1
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)
Of The Securities Exchange Act of 1934 (Fee Required)

For the fiscal year ended December 31, 1997 Commission file number 33-20417
----------------- ---------

Capital Directions, Inc.
------------------------
(Exact name of registrant as specified in its charter)

MICHIGAN 38-2781737
- ------------------------------- ----------------------------------------
(State of other jurisdiction of (I.R.S. Employer Indentification Number)
incorporation or organization)

322 South Jefferson St., Mason, Michigan 48854-0130
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (517) 676-0500
--------------

Securities registered pursuant to Section 12 (b) of the act NONE
------

Securities registered pursuant to Section 12 (g) of the act: NONE
------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Registration S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

The registrant estimates that as of March 19, 1998, the aggregate market value
of the voting stock held by non-affiliates of the registrant was approximately
$14,940,608. This is based on a market price of $32.00 per share for the
Registrant's stock.

As of March 19, 1998, the registrant had outstanding 595,056 shares of common
stock having a par value of $5 per share.

DOCUMENTS INCORPORATED BY REFERENCE

Annual Report to Shareholders for the Year Ended December 31, 1997 (Form 10-K,
Part I, Part II, Part III, and Part IV)

Proxy Statement for the Annual Meeting of Shareholders to be held April 23,
1998 (Form 10-K, Part III)

PART I

Item 1. Business

Capital Directions, Inc. (the "Registrant") is a one-bank holding company
registered under the Bank Holding Company Act of 1956, as amended. The
Registrant was incorporated on August 11, 1987 and formed for the purpose of
enabling Mason State Bank (the "Bank") to form a one-bank holding company and
engage in any other related activity allowed. Mason State Bank was
consolidated with Mason Bank on July 22, 1988, thereby causing Mason State Bank
to become a wholly-owned subsidiary of the Registrant.

Mason State Bank purchased Lakeside Insurance Services, Inc. in 1994 to take
advantage of the expanded insurance powers granted to banks in 1994. Lakeside
is licensed in Michigan to sell life insurance and variable annuity contracts.

The Registrant has no substantial assets except the investments in Mason State
Bank. The Registrant and its primary subsidiary, Mason State Bank, operate in
the banking industry, which accounts for substantially all of their assets,
revenues and operating income. Further discussion of the operations of the
Registrant and its subsidiaries is discussed under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the 1997 Annual
Report to the Shareholders, incorporated herein by reference. The Registrant's
primary competition is substantially the same as Mason State Bank's as
discussed below.

The Bank was organized in 1886 under the laws of Michigan and is subject to the
Michigan Banking Code of 1969. It is insured by the Bank Insurance Fund
through the Federal Deposit Insurance Corporation. The Bank is regulated by
the Michigan Financial Institutions Bureau and the Federal Deposit Insurance
Corporation. The Registrant is regulated by the Federal Reserve Board. The
Bank's Principal office is located at 322 South Jefferson Street, Mason,
Michigan. It operates a branch at 661 North Cedar Street, Mason, Michigan.

Banking services are provided to individuals, businesses, local state
and federal governmental units and institutional customers located in Mason and
the surrounding areas. Services include demand deposits, savings and time
deposits, collections, cash management, night depositories and personal,
installment, commercial and real estate loans. The Bank offers a credit card
program affiliated with the Visa and MasterCharge Inter-Bank charge card
system.

The Bank maintains a correspondent relationship with several of the major banks
in the Detroit area and elsewhere, in order to provide for the clearance of
checks, the transfer of funds, and the periodic purchase and sale of Federal
funds, and participation in large loans which would be beyond the Bank's legal
lending limit if made by the Bank alone.

The Bank has full and part-time employees (39 full-time equivalents) and owns
its main office and bank premises. The Bank operates primarily within Ingham
County. Competing with the Bank in Ingham County are several other commercial
banks and financial institutions, some of which have significantly greater
total resources than the Bank.

Item 1. Business-Statistical Disclosure

I. (A) Distribution of assets, liabilities and
shareholders'equity;

(B) Interest rates and interest differential

The following table sets forth average balances for major
categories of interest earning assets and interest bearing
liabilities, the interest earned (on a fully taxable equivalent
basis) or paid on such amounts, and average interest rates earned
or paid thereon.

1997 1996
------------------------------- ------------------------------
Average Yield/ Average Yield/
balance Interest rate balance Interest rate
------- -------- ---- ------- -------- ----
ASSETS (Dollars in thousands)

Loans, including fees (1) $ 54,870 $ 4,962 9.04% $ 49,507 $ 4,455 9.00%
Taxable investment
securities . . . . . . . . . . . . . . 12,893 878 6.81 14,262 939 6.58
Non-taxable investment
securities (2) . . . . . . . . . . . . 4,545 357 7.85 5,105 394 7.72
Federal funds sold . . . . . . . . . . . 1,295 68 5.25 2,154 115 5.34
---------- --------- --------- --------
Total interest earning assets . . . . . 73,603 6,265 8.51% 71,028 5,903 8.31%

Cash and due from banks . . . . . . . . 2,710 2,786
Other assets, net . . . . . . . . . . . 3,074 2,298
---------- ---------
Total non-interest earning
assets . . . . . . . . . . . . . . . . 5,784 5,084

Total assets . . . . . . . . . . . $ 79,387 $ 76,112
========== =========

LIABILITIES
Interest bearing demand
deposits . . . . . . . . . . . . . . . $ 9,299 182 1.96% $ 10,328 220 2.13%
Savings deposits . . . . . . . . . . . . 16,586 487 2.94 17,093 489 2.86
Time deposits under $100,000 21,133 1,213 5.74 21,378 1,225 5.73
Time deposits of $100,000 or
more . . . . . . . . . . . . . . . . . 8,551 493 5.77 6,686 380 5.68
Other borrowings . . . . . . . . . . . . 3,501 219 6.26 2,093 129 6.16
---------- --------- --------- --------
Total interest bearing
liabilities . . . . . . . . . . . . 59,070 2,594 4.39% 57,578 2,443 4.24%

Demand deposits 8,674 8,515
Other liabilities 1,743 1,054
Shareholders' equity . . . . . . . . . . 9,900 8,965
---------- ---------
Total non-interest bearing
liabilities and equity . . . . . . . 20,317 18,534
---------- ---------
Total liabilities and equity . . . . . $ 79,387 $ 76,112
========== =========

Net interest income . . . . . . . . . . $ 3,671 $ 3,460
========= ========
Net yield on interest earning
assets (2) . . . . . . . . . . . . . . 4.99% 4.87%
==== ====

(1) Average balances for loans include non-accrual loans.
The inclusion of non-accrual loans and fees does not have a
material effect on either the average balance or the average
interest rate.

(2) Interest on non-taxable investment securities is
reflected on a fully tax equivalent basis using an effective tax
rate of 34% for 1997 and 1996.

I. (C.) Interest rates and differential

The following table summarizes the changes in interest income (on a
fully taxable equivalent basis) and interest expense resulting from
changes in volume and changes in rates:

- ----------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 1997 COMPARED TO 1996 1996 COMPARED TO 1995
- ----------------------------------------------------------------------------------------------------------------------
INTEREST INCOME VOLUME(1) RATE(1) TOTAL VOLUME(1) RATE(1) TOTAL

Loans $485 $22 $507 ($145) ($83) ($228)
Taxable investment securities (92) 31 (61) 191 46 237
Non-taxable investment securities(2) (44) 7 (37) (17) 23 6
Federal funds sold (45) (2) (47) 25 (9) 16
--------- ------- ----- -------- ------ -----
Total interest income 304 58 362 54 (23) 31

INTEREST EXPENSE
Interest bearing demand deposits (21) (17) (38) (17) (23) (40)
Savings deposits (15) 13 (2) 15 (18) (3)
Time deposits under $100,000 (14) 2 (12) (67) 16 (51)
Time deposits of $100,000 or more 107 6 113 27 (12) 15
Other borrowings 88 2 90 79 2 81
--------- ------- ----- -------- ------ -----
Total interest expense 145 6 151 37 (35) 2

Net interest income $159 $52 $211 $17 $12 $29
--------- ------- ----- -------- ------ -----

(1) The change in interest due to both volume and rate has been
allocated to volume and rate in proportion to the relationship of
the absolute dollar amounts of the change in each.

(2) Interest on tax-exempt investment securities is based on a
fully taxable equivalent basis.

II. Investment portfolio

(A) A table of carrying values of the investment portfolio as of
December 31, 1997 and 1996 is set forth in Note 3 on pages 17 and 18
of the 1997 Annual Report to Shareholders. Such information is
incorporated herein by reference.

(B) The following table shows the relative maturities and weighted
yields of investment securities at December 31, 1997: (dollars in
thousands)

6
Item 1. Business (Continued)

II. Investment Portfolio (Continued)

Held-to-maturity

1 Year or less 1 Year - 5 Years 5 Years - 10 Years After 10 Years
Amount Yield Amount Yield Amount Yield Amount Yield
------ ----- ------ ----- ------ ----- ------ -----

U.S. Government
agencies (2) $ $ 1,184 6.62% $ 672 6.78% $ 1,052 8.28%
States and
Political Subdivisions
Non-taxable (1) 853 7.15% 1,135 7.84% 892 8.70% 1,204 8.26%
Taxable 455 6.60%
Collateralized
mortgage
obligations (2) 36 6.49%

--------- -------- --------- --------
Total $ 1,308 6.96% $ 2,319 7.22% $ 1,564 7.88% $ 2,292 8.25%
========= ======== ========= ========

Available-for-sale

1 Year or Less 1 Year - 5 Years 5 Years - 10 Years
Amount Yield Amount Yield Amount Yield
------ ----- ------ ----- ------ -----

U.S. Government
agencies (2) $ 1,499 6.40% $ 1,289 6.52% $ 709 6.68%
Corporate securities (2) 2,774 6.76%
--------- -------- ---------

Total $ 1,499 6.40% $ 4,063 6.68% $ 709 6.68%
========= ======== =========

(1) Weighted average yield adjusted to a taxable equivalent
basis using a federal income tax rate of 34 percent.

(2) Mortgage Backed Securities, Collateralized Mortgage
Obligations, and Corporate Securities, as reflected in
the above schedules, consider anticipated prepayments and
calls.

(C) The Registrant held no investment securities of a single issuer,
except U.S.Government and Agency Securities, in an amount
greater than ten percent of shareholders' equity as of December 31,
1997.
III. Loan Portfolio

(A) A table of loans outstanding as of December 31, 1997 and 1996
is set forth in Note 4 of page 19 of the 1997 Annual Report to
Shareholders. Such information is incorporated herein by reference.

The loan portfolio is systematically reviewed and the results
reported to the Board of Directors of the Registrant. The purpose of
these reviews is to assist in assuring proper loan documentation, to
provide for the early identification of potential problem loans and
to help ensure the adequacy of the allowance for loan losses.

6
7

(B) The following table sets forth the remaining maturity of
total loans outstanding (excluding real estate mortgages,
installment and lease financing) at December 31, 1997, according to
scheduled payments of principal (in thousands) and considering the
banks "rollover policy."(1)

(In thousands)

1 Year 1 Year - After
or less 5 Years 5 Years Total
-------- ------- ------ ------

Commercial and agricultural $1,867 $1,763 $611 $4,241
======== ======= ===== ======

The following table sets forth commercial and agricultural loans due
after one year, which have predetermined interest rates and/or
adjustable interest rates at December 31, 1997.

Fixed Adjustable
rate rate Total
------ ---------- ------

(In thousands)
Due after one but within five years $651 $1,112 $1,763
Due after five years 239 372 611
------ ---------- ------
Total $890 $1,484 $2,374
====== ========== ======

(1) The "rollover policy" is to generally write terms of
these loans for a shorter time then the expected payments.
The purpose of this is to re-evaluate the term and credit
of the respective borrower. We estimate that this happens on
approximately 80% of these borrowings and is reflected as
such in this schedule.

Item 1. Business (Continued)

III. Loan Portfolio

(1) Nonaccrual, past due, impaired and restructured loans

A table and discussion of nonaccrual, past due, impaired and
restructured loans for the years ended December 31, 1997 and
1996 is in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 5, 6 and 7 under
Provision and Allowance for Loan Losses, Note 1 under "Loans" and
"Allowance for Loan Losses" on pages 15 and 16 and in Note 5 on
page 19 in the 1997 Annual Report to the Shareholders. Such
information is incorporated herein by reference.

Gross interest income that would have been recorded in 1997 on
such loans if the loans had been current in accordance with their
original terms and outstanding throughout the period or since
origination was $8,363. No income was included in interest income
on these loans in 1997.

(2) Potential problem loans
There are no material loans that are current as to which
management has serious doubts as to the ability of the borrower
to comply with the loan repayment terms, or which are expected to
need adjustments in their repayment terms, or which are believed
to require additional provisions for loan losses.

(3) Foreign outstandings

There were no foreign outstandings as of December 31, 1997 and
1996.

(4) Loan concentrations

There were no concentrations of loans exceeding 10% of total
loans that have not been already disclosed as a category at
December 31, 1997.

(D) Other interest-bearing assets

As of December 31, 1997, there were no other interest-bearing assets
that would be required to be disclosed under Item III, Parts (C) (1)
or (C) (2) of the loan portfolio listing if such assets were loans.

9
Item 1. Business
IV. Summary of Loan Loss Experience

(A) The following table sets forth loan allowance balances and
summarizes changes in the allowance for loan losses for each
of the two years ended December 31

Analysis of the allowance for loan losses

(Dollars in thousands) 1997 1996
---- ----

Balance, beginning of period $1,020 $995
--------- --------
Loans charged-off
Commercial and agricultural 7 0
Real estate-construction 0 0
Real estate-mortgages 0 0
Lease financing 0 0
Installment and others 19 68
--------- --------
Total 26 68

Recoveries of loans charged off
Commercial and agricultural 6 28
Real estate-construction 0 0
Real estate-mortgages 0 0
Lease financing 0 0
Installment and others 35 65
--------- --------
Total 41 93

Net charge-offs (recoveries) (15) (25)

Additions charged to operations 0 0
--------- --------

Balance at end of period $1,035 $1,020
========= ========

Average gross loans outstanding $54,870 $49,507
========= ========

Ratio of net charge-offs (recoveries)
during the period to average gross
loans outstanding during the period -0.03% -0.05%
========= ========

Further discussion of the provision and allowance for loan losses as well
as non-performing and impaired loans is presented in "Management's
discussion and analysis of financial condition and results of operations"
on pages 5, 6 and 7 Note 1 on page 15 and 16 and Note 5 on page 19 in The
1997 Annual Report to the Shareholders, incorporated herein by reference.

IV. Summary of Loan Loss Experience (Continued)
(B) The following table presents an allocation for loan losses to the
various loan categories at December 31:

1997 1996
------------------------------ -----------------------------
% of % of
Allowance Loans to Allowance Loans to
(In thousands) Amount Total Loans Amount Total Loans
---------- ----------- --------- ------------

Commercial and agricultural $ 74 6.92% $ 55 8.60%
Real estate-mortgages 4 87.21 3 84.18
Installment and other 7 5.87 8 7.22
Unallocated 950 N/A 954 N/A
---------- ----------- --------- ------------
Total $ 1,035 100.00% $ 1,020 100.00%
========== =========== ========= ============

All the allowance allocations above were deemed by management to be
amounts reasonably necessary to provide for the possibility of future
losses being incurred in the various loan categories.

V. Deposits

The following table sets forth average deposit balances and the weighted
average rate paid for each of the two years ended December 31:

1997 1996
----------------------------- ---------------------------
Average Average
(Dollars In thousands) Balance Rate Balance Rate
------------ --------- --------- ---------

Non interest-bearing demand deposits $ 8,674 $ 8,515
Interest-bearing demand deposits 9,299 1.96% 10,328 2.13%
Savings deposits 16,586 2.94 17,093 2.86
Time deposits under $100,000 21,133 5.74 21,378 5.73
Time deposits of $100,000 or more 8,551 5.77 6,686 5.68
------------ ---------
Total $ 64,243 3.70% $ 64,000 3.62%
============ =========

The following table summarizes time deposits in amounts of $100,000 or
more by time remaining until maturity as of December 31, 1997:

(In thousands)
Three months or less $5,527
Over three months through six months 1,677
Over six months through one year 226
Over one year 1,848
------
Total $9,278
======

As of December 31, 1997 the registrant had no foreign deposits.

10
11

Item 1. Business (Continued)
VI. Return on Equity and Assets

The following table presents the ratios indicated for the years ended
December 31:

1997 1996
---- ----

Net income to average total assets 1.56% 1.49%
Net income to average shareholders' equity 12.47 12.67
Cash dividend payout ratio per share 33.65 29.84
Average shareholders' equity to average total assets 12.47 11.78

VII. Short Term Borrowings - Not applicable.

Item 2. Properties
The Bank owns the land on which the Bank's main office is located. The
land measures 85' by 170' and bears the municipal address of 322 South
Jefferson Street, Mason, Michigan. The permanent building, also owned
by Mason State Bank has approximately 6,800 square feet, including
banking facilities, storage and personnel lounge areas. This brick
structure was built in the mid 1800's and has gone through several
remodelings, the last one being in 1986 and is in good general
condition. A parking area with spaces to accommodate 20 vehicles
occupies part of the property; part is occupied by two drive-in banking
stations.

The Bank also owns the land used as a Branch office. The land measures
368' by 297' and bears the municipal address of 661 North Cedar Street,
Mason, Michigan. The permanent building, built in the 1960's, also
owned by Mason State Bank measures approximately 2,400 square feet,
including banking facilities, storage and personnel lounge areas. This
building is also in good condition. A parking area with spaces to
accommodate 24 vehicles occupies part of the property; part is occupied
by 4 drive-in banking stations.

The Registrant operates its business at the same address as Mason State
Banks' main office. As of March 19, 1998, the Registrant owned no
properties.

There are no liens or mortgages on the above mentioned properties.

Item 3. Legal Proceedings

There are no material pending legal proceedings to which the Registrant
or its subsidiaries is a party or to which any of its property is
subject, except for proceedings which arise in the ordinary course of
business. In the opinion of management, pending legal proceedings will
not have a material effect on the consolidated financial statements of
the Registrant or its subsidiaries.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable

11
12
Additional Item - Executive Officers

Executive officers of the Registrant are appointed annually by the Board of
Directors at the meeting of Directors following the Annual Meeting of
Shareholders. There are no family relationships among these officers and/or
Directors of the Registrant or any arrangement or understanding between any
officer and any other person pursuant to which the officer was elected.

The following sets forth certain information with respect to the Registrant's
executive Officers and Directors as of December 31, 1997.

Position with First elected as an
Name (Age) Registrant officer of the registrant
- ---------- ------------- -------------------------

Douglas W. Dancer (57) Chairman 1990

Gerald Ambrose (48) Vice Chairman 1994

Timothy P. Gaylord (43) President and C.E.O. 1995

George A. Sullivan (65) Secretary 1988

Mr. Dancer is a Director of the registrant and Chairman of the Board of
Directors of Mason State Bank.

Mr. Ambrose is a Director of the registrant and Vice Chairman of the Board of
Directors of Mason State Bank.

Mr. Gaylord is a Director of the registrant and President and Chief Executive
Officer of Mason State Bank.

Mr. Sullivan is a Director of the registrant and Secretary of the Board of
Directors of Mason State Bank.

PART II

I. The information required by this item appears in the Capital Directions,
Inc. Annual Report to Shareholders for the year ended December 31, 1997,
and is incorporated herein by reference, as follows:

Pages in 1997
Annual Report
-------------

Item 5. Market for registrant's common equity
and related stockholders matters 3

Item 6. Selected financial data 4

Item 7. Management's discussion and analysis of
financial condition and results of operations 5 - 9

Item 7a. Quantitative and qualitative disclosures about Not required as
market risk company meets
requirements to be a
small business filer

Item 8. Financial statements and supplementary data 10 - 25

Item 9. Changes in and disagreements with accountants
on accounting and financial disclosure None

PART III

The information required by this item is included in the Capital Directions,
Inc. 1998 Proxy Statement, dated April 1, 1998, and is incorporated herein by
reference, as follows:

Pages in 1997
Proxy Statement
---------------

Item 10. Directors and executive officers of the registrant 4 - 5

(In addition, reference is made to additional
item - executive officers under Part I of this
Form 10-K report on page 12)

Item 11. Executive compensation 6 - 8

Item 12. Security ownership of certain beneficial owners
and management 3 - 4

Item 13. Certain relationships and related transactions 9

The information appearing in the Corporation's Proxy Statement and in Note
4 on page 19 of the Notes to Consolidated Financial Statements of the 1997
Annual Report to Shareholders is incorporated herein by reference in response
to this item.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on

Form 8-K

(a) The following documents are filed as part of this report:

1. The following consolidated financial statements of Capital
Directions, Inc. included in the 1997 Annual Report to Shareholders for
the year ended December 31, 1997, are incorporated herein by reference
in Item 8:

Pages in 1997
Annual Report
-------------

Consolidated balances sheets -
December 31, 1997 and 1996 11

Consolidated statements of income for the years ended
December 31, 1997, 1996 and 1995 12

Consolidated statements of cash flows for the years
ended December 31, 1997, 1996 and 1995 13

13
14

Pages in 1997
Annual Report
-------------

Consolidated statements of changes in shareholders'
equity for the years ended December 31, 1997, 1996
and 1995 14

Notes to consolidated financial statements 15 - 25

Report of Independent Auditors 10

2. Financial Statement Schedules

Not applicable

3. Exhibits

(3a) Articles of Incorporation and (3b) Bylaws (previously filed as
Exhibits included in Capital Directions, Inc.'s Registration Statement
Amendment No. 1 to Form S-4, No. 33-20417, Dated March 17, 1988).

(10) Material Contracts
(a) Incentive Compensation Plans (previously filed as
Exhibits included in Capital Directions, Inc.'s 1988
10-K report dated March 29, 1989 and the 1993 10-K report
dated March 29, 1994).

(b) Directors Deferred Compensation Plans (previously filed as
Exhibits included in Capital Directions, Inc.'s 1988 10-K
report dated March 29, 1989).

(c) Supplementary Executive Retirement Plan (previously filed
as Exhibits included in Capital Directions, Inc.'s 1988
10-K report dated March 29, 1989).

(13) Annual Report to Shareholders for the year ended December 31,
1997 (filed herewith).

(22) Subsidiaries of registrant (previously filed as Exhibits
included in Capital Directions, Inc.'s 1988 10-K report dated
March 29, 1989).

(23) Consents of experts. Consent of Crowe, Chizek and Company LLP.

(27) Financial Data Schedule for EDGAR filer.

(b) Reports of Form 8-K

No reports of Form 8-K were filed during the last quarter
of the year covered by this report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 19, 1998.

CAPITAL DIRECTIONS, INC.

/s/ Timothy P. Gaylord Timothy P. Gaylord
- ---------------------------------- (President and Chief Executive Officer)

/s/ Lois A. Toth Lois A. Toth
- ---------------------------------- (Treasurer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been duly signed by the following persons in the capacities
indicated on March 19, 1998.

/s/ Douglas W. Dancer Douglas W. Dancer
- ---------------------------------- Chairman of Board of Directors

/s/ Gerald Ambrose Gerald Ambrose
- ---------------------------------- Vice Chairman of Board of Directors

/s/ George A. Sullivan George A. Sullivan
- ---------------------------------- Secretary of Board of Directors

/s/ Timothy P. Gaylord Timothy P. Gaylord
- ---------------------------------- President and Chief Executive
Officer

/s/ Marvin B. Oesterle Marvin B. Oesterle
- ---------------------------------- Director

/s/ Paula Johnson Paula Johnson
- ---------------------------------- Director

Index to Exhibits

The following exhibits are filed or incorporated by reference as part of this
report:

3(A) Articles of Incorporation of the Registrant as currently in effect and
any amendments thereto (Incorporated herein by reference to exhibit 3(A)
of the Registrants' form S-4 Registration Statement dated March 17, 1988
No. 33-20417).

3(B) Bylaws of the Registrant as currently in effect and any amendments
thereto(Incorporated herein by reference to exhibit 3(B) of the
Registrants' form S-4 Registration statement dated March 17, 1988 No.
33-20417).

10(A) Incentive Compensation Plans (Incorporated herein by reference to
exhibit 10(A) to Registrants' Report on Form 10-K for the year ended
December 31, 1988 and December 31, 1993 [1988 and 1993 10-K Report]).

10(B) Directors Deferred Compensation Plan (Incorporated herein by reference
to exhibit 10(B) to Registrants' Report on From 10-K for the year ended
December 31, 1988 [1988 10-K Report]).

10(C) Supplementary Executive Retirement Plan (Incorporated herein by
reference to exhibit 10(C) to Registrants' Report on Form 10-K
for the year ended December 31, 1988 [1988 10-K Report]).

13 Annual Report to Shareholders for the year ended December 31, 1997
(filed herewith).

22 List of Subsidiaries (Incorporated herein by reference to exhibit 22
to Registrants' Report on Form 10-K for the year ended December 31, 1988
[1988 10-K Report]).

23 Consents of experts. Consent of Crowe, Chizek and Company LLP.

27 Financial Data Schedule for EDGAR filer.