the Merger Agreement,
SabinaOhio River Bank has agreed to operate according to its ordinary and usual course
of business consistent with past practice, to seek to preserve intact its
current business organization and keep available the services of its current
directors, officers and employees, and to preserve its relationships with
customers, suppliers and others having business dealings with it so as not to
impair its goodwill and ongoing business prior to the Effective Time. SabinaOhio
River Bank has agreed, among other things, not to (i) declare any dividends or
make any other distributions in respect of SabinaOhio River Bank Common Stock, except that if the
Effective Time has not occurred before the record date for the dividend on
Premier Common Shares for the calendar quarter ended December 31, 1997, Sabina
Bank may declare a special dividend on Sabina Bank Common Stock to holders of
record of such shares as of the record date established therefor, in an amount
per share equal to the product of 4.33 multiplied by the dividend declared on
each Premier Common Share for the calendar quarter ended December 31, 1997, (ii)
issue or sell any shares of SabinaOhio River Bank Common Stock, (iii) amend its
articles of incorporation or its code of regulations, (iv) sell or otherwise
dispose of its properties or assets other than in the ordinary course of a
commercial banking business consistent with past practice, (v) incur any
indebtedness for borrowed money or make any loans, advances or capital
contributions to, or investments in, any other person, other than in the
ordinary course of a commercial banking business consistent with past practice,
(vi) increase the compensation payable to its officers or employees, grant any
severance or termination pay to, or enter into any employment or severance
arrangement with, any director, officer or employee, or establish, adopt, enter
into or amend in any material respect or take action to accelerate any rights or
benefits under any employee benefit plan, or (vii) make any capital
expenditures.

Pursuant to the Merger Agreement, Premier and SabinaOhio River Bank have each
agreed that it will not take any action that would, or that could reasonably be
expected to, result in (i) any representations and warranties of such party set
forth in the Merger Agreement that are qualified as to materiality becoming
untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect or (iii) any of the conditions
to the Merger not being satisfied.

SOLICITATION OF ACQUISITIONS PROPOSALS. Pursuant to the Merger Agreement,
SabinaOhio River Bank has agreed that it will not, and

47
that

it will direct and use its best efforts to cause its officers,
directors, employees and any investment banker, attorney or other advisor or
representative of it not to, (i) initiate, solicit or encourage the
submission of any Acquisition Proposal (as defined below), (ii) enter into
any agreement with respect to any Acquisition Proposal or (iii) engage in any
negotiations or discussions with or furnish any information or data to, any
third party relating to an Acquisition Proposal. SabinaOhio River Bank and the SabinaOhio
River Bank Board of Directors, however, may (a) furnish information to, and
participate in discussions or negotiations with, any person in connection
with an unsolicited bona fide written Acquisition Proposal to SabinaOhio River Bank
or its shareholders if and to the extent the Board of Directors determines in
good faith based on written advice of its outside legal counsel that such
action is necessary for the Board of Directors to comply with its fiduciary
duties to SabinaOhio River Bank shareholders under applicable law, and (b) comply
with Rule 14e-2 under the Exchange Act with respect to any Acquisition
Proposal. For purposes of the Merger Agreement, "Acquisition Proposal" means
any proposal or offer to SabinaOhio River Bank or its shareholders with respect to
a merger, acquisition, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, SabinaOhio River Bank.

OTHER ACTIONS. Pursuant to the Merger Agreement, each party has agreed to
use its best efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other party in doing, all
things necessary, proper or advisable to consummate and make effective the
Merger and other transactions contemplated by the Merger Agreement.

INDEMNIFICATION. Pursuant to the Merger Agreement, Premier has agreed to
indemnify for a period of three years from the Effective Time each officer,
director and employee of SabinaOhio River Bank against losses, claims and liabilities
arising out of acts or omissions occurring prior to the Effective Time to the
fullest extent SabinaOhio River Bank is permitted under Ohio law and its articles of
incorporation and code of regulations to indemnify such person.

ACCESS TO INFORMATION. Pursuant to the Merger Agreement, each of Premier
and SabinaOhio River Bank has agreed to afford to the other and to its officers,
employees, accountants, counsel and other representatives reasonable access
during normal business hours prior to the Effective Time to all of its
respective properties, books, contracts, personnel and records. Except as
required by law, Premier and SabinaOhio River Bank have agreed to hold any non-public
information in confidence.

CERTAIN OTHER COVENANTS. The Merger Agreement also contains customary
covenants applicable to transactions like the Merger, including covenants
relating to (i) each party's obligation to pay

48
its own fees and expenses, (ii) execution and delivery of closing

documentation and (iii) use of reasonable efforts to cause the Merger to
qualify as a "reorganization" within the meaning of Section 368(a) of the
Code and to be recorded for accounting purposes as a "pooling of interests."

CONDITIONS TO THE MERGER

The obligations of Premier and Merger Sub, on the one hand, and SabinaOhio
River Bank, on the other hand, to consummate the Merger are subject to
certain conditions, including the following: (i) approval and adoption of
the Merger Agreement by the affirmative vote of a majority of the outstanding
shares of SabinaOhio River Bank Common Stock; (ii) the receipt of all
authorizations, consents, orders or approvals of any governmental or
regulatory authorities that are necessary for the consummation of the Merger;
(iii) the Registration Statement shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order; (iv) the receipt by Parent, Merger Sub and SabinaOhio River
Bank of a letter from Eskew & Gresham, P.S.C.,PSC, Premier's independent
accountants, to the effect that the Merger qualifies for "pooling of
interests" accounting treatment; (v) the absence of any 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; (vi) the absence of any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger by any governmental or regulatory authority that, in
connection with the grant of any governmental or regulatory approval, imposes
any condition or restriction upon Premier or its subsidiaries, or SabinaOhio River
Bank, that materially adversely impacts the economic or business benefits of
the Merger so as to render inadvisable the consummation of the Merger; and
(vii) the Premier Common Shares issuable pursuant to the Merger shall have
been approved for listing on the Nasdaq National Market subject to official
notice of issuance.

The obligations of Premier and Merger Sub to consummate the Merger are
also subject to certain additional conditions, including the following: (i)
the accuracy of the representations and warranties of SabinaOhio River Bank set
forth in the Merger Agreement; (ii) SabinaOhio River Bank having performed in all
material respects all obligations required to be performed by it under the
Merger Agreement at or prior to the Closing Date; (iii) the obtaining by SabinaOhio
River Bank of the consent or approval of each person whose consent or
approval shall be required in order to permit the succession by SabinaOhio River
Bank, as the surviving corporation pursuant to the Merger, to any obligation,
right or interest of SabinaOhio River Bank under any material contract, agreement
or instrument; (iv) receipt by Premier of an
opinionthe Tax Opinion of Eskew & Gresham,
P.S.C.,PSC, to the effect that the Merger will be treated for

Federal49

federal income tax purposes as a reorganization within the meaning Section
368(a) of the Code; 47

(v) the receipt by Premier from each affiliate of SabinaOhio
River Bank of an "affiliate's letter"; and (vi) the shareholders of SabinaOhio
River Bank who properly exercise dissenters' rights in connection with the
Merger, if any, owning not more than 10% of the outstanding shares of SabinaOhio
River Bank Common Stock.

The obligation of SabinaOhio River Bank to consummate the Merger is also
subject to additional conditions, including the following: (i) the accuracy
of the representations and warranties of Premier and Merger Sub set forth in
the Merger Agreement; (ii) Premier and Merger Sub having performed in all
material respects all obligations required to be performed by them under the
Merger Agreement at or prior to the Closing Date; (iii) the obtaining by
Premier of the consent or approval of each person whose consent or approval
shall be required in connection with the Merger under any material contract,
agreement or instrument; (iv) receipt by SabinaOhio River Bank of an opinionthe Tax Opinion
of Vorys, Sater, Seymour and Pease,Eskew & Gresham, PSC to the effect that the Merger will treated for
federal income tax purposes as a reorganization within the meaning Section
368(a) of the Code; (v) the receipt by SabinaOhio River Bank from each affiliate of
Premier of an "affiliate's letter;" and (vi)
the average closing price per Premier Common Share for the 20 consecutive
trading days ending on the fifth business day prior to the Effective Time of the
Merger shall be at least $14.letter.

TERMINATION OF THE MERGER AGREEMENT

The Merger Agreement may be terminated at any time prior to the
Effective Time of the Merger pursuant to the mutual written consent of
Premier and SabinaOhio River Bank and at the option of either Premier or SabinaOhio River
Bank under certain circumstances, including the following: (i) if at the
Special Meeting the Merger Agreement is not approved and adopted by the
shareholders of SabinaOhio River Bank; (ii) if the Merger shall not have been
consummated on or before December 31,
1997,April 30, 1998, unless the failure to consummate the
Merger is the result of a willful and material breach of the Merger Agreement
by the party seeking to terminate the Merger Agreement; (iii) if any court or
other governmental agency shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger; (iv) in the event of a material breach by the other
party to the Merger Agreement; or (v) if (a) all the conditions to the Merger
that are conditions to the obligations of both Premier and SabinaOhio River Bank
have been satisfied and (b) any of the conditions to the obligations of the
terminating party to consummate the Merger cannot be satisfied on or before
December 31, 1997.April 30, 1998.

In addition, the Merger Agreement may be terminated at the option of SabinaOhio
River Bank if the SabinaOhio River Bank Board of Directors determines that an
Acquisition Proposal is more favorable to the shareholders of SabinaOhio River Bank
than the transactions contemplated by the Merger Agreement and such Board of
Directors shall concurrently 48

approve, and SabinaOhio River Bank shall concurrently
enter

into, a definitive agreement providing for the implementation of the
transactions contemplated by such Acquisition Proposal. In order to
terminate the Merger Agreement under this provision, SabinaOhio River Bank must
give Premier at least five business days' notice of its intention to
terminate, and the SabinaOhio River Bank Board of Directors is required to take
into account the terms of any revised proposal made by Premier during such
five business-day period.

EFFECTS OF TERMINATION

If any person makes an Acquisition Proposal with respect to SabinaOhio River
Bank and thereafter (i) the Merger Agreement is terminated (a) for failure to
obtain the approval and adoption of the Merger Agreement by the shareholders
of SabinaOhio River Bank, (b) because the Closing shall not have occurred on or
before December 31, 1997April 30, 1998 (if at the time of termination SabinaOhio River Bank is in
material breach of the Merger Agreement and such breach cannot be or has not
been cured within 30 days after SabinaOhio River Bank becomes aware of such breach
or such shorter period as may elapse between the date SabinaOhio River Bank becomes
aware of such breach and the time of termination, (c) because a court of
competent jurisdiction or other governmental agency shall have issued an
order, decree or ruling or taken any action permanently enjoining,
restraining or otherwise prohibiting the Merger (if at the time of
termination SabinaOhio River Bank is in material breach of the Merger Agreement and
such breach cannot be or has not been cured within 30 days after SabinaOhio River
Bank becomes aware of such breach or such shorter period that may elapse
between the date SabinaOhio River Bank becomes aware of such breach and the time of
termination), (d) by Premier as a result of the breach of the Merger
Agreement by SabinaOhio River Bank, (e) by Premier because any of the conditions to
its obligations is not capable of being satisfied prior to December 31, 1997April 30, 1998 or
(f) by SabinaOhio River Bank to permit SabinaOhio River Bank to enter into a definitive
agreement providing for the implementation of another Acquisition Proposal,
and (ii) a definitive agreement with respect to an Acquisition Proposal is
executed or an Acquisition Proposal is consummated at or within 12 months
after such termination, then SabinaOhio River Bank shall pay to Premier a fee of
$350,000 (reduced by any amount actually paid by SabinaOhio River Bank pursuant to
the next paragraph in connection with such termination).

If the Merger Agreement is terminated for the failure to obtain approval
of the Merger Agreement by the shareholders of SabinaOhio River Bank, then SabinaOhio
River Bank shall reimburse Premier for all its reasonable out-of-pocket
expenses actually incurred in connection with the Merger Agreement and the
transactions contemplated thereby, up to a maximum of $100,000.

In the event of termination of the Merger Agreement, the Merger
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Premier, Merger 49

Sub or SabinaOhio River
Bank, other than (i) liability with respect to

termination payments and reimbursement of fees and expenses as described
above, (ii) each party's obligation to pay its own fees and expenses (except
as set forth above with respect to reimbursement of fees and expenses), (iii)
certain obligations of confidentiality and (iv) liability resulting from any
willful and material breach by any party to the Merger Agreement.

DESCRIPTION OF PREMIER CAPITAL STOCK

AUTHORIZED CAPITAL STOCK

The authorized capital stock of Premier consists of 11 million shares,
of which 10 million are Common Shares, without par value, and 1 million are
Preferred Shares, without par value. Premier has 4,209,0904,685,390 Common Shares
issued and outstanding, 100,000 Common Shares reserved for issuance under the
Premier 1996 Employee Stock Ownership Incentive Plan and 476,300300,000 Common
Shares reserved for issuance in connection with the Merger. No Preferred
Shares are outstanding or reserved for issuance.

COMMON SHARES

Holders of Common Shares will be entitled to one vote for each share on
all matters voted on by shareholders, other than the election of directors,
and, except as required by law or provided in any resolution adopted by
Premier's Board of Directors with respect to any series of Preferred Shares,
will exclusively possess all voting power. In the election of directors,
holders of Common Shares have cumulative voting rights whereby each holder is
entitled to vote the number of shares held multiplied by the number of
directors to be elected, and each holder may cast the whole number of votes
for one candidate or distribute such votes among two or more candidates.
Holders of Common Shares do not have any conversion, redemption or preemptive
rights. Subject to any preferential rights of any outstanding series of
Preferred Shares designated by Premier's Board of Directors from time to
time, the holders of Common Shares will be entitled to such dividends as may
be declared from time to time by the Board of Directors from funds available
therefor, and upon liquidation will be entitled to receive pro rata all
assets of Premier available for distribution to such holders.

PREFERRED SHARES

The Board of Directors of Premier is authorized to provide for the
issuance of Preferred Shares, in one or more series, and to fix for each such
series such voting powers, designations, and relative, participating,
optional and other special rights, and such qualifications, limitations or
restrictions, as are stated in the resolution adopted by the Board of
Directors providing for the 50

issuance of such series and as are permitted by
the Kentucky Business Corporation Act (the "KBCA").

SHARES AVAILABLE FOR FUTURE ISSUANCE

Following the Merger, Premier will have 5,214,6104,914,610 Common Shares
authorized Common
Sharesand unissued (or reserved for issuance) and all of its authorized
Preferred Shares remaining available for issuance as the need arises in
connection with future acquisitions, combinations, equity financings, share
distributions and dividends, employee benefit plans and other corporate
purposes. The issuance of additional Common Shares and the issuance of any
Preferred Shares may occur without further authorization by shareholders on
such terms as Premier's Board of Directors, subject to its fiduciary duties,
may lawfully determine. The effect of the issuance of additional Common
Shares (other than on a pro rata basis among holders of Common Shares) would
be to dilute the present voting power and, depending on the terms of
issuance, possibly the book or market value of the Common Shares from that
prior to such issuance.

The ability to issue additional Common Shares or any Preferred Shares,
in addition to the other corporate purposes described above, could enable the
Premier Board of Directors to make more difficult the replacement of
incumbent directors or the accomplishment of certain business combinations or
takeover attempts opposed by the Board of Directors, even though any such
business combination or takeover attempt may be supported by holders of a
significant percentage of Premier's outstanding Common Shares.

Premier presently has no plan, understanding or arrangement to issue
additional Common Shares, other than in connection with the Merger or upon
the proper exercise of stock options granted pursuant to Premier's 1996
Employee Stock Ownership Incentive Plan. However, in view of Premier's
strategy to aggressively pursue acquisitions of bank holding companies, banks
(or their branches), thrift institutions (or their branches) or companies
conducting businesses deemed closely related to banking or managing or
controlling banks or thrift institutions, Premier believes that it is likely
that additional Common Shares and possibly Preferred Shares may be issued in
the future in connection with acquisitions that Premier may be able to make
in the future.

COMPARISON OF RIGHTS OF HOLDERS OF PREMIER COMMON SHARES
AND SABINAOHIO RIVER BANK COMMON STOCK

The rights of SabinaOhio River Bank shareholders are governed principally by
the OGCL, and the articles of incorporation and code of regulations of SabinaOhio
River Bank. The rights of shareholders of Premier are governed principally
by the KBCA and the articles of incorporation and bylaws of Premier. In many
instances, including dividend rights, 51

removal of directors, indemnification
of directors and officers, rights of appraisal, rights of inspection of
corporate books and records and liquidation rights, the rights of

53
the holders of SabinaOhio River Bank Common Stock are substantially the same as the
rights of the holders of Common Shares of Premier. The following summary
compares certain rights of the holders of SabinaOhio River Bank Common Stock to the
rights of holders of Premier Common Shares in areas where those rights are
materially different.

CUMULATIVE VOTING IN ELECTION OF DIRECTORS

Under the OGCL, shareholders have cumulative voting rights in an
election of directors unless the corporation's articles of incorporation
provide otherwise (which the articles of incorporation of SabinaOhio River Bank do)do
not). Consequently, shareholders of SabinaOhio River Bank are not entitled to
cumulative voting in an election of directors.

Under the KBCA and the Constitution of the Commonwealth of Kentucky,
shareholders of Kentucky corporations (as is Premier) are entitled to
cumulative voting rights in an election of directors. In an election of
directors, each shareholder has a number of votes equal to the product of (i)
the number of shares that such shareholder is entitled to vote in such
election, multiplied by (ii) the number of positions on the board of
directors to be filled in such election. The shareholder may divide such
votes among two or more nominees in such manner as he shall determine or he
may cumulate such votes and vote all of them for one nominee.

LIABILITY OF DIRECTORS

Under the OGCL, a director is liable in damages for any action he or she
takes or fails to take as a director only if it is proved by clear and
convincing evidence that such action or failure to act involved an act or
omission undertaken with either deliberate intent to cause injury to the
corporation or reckless disregard for the best interests of the corporation.
The limitation on liability will not apply to the improper payment of
dividends, distribution of assets, redemption or purchases of the
corporation's own shares, the making of certain loans or certain transactions
between the corporation and one or more interested directors. Moreover, the
statutory limitation on liability will not apply if at the time of the
relevant act or failure to act a corporation's articles of incorporation or
regulations specifically so provide. Neither the SabinaOhio River Bank articles of
incorporation nor its code of regulations contain a provision denying the
statutory limitation on liability.

The KBCA permits a corporation to include in its articles of
incorporation a provision eliminating the liability of its directors to such
corporation or its shareholders for monetary damages arising from a breach of
fiduciary duty, except for: (i) any transaction in which the director's
personal financial interest is in conflict with the financial interests of
the corporation or its shareholders, (ii) acts or omissions not in good faith
or which

involve intentional misconduct or are known to the director to be a violation
of law, (iii) any vote for or assent to an unlawful distribution to
shareholders as prohibited under the KBCA, or (iv) any transaction from which
the director derives an improper personal benefit. The articles of
incorporation of Premier contain such a provision eliminating the liability
of its directors to Premier or its shareholders for monetary damages.

CALL OF SPECIAL MEETINGS

Under the OGCL, a special meeting of shareholders may be called by (i)
the holders of 25% of the outstanding shares of a corporation entitled to
vote at such meeting, unless the corporation's regulations specify another
percentage, which in no event may be greater than 50%; (ii) the directors by
action at a meeting or a majority of the directors acting without a meeting;
or (iii) the chairman of the board, the president or, in case of the
52

president's absence, death or disability, the vice president authorized to
exercise the authority of the president. The SabinaOhio River Bank code of regulations
provides that special meetings of SabinaOhio River Bank shareholders may be called
by the Chairman of the Board, the President and Chief Executive Officer, the
SabinaOhio River Bank Board or the holders of 25% of the outstanding SabinaOhio River
Bank Common Stock.

Under the KBCA, a special meeting of shareholders may be called by (i)
the holders of one-third of the outstanding shares of a corporation entitled
to vote at such meeting, unless the corporation's bylaws specify another
percentage (which the Premier bylaws do not); (ii) the directors; or (iii)
the person or persons authorized to do so by the articles of incorporation or
bylaws of the corporation. The Premier bylaws provide that special meetings
of Premier shareholders may be called by the chief executive officer, a
majority of the directors or the holders of one-third of the outstanding
shares entitled to vote at such meeting.

ACTION BY SHAREHOLDERS WITHOUT A MEETING

Under the OGCL, unless the articles of incorporation or the regulations
of the corporation provide otherwise, any action that may be authorized or
taken by shareholders at a meeting may be authorized or taken without a
meeting with the unanimous written consent of all shareholders who would be
entitled to notice of a meeting of shareholders held for such purpose.
Neither the articles of incorporation nor the code of regulations of SabinaOhio
River Bank eliminate the ability of shareholders of SabinaOhio River Bank to act by
unanimous written consent in lieu of a meeting.

Under the KBCA, unless the articles of incorporation or bylaws of the
corporation provide otherwise (neither the articles of incorporation or
bylaws of Premier provide otherwise), any action that may be authorized or
taken by shareholders at a meeting may be

authorized or taken without a meeting with the unanimous written consent of
all shareholders who would be entitled to notice of a meeting of shareholders
held for such purpose. Further, where the articles of incorporation so
provide (and the articles of incorporation of Premier do so provide), any
action except the election of directors that may be authorized or taken by
shareholders at a meeting may be authorized or taken without a meeting with
the written consent of shareholders holding at least 80% of the voting power
of the corporation who would be entitled to notice of a meeting of
shareholders held for such purpose.

AMENDMENT TO ARTICLES OF INCORPORATION

To approve an amendment to the articles of incorporation proposed by the
SabinaOhio River Bank Board, the OGCL requires the approval of shareholders holding
two-thirds of the voting power of the corporation, unless the corporation's
articles of incorporation permits approval by the affirmative vote of 53

a
greater or lesser proportion, but not less than a majority of such voting
power (which the articles of incorporation of SabinaOhio River Bank do not).

To approve a charter amendment proposed by the Premier Board, the KBCA
requires the approval of shareholders holding a majority of the voting power
of the corporation, unless the corporation's charter permits approval by the
affirmative vote of a greater proportion (which the articles of incorporation
of Premier do not).

AMENDMENT TO CODE OF REGULATIONS OR BYLAWS

The OGCL provides that only shareholders of a corporation have the
power, by the affirmative vote of the holders of a majority of the voting
power, by the written consent of the holders of two-thirds of the voting
power or by such greater or lower proportion of the voting power specified in
the articles of incorporation, but not less than a majority, to adopt or
amend that corporation's code of regulations. The SabinaOhio River Bank code of
regulations requires that such amendments be approved by the affirmative vote
of the holders of a majority of the voting power entitled to vote on such
matter at a meeting held for such purpose or by the written consent of the
holders of shares representing two-thirds of the voting power.

Under the KBCA, a corporation's board of directors may amend or repeal
the corporation's bylaws unless the corporation's articles of incorporation
reserve this power exclusively to the shareholders in whole or in part (the
articles of incorporation of Premier do not) or the shareholders in amending
or repealing a particular bylaw provide expressly that the board of directors
may not amend or repeal that bylaw. A corporation's shareholders may amend
or repeal the corporation's bylaws, even though the bylaws may also be
amended or repealed by the board of directors, by the affirmative vote of the
holders of a majority of the voting power

56
exercised with respect to such proposal to amend or repeal the bylaws, unless
the articles of incorporation or bylaws require a greater affirmative vote
(which the articles of incorporation or bylaws of Premier do not).

APPROVAL OF MERGERS, ASSET SALES AND CERTAIN OTHER TRANSACTIONS

In addition to Board approval, the OGCL requires approval of certain
mergers, consolidations, dissolutions, dispositions of all or substantially
all of a corporation's assets, majority share acquisitions and combinations
involving the issuance of shares with one-sixth or more of the voting power
of the corporation, by the affirmative vote of holders of two-thirds of the
voting power of the corporation, unless the articles of incorporation or the
regulations specify a different proportion (but not less than a majority).
Neither the articles of incorporation nor code of regulations of SabinaOhio River
Bank provide for a different proportion of voting power to approve any of
such matters.

In addition to Board approval, the KBCA requires approval of certain
mergers, consolidations, dissolutions, dispositions of all or substantially
all of a corporation's assets and share exchanges by the affirmative vote of
a majority of the voting power of the corporation, unless the articles of
incorporation specify a different proportion (which the articles of
incorporation of Premier do not). The KBCA does not require approval of
share acquisitions (majority or otherwise) or combinations involving the
issuance of shares with a certain percentage of the voting power of the
corporation.

AUTHORIZED CAPITAL STOCK

SabinaOhio River Bank has only one class of capital stock authorized in its
articles of incorporation, SabinaOhio River Bank Common Stock. All 110,000Of the 275,000
shares of SabinaOhio River Bank Common Stock so authorized, 250,000 shares of Ohio
River Bank Common Stock are issued and outstanding and, consequently, SabinaOhio
River Bank is unableable to issue anyonly 25,000 additional shares of capital stock
without an amendment to its articles of incorporation, which requires
shareholder approval.

Premier has two classes of capital stock authorized in its articles of
incorporation, Common Shares and Preferred Shares. Following the Merger,
Premier will have 5,214,6104,914,610 authorized Common Shares and 1,000,000 authorized
Preferred Shares remaining available for issuance, any of which may be issued
without further authorization by shareholders on such terms as Premier's
Board of Directors, subject to its fiduciary duties, may lawfully determine.
The ability to issue such shares could enable the Premier Board of Directors
to make more difficult the replacement of incumbent directors or the
accomplishment of certain business combinations or takeover attempts opposed
by the Board of Directors. See

"Description of Premier Capital Stock - Shares Available for Future
Issuance."

SABINAOHIO RIVER BANK MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This discussion presents management's analysis of the primary factors
affecting the performance and financial condition of SabinaOhio River Bank. It
should be read in conjunction with the accompanying audited consolidated financial
statements beginning on page F-1 of this Proxy Statement/Prospectus. This
discussion contains forward-looking statements. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. There are a number of important
factors that could cause Ohio River Bank's actual results to differ
materially from those contemplated by such forward-looking statements. These
factors include, without limitation, Ohio River Bank's continued ability to
originate quality loans, fluctuation of interest rates, real estate market
conditions in Ohio River Bank's lending areas, general and local economic
conditions, Ohio River Bank's continued ability to attract and retain
deposits, Ohio River Bank's ability to control costs, new accounting
pronouncements, and changing regulatory requirements.

RESULTS OF OPERATIONS

EARNINGS SUMMARY. Net income for the sixnine months ended JuneSeptember 30, 1997 of
$132,000$94,000 or $1.28$0.38 per share was 29.0% less$293,000 more than the net incomeloss of $186,000$199,000 or
$1.82$(0.80) per share for the sixnine months ended JuneSeptember 30, 1996. This decreaseincrease
was due primarily to a $83,000$274,000 increase in non-interest expense and a $5,000 decrease in net interest income.income generated by
a 48% increase in average total assets. The

return on stockholders'average stockholders
equity and return on average assets were 5.8%3.05% and .73%.34%, respectively, for
the sixnine months ended JuneSeptember 30, 1997, compared to 8.4%(6.41)% and 1.02%(1.08)%,
respectively, for the same period in 1996.

Sabina Bank'sOhio River Bank s net incomeloss for 1996 was $288,000$206,000 or $2.82$(0.82) per share,
an increaseimprovement of 5.1%47.6% over the $274,000 for 1995. Net$393,000 net loss recorded in 1995 from its
inception on May 22, 1995 through December 31, 1995 (excluding pre-opening
expenses of $342,000 and interest income for 1994 was $310,000 or
$36,000 higher than 1995.on escrowed stock subscription funds
of $42,000). The increasedecrease in net incomeloss from 1995 to 1996 was primarily due to
a $168,000 decrease$746,000 increase in non-interest expenses from $1,450,000 in
1995 to $1,282,000 in 1996net interest income and a $44,000$90,000 increase in
non-interest income partially offset by an $85,000 decreasea $575,000 increase in net interest incomenon-interest
expenses and a $75,000 increase in the provision for loan losses. The netThese
increases in income and expense are attributable to the 150% growth in
1994 was higher
than bothaverage total assets from $10.6 million in 1995 to $26.5 million in 1996 and
1996 was the Bank s first full year whereas 1995 primarily due to higher net interest income.only included approximately
seven and a half months of operations. The return on shareholders'average shareholders
equity and return

on average assets were 6.4%(4.99)% and 0.79%(0.77)%, respectively, for the year ended
December 31, 1996, compared to 6.5%(8.83)% and 0.75%(3.72)%, respectively, for 1995 and 7.6% and 0.74%, respectively, for 1994.1995.

NET INTEREST INCOME. Sabina Bank'sOhio River Bank s primary source of revenue is its net
interest income, which is the difference between the interest received on its
earning assets and the interest paid on the funds acquired to support those
assets. Loans made to businesses and individuals are the primary interest
earning assets, followed by investment securities and federal funds sold in
the inter-bank market. Deposits are the primary interest bearing liabilities
used to support the interest earning assets. The level of net interest income
is affected by both the balances and mix of interest earning assets and
interest bearing liabilities, the changes in their corresponding yields and
costs, by the volume of interest earning assets funded by noninterest bearing
deposits, and the level of capital. Sabina Bank'sOhio River Bank s long term objective is
to manage thisits net interest income to provide the largest possible amount of
income while balancing interest rate, credit and liquidity risks.

Nontaxable income from loans andOhio River Bank anticipated incurring tax losses in its first two years
of operations therefore chose not to invest in any tax-exempt investment
securities is presented on a
tax-equivalent basis whereby income exempt fromuntil the tax has been adjusted upward by
an amount equivalent to the prevailing federal income taxes that would have been
paid if the income had been fully taxable.advantages of such investments could be utilized
immediately. The discussion of factors influencingthat follows regarding net interest income is not
influenced by tax-exempt income or any resultant tax-equivalent adjustment
that follows is based on taxable equivalent data. In each ofwould be appropriate if the three years, this adjustment is based on an assumed federal income tax rate
of 34%.Bank earned tax-exempt income.

The table below shows, for the periods indicated, the average
distribution of assets, liabilities and the interest earned or paidincurred on
those items, together with the level of shareholders'shareholders equity, as well as Sabina Bank'sOhio
River Bank s net yield on interest earning assets (net interest income
divided by average earning assets). The net interest margin for the first
halfnine months of 1997 was 4.85%declined to 3.99% versus 4.94%4.38% for the year ended
December 31, 1996, and the interest rate spread declined to 3.65%3.30% in 1997 from
3.73% for the year ended3.54% in 1996.

1996, tax equivalentThe decrease in net interest income decreased to $1,663,000 from
$1,751,000 in 1995,spread was caused by a decrease of $88,000 or 5%. This decrease was due to a13 basis point
decrease in the rate earned on interest earningsearning assets of 58and an 11 basis points
while the decreasepoint
increase in the rate paid on interest bearing liabilities only decreased
26 basis points,liabilities. This narrowing of
the interest rate spread from 1996 to 1997 was primarily due to the Bank s
continued emphasis on growth. The Bank's average balance of higher yielding
time deposits, which causedare generally easier to attract, to average total
interest bearing deposits increased from 59.9% in 1996 to 68.6% in 1997 and
the net interest marginBank's average balance of lower rate real estate mortgage loans to
declineaverage total loans increased from 5.26%34.1% in 19951996 to 4.94%39.5% in 1996.

Tax equivalent net interest income decreased $123,000 in 1995 from
$1,874,000 in 1994 to $1,751,000 in 1995. Although the net interest margin
increased in 1995 from 4.92% in 1994 to 5.26% in 1995, this increase was negated
by a decrease in average earning assets from $38.1 million in 1994 to $33.3
million in 1995.

571997.

AVERAGE BALANCE SHEETS AND NET INTEREST ANALYSIS
(Dollars in thousands)

FOR THE SIXPERIOD FROM
FOR THE NINE MONTHS ENDED JUNEFOR THE YEAR ENDED INCEPTION (MAY 22, 1995)
SEPTEMBER 30, 1997 DECEMBER 31, 1996 ------------------------- ----TO DECEMBER 31, 1995

AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE

ASSETS:
Interest earning assets:
U.S. Treasury and federal
agency securities $5,827 $157 5.39 $5,736 $323 5.63
State and
municipal
obligations
(1)(2) 2,629 106 8.06 2,664 217 8.15
Other securities
(1) 156 5 6.41 143 10 7.00
------- ------ ------ ------- ------ -----
Total investment $8,612 $268 6.22 $8,543 $550 6.44
securities$ 6,512 $ 277 5.67% $ 3,416 $ 188 5.51% $ 45 $ 1 4.80%
Federal funds sold 460 13 5.65 499 27 5.411,961 78 5.30 2,273 119 5.23 4,039 141 5.71

Loans, net of unearned
income (1)(2)
(3) (4)
Commercial 4,871 248 10.18 4,998 518 10.366,460 469 9.68 4,209 411 9.76 1,760 108 10.04

Real estate mortgage 10,479 438 8.36 9,134 795 8.709,858 645 8.72 6,057 528 8.72 1,670 96 9.41

Installment 9,085 435 9.58 10,481 911 8.698,648 628 9.68 7,520 746 9.92 965 71 12.04
------- ------ ---- ------- ------ ---- ------- ------ -----
Total loans $24,435 $1,121 9.18 $24,613 $2,224 9.04$24,966 $1,742 9.30% $17,786 $1,685 9.47% $ 4,395 $ 275 10.24%

Total interest-earning assets $33,507 $1,402 8.37 $33,655 $2,801 8.32$33,439 $2,097 8.36% $23,475 $1,992 8.49% $ 8,479 $ 417 8.05%

Allowance for loan losses 297 263(271) (192) (50)
Cash and due from banks 1,623 1,5971,132 1,051 823
Premises and equipment 721 7131,590 1,747 1,085
Other assets 778 820489 407 240
------- ------- -------
Total assets $36,332 $36,522$36,379 $26,488 $10,577

LIABILITIES:
Interest bearing deposits:
NOW and money market $3,444 $44 2.56 $4,093 $107 2.61$ 5,844 $ 151 3.44% $ 5,461 $ 195 3.57% $ 1,462 $ 27 2.99%
Savings 3,803 47 2.47 4,312 108 2.50
Certificates3,057 71 3.10 2,281 72 3.16 982 20 3.25

Certificate of deposit
and other time deposits 17,394 486 5.59 15,966 893 5.5919,407 852 5.85 11,563 689 5.96 2,120 85 6.53
------- ------ ---- ------- ------ ---- ------- ------ -----
Total interest-bearing
$24,641 $577 4.68 $24,371 $1,108 4.55
deposits $28,308 $1,074 5.06% $19,305 $ 956 4.95% $ 4,564 $ 132 4.73%

Other borrowings 342 13 7.60 401 30 7.48624 23 4.91 151 8 5.30 84 3 5.85
Total interest-bearing
$24,983 $590 4.72 $24,772 $1,138 4.59
liabilities $28,932 $1,097 5.06% $19,456 $ 964 4.95% $ 4,648 $ 135 4.75%

Non-interest bearing
$6,656 $6,915
demand deposits $ 3,140 $ 2,754 $ 1,398
Other liabilities 146 309194 149 78
------- ------- -------
Total liabilities $31,785 $31,996
SHAREHOLDERS' EQUITY: $4,547 $4,526
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $36,332 $36,522
NET INTEREST INCOME 812 1,663
NET INTEREST SPREAD$32,266 $22,359 $ 6,124

Shareholders' Equity: $ 4,113 $ 4,129 $ 4,453

Total liabilities and
shareholders' equity $36,379 $26,488 $10,577
Net interest income 1,000 1,028 282
Net interest spread 3.30% 3.54% 3.30%
Net interest margin 3.99% 4.38% 5.44%

(1) 3.65% 3.73%
NET INTEREST MARGIN (1) 4.85% 4.94%

1995 1994
---- ----
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE

ASSETS:
Interest earning assets:
U.S. TreasuryIncludes loan fees, immaterial in amount, in both interest income and federal 6,916 $399 5.77 $10,135 $504 4.97
agency securities
State and municipal 2,593 227 8.75 2,731 232 8.50
obligations (1)(2)
Other securities (1) 57 3 5.26 24 1 4.17
------ ------ ----- ------- ------- -----
Total investment $9,566 $629 6.57 $12,890 $737 5.72
securities
Federal funds sold 256 13 5.08 1,997 76 3.81
Loans, netthe calculation of unearned
incomeyield on loans.
(2) (3) (4)
Commercial 4,610 514 11.15 5,500 518 9.42
Real estate mortgage 7,689 794 10.33 6,943 717 10.33
Installment 11,186 1,014 9.06 10,777 911 8.45
------ ------ ----- ------- ------- -----
Total loans $23,485 $2,322 9.89 $23,220 $2,146 9.24
Total interest-earning $33,307 $2,964 8.90 $38,107 $2,959 7.76
assets
Allowance for loan losses 250 279
Cash and due from banks 1,671 2,392
Premises and equipment 652 703
Other assets 980 1,075
------- -------
Total assets $36,360 $41,998
LIABILITIES:
Interest bearing deposits:
NOW and money market $4,653 $129 2.77 $7,969 $207 2.60
Savings 4,293 113 2.63 4,653 107 2.30
Certificates of deposit
and other time deposits 15,446 924 5.98 17,143 748 4.36
------- ---- ---- ------- ------ ----
Total interest-bearing $24,392 $1,166 4.78 $29,765 $1,062 3.57
deposits
Other borrowings 594 47 7.91 342 23 6.73
Total interest-bearing $24,986 $ 1,213 4.85 $30,107 $1,085 3.60
liabilities
Non-interest bearing $6,776 $7,521
demand deposits
Other liabilities 398 286
------- -------
Total liabilites $32,160 $37,914
SHAREHOLDERS' EQUITY: $4,200 $4,084
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $36,360 $41,998
NET INTEREST INCOME 1,751 1,874
INTEREST RATE SPREAD (1) 4.05% 4.16%
NET INTEREST MARGIN (1) 5.26% 4.92%

(1) Taxable - equivalent yields are calculated assuming a 34%
federal income tax rate.
(2) Yields are calculated on historical cost.
(3) Includes loan fees, immaterial in amount, in both interest
income and the calculation of yield on loans.
(4) Includes loans on nonaccrual status.
58

The accompanying analysis of changes in net interest income in the
following table shows the relationship of the volume and rate portions of these
changes in 1996 and 1995.

ANALYSIS OF CHANGES IN NET
INTEREST INCOME
(Dollars in thousands on a taxable equivalent basis)

1996 VS. 1995 1995 VS. 1994
INCREASE (DECREASE) DUE INCREASE (DECREASE) DUE
TO CHANGE IN TO CHANGE IN
VOLUME RATE NET VOLUME RATE NET
CHANGE CHANGE

Interest Income:
Loans $108 $(206) $(98) $ 24 $152 $176
Investment securities (66) (13) (79) (208) 100 (108)
Federal funds sold 13 1 14 (82) 19 (63)
------- ------- ------- ------- ------- -------
Total interest income $55 $(218) $(163) $(266) $271 $5
Interest Expense:
Deposits -
NOW and money market $(14) $(8) $(22) $(91) $13 (78)
Savings 0 (5) (5) (8) 14 6
Certificates of deposit 31 (62) (31) (80) 256 176
and other time deposits
Other borrowings (14) (3) (17) 20 4 24
------- ------- ------- ------- ------- -------
Total interest $3 $(78) $(75) $(159) $287 $128
expense
Net interest income $52 $(140) $(88) $(107) $(16) $(123)

PROVISION AND ALLOWANCE FOR POSSIBLE LOAN LOSSES. SabinaThe Bank maintains its
allowance for possible loan losses (the "allowance")(allowance) at a level that is considered
sufficient to absorb potential losses in the loan portfolio. The allowance is
increased by the provision for possible loan losses as well as recoveries of
previously charged-off loans, and is decreased by loan charge-offs. The
provision is the necessary charge to expense to provide for current loan
losses and to maintain the allowance at an adequate level commensurate with
management's evaluation of the risks inherent in the loan portfolio. Various
factors are taken into consideration when the Bank determines the amount of
the provision and the adequacy of the allowance. Some of the factors include:

past- Past due and nonperforming assets;

specific- Specific internal analyses of loans requiring special attention;

the- The current level of regulatory classified and criticized assets
and the associated risk factors with each;

- Examinations and examinationsreviews by the Bank's independent accountants
and internal loan review personnel; and

- Examinations of the loan portfolio by federal and state
regulatory agencies.

The data collected from these sources is evaluated with regard to
current national and local economic trends, prior loss history, underlying
collateral values, credit concentrations, and industry risks. An estimate of
potential future loss on specific loans is developed in conjunction with an
overall risk evaluation of the total loan portfolio.

The following table is a summary of Sabinathe Bank's loan loss experience for
each of the past five years.

periods indicated.

SUMMARY OF LOAN LOSS EXPERIENCE
(Dollars in Thousands)

SIX

PERIOD
FROM
NINE INCEPTION
MONTHS YEARS(MAY 22,
ENDED YEAR ENDED 1995)
SEPTEMBER DECEMBER TO DECEMBER
30, 31, ENDED -----------------------------------------------------
JUNE 30,31,
1997 1996 1995 1994 1993 1992
-------
---- ---- ----
---- ----
1997
----

Balance at beginning of period $331 $261 $286 $308 $411 $391$ 273 $ 117 $ 0
Amounts charged off:
Commercial 0 73 46 42 97 522 1
Real estate mortgage 17 0 0 0
26Consumer 104 37 0
Installment 49 105 136 165 241 126
------- ---- ---- ---- ---------- ------ ----
Total loans charged off $66 $178 $182 $207 $364 $178$ 104 $ 39 $ 1

Recoveries on amounts previously charged off:
Commercial $7 $11 $4 $5 $16 $0$ 0 $ 2 $ 0
Real estate mortgage 0 0 0
Consumer 14 0 26 0
Installment 15 52 43 52 0 24
------- ---- ---- ---- ---------- ------ ----
Total recoveries $22 $63 $47 $57 $42 $24$ 14 $ 2 $ 0

Net charge-offs 44 115 135 150 322 15490 37 1
Provision for loan losses 23 185 110 128 219 174
------- ---- ---- ---- ----123 193 118
------ ------ ----
Balance at end of period $310 $331 $261 $286 $308 $411$ 306 $ 273 $117

Total loans, net of unearned income:
Average 24,435 24,613 23,485 23,220 24,987 26,70824,966 17,786 4,395
At period end 24,528 25,073 24,486 25,155 23,071 26,80926,964 22,828 9,771

As a percentage of average loans:
Net charge-offs .18% .47% .57% .65% 1.29% .58%.36% .21% .02%
Provision for possible loan losses .09% .75% .47% .55% .88% .65%.49% 1.09% 2.68%
Allowance as a percentage of year-
endperiod-end
net loans 1.26% 1.32% 1.07% 1.14% 1.34% 1.53%1.13% 1.20% 1.20%
Allowance as a multiple of net charge-offs 7x 3x 2x 2x 1x 3x3.4x 7.4x 117x

The provision for loan losses and net charge offs were $23,000$123,000 and
$44,000,$90,000, respectively, for the first halfnine months of 1997, compared to
$28,000$134,000 and $19,000, respectively, for the first halfnine months of 1996. The
increase in net charge offs from 1996 to 1997 was primarily due to the aging
of certain indirect consumer loans included in the loan portfolio. The
allowance for possible loan losses at JuneSeptember 30, 1997 was 1.26%1.13% of
outstanding loans and management believes it is adequate to absorb any future
loan losses. The provision for loan losses was $185,000$193,000 in 1996 compared to
$110,000$118,000 in 1995, an increase of $75,000. In 1996, net charge offs were
$115,000$37,000 compared to $135,000$1,000 in 1995. The allowance at December 31, 1996 was
$331,000$273,000 or 1.32%1.20% of outstanding loans. The provision for loan losses was $128,000 and net charge offs were
$150,000 in 1994.

The following table sets forth an allocation for the allowance for
possible loan losses by category of loan and a percentage distribution of the
allowance allocation. In making the allocation, consideration was given to
such factors as management's evaluation of risk in each category, current
economic conditions and charge-off experience. An allocation for the
allowance for possible loan losses is an estimate of the portion of the
allowance that will be used to cover future charge-offs in each major loan
category, but it does not preclude any portion of the allowance allocated to
one type of loan being used to absorb losses of another loan type.

ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
(Dollars in thousands)

At DecemberAT SEPTEMBER 30, AT DECEMBER 31, At June 30, ----------------------------------------------------------------------AT DECEMBER 31,
1997 1996 1995
1994 1993 1992
AmountAMOUNT % AmountAMOUNT % Amount % Amount % Amount % AmountAMOUNT %

Commercial $ 94 30.3265 21.24 $ 90 27.1957 20.88 $ 22 8.42 $ 23 8.05 $ 31 10.06 $ 40 9.7637 31.62
Real estate 11 3.55 15 4.53 12 4.60 15 5.24 33 10.72 46 11.21
mortgage 65 21.24 56 20.51 29 24.79

Installment 150 48.39 162 48.94 177 67.82 193 67.48 184 59.74 245 59.76120 39.22 113 41.39 30 25.64

Unallocated 55 17.74 64 19.34 50 19.16 55 19.23 60 19.48 79 19.2756 18.30 47 17.22 21 17.95
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- --------------------------- ------ ------ ------
Total $310 100% $331 100% $261 100% $286 100% $308 100% $410 100%$ 306 100.00 $ 273 100.00 $ 117 100.00

NON-INTEREST INCOME AND EXPENSE. SabinaThe Bank's non-interest income includes
deposit service charges, ATM fees, credit life insurance premiums, and fees
from other corporate and retail products. Non-interest income remained
stable, decreasing only $1,000has increased
steadily since the Bank's inception on May 22, 1995 as the Bank's deposit and
customer base has grown. Non-interest income increased 46% or $34,000 from
$106,000$74,000 for the first sixnine months ofended September 30, 1996 to $105,000$108,000 for the same
period in 1997. Non-interestService charges on deposit accounts, the largest component of
non-interest income, increased 22%65% or $43,000$30,000 from $193,000$46,000 for the nine
months ended September 30, 1996 to $76,000 for the same period in 1997. For
the full year 1996 non-interest income totaled $114,000 and

for the period from inception (May 22, 1995) through December 31, 1995
to $236,000 in 1996, due to a $40,000 increase
in deposit service charges resulting from both activity and fee increases.
Non-interestnon-interest income increased $7,000 from $186,000 in 1994 to $193,000 in
1995.totaled $24,000.

Non-interest expense includes all personnel, occupancy, data processing,
and other ordinary operating expenses associated with financial institutions.
Non-interest expenses for the first sixnine months ofended September 30, 1997 increased
$83,000only 3% or 13.5% as compared$26,000 to $891,000 from $865,000 in the same period in 1996. This increase was primarily due
to increasesThe
Bank has been successful in data processing fees resulting from increases in activity as
well as increases in legal and professional fees. Salaries and employee
benefits, the largest component ofcontrolling its non-interest expenses increased $38,000 or
14.6% from $260,000 during the
first half ofnine months ended September 30, 1997 even though the Bank grew in average
total assets from $24.5 million for the nine months ended September 30, 1996
to $298,000$36.4 million in the same period in 1997. Non-interest expense decreased $168,000 or 11.6%The increase in 1996 compared to 1995.
This decrease wasnon-interest
expenses is primarily due to decreasesthe 8.1% or $33,000 increase in salaries and
employee benefits ($127,000) and FDIC insurance ($52,000). Theover these time periods partially offset by a 3.3% or
$10,000 decrease in salaries and
benefits was due to the reduction in full time equivalent employees and the
elimination of bonuses in 1996. The FDIC insurance decrease resulted from
changes in the FDIC insurance fund which substantially reduced insurance
premiums for well capitalized commercial banks. Compared to 1994, the
non-interestother operating expenses. Occupancy expenses in 1995 in total remained
relatively stable with an increase of $3,000 or 1.9%.

The Bank's efficiency continues to improve as non-interest expense net
of non-interest income as a decreasepercent of $9,000 or 1%.average total assets has declined from
3.93% for the year ended December 31, 1996 to 2.87% for the nine months ended
September 30, 1997.

Non-interest expense for the full year 1996 was $1,155,000 and for the
period from inception (May 22, 1995) through December 31, 1995 was $580,000.

The following table is a summary of non-interest income and expense for
the three year periodperiods indicated.

NON-INTEREST INCOME AND EXPENSE
(Dollars in thousands)

FOR THE SIXPERIOD
FOR THE NINE INCREASE FOR THE FROM INCEPTION
MONTHS ENDED FOR THE YEARS(DECREASE) YEAR ENDED (MAY 22, 1995)
SEPTEMBER 30 1997 VS. DECEMBER 31 JUNE 30,
INCREASE INCREASE INCREASE
(DECREASE) (DECREASE) (DECREASE)
1997 VS. 1996 VS. 1995 VS.TO DECEMBER 31
--------------------- -------- ----------- --------------
1997 1996 1996 1996 1995
1995 1995 1994 1994
------------------------- ---------------------- ------------------------ ---- ---- ---- ----

Non-Interest Income:
Service charges on deposit
$89 $85 $4 $184 $144 $40 $144 $142 $2
accounts Investment securities gain 0 0 0 0 0 0 0 (7) 7
(losses)$ 76 $ 46 $ 30 $ 82 $ 15
Other 16 21 (5) 52 49 3 49 51 (2)
-- -- --- -- -- - -- --- ---32 28 4 32 9
----- ----- ----- ------ -----
Total non-interest income $105 $106 $(1) $236 $193 $43 $193 $186 $7$ 108 $ 74 $ 34 $ 114 $ 24

Non-Interest Expense:
Salaries and employee
$298 $260 $38 $607 $734 $(127) $734 $669 $65
benefits $ 438 $ 405 $ 33 $ 559 $ 301
Net occupancy and equipment 65 71 (6) 128 132 (4) 132 160 (28)
FDIC insurance 1 1 0 2 54 (52) 54 91 (37)
Franchise taxes 28 30 (2) 60 64 (4) 64 60 4159 156 3 211 82
Other 294 304 251 53 485 466 19 466 479 (13)
--- --- -- --- --- -- --- --- ----(10) 385 197
----- ----- ----- ------ -----
Total non-interest
expenses $696 $613 $83 $1,282 $1,450 $(168) $1,450 $1,459 $(9)$ 891 $ 865 $ 26 $1,155 $ 580

Net non-interest expenses as 3.25% 2.78% 2.86% 3.46% 3.46% 3.03%
a percent of
average assets (annualized where
appropriate) 2.87% 4.31% 3.93% 8.60%

INCOME TAXES. IncomeThe Bank has recorded no provisions for income taxes for any
period since its inception. Net losses were incurred in 1996 and 1995,
however no income tax expense was $30,000 for the first half of 1997
compared to $60,000 for the same period in 1996. The decrease is entirelybenefits were recorded due to the decrease in pre-tax income.

Sabina Bank recordedestablishment of a
valuation allowance for the realization of deferred tax assets.

During the nine months ended September 30, 1997, no income tax expense
for 1996has been recorded due to the utilization of $71,000, which represented
19.8%a portion of pre-tax income, comparedthe established
valuation allowance.

At September 30, 1997, the Bank had a tax net operating loss
carryforward of approximately $730,000 available to $33,000 in 1995 or 10.7% of pre-taxreduce any future taxable
income.

Income tax expense for 1994 was $84,000 or 21.3% of pre-tax income.

The following table reflects interest income on nonaccrual and restructured
loans for the periods indicated.

6366

INTEREST INCOME ON NON-ACCRUAL AND RESTRUCTURED LOANS

(Dollars in thousands)

SIX
MONTHS
ENDED
JUNE 30,
YEARS ENDED DECEMBER 31
-----------------------------------------------------

1997 1996 1995 1994 1993 1992

Contractual interest $1,600 $8,700 $5,200 $6,400 $28,000 $18,000
Interest recognized 0 0 0 0 0 0

FINANCIAL CONDITION

LENDING ACTIVITIES. Loans are Sabinathe Bank's primary use of financial resources
and represent the largest component of earning assets. SabinaThe Bank's loans are
made predominantly within Sabinathe Bank's market area and the portfolio is
diversified. Credit risk is inherent in each financial institution's loan and
investment portfolio. In an effort to minimize credit risk, Sabinathe Bank utilizes
a credit administration network, including specific lending authorities for
each loan officer, a system of loan committees to review and approve loans,
and ainternal loan review and credit quality
rating system.review. This network assists in the evaluation of the
quality of new loans and in the identification of problem or potential
problem credits and provides information to aid management in determining the
adequacy of the allowance for possible loan losses.

Total loans, net of unearned income, were $24.7$27.0 million at JuneSeptember 30,
1997 compared to $25.0$21.8 million at December 31,September 30, 1996, and averaged $24.4 million
for the first halfan increase of 1997.24%.

Total loans, net of unearned income, averaged $24.6$17.8 million in 1996
compared with $23.5$4.4 million in 1995. At year end 1996, loans net of unearned
income totaled $25.0$22.8 million compared to $24.5$9.8 million at December 31, 1995,
an increase of 2%134%.

Commercial loans generally are made to small-to-medium size businesses
located within Sabinathe Bank's defined market area and typically are generally
secured by business assets and guarantees of the principal owners. Real
estate mortgage loans include residential properties and generally do not
exceed 80% of the value of the real property securing the loan, based on
recent independent appraisals. The Bank's real estate mortgage loan portfolio
primarily consists of fixedadjustable rate residential mortgage loans. Consumer
loans generally are made to individuals living in Sabinaa Bank's defined market
area who are known to
Sabina Bank's staff.area. Consumer loans are made on a secured or unsecured basis.

The following table sets forth the maturity distribution and interest
sensitivity of selected loan categories at December 31, 1996. Maturities are
based upon contractual terms. SabinaThe Bank's

policy is to specifically review and
approve any loan renewed; no loans are automatically rolled over.

LOAN MATURITIES AND INTEREST SENSITIVITY
DECEMBER 31, 1996
(Dollars in thousands)

One Year One Over Total
or Less Through Five Loans
Five Years
Years

Commercial, secured by real estate $184 $0 $0 $184
Commercial, other 1,238 247 0 1,485
Real estate construction 0 0 0 0
Agricultural 1,401 280 0 1,681
------- ---- -- ------
Total $2,823 $527 $0 $3,350
Fixed rate loans $757 $248 $0 $1,005
Floating rate loans 2,066 279 0 2,345
------- ---- -- ------
Total $2,823 $527 $0 $3,350

65ONE YEAR ONE THROUGH OVER TOTAL
OR LESS FIVE YEARS FIVE LOANS
YEARS

Commercial, secured by
real estate $165 $ 132 $3,168 $3,465
Commercial, other 338 1,131 747 2,216
Real estate construction 285 100 0 385
Agricultural 20 0 0 20
------- ------- ------- -------
Total $808 $1,363 $3,915 $6,086

Fixed rate loans $263 $ 389 $ 429 $1,081
Floating rate loans 545 974 3,486 5,005
------- ------- ------- -------
Total $808 $1,363 $3,915 $6,086

The following table presents a summary of Sabina Bank'sthe Bank s loan portfolio by
category for the periods indicated. Other than the categories noted, there is
no concentration of loans in any industry greater than 5% in the portfolio.
SabinaThe Bank has no foreign loans or highly leveraged transactions in its loan
portfolio.

LOAN PORTFOLIO COMPOSITION

LOANS OUTSTANDING
(Dollars in thousands)

AT
JUNE

At September 30 AT DECEMBERAt December 31 ---------------------------------------------------------------------------At December 31
1997 % 1996 % 1995
% 1994 % 1993 % 1992 %

Commercial, secured by $180 .73% $184 .73% $211 .85% $452 1.75% $466 1.90% $698 2.42%
real estate $ 4,619 17.1% $ 3,465 15.2% $ 315 3.2%
Commercial, other 1,294 5.27 1,485 5.91 1,813 7.33 2,068 8.00 2,183 8.90 5,715 19.783,871 14.4 2,216 9.7 2,415 24.7
Real estate construction 0 0.0 0 0.0 258 1.04 0 0.0 0 0.0 30 .10461 1.7 385 1.7 116 1.2
Real estate mortgage 11,111 45.24 10,735 42.85 8,418 34.05 8,367 32.38 7,298 29.77 8,186 28.338,898 33.0 6,947 30.4 2,677 27.4
Agricultural 1,770 7.21 1,681 6.69 1,708 6.92 2,198 8.51 2,234 9.11 2,251 7.79
Installment 10,339 41.52 11,002 43.77 12,310 49.79 12,750 49.34 12,329 50.29 12,008 41.5420 0.1 20 0.1 0 0.0
Consumer 8,761 32.5 9,665 42.3 4,248 43.5
Other 8 .03 12 .05 6 .02 5 .02 7 .03 11 .04
-- --- -- --- - --- - --- - --- -- ---334 1.2 130 0.6 0 0.0
-------- ----- -------- ----- ------- ----
Total loans $24,702 100% $25,099 100% $24,724 100% $25,840 100% $24,517 100% $28,899 100%26,964 100.0% $ 22,828 100.0% $ 9,771 100.0%
Less unearned income 34 61 238 685 1,446 2,090
-- -- --- --- ----- -----0 0 0
-------- -------- -------
Total loans net of unearned income $24,668 $25,038 $24,486 $25,155 $23,071 $26,809$ 26,964 $ 22,828 $ 9,771

6669

A summary of the components of nonperforming assets, including several
ratios using period-end data, is shown below:

NONPERFORMING ASSETS
(Dollars in thousands)

JUNE 30, DECEMBER 31,
-------- -----------------------------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----

Nonaccrual loans $61 $345 $101 $157 $279 $95
Accruing loans which are 91 60 24 42 136 179
contractually past due 90
days or more
Restructured loans 0 0 0 0 0 0
- - - - - -
Total nonperforming and $152 $405 $125 $199 $415 $274
restructured loans
Other real estate and in- 46 0 0 34 59 0
substance foreclosures -- - - -- -- -
Total nonperforming and
restructured loans and
other real estate $198 $405 $125 $233 $474 $274
Nonperforming and
restructured loans as a
percentage of net loans .62% 1.62% .51% .79% 1.80% 1.02%
Nonperforming and
restructured loans and
other real estate as a
percentage of total assets .54% 1.10% .34% .59% 1.10% .61%

Nonaccrual loans at June 30, 1997 were $61,000 compared to $345,000 at
December 31, 1996 and $101,000 at December 31, 1995. Total nonperforming
assets declined from 1.10% of total assets at December 31, 1996 to .54% at
June 30, 1997.

NONPERFORMING ASSETS. Nonperforming assets consist of loans on which
interest is no longer accrued, certain restructured loans where interest rate
or other terms have been renegotiated, accruing loans past due 90 days or
more and real estate acquired through foreclosure.

SabinaThe Bank discontinueswill discontinue the accrual of interest on loans that become
90 days past due as to principal or interest unless they are adequately
secured and in the process of collection. A loan remainswill remain in a nonaccrual
status until doubts concerning the collectibility no longer exist. A loan is
classified as a restructured loan when the interest rate is materially
reduced or the term is extended beyond the original maturity date because of
the inability of the borrower to service the loan under the original terms.
Other real estate is recorded at the lower of cost or fair value less
estimated costs to sell.

A summary of the components of nonperforming assets, including certain
ratios using period-end data, is shown below:

NONPERFORMING ASSETS
(Dollars in thousands)

September 30 December 31 December 31
1997 1996 1995

Nonaccrual loans $ 0 $ 0 $ 0
Accruing loans which are contractually
past due 90 days or more 3 6 0
Restructured loans 0 0 0
-------- -------- --------
Total nonperforming and
restructured loans $ 3 $ 6 $ 0
Other real estate and in-substance
foreclosures 0 0 0
-------- -------- --------
Total nonperforming and restructured
loans and other real estate $ 3 $ 6 $ 0
Nonperforming and restructured loans
as a percentage of net loans .01% .03% 0%
Nonperforming and restructured loans
and other real estate as a percentage
of total assets .01% .02% 0%

Nonaccrual loans at September 30, 1997, December 31, 1996 and December
31, 1995 were zero. Total nonperforming assets declined from $6,000 or 0.02%
of total assets at December 31, 1996 to $3,000 or .01% at September 30, 1997.

The following table reflects interest income on nonaccrual and
restructured loans for the periods indicated.

INTEREST INCOME ON NON-ACCRUAL AND RESTRUCTURED LOANS

(Dollars in thousands)

FOR THE PERIOD
NINE MONTHS FROM INCEPTION
MONTHS ENDED YEAR ENDED (MAY 22, 1995)
SEPTEMBER 30 DECEMBER 31 TO DECEMBER 31

1997 1996 1995

Contractual interest $ 0 $ 0 $ 0

Interest recognized 0 0 0

INVESTMENT ACTIVITIES. The securities portfolio consists of debt securities
issued by the U. S. Treasury and other
securitiesFederal agencies which provide the Bank with
a long-term, relatively stable source of income. Additionally, the investment
portfolio provides a balance to interest rate and credit risks in other
categories of the balance sheet. The securities portfolio is also used as a
secondary source of liquidity by the Bank. SabinaThe Bank has classified all
securities as available for sale. Municipal securities within the portfolio provide tax-free income and are
within management's guidelines with respect to credit risk and market risk.
The U.S.U. S. Treasury and agencyAgency securities within the portfolio are held as a
source of stable, long-term income which
can be used as collateral to secure municipal deposits and repurchase
agreements. The securities portfolio does not contain significantany holdings in
mortgage-backed securities, collateralized mortgage obligations or other
mortgage-related derivative products and/or structured notes. There are no
tax-exempt municipal obligations within the securities portfolio due to the
availability of tax net operating loss carryforwards.

Securities as a percentage of average interest-earning assets decreased
from 33.8% in 1994 to 28.7% in 1995totaled
19.5% during the nine months ended September 30, 1997 and 25.4% in14.6% during 1996.
At JuneSeptember 30, 1997, investment securities represented 26.2%21.6% of
interest-earning assets. This
reduction in securities since 1994 reflects management's emphasis on
originating higher yielding loans and placing less reliance on the securities
portfolio for sources of income.

The following tables present the carrying values and maturity
distribution of investment securities.

CARRYING VALUE OF SECURITIES
(Dollars in thousands)

JUNE 30, DECEMBER 31,
-------- -------------------------
1997 1996 1995 1994

U.S. Treasury and federal agencies:
Available for sale $5,907 $5,301 $6,010 $0
Held to maturity 0 0 0 8,060
State and municipal obligations:
Available for sale 2,710 2,843 2,864 0
Held to maturity 0 0 0 2,844
Other securities:
Available for sale 157 153 116 27
Held to maturity 0 0 0 0
Total securities:
Available for sale 8,774 8,297 8,990 27
Held to maturity 0 0 0 10,904
------- ------- ------- -------
Total $8,774 $8,297 $8,990 $10,931

MATURITY DISTRIBUTION OF SECURITIES
June 30, 1997
(Dollars in thousands)

ONE FIVE
YEAR THROUGH THROUGH OVER
OR FIVE TEN TEN OTHER MARKET
LESS YEARS YEARS YEARS SECURITIES TOTAL VALUE

U.S. Treasury and federal agencies:
Available for sale $4,844 $1,092 $0 $0 $0 $5,936 $5,907
Held to maturity 0 0 0 0 0 0 0
State and municipal obligations:
Available for sale 250 1,243 1,036 99 0 2,628 2,710
Held to maturity 0 0 0 0 0 0 0
Other securities:
Available for sale 0 0 0 0 157 157 157
Held to maturity 0 0 0 0 0 0 0
Total securities:
Available for sale 5,094 2,335 1,036 99 157 8,721 8,774
Held to maturity 0 0 0 0 0 0 0
Total $5,094 $2,335 $1,036 $99 $157 $8,721 $8,774
Percent of total 58.41% 26.77% 11.88% 1.14% 1.80% 100.0% 100.61%
Weighted average yield* 5.67% 5.79% 5.41% 6.01% 6.41% 5.70% 5.67%

*The weighted average yields are calculated on historical cost on a non
tax-equivalent basis.

LIQUIDITY. Liquidity for a financial institution can be expressed in terms
of maintaining sufficient cash flows to meet both existing and unplanned
obligations in a cost effective manner. Adequate liquidity allows Sabinathe Bank to
meet the demands of both the borrower and the depositor on a timely basis, as
well as pursuing other business opportunities as they arise. Thus, liquidity
management embodies both an asset and liability aspect. Liquidity is
maintained through Sabina Bank'sthe Bank s ability to convert assets into cash, manage the
maturities of liabilities and generate funds through the attraction of local
deposits.

SabinaThe Bank prefers to manage its liquidity requirements primarily through
the matching of maturities of assets and liabilities. As a second source of
funds, Sabinathe Bank has accessavailability to overnight federal funds which can be
purchased from correspondent institutions.

The cash flow statements for the periods presented in the financial
statements of Sabina Bank included in this Proxy Statement/Prospectus provide an indication of Sabina Bank'sthe Bank s sources and uses of cash as
well as an indication of itsthe ability of the Bank to maintain an adequate
level of liquidity. A discussion of the cash flow statements for 1996, 1995 and 1994 follows.

Net cash provided from operating activities was $613,000, $642,000 and
$678,000 for the yearsnine
months ended September 30, 1997 ("1997"), the year ended December 31, 1996
("1996"), and the period from inception (May 22, 1995) to December 31, 1995
and 1994, respectively.
The net cash provided from operating activities was primarily due to the net
income of Sabina Bank plus non cash expenses.("1995") follows.

Cash provided byused in investing activities was $557,000, $1,294,000$5.4 million, $18.4 million and
$678,000$14.9 million for the years ended December 31,1997, 1996 1995 and 1994,1995, respectively. The cash provided byused in
investing activities is primarily due to the excess cash received
from maturing securities.

funding of new loans generated.

Cash used inprovided by financing activities was $455,000, $2,788,000$4.9 million, $18.6 million
and $4,190,000$16.6 million for the years ended December 31,1997, 1996 1995 and 1994,1995, respectively. In each of the three years,period, the
cash used inprovided by financing activities was primarily attributable to decreasesthe
growth in deposits.deposits and in 1995, the net proceeds received from the initial
capitalization of the Bank. Liquidity risk is the possibility that Sabinathe
Bank may not be able to meet its cash requirements. Management of liquidity
risk includes maintenance of adequate cash and sources of cash to fund
operations and meet the needs of borrowers, depositors and creditors.
Liquidity must be maintained at a level which is adequate but not excessive.
Excess liquidity has a negative impact on earnings resulting from the lower
yields on short-term assets.

In addition to cash, cash equivalents and Federal funds sold, the
securities portfolio provides an important source of liquidity. The total of
securities maturing within one year along with cash, due from banks and
Federal funds sold totaled $5,219,000 at December 31, 1996.$7.3 million as of September 30, 1997.
Additionally, securities available-for-sale with maturities greater than one
year and other
securities totaled $5,548,000$3.6 million at December 31, 1996.September 30, 1997. These securities are
available to meet liquidity needs on a continuing basis.

To maintain a desired level of liquidity, Sabinathe Bank has several sources
of funds available. One is the cash flow generated daily from itsthe Bank s
loan portfolio in the form of principal and interest payments. Another source
is its deposit base. SabinaThe Bank maintains a relatively stablecontinues to develop its base of customer
deposits. Due to the nature of the market served by Sabinathe Bank, management
believes that the majority of certificates of deposit of $100,000 or more are
no more volatile than its core deposits. Certificates of deposits and other
time deposits of $100,000 or more represented approximately 20.6%15.1% and 17.6%17.8%
of total deposits for 1996at September 30, 1997 and 1995,December 31, 1996,
respectively. A number of techniques are used to measure the liquidity
position, including the utilization of certain ratios that are presented
below.

These ratios are calculated based on annual
averages for each year.

7172

LIQUIDITY RATIOS

FOR THE
SIX
MONTHS
ENDED
JUNE 30, FOR THE YEARS ENDED DECEMBERSeptember 30 December 31 December 31
--------- --------------------------------
1997 1996 1995 1994

Total loans/total deposits . . . . . . . . . . . . 78.07% 78.67% 75.35% 62.23%
Net short-term borrowings/total assets . . . . . . 0.31% 0.33% 0.88% 0.06%

This analysis shows that Sabina Bank's loan to deposit ratios increased in 1996 and 1995

compared to the prior year due to an increase in loan demand
that exceeded the increase in deposit generation and retention.Total loans/total deposits 78.2% 76.3% 84.1%
Net short-term borrowings/
total assets 1.87% 1.20% 0.00%

INTEREST RATE SENSITIVITY. The interest spread and liability funding
discussed above are directly related to changes in asset and liability mixes,
volumes, maturities and repricing opportunities of interest-earning assets
and interest-bearing liabilities. Interest-sensitive assets and liabilities
are those which are subject to being repriced in the near term, including
both floating or adjustable rate instruments and instruments approaching
maturity. The interest rate sensitivity gap is the difference between total
interest-sensitive assets and total interest-sensitive liabilities. Interest
rates on Sabina Bank'sthe Bank s various asset and liability categories do not respond
uniformly to changing market conditions. Interest rate risk is the degree to
which interest rate fluctuations in the marketplace can affect net interest
income.

The need for interest rate sensitivity gap management is most critical in
times of a significant change in overall interest rates. Management generally
seeks to limit the exposure of Sabinathe Bank to interest rate fluctuations by
maintaining a relatively balanced mix of rate sensitive assets and
liabilities on a one-year time horizon. This mix is altered periodically
depending upon management'smanagement s assessment of current business conditions and the
interest rate outlook.

One tool which is used to monitor interest rate risk is the interest
sensitivity analysis as shown in the table below. This analysis reflects the
repricing characteristics of assets and liabilities over various time
periods. The gap indicates the difference between the level of assets and liabilities that are
subject to repricing over a given time period.

As shown by the interest rate sensitivity analysis as of JuneSeptember 30,
1997, the total amount of Sabina Bank'sthe Bank s interest earning assets repricing during
the first year is less than the total amount of its interest bearing
liabilities repricing during this period. This position, which is normally
termed a negative interest rate sensitivity gap, generally allows for enhanced net
interest income during periods of decreasing interest rates. This negative
gap is 72

within Sabinaoutside the Bank's internal policy guidelines andof

15%, however is not expected to impact significantly Sabina Bank'sthe Bank s net interest
income during a period of rising interest rates.

The following table provides an analysis of Sabinathe Bank's interest rate
sensitivity at JuneSeptember 30, 1997.

INTEREST RATE SENSITIVITY ANALYSIS
(Dollars in Thousands)

0 - 90 91 DAYSTHROUGH 1 - 5 OVER 5
-
DAYS
1 YEAR YEARS YEARS TOTAL

Assets
Fed Funds sold $ 1,770 $ 0 $ 0 $ 1,770

Loans, net of unearned
income $4,901 $4,366 $8,148 $7,253 $24,6688,141 17,298 1,525 26,964
Investment securities 1,088 3,375 2,685 1,626 8,774
----- ----- ----- ----- -----4,302 3,619 0 7,921
------- ------- ------- -------
Total earning assets $5,989 $7,741 $10,833 $8,879 $33,442$14,213 $20,916 $ 1,525 $36,654

Sources of Funds
NOW, money market
and savings $7,066 $0 $0 $0 $7,066$ 3,282 $ 0 $ 7,066 $10,348
Time deposits 3,332 9,614 5,02016,132 4,825 0 17,96620,957
Other borrowings 695 46 0 30 120 80 230741
------- ------ ------ ----------- ------- -------
Total interest 20,109 $ 4,871 $ 7,066 $32,046
bearing liabilities $10,398 $9,644 $5,140 $80 $25,262

Interest Sensitivity Gap
For the period $(4,409) $(1,903) $5,693 $8,799 $8,180$(5,896) $16,045 $(5,541) $ 4,608
Cumulative $(4,409) $(6,312) $(619) $8,180(5,896) 10,149 4,608
Cumulative as a percent
of earning assets (13.18)(16.08)% (18.87)% (1.85)% 24.46%27.69% 12.57%

The following tables present the carrying values and maturity distribution
of investment securities.

CARRYING VALUE OF SECURITIES
(Dollars in thousands)

September 30 December 31 December 31
1997 1996 1995

U.S. Treasury and Federal
agencies:
Available for sale $ 7,921 $ 5,593 $ 1,005
Held to maturity 0 0 0
Total securities:
Available for sale 7,921 5,593 1,005
Held to maturity 0 0 0
--------- -------- --------
Total $ 7,921 $ 5,593 $ 1,005

MATURITY DISTRIBUTION OF SECURITIES
September 30, 1997
(Dollars in thousands)

ONE FIVE
YEAR THROUGH THROUGH OVER
OR FIVE TEN TEN OTHER MARKET
LESS YEARS YEARS YEARS SECURITIES TOTAL VALUE

U.S. Treasury and
Federal agencies:
Available for sale $ 4,300 $ 3,609 $ 0 $ 0 $ 0 $ 7,909 $ 7,921
Held to maturity 0 0 0 0 0 0 0
Total securities:
Available for sale 4,300 3,609 0 0 0 0 0
Held to maturity 0 0 0 0 0 0 0
------- ------- ----- ---- ---- -------- -------
Total $ 4,300 $ 3,609 $ 0 $ 0 $ 0 $ 7,909 $ 7,921

Percent of total 54.37% 45.63% 0% 0% 0% 100% 100.15%
Weighted average yield* 5.51 6.73 0% 0% 0%

*The weighted average yields are calculated on historical cost.

DEPOSIT ACTIVITIES. Managing the mix and repricing of deposit liabilities is
an important factor affecting Sabina Bank'sthe Bank s ability to maximize its net interest
margin. The strategies used to manage interest-bearing deposit liabilities
are designed to adjust as the interest rate environment changes. In this
regard, management of Sabinathe Bank regularly assesses its funding needs, deposit
pricing, and interest rate outlooks.

For the sixnine months ended JuneSeptember 30, 1997, total deposits averaged
$31.3$31.4 million. Total deposits averaged $31.3$22.1 million in 1996 and $31.2$6.0 million
in 1995. Non-interest bearing deposits averaged 21.3%9.9% of total deposits induring
the first halfnine months of 1997 compared to 22.1%12.5% in 1996 21.7%and 23.4% in 1995 and 20.2% in 1994.1995.

Deposits totaled $31.7$34.5 million at JuneSeptember 30, 1997, compared to $31.6$29.9
million at December 31, 1996 and $31.9$11.6 million at December 31, 1995.

The table below provides information on the maturities of time deposits
of $100,000 or more at JuneSeptember 30, 1997 and December 31, 1996.

MATURITY OF TIME
DEPOSITS OF $100,000 OR MORE
June(IN THOUSANDS)

September 30 December 31
1997 1996
---- ----
(In thousands)------------ -----------

Maturing 3 months or less $1,637 $1,112$ 1,436 $ 1,008
Maturing over 3 months through 12 months 3,077 4,1502,746 2,576
Maturing over 12 months 1,188 1,228
------ ------
$5,902 $6,490

751,038 1,738
--------- --------
$ 5,220 $ 5,322

The following table sets forth the average amount of and average rate
paid on selected deposit categories during the six months ended June 30,
1997, and during the past three full years.periods indicated.

For the Six Months Ended
June

FOR THE PERIOD FROM
FOR THE NINE MONTHS FOR THE YEAR INCEPTION (MAY 22, 1995)
ENDED SEPTEMBER 30, For the Year Ended DecemberENDED DECEMBER 31, -------- -----------------------------------------------------------TO DECEMBER 31,
1997 1996 1995

1994
Amount RateAMOUNT RATE (%) Amount RateAMOUNT RATE (%) Amount RateAMOUNT RATE (%)

Amount Rate (%)
(Dollars in thousands)(DOLLARS IN THOUSANDS)

Demand $ 6,6563,140 0% $ 6,9152,754 0% $ 6,776 0% $ 7,5211,398 0%
NOW and money market accounts 3,444 2.56 4,093 2.61 4,653 2.77 7,969 2.605,844 3.44% 5,461 3.57% 1,462 2.99%
Savings 3,803 2.47 4,312 2.50 4,293 2.63 4,653 2.303,057 3.10% 2,281 3.16% 982 3.25%
Certificates of deposit and
other time deposits 17,394 5.59 15,966 5.59 15,446 5.98 17,143 4.3619,407 5.85% 11,563 5.96% 2,120 6.53
------- --------- ------- --------- ------- ----- ------- ---------
Total $31,297 3.69% $31,286 3.54% $31,168 3.74% $37,286 2.85%$31,448 4.55% $22,059 4.33% $ 5,962 3.62%

7677

SHORT-TERM BORROWINGS. Information regarding short-term borrowings for the
past three years isperiods indicated presented in the following table.

SHORT-TERM BORROWINGS
(Dollars in thousands)

FOR THE
SIX MONTHS
ENDED
JUNE 30,PERIOD
FROM
FOR THE INCEPTION
NINE FOR THE (MAY 22,
MONTHS YEAR ENDED 1995),
SEPTEMBER DECEMBER TO DECEMBER
30, 1997 31, -------- -------------------------------
1997 1996 31, 1995 1994

Federal funds purchased:Securities sold under agreements to
repurchase

Balance at yearperiod end $ 695 $ 415 $ 0 0 0 800

Weighted average rate at yearperiod end 0 0 0 6.0%5.61% 5.92% 0%

Average balance during the year 112 120 321 25period $ 565 $ 101 $ 0

Weighted average rate during the year 5.60% 3.89% 6.22% 3.90%period 4.87% 4.59% 0%

Maximum month-end balance 200 200 800 800$ 695 $ 415 $ 0

CAPITAL. The various regulatory agencies having supervisory authority over
financial institutions have adopted risk-based capital guidelines which define
the adequacy of the capital levels of regulated institutions. These risk-based
capital guidelines require minimum levels of capital based upon the risk rating
of assets and certain off-balance-sheet items. Assets and off-balance-sheet
items are assigned regulatory-risk weights ranging from 0% to 100% depending on
their level of credit risk. The guidelines classify capital in two tiers, Tier I
and Tier II, the sum of which is total capital. Tier I capital is essentially
common equity, less intangible assets. Tier II capital is essentially qualifying
long-term debt and a portion of the allowance for possible loan losses. SabinaThe
Bank's capital ratios significantly exceed all regulatory minimums.

Sabina78

The Bank's capital ratios were as follows:

SELECTED CAPITAL INFORMATION
(Dollars in thousands)

SELECTED CAPITAL INFORMATION
(DOLLARS IN THOUSANDS)
June

SEPTEMBER 30, 1997 DecemberDECEMBER 31, 1996
Amount Ratio Amount RatioAMOUNT RATIO AMOUNT RATIO

Total Capital (to risk weightedweighed assets) $4,791 21.4% $4,783 21.0%$4,415 16.2% $4,342 18.6%

Tier I Capital (to risk weightedweighed assets) 4,511 20.2% 4,462 19.6%4,109 15.1% $4,069 17.4%

Tier I Leverage 4,511 12.4% 4,462 12.2%4,109 10.4% $4,069 13.3%

RECENT ACCOUNTING PRONOUNCEMENTS. In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 129,
"Disclosure of Information about Capital Structure" ("SFAS 129") and Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128").
SFAS No. 129 establishes standards for disclosing information about an entity's
capital structure. SFAS 129 is effective for financial statements for the
periods ending after December 15, 1997. Ohio River Bank will adopt SFAS 129 in
the year ending December 31, 1997 and has not yet determined the effect of the
adoption.

SFAS 128 simplifies the standards for computing earnings per share ("EPS")
previously found in APB No. 15, "Earnings per Share," and makes them comparable
to international EPS standards. It replaces the presentation of primary EPS
with a presentation of basic EPS. It also requires dual presentation of basic
and diluted EPS on the face of the financial statements for all entities with
complex capital structures. Basic EPS excludes dilution and is computed by
dividing income available to common shareholders by the weighted average number
of common shares outstanding for the period. Diluted EPS is computed similarly
to fully diluted EPS under APB Opinion No. 15. SFAS 128 is effective for Ohio
River Bank's year ending December 31, 1997 and is not expected to have a
material impact on the financial statements.

PRINCIPAL HOLDERS OF SABINAOHIO RIVER BANK COMMON STOCK AND
OWNERSHIP OF MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth as of the Record Date the persons known
by SabinaOhio River Bank to own beneficially (as determined in accordance with the
rules and regulations of the Commission) more than 5% of the outstanding SabinaOhio
River Bank Common Stock.

NAME AND ADDRESS OF BENEFICIAL SHARES BENEFICIALLY
OWNER(1) OWNED PERCENTAGE

Harold E. Hite
Betty Hite 22,175(2) 20.2%

The Sabina Bank Employee Stock
Ownership Plan
135 N. Howard Street
Sabina, Ohio 45169 10,782 9.8%

Edwin E. Kuehn
Doris Kuehn 8,310(3) 7.6%

Mary Sparks, Trustee 8,100 7.4%

David Allen 6,250 5.7%

NAME AND ADDRESS OF SHARES PERCENTAGE
BENEFICIAL OWNER(1) BENEFICIALLY OWNED

Richard F. Marshall 14,615(2) 5.8%
1638 N. Second Street
Ironton, OH 45638

Charles G. Forth 12,750 5.1%
6617 Clark Drive
Barboursville, WV 25504

(1) Beneficial ownership as reported in the above table has been determined
in accordance with Rule 13d-3 under the Exchange Act. Unless otherwise
indicated, beneficial ownership includes both sole or shared voting power and
sole or shared investment power.

(2) Includes 11,17512,640 shares held of record by Harold E. Hite and 11,000 shares
held of record by Betty Hite, husband and wife, and each may be deemed to
beneficially own the shares of the other, although such beneficial ownership is
disclaimed.

(3) Includes 2,635 shares held of record by Edwin E. Kuehn, 50 shares held by
Mr. Kuehn as trustee and 5,625 shares held of record by Doris Kuehn, Mr. Kuehn's
wife. Each of Mr. and Mrs. Kuehn may be deemed to beneficially own the shares
of the other, although such beneficial ownership is disclaimed.owned jointly with his spouse.

SECURITY OWNERSHIP OF MANAGEMENT

SABINAOHIO RIVER BANK MANAGEMENT. The following table sets forth as of the
Record Date information concerning SabinaOhio River Bank Common Stock that each of
the directors of SabinaOhio River Bank (other than Harold E. Hite(excluding Messrs. Marshall and Edwin E. Kuehn)Forth, who
are listed in the preceding table), and all current directors and executive
officers of SabinaOhio River Bank as a group, may be deemed to beneficially own.

Information about the beneficial ownership of Sabina Bank
Common

Stock by Mr. HiteNAME SHARES BENEFICIALLY PERCENTAGE
OWNED(1)

Steven F. Bartram 10,752 4.3%

Dale Burcham 1,776 0.7%(2)

Betty May Ferrell-Kelly 3,000 1.2%

Edwin L. Graham 2,700 1.1%

James V. Hayes 2,688 1.1%

Keith F. Molihan 4,300 1.7%

Harley F. Mooney, Jr. 500 0.2%(2)

Patrick L. Ray 10,010 4.0%

Daniel H. Wiley 5,398 2.2%

Joseph C. Worth 100 0.04(2)

All directors and Mr. Kuehn is provided in the immediately preceding
table concerning persons beneficially owning more than 5% of the outstanding
Sabina Bank Common Stock.

SHARES BENEFICIALLY
NAME OWNED(1) PERCENTAGE

Marvin Bond 3,200(2) 2.9%
Billy V. Lieurance 1,200(3) 1.1%
Harold E. Losey 3,325(4) 3.0%
Garry W. Priest 1,100 1.0%
Paul Whittington 3,300(5) 3.0%
Jeffrey L. Wright 600 0.6%
All directors and executive
officers as a group (1169,189 27.7%
executive officers as a
group (13 persons) 43,360 39.4%

(1) Beneficial ownership as reported in the above table has been determined
in accordance with Rule 13d-3 under the Exchange Act. Unless otherwise
indicated,

80
beneficial ownership includes both sole or shared voting power and
sole or shared investment power.

(2) Includes 1,600 shares heldLess than 1%.

PREMIER MANAGEMENT. As of record by Mr. Bond and 1,600 shares heldthe Record Date, Premier's Chairman of record by Junia Bond, his wife. Mr. Bond may be deemed tothe
Board, Marshall T. Reynolds, beneficially own theowned 12,250 shares of his wife, although such beneficial ownership is disclaimed.

(3) Includes 800 shares heldOhio River
Bank Common Stock and Toney K. Adkins, a director of record by Mr. Lieurance and 400 shares held
of record by Juanita Lieurance, his wife. Mr. Lieurance may be deemed toPremier, beneficially
own theowned 250 shares of his wife, although such beneficial ownership
is disclaimed.

(4) Includes 2,500 shares held of record by the Losey Family Trust and 825
shares held of record by Mr. Losey.

(5) Includes 2,500 shares held of record by Mr. Whittington and 800 shares
held of record by Betty Whittington, his wife. Mr. Whittington may be deemed
to beneficially own the shares of his wife, although such beneficial
ownership is disclaimed.

PREMIER MANAGEMENT.Ohio River Bank Common Stock. No other current director
or executive officer of Premier beneficially owns any outstanding SabinaOhio River
Bank Common Stock.

DISSENTERS' RIGHTS

Holders of SabinaOhio River Bank Common Stock have the right to dissent from
the Merger and to receive payment of the fair value of their shares pursuant
to Section 1115.19 of the Ohio Revised Code and upon full compliance with
Section 1701.85 of the OGCL. SabinaOhio River Bank shareholders seeking to
exercise dissenters' rights are referred to herein as "Dissenting
Shareholders."

The following is a summary of the principal steps a SabinaOhio River Bank
shareholder must take to perfect dissenters' rights under

Section 1701.85 of
the OGCL. This summary does not purport to be complete and is qualified in
its entirety by reference to Section 1701.85, a copy of which is attached
hereto as Annex III.C. Any SabinaOhio River Bank shareholder contemplating the
exercise of dissenters' rights is urged to review carefully such provisions
and to consult an attorney, since dissenters' rights will be lost if the
procedural requirements under Section 1701.85 are not fully and precisely
satisfied. To perfect dissenters' rights with respect to any shares of SabinaOhio
River Bank Common Stock so that they become Dissenting Shares as described in
this Proxy Statement/Prospectus, a Dissenting Shareholder must satisfy each
of the following conditions:

NO VOTE IN FAVOR OF ADOPTION OF THE MERGER AGREEMENT. SabinaOhio River Bank
Common Stock held by the Dissenting Shareholder must not be voted at the Special
Meeting in favor ofagainst the adoption of the Merger Agreement. This requirement will
be satisfied if a proxy is signed and returned with instructions to vote
against the Merger or to abstain from such vote, if no
proxy is returned and no vote is cast at the Special Meeting in favor of
adoption of the Merger Agreement, or if the Dissenting Shareholder revokes a
proxy and thereafter abstains from voting with respect to adoption of the
Merger Agreement or votes against adoption of the Merger Agreement at the
Special Meeting. A vote in favor of adoption of the Merger Agreement at the
Special Meeting constitutes a waiver of dissenters' rights. A proxy that is
returned signed but on which no voting instruction is indicated will be voted
in favor of adoption of the Merger Agreement and will constitute a waiver of
dissenters' rights. A Dissenting Shareholder may revoke his or her proxy at
any time prior to its exercise by complying with the procedures set forth
herein under "The Special Meeting -- Revocability of Proxies."

FILING WRITTEN DEMAND. Not later than 10 days after the taking of the
vote on the proposal to approve and adopt the Merger Agreement, a Dissenting
Shareholder must deliver to SabinaOhio River Bank a written demand (the "Demand")
for payment of the fair cash value of the shares of SabinaOhio River Bank Common
Stock with respect to which the Dissenting Shareholder seeks payment. Each
Demand should be delivered to SabinaOhio River Bank at 135 N. Howard221 Railroad Street,
Sabina,Ironton, Ohio 45169,45638, Attention: Secretary. It is recommended, although not
required, that such Demand be sent by registered or certified mail, return
receipt requested. Voting against approval of the Merger Agreement will not
itself constitute a Demand. SabinaOhio River Bank will not send any further notice
to SabinaOhio River Bank shareholders as to the date on which such 10-day period
expires.

A Demand must identify the name and address of the holder of record of
the shares of SabinaOhio River Bank Common Stock with respect to which payment is
sought, the number and class of such shares and the amount claimed by such
holder as the fair cash value thereof. A beneficial owner of shares must, in
all cases, have the record holder of such shares submit the Demand in respect
thereof. A Demand must be signed by the shareholder of record (or by the
duly authorized representative of such shareholder) exactly as the
80

shareholder's name appears on the shareholder records of SabinaOhio River Bank. A
Demand with respect to shares owned jointly by more than one person must
identify and be signed by all of the holders of record. Any person signing a
Demand on behalf of a partnership or corporation or in any other
representative capacity (such as an attorney-in-fact, executor,
administrator, trustee or guardian) must indicate the nature of the
representative capacity and, if requested, must furnish written proof of his
or her capacity and his or her authority to sign such Demand.

Because only holders of record of SabinaOhio River Bank Common Stock at the
close of business on the Record Date may exercise dissenters' rights, any
person who beneficially owns shares that are held of record by a broker,
fiduciary, nominee or other holder and who wishes to exercise dissenters'
rights must instruct the record holder of the shares to satisfy the
conditions outlined above. If a record holder does not satisfy, in a timely
manner, all of the conditions outlined in this section, the dissenters'
rights for all of the shares held by such record holder will be lost.

From the time the Demand is given until the termination of the rights
and obligations arising from such Demand or the purchase of the related
shares of SabinaOhio River Bank Common Stock by SabinaOhio River Bank, all rights
accruing to the holder thereof, including voting and dividend or distribution
rights, will be suspended. If any dividend or distribution is paid in money
on SabinaOhio River Bank Common Stock or Premier Common Shares during the
suspension, an amount equal to the dividend or distribution that would have
been payable on such shares, but for such suspension, will be paid to the
holder of record thereof as a credit against the fair cash value of such
shares. If the right to receive the fair cash value is terminated other than
by the purchase of such shares by SabinaOhio River Bank, all rights will be
restored to the Dissenting Shareholder and any distribution that would have
been made to the holder of record of such shares, but for the suspension,
will be made to the holder of record at the time of the termination.

If SabinaOhio River Bank sends to a Dissenting Shareholder, at the address
specified in the Demand, a request for the certificates representing the
related shares of SabinaOhio River Bank Common Stock, the Dissenting Shareholder,
within 15 days from the date of sending such request, is required to deliver
to SabinaOhio River Bank the certificates requested. SabinaOhio River Bank will then
endorse the certificates with a legend to the effect that a demand for the
fair

cash value of the shares has been made, and promptly return such endorsed
certificates to the Dissenting Shareholder. Failure on the part of the
Dissenting Shareholder to deliver such certificates upon such request will
terminate his or her rights as a Dissenting Shareholder, at the option of
SabinaOhio River Bank, exercised by written notice to the Dissenting Shareholder
within 20 days after the lapse of the 15-day period, unless a court, for good
cause shown, otherwise directs.

PETITION TO BE FILED IN COURT. Within three months after the service of
the Demand, if SabinaOhio River Bank and the Dissenting Shareholder do not reach an
agreement on the fair cash value of the 81

shares of SabinaOhio River Bank Common
Stock subject to the Demand, the Dissenting Shareholder or SabinaOhio River Bank
may file a complaint in the Court of Common Pleas in ClintonLawrence County, Ohio
(the "Common Pleas Court"), or join or be joined in an action similarly
brought by another Dissenting Shareholder, for a judicial determination of
the fair cash value of the shares of SabinaOhio River Bank Common Stock held by
such Dissenting Shareholder(s). SabinaOhio River Bank does not intend to file any
complaint for a judicial determination of the fair cash value of any shares
of SabinaOhio River Bank Common Stock.

Upon the motion of the complainant, the Common Pleas Court will hold a
hearing to determine whether the Dissenting Shareholder is entitled to be
paid the fair cash value of his or her shares of SabinaOhio River Bank Common
Stock. If the Common Pleas Court finds that the Dissenting Shareholder is so
entitled, it may appoint one or more appraisers to receive evidence and to
recommend a decision on the amount of such fair cash value. The Common Pleas
Court is thereafter required to make a finding as to the fair cash value of
such shares and to render a judgment against SabinaOhio River Bank for the payment
thereof, with interest at such rate and from such date as the Common Pleas
Court considers equitable. Costs of the proceeding, including reasonable
compensation to the appraiser or appraisers, to be fixed by the Common Pleas
Court, are to be apportioned or assessed as the Common Pleas Court considers
equitable. Payment of the fair cash value of such shares is required to be
made within 30 days after the date of final determination of such value or
the Effective Time of the Merger, whichever is later, only upon surrender to
SabinaOhio River Bank of the certificates representing the shares of SabinaOhio River
Bank Common Stock for which payment is made.

Fair cash value is the amount that a willing seller, under no compulsion
to sell, would be willing to accept, and that a willing buyer, under no
compulsion to purchase, would be willing to pay, but in no event may the fair
cash value exceed the amount specified in the Demand. Because the Merger
requires the approval of the SabinaOhio River Bank shareholders, the fair cash
value is to be determined as of the day prior to the day of the Special
Meeting. In computing this value, any appreciation or depreciation in the

84
market value of the shares of SabinaOhio River Bank Common Stock held by the
Dissenting Shareholder resulting from the Merger is excluded.

The dissenters' rights of any Dissenting Shareholder will terminate if,
among other things, (i) he or she has not complied with Section 1701.85 of
the OGCL (unless the SabinaOhio River Bank Board of Directors waives compliance),
(ii) the Merger is abandoned or otherwise not carried out or such Dissenting
Shareholder withdraws his or her Demand with the consent of the SabinaOhio River
Bank Board of Directors or (iii) no agreement has been reached between SabinaOhio
River Bank and the Dissenting Shareholder as to the fair cash value for the
shares and neither the Dissenting Shareholder nor SabinaOhio River Bank shall have
timely filed or joined in a complaint in the Common Pleas Court. For a
discussion of the tax consequences to a shareholder exercising dissenters'
rights, see "The Merger -- Certain Federal Income Tax Consequences."

If holders of more than 10% of the outstanding shares of SabinaOhio River Bank
Common Stock properly demand dissenters' rights, Premier has the right to
decline to consummate the Merger. See "The Merger Agreement -- Conditions to
the Merger."

BECAUSE A PROXY CARD THAT DOES NOT CONTAIN VOTING INSTRUCTIONS WILL,
UNLESS REVOKED, BE VOTED IN FAVOR OF APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT, A SABINAOHIO RIVER BANK SHAREHOLDER WHO WISHES TO EXERCISE DISSENTERS'
RIGHTS MUST EITHER NOT SIGN AND RETURN A PROXY CARD OR, IF HE OR SHE SIGNS
AND RETURNS A PROXY CARD, HE OR SHE MUST VOTE AGAINST OR ABSTAIN FROM VOTING ON THE PROPOSAL TO ADOPT
THE MERGER AGREEMENT.

EXPERTS

The consolidated financial statements of Premier as of December 31, 1996
and 1995, and for the years ended December 31, 1996 and 1995, incorporated
herein by reference to the Premier 1996 Annual Report accompanying this Proxy
Statement/Prospectus, have been examined by Eskew & Gresham, PSC, independent
certified public accountants, as stated in their report thereon, and have
been so incorporated in reliance on the report of Eskew & Gresham, PSC set
forth therein, given on the authority of said firm as experts in accounting
and auditing. The consolidated financial statements of Premier for the year
ended December 31, 1994, incorporated herein by reference to the 1996 Premier
Annual Report, have been examined by McNeal, Williamson & Co., independent
certified public accountants, as stated in their report thereon, and have
been so incorporated in reliance on the report of McNeal Williamson & Co. set
forth therein, given on the authority of such firm as experts in accounting
and auditing.

The financial statements of SabinaOhio River Bank as of December 31, 1996 and
1995, and for the yearsyear ended December 31, 1996 and from May 22, 1995 and 1994,(date of
inception) to December 31, 1995, included in this Proxy Statement/Prospectus,
have been examined by Grant Thornton LLP,Kelly

Galloway & Company PSC independent certified public accountants, as stated in
their report thereon appearing in this Proxy Statement/Prospectus, and have
been included in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.

LEGAL MATTERS

The legality of the Premier Common Shares being offered hereby will be
passed upon on for Premier by David W. Harper, Esq., Louisville, Kentucky.

OTHER MATTERS

The SabinaOhio River Bank Board of Directors is not aware of any business that
will be presented at the Special Meeting other than

as set forth herein and
in the accompanying Notice of Special Meeting. However, if any other matters
are properly presented at the Special Meeting, the persons designated in the
proxies will have discretion to vote thereon. It is anticipated that such
persons will vote on any such matters in accordance with the recommendation
of the SabinaOhio River Bank Board of Directors.

8486

INDEX TO FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS

THE SABINAOHIO RIVER BANK

DecemberSEPTEMBER 30, 1997 and 1996 (UNAUDITED)

Financial Statements

Balance Sheets . . . . . . . . . . . . . . . . . . .F-2

Statements of Operations . . . . . . . . . . . . . .F-3

Statements of Cash Flows . . . . . . . . . . . . . F-4

DECEMBER 31, 1996 and FROM MAY 22, 1995 (DATE OF INCEPTION) TO
DECEMBER 31, 1995

Independent Auditor's Report. . . . . . . . . . . . . . .F-5

Financial Statements

Balance Sheets . . . . . . . . . . . . . . . . . . F-6

Statements of Operations . . . . . . . . . . . . . .F-7

Statements of Changes in Shareholders' Equity. . . .F-8

Statements of Cash Flows . . . . . . . . . . . . . .F-9

Notes to Financial Statements. . . . . . . . . . . F-10

F-1

CONTENTS

Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-3

FINANCIAL STATEMENTSOHIO RIVER BANK
BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)

September 30

1997 1996
--------- --------
ASSETS
Cash and due from banks $ 1,261 $ 1,535
Federal funds sold 1,770 2,427
Investment securities:
Available for sale 7,921 4,583
Loans $ 26,964 $ 21,751
Less: Unearned interest 0 0
Allowance for loan losses 306 232
--------- --------
Net loans $ 26,658 $ 21,519
Premises and equipment, net 1,608 1,754
Other assets 388 316
--------- --------
TOTAL ASSETS $ 39,606 $ 32,134

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 3,174 $ 3,048
Time deposits, $100,000 and over 5,220 4,472
Other interest bearing 26,085 20,330
--------- --------
Total deposits $ 34,479 $ 27,850
Securities sold under agreements to repurchase 695 0
Other liabilities 256 216
--------- --------
Total liabilities $ 35,430 $ 28,066

SHAREHOLDERS' EQUITY:
Common stock, $8 par value; 275,000 shares
authorized and 250,000 issued and outstanding $ 2,000 $ 2,000
Surplus 2,974 2,974
Retained deficit (806) (893)
Net unrealized gains or losses on investment
securities available for sale 8 (13)
--------- --------
Total shareholders' equity $ 4,176 $ 4,068

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,606 $ 32,134

F-2

OHIO RIVER BANK
STATEMENTS OF FINANCIAL CONDITION F-4

STATEMENTS OF EARNINGS F-5

STATEMENTS OF SHAREHOLDERS' EQUITY F-6INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

1997 1996
--------- --------
INTEREST INCOME:
Loans, including fees $ 1,742 $ 1,161
Investment securities -
Taxable 277 119
Federal funds sold and other 78 76
--------- --------
Total interest income $ 2,097 $ 1,356

INTEREST EXPENSE:
Deposits $ 1,074 $ 630
Repurchase agreements and other borrowings 23 0
--------- --------
Total interest expense $ 1,097 $ 630

Net interest income $ 1,000 $ 726
Provision for loan losses 123 134
--------- --------
Net interest income after provision for
loan losses $ 877 $ 592

NON-INTEREST INCOME:
Service charges on deposit accounts $ 76 $ 46
Other 32 28
--------- --------
$ 108 $ 74
NON-INTEREST EXPENSE
Salaries and employee benefits $ 438 $ 405
Occupancy and equipment expenses 159 156
Other operating expenses 294 304
--------- --------
$ 891 $ 865
Income (loss) before income taxes $ 94 $ (199)

Provision for income taxes 0 0
--------- --------
NET INCOME (LOSS) $ 94 $ (199)

Earnings (loss) per share $ 0.38 $ (0.80)

F-3

OHIO RIVER BANK
STATEMENTS OF CASH FLOWS
F-7

NOTES TO FINANCIAL STATEMENTS F-9

F-2NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)
(UNAUDITED)

1997 1996
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 94 $ (199)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization, net 118 148
Provision for loan losses 123 134
Change in:
Other assets (65) (144)
Other liabilities 36 (111)
--------- --------
Net cash provided by (used in) operating activities $ 306 $ (172)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale $(4,212) $ (4,103)
Proceeds from maturities of securities
available for sale 1,900 500
Net change in federal funds sold 1,193 (194)
Net change in loans (4,226) (12,017)
Purchases of bank premises and equipment, net (7) (5)
--------- -------
Net cash used in investing activities $(5,352) $ (15,819)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits $ 4,571 $ 16,228
Net change in repurchase agreements 280 0
--------- --------
Net cash provided by financing activities $ 4,851 $ 16,228

Net increase (decrease) in cash and cash equivalents $ (195) $ 237

Cash and cash equivalents at beginning of period 1,456 1,298
--------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,261 $ 1,535

F-4

[LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTSTo the Stockholders and Board of Directors
The SabinaOhio River Bank
Ironton, Ohio

We have audited the accompanying statementsbalance sheets of financial condition of The SabinaOhio River Bank as of
December 31, 1996 and 1995, and the related statements of earnings,
shareholders'operations, changes
in stockholders' equity, and cash flows for the years then ended.year ended December 31, 1996
and from May 22, 1995 (date of inception) to December 31, 1995. These
financial statements are the responsibility of the Bank'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. The scope of our audits also encompassed the Minimum Directors' Examination
Requirements promulgated by the Ohio Department of Commerce, Division of
Financial Institutions. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The SabinaOhio River Bank as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years thenyear ended December 31, 1996 and from May 22, 1995 (date of
inception) to December 31, 1995, in conformity with generally accepted
accounting principles.

Cincinnati, Ohio
March 14,[SIG]

January 10, 1997

F-3F-5

THE SABINAOHIO RIVER BANK

STATEMENTS OF FINANCIAL CONDITION

DecemberBALANCE SHEETS

DECEMBER 31, 1996 AND 1995

ASSETS

1996 1995
Cash and due from banks----------- -----------
CASH AND DUE FROM BANKS $ 2,169,9001,456,420 $ 1,455,044
Federal funds sold 300,000 1,100,000
Investment securities designated as available
for sale -1,297,955

FEDERAL FUNDS SOLD 2,963,000 2,233,000

INVESTMENT SECURITIES AVAILABLE FOR SALE,
at market 8,144,909 8,874,423
Loans receivable -5,593,313 1,005,487

LOANS, less allowance for loan losses of
$272,885 and $117,104, respectively 22,555,052 9,654,262

BANK PREMISES AND EQUIPMENT, net 24,707,068 24,224,665
Bank premises and equipment - net 719,484 683,495
Federal Home Loan Bank stock - at cost 125,800 89,200
Federal Reserve Bank stock - at cost 26,650 26,650
Accrued interest receivable 262,477 258,606
Goodwill - net - 3,189
Prepaid expenses and other assets 137,124 62,363
Prepaid federal income taxes 9,973 20,096of
accumulated depreciation 1,720,653 1,866,521

ACCRUED INTEREST RECEIVABLE 220,489 65,555

OTHER ASSETS 102,820 106,183
----------- -----------
Total assets $36,603,385 $36,797,731$34,611,747 $ 16,228,963
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY

DEPOSITS:
Demand $ 2,822,126 $ 2,341,052
Interest bearing checking 6,190,921 2,567,821
Savings 2,852,669 1,481,123
Time, $100,000 and over 5,217,415 1,420,689
Other time 12,824,792 3,811,228
----------- ------------
29,907,923 11,621,913

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE 415,000 -

ACCRUED INTEREST PAYABLE 115,521 23,781

OTHER LIABILITIES 104,489 303,134
----------- ------------
Total liabilities 30,542,933 11,948,828
----------- ------------
COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS' EQUITY:
Common stock; $8 par value; 275,000 shares
authorized and 250,000 issued and outstanding 2,000,000 2,000,000
Surplus 2,973,513 2,973,513
Retained deficit (899,076) (693,378)
Net unrealized loss on investment securities available
for sale, net of applicable deferred income taxes of $2,897 (5,623) -
----------- ------------
Total stockholders' equity 4,068,814 4,280,135
----------- ------------
Total liabilities and stockholders' equity $34,611,747 16,228,963
----------- ------------
----------- ------------

The accompanying notes to financial statements
are an integral part of these balance sheets.

F-6

OHIO RIVER BANK

STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1996

AND SHAREHOLDERS' EQUITY

Deposits $31,633,906 $31,923,755
Loan to Employee Stock Ownership Plan 230,305 260,919
Accrued interest payable 60,949 59,977
Other liabilities 44,487 44,757
Deferred federal income taxes 102,349 120,371FROM MAY 22, 1995 (DATE OF INCEPTION) TO DECEMBER 31, 1995

1996 1995
----------- -----------
INTEREST INCOME:
Interest and fees on loans $ 1,685,171 $ 274,833
Interest on Federal funds sold 118,800 140,866
Interest on escrowed stock subscription funds - 41,799
Interest on U.S. Treasury securities 188,337 1,315
----------- -----------
Total liabilities 32,071,996 32,409,779

Commitmentsinterest income 1,992,308 458,813

INTEREST EXPENSE:
Interest on deposits 964,313 135,170
----------- -----------

Net interest income 1,027,995 323,643

PROVISION FOR LOAN LOSSES 193,128 118,380
----------- -----------

Net interest income after provision
for loan losses 834,867 205,263
----------- -----------

OTHER INCOME:
Service charges on deposit accounts 81,552 15,078
Other service charges, commissions, and fees 23,165 4,105
Other operating income 9,305 4,328
----------- -----------
114,022 23,511
----------- -----------

OTHER EXPENSES:
Salaries and employee benefits 559,171 300,562
Net occupancy expense 211,362 82,464
Pre-opening expenses - 342,091
Federal Reserve fees 16,477 5,216
Insurance 18,587 6,770
Data processing 120,352 64,831
Legal and accounting 30,158 22,869
Advertising and marketing 37,390 38,996
Supplies 40,063 31,606
Franchise tax 64,202 -
Other operating expenses 56,825 26,747
----------- -----------
1,154,587 922,152
----------- -----------

NET LOSS BEFORE PROVISION FOR INCOME TAXES (205,698) (693,378)

PROVISION FOR INCOME TAXES - -
Shareholders' equity
Common stock - authorized, issued and
outstanding, 110,000 shares of $1 par
value at December 31, 1996 and 1995 110,000 110,000
Additional paid-in capital 778,634 778,634
Retained earnings 3,824,143 3,701,502
Required contributions for shares acquired by
Employee Stock Ownership Plan (ESOP) (230,305) (260,919)
Unrealized gains on securities designated as
available for sale, net of related tax effects 48,917 58,735
----------- -----------

Total shareholders' equity 4,531,389 4,387,952NET LOSS $ (205,698) $ (693,378)
----------- -----------
Total liabilities and shareholders' equity $36,603,385 $36,797,731----------- -----------

NET LOSS PER SHARE $ (.82) $ (2.77)
----------- -----------
----------- -----------

The accompanying notes to financial statements
are an integral part of these statements.

F-4F-7

THE SABINAOHIO RIVER BANK

STATEMENTS OF EARNINGS

Year ended DecemberCHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 1996

AND FROM MAY 22, 1995 Interest income
Interest on loans $2,224,471 $2,321,910
Interest and dividends on investments
U. S. Government and agency obligations 322,253 398,902
Obligations of state and political subdivisions 143,416 150,092
Interest-bearing deposits and other 36,941 16,155
---------- ----------
Total interest income 2,727,081 2,887,059

Interest expense
Deposits 1,108,046 1,165,906
Borrowings 29,906 46,778
---------- ----------
Total interest expense 1,137,952 1,212,684
---------- ----------

Net interest income 1,589,129 1,674,375
Provision for losses on loans 185,000 110,000
---------- ----------

Net interest income after provision
for losses on loans 1,404,129 1,564,375

Other income
Service fees, charges and other operating 236,585 192,904

General, administrative and other expense
Employee compensation and benefits 606,999 734,060
Occupancy and equipment 128,459 132,013
Federal deposit insurance premiums 17,158 54,468
Franchise taxes 60,046 64,282
Other operating 469,515 465,496
---------- ----------
Total general, administrative and
other expense 1,282,177 1,450,319
---------- ----------

Earnings before federal income taxes 358,537 306,960

Federal income taxes
Current 87,186 60,188
Deferred (16,290) (27,448)
---------- ----------
Total federal income taxes 70,896 32,740
---------- ----------

NET EARNINGS $ 287,641 $ 274,220
---------- ----------
---------- ----------

EARNINGS PER SHARE $2.82 $2.70
---------- ----------
---------- ----------

The accompanying notes are an integral part of these statements.

F-5

THE SABINA BANK

STATEMENTS(DATE OF SHAREHOLDERS' EQUITY

Years ended DecemberINCEPTION) TO DECEMBER 31, 1996 and 1995

UNREALIZED
REQUIRED GAINS ON
CONTRIBUTIONS SECURITIES
ADDITIONAL FOR SHARES DESIGNATED
COMMON PAID-IN ACQUIRED BY AS AVAILABLE RETAINED
STOCK CAPITAL ESOP FOR SALE EARNINGS TOTALNet unrealized loss
on investment
securities Total
Common Retained available Stockholders'
Stock Surplus Deficit for sale Equity
------------ ---------- --------- ------------- --------------

BalanceBALANCES, at January 1,inception
May 22, 1995 $110,000 $778,634 $(289,665)$2,000,000 $2,973,513 $ - $3,564,782 $4,163,751$ - $ 4,973,513

Net earnings for the yearloss, period ended
December 31, 1995 - - (693,378) - (693,378)
------------ ---------- --------- ------------- --------------
BALANCES,
December 31, 1995 2,000,000 2,973,513 (693,378) - 4,280,135

Net loss, year ended
December 31, 1996 - - 274,220 274,220

Cash dividends paid(205,698) - (205,698)

Net change in unrealized
loss on common shares - - - - (137,500) (137,500)

Unrealized gains oninvestment securities designated as
available for sale, net of
related
tax effectsapplicable deferred income
taxes of $2,897 - - - 58,735 - 58,735

Principal payments on loan to ESOP - - 28,746 - - 28,746
-------- --------(5,623) (5,623)
------------ ---------- --------- ------- ---------- ----------

Balance at December 31, 1995 110,000 778,634 (260,919) 58,735 3,701,502 4,387,952

Net earnings for the year - - - - 287,641 287,641

Cash dividends paid on common shares - - - - (165,000) (165,000)

Unrealized losses on securities designated
as available for sale, net of related
tax effects - - - (9,818) - (9,818)

Principal payments on loan to ESOP - - 30,614 - - 30,614
-------- -------- --------- ------- ---------- ----------

Balance at------------- --------------
BALANCES,
December 31, 1996 $110,000 $778,634 $(230,305) $48,917 $3,824,143 $4,531,389
-------- -------- --------- ------- ---------- ----------
-------- -------- --------- ------- ---------- ----------$2,000,000 $2,973,513 $(899,076) $(5,623) $ 4,068,814
========== ========== ========== ======== ===========

The accompanying notes are an integral part of these statements.

F-6

THE SABINA BANK

STATEMENTS OF CASH FLOWS

Year ended December 31,

1996 1995

Cash flows from operating activities:
Net earnings for the year $ 287,641 $ 274,220
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 56,811 55,594
Amortization of deferred loan origination costs 168,915 154,885
Amortization of premiums and discounts on
investment securities - net 5,761 2,704
Dividends on Federal Home Loan Bank stock (7,100) (700)
Provision for losses on loans 185,000 110,000
Increase (decrease) in cash due to changes in:
Prepaid expenses and other assets (74,761) 21,607
Accrued interest receivable (3,871) 18,392
Other liabilities (270) (3,530)
Accrued interest payable 972 56,779
Federal income taxes
Current 10,123 (20,565)
Deferred (16,290) (27,448)
------------ ------------
Net cash provided by operating activities 612,931 641,938

Cash flows provided by (used in) investing activities:
Net (increase) decrease in federal funds sold 800,000 (1,100,000)
Proceeds from maturity of investment securities 5,288,450 4,700,000
Purchase of investment securities (4,576,247) (2,596,678)
Principal repayments on loans 12,232,366 12,867,574
Loan disbursements (13,068,684) (12,487,882)
Purchase of Federal Home Loan Bank stock (29,500) (88,500)
Purchase of bank premises and equipment (89,611) (49,525)
Proceeds from sale of real estate acquired
through foreclosure - 49,052
------------ ------------
Net cash provided by investing activities 556,774 1,294,041

Cash flows provided by (used in) financing activities:
Net decrease in deposit accounts (289,849) (1,850,448)
Net decrease in federal funds purchased - (800,000)
Dividends paid on common stock (165,000) (137,500)
------------ ------------
Net cash used in financing activities (454,849) (2,787,948)
------------ ------------

Net increase (decrease) in cash and cash equivalents 714,856 (851,969)

Cash and cash equivalents at beginning of year 1,455,044 2,307,013
------------ ------------

Cash and cash equivalents at end of year $ 2,169,900 $ 1,455,044
------------ ------------
------------ ------------

F-7

THE SABINA BANK

STATEMENTS OF CASH FLOWS

Year ended December 31,

1996 1995

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Federal income taxes $ 72,063 $ 75,740
---------- ----------
---------- ----------

Interest on deposits and borrowings $1,136,980 $1,155,905
---------- ----------
---------- ----------

Supplemental disclosure of noncash
investing activities:
Transfer of securities to an available for sale
classification in accordance with SFAS No. 115 $ - $8,798,509
---------- ----------
---------- ----------

Unrealized gains (losses) on securities designated
as available for sale, net of related tax effects $ (9,818) $ 58,735
---------- ----------
---------- ----------

The accompanying notesfinancial statements
are an integral part of these statements.

F-8

OHIO RIVER BANK

STATEMENTS OF CASH FLOWS

FOR THE SABINAYEAR ENDED DECEMBER 31, 1996

AND FROM MAY 22, 1995 (DATE OF INCEPTION) TO DECEMBER 31, 1995

OPERATING ACTIVITIES: 1996 1995
----------- ------------

Net loss $ (205,698) $(693,378)
Adjustments to reconcile net loss to net
cash used for operating activities -
Provision for loan losses 193,128 118,380
Provision for depreciation 156,676 44,157
Premium amortization, net of discount accretion 11,654 138
Changes in:
Accrued interest receivable (154,934) (65,555)
Other assets 6,260 (106,183)
Accrued interest payable and
other liabilities ( 46,053) 290,233
----------- ------------
Net cash used for operating activities ( 38,967) (412,208)
----------- ------------
INVESTING ACTIVITIES:
Net increase in Federal funds sold (730,000) (2,233,000)
Net increase in loans (13,118,570) (9,772,642)
Purchases of investment securities
available for sale (5,608,000) (1,005,625)
Proceeds from maturities of investment
securities available for sale 1,000,000 -
Purchases of bank premises and equipment (10,808) (1,910,678)
Proceeds from sale of repossessed assets 24,652 -
----------- ------------
Net cash used for investing activities (18,442,726) (14,921,945)
----------- ------------

FINANCING ACTIVITIES:
Net increase in demand deposits,
interest bearing checking, and savings accounts 5,475,720 6,389,996
Net increase in time deposits 12,810,290 5,231,917
Net increase in securities sold under agreements
to repurchase 415,000 -
Payments on liability incurred under capital
lease obligation (15,989) (11,382)
Net increase (decrease) in other borrowed funds (44,863) 48,064
Net proceeds from issuance of stock - 4,973,513
----------- ------------
Net cash provided by financing activities 18,640,158 16,632,108
----------- ------------
INCREASE IN CASH AND DUE FROM BANKS 158,465 1,297,955

CASH AND DUE FROM BANKS, BEGINNING OF PERIOD 1,297,955 -
----------- ------------
CASH AND DUE FROM BANKS, END OF PERIOD $ 1,456,420 $ 1,297,955
----------- ------------
----------- ------------
SUPPLEMENTAL DISCLOSURE:
Cash paid during the year for interest $ 872,573 $ 111,389
----------- ------------
----------- ------------
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Liability incurred under capital lease
obligation for purchase of equipment $ - $ 86,431
----------- ------------
----------- ------------

Net unrealized loss on investment securities available
for sale $ (8,520) $ -
----------- ------------
----------- ------------
Loans transferred to repossessed assets during the year $ 24,652 $ -
----------- ------------
----------- ------------

The accompanying notes to financial statements
are an integral part of these statements.

F-9

OHIO RIVER BANK

NOTES TO FINANCIAL STATEMENTS

DecemberFOR THE YEAR ENDED DECEMBER 31, 1996

andAND FROM MAY 22, 1995 NOTE A -(DATE OF INCEPTION) TO DECEMBER 31, 1995

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The SabinaNature of Operations

Ohio River Bank (the "Bank") conductsis a generalstate bank providing a full range
of banking products and services, such as commercial, banking business in
central Ohio which consists of attracting deposits from the general publicinstallment and applying those funds to the originationother
types of loans, for commercial, consumerresidential mortgages, certificates of deposit, other
traditional deposit accounts and residential purposes.other banking products and services to
individuals and businesses, primarily those residing in or otherwise closely
associated with Lawrence County, Ohio, or its surrounding communities. The
Bank's profitability is significantly dependentBank commenced business on its net interest income, which is the difference between interest income
generated from interest-earning assets (i.e. loans and investments) and the
interest expense paid on interest-bearing liabilities (i.e. customer deposits
and borrowed funds). Net interest income is affected by the relative amountMay 22, 1995.

USE OF ESTIMATES

The preparation of interest-earning assets and interest-bearing liabilities and the interest
received or paid on these balances. The level of interest rates paid or
received by the Bank can be significantly influenced by a number of
environmental factors, such as governmental monetary policy, that are outside
of management's control.

The financial information presented herein has been preparedstatements in accordanceconformity with
generally accepted accounting principles ("GAAP") and general accounting
practices within the financial services industry. In preparing financial
statements in accordance with GAAP,requires management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from such estimates.

The following is a summaryMaterial estimates that are particularly
susceptible to significant change relate to determination of significant accounting policies which have been
consistently applied in the preparation of the accompanying financial
statements:

1. INVESTMENT SECURITIES

The Bank accounts for investment securities in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain
Investments in Debt and Equity Securities." SFAS No. 115 requires that
investments be categorized as held to maturity, trading, or available for
sale. Securities classified as held to maturity are carried at cost only if
the Bank has the positive intent and ability to hold these securities to
maturity. Trading securities and securities available for sale are carried at
fair value with resulting unrealized gains or losses charged to operations or
shareholders' equity, respectively.

In November 1995, the Financial Accounting Standards Board (the "FASB") issued
a Special Report on Implementation of SFAS No. 115, which provided for the
reclassification of securities between the held-to-maturity, available for
sale and trading portfolios during a forty-five day period, without calling
into question management's prior intent with respect to such securities.
Management elected to restructure the Bank's securities portfolio pursuant to
the Special Report, and transferred approximately $8.8 million of investment
securities from the held-to-maturity portfolio to an available for sale
portfolio. As a result of the transfer, the Bank recorded an unrealized gain,
net of related tax effects, of approximately $59,000 to shareholders' equity.

Realized gains and losses on sales on securities are recognized using the
specific identification method.

F-9

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

2. LOANS RECEIVABLE

Loans held in portfolio are stated at the principal amount outstanding,
adjusted for deferred loan origination costs and the allowance
for losses on loans. Interest is accruedActual results could differ from those estimates.

INVESTMENT SECURITIES

Investment securities "available for sale" are carried at estimated
market value (See Note 2). Unrealized holding gains and losses, net of
applicable income taxes, are reported as earned unless the collectibilitya separate component of
the loan is in
doubt. Uncollectible interest on loans that are contractually past due is
charged off, or an allowance is established based on management's periodic
evaluation. The allowance is established by a charge to interest income equal
to all interest previously accrued, and income is subsequently recognized only
to the extent that cash payments are receivedstockholders' equity until in management's judgment,
the borrower's ability to make periodic interest and principal payments has
returned to normal, in which case the loan is returned to accrual status.

3. LOAN ORIGINATION FEESrealized.

The Bank accounts for loan origination feesdoes not have any investment securities classified as held
to maturity or as trading securities.

Realized gains and costslosses on the sale of securities are recognized
in accordance with SFAS
No. 91, "Accounting for Nonrefundable Feesthe statement of operations using the specific identification method.

Premiums and Costs Associated with
Originating or Acquiring Loans and Initial Direct Costs of Leases". Pursuant
to the provisions of SFAS No. 91, all loan origination fees received, net of
certain direct origination costs,discounts are deferred on a loan-by-loan basis and
amortized torecognized in interest income using the
interest method giving effectover the period to actualmaturity.

LOANS AND INTEREST INCOME

Loans are stated at the amount of unpaid principal, reduced by an
allowance for loan prepayments. Additionally, SFAS No. 91losses. Interest on loans is calculated by using the
simple interest method on daily balances of the principal amount outstanding.
Accrual of interest is discontinued on a loan when management believes,
after considering economic and business conditions and collection efforts,
that the borrowers' financial condition is such that collection of interest
is doubtful.

Interest income generally limitsis not recognized on specific impaired
loans unless the definitionlikelihood of further loss is remote. Interest payments
received on such loans are applied as a reduction of the loan origination costsprincipal
balance. Interest income on other nonaccrual loans is recognized only to the
direct costs attributable to
originating a loan, i.e., principally actual personnel costs.

Fees received for loan commitments are deferred and amortized over the lifeextent of the related loan using the interest method.

4.payments received.

F-10

ALLOWANCE FOR LOAN LOSSES ON LOANS

It is the Bank's policy to provide valuation allowances for estimated losses
on loans based upon past loss experience, trends in the level of delinquent
and specific problem loans, adverse situations that may affect the borrower's
ability to repay, the estimated value of any underlying collateral and current
and anticipated economic conditions in the Bank's primary market area. When
the collection of a loan becomes doubtful, or otherwise troubled, the Bank
records a loan loss equal to the difference between the fair value of the
property securing the loan and the loan's carrying value. In providing
valuation allowances, costs of holding real estate, including the cost of
capital, are considered. Major loans and major lending areas are reviewed
periodically to determine potential problems at an early date.

The allowance for loan losses is increased by chargesestablished through a provision
for loan losses charged to earnings and decreased by charge-
offs (net of recoveries).

F-10

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

4. ALLOWANCE FOR LOSSES ON LOANS (continued)

In 1993,expenses. Loans are charged against the Financial Accounting Standards Board issued SFAS No. 114,
"Accounting by Creditorsallowance
for Impairment of a Loan". This Statement, which was
amended by SFAS No. 118 as to certain income recognition and financial
statement disclosure provisions, requiresloan losses when management believes that impaired loans be measured
based upon the present value of expected future cash flows discounted at the
loan's effective interest rate or, as an alternative, at the loans observable
market price or fair valuecollectibility of the
collateral.principal is unlikely. The Bank adopted SFAS No. 114
effective January 1, 1995, without material effectallowance is an amount that management believes
will be adequate to absorb possible losses on financial condition or
results of operations.

A loan is defined under SFAS No. 114 as impaired when,existing loans that may become
uncollectible, based on current
informationevaluations of the collectibility of loans. These
evaluations take into consideration such factors as changes in the nature and
events, it is probable that a creditor will be unable to
collect all amounts due according to the contractual termsvolume of the loan agreement. In applying the provisionsportfolio, overall portfolio quality, review of SFAS No. 114, the Bank considers its
investment in one-to-four family residential loans, consumer installmentspecific
problem loans, and credit card loanscurrent economic conditions that may affect the borrowers'
ability to be homogeneous and therefore excluded from separate
identification for evaluation of impairment. With respect to the Bank's
investment in commercial loans, and its evaluation of impairment thereof, such
loans are collateral dependent and as a result are carried as a practical
expedient at the lower of cost or fair value.

It is the Bank's general policy to charge off unsecured credits that are more
than ninety days delinquent. Similarly, collateral dependent loans which are
more than ninety days delinquent are considered to constitute more than a
minimum delay in repayment and are evaluated for impairment under SFAS No. 114
at that time.

At December 31, 1996 and 1995, the Bank had no loans that would be defined as
impaired under SFAS No. 114.

5.pay.

BANK PREMISES AND EQUIPMENT

Bank premises and equipment are recordedstated at cost, and include expenditures
which extend the useful livesnet of existing assets. Maintenance, repairs and
minor renewals are expensed as incurred.

For financial reporting,accumulated
depreciation and amortization are provided
principally onamortization. Depreciation is computed over the straight-line method over theestimated
useful lives of the assets estimated to be thirty-three to forty years for the building and improvements,
and three to ten years for furniture and equipment.

6. REAL ESTATE ACQUIRED THROUGH FORECLOSURE

Real estate acquired through foreclosure is carried at the lower of the loan's
unpaid principal balance (cost) or fair value less estimated selling expenses
at the date of acquisition. Real estate loss provisions are recorded if the
properties' fair value subsequently declines below the value determined at the
recording date. In determining the lower of cost or fair value at
acquisition, costs relating to development and improvement of property are
capitalized. Costs relating to holding real estate acquired through
foreclosure, net of rental income, are charged against earnings as incurred.

F-11

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

7. GOODWILL

Goodwill was amortized to operations over a ten-year period using the straight-line method.

8. INCOME TAXES

The Bank accountsIncome taxes are accounted for federal income taxes in accordance with the provisions of
SFASStatement of Financial Accounting Standards No. 109, "Accounting109. Income taxes are
provided for Income Taxes." Pursuant to the provisionstax effects of SFAS No. 109,the transactions reported in the financial
statements and consist of taxes currently due plus deferred taxes.
Provisions or credits for deferred income taxes are made as a deferred tax liability or deferred tax asset is computed by
applying the current statutory tax rates to theresult of
temporary differences between the financial statement and tax basis of an asset or liabilityassets
and its reported amount in the
financial statements that will result in taxable or deductible amounts in
future periods. Deferred tax assets are recorded onlyliabilities. Temporary differences relate principally to the extent that the
amount ofallowance
for loan losses and net deductible temporary differences or carryforward attributes may
be utilized against current period earnings, carried back against prior years'
earnings, offset against taxable temporary differences reversing in future
periods, or utilized to the extent of management's estimate of future taxable
income.operating loss carryforwards. A valuation allowance
is provided forestablished to reduce deferred tax assets to the
extentif it is more likely than not
that the value of net deductible temporary differences and carryforward
attributes exceeds management's estimates of taxes payable on future taxable
income. Deferreda deferred tax liabilities are provided on the total amount of net
temporary differences taxable in the future.

The Bank's principal temporary differences result primarily from the different
methods of accounting for deferred loan origination fees and costs, preparing
tax returns on the cash basis of accounting while the financial statements are
prepared on the accrual basis of accounting, and temporary differences in the
amount of the allowance for loan losses. A temporary difference is also
recognized for depreciation expense computed using accelerated methods for
federal income tax purposes.

9. EMPLOYEE STOCK OWNERSHIP PLAN

The Bank has an Employee Stock Ownership Plan ("ESOP") which purchased 10,000
shares of newly issued common stock. The ESOP provides retirement benefits
for all employees who have completed one year of service. Contributions of
approximately $31,000 and $29,000 were made to the ESOP for the years ended
December 31, 1996 and 1995, respectively.

11. EARNINGS PER SHARE

Earnings per share is computed based 101,995 and 101,591 weighted-average
shares outstanding during the years ended December 31, 1996 and 1995,
respectively. Weighted-average shares outstanding gives effect to a reduction
for unallocated shares held in the Bank's ESOP.

F-12

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)

12.asset will not be realized.

CASH AND CASH EQUIVALENTS

For purposes of reporting cash flows, cash and cash equivalents are
defined as cashthose amounts included in the balance sheet caption "Cash and due from banks.

13. RECLASSIFICATIONS

Certain prior year amounts have been reclassifiedDue
From Banks".

LOAN ORIGINATION FEES AND COSTS

Loan origination and commitment fees along with certain direct loan
origination expenses are deferred and the net amount is amortized using the
interest method over the life of the loan.

ORGANIZATIONAL COSTS

Organizational costs represent direct costs incurred in chartering
the Bank. Organizational costs of $104,749 are being amortized to conform toexpense
using the 1996
financial statement presentation.

NOTE B -straight-line method over five years.

NET LOSS PER SHARE

Net loss per share is calculated on the basis of the weighted
average number of shares outstanding.

(2) INVESTMENT SECURITIES

Investment securities as reflected in the accompanying balance
sheets consist of investments "available for sale" which are stated at
estimated market values. The carrying valuesamortized cost and approximate fairestimated market values of
these investment securities at December 31, 1996 and 1995 are summarized as follows:

F-11

1996 1995
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUEINVESTMENTS CLASSIFIED AS AVAILABLE FOR SALE
---------------------------------------------------
Carrying
Gross Gross Value
Amortized Unrealized Unrealized (Estimated
Cost Gains Losses Market)
----------- ---------- ------------ ------------

AVAILABLE FOR SALE:December 31, 1996
- -----------------
U.S. Government and
agency obligations $5,333,929 $5,301,311 $6,035,489 $6,009,718
Obligations of state and
political subdivisions 2,746,616 2,843,598 2,763,020 2,864,705
---------- ---------- ---------- ----------
Total investments $8,080,545 $8,144,909 $8,798,509 $8,874,423
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------Treasury securities $5,601,833 $4,614 $ (13,134) $ 5,593,313
=========== ======== ============ ============
December 31, 1995
- -----------------
U.S. Treasury securities $1,005,487 $ - $ - $ 1,005,487
=========== ======== ============ ============

AtThere were no realized gains or losses for the periods ended
December 31, 1996 and 1995, investment securities with an approximate book
value of $4.3 million and $4.9 million, respectively, were pledged as
collateral for public deposits.

At December 31, 1996, the market value appreciation on the Bank's investment
securities, totaling $64,364, was comprised of gross unrealized gains totaling
$114,479 and gross unrealized losses of $50,115.

At December 31, 1995, the market value appreciation on the Bank's investment
securities, totaling $75,914, was comprised of gross unrealized gains totaling
$126,166 and gross unrealized losses of $50,252.

F-13

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE B - INVESTMENT SECURITIES (continued)1995.

The amortized cost and estimated market value of investment
securities at December 31, 1996 and 1995, by term tocontractual maturity, are shown
below:

U.S. GOVERNMENT STATE AND
AND AGENCY MUNICIPAL

Due within one year $2,498,904 $ 250,370below.

Investments Classified as Available For Sale
1996 1995
------------------ --------------------

Estimated Estimated
Amortized Market Amortized Market
Cost Value Cost Value
---------- ---------- ----------- ----------

Due in one to three years 1,244,298 440,209year or less $1,904,982 $1,906,532 $ 1,005,487 $1,005,487
Due in three toafter one year
through five years 1,590,727 592,424
Due after five years3,696,851 3,686,781 - 1,463,613-
---------- ---------- $5,333,929 $2,746,616----------- ----------
$5,601,833 $5,593,313 $ 1,005,487 $1,005,487
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------

NOTE C - LOANS RECEIVABLE

The composition of the loan portfolioInvestment securities carried at December 31 is as follows:

1996 1995

Commercial $ 4,830,419 $ 4,720,523
Real estate mortgage (primarily residential) 10,476,728 8,161,261
Installment, net of unearned income of
$61,145 and $237,821 9,632,956 11,452,063
Consumer and other loans 133,006 152,378
----------- -----------
25,073,109 24,486,225
Less:
Unamortized yield adjustments 34,818 -
Less allowance for losses on loans 331,223 261,560
----------- -----------

$24,707,068 $24,224,665
----------- -----------
----------- -----------

The Bank's lending efforts have historically focused on residential real
estate loans and consumer installment loans which comprise approximately $20.1
million, or 81%, of the total loan portfolio$5,100,000 at December
31, 1996 were pledged to secure public deposits and approximately $19.6 million, or 81%,securities sold under
agreements to repurchase.

(3) LOANS AND ALLOWANCE FOR LOAN LOSSES

Major classifications of the total loan portfolio at December
31, 1995. Historically, such loans have been conservatively underwritten with
collateral and cash down payments sufficient to provide the Bank with adequate
coverage in the event of default. Nevertheless, the Bank, as with any lending
institution, is subject to the risk that real estate values or economic
conditions could deteriorate in its primary lending areas within Ohio, thereby
impairing collateral values. However, management is of the belief that real
estate values and economic conditions in the Bank's primary lending areas are
presently stable.

In the normal course of business, the Bank has made loans to its directors,
officers and employees, and their related business interests. In the opinion
of management, such loans are consistent with sound banking practices and are
within applicable regulatory lending limitations. The balance of such loans
outstanding at December 31, 1996 and 1995 totaled approximately $785,000are as
follows:

1996 1995
------------ -----------
Commercial $ 5,571,567 $ 2,605,193
Real estate 8,157,522 3,754,846
Installment 8,993,694 3,370,745
------------ -----------
22,722,783 9,730,784
Deferred loan costs, net 105,154 40,582
------------ -----------
22,827,937 9,771,366
Allowance for loan losses (272,885) (117,104)
------------ -----------
Loans, net $22,555,052 $ 9,654,262
------------ -----------
------------ -----------

Changes in the allowance for loan losses were as follows:

1996 1995
------------ -----------
Balance, beginning of period $ 117,104 $ -
Loans charged off (39,151) (1,276)
Recoveries 1,804 -
Provision charged to expense 193,128 118,380
---------- ---------
Balance, end of period $ 272,885 $ 117,104
========== =========
There were no impaired loans or loans on nonaccrual at December 31, 1996
or 1995.

F-12

(4) BANK PREMISES AND EQUIPMENT

A summary of the cost and $539,000, respectively.

F-14

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)accumulated deprecation of bank premises
and equipment and their estimated useful lives at December 31, 1996 and 1995
NOTE Dis as follows:

Estimated
Life
(Years) 1996 1995
--------- ---------- -----------
Land - ALLOWANCE FOR LOSSES ON LOANS

Activity in the allowance for losses on loans$ 68,010 $ 68,010
Land improvements 7-15 62,148 60,300
Bank buildings and improvements 30 955,215 950,352
Furniture, fixtures and
equipment 5-20 836,113 832,016
---------- -----------
1,921,486 1,910,678
Less -- Accumulated depreciation (200,833) (44,157)
---------- -----------

$ 1,720,653 $ 1,866,521
---------- -----------
---------- -----------

Depreciation expense for the periods ending December 31, 1996 and 1995,
was $156,676 and $44,157, respectively.

(5) TIME DEPOSITS

A summary of time deposit accounts by maturity at December 31, 1996 is
as follows:

Maturity Amount Percent
---------- ----------- --------
0-1 year $ 7,457,661 41.4%
1-2 years 9,834,249 54.5
2-3 years 619,468 3.4
3-4 years 26,000 0.1
4-5 years 104,829 0.6
----------- -----
$18,042,207 100.0%
----------- -----
----------- -----
(6) INCOME TAXES

There were no current income taxes payable at December 31, 1996
or 1995 and no change in deferred taxes related to income items, thereby
creating no provision for income taxes for the period ended December 31, is1996
or 1995. The Bank has a net tax operating loss carryforward of approximately
$855,000 which will be available to reduce future taxable income, if any.

Deferred tax assets (liabilities) have been provided for temporary
differences between transactions recognized for financial reporting and
income tax reporting purposes. The net deferred tax asset included in other
assets in the accompanying balance sheets as follows:of December 31, include the
following components:

1996 1995
Balance at beginning--------- ----------
Allowance for loan losses $ 40,991 $ 39,815
Deferred loan fees 11,169 8,813
Accumulated depreciation (18,575) 393
Organizational costs 79,479 102,741
Net operating loss carryforward 177,936 135,238
Unrealized holding loss on investments
available for sale 2,897 -
--------- ----------
293,897 287,000
Deferred tax asset valuation allowance (291,000) (287,000
--------- ----------
Net deferred tax asset $ 2,897 $ -
--------- ----------
--------- ----------

F-13

(7) SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER BORROWED
FUNDS

Securities sold under agreements to repurchase generally are held
until canceled by either party. Securities underlying the agreements are
under the Bank's control. Other borrowed funds included in other liabilities
consist of year $ 261,560 $ 285,529
Provision charged to operations 185,000 110,000
Less loans charged off, net$3,201 and $48,064 of recoveries of
$63,229treasury tax and $47,212 (115,337) (133,969)
--------- ---------
Balance at end of year $ 331,223 $ 261,560
--------- ---------
--------- ---------

Nonperforming and nonaccrual loans totaled $407,000 and $125,000loan deposits at December
31, 1996 and 1995. Interest which would have been recognized had
such loans performed pursuant1995, respectively, and generally are repaid daily.

Information concerning securities sold under agreements to
contractual terms totaled approximately
$8,700 and $5,200 for the years ended December 31, 1996 and 1995,
respectively.

NOTE E - BANK PREMISES AND EQUIPMENT

Bank premises and equipment at December 31 are summarized as follows:

1996 1995

Land and improvements $ 116,878 $ 116,878
Building and improvements 599,569 575,785
Furniture and equipment 1,008,994 943,168
---------- ----------
1,725,441 1,635,831

Less accumulated depreciation
and amortization 1,005,957 952,336
---------- ----------

$ 719,484 $ 683,495
---------- ----------
---------- ----------

F-15

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE F - DEPOSITS

At December 31 deposits are summarized as follows:

WEIGHTED-AVERAGE
RATE AT 1996 1995
DEPOSIT TYPE AND DECEMBER 31, PERCENT PERCENT
INTEREST RATE RANGE 1996 AMOUNT OF TOTAL AMOUNT OF TOTAL

Demand deposit accounts - $ 7,433,466 23.50% $ 7,424,111 23.26%
Money market accounts 2.70% 3,719,194 11.76% 3,951,694 12.38%
Savings accounts 2.50% 4,233,515 13.38% 4,260,113 13.34%
----------- ------ ----------- ------

Total transaction accounts 15,386,175 48.64% 15,635,918 48.98%

Certificates
2.00 - 4.99% 2,823,941 8.93% 1,635,293 5.12%
5.00 - 6.99% 13,423,790 42.43% 13,019,636 40.78%
7.00 - 8.99% - - 1,632,908 5.12%
----------- ------ ----------- ------

Total certificates of deposit 5.63% 16,247,731 51.36% 16,287,837 51.02%
----------- ------ ----------- ------

Total deposits $31,633,906 100.00% $31,923,755 100.00%
----------- ------ ----------- ------
----------- ------ ----------- ------

At December 31, 1996 and 1995, the Bank had certificates of deposit with
balances greater than $100,000 totaling $6.5 million and $5.6 million,
respectively.

F-16

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE F - DEPOSITS (continued)

Interest expense on deposits for the years ended December 31repurchase is summarized as follows:

1996 1995
Savings accounts-------- -------
Average monthly balance during the year $405,000 $ 107,768 $ 113,443
Money market accounts 106,517 128,681
Certificates-
Average interest rate during the year 4.59% -
Maximum month-end balance during the year $415,000 -

U.S. Treasury note underlying the agreements
at year-end:
Carrying value $417,216 -
Estimated fair value $415,000 -

The securities sold under agreements to repurchase were outstanding from
October through December of deposit 893,761 923,782
---------- ----------

$1,108,046 $1,165,906
---------- ----------
---------- ----------

Maturities of outstanding certificates of deposit at December 31 are
summarized as follows:

1996 1995
(In thousands)

Less than1996. The above monthly average balance was
calculated for that period.

(8) PENSION PLAN

The Bank sponsors a defined contribution pension plan.
Participation in the plan is available to all employees completing one year
$11,592 $12,343
One yearof service and having attained twenty-one years of age. The service
requirements were waived for employees who were employed on the plan's
effective date. Bank contributions to three years 4,656 3,945
------- -------

$16,248 $16,288
------- -------
------- -------

NOTE G - LOANthe plan are based on a percentage of
employee contributions. The cost of the plan in 1996 and 1995 was $12,507
and $7,421, respectively.

(9) CREDIT RISKS, COMMITMENTS AND CONTINGENCIES

The Bank primarily grants residential mortgage and consumer loans
to customers in Southern Ohio, Eastern Kentucky and Western West Virginia.

The Bank is a party to financial instruments with off-balance-sheetoff-balance sheet
risk in the normal course of business to meet the financing needs of its
customers
including commitments to extend credit. Such commitments involve, to varying
degrees, elements of credit and interest-rate risk in excess of the amount
recognized in the statement ofcustomers. These financial condition. The contract or notional
amounts of the commitments reflect the extent of the Bank's involvement in
such financial instruments.

The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument forinstruments include commitments to extend credit
is
represented byin the contractual notional amountforms of those instruments.unused lines of credit and unfunded loan commitments. The
Bank uses the same credit policies in making commitments and conditional obligations and
commitments as those utilizedthey do for on-balance-sheeton-balance sheet instruments. AtSuch commitments
approximated $1,300,547 and $2,306,324 at December 31, 1996 and 1995,
respectively.

Normally the Bank requires collateral or other security to support
financial instruments with credit risk.

Throughout the year ending December 31, 1996, the Bank had no outstanding commitmentshas
maintained cash balances in other financial institutions in excess of
federally insured limits. The Bank is required to originate
loans. At that date, the Bank had unused linesmaintain a compensating
balance of credit totaling
approximately $1.7 million. In the opinion of management all commitments will
be funded via cash flow from operations and existing excess liquidity.

F-17$100,000 with a correspondent bank.

F-14

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)(10) RELATED PARTY TRANSACTIONS

Included in loans at December 31, 1996 and 1995 NOTE H - FEDERAL INCOME TAXES

Federal income taxes differ from those computed atare loans to
directors, officers and their related interests. Management's opinion is
that these loans are comparable to other loans made in the statutory corporate tax
rate for the year ended December 31 as follows:

1996 1995
(In thousands)

Taxes at statutory rate $122 $104
Increase (decrease) resulting from:
Tax-exempt interest (55) (53)
Other 4 (18)
---- ----
Federal income taxes per
financial statements $ 71 $ 33
---- ----
---- ----

The compositionordinary course of
the Bank's net deferred tax liability at December 31business. A summary of these related party loans is as follows:

1996 1995
(In thousands)
Deferred tax liabilities:
Deferred loan origination costs-------- ---------
Beginning balance $829,693 $ (34) $ (56)
Cash vs. accrual basis-
New loans advanced 388,525 838,090
Repayments and reclassifications (398,863) (8,397)
-------- ---------
Ending balance $819,355 $829,693
-------- ---------
-------- ---------

(11) REGULATORY MATTERS

Banking regulations limit the amount of accounting (81) (54)
Book/tax depreciation (70) (58)
Unrealized gain on securities designated as
available for sale (15) (17)
Federal Home Loandividends that may be paid
without approval of the Bank's regulatory agency. Under such restrictions,
the Bank stockmay not declare dividends (2) (1)
----- -----
Total deferred tax liabilities (202) (186)
----- -----

Deferred tax assets:
Allowance for losses on loans 86 59
Other 14 7
----- -----
Total deferred tax assets 100 66
----- -----

Net deferred tax liability $(102) $(120)
----- -----
----- -----

NOTE I - REGULATORY CAPITAL REQUIREMENTSin excess of the sums of the current
year's earnings (as defined) plus the retained earnings (as defined) from the
prior two years.

The Bank is subject to thevarious regulatory capital requirements
ofadministered by the Federal
Deposit Insurance Corporation (the "FDIC").federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory --- and possibly additional
discretionary --- actions by regulators that, if undertaken, could have a
direct material effect on the Bank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Bank's capital amounts and classification are also subject to qualitative
judgmentsjudgements by the regulators about components risk weightings, and other
factors.

F-18

THE SABINA BANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 and 1995

NOTE I - REGULATORY CAPITAL REQUIREMENTS (continued)

The Federal Deposit Insurance Corporation (FDIC) has adopted risk-basedQuantitative measures established by regulation to ensure capital
ratio guidelines to whichadequacy require the Bank is subject. The guidelines
establish a systematic analytical framework that makes regulatory capital
requirements more sensitive to differences in risk profiles among banking
organizations. Risk-based capital ratios are determined by allocating assets
and specified off-balance sheet commitments to four risk-weighting categories,
with higher levels of capital being required for the categories perceived as
representing greater risk.

These guidelines divide the capital into two tiers. The first tier ("Tier 1")
includes common equity, certain non-cumulative perpetual preferred stock
(excluding auction rate issues) and minority interests in equity accounts of
consolidated subsidiaries, less goodwill and certain other intangible assets
(except mortgage servicing rights and purchased credit card relationships,
subject to certain limitations). Supplementary ("Tier II") capital includes,
among other items, cumulative perpetual and long-term limited-life preferred
stock, mandatory convertible securities, certain hybrid capital instruments,
term subordinated debt and the allowance for loan losses, subject to certain
limitations, less required deductions. Banks are required to maintain a total
risk-based capital ratio of 8%, of which 4% must be Tier 1 capital. The FDIC
may, however, set higher capital requirements when particular circumstances
warrant. Banks experiencing or anticipating significant growth are expected
to maintain capitalminimum amounts and ratios including tangible capital positions, well above
the minimum levels.

In addition, the FDIC established guidelines prescribing a minimum Tier 1
leverage ratio (Tier 1 capital to adjusted total assets as specified(set forth
in the guidelines)table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined). These guidelines provide for a minimum Tier 1 leverage ratio of
3% for banks that meet certain specified criteria, including that they have
the highest regulatory rating and are not experiencing or anticipating
significant growth. All other banks are required to maintain a Tier 1
leverage ratio of 3% plus an additional cushion of at least 100 to 200 basis
points.

AsManagement believes, as of December
31, 1996, management believes that the Bank metmeets all capital adequacy requirements to which it
is subject.

As of December 31, 1996, the most recent notification from the FDIC
categorized the Bank was subject.as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized the Bank
must maintain minimum total risk-based, Tier I risk-based, and Tier I
leverage ratios as set forth in the table. There are no conditions or events
since that notification that management believes have changed the
institution's category.

F-15

AS OF DECEMBER 31, 1996
TO BE "WELL-
CAPITALIZED" UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
---------------- -------------------------------------- ---------------------------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
(In thousands)To be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes: Action Provisions:
Amount Ratio Amount Ratio Amount Ratio
----------- ------ ------- ----- ------ -----

Total capitalAs of December 31, 1996 IS GREATER THAN IS GREATER THAN IS GREATER THAN IS GREATER
THAN
(to risk-weighted assets) $4,783 21.0%Total Capital OR EQUAL TO $1,819 OR EQUAL TO 8.0% OR EQUAL TO $2,274 OR EQUAL TO
(to Risk Weighted Assets) $4,341,699 18.6% $1,871,840 8.0% $2,339,800 10.0%

IS GREATER IS GREATER IS GREATER IS GREATER
Tier I capital IS GREATER THAN IS GREATER THAN IS GREATER THAN IS GREATER THAN OR
(to risk-weighed assets) $4,462 19.6%Capital OR EQUAL TO $ 910 OR EQUAL TO 4.0% OR EQUAL TO $1,364 EQUAL TO 6.0%

Tier I leverage IS GREATER THAN IS GREATER THAN IS GREATER THAN IS GREATER THAN
$4,462 12.2% OR EQUAL TO
$1,461(to Risk Weighted Assets) $4,068,814 17.4% $ 935,920 4.0% $1,403,880 6.0%

IS GREATER IS GREATER IS GREATER IS GREATER
Tier I Capital OR EQUAL TO 4.0% OR EQUAL TO $1,827 OR EQUAL TO OR EQUAL TO
(to Average Assets) $4,068,814 13.3% $1,221,240 4.0% $1,526,550 5.0%

As of December 31, 1995 IS GREATER IS GREATER IS GREATER IS GREATER
Total Capital OR EQUAL TO OR EQUAL TO OR EQUAL TO OR EQUAL TO
(to Risk Weighted Assets) $4,397,239 33.2% $1,061,237 8.0% $1,326,546 10.0%

IS GREATER IS GREATER IS GREATER IS GREATER
Tier I Capital OR EQUAL TO OR EQUAL TO OR EQUAL TO OR EQUAL TO
(to Risk Weighted Assets) $4,280,135 32.3% $ 530,618 4.0% $ 795,928 6.0%

IS GREATER IS GREATER IS GREATER IS GREATER
Tier I Capital OR EQUAL TO OR EQUAL TO OR EQUAL TO OR EQUAL TO
(to Average Assets) $4,280,135 41.2% $ 412,184 4.0% $ 515,230 5.0%

F-19

THE SABINA BANK
BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)

June 30
1997(12) CAPITAL LEASE
The Bank has a capital lease obligation relating to EDP equipment
for five years expiring in the year 2000. The obligation of $59,059 and
$75,049 at December 31, 1996 ASSETS
Cash and due from banks $ 1,990 $ 1,477
Federal funds sold 0 700
Investment securities:
Available for sale 8,774 8,016
Loans $24,702 $25,118
Less: Unearned interest 34 117
Allowance for loan losses 310 270
------- -------
Net loans $24,358 $24,731
Premises and equipment, net 705 702
Other assets 735 450
------- -------

TOTAL ASSETS $36,562 $36,076

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 6,630 $ 6,607
Time deposits, $100,000 and over 5,902 6,012
Other interest bearing 19,130 18,552
------- -------
Total deposits $31,662 $31,171
Loan to Employee Stock Ownership Plan (ESOP) 230 261
Other1995, respectively, is included in other
liabilities 98 184
------- -------
Total liabilities $31,990 $31,616

SHAREHOLDERS' EQUITY:
Common stock, $1 par value; 110,000 shares
authorized, issued and outstanding at
June 30, 1997 andin the accompanying balance sheets.

As of December 31, 1996, $ 110 $ 110
Surplus 779 779
Retained earnings 3,873 3,833
Required contributions for shares acquired
by Employee Stock Ownership Plan (ESOP) (230) (261)
Net unrealized gains or losses on investment
securities available for sale 40 (1)
------- -------
Total shareholders' equity $ 4,572 $ 4,460

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $36,562 $36,076

F-20

THE SABINA BANK
STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

1997 1996
INTEREST INCOME:
Loans, including fees $1,121 $1,093
Investment securities -
Taxable 162 156
Tax-exempt 70 71
Federal funds sold and other 13 23
------ ------
Total interest income $1,366 $1,343

INTEREST EXPENSE:
Deposits $ 577 $ 550
Debt and other borrowings 13 12
------ ------
Total interest expense $ 590 $ 562

Net interest income $ 776 $ 781
Provision for loan losses 23 28
------ ------
Net interest income after provision for
loan losses $ 753 $ 753

NON-INTEREST INCOME:
Service charges $ 89 $ 85
Investment securities gains(losses) 0 0
Other 16 21
------ ------
$ 105 $ 106

NON-INTEREST EXPENSE
Salaries and employee benefits $ 298 $ 260
Occupancy and equipment expenses 65 71
FDIC insurance 1 1
Franchise tax 17 17
Other expenses 315 264
------ ------
$ 696 $ 613

Income before income taxes $ 162 $ 246

Provision for income taxes 30 60
------ ------

NET INCOME $ 132 $ 186

Primary earnings per share $ 1.28 $ 1.82

F-21

THE SABINA BANK
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS)
(UNAUDITED)

1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 132 $ 186
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 28 30
Provision for loan losses 23 28
Change in:
Other assets (325) (109)
Other liabilities (110) (67)
------- -------
Net cash provided by (used in) operating
activities $ (252) $ 68

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale $(2,085) $(1,685)
Proceeds from maturities of securities
available for sale 1,600 2,627
Net change in federal funds sold 300 400
Net change in loans 326 (534)
Purchases of bank premises and equipment includes
$86,431 in furniture, fixtures and equipment that is under the capital lease.
Accumulated depreciation related to the equipment is $27,370.

Future minimum lease payments as of December 31, 1996 were:

1997 $20,137
1998 20,137
1999 20,137
2000 5,034
--------
Future minimum lease payments 65,445
Less amount representing interest 6,386
Present value of future minimum --------
lease payments $59,059
========
(13) RECLASSIFICATIONS

Certain reclassifications have been made to the 1995 financial
statements in order to conform to the 1996 presentation. These
reclassifications were between "OTHER EXPENSES" on the Statement of
Operations and had no effect on net (14) (46)
------- -------
Net cash provided by investing activities $ 127 $ 762

CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits $ 28 $ (753)
Dividends paid (83) (55)
------- -------
Net cash used in financing activities $ (55) $ (808)

Net increase (decrease) in cash and cash
equivalents $ (180) $ 22

Cash and cash equivalents at beginning of period 2,170 1,455
------- -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,990 $ 1,477

F-22earnings.

F-16

ANNEX IA
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER

AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated
as of May 28,November 24, 1997, among PREMIER FINANCIAL BANCORP, INC., a Kentucky
corporation ("Parent"), PFBIOHIO RIVER INTERIM BANK, an Ohio banking corporation
in organization and a wholly owned subsidiary of Parent ("Merger Sub"), and
THE SABINAOHIO RIVER BANK, an Ohio banking corporation (the "Company").

R E C I T A L S:
- - - - - - - - -

A. The Boards of Directors of Parent, Merger Sub and the Company each
have determined that a business combination involving the merger of Merger
Sub into the Company and the Company becoming a wholly owned subsidiary of
Parent is in the best interests of their respective companies and
shareholders and presents an opportunity for Parent and the Company and their
respective shareholders to achieve long-term strategic and financial
benefits, and accordingly have agreed to effect the merger provided for
herein (the "Merger") upon the terms and subject to the conditions set forth
herein.

B. Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and to prescribe various conditions to the Merger.

C. For federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code").

D. It is intended that the Merger shall be recorded for accounting
purposes as a pooling of interests.

E. Pursuant to the foregoing, the parties have entered into an
Agreement and Plan of Merger dated as of October 31, 1997 (the "Original
Agreement") providing for the Merger. The Original Agreement does not
provide that the shares of Parent to be issued in the Merger will be
registered under the Securities Act of 1933, as amended (the "Securities
Act").

F. The parties desire to amend the Original Agreement to provide that
the shares of Parent to be issued in the Merger will be registered under the
Securities Act and to restate the agreement of the parties by entering into
this Agreement.

A G R E E M E N T:
- - - - - - - - - -

NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:

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ARTICLE I

THE MERGER

1.1 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, a certificate of merger (the "Certificate of Merger") shall be
duly executed and acknowledged by Merger Sub and the Company and thereafter
delivered to the Secretary of State of the State of Ohio, for filing, as
provided in the General Corporation Law of the State of Ohio (the "OGCL"), as
soon as

1
practicable on or after the Closing Date (as defined in Section 1.2).
The Merger shall become effective upon the filing of the Certificate of
Merger with the Secretary of State of the State of Ohio or at such time
thereafter as is provided in the Certificate of Merger (the "Effective Time").

1.2 CLOSING. The closing of the Merger (the "Closing") will take place
at 10:00 a.m. on a date to be specified by the parties, which shall be the
first day which is five business days after satisfaction of the latest to
occur of the conditions set forth in Sections 6.1, 6.2(b) and 6.3(b) (other
than the delivery of the officers' certificates referred to in Sections
6.2(b) and 6.3(b)), provided that the other closing conditions set forth in
Article VI have been met or waived as provided in Article VI at or prior to
the Closing (the "Closing Date"), at the offices of Vorys, Sater, Seymour and
Pease,Ohio River Bank, 221
East FourthRailroad Street, Suite 2100, Cincinnati,Ironton, Ohio, unless another time, date or place is agreed
to in writing by the parties hereto.

1.3 EFFECTS OF THE MERGER. At the Effective Time, (a) the separate
existence of Merger Sub shall cease and Merger Sub shall be merged with and
into the Company, (b) the articles of incorporation of the Company as in
effect immediately prior to the Effective Time shall be the articles of
incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law and (c) the code of
regulations of the Company as in effect immediately prior to the Effective
Time shall be the code of regulations of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law. As
used in this Agreement, "Surviving Corporation" shall mean the Company. At
and after the Effective Time, the Merger will have the effects set forth in
Section 1701.82 of the OGCL. At the Effective Time, the principal place of
business of the Surviving Corporation shall be the address of the Company set
forth in Section 8.2(b) and the Board of Directors of the Surviving
Corporation shall be those individuals whose names and addresses are set
forth in Exhibit 1.3; PROVIDED, HOWEVER, that if any of such individuals
shall then be unable or unwilling to serve, such other person(s) as shall be
substituted by the remaining individuals who are listed in Exhibit 1.3 shall
serve as a member(s) of the Board of Directors of the Surviving Corporation
at the Effective Time.

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ARTICLE II

EFFECT OF THE MERGER ON THE STOCK OF THE COMPANY
AND MERGER SUB; EXCHANGE OF CERTIFICATES

2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any common stock,
$1.00$8.00 par value, of the Company ("Company Common Stock"):

(a) CANCELLATION OF PARENT- OR MERGER SUB-OWNEDCERTAIN SHARES. All Company Common Stock that is
owned by the Company as treasury stock or by Parent, Merger Sub or any other
Subsidiary (as defined in Section 3.1(a)) of Parent (other than shares in trust
accounts, managed accounts and the like that are beneficially owned by third
parties (any such shares, "trust account shares")) shall be cancelled and shall
cease to exist and no shares of common stock of Parent or other consideration
shall be delivered in exchange therefor.

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(b) CONVERSION OF MERGER SUB COMMON STOCK. Each of the shares of
common stock of Merger Sub ("Merger Sub Common Stock") issued and outstanding
immediately prior to the Effective Time of the Merger shall be converted into
1,000 shares of common stock of the Surviving Corporation, $1.00$8.00 par value per
share.

(c) CONVERSION OF COMPANY COMMON STOCK. Each of the shares of
Company Common Stock issued and outstanding immediately prior to the Effective
Time of the Merger shall be converted into 4.331.2 (such number being referred to as
the "Conversion Number") fully paid and non-assessable shares of common stock
of Parent, without par value ("Parent Common Stock"), all in accordance with
Section 2.2.

(d) DISSENTING SHARES. Notwithstanding any other provisions of this
Agreement to the contrary, Company Common Stock that is outstanding immediately
prior to the Effective Time and which is held by shareholders who shall not have
voted in favor of the Merger or consented thereto in writing and who shall have
properly demanded in writing appraisal for such shares in accordance with
Section 1701.85 of the OGCL (collectively, the "Dissenting Shares") shall not be
converted into or represent the right to receive the consideration provided in
Section 2.1(c). Such shareholders ("Dissenting Holders") shall be entitled to
receive payment of the appraised value of such Company Common Stock held by them
in accordance with the provisions of Section 1701.85 of the OGCL, except that
all Dissenting Shares held by shareholders who shall have failed to perfect or
who effectively shall have withdrawn or lost their rights to appraisal of such
Company Common Stock under such Section 1701.85 shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the consideration provided in Section
2.1(c), without any interest thereon, upon surrender of the certificate or
certificates that formerly evidenced such Company Common Stock in accordance
with Section 2.2.

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(e) ADJUSTMENT TO CONVERSION NUMBER. If, prior to the Effective
Time of the Merger, Parent shall pay a dividend in, subdivide, combine into a
smaller number of shares or issue by reclassification of its shares any
Parent Common Stock, the Conversion Number shall be multiplied by a fraction,
the numerator of which shall be the number of shares of Parent Common Stock
outstanding immediately after, and the denominator of which shall be the
number of such shares outstanding immediately before, the occurrence of such
event, and the product shall be the Conversion Number for purposes of Section
2.1(c).

2.2 EXCHANGE OF CERTIFICATES.

(a) EXCHANGE AGENT. Parent shall authorize a commercial bank (or
such other person or persons as shall be acceptable to Parent and the
Company) to act as exchange agent hereunder (the 3
"Exchange Agent"). As soon
as practicable, but not later than three business days after the Effective
Time, Parent shall deposit with the Exchange Agent, in trust for the holders
of certificates which immediately prior to the Effective Time represented
Company Common Stock converted in the Merger (the "Company Certificates"),
certificates representing the shares of Parent Common Stock (such shares of
Parent Common Stock, together with any dividends or distributions with
respect thereto in accordance with Section 2.2(c), being hereinafter referred
to as the "Exchange Fund") issuable pursuant to Section 2.1(c) in exchange
for the outstanding Company Common Stock (the "Parent Certificates").

(b) EXCHANGE PROCEDURES.

(i) As soon as practicable afterPrior to the Effective Time, the Exchange Agent shall
mail to each recordholder of a Company Certificate a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Company Certificates shall pass, only upon consummation of the
Merger and the actual delivery thereofof such letter of transmittal to the Exchange
Agent and shall contain instructions for use in effecting the surrender of
the Company Certificates in exchange for the consideration described in the
next sentence). UponAt or after the Effective Time and upon surrender for
cancellation to the Exchange Agent of all Company Certificates held by any
recordholder of a Company Certificate, together with such letter of
transmittal duly executed, such holder shall be entitled to receive in
exchange therefor a Parent Certificate(s) representing the number of whole
shares of Parent Common Stock into which the Company Common Stock represented
by the surrendered Company Certificate(s) shall have been converted at the
Effective Time pursuant to this Article II, cash in lieu of any fractional
share of Parent Common Stock in accordance with Section 2.2(e) and certain
dividends and other distributions

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in accordance with Section 2.2(c), and the Company Certificate(s) so
surrendered shall forthwith be cancelled; PROVIDED, HOWEVER, that Company
Certificates surrendered for exchange by any person constituting an
"affiliate" of the Company for purposes of Rule 145(c) under the Securities
Act of 1933, as amended (the "Securities Act"), shall not be exchanged for Parent Certificates until Parent has received
a written agreement from such person as provided in Section 5.6.

(ii) Until Company Certificates have been surrendered and
exchanged for Parent Certificates as herein provided, each outstanding
Company Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender a Parent
Certificate(s) representing a whole number of shares of Parent Common Stock
and cash in lieu of any fractional share as contemplated by this Section 2.2.
No transfer taxes shall be payable in connection with any such exchange,
except that if any Parent Certificate (or any check representing cash in lieu
of a fractional share) is to be issued in the name other than that in which
the Company Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange

4
that the person requesting such
exchange shall pay to the Exchange Agent any transfer or other taxes required
by reason of the issuance of the Parent Certificate (or check) in a name
other than that of the registered holder of the Company Certificate, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable. Parent or the Exchange Agent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Company Common Stock such amounts as Parent or the
Exchange Agent are required to deduct and withhold under the Code, or any
provision of state, local or foreign tax law, with respect to the making of
such payment. To the extent that amounts are so withheld by Parent or the
Exchange Agent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Company Common Stock
in respect of whom such deduction and withholding was made by Parent or the
Exchange Agent. If outstanding Company Certificates are not surrendered
prior to six years after the Effective Time of the Merger (or, in any
particular case, prior to such earlier date on which dividends and other
distributions, if any, described above would otherwise escheat to or become
the property of any governmental unit or agency), the amount of dividends and
other distributions, if any, that have become payable and that thereafter
become payable on Parent Common Stock evidenced by such Company Certificates
as provided herein shall, to the extent permitted by applicable law, become
the property of Parent (and, to the extent not in its possession, shall be
paid over to it), free and clear of all claims or interest of any person
previously entitled thereto.

(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions declared or made after the Effective Time
with respect to Parent Common Stock with a record

A-5
date after the Effective Time shall be paid to the holder of any
unsurrendered Company Certificate with respect to the Parent Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall
be paid to any such holder pursuant to Section 2.2(e), until the holder of
such Company Certificate shall surrender it. Subject to the effect of
applicable laws, following surrender of any such Company Certificate, there
shall be paid to the holder of the Parent Certificate representing whole
shares of Parent Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender or promptly thereafter as is practicable,
the amount of any cash payable with respect to a fractional share of Parent
Common Stock to which such holder is entitled pursuant to Section 2.2(e) and
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole number of shares
of Parent Common Stock and (ii) at the appropriate payment date, the amount
of dividends or other distributions with a record date after the Effective
Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole number of shares of Parent Common Stock.

(d) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
Parent Common Stock issued upon conversion of Company Common Stock in
accordance with the terms hereof (including any cash paid pursuant to Section
2.2(e)) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such Company Common Stock, SUBJECT, HOWEVER, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time that may have
been declared or made by the Company on Company Common Stock in accordance
with the terms of this Agreement on or prior to the Effective Time and which
remain unpaid at the Effective Time. At the Effective Time, the stock
transfer books of the Company shall be closed to holders of Company Common
Stock immediately prior to the Effective Time and no transfer of Company
Common Stock by any such holder shall thereafter be made or recognized. If,
after the Effective Time, Company Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided
in this Article II.

(e) NO FRACTIONAL SHARES.

(i) Notwithstanding any other provision hereof, no fractional
share of Parent Common Stock and no certificate or scrip therefor, or other
evidence of ownership thereof, will be issued, and no right to receive cash
in lieu thereof shall entitle the holder thereof to any voting or other
rights of a holder of shares or fractional share interests.

(ii) Each holder of Company Common Stock shall be paid an amount in
cash equal to the product obtained by multiplying the fractional share interest
to which such holder (after taking into

A-6
account all shares of Company Common Stock then held by such holder) would
otherwise be entitled by the midpoint between the highest "bid" and lowest
"asked" price for a share of Parent Common Stock in the over-the-counter
market for the business day immediately preceding the Closing Date.

(iii) As soon as practicable after the determination of the amount
of cash, if any, to be paid to holders of Company Common Stock with respect
to any fractional share interests, the Exchange Agent shall make available
such amounts to such holders of Company Common Stock subject to and in
accordance with the terms of Section 2.2(b).

(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund which remains undistributed to the shareholders of the Company for six
months after the Effective Time shall be delivered to Parent, upon demand,
and any shareholders of the Company who have not theretofore complied with
this Article II shall thereafter look only to Parent for payment of their
claim for Parent Common Stock, any cash in lieu of fractional shares of
6
Parent Common Stock and any dividends or distributions with respect to Parent
Common Stock.

(g) NO LIABILITY. Neither Parent, Merger Sub, the Company nor the
Surviving Corporation shall be liable to any holder of Company Common Stock
for any amount paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat or similar law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Merger Sub, as of the date of the
Original Agreement, that:

(a) ORGANIZATION, STANDING AND POWER. The Company is a banking
corporation duly organized, validly existing and in good standing under the
laws of the State of Ohio. The Company is a bank duly organized under
Chapter 1113 of the Ohio Revised Code validly existing and in good standing
under the laws of the State of Ohio, and all of its deposits are insured by
the Bank Insurance Fund of the Federal Deposit Insurance Corporation ("FDIC")
to the maximum extent permitted by law. The Company has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification
necessary, except where the failure to be so qualified would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect

A-7

on the Company. For purposes of this Agreement: (i) "Material Adverse
Change" or "Material Adverse Effect" means, when used with respect to Parent,
the Company or the Surviving Corporation, as the case may be, any change or
effect that is or would reasonably be expected (so far as can be foreseen at
the time) to be materially adverse to the business, properties, assets,
liabilities, condition (financial or otherwise) or results of the operations
of Parent and its Subsidiaries taken as a whole, the Company, or the
Surviving Corporation, as the case may be; provided, however, that no
Material Adverse Change or Material Adverse Effect shall be deemed to have
occurred by reason of a change or effect resulting from general economic
conditions, general industry conditions, changes in banking laws or
regulations of general applicability or interpretations thereof, or a general
deterioration in the financial markets; and (ii) "Subsidiary" means any
corporation, partnership, joint venture or other legal entity of which Parent
or the Company, as the case may be (either alone or through or together with
any other Subsidiary), owns, directly or indirectly, 50% or more of the
capital stock or other equity interest the holders of which are generally
entitled to vote for the election of 7
the board of directors or other
governing body of such corporation, partnership, joint venture or other legal
entity.

(b) CAPITAL STRUCTURE.

(i) The authorized capital stock of the Company consists of
110,000275,000 shares of Company Common Stock, all250,000 of which are outstanding.

(ii) No bonds, debentures, notes or other indebtedness having
the right to vote (or convertible into or exercisable for securities having
the right to vote) on any matters on which shareholders of the Company may
vote ("Voting Debt") are issued or outstanding. All outstanding shares of
Company Common Stock are, and any Company Common Stock that may be issued
pursuant to the exercise of any outstanding stock option will be, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights.

(iii) Except as set forth in the letter dated and delivered
to Parent on the date hereofNovember 4, 1997 (the "Company Letter"), which relates to this
Agreement and is designated therein as being the Company Letter, there is no
option, warrant, call, right (including any preemptive right), commitment or
any other agreement of any character that the Company is a party to, or may
be bound by, requiring it to issue, transfer, sell, purchase or redeem any
shares of capital stock, any Voting Debt, or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for
any shares of capital stock of the Company, or to provide funds to, or make
an investment, in the form of a loan, capital contribution or otherwise
(excepting loans made in the ordinary course of a commercial banking
business), in any other

A-8
corporation, partnership, firm, individual, trust or other legal entity
(each, and any group of any two or more of the foregoing, a "Person").

(iv) Except as set forth in the Company Letter, there is no
voting trust or other agreement or understanding to which the Company is a
party, or may be bound by, with respect to the voting of the capital stock of
the Company.

(v) Since DecemberOctober 31, 1994,1995, except as set forth in the
Company Letter, the Company has not (A) issued or permitted to be issued any
shares of capital stock, or securities exercisable for or convertible into
shares of capital stock, of the Company; (B) repurchased, redeemed or
otherwise acquired any shares of capital stock of the Company (other than the
acquisition of trust account shares); or (C) declared, set aside, made or
paid to shareholders of the Company dividends or other distributions on the
outstanding shares of capital stock of the Company, other than regular
semi-annual cash dividends at a rate not in excess of the

regular semi-annual cash dividends most recently declared by the Company
prior to March 31, 1997.Company.

(i) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby (other than
the approval of this Agreement by the shareholders of the Company in
accordance with the OGCL and the Company's articles of incorporation). This
Agreement has been duly and validly executed and delivered by the Company
and, assuming this Agreement constitutes the valid and binding agreement of
Parent and Merger Sub, constitutes the valid and binding agreement of the
Company, enforceable in accordance with its terms, except that the
enforcement hereof may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect,
relating to creditors' rights generally, (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law) and (C) judicial discretion.

(ii) Except as set forth in the Company Letter, the execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby (subject to approval by the shareholders of
the Company of this Agreement) will not, conflict with or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, amendment, cancellation,
acceleration or payment of any obligation or the loss of a material benefit
under, or the creation of a lien, pledge, security interest, charge or other
encumbrance on assets (any such conflict, violation, default,

A-9
right of termination, amendment, cancellation, acceleration or payment, loss
or creation, a "Violation") pursuant to, any provisions of the articles of
incorporation or code of regulations of the Company or, except as set forth
in the Company Letter, and subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and filings
referred to in Subsection (iii) below, result in any Violation of any loan or
credit agreement, note, mortgage, indenture, lease, Benefit Plan (as defined
in Section 3.1(o)) or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or its properties or
assets.

(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal or state court,
administrative agency or commission or other governmental authority or
9
instrumentality (a "Governmental Entity") is required by or with respect to
the Company in connection with the execution and delivery of this Agreement,
or the consummation by the Company of the transactions contemplated hereby,
the failure to obtain which would have a Material Adverse Effect on the
Company, except for (A) the filing by Parent of an application with the Board
of Governors of the Federal Reserve System (the "Federal Reserve") under the
Bank Holding Company Act of 1956, as amended ("BHC Act"), and approval of
same, (B) the filing by Merger Sub and/or the Company of an application with
the Federal ReserveFDIC under the Bank Merger Act and approval of same, (C) the filing by Parent of a Registration Statement on
Form S-4 ("S-4") with the Securities and Exchange Commission ("SEC"), and the
declaration by the SEC of its effectiveness, (D) the filing by
the Company of the Certificate of Merger with the Secretary of State of the
State of Ohio, and appropriate documents with the relevant authorities of
other states in which the Company is qualified to do business, (E)(D) the filing
of applications by Parent and/or Merger Sub with the Ohio Superintendent of
Financial Institutions (the "Superintendent"), and approval thereof, (F)(E) the
filing of an application by Parent with the Commissioner of the Department of
Financial Institutions of the Commonwealth of Kentucky ("KDFI"), and approval
thereof, (G)(F) notices to or filings with the Small Business Administration
("SBA"), or the Internal Revenue Service (the "IRS") or the Pension Benefit
Guaranty Corporation (the "PBGC") with respect to any Benefit Plans, and (H)(G) such
filings and approvals as may be required under the "blue sky" laws of various
states.states and (H) the filing by Parent of a Registration Statement on Form S-4
("S-4") with the Securities and Exchange Commission ("SEC"), and the
declaration by the SEC of its effectiveness.

(d) FINANCIAL STATEMENTS. The Company has made available to Parent
true and complete copies of the audited statements of financial position and the
related statements of operations, shareholders' equity and cash flows (including
the related notes thereto) of the Company for the years ended December 31, 1996
1995 and 1994,1995, certified by Grant Thornton LLP,Kelley Galloway & Company P.S.C., independent certified
public accountants (the "Company Audited Financial Statements"). The Company
also has made available to Parent true and

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complete copies of the monthly and quarterly unaudited statements of
financial position and the related statements of operations, shareholders'
equity and cash flows of the Company for the monthly and quarterly periods
ended during the period of January 1, 1997 through AprilSeptember 30, 1997 (the
"Company Unaudited Financial Statements"). (The Company Audited Financial
Statements, the Company Unaudited Financial Statements and those audited and
unaudited financial statements that the Company hereafter shall delivermake
available to Parent pursuant to Section 5.5 are collectively referred to as
the "Company Financial Statements"). Except as set forth in the Company
Letter, the Company Financial Statements are or, as the context requires
shall be, in compliance as to form in all material respects with applicable
accounting requirements, have been (or shall be) prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as otherwise noted therein) and fairly (or shall

fairly) present (subject, in the case of unaudited financial statements, to
normal year-end audit adjustments and any other adjustments described therein
which individually or in the aggregate will not be material in amount or
effect) the financial position of the Company as of their respective dates
and the results of its operations and cash flows for the periods presented
therein.

(e) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
the Company Letter, since December 31, 1996, the Company has not incurred any
material liability or obligation (indirect, direct or contingent), except in
the ordinary course of its business consistent with past practices, taken any
of the prohibited actions set forth in Section 4.1, or suffered any change,
or any event involving a prospective change, in its business, financial
condition or results of operations that has had, or is reasonably likely to
have, a Material Adverse Effect on the Company.

(f) ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the
Company Letter or reflected or reserved against in the Company Audited Financial
Statements for the 1996 year, the Company has no obligations or liabilities
(contingent or otherwise) that might reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company. The
Company has set forth in the Company Letter, as of the date hereof, all interest
rate and currency exchange agreements, and all trading positions regarding any
form or type of derivative financial product the value of which is linked to, or
derived from, the value of an underlying asset, rate or index.

(g) ALLOWANCE FOR CREDIT LOSSES. Except as set forth in the Company
Letter, the allowance for credit losses (the "Allowance") shown on the
statements of financial position of the Company as of AprilSeptember 30, 1997
included in the Company Financial Statements was, and the Allowance shown on
each of the statements of condition of the Company as of a date subsequent to
the

A-11

execution of this Agreement will be, in each case as of the dates thereof,
determined in accordance with safe and sound banking practices and the
guidelines and policies of the FDIC, and are (and will be) adequate, in the
reasonable judgment of management, to provide for losses relating to or
inherent in the loan and lease portfolios (including accrued interest
receivable) of the Company and other extensions of credit (including letters
of credit and commitments to make loans or extend credit) by the Company.

(h) ENVIRONMENTAL MATTERS. Except as set forth in the Company
Letter, to the knowledge of the Company, neither the Company nor any
properties presently or previously owned or operated by the Company has been
or is in violation of or liable under any Environmental Law (as hereinafter
defined). There are no actions, suits or proceedings, or demands, claims,
notices or, to the knowledge of the Company, investigations (including
notices,

11
demand letters or requests for information from any environmental
agency), instituted or pending, or to the knowledge of the Company,
threatened, relating to the liability of any properties owned or operated by
the Company under any Environmental Law. "Environmental Law" means any
federal, state or local law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, order, judgment, decree,
injunction or agreement between the Company and any Governmental Entity
relating to (i) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
ground water, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently listed,
defined, designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, whether by type or by quantity, including
any material containing any such substance as a component; and includes,
without limitation, the Resource Conservation and Recovery Act, the Clean Air
Act, the Federal Water Pollution Control Act, the Toxic Substances Control
Act and the Comprehensive Environmental Response, Compensation and Liability
Act.

(i) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Company for inclusion in (i) the S-4 to be filed with the SEC by
Parent in connection with the issuance of Parent Common Stock in the Merger
will, at the time the S-4 is filed with the SEC and at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (ii) the proxy statement of the
Company contained within the S-4 (the "Proxy Statement") will, at the date of
mailing to shareholders of the Company and at the time of the meeting of
shareholders of the Company to be held in connection with the

A-12
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Proxy Statement (except for such portions thereof that
relate only to Parent and Merger Sub) will comply as to form in all material
respects with the provisions of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations thereunder, to
the extent applicable. The information set forth in the Company Letter by
the Company for purposes of this Agreement is true and accurate in all
material respects.

(j) NO DEFAULT. Except as set forth in the Company Letter, no
Violation exists on the part of the Company with respect to any term,
condition or provision of (i) its articles of incorporation or bylaws, (ii)
any note, mortgage, indenture, other

12
evidence of indebtedness, guaranty,
license, agreement or other contract, instrument or contractual obligation to
which the Company is now a party or by which it or any of its properties or
assets may be bound, or (iii) any order, writ, injunction or decree
applicable to the Company, except for possible Violations that, individually
or in the aggregate, do not, and, insofar as reasonably can be foreseen, in
the future will not, have a Material Adverse Effect on the Company.

(k) COMPLIANCE WITH LICENSES, PERMITS AND APPLICABLE LAWS. The
Company has received such certificates, permits, licenses, franchises,
consents, approvals, orders, authorizations and clearances from appropriate
governmental entities (the "Company Permits") as are necessary to own or
lease and operate its properties and to conduct its business as currently
owned or leased and conducted, and all such Company Permits are valid and in
full force and effect. The Company is in compliance in all material respects
with its obligations under the Company Permits, with only such exceptions as,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company, and no event has occurred that
allows, or after notice of lapse of time, or both, would allow, revocation or
termination of any material Company Permit. Except as set forth in the
Company Letter, the business of the Company is not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity,
except for possible violations that individually or in the aggregate do not,
and in the future will not, have a Material Adverse Effect on the Company.
Except for routine examinations by Governmental Entities charged with the
supervision or regulation of banks or bank holding companies or the insurance
of bank deposits ("Bank Regulators"), as of the date of this Agreement, to
the knowledge of the Company, no investigation by any Governmental Entity
with respect to the Company is pending or threatened.

(l) ACTIONS AND PROCEEDINGS. Except as set forth in the Company
Letter, there are no outstanding orders, judgments,

A-13
injunctions, awards or decrees of any Governmental Entity against or
affecting the Company, any of its current or former directors, employees,
consultants, agents or shareholders, as such, any of its properties, assets
or business or any Company Benefit Plan (as defined in Section 3.1(o)).
Except as set forth in the Company Letter, there are no actions, suits or
claims or legal, administrative or arbitration proceedings or, to the
knowledge of the Company, investigations pending or threatened, against or
affecting the Company, any of its current or former directors, officers,
employees, consultants, agents or shareholders, as such, any of its
properties, assets or business or any Company Benefit Plan that if brought
(if not now pending) would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. There are no
actions, suits or claims or legal, administrative or arbitration proceedings
or, to the knowledge of the Company, investigations or labor disputes

13
pending
or threatened, against or affecting the Company, any of its current or former
directors, officers, employees, consultants, agents or shareholders, as such,
any of its properties, assets or business or any Company Benefit Plan
relating to the transactions contemplated by this Agreement.

(m) TAXES. To the Company's knowledge, the Company has filed all
tax returns required to be filed by it and has paid, or has set up an
adequate reserve for the payment of, all Taxes required to be paid as shown
on such returns, and the most recent Company Financial Statements reflect an
adequate reserve for all Taxes payable by the Company accrued through the
date of such financial statements. No material deficiencies for any Taxes
have been proposed, asserted or assessed against the Company that are not
adequately reserved for. Except with respect to claims for refund, the
federal income tax returns of the Company have been examined by and settled
with the IRS, or the statute of limitations with respect to such years has
expired (and no waiver extending the statute of limitations has been
requested or granted), for all years through 1993. For the purpose of this
Agreement, the term "Taxes" (including, with correlative meaning, the term
"tax") shall include, except where the context otherwise requires, all
federal, state, local and foreign income, profits, franchise, gross receipts,
payroll, sales, employment, unemployment (including unemployment insurance
premiums or contributions), use, property, withholding, excise, occupancy,
and other taxes, duties or assessments of any nature whatsoever, together
with all interest, penalties and additions imposed with respect to such
amounts.

(n) CERTAIN AGREEMENTS. Except as set forth in the Company Letter,
and except for this Agreement, as of the date of this Agreement, the Company is
not a party to any oral or written (i) employment or other agreement, contract,
commitment, program, policy or arrangement requiring the Company to pay
compensation (including any salary, bonus, deferred compensation, incentive
compensation, severance, vacation or sick pay, or any other fringe

A-14
benefit payment) or any other type of remuneration to any Person, (ii)
agreement or plan, including any stock option plan, any of the benefits of
which will be increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by
this Agreement, or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement, (iii) contract or agreement not terminable on 30 days' or less
notice involving the payment of more than $5,000 in any 12 month period; (iv)
contract or agreement that materially limits the ability of Company to
compete in any line of business or with any Person or in any geographic area
or during any period of time, or (v) any other material contract the
disclosure and inclusion as an exhibit of which would be required by Item 601
of Regulation S-K of the SEC if the Company were a corporation making filings
with the SEC under

14
the periodic reporting requirements of Section 13 of the
Exchange Act and the rules and regulations of the SEC thereunder.

(o) BENEFIT PLANS.

(i) The Company has disclosed in the Company Letter each
employee benefit plan (including, without limitation, any "employee benefit
plan," as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended, ("ERISA")) (all the foregoing being herein called
"Benefit Plans"), maintained or contributed to by the Company (the "Company
Benefit Plans"). The Company will make available to Parent a true and
correct copy of (a) the most recent annual report (Form 5500) filed with the
IRS, (B) each such Company Benefit Plan, (C) each trust agreement relating to
such Company Benefit Plan, (D) the most recent summary plan description for
each Company Benefit Plan for which a summary plan description is required,
(E) the most recent actuarial report or valuation relating to a Company
Benefit Plan subject to Title IV of ERISA and (F) the most recent
determination letter issued by the IRS with respect to any Company Benefit
Plan qualified under Section 401(a) of the Code.

(ii) With respect to the Company Benefit Plans, individually
and in the aggregate, except as set forth in the Company Letter, no event has
occurred and, to the knowledge of the Company, there exists no condition or
set of circumstances, in connection with which the Company could be subject
to any liability (except liability for benefits, claims and funding
obligations payable in the ordinary course) under ERISA, the Code or any
other applicable law.

(p) SUBSIDIARIES. The Company has no Subsidiaries.

(q) AGREEMENTS WITH BANK REGULATORS. The Company is not a party
to any written agreement or memorandum of understanding with, or a party to
any commitment letter or similar undertaking to, or subject to any order or
directive by, nor is it a recipient

A-15
of any extraordinary supervisory letter from, any Bank Regulator which
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit policies or its management, nor has the
Company been advised by any Bank Regulator that it is contemplating issuing
or requesting (or is considering the appropriateness of issuing or
requesting) any such order, directive, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission.

(r) VOTE REQUIRED. The affirmative vote of the holders of
two-thirds of the outstanding shares of Company Common Stock entitled to vote
thereon is the only vote of the holders of any class or series of Company
capital stock necessary to approve this Agreement and the transactions
contemplated hereby.

(s) PROPERTIES.

(i) Except as set forth in the Company Letter, the Company (A)
has good, valid and marketable title to all the properties and assets
reflected in the latest audited financial statements included in the Company
Financial Statements as being owned by the Company, or acquired after the
date thereof (except properties sold or otherwise disposed of since the date
thereof in the ordinary course of business), free and clear of all mortgages,
pledges, security interests, claims, liens, charges, options or other
encumbrances of any nature whatsoever (including, without limitation, in the
case of real property, easements and rights-of-way) (collectively, "Liens"),
except (x) statutory Liens securing payments not yet due, (y) Liens on assets
of the Company incurred in the ordinary course of a commercial banking
business and (z) such Liens and imperfections or irregularities of title that
do not materially affect the use of the properties or assets subject thereto
or affected thereby or otherwise materially impair business operations at
such properties, and (B) is the lessee of all leasehold estates reflected in
the latest audited financial statements included in the Company Financial
Statements or acquired after the date thereof (except for leases that have
expired by their terms since the date thereof) and is in possession of the
properties purported to be leased thereunder, and each such lease is valid
without default thereunder by the lessee or, to the Company's knowledge, the
lessor.

(ii) The Company has set forth in the Company Letter the
street address of all real property currently owned by the Company, including
properties held by the Company as a result of foreclosure or repossession or
carried on the Company's books as "other real estate owned" (the "Current
Real Properties"). Except as set forth in the Company Letter, the Current
Real Properties are in generally good condition and have been well maintained
in accordance with reasonable and prudent business practices applicable to
like facilities. Except as set forth in the Company Letter, there are no
proceedings, claims, disputes or conditions affecting any

A-16
of the Current Real Properties or leasehold interests of the Company that,
insofar as reasonably can be foreseen, may curtail or interfere with the use
of such property.

(t) CORPORATE DOCUMENTS, BOOKS AND RECORDS. The Company has made
available to Parent true and complete copies of the articles of incorporation
and code of regulations of the Company. The minute books of the Company
contain complete and accurate records in all material respects of all
meetings and other corporate actions of its shareholders and Board of
Directors (including committees of the Board of Directors). The stock
transfer records of the Company are, to the knowledge of the Company,
complete and accurate in all material respects.

(u) INSURANCE. The Company maintains with financially sound and
reputable insurance companies insurance policies and bonds in force in such
amounts and against such liabilities and risks as companies engaged in a
similar business, in accordance with good business practice, customarily
would be insured. Except as set forth in the Company Letter, to the
Company's knowledge, the Company is not liable for any material, retroactive
premium adjustments. All such insurance policies and bonds are valid,
enforceable and in full force and effect and, except as set forth in the
Company Letter, the Company has not received any notice of premium increases
or cancellation and, to the Company's knowledge, no grounds for any
cancellation notice exists. Except as set forth in the Company Letter, since
DecemberOctober 31, 1994,1995, the Company has not failed to make a timely claim with
respect to any matter giving rise to a claim or potential claim under any
such insurance policies and bonds where such failure to make a timely claim
would have a Material Adverse Effect on the Company.

(v) POTENTIAL COMPETING INTERESTS. Except as set forth in the
Company Letter, (i) no director, officer or key employee or, to the Company's
knowledge, any beneficial owner of 10% or more of any class of capital stock
of the Company (a "Ten Percent Owner") of the Company, directly or indirectly beneficially
owns a 5% or more interest in any institution that is engaged in the business
of making loans and/or taking deposits, (ii) neither the Company, nor anyno director, officer or key
employee of the Company or, to the Company's knowledge, any Ten Percent Owner
has any interest, direct or indirect, in any contract or agreement with,
commitment or obligation of or to, or claim against, the Company (excluding
contracts, agreements or obligations with respect to monies borrowed from, or
claims for deposits maintained with, the Company in the ordinary course of a
commercial banking business consistent with safe and sound banking
practices), and (iii) the Company does not use any real or personal property
in which any director, officer or key employee or, to the Company's
knowledge, Ten Percent Owner of
the Company directly or indirectly beneficially owns a 5% or
more interest in any such real or personal property.

A-17

(w) POOLING OF INTERESTS. To the Company's knowledge, the Company
has not taken or failed to take any action that would prevent the accounting
for the Merger as a pooling of interests in accordance with Accounting
Principles Board Opinion No. 16, the interpretive releases issued pursuant
thereto, and the pronouncements of the SEC.

3.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER Sub.SUB. Each of
Parent and Merger Sub jointly and severally represent and warrant to the
Company, as of the date of the Original Agreement, as follows:

(a) ORGANIZATION, STANDING AND POWER. Parent is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Kentucky. Each of Parent's Subsidiaries is a corporation
duly organized, validly existing and

17
in good standing under the laws of its
state of incorporation or organization. Each of Parent and its Subsidiaries
has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties
makes such qualification necessary, except where the failure to be so
qualified would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent.

(b) CAPITAL STRUCTURE.

(i) The authorized capital stock of Parent consists of
10,000,000 shares of common stock, without par value ("Parent Common Stock"),
and 1,000,000 shares of preferred stock, without par value ("Parent Preferred
Stock"), of which 4,209,090 shares of Common Stock are outstanding, 476,300
shares of Common Stock are reserved for issuance in connection with Parent's
acquisition of The Sabina Bank, Sabina, Ohio, 100,000 shares of Common Stock
are reserved for issuance under Parent's 1996 Employee Stock Ownership
Incentive Plan and no shares of Common Stock are held by Parent in its
treasury. There are no shares of Parent Preferred Stock outstanding,
reserved for issuance or held by Parent in its treasury.

(ii) No Voting Debt of Parent is issued or outstanding. All
outstanding shares of Parent Common Stock are duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.

(iii) Except as set forth in the Parent SEC Documents (as
defined in Section 3.2(d)) or the letter dated and delivered to the Company
on the date hereofof the Original Agreement (the "Parent Letter"), which relates to
this Agreement and is designated therein as the Parent Letter, there is no
option, warrant, call,

A-18

right (including any preemptive right), commitment or any other agreement of
any character that Parent or any Subsidiary is a party to, or may be bound
by, requiring it to issue, transfer, sell, purchase or redeem any shares of
capital stock, any Voting Debt, or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares of
capital stock of Parent or any Subsidiary, or to provide funds to, or make an
investment (in the form of a loan, capital contribution or otherwise) in, any
of Parent's Subsidiaries or (excepting loans made in the ordinary course of a
commercial banking business) any other Person.

(iv) Except as set forth in the Parent SEC Documents or the
Parent Letter, and except for this Agreement, there is no voting trust or other
agreement or understanding to which Parent or any Subsidiary is a party, or may
be bound by, with respect to the voting of the capital stock of Parent or any
Subsidiary.

(v) Since December 31, 1994, except as set forth in the Parent
SEC Documents or the Parent Letter, Parent has not (A) issued or permitted to be
issued any shares of capital stock, or securities exercisable for or convertible
into shares of capital stock, of Parent or any Subsidiary; (B) repurchased,
redeemed or otherwise acquired, directly or indirectly through any Subsidiary,
any shares of capital stock of Parent or any Subsidiary (other than the
acquisition of trust account shares); or (C) declared, set aside, made or paid
to shareholders of Parent dividends or other distributions on the outstanding
shares of capital stock of Parent, other than regular quarterly cash dividends.

(i) Each of Parent and Merger Sub has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. This Agreement and the consummation by
Parent and Merger Sub of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of Parent and Merger Sub,
and by Parent as the shareholder of Merger Sub, and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Parent and
Merger Sub, and assuming this Agreement constitutes the valid and binding
agreement of the Company, constitutes the valid and binding agreement of
Parent and Merger Sub, enforceable in accordance with its terms, except that
the enforcement hereof may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect,
relating to creditors' rights generally, (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or at law) and (C) judicial discretion.

A-19
(ii) The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, create
any Violation under any provisions of the articles of incorporation or bylaws
of Parent or any Subsidiary or, except as set forth in the Parent Letter and
subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
Subsection (iii) below, result in any Violation of any loan or credit
agreement, note, mortgage, indenture, lease, Benefit Plan (as defined in
Section 3.1(o)) or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or any Subsidiary or their
respective properties or assets.

(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required
by or with respect to Parent or any Subsidiary in connection with the
execution and delivery of this Agreement, or 19
the consummation by Parent and
Merger Sub of the transactions contemplated hereby, the failure to obtain
which would have a Material Adverse Effect on Parent, except for (A) the
filing by Parent of an application with the Federal Reserve under the BHC
Act, and approval of same, (B) the filing by Merger Sub and/or the Company of
an application with the Federal ReserveFDIC under the Bank Merger Act and approval of same,
(C) the filing by Parent of
the S-4 with the SEC, and the declaration by the SEC of its effectiveness,
(D) the filing by the Company of the Certificate of Merger with the Secretary
of State of the State of Ohio and appropriate documents with the relevant
authorities of other states in which the Company or any Subsidiary is
qualified to do business, (E)(D) the filing of applications by Parent and/or
Merger Sub with the Superintendent, and the approval thereof, (F)(E) the filing
of an application by Parent with the KDFI, and approval thereof, (G)(F) notices
to or filings with the SBA, or the IRS or the PBGC with respect to any
Benefit Plans, and (H)(G) such filings and approvals as may be required under the
"blue sky" laws of various states.states and (H) the filing by Parent of the S-4
with the SEC, and the declaration by the SEC of its effectiveness.

(d) SEC DOCUMENTS: FINANCIAL STATEMENTS. Parent has made
available to the Company each document filed by it since December 31, 19941996
with the SEC under the Securities Act or the Exchange Act, including without
limitation, (i) Parent's Annual Report on Form 10-K for the year ended
December 31, 1996, (ii) Parent's Quarterly Report on Form 10-Q for the period
ended March 31,June 30, 1997, and (iii) Parent's definitive proxy statement for its
1997 Annual Meeting of Shareholders held May 6, 1997, each in the form
(including exhibits and any amendments) filed with the SEC (collectively, the
"Parent SEC Documents"). As of their respective dates, each of the Parent
SEC Documents did not, and each of the Parent SEC Documents filed with the
SEC subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the

A-20

circumstances in which they were made, not misleading, provided, that Parent
makes no representation with respect to information supplied by the Company
for use in Parent SEC Documents after the date hereof. Each of the
consolidated balance sheets included in or incorporated by reference into the
Parent SEC Documents (including their related notes and schedules) fairly
presents the consolidated financial condition of Parent and its consolidated
Subsidiaries as of its date and each of the consolidated statements of income
and of changes in financial position included or incorporated by reference
into the Parent SEC Documents (including any related notes and schedules)
fairly presents the results of operations, retained earnings and changes in
financial position, as the case may be, of Parent and its consolidated
Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements to normal year-end adjustments and any other adjustments
described therein which individually or in the aggregate will not be material
in amount or effect), in each case in accordance with

20
generally accepted
accounting principals consistently applied during the periods involved,
except as may be noted therein.

(e) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
the Parent Letter, since December 31, 1996, neither Parent nor any
Subsidiary has incurred any material liability or obligation (indirect,
direct or contingent), except in the ordinary course of its business
consistent with past practices, or suffered any change, or any event
involving a prospective change, in its business, financial condition or
results of operations that has had, or is reasonably likely to have, a
Material Adverse Effect on Parent.

(f) ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
the Parent Letter or disclosed in the Parent SEC Documents, neither Parent
nor any Subsidiary has any obligations or liabilities (contingent or
otherwise) that might reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent. Parent has set forth in the
Parent Letter, as of the date hereof, all interest rate and currency exchange
agreements, and all trading positions regarding any form or type of
derivative financial product the value of which is linked to, or derived
from, the value of an underlying asset, rate or index.

(g) INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Parent for inclusion in (i) the S-4 to be filed with the SEC
by Parent in connection with the issuance of Parent Common Stock in the
Merger will, at the time the S-4 is filed with the SEC and at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) the Proxy
Statement will, at the date of mailing to shareholders of the

A-21
Company and at the time of the meeting of shareholders of the Company to be
held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Proxy
Statement (except for such portions thereof that relate only to the Company)
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder. The information set
forth in the Parent Letter by Parent for purposes of this Agreement is true
and accurate in all material respects.

(h) CORPORATE DOCUMENTS, BOOKS AND RECORDS. Parent has made
available to the Company true and complete copies of the articles of
incorporation and bylaws of Parent and each Subsidiary. The minute books of
Parent and each Subsidiary contain complete and accurate records in all
material respects of all meetings and other

corporate actions of its shareholders and Board of Directors (including
committees of the Board of Directors). The stock transfer records of Parent
and each Subsidiary are, to the knowledge of Parent, complete and accurate in
all material respects.

(i) POOLING OF INTERESTS. To Parent's knowledge, neither Parent
nor any Subsidiary has taken or failed to take any action that would prevent
the accounting for the Merger as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16, the interpretive releases issued
pursuant thereto, and the pronouncements of the SEC.

(j)(i) INDEPENDENT OPERATION. It has been the practice of Parent
since its formation to maintain the separate charters of commercial banks
that become affiliated with, and Subsidiaries of, Parent. It has also been
the practice of Parent to continue the directorships of directors and the
employment of officers and employees of commercial banks that become
affiliated with, and Subsidiaries of, Parent following consummation of
transactions resulting in such affiliations with Parent.

ARTICLE IV

CONDUCT OF THE COMPANY PRIOR TO CLOSING

4.1 CONDUCT OF BUSINESS.

(a) Except as set forth in the Company Letter, the Company agrees
that during the period from the date of this Agreement to the Effective Time
(unless Parent shall otherwise agree in writing and except as otherwise
contemplated by this Agreement), the Company will conduct its operations
according to its ordinary and usual course of business consistent with past
practice and, to the extent consistent therewith, with no less diligence and
effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organization, keep available the service
of its current directors, officers and employees and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that goodwill and ongoing business shall not be impaired
in any material aspect at the Effective Time. Without limiting the
generality of the foregoing, and except as otherwise permitted in this
Agreement prior to the Effective Time or except as set forth in the Company
Letter, the Company will not, without the prior written consent of Parent:

A-22
(i) issue, sell, grant, dispose of, pledge or otherwise
encumber, or authorize or propose the issuance, sale, disposition or pledge
or other encumbrance of (A) any additional shares of capital stock of any
class (including shares of Company Common Stock), or any securities or rights
convertible into,

22
exchangeable for, or evidencing the right to subscribe for
any shares of capital stock, or any rights, warrants, options, calls,
commitments or any other agreements of any character to purchase or acquire
any shares of capital stock or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock, or any other ownership interest (including, without
limitation, any phantom interest), or (B) any other securities in respect of,
in lieu of, or in substitution for, shares of Company Common Stock
outstanding on the date hereof;

(ii) redeem, purchase or otherwise acquire, or propose to
redeem, purchase or otherwise acquire, any of its outstanding shares of
Company Common Stock (except for the acquisition of trust account shares);

(iii) split, combine, subdivide or reclassify any shares of
Company Common Stock or declare, set aside for payment or pay any dividend,
or make any other actual, constructive or deemed distribution, whether in
cash, stock, property or otherwise, in respect of any shares of Company
Common Stock or otherwise make any payments to shareholders in their capacity
as such;

except that if the Effective Time has not occurred before the record
date for dividends on Parent Common Stock for the calendar quarter ended
December 31, 1997 the Company may declare a special dividend on Company
Common Stock to holders of record of such shares as of the record date
established therefor (which record date shall be prior to the date of the
Effective Time) with a payment date that is the same as the Closing Date, in
an amount per share equal to the product of (x) 4.33 multiplied by (y) the
dividend per share declared on Parent Common Stock by Parent for the calendar
quarter ended December 31, 1997;

(iv) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company (other than the Merger);

(v) adopt any amendments to its articles of incorporation or
code of regulations;

(vi) make any acquisition or disposition of assets or
securities, except in the ordinary course of business consistent with past
practices;

(vii) incur any indebtedness for borrowed money or guarantee
any such indebtedness or make any loans, advances or capital contributions
to, or investments in, any other Person, other than in the ordinary course of
a commercial banking business consistent with past practices, it being
understood and agreed that the incurrence of indebtedness in the ordinary
course of a commercial banking business shall include the creation of deposit
23
liabilities, purchases of federal funds, sales of certificates of deposit and
entering into repurchase agreements;

(viii) offer any new deposit or loan product or service or
change its lending, investment, liability management,

A-23

loan loss provision, loan loss charge-off or other material banking policies;

(ix) grant any increases in the compensation of any of its
directors, officers or employees, except in the ordinary course of business and
in accordance with past practice or as may be approved on a case by case basis
by Parent;

(x) pay or agree to pay any pension, retirement allowance,
severance or other employee benefit not required or contemplated by any of
the existing Company Benefit Plans or any agreements or arrangements as in
effect on the date hereof to any such director, officer or employee, whether
past or present;

(xi) enter into any new or amend any existing employment or
severance or termination agreement with any director, officer or employee;

(xii) except in the ordinary course of business consistent
with past practice or as may be required to comply with applicable law,
become obligated under any new Benefit Plan or amend any Company Benefit Plan
in existence on the date hereof if such amendment would have the effect of
materially enhancing any benefits thereunder;

(xiii) make any capital expenditures or commitments for any
capital expenditures, other than capital expenditures or commitments for any
capital expenditures set forth in the Company Letter;

(xiv) make any material changes in its customary methods of
marketing;

(xv) take, or agree to commit to take, any action that would make
any representation or warranty of the Company contained herein inaccurate in any
respect at, or as of any time prior to, the Effective Time; or

(xvi) change its method of accounting in effect at December 31,
1996, except as required by changes in generally accepted accounting principles
as concurred in by each party's independent auditors, or change its fiscal year;

(xvii) take any action that would, or reasonably might be
expected to, adversely affect the ability of the Company or Parent to obtain
any of the Requisite Regulatory Approvals (as 24
defined in Section 6.1(b))
without imposition of a condition or restriction of the type referred to in
Section 6.1(f)6.1(e);

(xviii) authorize, recommend, propose or announce an
intention to do any of the foregoing, or enter into any

A-24

contract, agreement, commitment or arrangement to do any of the foregoing.

4.2 ACQUISITION PROPOSALS.

(a) The Company shall not, and the Company shall direct and use its
best efforts to cause its officers, directors, employees, agents and
representatives (including without limitation any attorney, accountant,
investment banker or other advisor retained by it) not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making or implementation
of any proposal or offer (including, without limitation, any proposal or offer
to its shareholders) with respect to a merger, acquisition, consolidation or
similar transaction involving, or any purchase of all or any significant portion
of the assets or any equity securities of, the Company (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or engage in
any negotiations or discussions with, or furnish any information or data to, any
third party relating to an Acquisition Proposal. The Company and its officers,
directors, employees, agents and representatives shall immediately cease any
existing discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal.

(b) Notwithstanding anything to the contrary contained in this
Section 4.2, the Company and the Board of Directors of the Company (A) may
furnish information to, and participate in discussions or negotiations with any
third party that after the date hereof submits an unsolicited bona fide written
Acquisition Proposal to the Company if the Company's Board of Directors
determines in good faith, based upon the written advice of outside legal
counsel, that the failure to furnish such information or participate in such
discussions or negotiations may reasonably constitute a breach of the Board's
fiduciary duties under applicable law, and (B) shall be permitted to (y) take
and disclose to the Company's shareholders a position with respect to the Merger
or an Acquisition Proposal, or amend or withdraw such position, or (z) make
disclosure to the Company's shareholders, in each case either with respect to or
as a result of an Acquisition Proposal, if the Company's Board of Directors
determines in good faith, based upon the written advice of outside legal
counsel, that the failure to take such action may reasonably constitute a breach
of the Board's fiduciary duties under applicable law; PROVIDED, that the Company
shall not enter into any acquisition agreement with respect to any Acquisition
Proposal except concurrently with the termination of this Agreement in
accordance with the provisions of Section 7.1(d) and shall not enter into any
other agreements with respect to an 25
Acquisition Proposal except concurrently
with such termination unless, and only to the extent that, such other agreements
would facilitate the process of providing information to, or conducting
discussions or negotiations with, the parties submitting such an

A-25

Acquisition Proposal, such as confidentiality and standstill agreements.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1 ACCESS TO INFORMATION. Upon reasonable notice, the Company and
Parent shall each (and Parent shall cause its Subsidiaries to) afford to the
officers, directors, employees, accountants, counsel and other authorized
representatives of the other ("Representatives") reasonable access, during
normal business hours throughout the period prior to the Effective Time, to
its books and records, properties, officers, directors, employees, counsel,
accountants and other representatives, and, during such period, shall (and
Parent shall cause its Subsidiaries to) make available to such
Representatives (i) a copy of each report, schedule, registration statement
and other document filed or received by it during such period pursuant to the
requirements of federal securities laws or federal or state banking laws
(other than reports or documents that such party is not permitted to disclose
under applicable law) and (ii) all other information concerning its business,
properties and personnel and all financial operating and other data as may
reasonably be requested. The parties will hold any such information that is
non-public in confidence and, without limitation on its obligations under the
preceding clause, Parent will hold any such information in confidence until
such time that such information is or becomes generally available to the
public other than as a result of a disclosure by Parent or any of its
Representatives; PROVIDED, HOWEVER, that this sentence shall not prohibit
disclosure of such information to the extent required or reasonably
contemplated by and in accordance with, the provisions of the
Confidentiality Agreement dated March 26, 1997 between Parent and the Company
(the "Confidentiality Agreement"), which is incorporated herein by reference.any subpoena, civil investigative demand or other similar
process. No investigation by either Parent or Merger Sub, on the one hand,
or the Company on the other hand, shall affect the representations and
warranties of the other, except to the extent such representations and
warranties are by their terms qualified by information set forth in the
Parent Letter (in the case of Parent and Merger Sub) or the Company Letter
(in the case of the Company) to the other party.

5.2 PREPARATION OF S-4 AND THE PROXY STATEMENT. Parent shall prepare
and file with the SEC the S-4, in which the Proxy Statement will be included
as a prospectus. Parent shall use all reasonable efforts to have the S-4
declared effective under the Securities Act as promptly as practicable after
such filing. Parent shall also take any action (other than qualifying to do
business in any jurisdiction in which it is now not so qualified) required to
be taken under any applicable state securities laws in connection with the
issuance of Parent Common Stock in the Merger and the Company shall furnish
all information concerning the Company and the

26A-26

holders of Company Common Stock as may be reasonably requested in connection
with any such action.

5.3 SHAREHOLDER MEETING. The Company shall duly call, give notice of,
convene and hold a meeting of its shareholders to be held for the purpose of
voting upon the approval of this Agreement and the transactions contemplated
hereby. Unless the Company has determined to recommend an Acquisition Proposal
in accordance with Section 4.2(ii)4.2(b), the Company will, through its Board of
Directors, unanimously recommend to its shareholders approval of this Agreement
and the transactions contemplated hereby, subject to its receipt of a fairness
opinion from its financial advisor to the effect that the consideration to be
received by the shareholders of the Company pursuant to Section 2.1 is fair from
a financial point of view and such opinion shall not have been withdrawn or
materially modified.hereby. The Company shall cooperate with
Parent with respect to the timing of such meeting and shall use its best efforts
to hold such meeting as soon as reasonably practicable after the date on which the S-4 becomes
effective.of this
Agreement.

5.4 REASONABLE EFFORTS. Each of the Company and Parent shall, and Parent
shall cause its Subsidiaries to, use all reasonable efforts to take, or cause to
be taken, all actions necessary, proper or advisable to comply promptly with all
legal requirements that may be imposed on such party or (in the case of Parent)
its Subsidiaries with respect to the Merger and to consummate and make effective
the transactions contemplated by this Agreement, subject to the appropriate vote
of shareholders of the Company described in Section 3.2(r), including using all
reasonable efforts (i) to obtain (and to cooperate with the other party to
obtain) any necessary or appropriate consent, authorization, order or approval
of, or any exemption by, any Governmental Entity and/or any other public or
private third party in connection with the Merger and the transactions
contemplated by this Agreement, (ii) to effect all necessary registrations,
filings and submissions and (iii) to lift any injunction or other legal bar to
the Merger (and, in such case, to proceed with the Merger as expeditiously as
possible), subject, however, to the requisite vote of the shareholders of the
Company.

5.5 POST-APRILPOST-SEPTEMBER 30, 1997 COMPANY FINANCIAL STATEMENTS. The Company
shall make available to Parent true and complete copies of the following:

(a) UNAUDITED FINANCIAL STATEMENTS. Any monthly and quarterly
unaudited balance sheet and the related statements of income, changes in
shareholders' equity and statements of cash flows of the Company for any monthly
or quarterly period ended subsequent to AprilSeptember 30, 1997 and prior to the
Effective Time; and

(b) AUDITED FINANCIAL STATEMENTS. Any audited balance sheet and the
related statements of income, changes in 27
shareholders' equity and statements of
cash flows of the Company for any year ended after December 31, 1996 and prior
to the Effective Time.

A-27

5.6 AFFILIATES.

(a) OF THE COMPANY. At least 30 days prior to the Closing Date, the
Company shall deliver to Parent a list of names and addresses of those persons
who were, in the Company's reasonable judgment, at the record date for its
meeting of shareholders to approve the Merger, "affiliates" (each such person,
an "Affiliate") of the Company within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act. The Company shall provide
Parent such information and documents as Parent shall reasonably request for
purposes of reviewing such list. The Company shall use all reasonable efforts
to deliver or cause to be delivered to Parent and the Company, prior to the
Closing Date, from each of the Affiliates of the Company identified in the
foregoing list, an Affiliate Letter in the form attached hereto as Exhibit
5.6(a). Parent shall be entitled to place legends as specified in such
Affiliate Letters on the certificates evidencing any Parent Common Stock to be
received by such Affiliates pursuant to the terms of this Agreement, and to
issue appropriate stop transfer instructions to the transfer agent for Parent
Common Stock, consistent with the terms of such Affiliate Letters.

(b) OF PARENT. At least 30 days prior to the Closing Date, Parent
shall deliver to the Company a list of names and addresses of those persons who
were, in Parent's reasonable judgment, at the record date for the meeting of
shareholders of the Company to approve the Merger, Affiliates of Parent. Parent
shall provide the Company such information and documents as the Company shall
reasonably request for purposes of reviewing such list. Parent shall use all
reasonable efforts to deliver or cause to be delivered to Parent, prior to the
Closing Date, from each of the Affiliates of Parent identified in the foregoing
list, an Affiliate Letter in the form attached hereto as Exhibit 5.6(b).

5.7 EXPENSES. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense, except as
expressly provided herein and except that expenses incurred in connection with
printing and mailing the Proxy Statement shall be shared equally by Parent and
the Company.

5.8 BROKERS OR FINDERS. Except as set forth in the Company Letter or the
Parent Letter, each of Parent and the Company respectively represents, as to
itself, its Subsidiaries (in the case of Parent) and its affiliates, that no
agent, broker, investment banker, financial advisor or other firm or person is
or will be entitled to any broker's or finder's fee or any other 28
commission or
similar fee in connection with any of the transactions contemplated by this
Agreement. Each party agrees to indemnify the other party and hold the other
party harmless from and against any and all claims, liabilities or obligations
with

A-28

respect to any fees, commissions or expenses asserted by any Person on the
basis of any act or statement alleged to have been made by such first party or
its Subsidiary or affiliate.

5.9 ADDITIONAL AGREEMENTS. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of either of
the Company or Merger Sub, the proper officers and directors of the Company and
Merger Sub shall take all such necessary action.

5.10 INDEMNIFICATION. For a period of three years from and after the
Effective Time, Parent shall indemnify, defend and hold harmless each person who
is now or who becomes prior to the Effective Time, an officer, director or
employee of the Company (each, an "Indemnified Party" and, collectively, the
"Indemnified Parties") against (i) all losses, claims, damages, costs, expenses,
liabilities or judgments or amounts that are paid in settlement with the
approval of Parent (which approval shall not be unreasonably withheld) of or in
connection with any claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of the fact that such
person is or was a director, officer or employee of the Company, whether
pertaining to any matter existing or occurring at or prior to the Effective Time
and whether asserted or claimed prior to, or at or after, the Effective Time
("Indemnified Liabilities") and (ii) all Indemnified Liabilities based in whole
or in part on, or arising in whole or in part out of, or pertaining to this
Agreement or the transactions contemplated hereby, in each case to the full
extent the Company would have been permitted under Ohio law and its articles of
incorporation and code of regulations to indemnify such person (and Parent shall
pay expenses in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the full extent permitted by law upon
receipt of any undertaking required by Section 1701.13(E)(5) of the OGCL).
Without limiting the foregoing, in the event any such claim, action, suit,
proceeding or investigation is brought against Indemnified Parties (whether
arising before or after the Effective Time), (i) any counsel retained by the
Indemnified Parties for any period after the Effective Time shall be reasonably
satisfactory to Parent; (ii) after the Effective Time, Parent shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; and (iii) after the Effective
Time, Parent will use all reasonable efforts to assist in the vigorous defense
of any such matter, provided that Parent shall not be liable for any settlement
of any claim effected without its written consent, which consent, however, shall
not be unreasonably 29
withheld. Any Indemnified Party wishing to claim
indemnification under this Section 5.10, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Parent (but the
failure so to notify Parent shall not relieve it from any

A-29

liability which it may have under this Section 5.10 except to the extent such
failure materially prejudices Parent), and shall deliver to Parent the
undertaking, if any, required by Section 1701.13(E)(5) of the OGCL. The
Indemnified Parties as a group may retain only one law firm to represent them
with respect to each such matter unless there is, under applicable standards
of professional conduct, a conflict on any significant issue between the
positions of any two or more Indemnified Parties. In any case in which the
approval by the Surviving Corporation is required to effectuate any
indemnification, Parent shall cause the Surviving Corporation to direct, at
the election of any Indemnified Party (or, if more than one Indemnified
Party, a majority of the Indemnified Parties), that the determination of any
such approval shall be made by independent counsel mutually satisfactory to
the Surviving Corporation and the Indemnified Party (or, if applicable, a
majority of the Indemnified Parties).

5.11 POOLING AND TAX-FREE REORGANIZATION TREATMENT. Neither Parent nor
the Company shall intentionally cause to be taken any action, whether before
or after the Effective Time, that would disqualify the Merger as a "pooling
of interests" for accounting purposes or as a "reorganization" within the
meaning of Section 368(a) of the Code.

5.12 THE COMPANY'S ESOP. AfterEMPLOYEE BENEFIT PLANS. As soon as administratively feasible after
the Effective Time, the officers and employees of the Company shall maintainbe
provided with such employee benefits as Parent, directly or through its
Subsidiaries, generally provides to officers and employees from time to time,
including life, medical, hospitalization and disability insurance and sick
pay, personal leave and retirement plan benefits, on a non-discriminatory and
substantially similar basis. For purposes of providing such benefits to
officers and employees of the Company's Employee Stock OwnershipCompany and its Subsidiaries after the
Effective Time, Parent shall credit such officers and employees for years of
service at the Company prior to the Effective Time for purposes of (i)
eligibility to participate, vesting and eligibility to receive benefits under
any Parent Benefit Plan ("ESOP") only forand (ii) benefit accrual under any sickness, personal
leave or vacation pay plan. At and after the Effective Time, the directors
and officers of the Company and its Subsidiaries shall be provided with such
period ofdirectors' and officers' liability insurance coverage as Parent from time to
time determines to provide to its directors and on such terms and conditions as are set forth in Exhibit
5.12.officers.

ARTICLE VI

CONDITIONS PRECEDENT

6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing Date of the following conditions:

A-30

(a) SHAREHOLDER APPROVAL. This Agreement shall have been
respectively approved and adopted by the affirmative vote of the holders of
the outstanding shares of Company Common Stock.

(b) OTHER APPROVALS. Other than the filing of the Certificate of
Merger provided for by Section 1.1, all authorizations, consents, orders or
approvals of, or declarations or filings with, and all expirations of waiting
periods imposed by, any Governmental Entity (all of the foregoing,
"Consents") that are necessary for the consummation of the Merger, other than
immaterial 30
Consents the failure to obtain which would not have a significant
adverse effect on the consummation of the Merger or on Parent and its
Subsidiaries, taken as a whole, after consummation of the Merger, shall have
been filed, occurred or been obtained (all such permits, approvals, filings
and consents and the lapse of all such waiting periods being referred to as
the "Requisite Regulatory Approvals") and all such Requisite Regulatory
Approvals shall be in full force and effect. Parent shall have receivedcomplied with
all state securities or blue sky permits and other authorizationslaws necessary to issue without registration
thereunder the Parent Common Stock in exchange for Company Common Stock and
to consummate the Merger.

(c) S-4. The S-4 shall have become effective under the Securities
Act and shall not be the subject of any stop order or proceeding seeking a
stop order.

(d) POOLING. Parent, Merger Sub and the Company shall have
received a letter from Eskew & Gresham, P.S.C., Parent's independent
certified public accountants, to the effect that the Merger qualifies for
"pooling of interests" accounting treatment under Accounting Principles Board
Opinion No. 16, the interpretive releases issued pursuant thereto, and the
pronouncements of the SEC if consummated in accordance with this Agreement.

(e)(d) 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 (an "Injunction") preventing the consummation of the Merger shall
be in effect, nor shall any proceeding by any Governmental Entity seeking any
of the foregoing be pending. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, which makes the consummation of the Merger illegal.

(f)(e) BURDENSOME CONDITION. There shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, by any Governmental Entity which, in connection
with the grant of a Requisite Regulatory Approval, imposes any condition or
restriction upon Parent or its Subsidiaries, the Company or the Surviving
Corporation that would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement as to
render inadvisable the consummation of the Merger.

A-31

(f) S-4. The S-4 shall have become effective under the Securities
Act and shall not be the subject of any stop order or proceeding seeking a
stop order.

(g) NMSNASDAQ LISTING. The shares of Parent Common Stock issuable
pursuant to this Agreement shall have been approved for listing on the NASDAQThe Nasdaq
Stock Market, Inc.'s National Market, System, subject to official notice of issuance.

6.2 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER Sub.SUB. The obligations
of Parent and Merger Sub to effect the Merger are

31
subject to the satisfaction of
the following conditions or waiver by Parent on or prior to the Closing Date:

(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties of
the Company set forth in this Agreement that are not so qualified shall be true
and correct in all material respects, in each case as of the date of this
Agreement, and as of the Closing Date as though made on and as of the Closing
Date, except to the extent such representation or warranty expressly relates to
an earlier date (in which case as of such date), and Parent shall have received
a certificate signed on behalf of the Company by the Chief Executive Officer and
the Chief Financial Officer of the Company to such effect.

(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement, at or prior to the Closing Date, and Parent shall
have received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to such effect.

(c) CONSENTS UNDER AGREEMENTS. The Company shall have obtained the
consent or approval of each person (other than the Governmental Entities
referred to in Section 6.1(b)) whose consent or approval shall be required in
order to permit the succession by the Surviving Corporation pursuant to the
Merger to any obligation, right or interest of the Company under any loan or
credit agreement, note, mortgage, indenture, lease, license or other agreement
or instrument, except those for which failure to obtain such consents and
approvals would not, in the reasonable opinion of Parent, individually or in the
aggregate, have a Material Adverse Effect on the Surviving Corporation or upon
the consummation of the transactions contemplated hereby.

(d) TAX OPINION. Parent shall have received an opinion of Eskew &
Gresham, P.S.C., dated the Closing Date, in form and substance satisfactory to
Parent, to the effect that the Merger

A-32
will be treated for federal income tax purposes as a reorganization within
the meaning of Section 368(a) of the Code.

(e) LETTERS FROM THE COMPANY AFFILIATES. Parent shall have
received from each person named in the letter referred to in Section 5.6(a) an
executed copy of an agreement in the form of Exhibit 5.6(a).

(f) APPRAISAL RIGHTS. TheHolders who properly demand appraisal or
dissenter's rights pursuant to the OGCL, if any, shall not be the holders of not
more than 10% of the issued and outstanding shares of Company Common Stock shall have properly
demanded appraisal or dissenters rights pursuant to the OGCL.

32
Stock.

6.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to effect the Merger are subject to the satisfaction or waiver by the
Company on or prior to the Closing Date of the following conditions:

(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Merger Sub set forth in this Agreement that are
qualified as to materiality shall be true and correct, and the representations
and warranties of Parent and Merger Sub set forth in this Agreement that are not
so qualified shall be true and correct in all material respects, in each case as
of the date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date, except to the extent such representation or warranty
expressly relates to another date (in which case as of such date), and the
Company shall have received a certificate signed on behalf of Parent and Merger
Sub by the Chief Executive Officer and the Chief Financial Officer of Parent and
Merger Sub to such effect.

(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER Sub.SUB. Parent and
Merger Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate signed on behalf of
Parent and Merger Sub by the Chief Executive Officer and the Chief Financial
Officer of Parent and Merger Sub to such effect.

(c) CONSENTS UNDER AGREEMENTS. Parent and Merger Sub shall have
obtained the consent or approval of each person (other than the Governmental
Entities referred to in Section 6.1(b)) whose consent or approval shall be
required in connection with the transactions contemplated hereby under any loan
or credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument, except those for which failure to obtain such consents
and approvals would not, in the reasonable opinion of the Company, individually
or in the aggregate, have a Material Adverse Effect on Parent or upon the
consummation of the transactions contemplated hereby.

A-33
(d) TAX OPINION. The Company shall have received an opinion of Vorys, Sater, Seymour and PeaseEskew
& Gresham, P.S.C., dated the Closing Date, in form and substance satisfactory to
Parent and its counsel, to the effect that the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code.

(e) LETTERS FROM PARENT AFFILIATES. The Company shall have received
from each person named in the letter referred to in Section 5.6(b) an executed
copy of an agreement substantially in the form of Exhibit 5.6(b).

(f) PRICE OF PARENT COMMON STOCK. The Average Closing Price of a
share of Parent Common Stock shall be $14 or more. For purposes of this
Agreement, the "Average Closing Price" of a share of Parent Common Stock
shall be the average of the high bid and low asked price of a share of Parent
Common Stock as furnished by Advest, Inc. for the 20 consecutive trading days
ending on the fifth business day prior the Effective Time of the Merger.

ARTICLE VII

TERMINATION; AMENDMENT; WAIVER

7.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time of the Merger, whether before or after the approval of this
Agreement by the shareholders of the Company:

(a) by mutual written consent of Parent and the Company;

(b) by either Parent or the Company:

(i) if, at a duly held shareholders meeting of the Company or
any adjournment thereof at which approval of this Agreement is voted upon, the
approval of the shareholders of the Company shall not have been obtained;

(ii) if the Merger shall not have been consummated on or before
December 31, 1997,April 30, 1998, unless the failure to consummate the Merger is the result of a
willful and material breach of this Agreement by the party seeking to terminate
this Agreement;

(iii) if any court of competent jurisdiction or other
Governmental Entity shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise prohibiting the
Merger and such order, decree, ruling or other action shall have become final
and non-appealable;

(iv) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained in this
Agreement which (A) would give rise to the failure of a condition set forth in
Section 6.2(a) or 6.2(b) or Section 6.3(a) or 6.3(b), as applicable, and (B)
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach ("Material Breach") (PROVIDED that
the terminating party is not then in breach of any representation, warranty,
covenant or other agreement that would give rise to a failure of a condition
described in clause (A) above);

A-34
(c) by either Parent or the Company in the event that (i) all
the conditions to the obligation of such party to effect the Merger set forth
in Section 6.1 shall have been satisfied and (ii) any condition to the
obligation of such party to effect the

Merger set forth in Section 6.2 (in
the case of Parent) or Section 6.3 ( in the case of the Company) is not
capable of being satisfied prior to the date on which this Agreement may be
terminated pursuant to Section 7.1(b)(ii); or

(d) by the Company, subject to Section 7.5(b), if the Board of
Directors of the Company shall concurrently approve, and the Company shall
concurrently enter into, a definitive agreement providing for the
implementation of the transactions contemplated by an Acquisition Proposal;
PROVIDED, HOWEVER, that (i) the Company is not then in breach of Section 4.2
or in breach of any other representation, warranty, covenant or agreement
that would give rise to a failure of a condition set forth in Section 6.2(a)
or 6.2(b); (ii) the Board of Directors of the Company shall have complied
with Section 7.5(b) in connection with such Acquisition Proposal and (iii) no
termination pursuant to this Section 7.1(d) shall be effective unless the
Company shall simultaneously make the payment required by Section 7.2(a).

7.2 EFFECT OF TERMINATION.

(a) In the event that any person shall make an Acquisition
Proposal with respect to the Company and thereafter (i) this Agreement is
terminated (A) pursuant to Section 7.1(b)(i), (B) pursuant to Section
7.1(b)(ii) (if at the time of termination (x) the Company is in breach of any
representation, warranty, covenant or other agreement that would give rise to
a failure of a condition set forth in Section 6.2(a) or 6.2(b) and (y) such
breach cannot be or has not been cured within 30 days after the Company
becomes aware of such breach or such shorter period that may elapse between
the date the Company becomes aware of such breach and the time of
termination), (C) pursuant to Section 7.1(b)(iii) (if at the time of
termination (x) the Company is in breach of any representation, warranty,
covenant or other agreement that would give rise to a failure of a condition
set forth in Section 6.2(a) or 6.2(b) and (y) such breach cannot be or has
not been cured within 30 days after the Company becomes aware of such breach
or such shorter period that may elapse between the date the Company becomes
aware of such breach and the time of termination), (D) by Parent pursuant to
Section 7.1(b)(iv), (E) by Parent pursuant to Section 7.1(c) or (F) by the
Company pursuant to Section 7.1(d), and (ii) a definitive agreement with
respect to an Acquisition Proposal is executed, or an Acquisition Proposal is
consummated, at or within 12 months after such termination, then Parent shall
be paid a fee of $350,000 (reduced by any amount actually paid by the Company
pursuant to Section 7.2(b) in connection with such termination), which amount
shall be payable by wire transfer of same day funds on the date such
agreement is executed, or such Acquisition Proposal

A-35
is consummated, as applicable. The Company acknowledges that the agreements
contained in this Section 7.2(a) are an integral part of the transactions
contemplated by this Agreement, and that without these agreements, Parent
would not enter into this Agreement;

35
accordingly, if the Company fails to
promptly pay the amount due pursuant to this Section 7.2(a), and, in order to
obtain such payment, Parent commences a suit that results in a judgment
against the Company for the fees set forth in this Section 7.2(a), the
Company shall also pay to Parent its costs and expenses (including reasonable
attorneys' fees) in connection with such suit.

(b) In the event of termination of this Agreement by either Parent
or the Company pursuant to Section 7.1(b)(i), then the Company shall
reimburse Parent for all its reasonable out-of-pocket expenses actually
incurred in connection with this Agreement and the transactions contemplated
hereby, up to a maximum of $100,000, which amount shall be payable by wire
transfer of same day funds within three business days of written demand,
accompanied by a reasonably detailed statement of such expenses and
appropriate supporting documentation therefor.

(c) In the event of termination of this Agreement by either Parent
or the Company as provided in Section 7.1, this Agreement shall forthwith
become void and have no effect, without any liability or obligation on the
part of Parent, Merger Sub or the Company, other than the provisions of
Section 5.1 (penultimate sentence), Section 5.7, this Section 7.2 and Article
VIII and except to the extent that such termination results from the willful
and material breach by a party of any its representations, warranties,
covenants or other agreements set forth in this Agreement.

7.3 AMENDMENT. This Agreement may be amended by the parties at any
time before or after the approval of this Agreement by the shareholders of
the Company; PROVIDED, HOWEVER, that after such approval by the shareholders
of the Company, there shall be made no amendment that pursuant to the OGCL
requires further approval by the shareholders of the Company without the
further approval of such shareholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.

7.4 EXTENSION; WAIVER. At any time prior to the Effective Time of the
Merger, the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other parties; (ii) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement; or (iii) subject to the proviso
of Section 7.3, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of

A-36
its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.

7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.

(a) A termination of this Agreement pursuant to Section 7.1, an
amendment of this Agreement pursuant to Section 7.3 or an extension or waiver
pursuant to Section 7.4 shall, in order to be effective, require, in the case
of Parent, Merger Sub or the Company, action by its Board of Directors or, in
the case of an extension or waiver pursuant to Section 7.4, the duly
authorized designee of its Board of Directors.

(b) The Company shall provide to Parent written notice prior to
any termination of this Agreement pursuant to Section 7.1(d) advising Parent
(i) that the Board of Directors of the Company in the exercise of its good
faith judgment as to its fiduciary duties to the shareholders of the Company
under applicable law, after receipt of written advice of outside legal
counsel, has determined (on the basis of such Acquisition Proposal and the
terms of this Agreement, as then in effect) that such termination is required
in connection with an Acquisition Proposal that is more favorable to the
shareholders of the Company than the transactions contemplated by this
Agreement (taking into account all terms of such Acquisition Proposal and
this Agreement, including all conditions) and (ii) as to the material terms
of any such Acquisition Proposal. At any time after five business days
following receipt of such notice, the Company may terminate this Agreement as
provided in Section 7.1(d) only if the Board of Directors of the Company
determines that such Acquisition Proposal is more favorable to the
shareholders of the Company than the transactions contemplated by this
Agreement (taking into account all terms of such Acquisition Proposal and
this Agreement, including all conditions, and which determination shall be
made in light of any revised proposal made by Parent prior to the expiration
of such five business day period) and concurrently enters into a definitive
agreement providing for the implementatation of the transactions contemplated
by such Acquisition Proposal.

ARTICLE VIII

GENERAL PROVISIONS

8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time of the Merger. This
Section 8.1 shall not limit any covenant or agreement of the parties that by its
terms contemplates performance after the Effective Time of the Merger.

A-37
8.2 NOTICES. All notices and other communications required to be given
hereunder shall be in writing and shall be deemed given

37
upon (i)
transmitter's confirmation of receipt of a facsimile transmission, (ii)
confirmed delivery by a standard overnight carrier or when delivered by hand
or (iii) the expiration of five business days after the day when mailed by
certified or registered mail, postage prepaid, addressed to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):

(a) If to Parent or
Merger Sub, to: Premier Financial Bancorp, Inc.
120 N. Hamilton Street
Georgetown, Kentucky 40324
Attn: J. Howell Kelly,
President and
Chief Executive Officer

Telecopy No. (502) 863-7503

With a copy (which
shall not constitute
notice) to: David W. Harper, Esq.
2450 Meidinger Tower
Louisville, Kentucky 40202

Telecopy No. (502) 583-2418
and

(b) If to Company, to: The SabinaOhio River Bank
135 N. Howard221 Railroad Street
Sabina,Ironton, Ohio 4516945638
Attn: Garry W. Priest,Daniel H. Wiley,
President and Chief Executive Officer

Telecopy No. (937) 584-2494(614) 533-5494

With a copy (which
shall not constitute
notice) to: Terri Reyering Abare, Esq.
Vorys, Sater, Seymour and Pease
221Susan B. Zaunbrecher
Dinsmore & Shohl LLP
1900 Chemed Center
255 E. Fourth, Suite 2100Fifth Street
Cincinnati, Ohio 4520245202-4719

Telecopy No. (513) 723-4056977-8141

8.3 INTERPRETATION. Unless the context otherwise requires, words
describing the singular number shall include the plural and

A-38

vice versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and other entities and
vice versa. The table of contents, index of terms and headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. When a reference is
made in this Agreement to any "Section" or "Exhibit," such reference shall be
to

38
a section or exhibit to this Agreement unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." Whenever the words "or any Subsidiary", "or any Subsidiaries,"
"nor any Subsidiary" or "nor any Subsidiaries" are used in this Agreement in
connection with a preceding reference to Parent, they shall be deemed to
refer to a Subsidiary or Subsidiaries Parent. The phrase "made available" in
this Agreement shall mean that the information referred to has been made
available if requested by the party to whom such information is to be made
available, and the correlative phrase "make available" shall mean that such
information shall be promptly made available if so requested. The phrases
"the date of this Agreement," "the date hereof" and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to May 28,
1997.October
31, 1997, the date of the Original Agreement.

8.4 ASSIGNMENT; BINDING EFFECT; BENEFIT. 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 parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Article II and Sections 5.10 and 5.12 (collectively, the "Third Party
Provisions"), nothing in this Agreement, express or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement. The Third
Party Provisions may be enforced on behalf of the Company or the other
respective beneficiaries thereof by those individuals who were the directors of
the Company immediately prior to the Effective Time and also by the holder of
Company Common Stock converted in the Merger, the Indemnified Party or the
ESOPofficer or employee that such provisions respectively are intended to benefit
and their respective heirs and representatives. Parent shall pay all expenses,
including attorneys' fees, that may be incurred by such directors or other
persons in enforcing the Third Party Provisions.

A-39

8.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.

8.6 COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. Each counterpart
may consist of a number of copies hereof each signed by less than all, but
together signed by

39
all of the parties hereto. It shall not be necessary, in
making proof of this Agreement or any counterpart hereof, to produce or account
for any of the other counterparts.

8.7 SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable shall be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.

8.8 INCORPORATION OF DOCUMENTS. The Company Letter, Parent Letter, the
Confidentiality Agreement, and all
Annexes, Exhibits and Schedules, if any, attached hereto and referred to herein
are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.

8.9 ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Ohio or in Ohio state court, this being in addition to
any other remedy to which they are entitled at law or in equity.

8.10 WAIVERS. Except as provided in this Agreement or in any waiver
pursuant to Section 7.4, no action taken pursuant to this Agreement, including
any investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.

8.11 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter

A-40
hereof and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
signed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.

PREMIER FINANCIAL BANCORP, INC.

By: /s/ J. Howell Kelly
------------------------------------_____________________________________
J. Howell Kelly, President and Chief
Executive Officer

PFBIOHIO RIVER INTERIM BANK

By: /s/ J. Howell Kelly
-------------------------------------_____________________________________
J. Howell Kelly, anon behalf of and as President of
Premier Financial Bancorp, Inc., Incorporator

THE SABINAOHIO RIVER BANK

By: /s/ Garry W. Priest
--------------------------------------
Garry W. Priest,Daniel H. Wiley
______________________________________
Daniel H. Wiley, President and
Chief Executive Officer

EXHIBIT 5.6(a)

___________, 1997

Premier Financial Bancorp, Inc.
120 North Hamilton Street
Georgetown, KY 40324

The Sabina Bank
135 N. Howard Street
Sabina, OH 45169

Gentlemen and Ladies:

I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of The Sabina Bank (the "Company"), as the term "affiliate" is (i)
defined for purposes of paragraphs (c) and (d) of Rule 145 of the Rules and
Regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and/or (ii) used in and for purposes of Accounting Series Releases 130
and 135, as amended, of the Commission. Pursuant to the terms of the Agreement
and Plan of Merger dated as of May 28, 1997 among Premier Financial Bancorp,
Inc. ("Premier"), PFBI Interim Bank ("Merger Sub") and the Company (the
"Agreement"), Merger Sub will be merged with and into the Company (the
"Merger").

As a result of the Merger, I may receive shares of Common Stock of Premier
("Premier Shares") in exchange for shares owned by me of Common Stock of the
Company ("Company Shares").

I represent, warrant and covenant to Premier that in the event I receive
any Premier Shares as a result of the Merger:

A. I shall not make any sale, transfer or other disposition of the
Premier Shares in violation of the Act or the Rules and
Regulations.

B. I have carefully read this letter and the Agreement and discussed
its requirements and other applicable limitations upon my ability
to sell, transfer or otherwise dispose of Premier Shares, to the
extent I felt necessary, with my counsel or counsel for the
Company.

C. I have been advised that the issuance of Premier Shares to me
pursuant to the Merger has been registered with the Commission
under the Act on a Regis-

Page 2

tration Statement on Form S-4. However, I have also been advised
that, because at the time the Merger was submitted for a vote of the
shareholders of the Company I may be deemed to have been an affiliate
of the Company, and the distribution by me of the Premier Shares has
not been registered under the Act, I may not sell, transfer or
otherwise dispose of Premier Shares issued to me in the Merger unless
(i) such sale, transfer or other disposition has been registered under
the Act, (ii) such sale, transfer or other disposition is made in
conformity with the volume and other limitations of Rule 145
promulgated by the Commission under the Act, or (iii) in the opinion
of counsel reasonably acceptable to Premier, such sale, transfer or
other disposition is otherwise exempt from registration under the Act.

D. I understand that Premier is under no obligation to register the
sale, transfer or other disposition of the Premier Shares by me
or on my behalf under the Act or to take any other action
necessary in order to make compliance with an exemption from such
registration available.

E. I also understand that stop transfer instructions will be given
to Premier's transfer agents with respect to the Premier Shares
and that there will be placed on the certificates for the Premier
Shares issued to me, or any substitutions therefor, a legend
stating in substance:

"The shares represented by this certificate were issued
in a transaction to which Rule 145 promulgated under
the Securities Act of 1933 applies. The shares
represented by this certificate may only be transferred
in accordance with the terms of an agreement dated
___________, 1997 between the registered holder hereof
and the Issuer, a copy of which agreement is on file at
the principal offices of the Issuer.

F. I also understand that unless the transfer by me of my Premier
Shares has been registered under the Act or is a sale made in
conformity with the provisions

Page 3

of Rule 145, Premier reserves the right to put the following legend on
the certificates issued to my transferee:

"The shares represented by this certificate have not
been registered under the Securities Act of 1933 and
were acquired from a person who received such shares in
a transaction to which Rule 145 promulgated under the
Securities Act of 1933 applies. The shares have been
acquired by the holder not with a view to, or for
resale in connection with, any distribution thereof
within the meaning of the Securities Act of 1933 and
may not be sold, pledged or otherwise transferred
except in accordance with an exemption from the
registration requirements of the Securities Act of
1933."

It is understood and agreed that the legends set forth in paragraphs E and
F above shall be removed by delivery of substitute certificates without such
legend if the undersigned shall have delivered to Premier a copy of a letter
from the staff of the Commission, or an opinion of counsel in form and substance
reasonably satisfactory to Premier, to the effect that such legend is not
required for purposes of the Act.

I further represent to and covenant with Premier and the Company that I
have not, within the 30 days prior to the Effective Time (as defined in the
Agreement), sold, transferred or otherwise disposed of any Company Shares or
Premier Shares held by me and that I will not sell, transfer or otherwise
dispose of any Premier Shares, whether received by me in the Merger or
otherwise, until after such time as results covering at least 30 days of
combined operations of the Company and Premier have been published by Premier,
in the form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 10-K, 10-Q or 8-K,
or any other public filing or announcement that includes such combined results
of operations.

Page 4

Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of the Company as described in the first paragraph of
this letter, or as a waiver of any rights I may have to object to any claim that
I am such an affiliate on or after the date of this letter.

Very truly yours,

-----------------------------------
[Affiliate's Name]

Accepted this ____ day of
____________, 1997 by:

PREMIER FINANCIAL BANCORP, INC.

By:
----------------------------
J. Howell Kelly, President
and Chief Executive Officer

THE SABINA BANK

By:
----------------------------
Garry W. Priest, President
and Chief Executive Officer

EXHIBIT 5.6(b)

___________, 1997

Premier Financial Bancorp, Inc.
120 North Hamilton Street
Georgetown, KY 40324

Gentlemen and Ladies:

I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of Premier Financial Bancorp, Inc. ("Premier), as the term
"affiliate" is (i) defined for purposes of paragraphs (c) and (d) of Rule 145 of
the Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), and/or (ii) used in and for purposes of Accounting Series
Releases 130 and 135, as amended, of the Commission. Pursuant to the terms of
the Agreement and Plan of Merger (the "Agreement") dated as of May 28, 1997
among Premier, PFBI Interim Bank ("Merger Sub") and The Sabina Bank (the
"Company"), Merger Sub will be merged with and into the Company (the "Merger").

I hereby represent to and covenant with Premier that I have not, within the
30 days prior to the Effective Time (as defined in the Agreement), sold,
transferred or otherwise disposed of any shares of Common Stock of the Company
or shares of Common Stock of Premier ("Premier Shares") held by me and that I
will not sell, transfer or otherwise dispose of any Premier Shares, whether
received by me in the Merger or otherwise, until after such time as results
covering at least 30 days of combined operations of the Company and Premier have
been published by Premier, in the form of a quarterly earnings report, an
effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q or 8-K, or any other public filing or announcement
that includes such combined results of operations.

Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of Premier as described in the first paragraph of this
letter, or as a waiver of any rights I may have to object to any claim that I am
such an affiliate on or after the date of this letter.

Very truly yours,

-----------------------------------
[Affiliate's Name]

Page 2

Accepted this ____ day of
____________, 1997 by:

PREMIER FINANCIAL BANCORP, INC.

By:
----------------------------
J. Howell Kelly, President
and Chief Executive Officer

EXHIBIT 5.12

The Company shall terminate the ESOP as soon as practicable following the
Merger in a manner that is consistent with ERISA and the ESOP's constitutive
documents and does not result in any unnecessary Federal income tax
consequences. From the date of the Agreement until such termination, the
Company shall not make any contributions to the ESOP without the written consent
of Parent.A-41

ANNEX II

[Date of Proxy Statement/Prospectus]B
November 26, 1997

Board of Directors
The SabinaOhio River Bank
135 North Howard221 Railroad Street
Sabina, Ohio 45169

DearIronton, OH 45638

Members of the Board:

You have requested our opinion, from a financial point of view, as to
the fairness to Ohio River Bank, ("ORB") Ironton, Ohio and its shareholders
of the terms of the Amended and Restated Agreement and Plan of Merger
("Agreement") dated as of November 24, 1997 among Premier Financial Bancorp,
Inc., ("PFB") Georgetown, Kentucky, Ohio River Interim Bank ("Interim Bank")
and ORB. The terms of the Agreement provide for an affiliation and merger of
ORB, PFB, and Interim Bank, which is an Ohio banking corporation in
organization and a wholly-owned subsidiary of PFB. The reorganization will
result in the merger of Interim Bank with and into ORB and ORB becoming a
wholly-owned subsidiary of PFB. ORB will continue to carry on its banking
business in substantially in the same manner as before the reorganization.

Austin Financial Services, Inc., ("AFSI") is a nationally recognized
investment bankersbanking firm specializing in the banking and financial services
industry. AFSI is continually engaged in the valuation of business and
securities in connection with mergers and acquisitions, private placements
and valuations for estate, corporate and other purposes. In the past, AFSI
has not provided professional services and/or products to ORB or PFB in the
ordinary course of business. Furthermore, AFSI does not contemplate any
future business with ORB and/or PFB, arising from this engagement, nor has
its opinion concerning the fairness, from a financial point of view, of the
terms of the Agreement has been subject to indications of future business
with either ORB or PFB.

In connection with its opinion, AFSI reviewed material bearing upon the
financial operating condition of ORB and PFB including, but not limited to :
(1) the Annual Report of ORB for the year ending 1996 and the Annual Reports
of PFB for the years ending 1995-1996; (2) Consolidate Reports of Condition
and Income of ORB for the years ending 1995-1996 and for September 30, 1997;
(3) Consolidated Financial Statements Form FR Y-9C of PFB for September 30,
1997; (4) SEC for 10Q of PFB for September 30, 1997; (5) Uniform Bank
Performance Report of ORB for June 30, 1997; (6) Bank Holding Company
Performance Report of PFB for June 30, 1997; (7) certain other public
information on ORB and PFB; (8) other internal financial and operating
information which was provided to AFSI by ORB and PFB; (9) publicly available
information concerning certain other banks and bank holding companies, the
trading markets for their securities and the nature and terms of certain
other merger

Board of Directors
November 26, 1997
Page 2

and acquisition transactions believed relevant to its inquiry;
(10) reviewed the reported price and trading activity for ORB common stock
and PFB common stock, compared certain financial and stock market information
for ORB and PFB with similar compared certain financial and stock market
information for ORB and PFB with similar information of certain other
companies whose securities are publicly-traded; (11) discussed the foregoing
as well as other matters relevant to its inquiry, including the past and
current business operations and acquisitions, results of regulatory
examinations, financial condition, current loan quality and trends, and
future prospects of ORB and PFB with certain officers and representatives of
ORB and PFB; (12) the Agreement; and (13) this Proxy Statement. AFSI also
took into account its assessment of general economic, market and financial
conditions and its experience in other transactions, as well as, its
experience in securities valuation and general knowledge of the banking
industry. AFSI's opinion was necessarily based upon conditions as they
existed and could be evaluated on the date of the opinion and the information
made available to AFSI through that date.

AFSI relied upon and assumed without independent verification the accuracy
and completeness of all of the financial and other information provided to it by
ORB and PFB or from public sources. AFSI has not made an independent evaluation
of the assets of ORB or PFB, but has relied on valuators of the fair market
value of ORB. In addition, AFSI did not independently verify and relied on and
assumed the aggregate allowances for loan losses set forth in the balance sheet
of each of ORB and PFB at September 30, 1997, were adequate to cover such losses
and complied fully with applicable law, regulatory policy, and sound banking
practice as of the date of such financial statements. Furthermore, AFSI did not
independently verify the carrying values of other real estate owned and loans
classified as in-substance foreclosures of each of ORB and PFB in their
respective September 30, 1997, balance sheets, and AFSI assumed that such
carrying values complied fully with applicable law, regulatory policy and sound
banking practice as of such date. AFSI was not retained to and did not conduct
any physical inspection of any of the properties or facilities of ORB or PFB,
nor did AFSI make any independent evaluation or appraisal of the assets,
liabilities or prospects of ORB or PFB, was not furnished with any such
evaluation or appraisal, and did not review any individual credit files. AFSI
also assumed that the Agreement is, and will be, in compliance with all laws and
regulations that are applicable to ORB and PFB.

In its analyses, AFSI made numerous assumptions with respect to industry
performance, business and economic conditions, and other matters, many of which
are beyond the control of ORB and PFB. Any estimate contained in AFSI's
analyses are not necessarily

Board of Directors
November 26, 1997
Page 3

indicative of future results or value, which may be significantly more or
less favorable than such estimates. AFSI's estimates of values of companies
do not purport to be appraisals or necessarily reflect the price at which
companies or their securities actually may be sold. No company or
transaction utilized in AFSI's analyses was identical to ORB or PFB or the
Agreement. Accordingly, such analyses are not based solely on arithmetic
calculations; rather, they involve complex considerations and judgments by
AFSI concerning differences in financial and operating characteristics of the
relevant factors that could affect the public trading markets of the company
or companies to which they are being compared. Non of the analyses performed
by AFSI was assigned a greater significance by AFSI than any other.

The following is a brief description of the analyses performed by AFSI in
connection with its opinion as described to ORB's board of directors by AFSI:

Under the terms of the Agreement between ORB and PFB, each share of common
stock of ORB outstanding immediately prior to consummation of the reorganization
will be exchanged for 1.20 shares of PFB common stock. Furthermore, each share
of common stock of Interim Bank outstanding immediately prior to consummation of
the reorganization will be exchanged for 1,000.00 shares of PFB common stock.
The reorganization will result in the Interim Bank merging with and into ORB and
ORB surviving as a wholly-owned subsidiary of PFB. ORB will continue to carry
on its banking business in substantially the same manner as before the
reorganization.

Using a discounted cash flow analysis, AFSI projected ORB's cash flow from
September 30, 1997, through September 30, 2002, assuming a minimum equity
capital to asset ratio of 6.00%. AFSI also estimated the residual value of
ORB's common equity as of September 30, 2002. The steps involved in determining
the discounted cash flow value of ORB included the following: (1) the projected
earnings in excess over the amount necessary to maintain a 6.00% equity capital
to asset ratio were added to book charges such as depreciation less any
projected capital expenditures in order to determine future cash flows: (2) the
future cash flows were then converted to a present value equivalent using a
discount rate of 17.41%, which was determined from the use of the Capital Asset
Pricing Model ("CAPM"); (3) the residual value was then calculated by dividing
the projected cash flows for the year 2002 by the capitalization rate. The
capitalization rate not only includes all aspects of the CAPM but also reflects
the long-term income growth prospects of ORB, as well as specific company risk
factors; (4) the present value equivalent of the projected residual value was
calculated using the 17.41% discount rate; and (5) the

Board of Directors
November 26, 1997
Page 4

present value of the cash flows and the residual value were added together.
The present value per fully diluted share of ORB common stock resulting from
this analysis was $29.80.

AFSI also determined the adjusted book value of ORB as an alternative
valuation method. The adjusted book value approach requires a three-step
process. First, the book value is determined. This figure is derived from the
September 30, 1997, balance sheet, and its represents the summary measure of
stockholders' claims against the assets, on a historical cost basis. Second,
assets and liabilities are restated to their fair market values. The adjusted
book value calculation considers each major asset and liability account
classification. Finally, additional "off-balance sheet" adjustments are
calculated, if necessary. The fair market value per fully diluted share of ORB
common stock resulting for this analysis was $23.68.

AFSI applied a 75% weighting to the discounted cash flow and a 25%
weighting to the adjusted book value. The weightings were based on AFSI's
review of the financial position, history and recent performance of ORB. The
sum of the weighted values or $28.27 per share equates to the fair market value
of ORB.

Based on the $28.27 per share value of ORB common stock and a closing price
per share of $26.50 for PFB's common stock as of November 25, 1997, the
resulting exchange ratio of each share of common stock of ORB outstanding would
be for 1.067 shares of PFB common stock. Therefore, the exchange terms of the
Agreement provide an additional 0.133 shares of PFB stock for each share of ORB
stock in comparison to the exchange ratio based on the value of ORB determined
by AFSI.

AFSI analyzed certain other mergers and acquisitions that have consummated
over the past twelve months in Ohio as well as other nearby states (including
the states of Kentucky, West Virginia and Tennessee) involving financial
institutions with assets under $250 million. AFSI compared the multiple
produced by this reorganization (based on PFB's November 25, 1997, closing price
per share of $26.50) to the mean multiples for the transactions analyzed. Set
forth below are the mean transaction multiples.

Selected
Bank
Acquisitions ORB
------------ -----
Price/Earnings Multiple 24.81 91.38
Price/Book Value Multiple 197.30 190.37

Board of Directors
November 26, 1997
Page 5

The financial institution acquisition transactions announced for the
four-state area during the past twelve months included in the above multiples
are:

State of Buyer State of Target Buyer Target
-------------- --------------- ----- ------
Chippewa Valley
OH OH Wayne Bancorp, Inc. Bancshares, Inc.

OH OH First Financial Union State Bank
Bancorp
MS TN Deposit Guaranty Victory Bancshares
Corp.

IN OH American Bancorp Cardinal State Bank

Commercial Gateway Bancshares,
WV WV Bancshares, Inc. Inc.

OH Camco Financial
OH Corporation GF Bancorp, Inc.

OH OH Citizens Banchares, Unibank
Inc.
Enterprise Federal North Cincinnati
OH OH Bancorp, Inc. Savings Bank

First Citizens Banc Farmers State Bank of
OH OH Corp. New Wash.

Premier Financial
KY OH Bancorp Sabina Bank

WV WV Horizon Bancorp Beckley Bancorp
OH OH Oak Hill Financial, Unity Savings Bank
Inc.

OH KY Peoples Bancorp, Gateway Bancorp
Inc.

Cornerstone
TN TN Bancshares, Inc. East Ridge Bancshares

Suburban
OH OH Fifth Third Bancorp Bancorporation, Inc.
First Bank of East
KY TN Southeast Bancorp, Tennessee
Inc.

First Fed. Fin. Svcs
OH OH Corp. Summit Bancorp

WV WV WesBanco, Inc. Shawnee Bank, Inc.

Citizens of Hardeman
TN TN Union Planters Corp. County

Commercial
KY KY Bancshares, Inc. Commercial Bank

AFSI's analysis showed that the range of implied valuations of ORB,
applying the mean transaction multiples described above to ORB's earnings and
book value was $8.63 to $32.96 per share. The results produced in this analysis
do not purport to be indicative of actual values or expected values of ORB or
shares of ORB common stock.

Board of Directors
November 26, 1997
Page 6

AFSI also examined the operating and trading performance of ORB in
comparison to selected publicly-traded bank/bank holding companies located in
the same four-state area with total assets under $250 million. The group of
companies included:

Advance Financial Bancorp ASB Financial Corp CFK Bancrop, Inc.
Classic Bancshares, Inc. Community Fin. Group, Inc. Community Investors Bancorp
Delphos Citizens Bancorp, Inc. FFD Financial Corp. First Federal Bancorp, Inc.
First Franklin Corp. First Lancaster Bancshares First WV Bancorp, Inc.
Fort Thomas Financial Corp. Frankfort First Bancorp, Inc. Gateway Bancorp, Inc.
Harrisburg First Fin. Bancorp Harvest Home Financial Corp. Home City Financial Corp.
Kentucky First Bancorp, Inc. London Financial Corp. Market Financial Corp.
Milton Federal Financial Corp. Ohio State Financial Services OHSL Financial Corp.
Peoples Financial Corp. Peoples-Sidney Financial Corp. Potters Financial Corp.
Twin City Bancorp United Bancorp, Inc. Westwood Homestead Fin. Corp.
Wood Bancorp, Inc.

AFSI analyzed the relative performance and outlook for ORB by comparing
certain financial and trading market information of ORB with the group of
comparable banks. AFSI compared ORB with the comparable banks based upon
selected operating statistics, including capitalization, profitability and
credit quality. Using data at, or near the 12 months ended, September 30, 1997,
the multiple of mean market price to latest 12 months earnings was 21.14 for the
comparable banks. The mean price to stated book value was 126.20 percent for
the comparable banks. The implied market trading values for ORB derived from
such comparable company analysis utilizing the resulting mean valuation ratios
ranged from approximately $7.36 to $21.08 per share.

ORB and AFSI have entered into an arrangement relating to the services to
be provided by AFSI in connection with the Agreement. In regards to AFSI's
services in determining an opinion as to the fairness, from a financial perspective,point of
view, of the terms of the Agreement, the cost is a contractual $10,000. In
addition, ORB also has agreed to indemnify AFSI and its officers, directors,
shareholders, employees and agents for all of its time, expenses, and any
liability incurred as a result of AFSI's proposed engagement by means of legal
action, administrative proceedings or threat thereof, unless such action,
pending or threat thereof is caused by AFSI's own lawful conduct, breach of duty
or negligence during the commoncourse of performing AFSI's services.

AFSI, in rendering its opinion, has assumed that the transaction will be
a tax-free reorganization with no material adverse tax consequences to any of
the parties involved, or to ORB shareholders receiving holding company stock
of The Sabina Bank, Sabina,
Ohio (the "Bank"),PFB. In addition, AFSI has assumed that in the course of obtaining the
necessary regulatory approvals for the transaction, no condition will be
imposed upon ORB or PFB that will have a materially adverse impact on the
contemplated benefits of the proposed merger of PFBI Interim Bank ("Merger Sub"), a
wholly owned subsidiary of Premier Financial Bancorp, Inc., Georgetown, Kentucky
("Premier"), into the Bank, with the Bank becoming a wholly owned subsidiary of
Premier. In the proposed merger, Bank shareholders will receive 4.33 Common
Shares of Premier for each Bank share outstanding as further defined in the
Agreementtransaction to ORB and Plan of Merger dated as of May 28, 1997 among Premier, Merger Sub
and the Bank (the "Agreement"). As of May 23, 1997, the proposed consideration
to be received represents an aggregate value of $7,858,950 or $71.445 per Bank
common share based on the average of the bid / ask price for Premier common
stock of $16.50 as quoted on the Nasdaq National Market.

Professional Bank Services, Inc. ("PBS") is a bank consulting firm and as part
of its investment banking business is continually engaged in reviewing the
fairness, from a financial perspective, of bank acquisition transactions and in
the valuation of banks and other businessesPFB and their
securities in connection
with mergers, acquisitions, estate settlements and other purposes. We are
independent with respect to the parties of the proposed transaction.

For purposes of this opinion, PBS performed a review and analysis of the
historic performance of the Bank contained in: (i) March 31, 1997, December 31,
1996, September 30, 1996, June 30, 1996 and March 31, 1996 Consolidated Reports
of Condition and Income as filed with the Federal Reserve; (ii) December 31,
1996, 1995, 1994 and 1993 audited annual reports of the Bank; and (iii) December
31, 1996 and 1995 Uniform Bank Performance Reports of the Bank. We have reviewed
and tabulated statistical data regarding the loan portfolio, securities
portfolio and other performance ratios and statistics. Financial projections
were prepared and analyzed as well as other financial studies, analyses andshareholders.

Board of Directors
November 26, 1997
Page 2

investigations as deemed7

Based upon AFSI's analysis and subject to the qualifications described
herein, considering all circumstances known to us and based upon other matters
considered relevant, for the purposes of this opinion. In review of
the aforementioned information, we have taken into account our assessment of
general market and financial conditions, our experience in other transactions,
and our knowledge of the banking industry generally.

We have not compiled, reviewed or audited the financial statements of the Bank
or Premier, nor have we independently verified any of the information reviewed;
we have relied upon such information as being complete and accurate in all
material respects. We have not made independent evaluation of the assets of the
Bank or Premier.

Based on the foregoing and all other factors deemed relevant, it is our opinion
as investment bankersAFSI believes that as of the date hereof,of this letter, the consideration proposed to
be received by the shareholdersterms
of the Bank under the Agreement is fair and
equitable from a financial perspective.

Very truly yours,

PROFESSIONAL BANK SERVICES, INC.point of view are fair to ORB and its
shareholders.

AFSI hereby consents to the reference to our firm in the proxy statement or
prospectus related to the merger transaction and to the inclusion of our opinion
as an exhibit to the proxy statement or prospectus related to the merger
transaction.

On behalf of Austin Financial Services, Inc.

/s/ Dr. Douglas V. Austin
- -------------------------------------
Dr. Douglas V. Austin
President and CEO

ANNEX IIIC

SECTION 1701.85 OF THE OHIO GENERAL CORPORATION LAW

(A)(1) A shareholder of a domestic corporation is entitled to relief as
a dissenting shareholder in respect of the proposals described in sections
1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with this
section.

(2) If the proposal must be submitted to the shareholders of the
corporation involved, the dissenting shareholder shall be a record holder of the
shares of the corporation as to which he seeks relief as of the date fixed for
the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the
date on which the vote on the proposal was taken at the meeting of the
shareholders, the dissenting shareholder shall deliver to the corporation a
written demand for payment to him of the fair cash value of the shares as to
which he seeks relief, which demand shall state his address, the number and
class of such shares, and the amount claimed by him as the fair cash value of
the shares.

(3) The dissenting shareholder entitled to relief under division (C)
of section 1701.84 of the Revised Code in the case of a merger pursuant to
section 1701.80 of the Revised Code and a dissenting shareholder entitled to
relief under division (E) of section 1701.84 of the Revised Code in the case of
a merger pursuant to section 1701.801 of the Revised Code shall be a record
holder of the shares of the corporation as to which he seeks relief as of the
date on which the agreement of merger was adopted by the directors of that
corporation. Within twenty days after he has been sent the notice provided in
section 1701.80 or 1701.801 of the Revised Code, the dissenting shareholder
shall deliver to the corporation a written demand for payment with the same
information as that provided for in division (A)(2) of this section.

(4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the new
entity, whether the demand is served before, on, or after the effective date of
the merger or consolidation.

(5) If the corporation sends to the dissenting shareholder, at the
address specified in his demand, a request for the certificates representing
the shares as to which he seeks relief, the dissenting shareholder, within
fifteen days from the date of the sending of such request, shall deliver to
the corporation the certificates requested so that the corporation may
forthwith endorse on them a legend to the effect that demand for the fair
cash value of such shares has been made. The corporation promptly shall
return such endorsed certificates to the dissenting

C-1
shareholder. A dissenting shareholder's failure to deliver such certificates
terminates his rights as a dissenting shareholder, at the option of the
corporation, exercised by written notice sent to the dissenting shareholder
within twenty days after the lapse of the fifteen-day period, unless a court
for good cause shown otherwise directs. If shares represented by a
certificate on which such a legend has been endorsed are transferred, each
new certificate issued for them shall bear a similar legend, together with
the name of the original dissenting holder of such shares. Upon receiving a
demand for payment from a dissenting shareholder who is the record holder of
uncertificated securities, the corporation shall make an appropriate notation
of the demand for payment in its shareholder records. If uncertificated
shares for which payment has been demanded are to be transferred, any new
certificate issued for the shares shall bear the legend required for
certificated securities as provided in this paragraph. A transferee of the
shares so endorsed, or of uncertificated securities where such notation has
been made, acquires only such rights in the corporation as the original
dissenting holder of such shares had immediately after the service of a
demand for payment of the fair cash value of the shares. A request under
this paragraph by the corporation is not an admission by the corporation that
the shareholder is entitled to relief under this section.

(B) Unless the corporation and the dissenting shareholder have
come to an agreement on the fair cash value per share of the shares as to
which the dissenting shareholder seeks relief, the dissenting shareholder or
the corporation, which in case of a merger or consolidation may be the
surviving or new entity, within three months after the service of the demand
by the dissenting shareholder, may file a complaint in the court of common
pleas of the county in which the principal office of the corporation that
issued the shares is located or was located when the proposal was adopted by
the shareholders of the corporation, or, if the proposal was not required to
be submitted to the shareholders, was approved by the directors. Other
dissenting shareholders, within that three-month period, may join as
plaintiffs or may be joined as defendants in any such proceeding, and any two
or more such proceedings may be consolidated. The complaint shall contain a
brief statement of the facts, including the vote and the facts entitling the
dissenting shareholder to the relief demanded. No answer to such a complaint
is required. Upon the filing of such a complaint, the court, on motion of the
petitioner, shall enter an order fixing a date for a hearing on the complaint
and requiring that a copy of the complaint and a notice of the filing and of
the date for hearing be given to the respondent or defendant in the manner in
which summons is required to be served or substituted service is required to
be made in other cases. On the day fixed for the hearing on the complaint or
any adjournment of it, the court shall determine from the complaint and from
such evidence as is submitted by either party whether the dissenting
shareholder is entitled to be paid the fair cash value

C-2
of any shares and, if so, the number and class of such shares. If

2
the court
finds that the dissenting shareholder is so entitled, the court may appoint
one or more persons as appraisers to receive evidence and to recommend a
decision on the amount of the fair cash value. The appraisers have such
power and authority as is specified in the order of their appointment. The
court thereupon shall make a finding as to the fair cash value of a share and
shall render judgment against the corporation for the payment of it, with
interest at such rate and from such date as the court considers equitable.
The costs of the proceeding, including reasonable compensation to the
appraisers to be fixed by the court, shall be assessed or apportioned as the
court considers equitable. The proceeding is a special proceeding and final
orders in it may be vacated, modified, or reversed on appeal pursuant to the
Rules of Appellate Procedure and, to the extent not in conflict with those
rules, Chapter 2505 of the Revised Code. If, during the pendency of any
proceeding is or has been instituted to enjoin or otherwise to prevent the
carrying out of the action as to which the shareholder has dissented, the
proceeding instituted under this section shall be stayed until the final
determination of the other suit or proceeding. Unless any provision in
division (D) of this section is applicable, the fair cash value of the shares
that is agreed upon by the parties or fixed under this section shall be paid
within thirty days after the date of final determination of such value under
this division, the effective date of the amendment to the articles, or the
consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a
holder of uncertificated securities entitled to such payment. In the case of
holders of shares represented by certificates, payment shall be made only
upon and simultaneously with the surrender to the corporation of the
certificates representing the shares for which the payment is made.

(C) If the proposal was required to be submitted to the shareholders
of the corporation, fair cash value as to those shareholders shall be determined
as of the day prior to the day on which the vote by the shareholders was taken,
and, in the case of a merger pursuant to section 1701.80 or 1701.801 of the
Revised Code, fair cash value as to shareholders of a constituent subsidiary
corporation shall be determined as of the day before the adoption of the
agreement of merger by the directors of the particular subsidiary corporation.
The fair cash value of a share for the purposes of this section is the amount
that a willing seller who is under no compulsion to sell would be willing to
accept and that a willing buyer who is under no compulsion to purchase would be
willing to pay, but in no event shall the fair cash value of a share exceed the
amount specified in the demand of the particular shareholder. In computing such
fair cash value, any appreciation or depreciation in market value resulting from
the proposal submitted to the directors or to the shareholders shall be
excluded.

3C-3

(D)(1) The right and obligation of a dissenting shareholder to
receive such fair cash value and to sell such shares as to which he seeks
relief, and the right and obligation of the corporation to purchase such
shares and to pay the fair cash value of them terminates if any of the
following applies:

(a) The dissenting shareholder has not complied with this the
section, unless the corporation by its directors waives such failure;

(b) The corporation abandons the action involved or is finally
enjoined or prevented from carrying it out, or the shareholders
rescind their adoption, of the action involved;

(d) The corporation and the dissenting shareholder have not come
to an agreement as to the fair cash value per share, and neither the
shareholder nor the corporation filed or joined in a complaint under
division (B) of this section within the period provided in that
division.

(2) For purposes of division (D)(1) of this section, if the merger or
consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or the
comparable representatives of any other surviving or new entity.

(E) From the time of the dissenting shareholder's giving of the
demand until either the termination of the rights and obligations arising from
it or the purchase of the shares by the corporation, all other rights accruing
from such shares, including voting and dividend or distribution rights, are
suspended. If during the suspension, any dividend or distribution is paid in
money upon any securities issued in extinguishment of or in substitution for
such shares, an amount equal to the dividend, distribution, or interest which,
except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair cash
value of the shares. If the right to receive fair cash value is terminated
other than by the purchase of the shares by the corporation, all rights of the
holder shall be restored and all distributions which, except for the suspension,
would have been made shall be made to the holder of record of the shares at the
time of termination. (Last amended by S.B. 74, L.'94, eff. 7-1-94.)

4C-4

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 271B.2-020(2)(d) of Kentucky Business Corporation Act (the
"Act") enables a Kentucky corporation to provide in its articles of
incorporation, and the Registrant has so provided in its Articles of
Incorporation, for the elimination or limitation of the personal liability of
a director to the corporation or its shareholders for monetary damages for
breach of his fiduciary duty as a director; provided, however, that a
director's liability is not eliminated or limited: (1) for any transaction
in which the director's personal financial interest is in conflict with the
financial interests of the corporation or its shareholders; (2) for acts or
omissions not in good faith or which involve intentional misconduct or are
known to the director to be a violation of law; (3) for any vote or assent to
an unlawful distribution to shareholders as prohibited under Section
271B.8-330 of the Act (which imposes liability on directors for payments of
dividends, purchases, redemptions or other acquisitions of shares, and
distributions of indebtedness that are unlawful); or (4) for any transaction
from which the director derived an improper personal benefit.

Section 271B.8-510 of the Act permits the indemnification by a
corporation of any director who is made party to a threatened, pending or
completed action, suit or proceeding because he is or was a director of such
corporation. To be eligible for indemnification, such person must have
conducted himself in good faith and reasonably believed that his conduct, if
undertaken in his official capacity with the corporation, was in the
corporation's best interests, and, if not in his official capacity, was at
least not opposed to the corporation's best interests. In the case of a
criminal proceeding, the director must also not have reasonable cause to
believe his conduct was unlawful. A director may not be indemnified under the
above-referenced section in connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable to the
corporation or in connection with any other proceeding charging improper
personal benefit by him, whether or not involving action in his official
capacity, in which he was adjudged liable on the basis that personal benefit
was improperly received by him. Indemnification permitted under Section
271B.8-510 of the Act in connection with a proceeding by or in the right of
the corporation shall be limited to reasonable expenses incurred in
connection with the proceeding. Section 271B.8-560 of the Act provides that a
Kentucky corporation may indemnify its officers, employees and agents to the
same extent as directors. Mandatory indemnification against reasonable
expenses incurred in connection with a proceeding is provided for

II-1

by the Act, unless otherwise limited by the corporation's articles of
incorporation, where a director or officer has been wholly successful on the
merits or otherwise, in the defense of any proceeding to which he was a party
because he is or was a director or officer of the corporation. A court of
competent jurisdiction may also order indemnification if the director is
fairly and reasonably entitled thereto in view of all relevant circumstances,
whether or not he met the applicable standard of conduct or was adjudged
liable to the corporation.

The Act provides that indemnification pursuant to its provisions is not
exclusive of other rights of indemnification to which a person may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors, or otherwise. Additionally, the Act provides that a corporation
may purchase and maintain insurance on behalf of directors, officers,
employees and agents of the corporation against liability asserted against or
incurred by such party in their respective capacity with the corporation.

Articles X and XI of the Registrant's Articles of Incorporation and Article
VIII of the Registrant's By-Laws require Registrant to indemnify its
directors and officers to the fullest extent permitted by the Act.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The Exhibit Index appearing on the page following the signature
page of this Registration Statement is hereby incorporated by reference.

(b) No financial statement schedules are required to be filed herewith
pursuant to Item 21(b) or (c) of this Form.

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

II-2

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.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934, (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.

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 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

II-3

the Act and will be governed by the final adjudication of such issue.

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

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

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Georgetown, Commonwealth of Kentucky, on the 31st23rd day of July, 1997.January, 1998.

PREMIER FINANCIAL BANCORP, INC.

By: /s/ J. Howell Kelly
-------------------------------------------------------------
(J. Howell Kelly, President)

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints J. Howell Kelly his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments, including post-effective
amendments, to this Registration Statement, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.

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

NAME CAPACITY DATEName Capacity Date
---- -------- ---------
/s/ Marshall T. Reynolds
- ----------------------------------------------------
(Marshall T. Reynolds) Chairman and Director July 24, 1997January 22, 1998

President (Principal Executive
/s/ J. Howell Kelly Officer, Principal Financial
- ----------------------------------------------------
(J. Howell Kelly) President (Principal Executive
Officer, Principal Financial Officer and Principal Accounting
Officer) and Director July 24, 1997January 23, 1998
/s/ Toney K. Adkins
- ----------------------------------------------------
(Toney K. Adkins) Director July 24, 1997January 22, 1998

/s/ Gardner E. Daniel
- ----------------------------------------------------
(Gardner E. Daniel) Director July 24, 1997January 22, 1998

/s/ E.V. Holder Jr.
- ----------------------------------------------------
(E.V. Holder, Jr.) Director July 24, 1997

II-5
January 22, 1998

/s/ Wilbur M. Jenkins
- -----------------------------------------------------
(Wilbur M. Jenkins) Director July 24, 1997January 22, 1998

/s/ Benjamin T. Pugh
- -----------------------------------------------------
(Benjamin T. Pugh) Director July 24, 1997

II-6January 22, 1998

II-5

EXHIBIT INDEX

EXHIBIT DESCRIPTION OF DOCUMENT
- ------- -----------------------

2 Amended and Restated Agreement and Plan of Merger dated as of
May 28,November 24, 1997 among Premier Financial Bancorp, Inc.
("Registrant"), PFBIOhio River Interim Bank and The
SabinaOhio River Bank
(included as Annex IA to the Proxy Statement/Prospectus that is
part of the Registration Statement to which this Exhibit Index
relates).

3.1 Form of Articles of Incorporation of Registrant (included as Exhibit
3.1 to Registrant's Registration Statement on Form S-1, Registration
No. 333-1702, filed on February 28, 1996 with the Commission and
incorporated herein by reference).

3.2 Form of Articles of Amendment to Articles of Incorporation effective
March 15, 1996 re: amendment to Article IV (included as Exhibit 3.2 to
Registrant's Amendment No. 1 to Registration Statement on Form S-1,
Registration No. 333-1702, filed on March 25, 1996 with the Commission
and incorporated herein by reference).

3.3 Bylaws of registrant (included as Exhibit 3.2 to Registrant's
Registration Statement on Form S-1, Registration No. 333-1702, filed
on February 28, 1996 with the Commission and incorporated herein by
reference).

5 Opinion of David W. Harper, Esq.

8.1*8 Tax Opinion of Eskew & Gresham P.S.C.

8.2* Opinion of Vorys, Sater, Seymour & Pease.

10.1 Form of Junior Subordinated Indenture dated as of June 6, 1997 between
Registrant and Bankers Trust Company (as Trustee (included as Exhibit
4.1 to Registrant's Registration Statement on Form S-1, Registration
No. 333-27943, filed on May 28, 1997 with the Commission and
incorporated herein by reference).

10.2 Form of 9.75% Junior Subordinated Deferrable Interest Debentures due
June 30, 2027 (included as Exhibit 4.2 to Registrant's Registration
Statement on Form S-1, Registration No. 333-27943, filed on May 28,
1997 with the Commission and incorporated herein by reference).

10.3 Form of Trust Agreement dated as of May 27, 1997 between Registrant
and Bankers Trust (Delaware) as Trustee (included as Exhibit 4.3 to
Registrant's Registration

EXHIBIT DESCRIPTION OF DOCUMENT
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Statement on Form S-1, Registration
No. 333-27943, filed on May 28, 1997 with the Commission and
incorporated herein by reference).

EXHIBIT DESCRIPTION OF DOCUMENT
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10.4 Form of Amended and Restated Trust Agreement among Registrant, Bankers
Trust Company, as Property Trustee, Bankers Trust (Delaware), as
Delaware Trustee and various holders of Trust Securities dated as of
June 6, 1997 (included as Exhibit 4.4 to Registrant's Registration
Statement on Form S-1, Registration No. 333-27943, filed on May 28,
1997 with the Commission and incorporated herein by reference).

10.5 Form of Guarantee Agreement between Registrant, as Guarantor, and
Bankers Trust Company, as Trustee, dated as of June 6, 1997 (included
as Exhibit 4.6 to Registrant's Registration Statement on Form S-1,
Registration No. 333-27943, filed on May 28, 1997 with the Commission
and incorporated herein by reference).

10.6 Amended and Restated Preferred Stock Purchase Agreement dated as of
September 29, 1994 between First Guaranty Bank, Hammond, Louisiana,
and Registrant (included as Exhibit 10.3 to Registrant's Registration
Statement on Form S-1, Registration No. 333-1702, filed on February
28, 1996 with the Commission and incorporated herein by reference).

10.7 Employment Agreement dated March 16, 1992, between Georgetown Bank &
Trust Company and Gardner E. Daniel (included as Exhibit 10.4 to
Registrant's Registration Statement on Form S-1, Registration
No. 333-1702, filed on February 28, 1996 with the Commission and
incorporated herein by reference).

10.8 Deferred Compensation Agreement dated December 17, 1992, between
Georgetown Bank and Trust Company and Gardner E. Daniel (included as
Exhibit 10.5 to Registrant's Registration Statement on Form S-1,
Registration No. 333-1702, filed on February 28, 1996 with the
Commission and incorporated herein by reference).

10.9 Premier Financial Bancorp, Inc. 1996 Employee Stock Ownership
Incentive Plan (included as Exhibit 10.6 to Registrant's Registration
Statement on Form S-1, Registration No. 333-1702, filed on February
28, 1996 with the Commission and incorporated herein by reference).

13.1 Annual Report to Shareholders for the year ended December 31, 1996
(included within Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996, filed on

EXHIBIT DESCRIPTION OF DOCUMENT
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March 31, 1997 with the Commission
(Commission File No. 0-20908) and incorporated herein by reference).

EXHIBIT DESCRIPTION OF DOCUMENT
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13.2 Quarterly Report on Form 10-Q for the sixnine month period ended
JuneSeptember 30, 1997 (filed on August __,November 13, 1997 with the Commission
(Commission File No. 0-20908) and incorporated herein by reference).

16 Letter of McNeal, Williamson & Co. regarding change in certifying
accountant (included as Exhibit 16 to Registrant's Amendment No. 1 to
Registration Statement on Form S-1, Registration No. 333-1702, filed
on March 25, 1996 with the Commission and incorporated herein by
reference).

21 Subsidiaries of Registrant (included as Exhibit 21 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1996, filed
on March 31, 1997 with the Commission (Commission File No. 0-20908)
and incorporated herein by reference).

22.120.1 Letter from President of The SabinaOhio River Bank to shareholders regarding
Special Meeting of Shareholders.

22.220.2 Notice of Special Meeting of Shareholders of The SabinaOhio River Bank.

22.320.3 Form of Proxy for Special Meeting of Shareholders.

22.4Shareholders of Ohio River Bank.

20.4 Fairness Opinion of Professional BankAustin Financial Services, Inc., (included as
Annex IIB to the Proxy Statement/Prospectus that is part of the
Registration Statement to which this Exhibit Index relates).

21 Subsidiaries of Registrant.

23.1 Consent of Eskew & Gresham, PSC as to financial statements of
Registrant.

23.2 Consent of McNeal, Williamson & Co. as to financial
statements of Registrant.

23.3*23.3 Consent of Grant Thornton LLPKelley Galloway & Company, PSC as to financial statements
of The SabinaOhio River Bank.

23.4 Consent of David W. Harper, Esq. (included in Exhibit 5).

23.5 Consent of Professional BankAustin Financial Services, Inc.

23.6 Consent of Eskew & Gresham, PSC as to tax opinion (included in Exhibit
8.1)8).

23.7 Consent of Vorys, Sater, Seymour & Pease as to tax opinion (included
in Exhibit 8.2).

EXHIBIT DESCRIPTION OF DOCUMENT
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24 Power of Attorney (included in the Signature PagesPage to the Registration
Statement to which this Exhibit Index relates).

27 Financial Data Schedules.

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*To be filed by amendment.*
____________
* Omitted because they are not required or applicable or the required
information is shown in the financial statements or the notes thereto.