SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
__________________________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

Date of Report: October 29, 1998

F.N.B. CORPORATION
______________________________________________________
(Exact name of registrant as specified in its charter)

Pennsylvania 0-8144 25-1255406
- ------------------------ ----------- ------------
(State of Incorporation) (Commission (IRS Employer
File Number) Identification No.)

One F.N.B. Blvd., Hermitage, Pennsylvania 16148
----------------------------------------- ----------
(Address of principal executive offices) (Zip code)

(724) 981-6000
----------------------------------------------------
(Registrant's telephone number, including area code)

INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 5. OTHER EVENTS

On August 31, 1998, F.N.B. Corporation (the Corporation)
completed its acquisition of Citizens Holding Corporation.
Accordingly, the Corporation's Supplemental Consolidated
Financial Statements and Related Management's Discussion and
Analysis of Financial Condition and Results of Operations have
been provided giving retroactive effect to this merger using
the pooling of interests method of accounting. Such
supplemental consolidated financial statements will become
the historical consolidated financial statements when the
Corporation reports third quarter 1998 results. The Corporation
is hereby filing with the Securities and Exchange Commission a
copy of the Audited Supplemental Consolidated Financial
Statements for the years ended December 31, 1997, 1996 and 1995
and Management's Discussion and Analysis.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

(C). Exhibits (all filed herewith)

Exhibit 23.1 Consent of Ernst & Young LLP

Exhibit 23.2 Consent of Hill, Barth & King, Inc.

Exhibit 23.3 Consent of PricewaterhouseCoopers LLP

Exhibit 23.4 Consent of Hacker, Johnson, Cohen & Grieb PA

Exhibit 27.1 Financial Data Schedule for the years ended
December 31, 1997, 1996 and 1995

Exhibit 27.2 Financial Data Schedule for the quarterly
periods in the year ended December 31, 1997

Exhibit 27.3 Financial Data Schedule for the quarterly
periods in the year ended December 31, 1996

Exhibit 99.1 Supplemental Consolidated Financial
Statements for the years ended December 31,
1997, 1996 and 1995 with Report of
Independent Auditors and Management's
Discussion and Analysis

Exhibit 99.2 Report of Independent Auditors Hill, Barth &
King, Inc. for the 1996 and 1995 Audits of
Southwest Banks, Inc.

Exhibit 99.3 Report of Independent Auditors
PricewaterhouseCoopers LLP for the 1996 and
1995 Audits of West Coast Bancorp, Inc.

Exhibit 99.4 Report of Independent Auditors Hacker,
Johnson, Cohen & Grieb PA for the 1997, 1996,
and 1995 Audits of Seminole Bank

Exhibit 99.5 Report of Independent Auditors Hacker,
Johnson, Cohen & Grieb PA for the 1997, 1996
and 1995 Audits of Citizens Holding
Corporation and Subsidiaries

Signatures
----------

Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

F.N.B. CORPORATION
(Registrant)

By: /s/John D. Waters
________________________________
Name: John D. Waters
Title: Vice President and
Chief Financial Officer

Dated: October 29, 1998

EXHIBIT INDEX

23.1 Consent of Ernst & Young LLP

23.2 Consent of Hill, Barth & King, Inc.

23.3 Consent of PricewaterhouseCoopers LLP

23.4 Consent of Hacker, Johnson, Cohen & Grieb PA

27.1 Financial Data Schedule for the years ended December 31, 1997,
1996 and 1995

27.2 Financial Data Schedule for the quarterly periods in the year
ended December 31, 1997

27.3 Financial Data Schedule for the quarterly periods in the year
ended December 31, 1996

99.1 Supplemental Consolidated Financial Statements for the years ended
December 31, 1997, 1996 and 1995 with Report of Independent
Auditors and Management's Discussion and Analysis

99.2 Report of Independent Auditors Hill, Barth & King, Inc. for the
1996 and 1995 Audits of Southwest Banks, Inc.

99.3 Report of Independent Auditors PricewaterhouseCoopers LLP for the
1996 and 1995 Audits of West Coast Bancorp, Inc.

99.4 Report of Independent Auditors Hacker, Johnson, Cohen & Grieb PA
for the 1997, 1996 and 1995 Audits of Seminole Bank

99.5 Report of Independent Auditors Hacker, Johnson, Cohen & Grieb PA
for the 1997, 1996 and 1995 Audits of Citizens Holding Corporation
and Subsidiaries

EXHIBIT 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Regarding:

1) Registration Statement on Form S-8 relating to F.N.B. Corporation
1990 Stock Option Plan (File #33-78114).

2) Registration Statement on Form S-8 relating to F.N.B. Corporation
Restricted Stock Bonus Plan (File #33-78134).

3) Registration Statement on Form S-8 relating to F.N.B. Corporation
1996 Stock Option Plan (File #333-03489).

4) Registration Statement on Form S-8 relating to F.N.B. Corporation
Restricted Stock and Incentive Bonus Plan (File #333-03493).

5) Registration Statement on Form S-8 relating to F.N.B. Corporation
Directors Compensation Plan (File #333-03495).

6) Registration Statement on Form S-8 relating to F.N.B. Corporation
401(k) Plan (File #333-03503).

7) Post-Effective Amendment No.1 on Form S-8 to Registration Statement
on Form S-4 (File #333-01997).

8) Post-Effective Amendment No.1 on Form S-8 to Registration Statement
on Form S-4 (File #333-22909).

9) Registration Statement on Form S-3 relating to the F.N.B.
Corporation Subordinated Notes and Daily Cash Accounts (File #333-
31909).

10) Registration Statement on Form S-3 relating to the Voluntary
Dividend Reinvestment and Direct Stock Purchase Plan (File #333-
46581).

11) Registration Statement on Form S-8 relating to stock options assumed
in the acquisition of Mercantile Bank of Southwest Florida (File
#333-42333).

We consent to the incorporation by reference in the above listed
Registration Statements of our report dated October 28, 1998, with respect to
the supplemental consolidated financial statements of F.N.B. Corporation and
subsidiaries as of December 31, 1997 and 1996 and for each of the three years
in the period ended December 31, 1997 included in this Current Report on Form
8-K.

/s/ERNST & YOUNG LLP

Pittsburgh, Pennsylvania
October 28, 1998

EXHIBIT 23.2

CONSENT OF HILL, BARTH & KING, INC., INDEPENDENT AUDITORS

We consent to the incorporation by reference in the registration
statements of F.N.B. Corporation on Forms S-3 (Registration Nos. 333-31909 and
333-46581) and Forms S-8 (Registration Nos. 33-78114, 33-78134, 333-03489,
333-03493, 333-03495, 333-03503, 333-01997, 333-22909 and 333-42333) and to
the use in this Current Report of F.N.B. Corporation on Form 8-K of our report
dated January 22, 1997 on our audits of the consolidated financial statements
of Southwest Banks, Inc. which have been incorporated into the Supplemental
Consolidated Financial Statements for the years ended December 31, 1996 and
1995, which report is included as an exhibit in F.N.B. Corporation's Current
Report on Form 8-K.

/s/Hill, Barth & King, Inc.
Certified Public Accountants

Naples, Florida
October 27, 1998

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

/s/PricewaterhouseCoopers LLP
Tampa, Florida
October 29, 1998

EXHIBIT 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statement of
F.N.B. Corporation on Forms S-3 (Registration Nos. 333-31909 and 333-46581)
and Forms S-8 (Registration Nos. 33-78114, 33-78134, 333-03489, 333-03493,
333-03495, 333-03503, 333-01997, 333-22909 and 333-42333) of our report dated
January 9, 1998 and on our audits of the financial statements of Seminole Bank
at December 31, 1997 and 1996 and for each of the years in the three-year
period ended December 31, 1997 and of our report dated January 9, 1998 except
for Note 18, as to which the date is April 6, 1998 on our audits of the
financial statements of Citizens Holding Corporation and subsidiaries at
December 31, 1997 and 1996 and for each of the years in the three-year period
ended December 31, 1997 which reports are included as exhibits in F.N.B.
Corporation's Current Report on Form 8-K.

/s/HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
October 28, 1998

EXHIBIT 99.1

Supplemental Consolidated Financial Statements
and Management's Discussion and Analysis

F.N.B. Corporation and Subsidiaries

Years ended December 31, 1997, 1996 and 1995
with Report of Independent Auditors

F.N.B. CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
AND MANAGEMENT'S DISCUSSION AND ANALYSIS

Years ended December 31, 1997, 1996 and 1995

CONTENTS

Report of Independent Auditors............................................. 1

Supplemental Consolidated Financial Statements

Supplemental Consolidated Balance Sheet......................... 2
Supplemental Consolidated Income Statement...................... 3
Supplemental Consolidated Statement of Stockholders' Equity..... 4
Supplemental Consolidated Statement of Cash Flows............... 5
Notes to Supplemental Consolidated Financial Statements......... 6

Supplemental Selected Financial Data....................................... 31

Supplemental Quarterly Earnings Summary.................................... 32

Management's Discussion and Analysis of Supplemental Financial Condition
and Supplemental Results of Operations................................ 33

REPORT OF INDEPENDENT AUDITORS

Stockholders and Board of Directors
F.N.B. Corporation

We have audited the supplemental consolidated balance sheets of F.N.B.
Corporation and subsidiaries (F.N.B. Corporation) as of December 31, 1997 and
1996 and the related supplemental consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1997. The supplemental consolidated financial statements
give retroactive effect to the merger of F.N.B. Corporation and Citizens
Holding Corporation and subsidiaries, on August 31, 1998, which has been
accounted for using the pooling of interests method as described in the notes
to the supplemental consolidated financial statements. These supplemental
consolidated financial statements are the responsibility of management of
F.N.B. Corporation. Our responsibility is to express an opinion on these
supplemental consolidated financial statements based on our audits. We did
not audit the financial statements of Citizens Holding Corporation and
subsidiaries and Seminole Bank, which statements reflect total assets
constituting approximately 7% for 1997 and net income constituting
approximately 6% for 1997 of the related supplemental consolidated financial
statement totals. We did not audit the financial statements of Southwest
Banks, Inc. and subsidiaries, West Coast Bancorp, Inc. and subsidiary,
Seminole Bank or Citizens Holding Corporation and subsidiaries, which
statements reflect total assets constituting approximately 33% for 1996 and
net income constituting approximately 11% and 21% for 1996 and 1995,
respectively, of the related supplemental consolidated financial statements
totals. Those statements were audited by other auditors whose reports have
been furnished to us, and our opinion, insofar as it relates to data included
for Southwest Banks, Inc. and subsidiaries, West Coast Bancorp, Inc. and
subsidiary, Seminole Bank and Citizens Holding Corporation and subsidiaries,
is based solely on the reports of the other auditors.

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

In our opinion, based on our audits and the reports of other auditors, the
supplemental consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
F.N.B. Corporation at December 31, 1997 and 1996, and the consolidated
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1997, after giving retroactive effect to the
merger of Citizens Holding Corporation and subsidiaries, as described in the
notes to the supplemental consolidated financial statements, in conformity
with generally accepted accounting principles.

/s/ERNST & YOUNG LLP

Pittsburgh, Pennsylvania
October 28, 1998

F.N.B. CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED BALANCE SHEET

Dollars in thousands, except par values

December 31 1997 1996
---------- ----------
ASSETS
Cash and due from banks $ 107,770 $ 121,355
Interest bearing deposits with banks 4,081 1,792
Federal funds sold 36,355 19,896
Mortgage loans held for sale 6,536 10,863
Securities available for sale 460,419 348,342
Securities held to maturity (fair value of
$138,937 and $191,976) 138,590 192,803
Loans, net of unearned income of $20,473 and $24,013 2,094,904 1,903,281
Allowance for loan losses (29,906) (30,231)
---------- ----------
NET LOANS 2,064,998 1,873,050
Premises and equipment 73,463 56,713
Other assets 75,270 55,282
---------- ----------
$2,967,482 $2,680,096
========== ==========

LIABILITIES
Deposits:
Non-interest bearing $ 311,885 $ 278,357
Interest bearing 2,155,172 1,962,215
---------- ----------
TOTAL DEPOSITS 2,467,057 2,240,572
Other liabilities 40,742 37,724
Short-term borrowings 127,186 117,972
Long-term debt 72,246 58,179
---------- ----------
TOTAL LIABILITIES 2,707,231 2,454,447

STOCKHOLDERS' EQUITY
Preferred stock - $10 par value
Authorized - 20,000,000 shares
Issued - 287,500 and 352,531 shares
Aggregate liquidation value - $7,188 and $8,813 2,875 3,525
Common Stock - $2 par value
Authorized - 100,000,000 shares
Issued - 17,240,710 and 15,788,094 shares 34,482 31,577
Additional paid-in capital 128,600 110,771
Retained earnings 92,598 78,702
Net unrealized securities gains 5,324 2,561
Treasury stock - 113,592 and 62,723 shares at cost (3,628) (1,487)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 260,251 225,649
---------- ----------
$2,967,482 $2,680,096
========== ==========

See accompanying Notes to Supplemental Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED INCOME STATEMENT

Dollars in thousands, except per share data

Year Ended December 31 1997 1996 1995
-------- -------- --------
INTEREST INCOME
Loans, including fees $180,765 $169,986 $159,175
Securities:
Taxable 27,603 25,491 24,913
Nontaxable 2,414 2,428 2,121
Dividends 1,159 1,100 928
Other 4,337 3,375 3,606
-------- -------- --------
TOTAL INTEREST INCOME 216,278 202,380 190,743
INTEREST EXPENSE
Deposits 82,503 76,322 72,785
Short-term borrowings 6,415 4,030 5,606
Long-term debt 3,746 4,384 3,269
-------- -------- --------
TOTAL INTEREST EXPENSE 92,664 84,736 81,660
NET INTEREST INCOME 123,614 117,644 109,083
Provision for loan losses 11,100 9,773 7,174
NET INTEREST INCOME AFTER PROVISION -------- -------- --------
FOR LOAN LOSSES 112,514 107,871 101,909
NON-INTEREST INCOME
Insurance commissions and fees 3,983 4,116 4,284
Service charges 13,345 12,594 11,851
Trust 1,934 1,769 1,622
Gain on sale of securities 1,252 788 401
Gain on sale of loans 1,730 961 915
Other 3,734 2,594 2,605
-------- -------- --------
TOTAL NON-INTEREST INCOME 25,978 22,822 21,678
-------- -------- --------
138,492 130,693 123,587
NON-INTEREST EXPENSES
Salaries and employee benefits 51,688 47,596 42,372
Net occupancy 7,588 7,433 7,342
Amortization of intangibles 1,584 1,047 1,246
Equipment 7,531 6,960 6,261
Deposit insurance 875 1,128 3,402
Recapitalization of Savings Association
Insurance Fund 3,176
Promotional 2,633 2,925 3,484
Insurance claims paid 1,867 1,707 1,738
Other 24,564 25,903 21,310
-------- -------- --------
TOTAL NON-INTEREST EXPENSES 98,330 97,875 87,155
-------- -------- --------
INCOME BEFORE INCOME TAXES 40,162 32,818 36,432
Income taxes 12,771 10,951 12,122
-------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEMS 27,391 21,867 24,310
Gain on sale of subsidiary and branches,
net of tax of $4,743 8,809
-------- -------- --------
NET INCOME $ 36,200 $ 21,867 $ 24,310
======== ======== ========
Earnings Per Common Share
BASIC $2.05 $1.22 $1.37
===== ===== =====
DILUTED $1.95 $1.19 $1.32
===== ===== =====

See accompanying Notes to Supplemental Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

Dollars in thousands, except per share data

Net Employee
Additional Unrealized Stock
Preferred Common Paid-In Retained Securities Ownership Treasury
Stock Stock Capital Earnings Gains(Losses) Plan Stock

BALANCE AT
JANUARY 1, 1995 $4,563 $28,961 $ 92,370 $63,170 $ (964) $(141) $ (309)
Net income 24,310
Cash dividends declared:
Preferred stock (849)
Common stock $.33
per share (F.N.B.)
and $.20 per share
(WCBI) (3,489)
Purchase of common
stock (1,447)
Issuance of common
stock 89 420 1,292
Stock dividend 1,071 7,614 (8,691)
Conversion of
preferred stock (47) 85 502
Obligation under
ESOP plan (248)
Change in net
unrealized
securities gains
(losses) 4,252
------ ------- -------- ------- ------ ----- ------
Balance at 12/31/95 4,516 30,206 100,906 74,451 3,288 (389) (464)
Net income 21,867
Cash dividends declared:
Preferred stock (766)
Common stock
$.60 per share
(F.N.B.) and
$.23 per share
(WCBI) (6,123)
Purchase of
common stock (3,421)
Issuance (retirement)
of common stock (44) (438) 2,398
Stock dividend 1,016 9,711 (10,727)
Conversion of pre-
ferred stock (991) 399 592
Obligation under
ESOP plan 389
Change in net
unrealized
securities
gains (losses) (727)
------ ------- -------- ------- ------ ----- ------
Balance at 12/31/96 3,525 31,577 110,771 78,702 2,561 0 (1,487)
Net income 36,200
Cash dividends declared:
Preferred stock (588)
Common stock
$.63 per share
(F.N.B.) and
$.12 per share
(WCBI) (8,990)
Purchase of
common stock (7,688)
Issuance of
common stock 47 131 (497) 5,547
Issuance of
common stock
for acquisition 1,260 2,240 4,177
Stock dividend 1,332 15,074 (16,406)
Conversion of
preferred stock (650) 266 384
Change in net
unrealized
securities
gains (losses) 2,763
------ ------- -------- ------- ------ ------ -------
Balance at 12/31/97 $2,875 $34,482 $128,600 $92,598 $5,324 $ 0 $(3,628)
====== ======= ======== ======= ====== ====== =======

See accompanying Notes to Supplemental Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED STATEMENT OF CASH FLOWS

Dollars in thousands
Year Ended December 31 1997 1996 1995
---------- --------- ---------
OPERATING ACTIVITIES
Net income $ 36,200 $ 21,867 $ 24,310
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 7,867 6,821 7,119
Provision for loan losses 11,100 9,773 7,174
Provision for valuation allowance on
other real estate owned 540 664 100
Deferred taxes (1,460) (2,193) (650)
Gain on securities available for sale (1,252) (788) (401)
Gain on sale of loans (1,730) (961) (915)
Extraordinary gains on sales of
subsidiary and branches, net of tax (8,809)
Proceeds from sale of loans 115,998 72,459 68,311
Loans originated for sale (110,382) (64,694) (66,231)
Net change in:
Interest receivable (2,628) 1,353 (1,850)
Interest payable 1,783 620 2,021
Other, net 4,693 5,560 5,402
--------- --------- ---------
Net cash flows from operating activities 51,920 50,481 44,390

INVESTING ACTIVITIES
Net change in:
Interest bearing deposits with banks (2,311) 3,097 (524)
Federal funds sold (6,359) 54,214 (48,779)
Loans (196,892) (203,384) (112,778)
Securities available for sale:
Purchases (266,561) (198,820) (142,465)
Sales 40,682 43,667 11,941
Maturities 148,542 113,897 92,474
Securities held to maturity:
Purchases (9,101) (48,756) (49,615)
Maturities 60,423 50,616 83,729
Increase in premises and equipment (19,423) (13,029) (8,115)
Net cash paid for mergers, acquisitions
and divestiture (50,362)
--------- --------- ---------
Net cash flows from investing activities (301,362) (198,498) (174,132)

FINANCING ACTIVITIES
Net change in:
Non-interest bearing deposits,
savings and NOW 128,902 106,341 (2,163)
Time deposits 106,647 18,132 165,766
Short-term borrowings (1,802) 40,711 (15,206)
Increase in long-term debt 44,010 32,899 9,274
Decrease in long-term debt (29,862) (25,504) (15,104)
Net acquisition of treasury stock (2,460) (1,504) 354
Cash dividends paid (9,578) (6,889) (4,343)
--------- --------- ---------
Net cash flows from financing activities 235,857 164,186 138,578
--------- --------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (13,585) 16,169 8,836
Cash and cash equivalents at
beginning of year 121,355 105,186 96,350
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 107,770 $ 121,355 $ 105,186
========= ========= =========

See accompanying Notes to Supplemental Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

The supplemental consolidated financial statements give retroactive effect
to the merger of Citizens Holding Corporation and subsidiaries (Citizens) with
and into F.N.B. Corporation (F.N.B. or the Corporation). The merger, which
was consummated on August 31, 1998, resulted in the Corporation issuing a
total of 1,012,325 shares of common stock. The transaction has been accounted
for on a pooling-of-interests basis, and the financial statements are
presented as if the merger had been consummated for all the periods presented.
As required by generally accepted accounting principles, the supplemental
consolidated financial statements will become the historical consolidated
financial statements upon issuance of the Corporation's consolidated financial
statements for the quarter ended September 30, 1998.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS:
The Corporation is a bank holding company headquartered in Hermitage,
Pennsylvania. As of October 28, 1998, it operated 9 banks through 84 offices
and a consumer finance company through 34 offices in Pennsylvania, Florida,
Ohio and New York.

BASIS OF PRESENTATION:
The consolidated financial statements include the accounts of the
Corporation and its subsidiaries. All significant intercompany balances and
transactions have been eliminated. Certain reclassifications have been made
to the prior years' financial statements to conform to the current year's
presentation.

USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

SECURITIES:
Debt securities are classified as held to maturity when management has the
positive intent and ability to hold securities to maturity. Securities held
to maturity are carried at amortized cost.

Debt securities not classified as held to maturity and marketable equity
securities are classified as available for sale. Securities available for
sale are carried at fair value with net unrealized securities gains (losses)
reported separately as a component of stockholders' equity, net of tax.

Amortization of premiums and accretion of discounts are recorded as interest
income from securities. Realized gains and losses are recorded as net
securities gains (losses). The adjusted cost of specific securities sold is
used to compute gains or losses on sales.

Presently, the Corporation does not have and has no intention of
establishing a trading securities classification.

MORTGAGE LOANS HELD FOR SALE:
Mortgage loans held for sale are recorded at the lower of aggregate cost or
market value. Gain or loss on the sale of loans is included in non-interest
income.

LOANS AND THE ALLOWANCE FOR LOAN LOSSES:
Loans are reported at their outstanding principal adjusted for any charge-
offs and any deferred fees or costs on originated loans.

Interest income on loans is accrued on the principal amount outstanding. It
is the Corporation's policy to discontinue interest accruals when principal or
interest is due and has remained unpaid for 90 days or more unless the loan is
both well secured and in the process of collection. When a loan is placed on
non-accrual status, unpaid interest credited to income in the current year is
reversed, and unpaid interest accrued in prior years is charged against the
allowance for loan losses. While on non-accrual, contractual interest
payments are applied against principal until the loan is restored to accrual
status. Non-accrual loans may not be restored to accrual status until all
delinquent principal and interest has been paid, or the loan becomes both well
secured and in the process of collection. Consumer installment loans are
generally charged off against the allowance for loan losses upon reaching 90
to 180 days past due, depending on the installment loan type. Loan
origination fees and related costs are deferred and recognized over the life
of the loans as an adjustment of yield.

The allowance for loan losses is based on management's evaluation of
potential losses in the loan portfolio, which includes an assessment of past
experience, current and estimated future economic conditions, known and
inherent risks in the loan portfolio, the estimated value of underlying
collateral and industry standards. Additions are made to the allowance
through periodic provisions charged to income and recovery of principal on
loans previously charged off. Losses of principal are charged to the
allowance when the loss actually occurs or when a determination is made that a
loss is probable.

Impaired loans are identified and measured based on the present value of
expected future cash flows discounted at the loan's effective interest rate,
or at the loan's observable market price or at the fair value of the
collateral if the loan is collateral dependent. If the recorded investment in
the loan exceeds the measure of fair value, a valuation allowance is
established as a component of the allowance for loan losses. Impaired loans
consist of non-homogeneous loans, which based on the evaluation of current
information and events, management has determined that it is probable that the
Corporation will not be able to collect all amounts due according to the
contractual terms of the loan agreement. The Corporation evaluates all
commercial and commercial real estate loans which have been classified for
regulatory reporting purposes, including non-accrual and restructured loans,
in determining impaired loans.

PREMISES AND EQUIPMENT:
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed generally on the straight-line method.

OTHER REAL ESTATE OWNED:
Assets acquired in settlement of indebtedness are included in other assets
at the lower of fair value minus estimated costs to sell or at the carrying
amount of the indebtedness. Subsequent write-downs and net direct operating
expenses attributable to such assets are included in other expenses.

AMORTIZATION OF INTANGIBLES:
Goodwill is being amortized over 15 years on the straight-line method and
core deposit intangibles are being amortized on accelerated methods over
various lives ranging from 7-17 years. The Corporation periodically evaluates
its goodwill and core deposit intangibles for impairment.

INCOME TAXES:
Income taxes are computed utilizing the liability method. Under this method
deferred taxes are determined based on differences between financial reporting
and tax bases of assets and liabilities and are measured using the enacted tax
rates and laws that will be in effect when the differences are expected to
reverse.

PER SHARE AMOUNTS:
Earnings and cash dividends per share have been adjusted for common stock
dividends.

In 1997, the Financial Accounting Standards Board issued Statement No. 128
(FAS No. 128), "Earnings per Share." FAS No. 128 replaced the calculation of
primary and fully diluted earnings per share with basic and diluted earnings
per share. All earnings per share amounts have been restated to conform to
the FAS No. 128 requirements.

Basic earnings per common share is calculated by dividing net income,
adjusted for preferred stock dividends declared, by the sum of the weighted
average number of shares of common stock outstanding.

Diluted earnings per common share is calculated by dividing net income by
the weighted average number of shares of common stock outstanding, assuming
conversion of outstanding convertible preferred stock from the beginning of
the year or date of issuance and the exercise of stock options and warrants.
Such adjustments to net income and the weighted average number of shares of
common stock outstanding are made only when such adjustments dilute earnings
per common share.

CASH EQUIVALENTS:
The Corporation considers cash and due from banks as cash and cash
equivalents.

NEW ACCOUNTING STANDARDS:
FAS No. 130, "Reporting Comprehensive Income," establishes new standards for
reporting and display of comprehensive income and its components in a full set
of general purpose financial statements. Comprehensive income is defined as
the change in equity during a period from transactions and other events and
circumstances from non shareholder sources, such as changes in net unrealized
securities gains. It includes all changes in equity during a period except
those resulting from investments by shareholders and distributions to
shareholders. This statement is effective for the Corporation's fiscal year
ending December 31, 1998. Application of this statement will not impact
amounts previously reported for net income or affect the comparability of
previously issued financial statements.

FAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," establishes standards for the reporting of financial information
from operating segments in annual and interim financial statements. It
requires that financial information be reported on the basis that it is
reported internally for evaluating segment performance and deciding how to
allocate resources to segments. Because this statement addresses how
supplemental financial information is disclosed in annual and interim reports,
the adoption will have no material impact on the financial statements. This
statement is effective for the Corporation's fiscal year ending December 31,
1998.

FAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
requires companies to recognize all derivatives on the balance sheet at fair
value. Additionally, derivatives that are not hedges must be adjusted to fair
value through income. This Statement is effective for the Corporation's
fiscal year ending December 31, 2000. Because the Corporation has not entered
into any derivative transactions, the adoption of this statement will have no
impact on the financial statements.

MERGERS, ACQUISITIONS AND DIVESTITURES

On August 21, 1998, the Corporation signed a definitive merger agreement
with Guaranty Bank & Trust (Guaranty), a community bank headquartered in
Venice, Florida with assets of $144.0 million. The merger agreement calls for
the Corporation to pay $43.00 for each share of Guaranty common stock,
resulting in the issuance of approximately 1,148,099 shares of the
Corporation's common stock. Guaranty will be merged into an existing
subsidiary of the Corporation, West Coast Bank to form West Coast Guaranty
Bank. The transaction, which is expected to close during the first quarter of
1999 pending regulatory and shareholder approval, is expected to be accounted
for as a pooling-of-interests.

On August 31, 1998, the Corporation completed its affiliation with Citizens,
headquartered in Clearwater, Florida, with assets totaling $135.0 million.
Under the terms of the merger agreement, each outstanding share of Citizens'
common stock was converted into 1.743 shares of the Corporation's common
stock. A total of 1,012,325 shares of the Corporation's common stock were
issued. Citizens' principal asset, Citizens Bank and Trust, was merged into
an existing subsidiary of the Corporation, First National Bank of Florida (FNB
Florida), formerly Indian Rocks National Bank. Results for prior years are
restated to reflect this acquisition as a pooling-of-interests.

On May 29, 1998, the Corporation completed its affiliation with Seminole
Bank, headquartered in Seminole, Florida, with assets totaling $92.2 million.
Under the terms of the merger agreement, each outstanding share of Seminole's
common stock was converted into 1.530 shares of the Corporation's common
stock. A total of 855,450 shares of the Corporation's common stock were
issued. Seminole was merged into an existing subsidiary of the Corporation,
FNB Florida. Results for prior years are restated to reflect this acquisition
as a pooling-of-interests.

On January 20, 1998, the Corporation completed its affiliation with West
Coast Bank (West Coast), headquartered in Sarasota, Florida, with assets
totaling $107.4 million. Under the terms of the merger agreement, each
outstanding share of West Coast's common stock was converted into 1.0 share of
the Corporation's common stock. A total of 585,263 shares of the
Corporation's common stock were issued. Results for prior years have been
restated to reflect this acquisition as a pooling-of-interests.

The following table sets forth separate company financial information for
the year immediately prior to the mergers and does not reflect any mergers
which occurred subsequent to December 31, 1997 (in thousands):

YEAR ENDED DECEMBER 31, 1997 F.N.B. CITIZENS SEMINOLE WEST COAST
-------- -------- -------- ----------
Net interest income $111,030 $4,800 $3,771 $4,013
Net income 33,123 1,052 1,146 879

On November 21, 1997, the Corporation completed the sale of three Belmont
County, Ohio branches of its subsidiary, Metropolitan National Bank, to
Citizens Bancshares, Inc., a bank holding company headquartered in
Salineville, Ohio. The sale resulted in the Corporation recognizing a $3.6
million after-tax extraordinary gain.

On November 20, 1997, the Corporation purchased all of the assets and
liabilities of Mercantile Bank of Southwest Florida (Mercantile), a bank
located in Naples, Florida. The Corporation paid $17.72 per share for each of
the 766,681 outstanding shares of Mercantile's common stock. Mercantile was
merged into another affiliate of the Corporation, First National Bank of
Naples, headquartered in Naples, Florida. The transaction was accounted for
as a purchase. As a result of the purchase, the Corporation acquired assets
of $121.7 million, including goodwill amounting to $7.1 million and core deposit
intangibles amounting to $595,000, and assumed liabilities of $108.2 million.
Unaudited pro forma results of operations for the Corporation as if Mercantile
was acquired on January 1, 1995 are as follows (in thousands, except per share
data):

YEAR ENDED DECEMBER 31 1997 1996 1995
-------- -------- --------
Net interest income $126,332 $120,358 $111,361
Net income 35,082 21,734 24,025
Net income per common share (Basic) 1.99 1.21 1.35

On October 17, 1997, the Corporation completed its affiliation with FNB
Florida, a community bank headquartered in Largo, Florida with assets of $80.9
million. Under the terms of the merger agreement, each outstanding share of
FNB Florida's common stock was converted into 1.8 shares of the Corporation's
common stock with cash being paid in lieu of fractional shares. A total of
630,000 shares of the Corporation's common stock were issued. The merger has
been accounted for as a pooling-of-interests, except that financial statements
were not restated due to immateriality. FNB Florida's results of operations
since October 17, 1997 are included in the Corporation's consolidated assets.

On June 30, 1997, the Corporation completed the sale of its subsidiary,
Bucktail Bank and Trust Company (Bucktail), to Sun Bancorp, Inc. (Sun), a bank
holding company headquartered in Selinsgrove, Pennsylvania. Under the sales
agreement, Sun issued 565,384 shares of Sun's common stock, having an
estimated value of $17.6 million, in exchange for 100% ownership of Bucktail.
At consummation, Bucktail had assets of $124.6 million and liabilities of
$115.3 million. The sale resulted in the Corporation recognizing a $5.2
million after-tax extraordinary gain. The Corporation has reflected its
original ownership interest as well as subsequent purchases of Sun common
stock as an equity investment included in other assets. At December 31, 1997,
the Corporation's investment in Sun is accounted for using the equity method
and had a market value totaling $33.3 million and a carrying value totaling
$20.2 million. The Corporation recognized equity earnings from Sun totaling
$621,000 for the year ended December 31, 1997.

On April 18, 1997, the Corporation completed its affiliation with West Coast
Bancorp, Inc. (WCBI), a bank holding company headquartered in Cape Coral,
Florida, with assets totaling approximately $181.0 million. Under the terms
of the merger agreement, each outstanding share of WCBI's common stock was
converted into .794 share of the Corporation's common stock with cash being
paid in lieu of fractional shares. A total of 1,197,128 shares of the
Corporation's common stock were issued. Results for prior years are restated
to reflect this acquisition as a pooling-of-interests. The following table
sets forth separate company financial information for the period immediately
prior to the merger and does not reflect any mergers which occurred subsequent
to March 31, 1997 (in thousands):

QUARTER ENDED MARCH 31, 1997 F.N.B. WCBI
------- ------
Net interest income $25,800 $1,779
Net income 6,653 135

On January 21, 1997, the Corporation completed its affiliation with
Southwest Banks, Inc. (Southwest), a bank holding company headquartered in
Naples, Florida, with assets totaling $528.8 million. Under the terms of the
merger agreement, each outstanding share of Southwest's common stock was
converted into .819 share of the Corporation's common stock with cash being
paid in lieu of fractional shares. A total of 2,851,907 shares of the
Corporation's common stock were issued. Results for prior years are restated
to reflect this acquisition as a pooling-of-interests. The following table
sets forth separate company financial information for the period immediately
prior to the merger and does not reflect any mergers which occurred subsequent
to December 31, 1996 (in thousands):

YEAR ENDED DECEMBER 31, 1996 F.N.B. SOUTHWEST
------- ---------
Net interest income $80,744 $17,953
Net income 18,433 805

SECURITIES

The amortized cost of securities and their approximate fair values are as
follows (in thousands):

Securities available for sale:
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1997 COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
U.S. Treasury and other U.S.
Government agencies and
corporations $ 306,602 $ 978 $ (260) $ 307,320
Mortgage-backed securities of
U.S. Government agencies 120,491 501 (146) 120,846
States of the U.S. and political
subdivisions 1,486 51 1,537
Other debt securities 5,031 107 5,138
--------- -------- ------- ---------
TOTAL DEBT SECURITIES 433,610 1,637 (406) 434,841
Equity securities 18,590 7,002 (14) 25,578
--------- -------- ------- ---------
$ 452,200 $ 8,639 $ (420) $ 460,419
========= ======== ======= =========

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1996 COST GAINS LOSSES VALUE
--------- --------- ---------- ---------
U.S. Treasury and other U.S.
Government agencies and
corporations $ 281,766 $ 462 $ (855) $ 281,373
Mortgage-backed securities of
U.S. Government agencies 45,170 644 (176) 45,638
Other debt securities 2,000 (16) 1,984
--------- ------- ------- ---------
TOTAL DEBT SECURITIES 328,936 1,106 (1,047) 328,995
Equity securities 15,419 3,942 (14) 19,347
--------- ------- ------- ---------
$ 344,355 $ 5,048 $(1,061) $ 348,342
========= ======= ======= =========

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1995 COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
U.S. Treasury and other U.S.
Government agencies and
corporations $ 258,644 $ 1,905 $ (144) $ 260,405
Mortgage-backed securities of
U.S. Government agencies 27,693 203 (130) 27,766
Other debt securities 2,000 (5) 1,995
--------- ------- ------- ---------
TOTAL DEBT SECURITIES 288,337 2,108 (279) 290,166
Equity securities 14,005 3,304 17,309
--------- ------- ------- ---------
$ 302,342 $ 5,412 $ (279) $ 307,475
========= ======= ======= =========

Securities held to maturity:

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1997 COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
U.S. Treasury and other U.S.
Government agencies and
corporations $ 22,990 $ 98 $ (20) $ 23,068
States of the U.S. and political
subdivisions 53,279 414 (41) 53,652
Mortgage-backed securities of
U.S. Government agencies 61,468 122 (228) 61,362
Other debt securities 853 6 (4) 855
--------- ------- ------- ---------
$ 138,590 $ 640 $ (293) $ 138,937
========= ======= ======= =========

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1996 COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
U.S. Treasury and other U.S.
Government agencies and
corporations $ 22,554 $ 81 $ (43) $ 22,592
States of the U.S. and political
subdivisions 59,075 193 (443) 58,825
Mortgage-backed securities of
U.S. Government agencies 109,986 142 (757) 109,371
Other debt securities 1,188 5 (5) 1,188
--------- ------- ------- ---------
$ 192,803 $ 421 $(1,248) $ 191,976
========= ======= ======= =========

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1995 COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
U.S. Treasury and other U.S.
Government agencies and
corporations $ 31,267 $ 251 $ (72) $ 31,446
States of the U.S. and political
subdivisions 51,493 272 (291) 51,474
Mortgage-backed securities of
U.S. Government agencies 110,726 488 (424) 110,790
Other debt securities 1,316 6 (6) 1,316
--------- ------- ------- ---------
$ 194,802 $ 1,017 $ (793) $ 195,026
========= ======= ======= =========

In December of 1995, the Corporation transferred $97.5 million of debt
securities from the held to maturity category to the available for sale
category in accordance with the implementation guidance issued on FAS No. 115.
At the time of transfer, the market value of the securities totaled $97.8
million, and the unrealized gain, net of taxes, of $118,000 was recorded as an
increase to stockholders' equity.

At December 31, 1997 and 1996, respectively, securities with a carrying
value of $154.5 million and $142.5 million were pledged to secure public
deposits, trust deposits and for other purposes as required by law.
Securities with a carrying value of $137.1 million and $69.4 million at
December 31, 1997 and 1996, respectively, were pledged as collateral for other
borrowings.

As of December 31, 1997, the Corporation had not entered into any off-
balance sheet derivative transactions.

As of December 31, 1997, the amortized cost and fair value of securities, by
contractual maturities, were as follows (in thousands):

HELD TO MATURITY AVAILABLE FOR SALE
------------------- --------------------
AMORTIZED FAIR AMORTIZED FAIR
December 31, 1997 COST VALUE COST VALUE
--------- --------- --------- ---------
Due in one year or less $ 17,324 $ 17,335 $ 82,456 $ 82,499
Due from one to five years 49,195 49,393 199,104 199,719
Due from five to ten years 9,770 9,987 27,152 27,251
Due after ten years 833 860 4,407 4,526
--------- --------- --------- ---------
77,122 77,575 313,119 313,995
Mortgage-backed securities of
U.S. Government Agencies 61,468 61,362 120,479 120,823
Equity securities 18,602 25,601
--------- --------- --------- ---------
$ 138,590 $ 138,937 $ 452,200 $ 460,419
========= ========= ========= =========

Maturities may differ from contractual terms because borrowers may have the
right to call or prepay obligations with or without penalties. Periodic
payments are received on mortgage-backed securities based on the payment
patterns of the underlying collateral.

Proceeds from sales of securities available for sale during 1997, 1996 and
1995 were $40.7 million, $43.7 million and $11.9 million, respectively. Gross
gains and gross losses were realized on those sales as follows (in thousands):

1997 1996 1995
------ ------ ------
Gross gains $1,365 $ 885 $ 535
Gross losses 113 97 134
------ ------ ------
$1,252 $ 788 $ 401
====== ====== ======
LOANS

Following is a summary of loans (in thousands):

December 31 1997 1996
---------- ----------
Real estate:
Residential $ 905,065 $ 753,948
Commercial 524,006 479,041
Construction 67,216 45,532
Installment loans to individuals 295,336 410,322
Commercial, financial and agricultural 263,902 216,913
Lease financing 59,852 21,538
Unearned income (20,473) (24,013)
---------- ----------
$2,094,904 $1,903,281
========== ==========

The commercial loan portfolio consists principally of loans to small- and
medium-sized businesses within the Corporation's primary market area of
western Pennsylvania, southwest Florida and eastern Ohio.

As of December 31, 1997, no concentrations of loans exceeding 10% of total
loans existed which were not disclosed as a separate category of loans.

Certain directors and executive officers of the Corporation and its
significant subsidiaries, as well as associates of such persons, were loan
customers during 1997. Such loans were made in the ordinary course of
business under normal credit terms and do not represent more than a normal
risk of collection. Following is a summary of the amount of loans in which
the aggregate of the loans to any such persons exceeded $60,000 during the
year (in thousands):

Total loans at December 31, 1996 $ 30,940
New loans 40,232
Repayments (41,255)
Other 2,641
---------
Total loans at December 31, 1997 $ 32,558
=========

Other represents the net change in loan balances resulting from changes in
related parties during the year.

NON-PERFORMING ASSETS

Following is a summary of non-performing assets (in thousands):

December 31 1997 1996
------- -------
Non-accrual loans $ 8,340 $10,279
Restructured loans 1,345 2,709
------- -------
TOTAL NON-PERFORMING LOANS 9,685 12,988
Other real estate owned 4,027 7,282
------- -------
TOTAL NON-PERFORMING ASSETS $13,712 $20,270
======= =======

For the years ended December 31, 1997, 1996 and 1995, income recognized on
non-accrual and restructured loans was $477,000, $798,000 and $685,000,
respectively. Income that would have been recognized during 1997, 1996 and
1995 on such loans if they were in accordance with their original terms was
$1.1 million, $1.5 million and $1.3 million, respectively. Loans past due 90
days or more were $3.2 million, $3.1 million and $4.0 million at December 31,
1997, 1996 and 1995, respectively.

Following is a summary of information pertaining to loans considered to be
impaired under FAS 114 (in thousands):

At of For the Year Ended December 31 1997 1996
------- -------
Impaired loans with an allocated allowance $ 1,316 $ 5,063
Impaired loans without an allocated allowance 5,605
------- -------
Total impaired loans $ 1,316 $10,668
======= =======
Allocated allowance on impaired loans 492 1,529
======= =======
Portion of impaired loans on non-accrual 950 5,125
======= =======
Average impaired loans 5,887 13,389
======= =======
Income recognized on impaired loans 99 822
======= =======

ALLOWANCE FOR LOAN LOSSES

Following is an analysis of changes in the allowance for loan losses (in
thousands):

Year Ended December 31 1997 1996 1995
-------- -------- --------
Balance at beginning of year $ 30,231 $ 26,673 $ 24,720

Reduction due to the sale of a subsidiary
and loans (3,828)
Addition due to acquisitions 1,167

Charge-offs (10,035) (7,841) (7,405)
Recoveries 1,271 1,626 2,184
-------- -------- --------
NET CHARGE-OFFS (8,764) (6,215) (5,221)
Provision for loan losses 11,100 9,773 7,174
-------- -------- --------
Balance at end of year $ 29,906 $ 30,231 $ 26,673
======== ======== ========

PREMISES AND EQUIPMENT

Following is a summary of premises and equipment (in thousands):

December 31 1997 1996
-------- --------
Land $ 14,754 $ 12,495
Premises 62,461 49,119
Equipment 41,964 35,690
-------- --------
119,179 97,304
Accumulated depreciation (45,716) (40,591)
-------- --------
$ 73,463 $ 56,713
======== ========

Depreciation expense was $6.5 million for 1997, $6.0 million for 1996 and
$5.2 million for 1995.

The Corporation has operating leases extending to 2044 for certain land,
office locations and equipment. Leases that expire are generally expected to
be renewed or replaced by other leases. Rental expense was $3.7 million for
1997, $2.8 million for 1996 and $2.8 million for 1995. Total minimum rental
commitments under such leases were $26.4 million at December 31, 1997.
Following is a summary of future minimum lease payments for years following
December 31, 1997 (in thousands):

1998. . . . . . . . . . . . . . . $ 1,991
1999. . . . . . . . . . . . . . . 1,408
2000. . . . . . . . . . . . . . . 1,050
2001. . . . . . . . . . . . . . . 906
2002. . . . . . . . . . . . . . . 824
Later years . . . . . . . . . . . 20,177

DEPOSITS

Following is a summary of deposits (in thousands):

December 31 1997 1996
---------- ----------
Non-interest bearing $ 311,885 $ 278,358
Savings and NOW 1,068,156 960,186
Certificates of deposit and
other time deposits 1,087,016 1,002,028
---------- ----------
$2,467,057 $2,240,572
========== ==========

Following is a summary of the scheduled maturities of certificates of
deposits and other time deposits for each of the five years following
December 31, 1997 (in thousands):

1998. . . . . . . . . . . . . . $722,944
1999. . . . . . . . . . . . . . 234,789
2000. . . . . . . . . . . . . . 79,496
2001. . . . . . . . . . . . . . 29,780
2002. . . . . . . . . . . . . . 19,691
Later years . . . . . . . . . . 316

Time deposits of $100,000 or more were $213.4 million and $186.6 million at
December 31, 1997 and 1996, respectively. Following is a summary of these
time deposits by remaining maturity at December 31, 1997 (in thousands):

CERTIFICATES OTHER TIME
December 31, 1997 OF DEPOSIT DEPOSITS TOTAL
------------ ---------- --------
Three months or less $ 67,807 $ 4,410 $ 72,217
Three to six months 33,633 3,167 36,800
Six to twelve months 40,625 3,489 44,114
Over twelve months 42,497 17,791 60,288
-------- ------- --------
$184,562 $28,857 $213,419
======== ======= ========
SHORT-TERM BORROWINGS

Following is a summary of short-term borrowings (in thousands):

December 31 1997 1996
-------- --------
Securities sold under repurchase agreements $ 59,136 $ 40,213
Federal funds purchased 16,862 21,052
Other short-term borrowings 4,257 1,506
Subordinated notes 46,931 55,201
-------- --------
$127,186 $117,972
======== ========

Credit facilities amounting to $36.5 million at December 31, 1997 were
maintained with various banks. The majority of these facilities have rates
which are at or below prime rate. The facilities and their terms are
periodically reviewed by the banks and are generally subject to withdrawal at
their discretion. The amount of these credit facilities which were unused
amounted to $33.5 million at December 31, 1997.

In addition, certain subsidiaries have lines of credit with the Federal Home
Loan Bank, which if used would require collateralization. These lines totaled
$133.8 million, of which no amounts were used as of December 31, 1997.

LONG-TERM DEBT

Following is a summary of long-term debt (in thousands):

December 31 1997 1996
-------- --------
Real estate mortgages payable $ 147
Federal Home Loan Bank advances $ 28,386 24,042
Subordinated notes 43,860 33,990
-------- --------
$ 72,246 $ 58,179
======== ========

The Federal Home Loan Bank advances are secured by residential real estate
loans and Federal Home Loan Bank Stock and are scheduled to mature in various
amounts annually from 1998 through 2002. Interest rates paid on these
advances range from 5.66% to 6.32% in 1997 and 5.10% to 5.38% in 1996.

Subordinated notes are unsecured and subordinated to other indebtedness of
the Corporation. The subordinated notes are scheduled to mature in various
amounts annually from 1998 through the year 2007. At December 31, 1997, $33.8
million of long-term subordinated debt is redeemable prior to maturity at a
discount equal to three months of interest. The issuer may require the holder
to give 30 days prior written notice. No sinking fund is required and none
has been established to retire the debt. The weighted average interest rate
on long-term subordinated debt was 7.58% at December 31, 1997 and 7.69% at
December 31, 1996.

Scheduled annual maturities for all of the long-term debt for each of the
five years following December 31, 1997 are as follows (in thousands):

1998 . . . . . . . . . . . . . . . $22,239
1999 . . . . . . . . . . . . . . . 19,487
2000 . . . . . . . . . . . . . . . 2,727
2001 . . . . . . . . . . . . . . . 6,159
2002 . . . . . . . . . . . . . . . 17,185
Later years. . . . . . . . . . . . 4,449

COMMITMENTS AND CREDIT RISK

The Corporation has commitments to extend credit and standby letters of
credit which involve certain elements of credit risk in excess of the amount
stated in the consolidated balance sheet. The Corporation's exposure to
credit loss in the event of non-performance by the customer is represented by
the contractual amount of those instruments. Consistent credit policies are
used by the Corporation for both on- and off-balance sheet items.

Following is a summary of off-balance sheet credit risk information (in
thousands):

December 31 1997 1996
-------- --------
Commitments to extend credit $369,000 $305,623
Standby letters of credit 21,059 17,012

At December 31, 1997, funding of approximately 80% of the commitments to
extend credit is dependent on the financial condition of the customer. The
Corporation has the ability to withdraw such commitments at its discretion.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. Based on management's credit
evaluation of the customer, collateral may be deemed necessary. Collateral
requirements vary and may include accounts receivable, inventory, property,
plant and equipment and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the
Corporation which may require payment at a future date. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loans to customers.

STOCKHOLDERS' EQUITY

Series A - Cumulative Convertible Preferred Stock (Series A Preferred) was
issued in 1985 for the purpose of acquiring Reeves Bank. Holders of Series A
Preferred are entitled to 5.7 votes for each share held. The holders do not
have cumulative voting rights in the election of directors. Dividends are
cumulative from the date of issue and are payable at $.42 per share each
quarter. Series A Preferred is convertible at the option of the holder into
shares of the Corporation's common stock having a market value of $25.00 at
time of conversion. The Corporation has the right to require the conversion
of the balance of all outstanding shares at the conversion rate. During 1997,
2,270 shares of Series A Preferred were converted to 1,903 shares of common
stock. At December 31, 1997, 15,182 shares of common stock were reserved by
the Corporation for the conversion of the remaining 21,318 outstanding shares.

Series B - Cumulative Convertible Preferred Stock (Series B Preferred) was
issued during 1992 for the purpose of raising capital for the Erie
acquisition. Holders of Series B Preferred have no voting rights. Dividends
are cumulative from the date of issue and are payable at $.46875 per share
each quarter. Series B Preferred has a stated value of $25.00 per share and
is convertible at the option of the holder at any time into shares of the
Corporation's common stock at a price of $11.08 per share. The Corporation
has the right to require the redemption of the balance of all outstanding
shares at the conversion rate. During 1997, 62,761 shares of Series B
Preferred were converted to 131,197 shares of common stock. At December 31,
1997, 571,641 shares of common stock were reserved by the Corporation for the
conversion of the remaining 266,182 outstanding shares.

STOCK INCENTIVE PLANS

The Corporation has available up to 959,660 shares of common stock to be
issued under the restricted stock and incentive bonus and restricted stock
bonus plans to key employees of the Corporation. All shares of stock awarded
under these plans vest in equal installments over a five year period on each
anniversary of the date of grant. At December 31, 1997, 3,811 shares out of a
total of 54,740 shares were vested under these plans. The weighted average
grant date fair value of the restricted shares issued through December 31,
1997 was $21.55.

The Corporation has available up to 2,360,141 shares of common stock to be
issued under both incentive and non-qualified stock option plans to key
employees of the Corporation. The options vest in equal installments over
periods ranging from three to ten years. The options are granted at a price
equal to the fair market value at the date of the grant and are exercisable
within ten years from the date of the grant. Because the exercise price of
the Corporation's stock options equals the market price of the underlying
stock on the date of grant, no compensation expense is recognized.

Pro forma information regarding net income and earnings per share using the
Black-Scholes option pricing model is as follows (in thousands, except per
share data):

Year Ended December 31 1997 1996 1995
-------- -------- --------
Pro forma net income before
extraordinary items $ 27,060 $ 21,669 $ 24,240
Extraordinary items, net of tax 8,809
-------- -------- --------
Pro forma net income $ 35,869 $ 21,669 $ 24,240
======== ======== ========
Pro forma earnings per share:
Basic:
Before extraordinary items $1.53 $1.21 $1.36
Extraordinary items, net of tax .50
----- ----- -----
Net income $2.03 $1.21 $1.36
===== ===== =====
Diluted:
Before extraordinary items $1.46 $1.18 $1.32
Extraordinary items, net of tax .47
----- ----- -----
Net income $1.93 $1.18 $1.32
===== ===== =====

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period of five years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferrable. In addition, option valuation models require the input
of highly subjective assumptions including the expected stock price
volatility. Because the Corporation's employee stock options have
characteristics significantly different from those of traded options, and
changes in the subjective input assumptions can materially affect the fair
value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its
employee stock options. The following input assumptions were utilized:

1997 1996 1995
------ ------ ------
Risk-free interest rate 6.53% 5.63% 7.65%
Dividend yield 1.66% 3.00% 3.00%
Volatility factor of the expected market
price of the Corporation's common stock .22% .19% .19%
Weighted average expected life of the
options (years) 5.00 5.00 5.00

Activity in the Option Plan during the past three years was as follows:

WEIGHTED
AVERAGE
PRICE
PER
1997 SHARE 1996 1995
--------- ------- -------- -------
Outstanding, beginning of year 1,161,147 $11.38 973,455 874,374
Granted during the year 147,971 23.24 206,607 136,826
Exercised during the year (61,179) 8.99 (12,315) (22,212)
Forfeited during the year (48,658) 16.73 (6,600) (15,533)
--------- --------- -------
Ending balance 1,199,281 12.20 1,161,147 973,455
========= ========= =======

At December 31, 1997, options for 706,218 of common stock were exercisable
at prices ranging from $5.71 to $21.54 per share. The weighted average
remaining contractual life of outstanding options was 6 years at December 31,
1997.

The Corporation has granted warrants to purchase one share of common stock
(at an exercise price of $6.24 or $10.39 per share). Such warrants are
exercisable and will expire on June 19, 2001 or December 17, 2003. The
Corporation has reserved 152,856 shares of common stock for issuance in
connection with these warrants.

RETIREMENT PLANS

Certain of the Corporation's subsidiaries have defined benefit retirement
plans covering substantially all of their employees. The expense associated
with these plans was $1.6 million in 1997, $1.6 million in 1996 and $1.3
million in 1995.

The defined benefit plans provide benefits based on years of credited
service and compensation (as defined), subject to ERISA limitations.
Contributions to the tax-qualified plans are made in amounts not less than the
minimum-required contribution under ERISA nor more than the maximum-deductible
contribution under the Internal Revenue Code.

Following is the estimated funded status (in thousands):

December 31 1997 1996
----------------------------- ------------------------------
PLANS WHOSE PLANS WHOSE PLANS WHOSE PLANS WHOSE
ASSETS EXCEED ACCUMULATED ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS BENEFITS EXCEED ASSETS
----------------------------- ------------------------------
Actuarial present value of:

Vested benefit obligation $ 16,232 $ 2,910 $ 13,841 $ 2,770
======== ======== ======== ========
Accumulated benefit obligation $ 16,672 $ 4,112 $ 14,150 $ 3,635
======== ======== ======== ========

Projected benefit obligation for services
rendered to date $(20,625) $ (4,776) $(17,472) $ (4,160)
Plan assets at fair value, primarily U.S.
Government securities and common stocks 25,229 20,238
-------- -------- -------- --------
Plan assets in excess of or (less than)
projected benefit obligation 4,604 (4,776) 2,766 (4,160)
Unrecognized net (gain) loss (3,274) (50) (1,832) (63)
Unrecognized net obligation 47 52
Unrecognized prior service cost 129 1,642 146 1,911
-------- -------- -------- --------
$ 1,506 $ (3.194) $ 1,132 $ (2,312)
======== ======== ======== ========

The pension expense for the defined benefit plans included the following
components (in thousands):

Year Ended December 31 1997 1996 1995
------- ------- -------
Service costs - benefits earned during the period $ 1,196 $ 1,244 $ 854
Interest cost on projected benefit obligation 1,726 1,525 1,375
Actual return on plan assets (4,614) (2,026) (3,014)
Net amortization 3,304 894 2,115
------- ------- -------
Net pension expense $ 1,612 $ 1,637 $ 1,330
======= ======= =======

Assumptions as of December 31 1997 1996 1995
---- ---- ----
Weighted average discount rate 7.0% 7.5% 7.0%
Rates of increase in compensation levels 4.0% 4.0% 4.0%
Expected long-term rate of return on assets 8.0% 8.0% 8.0%

At December 31, 1997 and 1996, respectively, plan assets include $1.6
million and $965,000 the Corporation's common stock. At December 31, 1996,
plan assets also include $193,000 of the Corporation's subordinated debt.

Certain subsidiaries of the Corporation participate in a qualified 401(k)
defined contribution plan for the full-time employees of the subsidiary. A
percentage of employees' contributions to the plan are matched by the
Corporation. The Corporation's contribution expense amounted to $570,000 in
1997, $536,000 in 1996 and $504,000 in 1995.

Certain subsidiaries of the Corporation participate in a Salary Savings ESOP
Plan, under which eligible employees may contribute a percentage of their
salary. The Corporation matches 50 percent of an eligible employee's
contribution on the first 6 percent that the employee defers, and may make a
discretionary contribution payable either in cash or the Corporation's common
stock based upon the Corporation's profitability. Employees are generally
eligible to participate upon completing one year of service and having
attained age 21. Employer contributions become 20 percent vested when an
employee has completed two years of service, and vest at a rate of 20 percent
per year thereafter. The Corporation recognized expense of $468,000 in 1997,
$384,000 in 1996 and $298,000 in 1995 related to the Salary Savings ESOP Plan.

POSTRETIREMENT PLANS

In addition to the Corporation's retirement plans, the Corporation has
various unfunded postretirement plans which provide medical benefits and life
insurance benefits to its retirees. The postretirement health care plans
vary, the most stringent of which are contributory and contain other cost-
sharing features such as deductibles and co-insurance. The life insurance
plans are noncontributory.

The amounts recognized in the Corporation's consolidated financial
statements are as follows (in thousands):

Year Ended December 31 1997 1996
---- ----
Accumulated postretirement benefit obligation:
Current retirees $ 77 $ 79
Fully eligible actives 28 49
Other actives 674 688
Total Accumulated Postretirement ---- ----
Benefit Obligation 779 816
Unrecognized net transition obligation (563) (612)
Unrecognized net gain 311 233
Unrecognized prior service cost (7) (7)
---- ----
Accrued postretirement benefit liability $520 $430
==== ====

Net periodic postretirement benefit cost included the following components
(in thousands):

Year Ended December 31 1997 1996 1995
---- ---- ----
Service cost $ 60 $ 66 $ 60
Interest cost 56 54 68
Amortization of transition obligation 25 30 38
---- ---- ----
Net periodic postretirement benefit cost $141 $150 $166
==== ==== ====

A 6.0% annual rate of increase in the per capita costs of covered health
care benefits is assumed for 1998, gradually decreasing to 5.25% by the year
2001. Increasing the assumed health care cost trend rates by one percentage
point in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1997 by $73,000 and increase the aggregate of
the service and interest cost component of net periodic postretirement benefit
cost for 1997 by $14,000. A discount rate of 7.0% was used to determine the
accumulated postretirement benefit obligation.

RECAPITALIZATION OF SAVINGS ASSOCIATION INSURANCE FUND

On September 30, 1996, the Deposit Insurance Funds Act of 1996 was signed
into law and included a provision to recapitalize the Savings Association
Insurance Fund (SAIF). The legislation required a one-time assessment on all
deposits insured by the SAIF, including those held by chartered commercial
banks as a result of previous acquisitions. The one-time assessment paid by
the Corporation totaled $3.2 million, or $.19 per share. The legislation also
included provisions that resulted in a reduction in annual deposit insurance
costs.

INCOME TAXES

Income tax expense consists of the following (in thousands):

Year Ended December 31 1997 1996 1995
-------- -------- --------
Current income taxes:
Federal taxes $ 13,859 $ 12,685 $ 12,106
State taxes 372 461 639
-------- -------- --------
14,231 13,146 12,745
Deferred income taxes:
Federal taxes (1,460) (2,195) (623)
------- ------- -------
$12,771 $10,951 $12,122
======= ======= =======

The tax effects of temporary differences that give rise to deferred tax
assets and liabilities are presented below (in thousands):

December 31 1997 1996
Deferred tax assets: ------- -------
Allowance for loan losses $10,292 $ 9,239
Deferred compensation 1,957 1,374
Deferred benefits 913 634
Loan fees 661 202
Other 471 1,112
------- -------
TOTAL GROSS DEFERRED TAX ASSETS 14,294 12,561
------- -------
Deferred tax liabilities:
Depreciation (79) (780)
Unrealized gains on securities available
for sale (2,881) (2,110)
Leasing (4,997) (1,915)
Other (1,347) (812)
------- -------
TOTAL GROSS DEFERRED TAX LIABILITIES (9,304) (5,617)
------- -------
NET DEFERRED TAX ASSETS $ 4,990 $ 6,944
======= =======

Following is a reconciliation between tax expense using federal statutory
tax and actual effective tax:

Year Ended December 31 1997 1996 1995
---- ---- ----
Federal statutory tax 35.0% 35.0% 35.0%
Effect of nontaxable interest and
dividend income (3.6) (4.2) (3.8)
State taxes .6 .6 1.1
Goodwill .3 .3 .4
Merger related costs .6 2.2
Other items (1.1) (.5) .6
---- ---- ----
Actual effective taxes 31.8% 33.4% 33.3%
==== ==== ====

EARNINGS PER SHARE

The following tables set forth the computation of basic and diluted earnings
per share (in thousands, except per share data):

Year Ended December 31 1997 1996 1995
------- ------- -------
BASIC
Income before extraordinary items $27,391 $21,867 $24,310
Less: Preferred stock dividends declared (588) (766) (849)
Income before extraordinary items ------- ------- -------
applicable to common stock 26,803 21,101 23,461
Extraordinary items, net of tax 8,809
------- ------- -------
Net income applicable to basic earnings
per share $35,612 $21,101 $23,461
======= ======= =======

Average common shares outstanding 17,340,823 17,270,127 17,140,229
========== ========== ==========

Income before extraordinary items $1.54 $1.22 $1.37
Extraordinary items, net of tax .51
----- ----- -----
Earnings per share $2.05 $1.22 $1.37
===== ===== =====

DILUTED
Income before extraordinary items $27,391 $21,867 $24,310
Extraordinary items, net of tax 8,809
------- ------- -------
Net income applicable to diluted earnings
per share $36,200 $21,867 $24,310
======= ======= =======

Average common shares outstanding 17,340,823 17,270,127 17,140,229
Convertible preferred stock 662,685 947,220 1,054,654
Net effect of dilutive stock options
based on the treasury stock method
using the average market price 566,930 213,196 154,988
---------- ---------- ----------
18,570,438 18,430,543 18,349,871
========== ========== ==========

Income before extraordinary items $1.48 $1.19 $1.32
Extraordinary items, net of tax .47
----- ----- -----
Earnings per share $1.95 $1.19 $1.32
===== ===== =====

CASH FLOW INFORMATION

Following is a summary of supplemental cash flow information (in thousands):

Year Ended December 31 1997 1996 1995
-------- -------- --------
Cash paid during year for:
Interest $90,520 $84,115 $79,639
Income taxes 11,111 11,160 12,453

Non-cash Investing and Financing Activities:
Acquisition of real estate in
settlement of loans $ 3,336 $ 6,720 $ 3,757
Loans granted in the sale of
other real estate 1,557 407 641
Transfers and reclassifications
of investment securities to
securities available for sale 97,483

REGULATORY MATTERS

Quantitative measures established by regulators to ensure capital adequacy
require the Corporation and its banking subsidiaries to maintain minimum
amounts and ratios of total and tier 1 capital (as defined in the regulations)
to risk-weighted assets (as defined) and of tier 1 capital to average assets
(as defined). Management believes, as of December 31, 1997, that the
Corporation and each of its banking subsidiaries meet all capital adequacy
requirements to which they are subject.

As of December 31, 1997, the Corporation and each of its banking
subsidiaries have been categorized by the various regulators as "well
capitalized" under the regulatory framework for prompt corrective action.

Following are the capital ratios as of December 31, 1997 for the Corporation
and its significant subsidiaries, First National Bank of Pennsylvania and
First National Bank of Naples (dollars in thousands):

TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS
---------------- ----------------- -----------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
-------- ----- -------- ----- -------- -----
F.N.B. CORPORATION:
Total Capital $280,660 14.0% $160,010 8.0% $200,013 10.0%
(to risk-weighted
assets)
Tier 1 Capital 245,777 12.3 80,005 4.0 120,008 6.0
(to risk-weighted
assets)
Tier 1 Capital 245,777 8.6 114,425 4.0 143,031 5.0
(to average assets)

FIRST NATIONAL BANK OF
PENNSYLVANIA:
Total Capital $ 88,384 11.5% $ 61,709 8.0% $ 77,136 10.0%
(to risk-weighted
assets)
Tier 1 Capital 78,714 10.2 30,854 4.0 46,282 6.0
(to risk-weighted
assets)
Tier 1 Capital 78,714 7.1 44,089 4.0 55,111 5.0
(to average assets)

FIRST NATIONAL BANK
OF NAPLES:
Total Capital $ 46,770 11.7% $ 31,886 8.0% $ 39,858 10.0%
(to risk-weighted
assets)
Tier 1 Capital 42,208 10.6 15,943 4.0 23,915 6.0
(to risk-weighted
assets)
Tier 1 Capital 42,208 8.3 20,372 4.0 25,465 5.0
(to average assets)

The Corporation and its banking subsidiaries are subject to various
regulatory capital requirements administered by the 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 Corporation's financial
statements. Under capital adequacy guidelines and the regulatory framework
for prompt corrective action, the Corporation and its banking subsidiaries
must meet specific capital guidelines that involve quantitative measures of
assets, liabilities and certain off-balance sheet items as calculated under
regulatory accounting practices. The Corporation's and banking subsidiaries'
capital amounts and classifications are also subject to qualitative judgments
by the regulators about components, risk weightings and other factors.

The Corporation's banking subsidiaries were required to maintain aggregate
reserves amounting to $12.6 million at December 31, 1997 to satisfy federal
regulatory requirements. The Corporation also maintains deposits for various
services such as check clearing.

Certain limitations exist under applicable law and regulations by regulatory
agencies regarding dividend payments to a parent by its subsidiaries. As of
December 31, 1997, the subsidiaries had $40.5 million of retained earnings
available for distribution as dividends without prior regulatory approval.

Under current Federal Reserve regulations, the Corporation's banking
subsidiaries are limited in the amount they may lend to non-bank affiliates,
including the Corporation. Such loans must be secured by specified
collateral. In addition, any such loans to a single non-bank affiliate may
not exceed 10% of any banking subsidiary's capital and surplus and the
aggregate of loans to all such affiliates may not exceed 20%. The maximum
amount that may be borrowed by the parent company under these provisions
approximated $44.0 million at December 31, 1997.

PARENT COMPANY FINANCIAL STATEMENTS

Below is condensed financial information of F.N.B. Corporation (parent
company only). In this information, the parent's investments in subsidiaries
are stated at cost plus equity in undistributed earnings of subsidiaries since
acquisition. This information should be read in conjunction with the
supplemental consolidated financial statements.

BALANCE SHEET (IN THOUSANDS):

December 31 1997 1996
-------- --------
ASSETS
Cash $ 6 $ 19
Short-term investments 2,095 4,457
Advances to subsidiaries 12,122 81,099
Other assets 5,414 5,162
Securities available for sale 7,191
Investment in bank subsidiaries 230,020 206,412
Investment in non-bank subsidiaries 110,940 14,715
-------- --------
$360,597 $319,055
======== ========

LIABILITIES
Other liabilities $ 6,555 $ 4,215
Short-term borrowings 49,931 55,201
Long-term debt 43,860 33,990
-------- --------
TOTAL LIABILITIES 100,346 93,406
-------- --------
STOCKHOLDERS' EQUITY 260,251 225,649
-------- --------
TOTAL $360,597 $319,055
======== ========

Subordinated notes, included within short-term borrowings and long-term debt
are unsecured and subordinated to other indebtedness of the Corporation. At
December 31, 1997, $80.7 million principal amount of such notes was redeemable
prior to maturity by the holder at a discount equal to one month of interest
on short-term notes or three months of interest on long-term notes. The
Corporation has the right to require the holder to give 30 days prior written
notice. The weighted average interest rate was 6.33% at December 31, 1997 and
6.25% at December 31, 1996. The subordinated notes are scheduled to mature in
various amounts annually from 1998 through the year 2007.

Following is a summary of the combined aggregate scheduled annual maturities
of subordinated notes for each year following December 31, 1997 (in
thousands):

1998. . . . . . . . . . . $56,100
1999. . . . . . . . . . . 14,171
2000. . . . . . . . . . . 2,727
2001. . . . . . . . . . . 1,159
2002. . . . . . . . . . . 12,185
Later years . . . . . . . 4,449

INCOME STATEMENT (IN THOUSANDS)

Year Ended December 31 1997 1996 1995
------- ------- -------
INCOME
Dividend income from subsidiaries:
Bank $31,373 $11,778 $ 8,942
Non-bank 4,660 2,501 3,706
------- ------- -------
36,033 14,279 12,648
Gain on sale of securities 1,296 850 512
Interest income 5,423 5,394 4,924
Income from equity investment 621
Other income 95 254 206
------- ------- -------
TOTAL INCOME 43,468 20,777 18,290
------- ------- -------
EXPENSES
Interest expense 6,280 5,920 5,972
Service fees 970 617 609
Other expenses 3,248 2,076 1,297
------- ------- -------
TOTAL EXPENSES 10,498 8,613 7,878
------- ------- -------
INCOME BEFORE TAXES AND EQUITY IN
UNDISTRIBUTED INCOME OF SUBSIDIARIES 32,970 12,164 10,412
Income tax benefit 1,156 618 700
------- ------- -------
34,126 12,782 11,112
------- ------- -------
Equity in undistributed income (loss)
of subsidiaries:
Bank (1,035) 8,052 12,199
Non-bank (2,118) 1,033 999
------- ------- -------
(3,153) 9,085 13,198
------- ------- -------

INCOME BEFORE EXTRAORDINARY ITEM 30,973 21,867 24,310
Gain on sale of subsidiary, net of tax 5,227
------- ------- -------
NET INCOME $36,200 $21,867 $24,310
======= ======= =======

STATEMENT OF CASH FLOWS (IN THOUSANDS)

Year Ended December 31 1997 1996 1995
-------- -------- --------
OPERATING ACTIVITIES
Net income $ 36,200 $ 21,867 $ 24,310
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on sale of securities (1,296) (850) (512)
Undistributed earnings of subsidiaries 3,153 (9,085) (13,198)
Extraordinary gain on sale of
subsidiaries (5,227)
Other, net (383) (2,030) (882)
-------- -------- --------
Net cash flows from operating activities 32,447 9,902 9,718

INVESTING ACTIVITIES
Purchase of securities (1,704) (235) (383)
Proceeds from sale of securities 1,828 1,244 922
Advances from (to) subsidiaries (2,735) (4,250) (6,107)
Cash paid upon acquisition of subsidiaries (13,586)
Investment in subsidiaries (11,700) 356 737
-------- -------- --------
Net cash flows from investing activities (27,897) (2,885) (4,831)

FINANCING ACTIVITIES
Net increase in due to non-bank subsidiary 2,950
Net decrease in short-term borrowings (5,270) 4,839 (1,723)
Decrease in long-term debt (6,680) (12,303) (5,334)
Increase in long-term debt 16,550 8,899 6,274
Net acquisition of treasury stock (2,535) (1,560) 242
Cash dividends paid (9,578) (6,889) (4,343)
-------- -------- --------
Net cash flows from financing activities (4,563) (7,014) (4,884)
-------- -------- --------
NET INCREASE IN CASH (13) 3 3
Cash at beginning of year 19 16 13
-------- -------- --------
CASH AT END OF YEAR $ 6 $ 19 $ 16
======== ======== ========

CASH PAID
Interest $ 6,181 $ 6,251 $ 5,009

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each financial instrument:

Cash and Due from Banks:
For these short-term instruments, the carrying amount is a reasonable
estimate of fair value.

Securities:
For both securities available for sale and securities held to maturity, fair
value equals quoted market price, if available. If a quoted market price is
not available, fair value is estimated using quoted market prices for similar
securities.

Loans:
The fair value of fixed rate loans is estimated by discounting the future
cash flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings and for the same remaining maturities.
The fair value of adjustable rate loans approximate the carrying amount.

Deposits:
The fair value of demand deposits, savings accounts and certain money market
deposits is the amount payable on demand at the reporting date. The fair
value of fixed-maturity deposits is estimated by discounting future cash flows
using rates currently offered for deposits of similar remaining maturities.

Short-Term Borrowings:
The carrying amounts for short-term borrowings approximate fair value for
amounts that mature in 90 days or less. The fair value of subordinated notes
is estimated by discounting future cash flows using rates currently offered.

Long-Term Debt:
The fair value of long-term debt is estimated by discounting future cash
flows based on the market prices for the same or similar issues or on the
current rates offered to the Corporation for debt of the same remaining
maturities.

The estimated fair values of the Corporation's financial instruments are as
follows (in thousands):

1997 1996
--------------------- ---------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
---------- ---------- ---------- ----------
FINANCIAL ASSETS
Cash and short-term investments $ 148,206 $ 148,206 $ 143,043 $ 143,043
Securities available for sale 460,419 460,419 348,342 348,342
Securities held to maturity 138,590 138,937 192,803 191,976
Net loans, including loans held
for sale 2,071,534 2,083,150 1,883,913 1,910,578

FINANCIAL LIABILITIES
Deposits $2,467,057 $2,472,139 $2,240,572 $2,247,067
Short-term borrowings 127,186 127,186 117,972 117,972
Long-term debt 72,246 73,837 58,179 58,901

F.N.B. CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL SELECTED FINANCIAL DATA (DOLLARS IN THOUSANDS, EXCEPT PER SHARE
DATA)

The mergers between F.N.B. Corporation and Southwest Banks, Inc., West Coast
Bancorp, Inc., West Coast Bank, Seminole Bank and Citizens Holding Corporation
and subsidiaries were completed on January 21, 1997, April 18, 1997, January
20, 1998, May 29, 1998 and August 31, 1998, respectively, and accounted for as
poolings-of-interests. Accordingly, all financial information has been
restated as if the companies were combined for all periods presented.

YEAR ENDED DECEMBER 31 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------

Total interest income $ 216,278 $ 202,380 $ 190,743 $ 164,346 $ 157,795
Total interest expense 92,664 84,736 81,660 65,043 67,798
Net interest income 123,614 117,644 109,083 99,303 89,997
Provision for loan losses 11,100 9,773 7,174 9,369 10,342
Total non-interest income 25,978 22,822 21,678 19,545 20,881
Total non-interest expenses 98,330 97,875 87,155 82,550 77,668
Net income before
extraordinary items 27,391 21,867 24,310 17,929 14,697
Extraordinary items, net
of tax 8,809
Net income 36,200 21,867 24,310 17,929 14,697
Recurring net income * 31,956 26,010 24,310 17,929 14,697

AT YEAR-END
Total assets $2,967,482 $2,680,096 $2,487,518 $2,318,405 $2,195,853
Net loans 2,064,998 1,873,050 1,685,317 1,589,684 1,345,970
Deposits 2,467,057 2,240,572 2,116,099 1,952,496 1,903,953
Long-term debt 72,246 58,179 50,784 56,614 32,528
Preferred stock 2,875 3,525 4,516 4,563 4,582
Total stockholders'
equity 260,251 225,649 212,514 187,516 160,673

PER COMMON SHARE
Earnings
Basic $ 2.05 $ 1.22 $ 1.37 $ 1.02 $ .90
Diluted 1.95 1.19 1.32 1.01 .89
Recurring earnings *
Basic 1.81 1.46 1.37 1.02 .90
Diluted 1.72 1.41 1.32 1.01 .89
Cash dividends .60 .57 .31 .23 .22
Book value 14.14 13.21 11.86 10.44 9.61

RATIOS
Return on average assets 1.32% .85% 1.01% .80% .69%
Return on average assets,
based on recurring net
income * 1.16 1.02 1.01 .80 .69
Return on average equity 15.21 9.91 12.13 10.03 9.57
Return on average equity,
based on recurring net
income * 13.43 11.79 12.13 10.03 9.57
Dividend payout ratio 25.24 29.02 14.87 15.01 17.75
Average equity to
average assets 8.66 8.62 8.35 7.95 7.21

* Recurring net income excludes extraordinary gains on the sale of a
subsidiary and branches of $8.8 million and merger related and other non-
recurring costs of $4.6 million in 1997 and a one-time assessment of $2.1
million legislated by Congress to recapitalize the Savings Association
Insurance Fund and merger related and other non-recurring costs of $2.1
million in 1996, all on an after-tax basis. Such presentation is provided
in order to eliminate all items deemed by management to be of a non-recurring
nature.

F.N.B. CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL QUARTERLY EARNINGS SUMMARY (DOLLARS IN THOUSANDS, EXCEPT PER
SHARE DATA)

The mergers between F.N.B. Corporation and Southwest Banks, Inc., West Coast
Bancorp, Inc., West Coast Bank, Seminole Bank and Citizens Holding Corporation
and subsidiaries were completed on January 21, 1997, April 18, 1997, January
20, 1998, May 29, 1998 and August 31, 1998, respectively, and accounted for as
poolings-of-interests. Accordingly, the unaudited quarterly financial data
has been restated as if the companies were combined for all periods presented.

QUARTER ENDED 1997 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
------- ------- -------- -------
Total interest income $52,810 $54,154 $53,384 $55,930
Total interest expense 22,219 22,898 22,957 24,590
Net interest income 30,591 31,256 30,427 31,340
Provision for loan losses 2,342 3,602 2,464 2,692
Total non-interest income 6,564 5,769 6,743 6,902
Total non-interest expenses 23,574 28,144 21,849 24,763
Net income before extraordinary items 7,549 3,637 8,832 7,373
Extraordinary items, net of tax 5,227 3,582
Net income 7,549 8,864 8,832 10,955
Recurring net income * 7,549 7,899 8,832 7,676

PER COMMON SHARE
Earnings
Basic $.43 $.51 $.50 $.61
Diluted .41 .48 .48 .58
Recurring earnings *
Basic .43 .45 .50 .43
Diluted .41 .43 .48 .40
Cash dividends .15 .15 .15 .15

QUARTER ENDED 1996 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
------- ------- -------- -------
Total interest income $49,819 $50,169 $50,487 $51,905
Total interest expense 21,110 20,730 21,078 21,818
Net interest income 28,709 29,439 29,409 30,087
Provision for loan losses 1,765 1,992 1,735 4,281
Total non-interest income 5,722 5,583 6,031 5,486
Total non-interest expenses 22,817 22,847 27,094 25,117
Net income 6,734 6,866 4,607 3,660
Recurring net income ** 6,734 6,866 6,810 5,600

PER COMMON SHARE
Earnings
Basic $.38 $.38 $.26 $.20
Diluted .37 .37 .25 .20
Recurring earnings **
Basic .38 .38 .39 .31
Diluted .37 .37 .37 .30
Cash dividends .14 .14 .14 .15

* Non-recurring items include merger related costs and other non-recurring
costs of approximately $4.2 million recognized during the second quarter and
merger related costs of approximately $357,000 recognized during the fourth
quarter, each on an after-tax basis.

** Non-recurring items include a one-time third quarter assessment of $2.1
million legislated by Congress to recapitalize the Savings Association
Insurance Fund and merger related costs of approximately $2.1 million
recognized during the fourth quarter, each on an after-tax basis.

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

This financial review summarizes the combined financial condition and
results of operations giving retroactive effect to the merger of Citizens
Holding Corporation and subsidiaries (Citizens) with and into F.N.B.
Corporation (the Corporation), and is intended to be read in conjunction with
the Supplemental Consolidated Financial Statements and accompanying Notes to
those statements. The merger of the Corporation and Citizens was consummated
on August 31, 1998, and has been accounted for on a pooling-of-interests
basis. The Corporation issued 1,012,325 shares of common stock in exchange
for all of the outstanding common stock of Citizens. This financial review is
presented as if the merger had been consummated for all periods presented.

RESULTS OF OPERATIONS

Net income increased 65.5% to $36.2 million in 1997 from $21.9 million in
1996. Basic earnings per share was $2.05 and $1.22 for 1997 and 1996, while
diluted earnings per share were $1.95 and $1.19, respectively, for those same
periods. The results for 1997 include $8.8 million in gains relating to the
sales of a subsidiary and branches and merger related and other non-recurring
costs of $4.6 million, both net of tax. The results for 1996 include a
special one-time assessment to recapitalize the Savings Association Insurance
Fund (SAIF) of $2.1 million and merger related costs of $2.1 million, both net
of tax. Excluding these items, net income would have been $32.0 million in
1997 versus $26.0 million in 1996 and basic and diluted earnings per share
would have been $1.81 and $1.72 in 1997 and $1.46 and $1.41 in 1996,
respectively. Net interest income increased by 5.1% as net average interest
earning assets increased by $27.4 million. These factors are further detailed
in the discussion which follows.

Common comparative ratios for results of operations include the return on
average assets and the return on average equity. The Corporation's return on
average assets was 1.32% for 1997 compared to .85% for 1996, while the
Corporation's return on average equity was 15.21% for 1997 compared to 9.91%
for 1996. Excluding the extraordinary and non-recurring items, the
Corporation had a return on average assets of 1.16% and 1.02% for 1997 and
1996, respectively, and a return on average equity of 13.43% and 11.79% for
those same periods.

NET INTEREST INCOME

The following table provides information regarding the average balances and
yields and rates on interest earning assets and interest bearing liabilities
(dollars in thousands):

Year Ended December 31, 1997 1996 1995
--------------------------- -------------------------- --------------------------
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
---------- -------- ------ ---------- -------- ------ ---------- -------- ------

ASSETS
Interest earning assets:
Interest bearing deposits
with banks $ 3,994 $ 236 5.91% $ 7,218 $ 394 5.46% $ 5,462 $ 340 6.22%
Federal funds sold 77,198 4,101 5.31 57,580 2,981 5.18 56,149 3,266 5.82
Taxable investment
securities (1) 444,597 27,603 6.21 429,406 25,491 5.94 435,810 24,913 5.72
Non-taxable investment
securities 79,374 4,683 5.90 71,975 4,428 6.15 62,039 3,959 6.38
Loans (2)(3) 1,961,470 181,726 9.26 1,814,864 171,289 9.44 1,678,104 160,577 9.57
---------- -------- ---------- -------- ---------- --------
Total interest earning assets 2,566,633 218,349 8.51 2,381,043 204,583 8.59 2,237,564 193,055 8.63
---------- -------- ---------- -------- ---------- --------
Cash and due from banks 86,043 91,793 85,943
Allowance for loan losses (30,799) (27,756) (25,922)
Premises and equipment 62,728 52,926 48,157
Other assets 63,769 61,841 53,918
---------- ---------- ----------
$2,748,374 $2,559,847 $2,399,660
========== ========== ==========
LIABILITIES
Interest bearing liabilities:
Deposits:
Interest bearing demand $ 370,624 9,002 2.43 $ 362,834 6,968 1.92 $ 314,150 7,478 2.38
Savings 595,294 16,405 2.76 545,073 15,587 2.86 535,224 14,194 2.65
Other time 1,042,899 57,096 5.47 986,513 53,768 5.45 927,138 51,113 5.51
Short-term borrowings 135,089 6,415 4.75 92,444 4,030 4.36 99,773 5,606 5.62
Long-term debt 51,145 3,746 7.32 49,977 4,384 8.77 39,856 3,269 8.20
---------- -------- ---------- -------- ---------- --------
Total interest bearing
liabilities 2,195,051 92,664 4.22 2,036,841 84,737 4.16 1,916,141 81,660 4.26
-------- -------- --------
Non-interest bearing
demand deposits 278,172 259,375 248,558
Other liabilities 37,222 43,062 34,543
---------- ---------- ----------
2,510,445 2,339,278 2,199,242
---------- ---------- ----------
STOCKHOLDERS' EQUITY 237,929 220,569 200,418
---------- ---------- ----------
$2,748,374 $2,559,847 $2,399,660
========== ========== ==========
Excess of interest earning
assets over interest
bearing liabilities $ 371,582 $ 344,202 $ 321,423
========== ========== ==========
Net interest income $125,685 $119,846 $111,395
======== ======== ========
Net interest spread 4.29% 4.43% 4.37%
==== ==== ====
Net interest margin (4) 4.90% 5.03% 4.98%
==== ==== ====

(1) The average balances and yields earned on securities are based on
historical cost.

(2) The amounts are reflected on a fully taxable equivalent basis using the
federal statutory tax rate of 35%, adjusted for certain federal tax
preferences.

(3) Average balances include non-accrual loans. Loans consist of average
total loans less average unearned income. The amount of loan fees
included in interest income on loans is immaterial.

(4) Net interest margin is calculated by dividing the difference between
total interest earned and total interest paid by total interest earning
assets.

Net interest income, the Corporation's primary source of earnings, is the
amount by which interest and fees generated by earning assets, primarily loans
and securities, exceed interest expense on deposits and borrowed funds. Net
interest income, on a fully taxable equivalent basis, totaled $125.7 million
in 1997 versus $119.9 million in 1996. Net interest income consisted of
interest income of $218.3 million and interest expense of $92.7 million in
1997, compared to $204.6 million and $84.7 million for each, respectively, in
1996. Net interest income as a percentage of average earning assets (commonly
referred to as the margin) fell to 4.90% in 1997 compared to 5.03% in 1996.

Interest income on loans increased 6.3% from $170.0 million in 1996 to
$180.8 million in 1997. This increase is the result loan growth. Average
loans increased 8.08% from 1996.

Interest expense on deposits increased to $82.5 million in 1997. This
increase was attributable to increases in other time deposits as well as a 51
basis point increase in the rate paid on interest bearing demand.

The Corporation monitors interest rate sensitivity by measuring the impact
that future changes in interest rates will have on net interest income.
Through its asset/liability management and pricing policies, management has
strived to optimize net interest income while reducing the effects of changes
in interest rates. (See "Liquidity and Interest Rate Sensitivity"
discussion).

The following table sets forth certain information regarding changes in net
interest income attributable to changes in the volumes of interest earning
assets and interest bearing liabilities and changes in the rates for the
periods indicated (in thousands):

Year Ended December 31, 1997 1996
------------------------ -------------------------
VOLUME RATE NET VOLUME RATE NET
------- ------- ------- ------- ------- -------
INTEREST INCOME
Interest bearing deposits
with banks $ (194) $ 36 $ (158) $ 87 $ (33) $ 54
Federal funds sold 1,043 77 1,120 86 (371) (285)
Securities 1,345 1,022 2,367 250 797 1,047
Loans 13,662 (3,225) 10,437 12,855 (2,143) 10,712
------- ------- ------- ------- ------- -------
15,856 (2,090) 13,766 13,278 (1,750) 11,528
------- ------- ------- ------- ------- -------
INTEREST EXPENSE
Deposits:
Interest bearing 152 1,882 2,034 2,063 (2,573) (510)
Savings 1,318 (500) 818 263 1,130 1,393
Other time 3,127 201 3,328 3,199 (544) 2,655
Short-term borrowings 1,998 387 2,385 (389) (1,187) (1,576)
Long-term debt 105 (743) (638) 875 240 1,115
------- ------- ------- ------- ------- -------
6,700 1,227 7,927 6,011 (2,934) 3,077
------- ------- ------- ------- ------- -------
NET CHANGE $ 9,156 $(3,317) $ 5,839 $ 7,267 $ 1,184 $ 8,451
======= ======= ======= ======= ======= =======

The amount of change not solely due to rate or volume changes was allocated
between the change due to rate and the change due to volume based on the net
size of the rate and volume changes.

PROVISION FOR LOAN LOSSES

The provision for loan losses charged to operations is a direct result of
management's analysis of the adequacy of the allowance for loan losses which
takes into consideration quantitative and qualitative factors relevant to the
collectibility of the existing portfolio. The provision for loan losses
increased 13.6% to $11.1 million in 1997. This increase resulted from applying
a consistent allowance for loan loss policy and methodology for evaluating the
adequacy of the allowance to all affiliates in 1997. (See "Non-Performing
Loans and Allowance for Loan Losses" and "Mergers, Acquisitions and
Divestitures" discussions).

NON-INTEREST INCOME

Total non-interest income increased 13.8% from $22.8 million in 1996 to $26.0
million in 1997. This increase was attributable to increases in service
charges and gains on the sale securities, as well as income from the
Corporation's equity investment. Service charges increased 6.0% from $12.6
million in 1996 to $13.3 million in 1997. Revenue was recognized as a result
of increases in the level of deposits. Net gains on the sale of securities
increased 58.9% due to a higher level of equity security sales in 1997. The
Corporation recognized $621,000 in income from its equity investment since June
30, 1997.

NON-INTEREST EXPENSES

Total non-interest expense increased from $97.9 million in 1996 to $98.3
million in 1997. The increase is primarily attributable to an increase of $4.1
million in salaries and employee benefits and an increase in merger-related
expenses from $2.1 million in 1996 to $2.3 million in 1997. Additionally, the
1996 total reflects a one-time assessment of $3.2 million to recapitalize the
SAIF.

Salaries and personnel expense increased 8.6% in 1997. This increase was due
to increases for incentive compensation, as well as normal annual salary
adjustments. The Corporation's incentive compensation plans allow for
additional compensation to be paid to employees based on the Corporation
achieving various financial and productivity goals.

On September 30, 1996, the President of the United States signed into law the
Deposit Insurance Funds Act of 1996 to recapitalize the SAIF. The legislation
included a one-time assessment on all deposits insured by the SAIF, including
those held by chartered commercial banks as a result of previous acquisitions.
The Corporation was required to pay a one-time assessment of $3.2 million.

Other non-interest expenses decreased $1.3 million to $24.6 million.
Included in other non-interest expenses were $2.3 million in 1997 and $2.1
million in 1996 for expenses related to the affiliations with Southwest, WCBI
and FNB Florida. The expenses were primarily legal and investment banking
costs associated with the structuring and completion of each affiliation.

INCOME TAXES

The Corporation recognized income tax expense of $12.8 million for 1997
compared to $11.0 million for 1996. The 1997 effective tax rate of 31.8% was
lower than the 35.0% federal statutory tax rate due to the tax benefits
resulting from tax-exempt instruments and excludable dividend income.
Additional information relating to income taxes is furnished in the Notes to
Supplemental Financial Statements.

LIQUIDITY AND INTEREST RATE SENSITIVITY

The Corporation monitors its liquidity position on an ongoing basis to assure
that it is able to meet the need for funds at all times. Given the monetary
nature of its assets and liabilities and the significant source of liquidity
provided by its securities portfolio, the Corporation generally has sufficient
sources of funds available as needed to meet its routine, operational cash
needs. Excluding mortgage-backed securities, debt securities due to mature
within one year, which will provide a source of short-term liquidity, amounted
to $99.8 million or 16.7% of the securities portfolio.

Additionally, the Corporation has external sources of funds available should
it desire to use them. These include approved lines of credit with several
major domestic banks, of which $33.5 million was unused at the end of 1997. To
further meet its liquidity needs, the Corporation also has access to the
Federal Home Loan Bank and the Federal Reserve Bank, as well as other
uncommitted funding sources.

The financial performance of the Corporation is subject to risk from interest
rate fluctuations. This interest rate risk arises due to differences between
the amount of interest-earning assets and the amount of interest-bearing
liabilities subject to pricing over a specified period, the amount of change in
individual interest rates and the embedded options in all financial
instruments. The principal objective of the Corporation's asset/liability
management activities is to maximize net interest income while maintaining
acceptable levels of interest rate and liquidity risk and facilitating the
funding needs of the Corporation. The Corporation's Asset/Liability Committee
(ALCO) is responsible for achieving this objective. The Corporation uses an
asset/liability model to quantify its balance sheet strategies and their
associated risks. Net interest income simulation is the principal tool utilized
for these purposes. Gap analysis is employed as a secondary diagnostic
measurement. The Corporation attempts to mitigate interest rate risk through
asset and liability pricing and matched maturity funding.

A gradual 300 basis point decrease in interest rates is estimated to cause a
decline in net interest income of .9% or $1.1 million for 1998 as compared to
net interest income if interest rates were unchanged during 1998. This low
level of variation is within the Corporation's policy limits. This simulation
analysis assumed that savings and checking interest rates had a low correlation
to changes in market rates of interest and that asset prepayments changed as
refinancing incentives evolved. Further, in the event of a change of such a
magnitude in interest rates, the ALCO would likely take actions to further
mitigate its exposure to the change. However, due to the greater uncertainty
of other specific actions that would be taken, the analysis assumed no change
in the Corporation's asset/liability composition.

Following is the gap analysis as of December 31, 1997 (dollars in thousands):

WITHIN 4-12 1-5 OVER
3 MONTHS MONTHS YEARS 5 YEARS TOTAL
-------- -------- ---------- ---------- ---------
INTEREST EARNING ASSETS
Interest bearing
deposits with banks $ 3,981 $ 100 $ 4,081
Federal funds sold 36,355 36,355
Securities:
Available for sale 42,687 40,486 $ 245,886 $ 131,360 460,419
Held to maturity 3,690 27,130 94,111 13,659 138,590
Loans, net of
unearned income 579,389 537,880 804,630 179,541 2,101,440
-------- -------- ---------- ---------- ----------
666,102 605,596 1,144,627 324,560 2,740,885
Other assets 226,597 226,597
-------- -------- ---------- ---------- ----------
$666,102 $605,596 $1,144,627 $ 551,157 $2,967,482
======== ======== ========== ========== ==========

INTEREST BEARING LIABILITIES
Deposits:
Interest checking $117,887 $ 262,566 $ 380,453
Savings 259,485 428,218 687,703
Time deposits 236,887 $ 486,054 $ 363,757 318 1,087,016
Short-term borrowings 84,526 9,784 528 32,348 127,186
Long-term debt 12,729 10,510 44,558 4,449 72,246
-------- --------- ---------- ---------- ----------
711,514 506,348 408,843 727,899 2,354,604
Other liabilities 352,627 352,627
Stockholders' equity 260,251 260,251
-------- --------- ---------- ---------- ----------
$711,514 $ 506,348 $ 408,843 $1,340,777 $2,967,482
======== ========= ========== ========== ==========

PERIOD GAP $(45,412) $ 99,248 $ 735,784 $ (789,620)
======== ========= ========== ==========

CUMULATIVE GAP $(45,412) $ 53,836 $ 789,620
======== ========= ==========
CUMULATIVE GAP AS
A PERCENT OF
TOTAL ASSETS (1.53)% 1.81% 26.61%
===== ==== =====
RATE SENSITIVE ASSETS/
RATE SENSITIVE
LIABILITIES
(CUMULATIVE) .94 1.04 1.49 1.16
=== ==== ==== ====

The preceding gap analysis is based on the amortization, maturity or repricing
of the Corporation's interest-bearing assets and interest-bearing liabilities.
Non-maturity deposits have been allocated to represent their lower sensitivity
to changes in market interest rates than other variable-rate instruments. The
cumulative gap represents the difference between these assets and liabilities
over a specified time period. Based on the cumulative one year gap and assuming
no change in asset/liability composition, a decrease in interest rates would be
expected to result in slightly lower net interest income. This gap position is
within the Corporation's policy limits.

FINANCIAL CONDITION

LOAN PORTFOLIO

Following is a summary of loans (dollars in thousands):

December 31 1997 1996 1995 1994 1993
Real estate: ---------- ---------- ---------- --------- ----------
Residential $ 905,065 $ 753,948 $ 674,920 $ 616,172 $ 542,585
Commercial 524,006 479,041 436,578 350,740 285,346
Construction 67,216 45,532 38,803 51,744 31,939
Installment loans to
individuals 295,336 410,322 396,745 384,745 292,263
Commercial, financial
and agricultural 263,902 216,913 187,535 234,109 237,365
Lease financing 59,852 21,538 5,037
Unearned income (20,473) (24,013) (27,628) (23,106) (23,194)
---------- ---------- ---------- ---------- ----------
$2,094,904 $1,903,281 $1,711,990 $1,614,404 $1,366,304
========== ========== ========== ========== ==========

The Corporation strives to minimize credit losses by utilizing credit
approval standards, diversifying its loan portfolio by industry and borrower
conducting ongoing review and management of the loan portfolio.

The ratio of loans to deposits at the end of both 1997 and 1996 was 84.9%.

During 1997 and 1996 the Corporation sold $23.9 million and $38.5 million,
respectively, in fixed rate residential mortgages to the Federal National
Mortgage Association (FNMA). These sales allowed the Corporation to avoid the
potential interest rate risk of those fixed rate loans in a rising rate
environment. Additionally, it created liquidity for the Corporation to
continue to offer credit availability to the markets it serves. All of the
mortgages were sold with the servicing retained by the Corporation.

In 1997, total installment loans to individuals and lease financing decreased
to $355.2 million. The Corporation significantly reduced its exposure to
non-prime motor vehicle loans by selling approximately $20.7 million of such
loans to a third party. The sale resulted in the Corporation recognizing an
after-tax loss of $249,000, after reducing the allowance for loan losses by
$2.4 million.

The commercial loan portfolio consists principally of loans to small- and
medium-sized businesses within the Corporation's primary market area of western
Pennsylvania, eastern Ohio and southwest Florida.

As of December 31, 1997, no concentrations of loans exceeding 10% of total
loans existed which were not disclosed as a separate category of loans.

Following is a summary of the maturity distribution of certain loan
categories based on remaining scheduled repayments of principal (in thousands):

WITHIN ONE TO AFTER
ONE YEAR FIVE YEARS FIVE YEARS TOTAL
-------- ---------- ---------- --------
DECEMBER 31, 1997
Commercial, financial and
agricultural $133,542 $116,538 $ 13,822 $263,902
Real Estate - construction 23,261 36,130 7,825 67,216
-------- -------- -------- --------
Total $156,803 $152,668 $ 21,647 $331,118
======== ======== ======== ========

The total amount of loans due after one year includes $88.2 million with
floating or adjustable rates of interest and $86.1 million with fixed rates of
interest.

NON-PERFORMING LOANS

Non-performing loans include non-accrual loans and restructured loans. Non-
accrual loans represent loans on which interest accruals have been
discontinued. Restructured loans are loans in which the borrower has been
granted a concession on the interest rate or the original repayment terms due
to financial distress.

Following is a summary of non-performing loans (dollars in thousands):

December 31 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
Non-accrual loans $ 8,340 $10,279 $ 9,799 $11,756 $11,602
Restructured loans 1,345 2,709 3,629 3,707 3,790
------- ------- ------- ------- -------
$ 9,685 $12,988 $13,428 $15,463 $15,392
======= ======= ======= ======= =======
Non-performing loans as a
percentage of total loans .46% .68% .78% .96% 1.08%

Following is a table showing the amounts of contractual interest income and
actual interest income recorded on non-accrual and restructured loans (in
thousands):

Year Ended December 31 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
Gross interest income that
would have been recorded
if the loans had been
current and in accordance
with their original terms $1,059 $1,467 $1,317 $1,864 $1,843
Interest income recorded
during the year 477 798 694 720 712

Following is a summary of loans 90 days or more past due, on which interest
accruals continue (dollars in thousands):

December 31 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
Loans 90 days or more
past due $3,218 $3,065 $4,025 $2,753 $3,749
Loans 90 days or more past
due as a percentage of
total loans .15% .16% .24% .17% .27%

ALLOWANCE FOR LOAN LOSSES

Management's analysis of the allowance for loan losses includes the
evaluation of the loan portfolio based on internally generated loan review
reports and the historical loss experience of the remaining balances of the
various homogeneous loan pools which comprise the loan portfolio. Specific
factors which are evaluated include the previous loan loss experience with the
customer, the status of past due interest and principal payments on the loan,
the collateral position of the loan, the quality of financial information
supplied by the borrower and the general financial condition of the borrower.
Historical loss experience on the remaining portfolio segments is considered in
conjunction with the current status of economic conditions, loan loss trends,
delinquency and non-accrual trends, credit administration and concentrations of
credit risk.

Following is a summary of changes in the allowance for loan losses (dollars
in thousands):

Year Ended December 31 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
Balance at beginning of year $30,231 $26,673 $24,720 $20,334 $18,158
Reduction due to the sale of a
subsidiary and loans (3,828) (893)
Addition due to acquisitions 1,167

Charge-offs:
Real estate - mortgage (880) (428) (736) (1,456) (591)
Installment loans to individuals (6,981) (5,970) (5,443) (3,837) (4,000)
Commercial, financial and
agricultural (2,174) (1,451) (1,226) (1,725) (4,218)
------- ------- ------- ------- -------
(10,035) (7,849) (7,405) (7,018) (8,809)
------- ------- ------- ------- -------
Recoveries:
Real estate - mortgage 100 135 189 98 173
Installment loans to individuals 812 1,053 1,125 968 801
Commercial, financial and
agricultural 359 446 870 969 562
------- ------- ------- ------- -------
1,271 1,634 2,184 2,035 1,536
------- ------- ------- ------- -------
Net charge-offs (8,764) (6,215) (5,221) (4,983) (7,273)
Provision for loan losses 11,100 9,773 7,174 9,369 10,342
------- ------- ------- ------- -------
Balance at end of year $29,906 $30,231 $26,673 $24,720 $20,334
======= ======= ======= ======= =======

Net charge-offs as a percent of
average loans, net of unearned
income .45% .34% .31% .33% .52%
Allowance for loan losses as a
percent of total loans, net
of unearned income 1.43 1.59 1.56 1.53 1.49
Allowance for loan losses as a
percent of non-performing loans 308.79 232.76 198.64 159.87 137.84

The increase in the level of charge-offs and the provision for loan losses in
1997 and 1996 resulted primarily from the consistent application of the
Corporation's charge-off policy and methodology for determining the adequacy of
the allowance for loan losses to acquired affiliates.

The Corporation has allocated the allowance according to the amount deemed to
be reasonably necessary to provide for the possibility of losses being incurred
within each of the categories of loans shown in the table below. The
allocation of the allowance should not be interpreted as an indication that
loan losses in future years will occur in the same proportions or that the
allocation indicates future loan loss trends. Furthermore, the portion
allocated to each loan category is not the sole amount available for future
losses within such categories since the total allowance is a general allowance
applicable to the entire portfolio.

Following shows the allocation of the allowance for loan losses (in
thousands):

% OF % OF % OF % OF % OF
LOANS LOANS LOANS LOANS LOANS
IN EACH IN EACH IN EACH IN EACH IN EACH
CATEGORY CATEGORY CATEGORY CATEGORY CATEGORY
TO TOTAL TO TOTAL TO TOTAL TO TOTAL TO TOTAL
Year Ended December 31 1997 LOANS 1966 LOANS 1995 LOANS 1994 LOANS 1993 LOANS
------- ------- ------- ------- ------- ------- ------- ------- ------- -------

Commercial, financial and
agricultural $ 5,297 38% $ 7,416 37% $ 6,722 36% $ 8,876 36% $ 7,801 38%
Real estate - construction 284 3 132 2 88 2 216 3 520 2
Real estate - mortgage 5,963 43 4,524 40 4,068 39 4,498 38 3,768 40
Installment loans to
individuals 5,387 16 7,549 21 6,550 23 5,138 23 4,609 20
Unallocated portion 12,975 10,610 9,245 5,992 3,636
------- --- ------- --- ------- --- ------- --- ------- ---
$29,906 100% $30,231 100% $26,673 100% $24,720 100% $20,334 100%
======= === ======= === ======= === ======= === ======= ===

INVESTMENT ACTIVITY

Investment activities serve to enhance overall yield on earning assets while
supporting interest rate sensitivity and liquidity positions. Securities
purchased with the intent and ability to retain until maturity are categorized
as securities held to maturity and carried at amortized cost. All other
securities are categorized as securities available for sale and must be marked
to market.

The relatively short average maturity of all securities provides a source of
liquidity to the Corporation and reduces the overall market risk of the
portfolio.

During 1997, securities available for sale increased 32.2% while securities
held to maturity decreased 28.1% from December 31, 1996.

The following table indicates the respective maturities and weighted-average
yields of securities as of December 31, 1997 (in thousands):

Weighted
Amount Average Yield
Obligations of U.S. Treasury and --------- -------------
Other U.S. Government agencies:
Maturing within one year $ 93,349 5.75%
Maturing after one year within five years 208,375 6.25%
Maturing after five years within ten years 28,587 6.74%

State & political subdivisions:
Maturing within one year 6,472 4.94%
Maturing after one year within five years 38,707 6.25%
Maturing after five years within ten years 7,277 6.48%
Maturing after ten years 2,359 5.52%

Other securities:
Maturing within one year 2 6.55%
Maturing after one year within five years 1,832 6.10%
Maturing after five years within ten years 1,157 6.62%
Maturing after ten years 3,000 6.68%

Mortgage-backed securities 182,291 6.33%
No stated maturity 25,601 4.65%
-------- -----
TOTAL $599,009 6.14%
======== =====

The weighted average yields for tax exempt securities are computed on a tax
equivalent basis.

DEPOSITS AND SHORT-TERM BORROWINGS

As a commercial bank holding company, the Corporation's primary source of
funds is its deposits. Those deposits are provided by businesses and
individuals located within the markets served by the Corporation's
subsidiaries.

Total deposits increased 10.1% to $2.5 billion in 1997. The majority of this
increase was due to an 11.2% increase in savings and NOW accounts.
Additionally, time deposits increased 8.5% to $1.1 billion.

Short-term borrowings, made up of repurchase agreements, federal funds
purchased, notes payable and subordinated notes increased 7.8% in 1997 to
$127.2 million. The primary reason for this increase was an increase in
securities sold under repurchase agreements. Securities sold under repurchase
agreements increased $18.9 million in 1997.

CAPITAL RESOURCES

The assessment of capital adequacy depends on a number of factors such as
asset quality, liquidity, earnings performance, changing competitive conditions
and economic forces. The Corporation seeks to maintain a strong capital base
to support its growth and expansion activities, to provide stability to current
operations and to promote public confidence. Since December 31, 1996,
stockholders' equity has increased $26.6 million as a result of earnings
retention. Total cash dividends declared represented 26.5% of net income for
1997 compared to 31.5% for 1996. Book value per share was $14.14 at December
31, 1997, compared to $13.21 at December 31, 1996.

1996 VERSUS 1995

The Corporation's net income decreased 10.0% from $24.3 million in 1995 to
$21.9 million in 1996. Basic earnings per share were $1.22 and $1.37 for 1996
and 1995, while diluted earnings per share were $1.19 and $1.32, respectively,
for those same periods. The results for 1996 include a special one-time
assessment to recapitalize the SAIF of $3.2 million and merger related costs of
$2.1 million. Excluding these items, net income would have been $26.0 million,
a 7.0% increase over 1995, and basic and diluted earnings per share would have
been $1.46 and $1.41, respectively. The Corporation's return on average assets
was .85% for 1996 compared to 1.01% for 1995, while the Corporation's return on
average equity was 9.91% for 1996 compared to 12.13% for 1995. Excluding the
SAIF assessment and merger related costs, the Corporation had a return on
average assets of 1.02% and a return on average equity of 11.79%.

Net interest income, on a fully taxable equivalent basis, increased from
$111.2 million in 1995 to $119.9 million in 1996. Net margin rose to 5.03%
from 4.98% in 1995. Average loans increased 8.1% from 1995, contributing to
the improvement in net interest income.

The provision for loan losses was $9.8 million and represented an increase of
36.2% from 1995, when a provision of $7.2 was charged to operations. This
increase resulted from applying a consistent allowance for loan loss policy and
methodology for evaluating the adequacy of the adequacy of the allowance across
all affiliates.

Total non-interest income increased 5.3% from $21.7 million in 1995 to $22.8
million in 1996. This increase was attributable to increases in service
charges and gains on the sale of securities. Service charges increased 6.3%
from $11.9 million in 1995 to $12.6 million in 1996. Revenue was recognized as
a result of increases in the level of deposits. Net gains on the sale of
securities increased by $387,000 due to a higher level of equity security sales
in 1996.

Total non-interest expense increased from $87.2 million in 1995 to $97.9
million in 1996. Salaries and employee benefits increased 12.3% in 1996. This
increase was due to expansion in the Corporation's retail network and increases
for incentive compensation, as well as normal annual salary adjustments. As a
result of legislation passed in 1996, the Corporation was required to pay a
one-time assessment of $3.2 million to recapitalize the SAIF. Other non-
interest expenses increased $4.6 million in 1996. Included in this total was
$2.1 million of merger-related expenses.

Income tax expense was $11.0 million for 1996 compared to $12.1 million for
1995. The 1996 effective tax rate of 33% was below the 35% statutory tax rate
due to the tax benefits resulting from tax-exempt instruments and excludable
dividend income.

YEAR 2000

The Year 2000 (Y2K) Issue is the result of computer programs being written
using date fields consisting of only two digits rather than four. Computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than year 2000. This could result in system failures and
temporary interruptions in the processing of transactions. The Y2K Issue is
not only an internal issue but also affects third parties including customers,
counter parties, service providers and vendors.

Because the Y2K Issue poses an unprecedented and profound enterprise wide
challenge for every organization, the Corporation formed a Y2K Committee. The
Y2K Committee has developed a Year 2000 Enterprise Wide Project Plan (Y2K
Plan). The Y2K Plan addresses both internal and external technology.

In connection with the Y2K Plan, the Corporation has completed its inventory
and assessment of all internal technologies, including both software and
hardware. Each system was assigned a significance rating as to the degree of
criticality. Formal detailed test plans for systems with significance ratings
of a critical nature have been completed. Such systems include core processing
and ancillary systems required to sustain operations.

By the end of the millennium, each of the Corporation's banking subsidiaries
will be processing on either of two core processing systems. The Corporation's
northern banking affiliates will continue to process transactions on their
existing core processing system. During the second quarter of 1998, the
Corporation made the strategic decision to convert each of the Florida banking
affiliates to a new core processing system over the next fifteen month period.
The decision to convert was based in part on the number of different systems
currently being utilized by the Florida banking affiliates and the expiration
of the Corporation's primary Florida core processing contract. The Corporation
has received a third party certification and written representations from both
vendors that each system is Y2K compliant. The Corporation will be
participating in test verifications of each core system during the fourth
quarter of 1998. The Corporation is currently in the formative stage of
developing a contingency plan which will utilize the two corporate wide
core processing systems as contingencies for each other. The completion of
the contingency plan will also occur during the fourth quarter of 1998.

During July of 1998, the Corporation's consumer finance subsidiary, Regency
Finance Company (Regency), selected a third party vendor to support all of its
future core application requirements. These core applications will include
loans, insurance and the Corporation's subordinated note program. Regency's
decision to select a new system was based upon the system's ability to support
new lending products as well as the operating efficiencies resulting from real-
time centralized processing. The vendor has provided a written warranty to
Regency that it is Y2K compliant. The system will be tested for Y2K readiness
during the fourth quarter of 1998 and installed during the first quarter of
1999.

With respect to external technology, the Y2K Plan provides for the evaluation
and assessment of all significant funds takers, including large borrowing
customers and bond issuers, and funds providers, including contingency lines of
credit and deposit accounts. All project plans for funds takers and providers
have been substantially completed with continued monitoring to occur. An
integral part of the Corporation's funds provider project plan includes a
Customer Awareness Program. This program was developed to assure customer
confidence and avert reputation and liquidity risk. The program was not only
developed to educate the Corporation's customers, but also its employees in
responding to customer inquiries.

The Y2K Plan includes due diligence procedures as it relates to the fiduciary
responsibilities of the Corporation's investment and trust department,
including such activities as settlement transactions, remittance of bond
payments and transactions related to mutual funds and other securities. In
performing its fiduciary responsibilities, the Corporation is in the process of
assessing the Y2K readiness of its safe keeping agents and broker/dealers. All
assessments have been completed.

Finally, the Y2K Plan addresses the Corporation's service providers,
including significant suppliers and vendors. Currently, the Corporation is in
the process of rating each service provider, assessing their ability to be Y2K
ready and developing a contingency plan for those in question. While this
process is in its early stages, there is a reluctance by the service providers
to expressly certify to Y2K readiness. The Corporation's assessment of all
significant service providers and the identification of contingency providers
is to be completed by the end of the fourth quarter of 1998.

The Corporation's current assessment of cost associated with the completion
of its Y2K Plan is not considered by management to be material to the
Corporation's future operations. The cost of completing the Corporation's Y2K
Plan and the dates on which all procedures will be completed are based on
management's best estimates. These estimates were derived utilizing various
assumptions about future events, including the continued availability of
resources, external technology modification plans and other significant
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those anticipated.

EXHIBIT 99.2

INDEPENDENT AUDITORS' REPORT

January 22, 1997

Board of Directors and Stockholders
of Southwest Banks, Inc.
Naples, Florida

We have audited the accompanying consolidated balance sheet of Southwest
Banks, Inc. and its subsidiaries, First National Bank of Naples and Cape Coral
National Bank (collectively, the Company), as of December 31, 1996 and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the two years in the period ended December 31, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Southwest Banks, Inc. and its subsidiaries as of December 31, 1996 and the
consolidated results of their operations and their consolidated cash flows
for each of the two years in the period ended December 31, 1996 in conformity
with generally accepted accounting principles.

/s/HILL, BARTH & KING, INC.
NAPLES, FLORIDA

EXHIBIT 99.3

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
West Coast Bancorp, Inc. and Subsidiary
Cape Coral, Florida

We have audited the accompanying consolidated balance sheets of West Coast
Bancorp, Inc. and Subsidiary at December 31, 1996 and 1995, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

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

/s/COOPERS & LYBRAND L.L.P.
FORT MYERS, FLORIDA
January 24, 1997

EXHIBIT 99.4

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Seminole Bank
Seminole, Florida:

We have audited the balance sheets of Seminole Bank (the "Bank") at December
31, 1997 and 1996, and the related statements of earnings, stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1997. 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. 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 Bank at December 31, 1997
and 1996, and the results of its operations and cash flows for each of the
years in the three-year period ended December 31, 1997, in conformity with
generally accepted accounting principles.

/s/HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
January 9, 1998

EXHIBIT 99.5

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Citizens Holding Corporation
Clearwater, Florida:

We have audited the accompanying consolidated balance sheets of Citizens Holding
Corporation and Subsidiaries (the "Company") at December 31, 1997 and 1996, and
the related consolidated statements of earnings, comprehensive income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
at December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1997,
in conformity with generally accepted accounting principles.

/s/HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
January 9, 1998, except for Note 18, as to which
the date is April 6, 1998