AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------

OFFIT HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 6091 51-0382635
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)

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

520 MADISON AVENUE
NEW YORK, NEW YORK 10022-4213
(212) 958-9600
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive office)
--------------------------

MORRIS W. OFFIT
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
OFFIT HOLDINGS, INC.
520 MADISON AVENUE
NEW YORK, NEW YORK 10022-4213
(212) 758-9600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------

COPIES TO:

VINCENT J. PISANO, ESQ. E. ROBERT GOODKIND, ESQ.
Skadden Arps Slate Meagher Goodkind Labaton Rudoff
& Flom LLP & Sucharow LLP
919 Third Avenue 100 Park Avenue
New York, New York 10022 New York, New York 10017

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
--------------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If the delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. / /
--------------------------

CALCULATION OF REGISTRATION FEE

PROPOSED MAXIMUM
TITLE OF EACH CLASS AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE

Common Stock, $.01 par value per share................................ $46,000,000 $13,570

(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.
------------------------

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

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

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PROSPECTUS
,000,000 SHARES
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 6, 1998

[LOGO]
OFFITBANK HOLDINGS, INC.

COMMON STOCK
------------------

Of the shares of Common Stock, par value $0.01 per share (the "Common
Stock"), offered hereby (the "Offering"), shares will be issued and
sold by OFFITBANK Holdings, Inc., a Delaware corporation (the "Company"), and
shares will be sold by certain selling shareholders (the "Selling
Shareholders"). See "PRINCIPAL AND SELLING SHAREHOLDERS." The Company will not
receive any proceeds from the sale by the Selling Shareholders.

Each share of Common Stock entitles its holder to one vote. Following the
Offering, Morris W. Offit, Chairman and Chief Executive Officer of the Company,
together with the other officers and directors, will beneficially own shares of
Common Stock having approximately [ ]% of the voting power of the outstanding
Common Stock ( % if the Underwriters' over-allotment options are exercised in
full), and such persons, together with the Managing Directors of the Company,
will beneficially own approximately [ ]% of the voting power of the outstanding
Common Stock ( % if the Underwriters' over-allotment options are exercised in
full). See "PRINCIPAL AND SELLING SHAREHOLDERS" and "MANAGEMENT."

Prior to the Offering, there has been no public market for the Common Stock.
It is currently estimated that the initial public offering price per share of
Common Stock will be between $ and $ . For a discussion of the
factors considered in determining the initial public offering price, see
"UNDERWRITING."

Application has been made to list the Common Stock on The New York Stock
Exchange under the symbol "OFB."

FOR INFORMATION CONCERNING RISK FACTORS RELATING TO THIS OFFERING SEE "RISK
FACTORS" ON PAGE 9 IMMEDIATELY FOLLOWING THE SUMMARY.
------------------------

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

PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)

Per Share............................................... $ $ $

Total(3)................................................ $ $ $

PROCEEDS TO SELLING
SHAREHOLDERS (2)

Per Share............................................... $
Total(3)................................................ $

(1) The Company and the Selling Shareholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "UNDERWRITING."

(2) Before deducting estimated expenses of the Offering of $ of which
$ will be payable by the Company and $ will be paid by the
Selling Shareholders.

(3) The Company and the Selling Shareholders have granted the Underwriters a 30
day option to purchase up to and , additional shares of Common
Stock, respectively, to cover over-allotments, if any. If all such options
are exercised in full, the total Price to Public, Underwriting Discount,
Proceeds to the Company and Proceeds to Selling Shareholders will be
$ , $ , $ and $ , respectively. See
"UNDERWRITING."
--------------------------

The Common Stock is offered by the several Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, subject to the approval of
certain legal matters by counsel to the Underwriters and to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject any orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York on or
about , 1998.
--------------------------

MERRILL LYNCH & CO. SCHRODER & CO. INC.
---------------

The date of this Prospectus is , 1998.

O F F I T B A N K

THE WEALTH MANAGEMENT BANK

[PHOTO]

520 MADISON AVENUE NEW YORK, NEW YORK 10022 212-350-3772 FAX 212-421-6227

520 MADISON AVENUE NEW YORK, NY 10022-4213 212-758-9600

WWW.OFFITBANK.COM

DEDICATED TO
EXCELLENCE AND
INTEGRITY IN
WEALTH MANAGEMENT
---------------
PROVIDING COMPREHENSIVE INVESTMENT MANAGEMENT
SERVICES TO INDIVIDUALS AND FAMILY GROUPS IN CONCERT
WITH THE FINANCIAL AND LEGAL ADVISORS WHO SERVE THEM.
-----------------------------------------------------

O F F I T B A N K

THE WEALTH MANAGEMENT BANK

As appeared in the financial press.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING STABILIZING BIDS, SYNDICATE COVERAGE TRANSACTIONS OR THE IMPOSITION OF
PENALTY BIDS. FOR A DISCUSSION OF THESE ACTIVITIES, SEE "UNDERWRITING."

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the shares of Common Stock offered hereby (the "Offering"). This
Prospectus, which is a part of the Registration Statement, is complete in
material respects but does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the shares of Common Stock,
reference is hereby made to such Registration Statement and the exhibits and
schedules thereto, copies of which may be inspected without charge at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, New York, New York
10048, and at the Northwest Atrium Center, 500 Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials can be obtained from the
public reference section of the Commission upon payment of the fees prescribed
by the Commission. The public may obtain information on the operation of the
Public Reference Room by calling the Commission at 1-800-SEC-0330. In addition,
registration statements and certain other documents filed with the Commission
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system
are publicly available through the Commission's site on the World Wide Web,
located at http://www.sec.gov. The Registration Statement, including all
exhibits thereto and amendments thereof, has been filed with the Commission
through EDGAR. The summaries in this Prospectus of additional information
included in the Registration Statement or any exhibit thereto are qualified in
their entirety by reference to such information or exhibit.

As a result of the Offering, the Company will become subject to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith will file periodic reports, proxy statements and other
information with the Commission. After the Offering, such reports, statements
and other information may also be obtained from The New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005. The Company intends to furnish
its shareholders with annual reports containing audited consolidated financial
statements and an opinion thereon expressed by independent public accountants
and with quarterly reports containing unaudited consolidated financial
information for the first three quarters of each fiscal year.

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements under "SUMMARY"; "RISK FACTORS"; "BUSINESS";
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" and elsewhere in this Prospectus constitute forward-looking
statements, which involve known and unknown risks, and other factors that may
cause the actual results, levels of activity, performance or achievements of the
Company or industry results to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, those listed
under "RISK FACTORS" and elsewhere in this Prospectus. As a result of the
foregoing and other factors, no assurance can be given as to future results,
levels of activity or achievements, and neither the Company nor any other person
assumes responsibility for the accuracy and completeness of such statements.

SUMMARY

THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS. REFERENCE IS MADE TO, AND THIS SUMMARY IS QUALIFIED IN ITS
ENTIRETY BY, THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS (INCLUDING
THE NOTES THERETO) APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE
INDICATED, THE INFORMATION CONTAINED IN THIS PROSPECTUS (I) GIVES EFFECT TO THE
FORMATION TRANSACTIONS DESCRIBED UNDER "CERTAIN TRANSACTIONS--THE FORMATION
TRANSACTIONS" AND (II) ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT
OPTIONS. UNLESS THE CONTEXT OTHERWISE REQUIRES, REFERENCES TO THE "COMPANY" MEAN
OFFITBANK HOLDINGS, INC. AND ITS CONSOLIDATED SUBSIDIARIES; REFERENCES TO
"OFFITBANK" MEAN OFFITBANK, A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY AND ITS
PREDECESSOR, OFFIT ASSOCIATES, INC.; AND REFERENCES TO "COMMON STOCK" MEAN THE
COMMON STOCK OF THE COMPANY.

OVERVIEW

OFFITBANK is a leading provider of wealth management services to the upper
tier of the wealth management market. Its select client base is comprised of
high net worth individuals and families, non-profit organizations and corporate
and institutional investors seeking primarily customized fixed income
management. Founded in 1983 as a registered investment advisor, OFFITBANK
converted to a New York state trust bank in 1990.

OFFITBANK has modeled itself after the classic Swiss private bank in which
asset management is the core business, establishing a foundation for the Company
to successfully provide other corollary services, such as custody, foreign
exchange services, trust services, deposit services and collateralized lending.
It is the view of the Company that these corollary services are natural product
extensions of asset management. Its emphasis on asset management as the wealth
management business model has distinguished OFFITBANK from many other
institutions servicing the high net worth market.

OFFITBANK's focus on the upper tier of the wealth management market,
nationally and internationally, has produced a unique client profile. As of June
30, 1998, 65% of the Company's portfolio assets were comprised of managed
account relationships of $30 million or more and 95% of its assets were
comprised of managed account relationships of $5 million or more. As of June 30,
1998, the Company had $9.26 billion under management for 471 actively managed
client relationships and an additional $645 million directly invested in its
mutual funds.

Assets under management have grown at a 11.4% compound annual growth rate
("CAGR"), from $6.1 billion at December 31, 1993 to $9.9 billion at June 30,
1998. During the same period, annualized investment management fees grew by
14.5%, from $21.6 million at December 31, 1993 to $39.6 million at June 30,
1998. As a result of growth of assets and revenues and increasing operating
margins, net income for the 6 months ended on June 30, 1998 was $2.8 million, up
73.1% from the same prior year period. Net income for 1997 was $3.3 million, up
36.4% from 1996. See "SUMMARY CONSOLIDATED FINANCIAL DATA."

The cornerstone of OFFITBANK's wealth management services is fixed income
investment management. The defining characteristic of OFFITBANK's investment
strategy is its emphasis on fundamental research, integrating interest rate
risk, credit risk and currency risk analyses. In providing investment management
for its clients, OFFITBANK seeks to satisfy four primary goals: preservation of
capital, generation of income, appreciation of assets and efficient wealth
transfer. See "BUSINESS--Investment Methodology."

OFFITBANK also provides financial services which enhance its core asset
management business, namely, custody, sophisticated client reporting, including
unit and individual tax accounting, foreign exchange services and, on a more
limited basis, collateralized lending and trust services.

OFFITBANK believes that its competitive investment performance, its emphasis
on building enduring client relationships and its name recognition within the
upper tier of the wealth management market position it to take advantage of
favorable economic and demographic trends affecting the market for wealth
management services.

WEALTH MANAGEMENT MARKET

The wealth management industry is highly fragmented with a number of
regional and national organizations, including banks, broker/dealers and
specialized firms serving clients within distinct geographic regions. The
Company believes that the wealth management market is increasingly global. It
includes both a large number of clients and substantial investable assets which
offer significant opportunities for growth. OFFITBANK, in contrast to other
wealth management firms, focuses heavily on the upper tier of the wealth
management market. It is the opinion of OFFITBANK that there is no dominant
franchise serving this market. While there is no precise measure of segmentation
in the industry, OFFITBANK considers the "upper tier" of the wealth management
market to consist of individuals, families and institutional clients with
investable assets of greater than $10 million. Based on its years of experience
in serving high net worth clients, it is the view of the Company, that the upper
tier clientele is a particularly under-served segment of the market due to the
multifaceted and complex nature of the client relationship. More significant
asset sizes require more complex investment strategies, diverse investment
vehicles and specialized fiduciary client services and reporting. Consequently,
the upper tier wealth management client requires a highly differentiated client
service level which, in management's opinion, generally is not adequately
provided. Globally, high net worth individuals accounted for $17 trillion in
assets in 1996, which is expected to approach $25 trillion by the year 2000.

INVESTMENT METHODOLOGY

OFFITBANK brings a disciplined approach to wealth management through its
investment philosophy and its experienced team of investment professionals. It
is the Company's objective to develop for each client a tax efficient and
customized wealth management strategy which is designed to produce a favorable
"risk adjusted rate of return" within the guidelines established with clients
and their advisors.

In customizing portfolio investment strategies for its clients, OFFITBANK
asset allocates among one or more of six primary fixed income asset classes, as
well as specialized and domestic equities. The primary fixed income classes are
comprised of U.S. Treasury securities, Mortgage-Backed securities, Tax Exempt
bonds, International High Grade debt, High Yield bonds and Emerging Market debt.
OFFITBANK also uses commingled investment vehicles, such as proprietary mutual
funds, limited partnerships and structured insurance products. OFFITBANK has
selectively taken an "open architecture" approach to domestic equity investment
management. This entails both the use of individual equity securities and mutual
funds managed by third-party investment managers.

MARKETING

OFFITBANK's principal source of new clients is, and is expected to continue
to be, referrals from its existing clients and from over 500 fiduciary advisors,
nationally and internationally, including accountants, attorneys, investment
consultants, financial planners and registered investment advisors with whom
OFFITBANK has ongoing relationships. OFFITBANK also obtains referrals from
consultants, who are engaged by pension funds, non-profits and other large
investors to monitor money manager performance and advise on asset allocations
and financial planning. An internal client development group is focused on
maximizing the Company's referral business by working closely with the fiduciary
advisors of high net worth individuals and families.

BUSINESS STRATEGY

The Company's goal is to maintain and expand OFFITBANK's penetration into
the upper tier of the wealth management market using the following key
strategies (See "BUSINESS--Business Strategy"):

- CONTINUE GROWTH OF CURRENT WEALTH MANAGEMENT SERVICES. OFFITBANK will
continue to stress the strength of its current wealth management services
within its primary client market.

- EXPAND EXISTING WEALTH MANAGEMENT BUSINESS THROUGH ENHANCED PRODUCT
CAPABILITY. The Company believes that, due to the highly fragmented nature
of the wealth management business, the absence of dominant franchises and
the unique nature of its wealth management client base and relationships,
substantial opportunity exists to expand OFFITBANK's current business
through a broader range of product offerings, including new investment
alternatives, a direct collateralized lending capability and expanded
trust services.

- INCREASE GEOGRAPHIC PRESENCE. OFFITBANK intends to capitalize on the
current fragmented state of the wealth management market through an
expansion of its offices into affluent areas in the United States and
internationally and, where appropriate, the addition or acquisition of
wealth managers with very high net worth clients.

- PURSUE RELATIONSHIPS WITH OTHER PROVIDERS OF PRODUCTS AND SERVICES.
OFFITBANK believes that offering its clients the best available products
is fundamental to maintaining its client relationships. OFFITBANK intends
to selectively pursue opportunities relying on its "open architecture"
approach to wealth management. Open architecture is the provision of
investment products and services to OFFITBANK clients through
relationships with other providers of wealth management services,
including investment managers and providers of administrative services.

- ENHANCE CLIENT SERVICES THROUGH INVESTMENTS IN HUMAN CAPITAL AND
TECHNOLOGY. OFFITBANK believes that its client relations, investment
management and information systems personnel are among the most highly
skilled and experienced in their respective fields and will seek to hire
especially qualified people to support its growth. In addition, a
significant component of wealth management is the ability to provide
clients and their professional advisors with information concerning the
client's account in a wide variety of formats and for a wide variety of
particular purposes such as tax planning, fiduciary reporting and other
needs. OFFITBANK currently has the capability to provide this array of
information through its information technologies and specialized programs
designed for wealth management. OFFITBANK intends to continue to invest in
state-of-the-art technologies that differentiate the Company as a wealth
management provider.

- PURSUE ACQUISITIONS. OFFITBANK intends to selectively pursue acquisitions
to broaden its product offerings in its core investment management
business, as well as corollary wealth management services such as
collateralized lending capability and enhanced trust services.

THE OFFERING

Common Stock offered by the Company.......... shares
---------

Common Stock offered by the Selling
Shareholders............................... shares
---------

Total.................................... shares
---------
---------

The shares of Common Stock offered by
the Selling Shareholders consist of
shares held by certain institutions and
shares held by certain other Existing
Shareholders (as hereinafter defined). See
"PRINCIPAL AND SELLING SHAREHOLDERS."

Common Stock Outstanding After Offering...... shares (without giving effect to the
Underwriters' exercise of the over-allotment
options).

Use of Proceeds.............................. The net proceeds to be received by the
Company from the sale of the shares offered
by it hereby is estimated at $
million, assuming an offering price of
$ per share, after deducting the
underwriting discount and estimated offering
expenses to be paid by the Company.

The net proceeds received by the Company will
be used for general corporate purposes,
including those associated with the Company's
plans to expand the business of OFFITBANK.
The Company will receive no proceeds from the
sale of Common Stock by the Selling
Shareholders. See "USE OF PROCEEDS."

NYSE Listing................................. Application will be made to list the Common
Stock on The New York Stock Exchange.

NYSE Symbol.................................. OFB

RISK FACTORS

Prospective investors should carefully consider the factors set forth under
the caption "RISK FACTORS", which include risks associated with the Company's
ability to retain and attract key personnel, competition, securities markets,
poor investment performance, termination of client arrangements on short notice,
use of proceeds, plans to provide credit facilities to clients, risks associated
with potential future acquisitions, Year 2000 risks, regulatory limitations,
immediate and substantial dilution to prospective investors, control by officers
and directors and anti-takeover provisions, authorization of preferred stock,
absence of a prior public market, volatility of stock price, shares eligible for
future sale and no assurance of dividends, as well as the other information set
forth in this Prospectus, before purchasing shares of Common Stock offered by
this Prospectus.

CORPORATE STRUCTURE

OFFITBANK Holdings, Inc. is a newly organized holding company that has not
engaged in any business operations, acquired any assets or incurred any
liabilities other than in connection with the Offering. The Company has issued
9,254,808 shares of its Common Stock to all of the former shareholders of
OFFITBANK (the "Existing Shareholders") in exchange for all of the shares of
common stock of OFFITBANK. As a result, OFFITBANK became a wholly owned
subsidiary of the Company, and the Company will conduct its current business
operations through OFFITBANK and its subsidiaries. After the consummation of the
Offering, the Existing Shareholders (other than the Selling Shareholders who are
selling all of their shares of Common Stock) will own shares of Common
Stock, which will represent approximately % of the outstanding shares ( %
if the Underwriters' over-allotment options are exercised in full).
Approximately % ( % if the Underwriters' over-allotment options are
exercised in full) of the outstanding shares after the consummation of the
Offering (without giving effect to options to acquire 673,248 shares of Common
Stock held by employees of OFFITBANK) will be owned by Morris W. Offit, and the
other officers, directors and Managing Directors of OFFITBANK. Together, these
persons will control the Company. See "MANAGEMENT", "PRINCIPAL AND SELLING
SHAREHOLDERS" and "CERTAIN TRANSACTIONS--The Formation Transactions."

The following sets forth a simplified organizational chart for the Company
and its active subsidiaries. All subsidiaries of the Company are 100% owned.

[LOGO]

The Company's principal office is located at 520 Madison Avenue, New York,
New York 10022-4213 and its telephone number is (212) 758-9600.

OFFITBANK

SUMMARY CONSOLIDATED FINANCIAL DATA

(IN THOUSANDS, EXCEPT PER SHARE DATA)

FOR THE SIX MONTHS
ENDED JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- --------- ---------

Statement of Income Data:

Revenues:
Management fees........................ $ 19,090 $ 15,427 $ 32,868 $ 28,220 $ 22,804 $ 22,022 $ 21,521
Interest and dividends................. 626 643 1,363 1,200 1,153 935 668
Foreign exchange....................... 318 385 627 1,341 1,150 7,997 9,510
Custody................................ 351 306 607 359 297 334 209
Net realized gains/(losses) in
investments available for sale....... 81 57 321 184 265 (346) 126
Other.................................. 70 68 307 142 439 240 270
--------- --------- --------- --------- --------- --------- ---------
Total revenues....................... 20,536 16,886 36,093 31,446 26,108 31,182 32,304
Expenses:
Salaries and employee benefits......... 10,460 9,081 19,232 17,376 16,121 16,628 14,816
Occupancy.............................. 1,184 897 1,823 1,788 1,498 1,874 1,746
Advertising and marketing.............. 1,033 1,045 2,000 1,506 1,069 976 1,282
Data processing and software
development.......................... 491 341 809 722 961 811 947
Depreciation and amortization.......... 350 375 739 724 792 864 757
Professional fees...................... 237 251 615 793 470 1,209 951
Market research and information
services............................. 374 388 769 748 720 787 536
Insurance.............................. 228 217 434 431 411 415 361
Equity in loss of affiliate............ -- 247 1,335 665 -- -- --
Other.................................. 1,195 1,072 2,426 2,423 1,497 2,192 1,982
--------- --------- --------- --------- --------- --------- ---------
Total expenses....................... 15,552 13,914 30,182 27,176 23,539 25,756 23,378
Income before income taxes........... 4,984 2,972 5,911 4,270 2,569 5,426 8,926
Income taxes............................. 2,155 1,337 2,630 1,864 1,131 2,741 4,200
--------- --------- --------- --------- --------- --------- ---------
Net income........................... $ 2,829 $ 1,635 $ 3,281 $ 2,406 $ 1,438 $ 2,685 $ 4,726
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net income per share................. $ 0.31 $ 0.18 $ 0.35 $ 0.26 $ 0.16 $ 0.30 $ 0.52
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net income per share-assuming
dilution........................... $ 0.29 $ 0.17 $ 0.34 $ 0.25 $ 0.15 $ 0.29 $ 0.51
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Balance Sheet Data:
Total Assets............................. $ 32,864 $ 31,056 $ 30,453 $ 28,716 $ 26,617 $ 24,513 $ 22,822
Total Liabilities........................ 5,822 5,613 4,784 3,287 2,789 2,994 3,781
Total Stockholders' Equity............... 27,042 25,443 25,669 24,889 23,828 21,519 19,041

Dividends Declared....................... 1,542 1,078 2,619 1,263 493 -- $ --

Performance fees included in investment
management fees........................ -- -- -- 1,527 309 301 2,023

- ------------------------------------------
Selected Business Data:
Assets under management at end of
period................................. $9,905,000 $8,409,000 $9,342,000 $7,985,000 $6,651,000 $6,007,000 $6,078,000
Annualized investment management fees at
end of period.......................... 39,602 32,930 37,011 29,350 25,045 20,144 21,573
Average investment management fees at end
of period.............................. 0.40% 0.39% 0.40% 0.37% 0.38% 0.34% 0.35%

RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS,
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, IN EVALUATING
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.

ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL

OFFITBANK's future success depends, in significant part, on the continued
service of key Managing Directors, relationship managers and portfolio managers,
particularly Morris W. Offit, the Company's Chairman and Chief Executive
Officer. The loss of Mr. Offit's services would have an adverse effect on the
Company's business, financial condition and operating results. The Company has
entered into non-compete agreements with certain key employees and maintains
"key person" life insurance on Mr. Offit for the benefit of the Company.
Competition for key personnel and other highly qualified relationship managers
and portfolio managers is intense, and there can be no assurance that OFFITBANK
will be able to retain its key personnel or that it will be able to attract,
assimilate or retain other highly qualified personnel in the future. See
"BUSINESS--Clients" and "Marketing" and "MANAGEMENT--Executive Compensation" and
"Non-Competition Agreement."

COMPETITION

OFFITBANK believes that only a limited number of companies are currently
directly competing with it in its core business of providing wealth management
services to the upper tier of the wealth management market. However, the
investment management business in general is intensely competitive. In providing
investment management services, the Company competes with a large number of
asset management firms as well as broker/dealers, trust banks, commercial banks
and other specialized wealth management providers. Future growth and
profitability of the Company will be affected by the Company's ability to retain
and increase its market share which could be adversely affected in the longer
term as competitors seek to develop high net-worth relationships. Many of
OFFITBANK's current and potential competitors are larger in terms of capital,
assets, geographic presence and other important business criteria and may have
access to greater resources than the Company. See "BUSINESS--Competition."

RISKS ASSOCIATED WITH SECURITIES MARKETS

In recent years, the United States securities markets have generally
experienced favorable conditions and, in particular, the demand for and
proliferation of available fixed income securities has been substantial. Market
performance has benefited OFFITBANK by producing a demand for investment
management and wealth management services. A significant portion of OFFITBANK's
revenue is derived from investment management fees, which are based on the
amount of assets under management. By the nature of its core business,
OFFITBANK's assets under management increase primarily as the result of its
acquiring new clients or its being entrusted with larger amounts of investable
capital by its existing clients, rather than as a result of market appreciation.
OFFITBANK's business, therefore, could possibly be adversely affected by a
decline in the securities markets, which may cause its potential and existing
wealth management clients to withdraw investment funds, or by a change in market
conditions which affect the demand for fixed-income securities.

OFFITBANK's revenues are derived largely from fees which are based on the
values of assets managed or administered. Such values are affected by changes in
the broader financial markets which are, in part, affected by changing interest
rates. In a period of rapidly rising interest rates, management fee revenue may
be negatively impacted by reduced asset values and redemptions, which would
reduce managed assets, thereby reducing management fees and certain other
revenue.

RISK OF POOR INVESTMENT PERFORMANCE

Success in the investment management business is largely dependent on the
investment performance of the assets under management relative to market
conditions and the performance of competing investment managers. Poor investment
performance by OFFITBANK could result in withdrawals of investment funds by
existing clients and an inability to acquire new clients, with corresponding
decreases in OFFITBANK's revenues, and could have a material adverse effect on
the Company. See "BUSINESS - Overview", "Clients" and "Investment Methodology."

RISK OF TERMINATION OF CLIENT ARRANGEMENTS ON SHORT NOTICE

OFFITBANK's investment advisory agreements with clients, other than mutual
funds, are typically terminable by either party on notice. OFFITBANK's
investment advisory agreements with its mutual funds are terminable on 60 days'
notice and must be approved and renewed annually by the disinterested members of
the boards of directors of the mutual funds or by their shareholders, as
required by law. Termination of, or the failure to renew, a significant number
of these agreements would have a material adverse effect on the Company.

USE OF PROCEEDS

The Company intends to use the net proceeds of this Offering for general
corporate purposes, including establishing expanded collateralized lending
facilities for its clients, opening and operating additional regional offices,
making additions to its marketing and portfolio management personnel, developing
new investment product offerings and funding the other costs associated with the
Company's plans to expand its business. From time to time in the normal course
of business, OFFITBANK reviews possible acquisition opportunities, and
anticipates funding any such acquisitions, in part, with proceeds from this
Offering. The amounts to be applied to any of the foregoing purposes or other
purposes have not been determined and, depending upon market and other factors,
such intended uses of funds may change. Accordingly, management will have
significant flexibility in applying the net proceeds of the Offering. See "USE
OF PROCEEDS."

PLANS TO PROVIDE CREDIT FACILITIES TO CLIENTS

The Company believes that OFFITBANK's high net worth clients would benefit
from expansion of OFFITBANK's products, including the direct provision by
OFFITBANK of credit collateralized by clients' assets. OFFITBANK currently has
arranged a facility for such loans with an unaffiliated bank, secured by the
clients' assets under management with OFFITBANK. It is the intent of the Company
to make such loans directly in the future and to make residential mortgage loans
to its existing wealth management clients. In addition, the Company may accept
deposits to fund such loans upon receipt of required regulatory approvals. In
order to make such loans and to accept deposits, OFFITBANK will be required to
amend its charter, comply with state and federal laws and regulations applicable
to state chartered deposit-taking institutions and to obtain Federal Deposit
Insurance. In providing a collateralized lending facility to its high net worth
clients, the Company will be assuming the credit risk of such loans and may be
accepting deposits as a means of funding such loans, two activities in which it
has not heretofore engaged. See "BUSINESS--Other Wealth Management
Services--Collateralized Lending", "Business Strategy" and "Regulation."

RISKS ASSOCIATED WITH POTENTIAL FUTURE ACQUISITIONS

The Company's business strategy contemplates the possible acquisition of
other investment and wealth management companies and fixed income and equity
investment advisors. There can be no assurance that the Company will find
suitable acquisition candidates at acceptable prices, have sufficient capital
resources to realize its acquisition strategy or be successful in entering into
definitive agreements

for desired acquisitions. Furthermore, there can be no assurance that the
Company will be able to successfully integrate acquired businesses into the
Company, or that any such acquisitions, if consummated, will prove to be
advantageous to the Company. See "BUSINESS--Business Strategy."

YEAR 2000 RISKS

OFFITBANK has completed its analysis of modifications to its information
systems required to make such systems Year 2000 ready, has completed a
substantial portion of the modifications called for by the analysis and expects
all such modifications to be completed by the end of 1998. Management does not
anticipate that OFFITBANK will incur significant operating expenses or be
required to incur material costs to be Year 2000 ready. However, upon completion
of testing of the modifications, additional work may be required that could
materially increase costs and/or delay completion beyond the end of 1999. In
addition, OFFITBANK's businesses all depend in part upon computer systems of
third parties, such as broker/dealers and commercial banks that may not be Year
2000 ready. To the extent that OFFITBANK's or such third parties' systems are
not Year 2000 ready, potential systems interruptions or the costs associated
with operating without Year 2000 ready software and hardware could have an
adverse effect on the Company. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS."

REGULATORY LIMITATIONS

OFFITBANK is a trust company chartered under the New York Banking Law
("NYBL") and is supervised and examined by the New York State Banking Department
("NYSBD"). As such, OFFITBANK may only engage in those activities permitted for
trust companies. Any expansion of OFFITBANK's business beyond the powers granted
to New York trust companies would require application to the NYSBD and an
amendment of OFFITBANK's charter.

The Superintendent of Banks of the State of New York (the "Superintendent")
is empowered to impose penalties for violation of law and regulation and to take
possession of a limited purpose trust company and its business and property in
the event that it appears that the limited purpose trust company has, among
other things, violated any law, is conducting business in an unauthorized or
unsafe manner, is in an unsound or unsafe condition to transact its business or
has an impairment of capital. The Superintendent may also remove officers and
directors of a limited purpose trust company if any such person has violated any
law applicable to the trust company or has continued unsafe or unsound practices
in conducting the business of the trust company after having been ordered or
warned by the Superintendent to discontinue such practices.

Following the implementation by the Company of its strategy of entering into
the deposit-taking and lending businesses, OFFITBANK would be required to amend
its charter to become a bank under the NYBL and would be regulated and examined
as a bank by the NYSBD. In addition, OFFITBANK would be regulated and examined
by the appropriate federal regulator (the FDIC or the Federal Reserve if it
becomes a member bank). OFFITBANK also would become subject to state and federal
regulatory requirements applicable to banks, including without limitation,
single borrower lending limits, limitations on loans to and transactions with
affiliates (including the Company), maximum rates of interest, reserve
requirements, limitations on interest rates paid on deposits, limitations on
activities other than banking, limitations on affiliation with companies engaged
in underwriting and dealing in securities and limitations on investments in
subsidiaries.

In addition, the Company would become a bank holding company regulated by
the Federal Reserve, and both OFFITBANK and the Company would be subject to
federal laws and regulations applicable to banks and bank holding companies.

Regulators could impose new or additional requirements or limitations with
respect to: (i) the scope of permissible activities of OFFITBANK or the Company;
(ii) capital requirements of OFFITBANK or

the Company; and (iii) acquisitions by OFFITBANK or the Company. Moreover,
regulators could impose restrictions which could affect the ability of OFFITBANK
or the Company to engage in new activities or introduce new products. In
addition, acquisition by, or change in activities of, OFFITBANK or the Company
may result in different or additional regulatory restrictions. Changes in laws
or regulations or in governmental policies, or the application of additional
laws or regulations, could have a material adverse effect on the business,
results of operation and prospects of OFFITBANK and the Company and the price of
the Common Stock. See "BUSINESS--Regulation."

IMMEDIATE AND SUBSTANTIAL DILUTION TO PROSPECTIVE PURCHASERS

Purchasers of Common Stock offered hereby will experience immediate and
substantial dilution in net tangible book value per share of Common Stock from
the initial offering price. In addition, employees of the Company hold options,
substantially all of which are currently exercisable, to acquire a total of
673,248 shares of Common Stock at a weighted average exercise price of $7.02.
The exercise of these options will result in further dilution of the net
tangible book value represented by the shares to be acquired by investors. See
"DILUTION."

CONTROL BY OFFICERS AND DIRECTORS; ANTI-TAKEOVER PROVISIONS

Upon the consummation of the sale of the Common Stock offered hereby, the
officers and directors of the Company will beneficially own approximately %
and, together with OFFITBANK's Managing Directors, will beneficially own
approximately % of the then-issued and outstanding shares of Common Stock
(assuming no exercise of the Underwriters' over-allotment options or outstanding
stock options). Accordingly, the current management will, in all likelihood, be
able to elect all of the Company's directors, increase the authorized capital,
dissolve, merge or sell the assets of the Company and, generally, direct the
affairs of the Company. The By-laws also provide that meetings of shareholders
may only be called by the Board of Directors and require shareholders who wish
to bring matters before such meetings to comply with certain notice and
informational requirements. Each of the foregoing provisions, alone or in
combination with each other, or with the issuance of preferred stock authorized
by the Company's Certificate of Incorporation, may have the effect of rendering
more difficult or discouraging an acquisition of the Company or changes in
control of the Company deemed undesirable by the Board of Directors. See
"MANAGEMENT," "PRINCIPAL AND SELLING SHAREHOLDERS" and "DESCRIPTION OF CAPITAL
STOCK."

AUTHORIZATION OF PREFERRED STOCK

The Company's Certificate of Incorporation authorizes the issuance of "blank
check" preferred stock with such designations, rights and preferences as may be
determined from time to time by the Board of Directors. Accordingly, the Board
of Directors is empowered, without shareholder approval, to issue preferred
stock with dividend, liquidation, conversion, voting or other rights which could
adversely affect the voting power or other rights of the holders of the
Company's Common Stock. In addition, the issuance of such preferred stock may
have the effect of rendering more difficult or discouraging an acquisition of
the Company or changes in control of the Company. Although the Company does not
currently intend to issue any shares of its preferred stock, there can be no
assurance that the Company will not do so in the future. See "MANAGEMENT,"
"PRINCIPAL AND SELLING SHAREHOLDERS" and "DESCRIPTION OF CAPITAL STOCK."

ABSENCE OF A PRIOR PUBLIC MARKET

Prior to the Offering, there has been no public market for the Common Stock.
Application has been made to list the Common Stock on The New York Stock
Exchange. However, there can be no assurance that a significant public market
for the Company's Common Stock will develop or be sustained after the Offering.
The offering price has been determined through negotiations among the Company,
the Selling

Shareholders and the Underwriters and may not be indicative of the market price
of the Common Stock after the Offering. After the Offering, the market price of
the Common Stock may be more or less than the initial offering price. See
"UNDERWRITING."

VOLATILITY OF STOCK PRICE

The market price for the Common Stock may be volatile. The Company believes
that factors such as announcements by the Company, or by its competitors, of
quarterly variances in financial results could cause the market price of the
Common Stock to fluctuate substantially. In addition, the stock market may
experience price and volume fluctuations, often unrelated to the operating
performance of specific companies, which could have a direct adverse effect on
the market price of the Common Stock and which could also adversely affect the
assets under management and, therefore, the results of the Company's operations.
Market fluctuations or perceptions regarding the Company's industry, as well as
general economic or political conditions, may adversely affect the market price
of the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

Substantially all of the shares of Common Stock currently outstanding
will be eligible for sale in the public market after completion of this
Offering. Of such number, shares will be salable without any limitation as
to volume and an aggregate of such shares, which are owned by
officers and directors, will be salable by each such officer and director
in amounts which, in any three-month period, do not exceed the greater of 1% of
the total number of outstanding shares of the same class or the average weekly
trading volume of the shares on The New York Stock Exchange during the four
calendar weeks preceding the sale. Each of the Company's officers and directors
has agreed not to make a public sale or offering of any securities of the
Company for a period of 180 days from the date of this Prospectus without the
prior written consent of Merrill Lynch & Co. ("Merrill Lynch"). Both actual
sales by holders of the currently outstanding Common Stock and the possibility
that substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock. See "SHARES
ELIGIBLE FOR FUTURE SALE."

NO ASSURANCE OF DIVIDENDS

The declaration and payment of dividends by the Company are subject to the
discretion of its Board of Directors. Any determination as to the payment of
dividends, as well as the level of such dividends, will depend on, among other
things, general economic and business conditions, the strategic plans of the
Company, the Company's financial results and condition, contractual, legal and
regulatory restrictions on the payment of dividends by the Company or OFFITBANK,
and such other factors as the Board of Directors of the Company may consider to
be relevant. See "DIVIDEND POLICY."

USE OF PROCEEDS

The net proceeds received by the Company from the sale of the Common Stock
offered hereby is estimated at $ million, assuming an offering price of $ per
share ($ million if the Underwriters' options are exercised in full), after
deducting the underwriting discount and estimated offering expenses to be paid
by the Company.

The Company intends to use the net proceeds of this Offering for general
corporate purposes, including establishing expanded collateralized lending
facilities for its clients, opening and operating additional regional offices,
making additions to its marketing and portfolio management personnel, developing
new investment product offerings and funding the other costs associated with the
Company's plans to expand its business. From time to time in the normal course
of business, the Company reviews possible acquisition opportunities, and
anticipates funding any such acquisitions, in part, with proceeds from this
Offering. The amounts to be applied to any of the foregoing purposes or other
purposes have not been determined and, depending upon market and other factors,
such intended uses of funds may change. The Company will receive no proceeds
from the sale of Common Stock by the Selling Shareholders.

DILUTION

Purchasers of the Common Stock offered hereby will purchase the shares at a
price substantially higher than the price paid by the Existing Shareholders. In
addition, the public offering price of the Common Stock exceeds the net tangible
book value per share of Common Stock after the Offering, resulting in an
immediate dilution to purchasers in this Offering of $ per share of Common
Stock.

After giving effect to the Formation Transactions, the Company's pro forma
net tangible book value as of June 30, 1998 would have been $27.0 million, or
$2.92 per share of Common Stock. "Net tangible book value" is defined as common
shareholders' equity of the Company less intangible assets. "Net tangible book
value per share of Common Stock" is determined by dividing the net tangible book
value of the Company by the number of shares of Common Stock outstanding.

After giving effect to the sale of Common Stock offered hereby (at an
assumed offering price of $ per share and after deducting the estimated
underwriting discount and offering expenses to be paid by the Company and
without giving effect to the Underwriters' overallotment options), the Company's
pro forma net tangible book value as of June 30, 1998 would have been $ million
or $ per share of Common Stock. This represents an immediate increase in net
tangible book value of $ per share of Common Stock to Existing Shareholders
and an immediate dilution of $ per share of Common Stock to investors who
purchase shares of Common Stock in this Offering. "Dilution" is the difference
between the offering price per share of Common Stock and pro forma net tangible
book value per share of Common Stock as adjusted for the Offering.

The following table illustrates the dilution per share of Common Stock as of
June 30, 1998, which is determined by subtracting the net tangible book value
per share of Common Stock after the Offering from the price paid by a new
investor:

NET TANGIBLE
BOOK VALUE
------------

Assumed public offering price per share of Common Stock (1)............................... $
Net tangible book value per share of Common Stock before the Offering...................
Increase per share attributable to payments made by new
investors(2)..........................................................................
Pro forma net tangible book value per share of Common Stock after the Offering............
Dilution per share of Common Stock to new investors....................................... $
------------
------------

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

(1) Before deducting the estimated underwriting discount and offering expenses
payable by the Company.

(2) After deducting the estimated underwriting discount and offering expenses
payable by the Company.

DIVIDEND POLICY

OFFITBANK has paid annual dividends for each of the calendar years from 1995
through 1997, in the amounts set forth below. The declaration and payment of
dividends by the Company is subject to the discretion of its Board of Directors.
Any determination as to the payment of dividends, as well as the level of
dividends, will depend on, among other things, general economic and business
conditions, the strategic plans of the Company, the Company's financial results
and condition, contractual, legal and regulatory restrictions on the payment of
dividends by the Company or its subsidiaries and such other factors as the Board
of Directors of the Company may consider to be relevant. See "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--Liquidity and Capital Resources" and "BUSINESS--Regulation."

END OF PERIOD FOR WHICH DIVIDEND WAS DECLARED PER SHARE AGGREGATE
- --------------------------------------------------------------------- ----------- ------------

June 1998............................................................ $ .1667 $ 1,542,468

December 1997........................................................ .1667 1,540,468
June 1997............................................................ .1167 1,078,328
----------- ------------
Total 1997..................................................... .2834 2,618,796

December 1996........................................................ .0833 770,234
June 1996............................................................ .0533 492,950
----------- ------------
Total 1996..................................................... .1366 1,263,184

December 1995........................................................ .0533 492,950

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company as of December 31, 1997 and June 30, 1998, as adjusted to give effect to
the sale of shares of the Common Stock offered hereby by the Company (at
an assumed public offering price of $ per share, after deducting the
estimated underwriting discount and offering expenses to be paid by the Company
and without giving effect to the Underwriters' overallotment options) assuming
the Formation Transactions had been effected as of December 30, 1997. See
"CERTAIN TRANSACTIONS--The Formation Transactions."

JUNE 30, 1998 DECEMBER 31, 1997
---------------------------- ----------------------------

ACTUAL AS ADJUSTED ACTUAL AS ADJUSTED
------------- ------------- ------------- -------------
DEBT:
Total debt............................................ $ 0 $ 0 $ 0 $ 0

SHAREHOLDERS' EQUITY:
PREFERRED STOCK: $.01 par value per share, 1,000,000
shares authorized, no shares issued and
outstanding......................................... 0 0 0 0
COMMON STOCK: $.01 par value per share, 30,000,000
shares authorized, 9,242,808 shares issued and
outstanding at December 31, 1997 (9,254,808 at June
30, 1998)........................................... 92,548 92,428
Additional paid-in capital............................ 11,489,661 11,389,781
Retained earnings..................................... 15,189,735 13,903,114
Other equity adjustments(1)........................... 269,970 283,160
------------- ------------- -----
Total shareholders' equity.......................... 27,041,914 25,668,483
------------- -------------
Total capitalization................................ $ 27,041,914 $ 25,668,483
------------- ----- ------------- -----
------------- ----- ------------- -----

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

(1) Includes equity adjustments for unrealized gain on investments available for
sale, net of taxes.

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected financial data for, and as of the end of, each of the
years ended December 31, 1997, 1996, 1995, 1994 and 1993 are derived from the
audited financial statements of OFFITBANK. The following selected interim data
for, and as of the end of, the six month periods ended June 30, 1998 and 1997
have been derived from unaudited financial statements of OFFITBANK, which, in
the opinion of management, have been prepared on the same basis as the audited
financial statements included herein, and reflect all adjustments, which are of
a normal recurring nature, necessary for a fair presentation of such data. The
results of the interim periods are not necessarily indicative of the results of
a full year. The selected financial data set forth below should be read in
conjunction with, and are qualified by reference to, the financial statements of
OFFITBANK and the notes thereto, and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" included elsewhere in this
Prospectus.

FOR THE SIX MONTHS
ENDED JUNE 30, FOR THE YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------

1998 1997 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- --------- ---------
Statement of Income Data:
Revenues:
Management fees........................ $ 19,090 $ 15,427 $ 32,868 $ 28,220 $ 22,804 $ 22,022 $ 21,521
Interest and dividends................. 626 643 1,363 1,200 1,153 935 668
Foreign exchange....................... 318 385 627 1,341 1,150 7,997 9,510
Custody................................ 351 306 607 359 297 334 209
Net realized gains/(losses) in
investments available for sale....... 81 57 321 184 265 (346) 126
Other.................................. 70 68 307 142 439 240 270
--------- --------- --------- --------- --------- --------- ---------
Total revenues....................... 20,536 16,886 36,093 31,446 26,108 31,182 32,304

Expenses:
Salaries and employee benefits......... 10,460 9,081 19,232 17,376 16,121 16,628 14,816
Occupancy.............................. 1,184 897 1,823 1,788 1,498 1,874 1,746
Advertising and marketing.............. 1,033 1,045 2,000 1,506 1,069 976 1,282
Data processing and software
development.......................... 491 341 809 722 961 811 947
Depreciation and amortization.......... 350 375 739 724 792 864 757
Professional fees...................... 237 251 615 793 470 1,209 951
Market research and information
services............................. 374 388 769 748 720 787 536
Insurance.............................. 228 217 434 431 411 415 361
Equity in loss of affiliate............ -- 247 1,335 665 -- -- --
Other.................................. 1,195 1,072 2,426 2,423 1,497 2,192 1,982
--------- --------- --------- --------- --------- --------- ---------
Total expenses....................... 15,552 13,914 30,182 27,176 23,539 25,756 23,378
Income before income taxes........... 4,984 2,972 5,911 4,270 2,569 5,426 8,926
Income taxes............................. 2,155 1,337 2,630 1,864 1,131 2,741 4,200
--------- --------- --------- --------- --------- --------- ---------
Net income........................... $ 2,829 $ 1,635 $ 3,281 $ 2,406 $ 1,438 $ 2,685 $ 4,726
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net income per share................. $ 0.31 $ 0.18 $ 0.35 $ 0.26 $ 0.16 $ 0.30 $ 0.52
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net income per share--assuming
dilution........................... $ 0.29 $ 0.17 $ 0.34 $ 0.25 $ 0.15 $ 0.29 $ 0.51
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Balance Sheet Data:
Total Assets............................. $ 32,864 $ 31,056 $ 30,453 $ 28,716 $ 26,617 $ 24,513 $ 22,822
Total Liabilities........................ 5,822 5,613 4,784 3,287 2,789 2,994 3,781
Total Stockholders' Equity............... 27,042 25,443 25,669 24,889 23,828 21,519 19,041

Dividends Declared....................... 1,542 1,078 2,619 1,263 493 -- --

Performance fees included in investment
management fees........................ -- -- -- 1,527 309 301 2,023
- -----------------------------------------
Selected Business Data:
Assets under management at end of
period................................. $9,905,000 $8,409,000 $9,342,000 $7,985,000 $6,651,000 $6,007,000 $6,078,000
Annualized investment management fees at
end of period.......................... 39,602 32,930 37,011 29,350 25,045 20,144 21,573
Average investment management fees at end
of period.............................. 0.40% 0.39% 0.40% 0.37% 0.38% 0.34% 0.35%

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

INTRODUCTION

The principal objective of this financial review is to provide a discussion
and an overview of the financial condition and results of operations of
OFFITBANK for the years ended December 31, 1997, 1996 and 1995, and for the
six-month period ended June 30, 1998. This discussion should be read in
conjunction with the financial statements and notes thereto, as well as
statistical information included elsewhere in this Prospectus.

RESULTS OF OPERATIONS

GENERAL

The revenues and results of operations of OFFITBANK are largely dependent on
the total value and composition of assets under management and, accordingly,
fluctuations in financial markets, the composition of assets under management
and redemptions and new infusions of managed assets have a substantial effect on
revenues and results of operations.

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1997

NET INCOME

Net income for the six months ended June 30, 1998 was $2.8 million ($0.29
per diluted share of OFFITBANK Common Stock ("Common Share") as compared to net
income for the six months ended June 30, 1997 of $1.6 million ($0.17 per diluted
Common Share), an increase of $1.2 million ($0.12 per diluted Common Share) or
73%. The increase was the result of revenue growth of $3.6 million offset by a
$1.6 million increase in operating expenses.

REVENUE

OFFITBANK's revenue for the six months ended June 30, 1998 was $20.5 million
as compared to the six months ended June 30, 1997 of $16.9 million, an increase
of $3.6 million or 21%. The primary reason for the increase was an increase in
management fees which accounted for $3.7 million, or 103% of the total increase.
This increase was offset by a reduction in foreign exchange revenue. The
increase in fees is principally attributable to an increase in average managed
assets of $1.4 billion (17%) to $9.6 billion for the six months ended June 30,
1998 from $8.2 billion for the six months ended June 30, 1997. Managed assets
increased primarily due to assets placed under management by new clients.

OPERATING EXPENSES

Total operating expenses increased $1.6 million (12%) to $15.5 million for
the six months ended June 30, 1998, from $13.9 million for the six months ended
June 30, 1997.

Salaries and employee benefits expense for the six months ended June 30,
1998 was $10.5 million as compared to $9.1 million for the six months ended June
30, 1997, an increase of $1.4 million or 15%. This increase was primarily due to
the addition of client service and investment management professionals as well
as an increase in incentive compensation expense as a result of the improved
financial performance of OFFITBANK.

Occupancy expense increased $0.3 million to $1.2 million for the six months
ended June 30, 1998 from $0.9 million for the six months ended June 30, 1997.
This increase is due primarily to additional office space leased in New York
starting in the fourth quarter of 1997.

ASSETS UNDER MANAGEMENT

Assets under management at June 30, 1998 increased $1.5 billion (18%) to
$9.9 billion from the six months ended June 30, 1997. Market appreciation
accounted for approximately 10% or $145 million of the increase, reinvestment of
investment income accounted for approximately 25% or $377 million of the
increase and the remainder of approximately $978 million was the result of net
inflow of assets. Growth in fee revenue exceeded the growth in average assets
due to growth in specialized fixed income investments, such as High Yield, and
the expanded use in the current period of value-added Total Return investment
strategies for client portfolios. These strategies employ multiple asset classes
and such portfolios, which often use mutual funds, typically generate higher
average fee levels.

OTHER SOURCES OF REVENUE

OFFITBANK acts as "riskless principal" on behalf of its clients in the
interbank foreign exchange market at a disclosed fixed bid to offer spread, and
foreign exchange revenue for the period decreased by $67 thousand or 17%.
Foreign exchange revenue is an incident to the international investments held in
client portfolios managed by OFFITBANK. Asset allocations to non-U.S. dollar
denominated securities were reduced and, consequently, foreign exchange revenue
was less.

Custody revenue for the period increased by $46 thousand or 15%. OFFITBANK
began a broader custody initiative in late 1996 to function as custodian for
assets directly managed by it as well as master custodian for a select number of
clients. The increase in custody revenue is the result of the broader initiative
and the growth of assets under management.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED DECEMBER 31, 1996

NET INCOME

OFFITBANK's net income applicable to Common Stock for the year ended
December 31, 1997 was $3.3 million ($.34 per diluted Common Share) as compared
to the year ended December 31, 1996 of $2.4 million ($0.25 per diluted Common
Share), an increase of $0.9 million ($0.09 per diluted Common Share) or 36%. The
improved performance was the result of revenue growth of $4.6 million offset by
the $3.0 million increase in operating expenses and equity in the loss of an
affiliate.

REVENUE

OFFITBANK's revenue for the year ended December 31, 1997 was $36.1 million
as compared to the year ended December 31, 1996 of $31.4 million, an increase of
$4.6 million or 15%. The primary reason for the increase was an increase in
management fees which accounted for $4.6 million, or 100% of the total increase.
The increase in fees is principally attributable to an increase in average
managed assets of $1.3 billion (18%) to $8.6 billion for the year ended December
31, 1997 from $7.3 billion for the year ended December 31, 1996. Managed assets
increased primarily due to new client investments.

OPERATING EXPENSES

Total operating expenses increased $3.0 million (11%) to $30.2 million for
the year ended December 31, 1997, from $27.2 million for the year ended December
31, 1996. Excluding equity in losses of an affiliate, operating expenses
increased 9% or $2.3 million for the period.

Salaries and employee benefits expense for the year ended December 31, 1997
was $19.2 million as compared to $17.4 million for the year ended December 31,
1996, an increase of $1.8 million or 11%. This increase was primarily due to the
addition of client service and investment management professionals, as well as
an increase in incentive compensation expense as a result of the improved
financial performance of OFFITBANK.

Professional fees decreased by $178 thousand or 22% to $615 thousand for the
year ended December 31, 1997 from $793 thousand for the year ended December 31,
1996. The reduction in cost was principally the result of the non-recurrence of
legal fees incurred in conjunction with new products begun in 1996.

Advertising and marketing expenses were $2.0 million for the year ended
December 31, 1997 as compared to $1.5 million for 1996, an increase of $0.5
million or 33%. This increase was primarily due to increasing expenditures in
connection with management's initiative to increase OFFITBANK's name recognition
which began in 1996.

Equity in losses of an affiliate increased $669 thousand to $1.3 million for
the year ended December 31, 1997 from $665 thousand for the year ended December
31, 1996. This expense is the result of OFFITBANK's equity investment in a
wealth management software development affiliate, which is a consortium of other
private banks and high net worth families. The software affiliate experienced
operating losses due to technology development costs incurred in 1996.

ASSETS UNDER MANAGEMENT

Assets under management for the year ended December 31, 1997 increased $1.3
billion (16%) to $9.3 billion from the year ended December 31, 1996. Market
appreciation accounted for approximately 8% or $107 million of the increase,
reinvestment of investment income accounted for approximately 30% or $390
million of the increase, and the remainder of approximately $803 million was the
result of net inflow of assets. Growth in fee revenue exceeded the growth in
average assets due to growth in specialized fixed income investments, such as
High Yield, and the expanded use in the current period of value-added Total
Return investment strategies for client portfolios. These strategies employ
multiple asset classes and such portfolios, which often use mutual funds,
typically generate higher average fee levels.

OTHER SOURCES OF REVENUE

OFFITBANK acts as "riskless principal" on behalf of its clients in the
interbank foreign exchange market at a disclosed fixed bid to offer spread, and
foreign exchange revenue for the period decreased by $713 thousand or 53%.
Foreign exchange revenue is an incident to the international investments held in
client portfolios managed by OFFITBANK. Asset allocations to non-U.S. dollar
denominated securities were reduced, and, consequently, foreign exchange revenue
was less.

Custody revenue for the period increased by $247 thousand or 69%. OFFITBANK
began a broader custody initiative in late 1996 to function as custodian for
assets directly managed by it as well as master custodian for a select number of
clients. The increase in custody revenue is the result of the broader initiative
and the growth of assets under management.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO THE YEAR ENDED DECEMBER 31, 1995

NET INCOME

OFFITBANK's net income applicable to Common Stock for the year ended
December 31, 1996 was $2.4 million ($.25 per diluted Common Share) as compared
to the year ended December 31, 1995 of $1.4 million ($.15 per diluted Common
Share), an increase of $1.0 million ($.10 per diluted Common Share) or 67%. The
improved performance was the result of revenue growth of $5.3 million, largely
generated from higher levels of managed assets, offset by the $3.6 million
increase in operating expenses.

REVENUE

OFFITBANK's revenue for the year ended December 31, 1996 was $31.4 million
as compared to the year ended December 31, 1995 of $26.1 million, an increase of
$5.3 million or 20%. The primary reason for the increase was an increase in
management fees which accounted for $5.4 million, or 101% of the total

increase. This increase was offset by a reduction in the other components of
Income. The increase in fees was principally attributable to an increase in
average managed assets of $1.0 billion (17%) to $7.3 billion for the year ended
December 31, 1996 from $6.3 billion for the year ended December 31, 1995.
Managed assets increased primarily due to new client investments.

OPERATING EXPENSES

Total operating expenses increased $3.6 million (15%) to $27.2 million for
the year ended December 31, 1996 from $23.6 million for the year ended December
31, 1995. Excluding equity in losses of an affiliate, operating expenses
increased by 13% or $3.0 million for the period.

Salaries and employee benefits expense for the year ended December 31, 1996
was $17.4 million as compared to $16.1 million for the year ended December 31,
1995, an increase of $1.3 million or 8%. This increase was primarily due to the
addition of client service and investment management professionals as well as an
increase in incentive compensation expense as a result of the improved financial
performance of OFFITBANK.

Professional fees increased by $323 thousand or 69% to $793 thousand for the
year ended December 31, 1996 from $470 thousand for the year ended December 31,
1995. The increase was principally the result of incurring legal fees in
conjunction with new product development during 1996.

Advertising and marketing expenses were $1.5 million for the year ended
December 31, 1996 as compared to $1.1 million for the year ended December 31,
1995, an increase of $0.4 million or 36%. This increase was primarily due to
management's initiative to increase OFFITBANK's name recognition during 1996.

Equity in losses of an affiliate increased to $665 thousand for the year
ended December 31, 1996 from zero for the year ended December 31, 1995. This
expense is the result of OFFITBANK's equity investment in a wealth management
software development affiliate, which is a consortium of other private banks and
high net worth families. The software affiliate experienced operating losses due
to technology development costs incurred in 1996.

ASSETS UNDER MANAGEMENT

Assets under management for the year ended December 31, 1996 increased $1.3
billion (20%) to $8.0 billion from the year ended December 31, 1995.
Reinvestment of investment income of approximately $362 million and net inflow
of assets of approximately $958 million were marginally offset by asset
reductions due to market declines of approximately $20 million. Growth in fee
revenue exceeded the growth in average assets due to growth in specialized fixed
income investments, such as High Yield, and the expanded use in the current
period of value-added Total Return investment strategies for client portfolios.

OTHER SOURCES OF REVENUE

OFFITBANK acts as "riskless principal" on behalf of its clients on the
interbank foreign exchange market at a disclosed fixed bid to offer spread, and
foreign exchange revenue for the period increased by $191 thousand or 17%.
Foreign exchange revenue is an incident to the international investments held in
client portfolios managed by OFFITBANK. Asset allocations to non-U.S. dollar
denominated securities were modestly greater and, consequently, foreign exchange
revenue increased.

Custody revenue for the period increased by $62 thousand or 21%. During the
period, OFFITBANK functioned in a limited capacity as custodian for a number of
its clients placing assets under OFFITBANK's management. The increase in custody
revenue was the result of an increase in assets under management.

LIQUIDITY AND CAPITAL RESOURCES

OFFITBANK'S operations have historically generated cash flows in excess of
the needs of its business plans. Cash flow provided from OFFITBANK's operations
was $5.8 million, $3.7 million and $124 thousand for the years ended December
31, 1997, 1996 and 1995, respectively. Cash flows from investing activities
generally include capital expenditures and the results of investment securities
sales and purchases. OFFITBANK has no material commitments for capital
expenditures.

Cash flows from financing activities include cash dividends to shareholders.
In January 1998, cash dividends of approximately $1.5 million were paid. The
Company believes that its cash flows from operations will be sufficient to fund
dividends and its operations for at least the next two years.

YEAR 2000

OFFITBANK has completed its analysis of modifications to its information
systems required to make such systems Year 2000 ready. It has completed a
significant portion of the modifications called for by the analysis and expects
all such modifications to be completed by the end of 1998. In addition,
OFFITBANK is working with other third parties to ensure timely completion of the
Year 2000 activities. Based on management's identification of resource
requirements for both plan implementation and overall project management, it is
anticipated that the Year 2000 costs, which are being expensed as incurred, will
be approximately $300 thousand.

INTEREST RATE SENSITIVITY

OFFITBANK's revenues are derived almost exclusively from fees which are
based on the values of assets managed or administered. Such values are affected
by changes in the broader financial markets which are, in part, affected by
changing interest rates. In a period of rapidly rising interest rates,
management fee revenue may be negatively impacted by reduced asset values and
redemptions, which would reduce managed assets, thereby reducing management fees
and certain other revenue.

ECONOMIC AND MARKET CONDITIONS

The financial markets and the investment management industry in general have
experienced record performance and record growth in recent years. The financial
markets and businesses operating in the securities industry, however, are highly
volatile and are directly affected by, among other factors, domestic and foreign
economic conditions and general trends in business and finance, all of which are
beyond the control of OFFITBANK. There can be no assurance that broader market
performance will be favorable in the future. Any decline in the financial
markets or a lack of sustained growth may result in a corresponding decline in
performance by OFFITBANK and may adversely affect managed assets and related
fees.

IMPACT OF INFLATION AND CHANGING PRICES

The financial statements and notes thereto presented elsewhere herein have
been prepared in accordance with generally accepted accounting principles, which
require the measurement of financial position and operating results in terms of
historical dollars without considering the change in the relative purchasing
power of money over time and due to inflation. The impact of inflation is
reflected in the increased cost of OFFITBANK's operations. In addition, interest
rates have a greater impact on OFFITBANK's performance than do the effects of
general levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the price of goods and services. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--Interest Rate Sensitivity."

NEW ACCOUNTING PRONOUNCEMENTS

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," is effective for financial statements for periods beginning after
December 15, 1997. This statement requires financial and descriptive information
about an entity's operating segments to be included in the annual financial
statements.

SFAS No. 132, "Employers' Disclosures about Pensions and Other
Post-Retirement Benefits," is effective for fiscal years beginning after
December 15, 1997. This statement revises employers' disclosures about pension
and other post-retirement benefit plans. It does not change the measurement or
recognition of those plans.

SFAS No. 133, "Accounting for Derivative Instruments and for Hedging
Activities," is effective for fiscal years beginning after June 15, 1999. This
statement standardizes the accounting for derivative instruments and the
derivative portion of certain other contracts that have similar characteristics
by requiring that an entity recognize those instruments and derivative portions
of other contracts as assets or liabilities in the statement of financial
position and measure them at fair value.

The Company believes that the impact of the adoptions of SFAS No. 131, SFAS
No. 132 and SFAS No. 133 will not have a material impact on its financial
statements.

BUSINESS

OVERVIEW

OFFITBANK has modeled itself after the classic Swiss private bank in which
asset management is the core business, establishing a foundation for the Company
to successfully provide other corollary financial services, such as custody,
foreign exchange services, trust services, deposit services and collateralized
lending. It is the view of the Company that these corollary services are natural
product extensions of asset management. Its emphasis on asset management as the
wealth management business model has distinguished OFFITBANK from many other
institutions serving the high net worth market.

OFFITBANK's focus on the upper-tier of the wealth management market has
produced a unique client profile. As of June 30, 1998, 65% of the Company's
portfolio assets were comprised of managed account relationships of $30 million
or more and 95% of its assets were comprised of managed account relationships of
$5 million or more. As of June 30, 1998, the Company had $9.26 billion under
management for 471 actively managed client relationships, and an additional $645
million invested directly in its mutual funds. Assets under management have
grown at a 11.4% compound annual growth rate ("CAGR"), from $6.1 billion at
December 31, 1993 to $9.9 billion at June 1998.

In providing investment management for its clients, OFFITBANK seeks to
satisfy four primary goals: preservation of capital, generation of income,
appreciation of assets and efficient wealth transfer. See "BUSINESS--Investment
Methodology." OFFITBANK's investments generally fall within six core fixed
income asset classes, which include U.S. Treasury securities, Mortgage-Backed
securities, Tax Exempt bonds, International High Grade debt, High Yield bonds
and Emerging Market debt. OFFITBANK also uses commingled investment vehicles,
such as its own mutual funds, limited partnerships and structured insurance
products to create customized portfolio strategies specifically designed for its
clients.

To complement its emerging market debt capabilities, OFFITBANK also offers
two specialized emerging market equity products including a Latin American
equity product and the CVO Greater China Fund. Further, OFFITBANK has taken an
"open architecture" approach to domestic equity investment management. "Open
architecture" involves the provision of investment products and services to
OFFITBANK clients through other investment managers. In the case of domestic
equities, this entails both the use of individual equity securities and mutual
funds managed by third-party investment managers. (See "BUSINESS--Investment
Methodology.")

The Company also provides important wealth management services to complement
its core asset management business. These services include custody, structured
insurance products and sophisticated client reporting, including unit and
individual tax accounting, and foreign exchange services, and, on a more limited
basis, collateralized lending and trust services.

WEALTH MANAGEMENT MARKET

The wealth management industry is highly fragmented with a number of
regional and national organizations, including banks, broker/dealers and
specialized firms serving clients within distinct geographic regions. OFFITBANK,
in contrast to other wealth management firms, focuses heavily on the upper tier
of the wealth management market. It is the opinion of OFFITBANK that there is no
dominant franchise serving this market. While there is no precise measure of
segmentation in the industry, OFFITBANK considers the "upper tier" of the wealth
management market to consist of individuals and families and institutional
clients with investable assets of greater than $10 million. Based on its years
of experience in serving high net worth clients, it is the view of the Company,
that the upper tier clientele is a particularly under-served segment of the
market due to the multifaceted and complex nature of the client relationship.
More significant asset sizes require more complex investment strategies, diverse
investment vehicles and specialized fiduciary client services and reporting.
Consequently, the upper tier wealth management client requires a highly
differentiated client service level which, in management's opinion, generally is
not adequately provided.

The Company believes that the upper tier of the wealth management market is
increasingly global. It includes both a large number of clients and substantial
investable assets which offer significant opportunities for growth. According to
an independent industry research report by Cerulli Associates, the top 3% of all
households in the United States control more than half of the nation's financial
assets. Globally, high net worth individuals accounted for $17 trillion in
assets in 1996. This amount will likely approach $25 trillion by the year 2000.

In addition to an already fragmented and underserved market, the Company
believes that current demographic trends will continue to offer organic growth
opportunities for wealth management services. In the view of the Company, at
least two trends will substantially influence the future size of the wealth
management market. The first involves the liquification, through public
offerings, sales or other means, of the vast wealth created by individuals and
entrepreneurs in the post-World War II economic expansion. The second, a
consequence of the first, is the need to transfer wealth in a manner that is
both tax efficient and consistent with family requirements. According to Cerulli
Associates, cross-generational inheritance in the United States will total
approximately $10.3 trillion, and one-third of the inheritances will happen
within the next fifteen years.

CLIENTS

The Company serves the upper tier of the wealth management client market,
nationally and internationally. OFFITBANK currently has clients in thirty-nine
states and a small but distinguished international client base in Latin America,
Europe and Asia. OFFITBANK's wealth management clients fall generally within
three categories: high net worth individuals and families, non-profit
organizations and corporate and institutional clients, including a select number
of retirement plans. In addition, as of June 30, 1998, the Company had
relationships with 362 high net worth individuals and families, 82 non-profit
organizations and 27 corporate and institutional clients with $5.5, $2.6 and
$1.1 billion in assets under management, respectively.

OFFITBANK has successfully developed its wealth management franchise as a
result of management's years of interaction and relationship building with
clients and their fiduciary advisors. Relationships within the upper tier of the
wealth management market are unique in that they are established over long
periods of time and require a substantial amount of trust and on-going personal
involvement. In addition, the Company believes that the relationships it
develops foster continued growth and brand identity through an active referral
network. This franchise foundation is not easily reproduced, constitutes a
natural barrier to entry and provides a significant opportunity to expand
OFFITBANK's product offerings.

OFFITBANK has developed a national non-profit client base consisting of
leading institutions in the arts, social services, education and health care.
The Company provides investment management services to

non-profit organizations through managed accounts, regardless of the amount
under management. Considerable competition among investment managers exists in
the non-profit sector. OFFITBANK is engaged by a non-profit client only after a
thorough evaluation by such client's investment committee and, generally, its
outside investment consultants. The Company believes that, to effectively
compete in the non-profit sector, wealth managers must have a long-term
performance record with specifically defined investment management styles.
OFFITBANK believes that its unique relationship with, and understanding of, its
non-profit client base, combined with its continued commitment to the non-profit
community, positions the Company to successfully attract new non-profit clients.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

OFFITBANK'S CLIENT BASE

Assets under Management
5%
27%
8%
60%

INVESTMENT METHODOLOGY

OFFITBANK brings a disciplined approach to wealth management through its
investment philosophy and its experienced team of investment professionals. The
defining characteristic of OFFITBANK's investment strategy is its emphasis on
fundamental research, integrating interest rate risk, credit risk and currency
risk analyses. Each client maintaining a managed account with OFFITBANK is
serviced by a dedicated team of seasoned investment managers and fiduciary
specialists, who are all particularly sensitive to the unique needs of high net
worth clients and the fiduciary advisors who serve them. As of June 30, 1998,
actively managed portfolios at OFFITBANK represented $9.26 billion in assets.

The strategy for each actively managed account is developed in consultation
with the client and the client's advisors. The investment strategy is designed
to be tax efficient and tailored to the client's overall investment objectives.
Once implemented, the portfolio is actively managed within the guidelines
established, and the strategy is constantly reviewed and modified.

OFFITBANK clients generally require portfolio strategies which address four
investment objectives: preservation of capital, generation of income,
appreciation of assets and efficient wealth transfer. It is the Company's
objective to develop for each client a wealth management strategy which is
designed to produce a favorable "risk adjusted rate of return" within the
guidelines established with the client and its advisors.

As of June 30, 1998, OFFITBANK had 33 portfolio managers, traders and market
analysts, with an average of approximately 17 years of industry experience.
These market professionals are supported by seasoned experts in fiduciary
services, such as trusts and taxation. Further, OFFITBANK has had an
exceptionally low turnover rate since inception and attributes employee loyalty
and low turnover to its ability to provide a challenging work environment with
opportunities for professional advancement.

To meet its wealth management clients' investment objectives, OFFITBANK
creates customized investment portfolios which generally result in investments
in one or more of five broad portfolio types. The portfolios include Total
Return Fixed Income, Intermediate Government Fixed Income, High Yield Fixed
Income, Tax Sensitive Fixed Income and Emerging Markets Fixed Income. The Total
Return Portfolio is a blended portfolio investment product designed around core
high grade investments with strategic allocations to other bond asset classes to
enhance total return. The specific portfolio allocations are determined by the
client's investment objectives and individual risk profile.

In customizing portfolio investment strategies for its clients, OFFITBANK
asset allocates among one or more of six primary fixed income asset classes and
specialized and domestic equities as defined below.

- TREASURY AND MORTGAGE-BACKED SECURITIES. OFFITBANK manages approximately
$3.3 billion in high-grade taxable securities, primarily U.S. Treasury and
high-grade Mortgage Backed securities. Investment grade corporate bonds
are not utilized in the investment strategies because, in the view of
OFFITBANK, the risk adjusted returns of such bonds are not attractive when
compared to the more liquid, higher yielding and better credit mortgage
backed securities. OFFITBANK offers a mutual fund for U.S. Government
securities and Mortgage Backed securities.

- TAX EXEMPT SECURITIES. OFFITBANK manages approximately $2.2 billion of tax
exempt securities for a national client base. OFFITBANK's team of traders,
portfolio managers and municipal credit analysts deal with over 100
municipal broker/dealers throughout the United States. OFFITBANK offers
three municipal mutual funds: a New York municipal fund, a California
municipal fund and a national municipal fund.

- INTERNATIONAL HIGH GRADE SECURITIES. OFFITBANK opportunistically invests
in the international investment grade bond markets of Europe, Japan and
Austral-Asia. Generally, the currency risk of these investments is hedged
because, in the opinion of OFFITBANK, higher currency volatility
overwhelms the fixed income components of the investment. Unhedged
international securities positions, in the opinion of OFFITBANK, convert
fixed income investments into currency positions. OFFITBANK typically
invests in the fixed income securities of sovereign issuers, supra-
nationals and leading corporations.

- HIGH YIELD SECURITIES. OFFITBANK manages approximately $3.6 billion in
U.S. High Yield securities. The OFFITBANK High Yield investment strategies
focus on the higher tier credits (generally BB/B) in the high yield sector
which will earn above average returns over time. Portfolio decisions are
primarily credit driven, and the fundamental strategy is to buy and hold
better quality issues. According to independent research, the credit
quality of the OFFITBANK High Yield portfolios is among the highest in the
market place. OFFITBANK offers both an on-shore and an off-shore mutual
fund for U.S. High Yield securities. In addition, OFFITBANK offers an
energy income

fund, that is offered as a private investment limited partnership focusing
on energy related debt issues.

- EMERGING MARKET DEBT. OFFITBANK manages approximately $530 million in
Emerging Market debt. OFFITBANK Emerging Market debt investments
concentrate in Latin America, the deepest and most liquid emerging debt
market. The OFFITBANK Emerging Market debt investment strategy focuses on
U.S. dollar denominated corporate bonds and sovereign issued primarily in
the Euro Market. This "international high yield" emphasis differentiates
OFFITBANK's Emerging Market strategy in the marketplace. OFFITBANK offers
both an on-shore emerging market debt mutual fund and an off-shore Latin
American income fund. In addition, an on-shore Latin American income fund
is offered as a private investment limited partnership.

- SPECIALIZED EQUITY. In addition to the six primary fixed income asset
classes, OFFITBANK offers two specialized regional equity investment
opportunities in Latin America and Greater China aggregating approximately
$85 million. The principal vehicle by which such investment opportunities
are offered are on-shore and off-shore mutual funds. However, separate
account management is available when sufficient assets are placed under
management. The Latin American equity product invests in publicly traded
equities in the Latin American region and is managed by the same
investment team which manages the Emerging Markets bond investments. CVO
Greater China Fund invests in publicly traded equities of the Greater
China region: Hong Kong, Singapore, Taiwan and the Peoples Republic of
China. The two portfolio managers of the Greater China Fund are
specialists in the Greater China region and are located in the OFFITBANK
San Francisco office.

- DOMESTIC EQUITY. OFFITBANK manages approximately $100 million in domestic
equities. An "open architecture" approach is used in managing these
assets, which entails a combination of individual equity securities and
commingled investment funds managed by third-party investment managers.

PORTFOLIO COMPOSITION

Managed portfolios may consist entirely of individual securities or a
combination of individual securities and, generally, OFFITBANK managed
commingled investment vehicles, such as mutual funds and limited partnerships,
insurance products, off-shore funds and trusts, as described below.

- MUTUAL FUNDS AND LIMITED PARTNERSHIPS. OFFITBANK has developed a fund
complex consisting of nine mutual fund portfolios and two limited
partnerships. Eight of the mutual funds operate under the general umbrella
of the OFFITBANK Investment Fund, Inc. and one operates under the CVO
Greater China Fund, Inc. The primary purpose of the mutual funds is to
provide vehicles for asset allocation for actively managed Total Return
Portfolios. As of June 30, 1998, approximately $2.2 billion was invested
in these funds of which 70% represents assets associated with individually
managed portfolios. There is growing demand among high net worth
individuals who utilize the OFFITBANK mutual funds exclusively for their
specialized fixed income management needs. Below is a listing of the
mutual funds and limited partnerships, assets under management and fee
structures:

NET ASSETS AS OF
INVESTMENT OBJECTIVE 12/31/97 6/30/98 MANAGEMENT FEES
----------------------- -------------- -------------- -----------------------

(000'S (000'S
OMITTED) OMITTED)
-------------- --------------

The OFFITBANK
Investment Fund, Inc.
- -----------------------

FIXED INCOME FUNDS

High Yield High Current Income 1,346,568 1,660,546 .85% up to $200,000,000
.75% of the next
400,000,000
.65% thereafter

Emerging Markets Current Yield and 210,777 254,656 .90% up to $200,000,000
Opportunities for .80% thereafter
Capital Appreciation

Mortgage Securities Investment Income and 17,037 38,318 .35%
Capital Appreciation

US Govt Securities Current Income 3,955 18,431 .35%
MUNICIPAL BOND FUNDS

New York Municipal Maximize Total 42,046 56,287 .35%
After-Tax Return for
New York Investors

California Municipal Maximize Total 4,792 8,134 .35%
After-Tax Return for
California Investors

National Municipal Maximize Total 2,805 8,025 .35%
After-Tax Return

EQUITY FUNDS

Latin America Equity Capital Appreciation 55,052 35,762 1.00%

CVO Greater China Capital Appreciation 18,527 13,194 1.25%
Fund, Inc. and Income Generation
- -----------------------

OFFITBANK Limited
Partnerships
- -----------------------

FIXED INCOME FUNDS

OFFITBANK Latin America Investment Income and 70,340 61,582 .85% up to $40,000,000,
Income Fund, L.P. Capital Appreciation .75% thereafter, plus a
performance fee of 15%
of the annual increase
in the NAV (after fees
and expenses) over the
benchmark

OFFIT Energy Income Current Income and 28,407 26,514 1.00% plus a
Fund, L.P. Capital Appreciation performance fee of 15%
of the annual increase
in the NAV (after fees
and expenses) over the
benchmark

- INSURANCE PRODUCTS. Insurance products are an important wealth management
tool. OFFITBANK has invested a number of years in developing the OFFITBANK
Variable Annuity and the OFFITBANK Variable Universal Life products to
meet the special requirements of high net worth families. The Variable
Annuity has been developed with Mass Mutual Life Insurance Company and C.
M. Life Insurance Company. It is offered nationally. The Variable Annuity
is an attractive investment vehicle for fixed income investments because
it is designed to increase net after-tax ordinary income through low
annuity costs, no commissions and no surrender charges. The Variable
Universal Life product has been developed with Security Equity Life
Company (SELIC), a wholly owned subsidiary of General American. The
Variable Universal Life product is a particularly effective vehicle for
managing wealth transfers within high net worth families and creating tax
deferred cash flows. As of June 30, 1998, OFFITBANK had approximately $52
million under management in the investment portfolios relating to the
Variable Annuity and Variable Universal Life products. Below is a listing
of the insurance products, assets under management and fee structures:

NET ASSETS AS OF
INVESTMENT OBJECTIVE 12/31/97 6/30/98 MANAGEMENT FEES
----------------------- --------------- --------------- -----------------------

(000'S OMITTED) (000'S OMITTED)
--------------- ---------------

FIXED INCOME FUNDS

VIF-High Yield High Current Income 29,949 43,104 .85% up to $200,000,000
.75% thereafter

VIF-Emerging Markets Current Yield and 5,493 5,890 .90% up to $200,000,000
Opportunities for .80% thereafter
Capital Appreciation

EQUITY FUNDS

VIF-DJG Value Equity Long-term Appreciation 1,412 1,787 .80% payable to David
and Preservation of J. Greene & Co.
Capital

VIF-US Small Cap Capital Appreciation 1,254 1,226 1.00%, .50% of which is
payable to Rockefeller
& Co.

- OFFSHORE FUNDS. OFFITBANK is active in the off-shore centers of Bermuda,
the Cayman Islands, Luxembourg and Hong Kong. It has developed a parallel
off-shore mutual fund complex for specialized fixed income and the two
specialized equity products. The off-shore funds are designed to meet the
investment needs of off-shore clients. The off-shore funds represent a
small component of OFFITBANK's business at this time. However,
establishing the off-shore funds will permit OFFITBANK to access a growing
international off-shore client base and to increase this client base in a
cost-effective manner by leveraging its on-shore investment products. As
of June 30, 1998, approximately $120 million was invested in off-shore
funds. Below is a listing of the off-shore funds, assets under management
and fee structures:

NET ASSETS AS OF
INVESTMENT OBJECTIVE 12/31/97 6/30/98 MANAGEMENT FEES
----------------------- --------------- --------------- -----------------------

(000'S OMITTED) (000'S OMITTED)
--------------- ---------------

FIXED INCOME FUNDS

OFFITBANK High Yield High Current Income 41,022 52,365 .85% up to $200,000,000
Fund, Ltd. .75% thereafter

OFFIT Latin America Investment Income and 46,921 43,239 .85% up to $40,000,000,
Income Fund Capital Appreciation .75% thereafter, plus a
performance fee of 15%
of the annual increase
in the NAV (after fees
and expenses) over the
benchmark

EQUITY FUNDS

OFFIT Latin America Capital Appreciation 28,756 22,665 1.00%
Equity Fund, Ltd. and Current Income

CVO Greater China Fund, Capital Appreciation 1,887 1,336 1.25% plus a
Ltd. performance fee of 15%
of the annual increase
in the NAV (after fees
and expenses) over the
benchmark

- TRUSTS. Trusts are critical tools for the efficient transfer of wealth.
OFFITBANK maintains a highly experienced group of professionals,
knowledgeable in a wide range of trust issues, including charitable
giving, estate planning and trust accounting. These professionals work
closely with the advisors of high net worth individuals to effectively
combine trust structures and investment strategies. OFFITBANK may also
function as a trustee, although, to date, its services in that capacity
have been limited. See "BUSINESS--Business Strategy--Expand Existing
Wealth Management Business through Enhanced Product Capability."

OTHER WEALTH MANAGEMENT SERVICES

- CUSTODY. As a trust bank, OFFITBANK has developed a custody product to
provide integrated investment management services to its clients.
OFFITBANK performs the duties of legal custodian and assumes all reporting
requirements. An unaffiliated major money-center bank functions as sub-
custodian for the purposes of securities settlement and safekeeping.
Underlying transfer-accounting and settlement systems are maintained by
the sub-custodian. OFFITBANK maintains the front-end client reporting
systems, and custody quality control and acts on behalf of the client with
the sub-custodian. This structure has permitted OFFITBANK to reduce client
custody costs significantly. The OFFITBANK custody product is one of the
most competitively priced in the marketplace. As of June 30, 1998,
OFFITBANK had approximately $3.3 billion under custody administration.

- COLLATERALIZED LENDING. Competitive wealth management requires the
capacity to provide secured lending to high net worth clients and
non-profit institutions. OFFITBANK has developed a collateralized lending
facility for its clients where OFFITBANK structures the loan and provides
custody services for the collateral underlying the loan. The loans are
funded and carried by a major money-center bank. The Company intends to
provide collateralized loan facilities directly to its clients upon
receiving the requisite regulatory approvals. See "BUSINESS--Regulation"
and "Business Strategy."

- FOREIGN EXCHANGE. As a trust bank, OFFITBANK provides access and execution
in the foreign exchange inter-bank market, the wholesale market for
foreign exchange, on behalf of its clients holding non-U.S. dollar
denominated securities in their portfolios. OFFITBANK operates in the
foreign exchange inter-bank market as a "riskless principal" for its
clients. In this capacity, OFFITBANK simultaneously sells currency to a
client and purchases currency from a "dealing" bank, or in the inverse
case, purchases currency from a client and sells the currency
simultaneously to a "dealing" bank. OFFITBANK does not trade for its own
account or maintain any proprietary positions in foreign exchange.

In functioning as riskless principal, OFFITBANK operates on a fixed
bid-to-offer spread of five one hundredths of 1% (.05 of 1%) of the U.S.
dollar amount of the transaction. The fixed bid-to-offer spread ensures
consistent and equal treatment of all OFFITBANK clients in all
transactions regardless of market movements and transaction amounts. Thus,
clients are protected from arbitrariness and pricing disparities.

- CLIENT REPORTING. OFFITBANK has developed unit accounting and specialized
tax reporting systems to meet the demanding requirements of high net worth
families for fiduciary reporting. The systems flexibility allows extensive
customization to meet specific client needs. Such reporting capacity is a
crucial component of wealth management services.

INVESTMENT PERFORMANCE

For each of OFFITBANK's five basic portfolio types, the following table
compares the compound annualized rates of return ("ROR") and Sharpe Ratios of
composite OFFITBANK portfolios (combining all separately managed portfolios and
mutual fund portfolios of the pertinent product) and a recognized index over the
periods indicated. The composites and performance data included are in
compliance with Association for Investment Management and Research (AIMR)
standards. Past performance is not predictive of future performance.

COMPOUND ANNUALIZED RATES OF RETURN(1)
PERIODS ENDING JUNE 30, 1998
---------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS
------------------------ ------------------------ -----------
PORTFOLIO PRODUCT NAME ROR SHARPE(2) ROR SHARPE ROR
- ---------------------------------------------------------- --------- ------------- ----- ----------- -----

TOTAL RETURN FIXED INCOME 10.11% 0.73 9.42% 0.30 8.29%

Lehman Brothers Aggregate Bond Index 10.54 0.80 7.88 0.17 6.87

INTERMEDIATE GOVERNMENT FIXED INCOME 8.92 0.86 7.52 0.20 6.50

Lehman Brothers Intermediate Government/Corporate Index 8.54 0.78 6.91 0.15 6.11

HIGH YIELD FIXED INCOME 11.83 0.66 12.65 0.60 11.54

Merrill Lynch "BB" High Yield Index 11.94 0.87 11.00 0.42 10.02

TAX SENSITIVE FIXED INCOME(3) 6.80 0.30 6.34 0.13 5.64

Lehman Brothers 5-year Municipal Bond Index 6.25 0.22 5.83 0.07 5.30

EMERGING MARKETS FIXED INCOME 4.04 -0.02 17.84 0.40 14.29

50% JPM Emer. Mkt. Bond Index +/ 50% JPM Latin Euro 2.65 -0.05 18.84 0.36 12.07
Index

J.P. Morgan Emerging Markets Bond Index + 1.39 -0.06 21.77 0.34 14.44

10 YEARS
----------------------
PORTFOLIO PRODUCT NAME SHARPE ROR SHARPE
- ---------------------------------------------------------- ----------- --------- -----------

TOTAL RETURN FIXED INCOME 0.18 9.79% 0.22
Lehman Brothers Aggregate Bond Index 0.10 9.06 0.18
INTERMEDIATE GOVERNMENT FIXED INCOME 0.11 8.69 0.19
Lehman Brothers Intermediate Government/Corporate Index 0.08 8.26 0.16
HIGH YIELD FIXED INCOME 0.43 13.58 0.39
Merrill Lynch "BB" High Yield Index 0.25 N/A N/A
TAX SENSITIVE FIXED INCOME(3) 0.06 7.19 0.13
Lehman Brothers 5-year Municipal Bond Index 0.03 6.93 0.11
EMERGING MARKETS FIXED INCOME 0.24 N/A N/A
50% JPM Emer. Mkt. Bond Index +/ 50% JPM Latin Euro 0.12 N/A N/A
Index
J.P. Morgan Emerging Markets Bond Index + 0.13 N/A N/A

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

(1) Composites are presented gross of fees.

(2) Sharpe Ratio is an industry standard measure of relative risk. It is
calculated as follows: investment return -risk free rate / standard
deviation of investment return.

(3) The taxable securities in the Tax Sensitive and Tax Sensitive Total Return
composites are adjusted for Federal income taxes at each individual
portfolio's tax rate until the first quarter of 1998 when the maximum
Federal income tax rate (39.6%) is applied to all portfolios. In addition, a
large part of the total return of the Tax Sensitive accounts is from
municipal income which is exempt from Federal, State and local income taxes.

MARKETING

OFFITBANK's principal source of new clients is, and is expected to continue
to be, referrals from its existing clients and from over 500 fiduciary advisors,
nationally and internationally, including accountants, attorneys, investment
consultants, financial planners and registered investment advisors with whom
OFFITBANK has ongoing relationships. OFFITBANK also obtains referrals from
consultants with whom it has no ongoing relationship, who are engaged by pension
funds, non-profits and other large investors to monitor money manager
performance and advise on asset allocations and financial planning.

An internal client development group is focused on maximizing the Company's
referral business by working closely with the fiduciary advisors of high net
worth individuals and families. In addition, OFFITBANK maintains a national
advertising campaign through newspapers or magazines such as THE NEW YORK TIMES,
THE WALL STREET JOURNAL, THE FINANCIAL TIMES and THE AMERICAN BENEFACTOR. The
advertising themes emphasize OFFITBANK's commitment to providing highly
personalized and sophisticated wealth management services in concert with
clients and their fiduciary advisors.

Similarly, OFFITBANK has launched marketing programs specifically designed
for a variety of distribution channels, including investment consultants,
marketers of insurance oriented products and registered investment advisors
serving high net worth individuals. OFFITBANK also sponsors seminars,
conferences and small-scale dinners featuring well-known speakers and industry
experts to address matters of particular interest to different constituencies
within its client base. In addition, OFFITBANK regularly publishes commentaries
on a variety of investment topics which are sent to existing and potential
clients.

OFFITBANK makes a special effort to support the non-profit sector and, since
its inception, it has been strongly committed to the goals of the non-profit
community. Reflecting this commitment, OFFITBANK waives its minimum separate
account requirements for any non-profits and encourages its executives and
managing directors to actively participate in a variety of non-profit
organizations. In addition, OFFITBANK sponsors the Forum for Non-Profit
Investment and Finance (the "Forum"). The

Forum is a unique series of programs dedicated to issues of concern to managers
of non-profits, and OFFITBANK believes that it serves an important function in
defining the institutional character of OFFITBANK.

In addition to its marketing efforts targeting individual clients,
non-profit organizations and corporate and institutional clients, OFFITBANK's
mutual funds and other publicly offered commingled investment vehicles are also
marketed through distribution channels appropriate to high net worth investors,
including independent investment advisors, financial planners and broker/dealer
institutional networks such as those operated by Charles Schwab & Co., Jack
White & Co. and Fidelity Investments Institutional Services Co., Inc.

OFFITBANK introduced its own proprietary mutual funds to provide a range of
investment alternatives to meet the growing requirement among its clients for
asset allocation. As the OFFITBANK mutual funds have gained recognition in the
high net worth marketplace, an increasing number of high net worth investors are
investing directly in the OFFITBANK mutual funds, particularly in the area of
specialized fixed income.

BUSINESS STRATEGY

The Company's goal is to maintain and expand OFFITBANK's penetration into
the upper tier of the wealth management market using the following key
strategies:

- CONTINUED GROWTH OF CURRENT WEALTH MANAGEMENT SERVICES. OFFITBANK will
continue to stress the strengths of its current wealth management services
within its primary client market.

- EXPAND EXISTING WEALTH MANAGEMENT BUSINESS THROUGH ENHANCED PRODUCT
CAPABILITY. The Company believes that, due to the highly fragmented nature
of the wealth management business and the unique nature of its wealth
management client base and relationships, substantial opportunity exists
to expand OFFITBANK's current business through a broader range of product
offerings, including new investment alternatives, a direct collateralized
lending capability and expanded trust services.

OFFITBANK will continue to expand investment alternatives available to
its clients through the introduction of new investment products. Most
recently, OFFITBANK launched a Treasury fund and a Mortgage-Backed
securities fund and began managing the investment components of structured
Variable Annuity and Universal Life insurance products specifically
designed for OFFITBANK clients. In addition, the Company believes that
expanded domestic equity capabilities would provide additional investment
flexibility to meet the unique investment requirements of its client base.
The Company intends to develop internally or to acquire a more diverse
equity capability. It is the opinion of OFFITBANK that, with increased
product breadth, it can offer its existing and potential clients more
comprehensive wealth management services.

OFFITBANK intends to expand its collateralized lending capabilities
for its existing wealth management clients specifically for the purpose of
making loans secured by portfolio securities and residential mortgage
loans. Management believes that, by expanding its lending capabilities, it
will both solidify existing client relationships and significantly enhance
OFFITBANK's ability to attract new wealth management clients. To fund its
secured loans, OFFITBANK intends to develop internally or to acquire a
deposit-taking institution, subject to applicable law and governmental
regulations. See "BUSINESS--Regulation."

OFFITBANK clients generally require a wide range of trust activities.
Management plans to capitalize on the Company's status as a trust company
with full trust powers by marketing and providing a broad range of trust
services, including accepting fiduciary appointments and providing estate
planning, estate and trust administration, trust accounting and related
services. In addition to traditional trust services, OFFITBANK believes
significant opportunity exists to provide asset allocation services to
trustees and their clients in its role as a fiduciary advisor. The
availability of

expanded trust services will, in addition to providing a future profit
opportunity, enhance existing client relationships and OFFITBANK's ability
to attract new clients, particularly in light of the rapidly expanding use
of trusts as vehicles for intergenerational wealth transfer and
liquification.

- INCREASE GEOGRAPHIC PRESENCE. OFFITBANK intends to capitalize on the
current fragmented state of the wealth management market through an
expansion of its offices into affluent areas throughout the United States
and internationally. Local presence in major wealth centers is an
important factor in further developing OFFITBANK's national client base.
The Company anticipates implementing its geographic expansion through a
combination of OFFITBANK's traditional growth sources, primarily client
and fiduciary advisory referrals, and, where appropriate, the addition or
acquisition of wealth managers having demonstrable relationships with very
high net worth clients in these wealth centers.

- PURSUE RELATIONSHIPS WITH OTHER PROVIDERS OF PRODUCTS AND SERVICES.
OFFITBANK believes that offering its clients the best available products
is fundamental to maintaining its client relationships. OFFITBANK intends
to selectively pursue opportunities relying on its "open architecture"
approach to wealth management. Open architecture is the provision of
investment products and services to OFFITBANK clients through
relationships with other providers of such wealth management services,
including investment managers and providers of administrative services.

- ENHANCE CLIENT SERVICES THROUGH INVESTMENTS IN HUMAN CAPITAL AND
TECHNOLOGY. OFFITBANK follows a principle of controlled growth and will
not sacrifice professionalism in the markets or client service to expand
business opportunities. Therefore, the Company places a premium on high
quality professionals and intends to maintain adequate staffing to ensure
high levels of investment performance and client service. Because wealth
management is a relationship business with a significant amount of
interaction with high net worth clients, the quality of personnel is
critical. OFFITBANK believes that its client relations, investment
management and information systems personnel are among the most highly
skilled and experienced in their respective fields. To support the
continued professional growth required by the demands of an evolving
wealth management environment, OFFITBANK maintains a continuous program of
training for its entire staff.

A significant component of wealth management is the ability to provide
clients and their professional advisors with information concerning the
client's account in a wide variety of formats and for a wide variety of
particular purposes such as tax planning, fiduciary reporting and other
needs. OFFITBANK currently has the capability to provide this array of
information through its information technologies and specialized programs
designed for wealth management. OFFITBANK intends to continue to invest in
state-of-the-art technologies that differentiate the Company as a wealth
management provider.

- PURSUE ACQUISITIONS. OFFITBANK intends to selectively pursue acquisitions
to broaden its product offerings, in its core investment management
business, as well as corollary wealth management services such as
collateralized lending capability and enhanced trust services. In
addition, acquisitions, joint ventures and other marketing alliances may
offer the Company the opportunity to broaden the OFFITBANK brand
geographically.

COMPETITION

OFFITBANK believes that only a limited number of companies are currently
directly competing with the Company in its core business of providing wealth
management services to the upper tier of the wealth management market. However,
the investment management business in general is intensely competitive. In
providing investment management services, the Company competes with a large
number of asset management firms as well as broker/dealers, trust banks,
commercial banks and other specialized wealth management providers. Future
growth and profitability of the Company will be affected by the Company's
ability to retain and increase its market share which could be adversely
affected in the longer term as

competitors seek to develop high net-worth relationships. Many of OFFITBANK's
current and potential competitors are larger in terms of capital, assets,
geographic presence and other important business criteria and may have access to
greater resources than the Company.

EMPLOYEES

At June 30, 1998, OFFITBANK had 108 full-time employees. The Company
considers its relationships with its employees to be satisfactory.

REGULATION

Certain of the New York State and Federal regulations applicable to banks
and bank holding companies are discussed below. This discussion is intended to
provide a general outline of the more relevant regulations and is not intended
as a comprehensive discussion of such regulations.

OFFITBANK is a trust company chartered under the New York Banking Law
("NYBL") and is supervised and examined thereunder by the New York State Banking
Department ("NYSBD"). The formation and existence of the Company does not change
the regulations applicable to OFFITBANK or the scope of permissible activities
of OFFITBANK. Acquisitions by or changes in activities of OFFITBANK or the
Company may, however, result in different or additional regulatory restrictions.

In order to establish itself as a New York trust company, an application was
made to and organization certificate filed with the NYSBD which voluntarily
limits OFFITBANK's activities to the fiduciary powers enumerated in Section 100
of the NYBL. These powers are the trust powers typically conducted by the trust
department of a New York Bank and include: (i) issuing, converting, exchanging,
transferring, registering, countersigning and returning stock certificates,
bonds and other securities and acting as agent or attorney-in-fact for any
person or corporation, foreign or domestic; (ii) acting as trustee under any
mortgage or bond issued by any political body or corporation, foreign or
domestic; (iii) being appointed as receiver, trustee or committee in any
bankruptcy or insolvency proceedings; (iv) being appointed as executor or
trustee under a will or administrator of a decedent's estate; (v) taking,
accepting and executing any and all trusts and fiduciary appointments and acting
as custodian; and (vi) acting as fiscal or transfer agent of the United States,
other political bodies (such as state or local governments) or corporations, and
in such capacity, receiving and disbursing money. In conducting its fiduciary
activities, OFFITBANK is subject to the standards applicable to fiduciaries,
recordkeeping requirements and operational requirements imposed under the NYBL.

In addition, the NYSBD interprets NYBL Section 100 to permit trust companies
to provide discretionary asset management services, including acting as an
investment advisor, administrator, transfer agent or custodian to an investment
company and to purchase shares of an investment company as agent for and upon
the order of a client.

In the event that OFFITBANK wishes to engage in a new line of business, such
line of business must be within the scope of the powers described above. Any
expansion of its business beyond such powers would require application to the
NYSBD and an amendment of OFFITBANK's charter.

New York limited purpose trust companies such as OFFITBANK must meet certain
minimum capitalization requirements. A limited purpose trust company must
maintain capital equal to a certain percentage of assets under management, based
on the activities of the particular limited purpose trust company, subject to a
minimum capitalization of $2 million. The NYSBD prefers, but does not require,
that such capital be in the form of "core" capital, which consists of common and
perpetual preferred stock. At present, OFFITBANK substantially exceeds these
capital requirements. The Company is not subject to such capital requirements.

Under the NYBL, OFFITBANK may not declare, credit or pay dividends so long
as there is any impairment of capital stock. In addition, the NYBL provides
that, without regulatory approval, a limited

purpose trust company cannot declare and pay dividends in any calendar year in
excess of its "net profits" for such year combined with its "retained net
profits" of the two preceding years, less any required transfer to surplus or a
fund for the retirement of preferred stock.

The activities of a New York limited purpose trust company are subject to
certain limitations pursuant to its organization certificate and certain
provisions of the NYBL. OFFITBANK is prohibited by its charter from accepting
deposits other than deposits arising directly from its exercise of its fiduciary
powers and, accordingly, is not an insured depository institution for purposes
of the Federal Deposit Insurance Act or any other banking law or regulation.
OFFITBANK also may not exercise the general banking powers enumerated in Section
96 of the NYBL, such as making extensions of credit on real or personal security
or on an unsecured basis or discounting, purchasing and negotiating promissory
notes or other evidences of indebtedness. Furthermore, a New York State
chartered trust company may not continuously engage in the issuance of its
shares and cannot issue, underwrite, sell or distribute securities or be
affiliated in certain ways with an entity that engages in such activities.
Accordingly, OFFITBANK may not control or distribute the shares of registered
open-ended investment companies.

In addition, the Superintendent of Banks of the State of New York
("Superintendent") is empowered to impose penalties for violations of law and
regulation and to take possession of a limited purpose trust company and its
business and property in the event that it appears that the limited purpose
trust company has, among other things, violated any law, is conducting business
in an unauthorized or unsafe manner, is in an unsound or unsafe condition to
transact its business or has an impairment of capital. The Superintendent may
also remove officers and directors of a limited purpose trust company if such
person has violated any law applicable to the trust company or has continued
unsafe or unsound practices in conducting the business of the trust company
after having been ordered or warned by the Superintendent to discontinue such
practices.

OFFITBANK and the Company are not members of the Federal Reserve System and
are not subject to Sections 16, 20 or 32 of the Glass-Steagall Act, the Bank
Holding Company Act of 1956 ("BHCA") or any other federal banking law or
regulation (including, without limitation, federal capital adequacy guidelines).
Moreover, neither the Federal Deposit Insurance Corporation ("FDIC"), the Board
of Governors of the Federal Reserve System (the "Federal Reserve") nor any other
bank regulator, other than the NYSBD, regulates the activities of OFFITBANK or
the Company.

Following the implementation by the Company of its strategy of entering into
the deposit-taking and lending business, OFFITBANK would be required to amend
its charter to become a bank under the NYBL and would be regulated and examined
as a bank by the NYSBD. In addition, OFFITBANK would be regulated and examined
by the appropriate federal regulator (the FDIC or the Federal Reserve if it
becomes a member bank). The regulators have extensive discretion in their
supervisory activities and examination policies, including policies with respect
to classification of assets, establishment of loan loss reserves, safety and
soundness guidelines (with respect to, among other things, internal controls,
loan documentation, credit underwriting, interest rate risk exposure and asset
growth) and lending standards. For example, the federal banking agencies have
adopted real estate lending standards to which OFFITBANK would become subject,
whose requirements include written internal lending policies and loan-to-value
standards for different types of real estate loans.

As a bank, OFFITBANK would derive its lending, deposit taking, investment
and other authority primarily from the NYBL and the regulations of the NYSBD, as
limited by federal law. Under applicable federal law, OFFITBANK's activities as
principal (including any investment in equity securities and insurance
underwriting) would, subject to certain exceptions, be limited to those
permissible to national banks. OFFITBANK also would become subject to state and
federal regulatory requirements applicable to banks, including without
limitation: single borrower lending limits, limitations on loans to and
transactions with affiliates (including the Company), maximum rates of interest,
reserve requirements, limitations on interest rates paid on deposits,
limitations on activities other than banking, limitations on affiliation with

companies engaged in underwriting and dealing in securities and limitations on
investments in subsidiaries. Upon becoming a bank, OFFITBANK would be required
to obtain federal deposit insurance and pay an assessment for such insurance to
the FDIC. Assessment rates currently may be as high as 27 basis points and may
be raised by the FDIC in certain circumstances. OFFITBANK's assessment would
depend on its capital and supervisory category. The FDIC would also have the
power to appoint itself as a conservator or receiver in certain circumstances,
including, situations where the institution's assets are less than its
obligations to its creditors and others, substantial dissipation of assets or
earnings due to any violation of law or unsafe or unsound banking practice, an
unsafe or unsound condition to transact business, the likelihood that demands of
depositors will not be met or obligations paid in the normal course of business
and the incurrence or likelihood to incur losses that will deplete all or
substantially all of the institution's capital with no reasonable prospect for
the institution to become adequately capitalized without federal assistance.

OFFITBANK would also become subject to state and federal consumer statutes
and regulations, including, without limitation, the Community Reinvestment Act
("CRA"). The CRA requires a bank to help meet the credit needs of its entire
community, including low and moderate income neighborhoods. An assessment of
OFFITBANK's record of complying with the CRA will be performed by the
appropriate federal regulator, will be publicly disclosed and will be considered
by the appropriate federal regulator in approving certain acquisitions by
OFFITBANK and/or the Company. New York imposes substantially similar
requirements on state banks meeting the credit needs of its local community,
including examination assessment by the NYSBD and review of such assessment by
the Superintendent in the event that a bank is considering transactions such as
mergers, asset purchases and the establishment of branch offices. New York also
requires that banks maintain basic banking accounts for certain customers.

In addition, the Company would need to obtain the prior approval of the
Federal Reserve to become a bank holding company under the BHCA and would then
be regulated by the Federal Reserve, and both OFFITBANK and the Company would,
as such, be subject to the Glass-Steagall Act and other federal laws or
regulations applicable to banks and bank holding companies, some of which are
discussed below. (Generally, the Company will not be considered a bank holding
company under the NYBL so long as it controls only one banking institution. The
approval of the Superintendent would be required for the Company to become a
bank holding company.)

If the Company becomes a bank holding company, it would become subject to
restrictions on its non-banking activities and on interstate banking. A bank
holding company must obtain Federal Reserve approval before: (i) acquiring,
directly or indirectly, ownership or control of any voting shares of a bank or
bank holding company if, after such acquisition, it would own or control 5% or
more of such shares; (ii) acquiring all or substantially all of the assets of
another bank or bank holding company; or (iii) merging or consolidating with
another bank holding company. In September 1994, the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 ("Riegle-Neal" or the "1994 Act")
was enacted. Under Riegle-Neal, bank holding companies are permitted to acquire
banks in any state subject to state deposit caps and a 10% nationwide cap. In
addition, as of June 1, 1997, Riegle-Neal provides for full interstate branching
by bank merger. States were permitted to "opt out" of this branching provision
prior to June 1997 and, alternatively, states were permitted to "opt in" earlier
than such date. Texas and Montana adopted legislation to opt out of the
branching provisions.

The BHCA also prohibits a bank holding company, with certain limited
exceptions, from acquiring or retaining direct or indirect ownership or control
of 5% or more of the voting shares of any company which is not a bank or a bank
holding company, or from engaging in any activities other than those of banking,
managing or controlling banks, or providing services for its subsidiaries. The
principal exceptions to these prohibitions involve certain activities which the
Federal Reserve has determined to be closely related to the business of banking
or managing or controlling banks.

A bank holding company and its subsidiaries are prohibited from engaging in
certain tying arrangements in connection with the extension of credit, with
limited exemptions. In addition, the Federal Reserve possesses cease and desist
powers over bank holding companies if their actions represent unsafe or unsound
practices or violations of law.

The Banking Act of 1933, sections of which are commonly referred to as the
Glass-Steagall Act, restricts banks that are members of the Federal Reserve
System from affiliating with entities "principally engaged in" underwriting
securities. Beginning in 1987, the Federal Reserve permitted member banks to
affiliate with companies which derive only up to 10% of their revenue from bank
ineligible activities, and on March 6, 1997, the Federal Reserve raised that
limit to 25%. An insured state bank that is not a member of the Federal Reserve
system is not subject to the Glass-Steagall Act and may, if authorized by state
law and subject to the regulations of the FDIC, be affiliated with a company
engaged in underwriting and dealing in securities. Any such insured state bank
that is a subsidiary of a bank holding company will nonetheless be subject to
the BHCA and limitations on nonbanking activities thereunder.

Both OFFITBANK and the Company (on a consolidated basis) would become
subject to risk-based capital adequacy guidelines established by the federal
banking regulators for use in its examination and supervision of bank holding
companies and banks. The guidelines have three main goals: (i) to make
regulatory capital requirements more sensitive to differences in risk profiles
among banking organizations, (ii) to take off balance sheet risk exposures into
explicit account in assessing capital adequacy and (iii) to minimize
disincentives to holding liquid, low-risk assets. A bank holding company's
ability to pay dividends and expand its business through the acquisition of new
banking subsidiaries could be restricted if its capital falls below levels
established by the risk-based capital guidelines. Bank holding companies and
banks are also required to adhere to another capital guideline referred to as
the Tier 1 leverage ratio. The leverage ratio places a constraint on the degree
to which a banking institution can leverage its equity capital base. In 1995 and
1997, respectively, the risk-based capital guidelines were modified to
incorporate interest rate risk and market risk. The federal banking agencies
issued a joint policy statement setting forth prudent interest rate risk
management principles. A bank with material weaknesses in its risk management
process or high levels of exposure relative to its capital will be directed by
the appropriate federal agency to take corrective action. For bank holding
companies and banks with substantial trading activity, the market risk guideline
requires that the bank holding company/bank reflect in its capital adequacy
calculations the general market and specific risk of debt and equity positions
in its trading account and the general market risk associated with its foreign
exchange and commodity positions.

In December, 1991, the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA") was enacted. FDICIA, among other things, identifies the
following capital standards for depository institutions: well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized and
critically undercapitalized. A depository institution is well capitalized if it
significantly exceeds the minimum level required by regulation for each relevant
capital measure, adequately capitalized if it meets each such measure,
undercapitalized if it fails to meet any such measure, significantly
undercapitalized if it is significantly below any such measure, and critically
undercapitalized if it fails to meet any critical capital level set forth in the
regulations. FDICIA requires a bank that is determined to be undercapitalized to
submit a capital restoration plan, and the bank's holding company must guarantee
that the bank will meet its capital plan. FDICIA also requires the appropriate
federal bank regulator to take certain prompt corrective actions in the event a
bank becomes undercapitalized, significantly undercapitalized or critically
undercapitalized, including, without limitation, prohibitions on capital
distributions (including dividends), restrictions on asset growth, restrictions
on activities and restrictions on payment of management fees. In addition, if a
bank becomes critically undercapitalized a receiver or conservator is required
to be appointed.

The foregoing discussion is a general discussion of the more relevant laws
and regulations to which OFFITBANK and the Company could become subject if
OFFITBANK were to expand its activities as

currently anticipated. Depending on the nature of the activities actually
undertaken by the Company and OFFITBANK, different or additional regulatory
restrictions could apply.

PROPERTIES

As of June 30, 1998, the properties leased by the Company were as follows:

CURRENT
LOCATION ANNUAL RENT LEASE EXPIRATION SQUARE FOOTAGE
- --------------------------------------------- --------------- ----------------- --------------------

520 Madison Avenue $ 2,140,600(1) July 14, 2003 33,496 (Net of
New York, NY 10022 Sublease)

160 Sansome Street $ 55,900 May 31, 2000 2,664
San Francisco, CA 94104

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

(1) $2,319,800 per year beginning April 1999, plus additional rent for increases
in real estate taxes and operating expenses.

The New York city location consists of 44,800 square feet of office space on
two separate floors and 1,750 square feet of basement space, all at 520 Madison
Avenue. The Company has a right to renew the lease for an additional ten year
period for a 50% increase in the rent. The Company subleases the space on one of
the floors consisting of 13,054 square feet for $587,430 per year ($607,011 per
year beginning October 2001) plus approximately 30% of the escalation payments
it must make to the landlord under its lease.

The Company considers these facilities to be adequate for its current and
anticipated needs in the cities in question.

LEGAL MATTERS

OFFITBANK is not a party to any legal proceedings.

INVESTMENT MANAGEMENT AGREEMENTS

OFFITBANK's standard investment management agreement with its clients gives
OFFITBANK discretionary authority to invest the client's funds within the
investment guidelines furnished by the client in writing. The fees charged will
vary with the individual client's investment program. OFFITBANK will either act
as custodian for the securities pursuant to a separate custody agreement (for
which services it is compensated pursuant to that agreement) or will give
instructions for the execution of transactions to the entity or entities which
have custody. The investment management agreement also recites that OFFITBANK
will receive (i) advisory fees from the investment companies whose portfolios
are managed by OFFITBANK if the client's funds are invested in those companies
pursuant to the client's investment guidelines, and (ii) a "spread" on any
foreign exchange transaction for the client's account in which OFFITBANK acts as
counterparty on the transaction.

UNDERWRITING AGREEMENTS WITH THE FUNDS

Banking laws and regulations, as currently interpreted by the NYSBD,
prohibit New York State chartered trust companies from controlling, or
distributing the shares of, a registered open-end investment

company continuously engaged in the issuance of its shares, and prohibit such
trust companies generally from issuing, underwriting, selling or distributing
securities, but do not prohibit such trust companies from acting as investment
advisor, administrator, transfer agent or custodian to such an investment
company or from purchasing shares of such a company as agent for and upon the
order of a customer.

Shares in each fund whose portfolio is managed by OFFITBANK are sold on a
continuous basis by its distributor, OFFIT Funds Distributor, Inc. (the
"Distributor"), a wholly-owned subsidiary of Provident Distributors, Inc.

Solely for the purpose of reimbursing the Distributor for activities
primarily intended to result in the sale of the shares in the funds, each fund
is authorized to spend up to 0.25% of its net assets annually with respect to
the shares of the fund in accordance with the plan of distribution.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The names, ages and positions of the directors and executive officers of the
Company are set forth in the table below. Each director serves a term of one
year or until the selection of his successor. The table also sets forth the year
each director or executive officer was first elected to such position with
OFFITBANK and the position currently held by each such individual with
OFFITBANK.

DIRECTORS

DIRECTOR OF
OFFITBANK
NAME AGE SINCE POSITION
- -------------------------------------------- --- ----------------- --------------------------------------------

Morris W. Offit............................. 61 1990 Chairman of the Board, member of the
Compensation Committee and Chief Executive
Officer of the Company; Chairman of the
Board and Chief Executive Officer of
OFFITBANK

H. Furlong Baldwin.......................... 66 1990 Director, Chairman of the Audit Committee of
the Company and member of the Compensation
Committee of the Company; Director of
OFFITBANK

Alessandro C. di Montezemolo................ 79 1991 Director of the Company and OFFITBANK

David I. Margolis........................... 68 1990 Director and member of the Audit Committee
of the Company; Director of OFFITBANK

Harvey M. Meyerhoff......................... 71 1991 Director of the Company and OFFITBANK

George R. Packard........................... 66 1990 Director of the Company and OFFITBANK

Edward V. Regan............................. 67 1996 Director and member of the Audit Committee
of the Company; Director of OFFITBANK

B. Lance Sauerteig.......................... 53 1990 Director and Chairman of the Compensation
Committee of the Company; Director of
OFFITBANK

Ricardo Steinbruch.......................... 39 1996 Director of the Company and OFFITBANK

MORRIS W. OFFIT has been Chairman and Chief Executive Officer and a Managing
Director of OFFITBANK since its inception. OFFITBANK's predecessor company,
OFFIT Associates, Inc., a registered investment advisor was formed by him in
1983 and he served as its President until OFFITBANK succeeded to its business.
Prior to this Mr. Offit was associated with the Julius Baer Group in Zurich
(1980-1982) and, as a Director of Baer Holding Ltd., he was responsible for its
U.S. investment operations. Mr. Offit joined Salomon Brothers in 1968 and for
ten years was a General Partner, during which time he was responsible for fixed
income and equity sales and its Stock Research Department. He began his career

in 1960 at Mercantile Safe Deposit and Trust Company in Baltimore in investment
research. Mr. Offit received a BA from Johns Hopkins University (1957) and an
MBA from the Wharton School of the University of Pennsylvania (1960). He was
also the recipient of an Honorary Degree of Doctor of Humane Letters from Johns
Hopkins University in 1996. In 1983 he served as Adjunct Professor of Finance at
the Columbia Graduate School of Business, lecturing on the secondary capital
markets. He has lectured widely at investment seminars and graduate schools of
business and international affairs. He has also authored a number of articles
for financial publications. Mr. Offit's outside affiliations include serving as
a Trustee of The Johns Hopkins University, where he served as Chairman of the
Board (1990-1996). He is also a Trustee of The Jewish Museum, where he served as
Chairman of the Board (1987-1991). Other trusteeships include The Jewish
Theological Seminary, The Union Theological Seminary, Teachers College (Columbia
University), Thirteen-WNET and The American Jewish Committee. He serves as a
director of Hasbro, Inc. and Mercantile Bankshares Corporation.

H. FURLONG BALDWIN is the Chairman and Chief Executive Officer of Mercantile
Bankshares Corporation, which positions he has held since 1984 and 1976,
respectively.

ALESSANDRO C. DI MONTEZEMOLO served as Chairman and Chief Executive Officer
of Marsh & McLennan Inc., an insurance brokerage firm, from January 1982 to
1985. Since 1985 Mr. Di Montezemolo has been a private investor. He serves as
Chairman Emeritus of the American Italian Cancer Foundation and as Chairman of
the International Board of the National Museum of Women in the Arts in
Washington, D.C.

DAVID I. MARGOLIS, as of February 1, 1995, became Chairman of the Executive
Committee of Coltec Industries Inc., having prior thereto been Chairman and
Chief Executive Officer since 1985. Coltec is a manufacturer of a diversified
line of aerospace and industrial products in the United States and abroad.

HARVEY M. MEYERHOFF was Chairman of the Board of Magna Properties, Inc.,
which has its offices in Baltimore, Maryland. He held this position from 1979
until 1995. He is now retired and is involved in private investment and
philanthropic activities. Mr. Meyerhoff is also Chairman Emeritus of the United
States Holocaust Memorial Council.

Dr. GEORGE R. PACKARD completed his term in December 1993 as Dean of The
Johns Hopkins University Nitze School of Advanced International Studies in
Washington, D.C., after 14 years of service in that position. He is currently on
leave as the Edwin O. Reischauer Professor of East Asian Studies and director of
the Reischauer Center at the same school, and is now President of the U.S.-Japan
Foundation in New York.

EDWARD V. REGAN is a Distinguished Fellow at The Jerome Levy Economics
Institute at Bard College and serves as the Chairman of the Municipal Assistance
Corporation of the City of New York. In addition, he is a trustee of the
Financial Accounting Foundation. Before joining the Institute in 1993, Mr. Regan
served 14 years as New York State Comptroller.

B. LANCE SAUERTEIG is President of BLS Strategic Capital, Inc., a financial
and investment advisory company, a position he has held since 1994 and has also
been a principal in the law firm of Levett, Rockwood & Sanders, P.C. since 1995.
Prior thereto, he served from 1986 to 1994 as President of First Spring
Corporation, a diversified private family investment company. Before that he was
a principal in the New Haven, Connecticut law firm of Bergman, Horowitz &
Reynolds, P.C.

RICARDO STEINBRUCH is one of the two principals of Grupo Vicunha, the
largest textile conglomerate in Brazil. Since April 1995, Mr. Steinbruch has
served as President of Elizabeth S/A Industria Textil and Fiacao Nordeste do
Brasil S/A, and prior thereto.

EXECUTIVE OFFICERS

OFFICER OF
OFFITBANK
NAME AGE SINCE POSITION
- -------------------------------------------- --- ----------------- --------------------------------------------

Morris W. Offit............................. 61 1983 Chairman of the Board and Chief Executive
Officer

Wallace Mathai-Davis........................ 54 1986 Chief Financial Officer and Corporate
Secretary

Vincent M. Rella............................ 46 1990 Chief Accounting Officer and Controller

ELECTION OF DIRECTORS

Each director of the Company serves a term from the date of such director's
election until the next annual meeting of shareholders. Officers of the Company
are elected by, and serve at the discretion of, the Board of Directors.

Each director of the Company who is not an employee of the Company or
OFFITBANK will receive an annual retainer of $12,500 and a meeting fee of $625
for each meeting of the Board and each Committee of the Board on which he or she
serves. In addition, the Chairman of the Audit and Compensation Committees of
the Board will receive an annual retainer of $3,000. Non-employee directors of
OFFITBANK currently receive an annual director's fee of $12,500 ($15,500 for
committee chairmen) and a fee of $625 for each meeting of the Board attended by
the director. The Company and OFFITBANK reimburse all directors for travel
expenses incurred in attending meetings of the Board of Directors and its
committees.

The Company By-laws provide for indemnification of officers and directors of
the Company and its subsidiaries to the full extent permitted by the Delaware
Business Corporation Law ("DGCL"). The Company is also authorized under the
Company By-laws to purchase and maintain insurance for purposes of providing
indemnification to officers, directors, employees and agents of the Company,
whether or not such indemnification is provided for by the DGCL. The Company
intends to acquire such insurance after completion of this Offering. The Company
believes that these provisions are necessary for the Company to continue to
attract and retain qualified persons as directors and officers.

AUDIT COMMITTEE

The Audit Committee consists of three directors, none of whom are employees
or officers (or former employees or officers) of the Company or its
subsidiaries. The Audit Committee's duties include reviewing internal financial
information, monitoring cash flow, budget variances and credit arrangements,
reviewing the audit program of the Company, reviewing with the Company's
independent accountants the results of all audits upon their completion,
annually selecting and recommending independent public accountants, overseeing
the quarterly unaudited reporting process and taking such other action as may be
necessary to assure the adequacy and integrity of all financial information
distributed by the Company. Members of the Audit Committee served as members of
the Audit Committee of OFFITBANK prior to their appointment to the Audit
Committee of the Company.

COMPENSATION COMMITTEE

The Compensation Committee consists of three directors, a majority of whom
may not be officers or employees (or former officers or employees) of the
Company or its subsidiaries. The Committee will recommend compensation levels of
senior management, work with senior management on benefit and

compensation programs for Company employees and monitor local and national
compensation trends to ensure the Company's compensation program is competitive.
The Committee also has authority to make grants under the OFFITBANK 1993 Stock
Option Plan which has been adopted by the Company. Members of the Compensation
Committee served as members of the Compensation Committee of OFFITBANK prior to
their appointment to the Compensation Committee of the Company.

MANAGING DIRECTORS OF OFFITBANK

The following sets forth information concerning the Managing Directors of
OFFITBANK, each of whom plays an important role in the investment management of
client assets and/or client relations and services. Each is a shareholder of the
Company. See "PRINCIPAL AND SELLING SHAREHOLDERS."

LESLIE F.B. ASHBURNER joined OFFITBANK in 1984 and has recently taken over
responsibility for special projects for OFFITBANK and functions as a senior
advisor in administrative matters. From 1994 to 1996 he was responsible for the
administrative activities of OFFITBANK including operations, personnel
administration and technology. From 1984 to 1994 he was responsible for the
OFFITBANK's Global fixed income activities. Between 1971 and 1984 he was
associated with two global commercial banks: from 1981 to 1984 he was an
Administrative Vice President and Global Funding Manager for Marine Midland Bank
with specific responsibilities for coordinating the Eurodollar and Eurocurrency
books and the worldwide funding of all foreign branches and international
banking facilities. From 1971 to 1981 he was with Chemical Bank, first in
London, where he was responsible for trading foreign exchange, interbank
sterling and UK securities; and then in New York as Vice President in charge of
the Nassau desk. He received a degree in Banking from Kings College (University
of London) in 1972. Mr. Ashburner is a patron of Grenville College, a university
preparatory school located in Ontario, Canada and is a member of the Greater New
York Board of Advisors to the Salvation Army.

ALBERT C. BELLAS joined OFFITBANK in 1992 and has responsibility for
Marketing and Client Development. Prior to this, Mr. Bellas spent 15 years with
Shearson Lehman Brothers Inc. where he was a Senior Executive Vice President and
a member of the Board of Directors of Lehman Brothers. From 1982 to 1990 Mr.
Bellas was the Director of the Public Finance Division and Chairman of its
operating committee. From 1979 to 1982 he was the Administrative Head of the
Investment Banking Divisions including the Corporate, Public and International
Finance Departments. Prior to joining Shearson Lehman Brothers Inc., Mr. Bellas
was a General Partner at Loeb Rhoades & Co. from 1976 to 1979, and a Vice
President at Goldman, Sachs & Co. from 1973 to 1976. He was an Associate at
Dillon Read & Co. Inc. from 1968 to 1972. Mr. Bellas graduated with a BA from
Yale University in 1964, received a JD from the University of Chicago Law School
in 1967 and an MBA from the Columbia Graduate School of Business in 1968, where
he was elected a McKinsey Scholar. In 1963, Mr. Bellas was a White House Intern.
Mr. Bellas is a frequent speaker on investment topics at various investment
institute, programs, seminars and forums. Mr. Bellas's outside affiliations
include serving as a Director of the Lincoln Center for the Performing Arts,
Inc., Chairman of the Board of the School of American Ballet, a Director of the
Guild Hall of East Hampton and a member of the Board of Regents of The
Mercersburg Academy.

JACK D. BURKS joined OFFITBANK in 1984 and has responsibility for
OFFITBANK's domestic, global and total return fixed income investment
strategies. He is the President of OFFITBANK Derivatives Inc., a subsidiary of
OFFITBANK. Mr. Burks manages The OFFITBANK Government Securities Fund and The
OFFITBANK Mortgage Backed Securities Fund. Prior to joining OFFITBANK, Mr. Burks
worked at Pittsburgh National Bank (1973-1984) where he was a Vice President
responsible for treasuries, mortgage backed instruments and money market
trading, as well as several areas of arbitrage. Mr. Burks received both a BA
(1972) and an MBA (1978) from Indiana University. Mr. Burks serves on the Board
of Directors and is Treasurer of the Alzheimer's Association of New York City.

CAROLYN N. DOLAN has been associated with OFFITBANK since 1983 and has
responsibility for OFFITBANK's tax sensitive and tax sensitive total return
investment strategies. From 1978 to 1983 she was associated with Julius Baer
Securities, Oppenheimer Capital Corporation and Equitable Life Assurance as a
portfolio manager and investment analyst. At Equitable she was a senior team
member in the restructuring of a multi-billion dollar Taft-Hartley Fund. Ms.
Dolan holds a Masters of Science Degree from the Columbia School of Social Work
(1977) and an MBA (1978) from Columbia University. Ms. Dolan graduated from
Marymount College in 1968 and was a social worker for seven years. Ms. Dolan
serves on the Board of Trustees of both Marymount College and the Cathedral
School of St. John the Divine.

JOHN H. HALDEMAN, JR. has been associated with OFFITBANK since 1988 and has
responsibilities in fixed income portfolio Management with a specialty in
municipal securities. He was a partner at Langdon P. Cook & Company, a firm
specializing in municipal securities, from 1978 to 1988. Between 1970 and 1978
he was with Pittsburgh National Bank where he was responsible for the bank's
municipal and treasury portfolios and their investment advisory services. Mr.
Haldeman received his BS from Pennsylvania State University in 1969.

RICHARD M. JOHNSTON joined OFFITBANK in 1992 and shares the responsibility
as co-head of OFFITBANK's investment activities in the Emerging Markets. Since
graduating Middlebury College in 1980 with a BA in economics and political
science, Mr. Johnston has spent his entire business career involved with
Emerging Markets finance. From 1988 to 1992 Mr. Johnston was associated with
Salomon Brothers where he was a Vice President in the International Corporate
Finance Division and an architect in building the firm's entire Emerging Markets
business. From 1980 to 1988 he was a member of the Latin American Group in the
International Corporate Banking Division of Manufacturers Hanover Trust Company.
During that time he had a number of important assignments: managing the bank's
Mexican business activities and loan portfolio (1987-1988); managing the bank's
Venezuelan operations (1984-1987); and having primary responsibility for
formulating and marketing Chile's comprehensive sovereign restructuring
(1980-1984). He has been deeply involved in pioneering the issuance of new
Emerging Markets securities in the U.S. and Euro-markets and in introducing many
institutional investors to the opportunities offered by investing in Emerging
Markets securities. Mr. Johnston was born in Bogota, Colombia and has lived in
Amsterdam, Buenos Aires, Caracas, Frankfurt, London, Mexico City, Santiago and
Tokyo.

WALLACE MATHAI-DAVIS, Ph.D., is the Chief Financial Officer and Corporate
Secretary of the Company and OFFITBANK and is a Managing Director of OFFITBANK.
He joined OFFITBANK in 1986. He has responsibility for all OFFITBANK finance and
administration and is involved with OFFITBANK's global and emerging markets
investment activities. Formerly, Dr. Mathai-Davis was Executive Vice President
and Chief Operating Officer of the Cathedral Corporation of St. John the Divine
with responsibility for all investments and operations of The Cathedral
Corporation and its subsidiaries. He was a management consultant and principal
of Adimas International, Ltd. advising clients domestically and internationally
in Europe, South America and Asia. Dr. Mathai-Davis also served as a member of
the Graduate Faculty of Sociology at Stony Brook University, where he conducted
comparative international research, taught at the graduate level and directed
doctoral research. Dr. Mathai-Davis graduated with a B.A. MAXIMA CUM LAUDE from
the University of Notre Dame in 1966. He holds both an M.A. (1972) and a Ph.D.
(1974) from Princeton University. Dr. Mathai-Davis is a member of the New York
Academy of Sciences. He is a Director of Global Decisions Group, Inc. He
previously served as Treasurer of the Board of Trustees of The Cathedral of St.
John the Divine and is currently a Member of its Board of Trustees. He is a
Director of the Public Education Association.

VINCENT M. RELLA, CPA, joined OFFITBANK in 1986 and serves as the Company's
and OFFITBANK's Controller and Chief Accounting Officer. He was a Vice President
of OFFITBANK from 1990 through 1997 and became a Managing Director in 1998. He
is responsible for the integrity of the Bank's portfolio accounting, unit
accounting and tax reporting systems. In 1988, Mr. Rella designed and
implemented OFFITBANK's multi-currency, tax lot portfolio accounting system Mr.
Rella is also responsible for mutual fund administration, human resources and
general services, and he serves as the principal liaison with OFFITBANK's
outside mutual fund administrator. From 1981 until 1986 he was employed by
Richard A. Eisner & Company, CPAs, as a senior accountant in the Audit and Tax
departments. Mr. Rella received his BA in accounting and economics from Queens
College in 1981.

STEPHEN T. SHAPIRO, a co-founder of OFFITBANK, developed OFFITBANK's high
yield products and is responsible for the high yield strategy. He is responsible
for all high yield investments, including OFFITBANK's high yield partnership,
the OFFIT Energy Income Fund, L.P., and The OFFITBANK High Yield Fund, a
portfolio of OFFITBANK Funds, The OFFITBANK Investment Fund, Inc. and the
Variable Insurance High Yield Fund. Prior to joining OFFITBANK, he had portfolio
management and research responsibilities at Julius Baer and was a securities
analyst at Drexel Burnham Lambert and Lionel D. Edie & Company. Mr. Shapiro is a
1977 graduate of Northwestern University and received an MBA from the Wharton
School of the University of Pennsylvania in 1979.

STEPHEN B. WELLS joined OFFITBANK in 1994 and is responsible for legal and
compliance for the bank and its mutual funds, variable insurance products and
fiduciary trust activities. He started his career as a trust and estate attorney
with Cadwalader, Wickersham & Taft and Davidson, Dawson & Clark, two New York
law firms. He also served as Trust and Investment Counsel for Irving Trust Co.
where he created an investment and compliance process for its trust activity.
From 1982 to 1989, he was a Principal of Morgan Stanley & Co. Incorporated,
General Counsel for Morgan Stanley Asset Management and President of their
various domestic and international closed-end and open-end mutual funds. He also
developed a Fiduciary Advisor business which provided asset allocation, manager
selection and monitoring and reporting services to trusts and wealthy families.
From 1989 to 1990, he was a Vice President and General Counsel of Goldman Sachs
Asset Management and he assisted in the development and global expansion of the
asset management business. From 1991 to 1993, Mr. Wells was President of the
Goldman Sachs Funds Group and Director of their load and no-load mutual funds,
and was responsible for the management, strategic planning, new product
development and direct client servicing functions of this business. During 1993,
Mr. Wells was a Senior Vice President and General Counsel for Gabelli Funds,
Inc. where he was responsible for administration, legal and compliance
activities of the mutual funds, the investment adviser and the broker/dealer.
Mr. Wells received his BA from Princeton University in 1966 and his law degree
from New York University School of Law in 1969. He serves as a Director for St.
Mary's Hospital for Children. In addition, he was a former member of the Board
of Governors of the Investment Company Institute.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

Prior to the Offering, the executive officers of the Company did not receive
cash compensation in respect of their services to the Company but rather
received compensation for services rendered to OFFITBANK and its subsidiaries.
The following table sets forth the cash compensation paid to the Chairman of the
Board and Chief Executive Officer and each of the other executive officers of
OFFITBANK, as of December 31, 1997, for services rendered in all capacities to
OFFITBANK and its subsidiaries during the fiscal year ended December 31, 1997.

ANNUAL COMPENSATION
-------------------------------------------

NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION SALARY($) BONUS($) COMPENSATION ($)(1) COMPENSATION ($)
- -------------------------------------------------- ---------- ---------- ------------------- ----------------

Morris W. Offit, Chairman of the Board and Chief
Executive Officer of OFFITBANK $ 900,000 $ 550,000 $ 0 $ 0

Wallace Mathai-Davis, Chief Financial Officer and
Corporate Secretary of OFFITBANK $ 600,000 $ 275,000 $ 0 $ 0

Vincent M. Rella, Controller and Chief Accounting
Officer of OFFITBANK $ 170,000 $ 100,000 $ 0 $ 0

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

(1) In accordance with the applicable rules, the amounts set forth in this
column do not include perquisites and other personal benefits received by
the named executive officer unless the aggregate value thereof exceeded the
lesser of $50,000 or 10% of the base salary and bonus reported for such
officer.

BONUS COMPENSATION

OFFITBANK maintains a bonus compensation program under which a portion of
total compensation consists of a bonus pool which is subject to allocation at
year-end based upon performance as evaluated by senior management and the
Compensation Committee. The Compensation Committee can, and has in the past,
determined at year end to increase the bonus pool from the initially allocated
amount. In addition, OFFITBANK has established a discretionary special
performance bonus compensation program for calendar year 1998 (the "Special
Performance Bonus") based on the recommendation of its Compensation Committee,
whose members are the same individuals who form the Compensation Committee of
the Company. The discretionary Special Performance Bonus provides for cash
awards to employees of OFFITBANK based on the attainment of annual performance
objectives established by the Compensation Committee at the beginning of the
year. For calendar year 1998 the Compensation Committee recommended, and the
Board of Directors approved, performance objectives for funding the
discretionary Special Performance Bonus based on OFFITBANK's net operating
margins before taxes and two special ventures, The Witan Company LLC technology
software consortium and the CVO Greater China Fund, Inc. ("NOI") over a
threshold of twenty-two percent (22%) of NOI. The maximum available for
distribution under the Bonus Plan for 1998 will consist of (i) fifty percent
(50%) of NOI between 22% and 25% of NOI, plus (ii) forty percent (40%) of NOI in
excess of 25% of NOI. The discretionary Special Performance Bonus may be
terminated or amended at any time by action of the Board of Directors.

1993 STOCK OPTION PLAN

The Company has adopted and assumed the obligations under OFFITBANK's 1993
Stock Option Plan (the "1993 Plan"), including the obligations under outstanding
options, which is intended to encourage stock ownership by employees of the
Company and its subsidiaries and nonemployee directors of the Company, so that
they may acquire or increase their proprietary interest in the Company, and to
encourage such employees to remain in the employ of the Company or its
subsidiaries (or, in the case of nonemployee directors, to remain in service as
directors of the Company) and to put forth maximum efforts for the success of
the business. It is further intended that options granted under the 1993 Plan by
the Compensation Committee ("Options") shall constitute either (i) incentive
stock options ("Incentive Stock Options") within the meaning of Section 422 of
the Code, or (ii) nonqualified stock options ("Nonqualified Stock Options").
Under the 1993 Plan, options can be granted to acquire up to an aggregate of
seven and one-half percent (7 1/2%) of the outstanding shares of the Common
Stock of the Company.

The following describes other aspects of the 1993 Plan:

- Option Term--The term of an option is limited to eight (8) years. To the
extent that an option is exercisable on the date of termination of an
optionee's employment, an option will generally continue to be exercisable
for a one-year period following an optionee's death, retirement or
disability or for a three-month period following any other termination of
an optionee's employment other than a termination for cause (but not
beyond the original term of the option).

- Exercise Price--All stock options shall provide for an exercise price of
not less than one hundred percent (100%) of the Common Stock's fair market
value on the date the option is granted.

- Medium of Payment--Options may only be exercised for cash.

- Vesting Criteria--Options become exercisable at the times and upon the
conditions that the Compensation Committee of the Board determines, as
reflected in each option agreement.

- Changes in Control--All outstanding options become immediately exercisable
upon the occurrence of a "change-in-control." Change-in-control events are
limited to a sale of substantially all of the Company's assets or a more
than fifty percent change in stock ownership.

No options have been granted to any officer or director of OFFITBANK or the
Company.

As of June 30, 1998, the Company had options outstanding to purchase an
aggregate of 673,248 shares (of which 649,248 are currently exercisable) with
exercise prices ranging from $5.56 to $12.08, and a weighted average exercise
price of $7.02. The options, all of which were issued under the 1993 Plan, are
held by 11 employees of OFFITBANK.

NON-COMPETITION AGREEMENT

Each Managing Director has executed a Non-Competition Agreement with
OFFITBANK under which he or she has agreed not to engage in or have any interest
in or provide services for any enterprise which provides investment advisory,
asset management or private banking services of any kind (other than as a
director or in a similar advisory capacity) while employed by OFFITBANK without
the approval of its Board of Directors. In addition, such agreement provides the
Managing Director will not (i) solicit or induce any customer, client or
employee of OFFITBANK to terminate its relationship with OFFITBANK or its
affiliates, or (ii) provide services to any client or customer of OFFITBANK or
any of its affiliates, or (iii) disclose any confidential information, in each
case, either during his or her employment or for a period of two years
thereafter.

CERTAIN TRANSACTIONS

THE FORMATION TRANSACTIONS

The Company is a newly formed company. It has not engaged in any business
operations. On , 1998, the Company issued shares of its Common Stock
to all of the Existing Shareholders in exchange for all of the outstanding
shares of common stock of OFFITBANK and adopted and assumed the 1993 Plan and
all of the outstanding options granted thereunder. As a result, OFFITBANK became
a wholly-owned subsidiary of the Company, and the Company will initially conduct
all of its business operations through OFFITBANK and its subsidiaries. After the
consummation of the Offering, the Existing Shareholders will own shares of
Common Stock, which will represent approximately % of the voting power of the
outstanding Common Stock ( % if the Underwriters' over-allotment options
are exercised in full).

The foregoing transactions are collectively referred to herein as the
"Formation Transactions."

OTHER TRANSACTIONS

OFFITBANK maintains for its own benefit a $15 million "key man" insurance
policy on the life of Morris W. Offit. In addition, OFFITBANK and Morris W.
Offit maintain a $10 million "split-dollar" life insurance on the life of Mr.
Offit. The beneficiaries of the policy are the Company and a trust established
for the benefit of Mr. Offit's family. The Company and the trust pay premiums on
the policy. Under the policy, after reimbursing OFFITBANK for the aggregate
amount of its premium payments and interest accrued thereon, death benefits and
cash surrender value belong to the Offit family trust. To fund the portion of
the insurance premiums to be paid by the trust, the Company may, if required,
make annual loans to the trust. The loans are evidenced by demand promissory
notes of the trust and accrue interest at a rate per annum calculated with
reference to the short-term federal rate, compounded semiannually, as determined
under Section 1274(d) of the Internal Revenue Code of 1986, as amended. The
loans are secured by the cash value of the life insurance. OFFITBANK has the
right to terminate its participation at any time. At June 30, 1998 the aggregate
principal amount of the loans was $256,894 and the interest accrued thereon to
that date was $44,295. It is expected that the annual principal amount of the
loans will increase by approximately $60,000 in each of the next ten years.

PRINCIPAL AND SELLING SHAREHOLDERS

The following tables set forth certain information regarding the beneficial
ownership of the Company's Common Stock, without giving effect to the
Underwriters' exercise of the overallotment options, by (i) each person who is
known by the Company to own beneficially more than 5% of the outstanding shares
of Common Stock, (ii) each of the directors of the Company, (iii) the executive
officers of the Company named in the compensation table on page , (iv) all
directors and executive officers of the Company as a group, and (v) each of the
Selling Shareholders. Unless otherwise intended, the Company believes that the
beneficial owner has sole voting and investment powers over such shares.

BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING(2) AFTER OFFERING(2)
--------------------------- ----------------------------

NUMBER NUMBER OF
OF % OF CLASS SHARES TO NUMBER OF % OF CLASS
NAME(1) SHARES OUTSTANDING BE SOLD SHARES OUTSTANDING
- -------------------------------------------------------- ---------- --------------- ------------- ------------- -------------
PRINCIPAL SHAREHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS
Morris W. Offit(3)+..................................... 2,641,863 28.5
H. Furlong Baldwin(4)................................... 0 0 -- -- --
Alessandro C. di Montezemolo............................ 180 *
David I. Margolis....................................... 112,500 1.2
Harvey M. Meyerhoff..................................... 112,500 1.2
George R. Packard....................................... 180 *
Edward V. Regan......................................... 0 0 -- -- --
B. Lance Sauerteig...................................... 0 0 -- -- --
Ricardo Steinbruch(5)................................... 884,811 9.6
Leslie F.B. Ashburner................................... 588,624 6.4
Jack D. Burks(6)........................................ 588,624 6.4
Carolyn N. Dolan........................................ 588,624 6.4
Wallace Mathai-Davis+................................... 294,321 3.2
Vincent M. Rella+....................................... 58,872 *
Steven T. Shapiro....................................... 591,000 6.4
- ------------------------

All directors and executive officers as a group (11
persons)..............................................

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

+ Executive Officer

* Less than 1%.

(1) Except as indicated in the footnotes below, the address of each five percent
shareholder is in care of the Company at its principal executive office. See
"MANAGEMENT" for a description of the offices held by directors and
executive officers.

(2) Calculated pursuant to Rule 13d-3(d) of the Exchange Act. Unless stated
below, each such person has sole voting and investment power with respect to
all such shares.

(3) Does not include an aggregate of 90,000 shares (.9725%) owned by Mr. Offit's
two adult sons who maintain their own respective separate residences.

(4) Does not include 225,000 shares of Common Stock held by Mercantile Bankshare
Corporation, of which Mr. Baldwin is Chairman and Chief Executive Officer.
Mr. Baldwin disclaims beneficial interest in these shares.

(5) These shares are held in the name of Fibra Holdings, Ltd., a British Virgin
Islands corporation controlled by Mr. Steinbruch's family ("Fibra").

(6) Includes 117,726 (1.3%) owned by an unrelated party but subject to a voting
trust of which Mr. Burks is trustee.

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 30,000,000 shares of
Common Stock, par value $.01 per share. No Preferred Stock is outstanding as of
the date of this Prospectus. Of the 30,000,000 shares of Common Stock
authorized, shares will be outstanding and held by the officers and
directors of the Company and the Managing Directors of OFFITBANK. After
completion of the Offering, there will be issued and outstanding shares of
Common Stock (without giving effect to the exercise of the Underwriters'
over-allotment option) and no shares of Preferred Stock, and shares of
Common Stock have been reserved for issuance pursuant to the 1993 Plan. The
following summary description of the capital stock of the Company is qualified
by reference to the Certificate of Incorporation and By-laws of the Company,
copies of which are filed as exhibits to the Registration Statement of which
this Prospectus forms a part.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on all matters to
be voted on by shareholders and are not entitled to cumulative voting rights.
Therefore, the holders of a majority of the shares voted in an election of
directors at which a quorum is present can elect all of the directors then
standing for election, subject to the rights of the holders of Preferred Stock,
if and when issued. The holders of Common Stock have no preemptive or other
subscription rights, and there are no conversion rights or redemption or sinking
fund provisions with respect to the Common Stock.

The holders of Common Stock are entitled to receive such dividends, if any,
as may be declared from time to time by the Board of Directors from funds
legally available therefor, with each share of Common Stock sharing equally in
such dividends. The possible issuance of Preferred Stock with a preference over
Common Stock as to dividends could impact the dividend rights of holders of
Common Stock. All outstanding shares of Common Stock, including the shares
offered by this Prospectus, are, or will be upon consummation of the Offering,
fully paid and non-assessable.

The By-laws provide, subject to the rights of the holders of the Preferred
Stock, if and when issued, that the number of directors shall be fixed by the
Board of Directors. Subject to any rights of the holders of Preferred Stock, if
and when issued, to elect directors, and to remove any director whom the holders
of any such Preferred Stock had the right to elect, any director of the Company
may be removed from office only with cause and by the affirmative vote of at
least eighty (80%) percent of the total votes which would be eligible to be cast
by shareholders in the election of such director.

UNDESIGNATED PREFERRED STOCK

The Board of Directors of the Company is authorized, without further action
of the shareholders of the Company, to issue up to 1,000,000 shares of Preferred
Stock in classes or series and to fix the designations, powers, preferences and
the relative, participating, optional or other special rights of the shares of
each series and any qualifications, limitations and restrictions thereon as set
forth in the Certificate. Any such Preferred Stock issued by the Company may
rank prior to the Common Stock as to dividend rights, liquidation preference or
both, may have full or limited voting rights and may be convertible into shares
of Common Stock. The purpose of authorizing the Board of Directors to issue
Preferred Stock is, in part, to eliminate delays associated with a shareholder
vote on specific issuances. The issuance of Preferred Stock could have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring or seeking to acquire, a significant
portion of the outstanding stock of the Company.

CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION AND BY-LAWS

GENERAL

A number of provisions of the Company's Certificate and By-laws concern
matters of corporate governance and the rights of shareholders. Certain of these
provisions, including those which grant the Board of Directors the ability to
issue shares of Preferred Stock and to set the voting rights, preferences and
other terms thereof, may be deemed to have an anti-takeover effect and may
discourage takeover attempts not first approved by the Board of Directors
(including takeovers which certain shareholders may deem to be in their best
interests). To the extent takeover attempts are discouraged, temporary
fluctuations in the market price of the Common Stock, which may result from
actual or rumored takeover attempts, may be inhibited. These provisions,
together with the ability of the Board of Directors to issue Preferred Stock
without further shareholder action, also could delay or frustrate the removal of
incumbent directors or the assumption of control by shareholders, even if such
removal or assumption would be beneficial to shareholders of the Company. These
provisions also could discourage or make more difficult a merger, tender offer,
or proxy contest, even if they could be favorable to the interests of
shareholders, and could potentially depress the market price of the Common
Stock. The Board of Directors of the Company believes that these provisions are
appropriate to protect the interests of the Company and all of its shareholders.
The Company has no present plans to adopt any other measures or devices which
may be deemed to have an "anti-takeover effect."

MEETINGS OF SHAREHOLDERS

The By-laws provide that a special meeting of shareholders may be called
only by the Board of Directors unless otherwise required by law. The By-laws
provide that only those matters set forth in the notice of the special meeting
may be considered or acted upon at that special meeting, unless otherwise
provided by law. In addition, the By-laws set forth certain advance notice and
informational requirements and time limitations on any director nomination or
any new business which a shareholder wishes to propose for consideration at an
annual meeting of shareholders.

NO SHAREHOLDER ACTION BY WRITTEN CONSENT

The Certificate provides that any action required or permitted to be taken
by the shareholders of the Company at an annual or special meeting of
shareholders must be effected at a duly called meeting and may not be taken or
effected by a written consent of shareholders in lieu thereof.

INDEMNIFICATION AND LIMITATION OF LIABILITY

The By-laws of the Company provide that directors and officers of the
Company and its subsidiaries shall be, and in the discretion of the Board of
Directors non-officer employees may be, indemnified by the Company to the
fullest extent authorized by Delaware law, as it now exists or may in the future
be amended, against all expenses and liabilities reasonably incurred in
connection with service for or on behalf of the Company. The By-laws of the
Company also provide that the right of directors and officers to indemnification
shall be a contract right and shall not be exclusive of any other right now
possessed or hereafter acquired under any by-law, agreement, vote of
shareholders or otherwise. The Certificate contains a provision permitted by
Delaware law that generally eliminates the personal liability of directors for
monetary damages for breaches of their fiduciary duty, including breaches
involving negligence or gross negligence, unless the director has breached his
or her duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or a knowing violation of law, paid a dividend or approved a stock
repurchase in violation of the Delaware General Corporation Law or obtained an
improper personal benefit. This provision does not alter a director's liability
under the federal securities laws. In addition, this provision

does not affect the availability of equitable remedies, such as an injunction or
rescission, for breach of fiduciary duty.

AMENDMENT OF THE CERTIFICATE

The Certificate provides that an amendment thereof must first be approved by
a majority of the Board of Directors and (with certain exceptions) thereafter
must be approved by the holders of a majority of the total votes eligible to be
cast by holders of Common Stock with respect to such amendment or repeal.

AMENDMENT OF BY-LAWS

The Certificate provides that the By-laws may be amended or repealed by the
Board of Directors or by the shareholders. Such action by the Board of Directors
requires the affirmative vote of a majority of the Board of Directors then in
office. Such action by the shareholders requires the affirmative vote of the
holders of at least two-thirds of the total votes eligible to be cast by holders
of Common Stock with respect to such amendment or repeal at an annual meeting of
shareholders or a special meeting called for such purpose, unless the Board of
Directors recommends that the shareholders approve such amendment or repeal at
such meeting, in which case such amendment or repeal shall only require the
affirmative vote of a majority of the total votes eligible to be cast by holders
of Common Stock with respect to such amendment or repeal.

STATUTORY BUSINESS COMBINATION PROVISION

Upon completion of the Offering the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law ("Section
203"). Section 203 provides, with certain exceptions, that a Delaware
corporation may not engage in any of a broad range of business combinations with
a person, or an affiliate or associate of such person, who is an "interested
stockholder" for a period of three years from the date that such person became
an interested stockholder unless: (i) the transaction resulting in the person
becoming an interested stockholder, or the business combination, is approved by
the board of directors of the corporation before the person becomes an
interested stockholder; (ii) the interested stockholder acquired 85% or more of
the outstanding voting stock of the corporation (excluding shares owned by
persons who are both officers and directors of the corporation, and shares held
by certain employee stock ownership plans) in the same transaction that makes it
an interested stockholder; or (iii) on or after the date the person becomes an
interested stockholder, the business combination is approved by the
corporation's board of directors and by the holders of at least 66 2/3% of the
corporation's outstanding voting stock, excluding shares owned by the interested
stockholder, at an annual or special meeting. Under Section 203, an "interested
stockholder" is defined (with certain limited exceptions) as any person that is
(A) the owner of 15% or more of the outstanding voting stock of the corporation
or (B) an affiliate or associate of the corporation and was the owner of 15% or
more of the outstanding voting stock of the corporation at any time within the
three-year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder.

A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or by-laws by action of
its stockholders to exempt itself from coverage; provided that, with certain
limited exceptions, such by-law or charter amendment shall not become effective
until 12 months after the date it is adopted. Neither the Certificate nor the
By-laws contains any such exclusion.

LISTING

The Company has applied for the listing of the Common Stock on the New York
Stock Exchange under the symbol "OFB."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is The Bank of New
York.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, the Company will have outstanding
shares of Common Stock (assuming the Underwriters' over-allotment options
are not exercised). All of the shares of Common Stock to be sold in the Offering
will be freely tradable without restrictions or further registration under the
Securities Act, except that shares purchased by an "affiliate" of the Company
(as that term is defined in Rule 144) (an "Affiliate") will be subject to the
resale limitations of Rule 144. The shares of Common Stock to be owned by
the Existing Shareholders after the Offering are "restricted securities" as
defined in Rule 144 under the Securities Act, and may not be sold in the absence
of registration under the Securities Act other than pursuant to Rule 144 under
the Securities Act or another exemption from registration under the Securities
Act.

In general, under Rule 144, as currently in effect, (i) a person (or persons
whose shares are required to be aggregated) who has beneficially owned shares of
Common Stock as to which at least one year has elapsed since such shares were
sold by the Company or by an Affiliate of the Company in a transaction or chain
of transactions not involving a public offering ("restricted securities") or
(ii) an Affiliate of the Company who holds shares of Common Stock that are not
restricted securities may sell, within any three-month period, a number of such
shares that does not exceed the greater of 1% of the Company's class of Common
Stock then outstanding or the average weekly trading volume in the class of
Common Stock during the four calendar weeks preceding the date on which notice
of such sale required under Rule 144 was filed. Sales under Rule 144 are also
subject to certain provisions relating to the manner and notice of sale and
availability of current public information about the Company. Affiliates of the
Company must comply with the requirements of Rule 144, including the one-year
holding period requirement, to sell shares of Common Stock that are restricted
securities. Furthermore, if a period of at least two years has elapsed from the
date restricted securities were acquired from the Company or an Affiliate of the
Company, a holder of such restricted securities who is not an Affiliate of the
Company at the time of the sale and has not been an Affiliate of the Company at
any time during the three months prior to such sale would be entitled to sell
such shares without regard to the volume limitation and other conditions
described above.

The shares of Common Stock authorized for issuance pursuant to options that
may be granted under the 1993 Plan may be either authorized but unissued shares
or treasury shares obtained by the Company through market or private purchases.
See "MANAGEMENT--1993 Stock Option Plan." The Company intends to register under
the Securities Act the shares of Common Stock issuable upon the exercise of
options granted pursuant to the 1993 Plan.

Prior to the Offering, there has been no public market for the Common Stock.
Although the Company can make no prediction as to the effect, if any, that sales
of shares of Common Stock by the Existing Shareholders would have on the market
price prevailing from time to time, sales of substantial amounts of Common Stock
or the availability of such shares for sale could adversely affect prevailing
market prices. See "RISK FACTORS--Shares Eligible for Future Sales."

All officers and directors of the Company have entered into contractual
"lock-up" agreements providing that they will not during the period of 180 days
from the date of this Prospectus, without the prior written consent of the
Underwriters, directly or indirectly, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, any Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement under the
Securities Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of

ownership of the Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise (collectively, the "Lock-Up"), subject to
certain limited exceptions. With respect to the Selling Shareholders, the
Lock-Up shall not apply to (A) the securities being sold by the Selling
Shareholders in the Offering, (B) any transfer of such securities to an
Affiliate of the Selling Shareholder who or which agrees in a writing in form
and substance reasonably satisfactory to the Underwriters to agree to be bound
by the provisions of the Lock-Up as if it were the Selling Shareholder, (C) any
pledge prior to the date of this Prospectus by a shareholder of the Company of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock and (D) any pledge after the date of this Prospectus by a
shareholder of the Company of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock for the purpose of securing a bona
fide loan by a financial institution to such shareholder. As a result of these
contractual restrictions, notwithstanding possible earlier eligibility for sale
under the provisions of Rule 144 promulgated under the Securities Act, which are
summarized above, shares subject to lock-up agreements will not be saleable
until the agreements expire.

The Company has agreed not to, during the period of [ ] days from the date
of this Prospectus, without the prior written consent of the Underwriters,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of,
any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
Securities Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Common
Stock, whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise (collectively, the "Lock-Up"), subject to certain limited
exceptions. With respect to the Company, the Lock-Up shall not apply to (A) the
issuance of the securities being sold by the Company in the Offering, (B) any
issuance of Common Stock by the Company upon the exercise of an option or
warrant or the conversion or exchange of a security outstanding on the date
hereof and referred to in this Prospectus, (C) any issuance of Common Stock, or
any grant of options to purchase Common Stock, pursuant to existing employee
benefit plans of the Company referred to in the Prospectus, (D) any issuance of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock by the Company in consideration of the acquisition by the
Company from a third party of a business (whether through a merger, sale of
assets or securities, or otherwise), provided that each transferee of such
Common Stock or securities agrees in a writing in form and substance reasonably
satisfactory to the Underwriters to agree to be bound by the provisions of the
Lock-Up as if it were the Company, or the filing by the Company of a
registration statement under the 1933 Act with respect to such issuance and
acquisition.

UNDERWRITING

Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement") among the Company, the Selling Shareholders and the
underwriters named below (the "Underwriters"), the Company and the Selling
Shareholders have agreed to sell to the Underwriters, and each of the
Underwriters severally has agreed to purchase, the aggregate number of shares of
Common Stock set forth opposite its name below.

NUMBER
UNDERWRITERS OF SHARES
- ----------------------------------------------------------------------------------- -----------------

Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................................
Schroder & Co. Inc.................................................................
Total....................................................................

PRICING OF THE OFFERING

Prior to the Offering, there has been no public market for Common Stock. The
initial public offering price will be determined by negotiations between the
Company on the one hand and the Representatives on the other hand. Among the
factors to be considered in determining the initial public offering price will
be the future prospects of the Company and its industry in general, sales,
earnings, and certain other financial operating information of the Company in
recent periods, and the price-earnings ratios, price-sales ratios, market prices
of securities and certain financial and operating information of companies
engaged in activities similar to those of the Company. The estimated initial
public offering price range set forth on the cover page of this Prospectus is
subject to change as a result of market conditions and other factors.

LEGAL MATTERS

Certain legal matters in connection with the shares of the Common Stock
offered hereby will be passed upon for the Company by Goodkind Labaton Rudoff &
Sucharow LLP, New York, New York. One of partners of this firm (through his
professional corporation) owns 18,750 shares of common stock of OFFITBANK,
which, after the Formation Transactions, will represent 56,250 shares or less
than one percent of the outstanding Common Stock. Certain legal matters in
connection with the sale of shares of Common Stock in the Offering will be
passed on for the Underwriters by Skadden Arps Slate Meagher & Flom LLP, New
York, New York.

EXPERTS

The financial statements as of December 31, 1997 and 1996 and for each of
the three years in the period ended December 31, 1997 included in this
Prospectus and Registration Statement have been so included in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

INDEX TO FINANCIAL STATEMENTS

Report of PricewaterhouseCoopers LLP,
Independent Accountants............................................................. F-2

OFFITBANK Balance Sheets as of June 30, 1998
(unaudited) and December 31, 1997 and 1996.......................................... F-3

OFFITBANK Statements of Income for the
Six Months ended June 30, 1998 and 1997
(unaudited) and for the three years ended
December 31, 1997, 1996 and 1995.................................................... F-4

OFFITBANK Statements of Changes in Stockholders'
Equity for the three years ended December 31, 1997,
1996 and 1995....................................................................... F-5

OFFITBANK Statements of Cash Flows for the three
years ended December 31, 1997, 1996 and 1995........................................ F-7

OFFITBANK Notes to Financial Statements
December 31, 1997, 1996 and 1995.................................................... F-8

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
OFFITBANK

The recapitalization described in Note 1 to the financial statements has not
been consummated at August 6, 1998. When it has been consummated, we will be in
a position to furnish the following report:

"In our opinion, the accompanying balance sheets and the related statements of
income, of changes in stockholders' equity and of cash flows present fairly, in
all material respects, the financial position of OFFITBANK at December 31, 1997
and 1996, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of OFFITBANK's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above."

PricewaterhouseCoopers LLP
New York, New York
March 6, 1998

F-2

OFFITBANK

BALANCE SHEETS

DECEMBER 31,
JUNE 30, ----------------------------
1998 1997 1996
------------- ------------- -------------

(UNAUDITED)
ASSETS

Cash and interest-bearing deposits with banks....................... $ 1,534,676 $ 1,263,736 $ 416,083
Management fees receivable, net of allowance for doubtful accounts
of $40,000 at June 30, 1998 and December 31, 1997 and 1996........ 2,647,916 1,944,955 2,595,622
Prepaid assets...................................................... 852,354 428,466 352,124
Investments available for sale...................................... 21,488,374 20,730,571 17,885,209
Investment in affiliate............................................. -- -- 1,334,654
Fixed assets, net................................................... 2,230,564 2,321,279 2,492,869
Other assets........................................................ 4,110,205 3,763,915 3,639,819
------------- ------------- -------------
TOTAL ASSETS.................................................... $ 32,864,089 $ 30,452,922 $ 28,716,380
------------- ------------- -------------
------------- ------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Accounts payable and accrued expenses............................. $ 1,242,918 $ 1,372,936 $ 1,099,816
Accrued salaries and employee benefits............................ 2,802,472 720,126 568,948
Dividends payable................................................. -- 1,540,468 770,234
Deferred rent..................................................... 1,193,835 761,131 839,230
Other liabilities................................................. 582,950 389,778 549,273
------------- ------------- -------------
TOTAL LIABILITIES............................................... 5,822,175 4,784,439 3,827,501
------------- ------------- -------------
Commitments and contingencies (Note 12)
Stockholders' equity
Common stock; $0.01 par value, 30,000,000 shares authorized,
9,254,808 outstanding at June 30, 1998; 9,242,808 outstanding at
December 31, 1997 and 1996...................................... 92,548 92,428 92,428
Additional paid-in capital........................................ 11,489,661 11,389,781 11,389,781
Retained earnings................................................. 15,189,735 13,903,114 13,241,331
Accumulated other comprehensive income............................ 269,970 283,160 165,339
------------- ------------- -------------
TOTAL STOCKHOLDERS' EQUITY...................................... 27,041,914 25,668,483 24,888,879
------------- ------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...................... $ 32,864,089 $ 30,452,922 $ 28,716,380
------------- ------------- -------------
------------- ------------- -------------

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

F-3

OFFITBANK

STATEMENTS OF INCOME

FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, DECEMBER 31,
---------------------------- -------------------------------------------

1998 1997 1997 1996 1995
------------- ------------- ------------- ------------- -------------

(UNAUDITED)

REVENUES:

Management fees...................... $ 19,089,662 $ 15,427,531 $ 32,867,879 $ 28,219,941 $ 22,803,503
Interest and dividends............... 625,636 643,353 1,363,450 1,200,425 1,152,643
Foreign exchange..................... 317,895 385,139 627,284 1,340,761 1,149,751
Custody.............................. 351,149 305,644 606,458 359,504 297,448
Net realized gains on investments
available for sale................. 81,056 56,832 320,726 183,867 264,890
Other................................ 70,522 67,781 306,525 141,654 439,277
------------- ------------- ------------- ------------- -------------
TOTAL REVENUES..................... 20,535,920 16,886,280 36,092,322 31,446,152 26,107,512
------------- ------------- ------------- ------------- -------------

EXPENSES:

Salaries and employee benefits....... 10,459,940 9,081,081 19,232,604 17,376,295 16,121,499
Occupancy............................ 1,184,113 896,835 1,823,397 1,788,163 1,497,532
Advertising and marketing............ 1,033,309 1,045,332 1,999,651 1,506,188 1,069,477
Data processing and software
development........................ 490,699 341,122 809,207 722,002 960,538
Depreciation and amortization........ 350,202 375,132 738,610 724,170 791,707
Professional fees.................... 237,499 251,001 615,000 792,956 470,000
Market research and information
services........................... 373,809 387,838 768,776 747,781 719,748
Insurance............................ 227,595 216,521 434,183 430,977 410,767
Equity in losses of affiliate........ -- 247,500 1,334,654 665,346 --
Other................................ 1,195,085 1,071,830 2,425,661 2,422,478 1,497,349
------------- ------------- ------------- ------------- -------------

TOTAL EXPENSES..................... 15,552,251 13,914,192 30,181,743 27,176,356 23,538,617
------------- ------------- ------------- ------------- -------------

INCOME BEFORE INCOME TAXES........... 4,983,669 2,972,088 5,910,579 4,269,796 2,568,895

Income taxes......................... 2,154,580 1,337,439 2,630,000 1,864,257 1,131,000
------------- ------------- ------------- ------------- -------------

NET INCOME........................... $ 2,829,089 $ 1,634,649 $ 3,280,579 $ 2,405,539 $ 1,437,895
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------

EARNINGS PER SHARE--BASIC............ $ .31 $ .18 $ .35 $ .26 $ .16
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------

EARNINGS PER SHARE--ASSUMING
DILUTION........................... $ .29 $ .17 $ .34 $ .25 $ .15
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------

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

F-4

OFFITBANK

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

ACCUMULATED
COMMON STOCK ADDITIONAL OTHER
-------------------- PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS'
SHARES PAR VALUE CAPITAL EARNINGS INCOME EQUITY
--------- --------- ----------- ---------- -------------- ------------

Balance, December 31, 1994.................. 9,092,808 90,928 10,480,781 $11,154,031 $ (206,135) $21,519,605
Comprehensive income
Net income................................ -- -- -- 1,437,895 -- 1,437,895
Other comprehensive income, net of taxes
Unrealized gains on investments
available for sale, net of
reclassifications (net of taxes of
$356,090)............................... -- -- -- -- 453,205 453,205
---------- -------------- ------------
Total comprehensive income.................. 1,437,895 453,205 1,891,100
---------- -------------- ------------
Dividends declared.......................... -- -- -- (492,950) -- (492,950)
Stock options exercised..................... 150,000 1,500 909,000 -- -- 910,500
--------- --------- ----------- ---------- -------------- ------------
Balance, December 31, 1995.................. 9,242,808 92,428 11,389,781 12,098,976 247,070 23,828,255
Comprehensive income
Net income................................ -- -- -- 2,405,539 -- 2,405,539
Other comprehensive income, net of taxes
Unrealized (losses) on investments
available for sale, net of
reclassifications (net of tax benefit of
$63,440)................................ -- -- -- -- (81,731) (81,731)
---------- -------------- ------------
Total comprehensive income.................. 2,405,539 (81,731) 2,323,808
---------- -------------- ------------
Dividends declared.......................... -- -- -- (1,263,184) -- (1,263,184)
--------- --------- ----------- ---------- -------------- ------------
Balance, December 31, 1996.................. 9,242,808 92,428 11,389,781 13,241,331 165,339 24,888,879
Comprehensive income
Net income................................ -- -- -- 3,280,579 -- 3,280,579
Other comprehensive income, net of taxes
Unrealized gains on investments
available for sale, net of
reclassifications (net of taxes of
$94,469)................................ -- -- -- -- 117,821 117,821
---------- -------------- ------------
Total comprehensive income.................. 3,280,579 117,821 3,398,400
---------- -------------- ------------
Dividends declared.......................... -- -- -- (2,618,796) -- (2,618,796)
--------- --------- ----------- ---------- -------------- ------------
Balance, December 31, 1997.................. 9,242,808 92,428 11,389,781 13,903,114 283,160 25,668,483
(UNAUDITED)
Comprehensive income
Net income................................ -- -- -- 2,829,089 -- 2,829,089
Other comprehensive income, net of taxes
Unrealized gains on investments
available for sale, net of
reclassifications (net of tax benefit of
$10,046)................................ -- -- -- -- (13,190) (13,190)
---------- -------------- ------------
Total comprehensive income.................. 2,829,089 (13,190) 2,815,899
---------- -------------- ------------
Dividends declared.......................... -- -- -- (1,542,468) -- (1,542,468)
Stock options exercised..................... 12,000 120 99,880 -- -- 100,000
--------- --------- ----------- ---------- -------------- ------------
--------- --------- ----------- ---------- -------------- ------------
Balance, June 30, 1998 (UNAUDITED).......... 9,254,808 92,548 11,489,661 $15,189,735 $ 269,970 $27,041,914
--------- --------- ----------- ---------- -------------- ------------
--------- --------- ----------- ---------- -------------- ------------

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

F-5

OFFITBANK

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, DECEMBER 31,
------------- -------------------------------
1998 1997 1996 1995
------------- --------- --------- ---------

(UNAUDITED)
Disclosure of reclassification amounts:

Unrealized holding gains arising during period (net of taxes of
$51,685 for the six months ended June 30, 1998 and $351,627,
$79,277 and $564,218 for the years ended December 31, 1997, 1996
and 1995, respectively).......................................... $ 67,866 $ 438,547 $ 102,136 $ 718,095

Less--reclassification adjustment for gains included in net income
(net of taxes of $61,731 for the six months ended June 30, 1998
and $257,158, $142,717 and $208,128 for the years ended December
31, 1997, 1996 and 1995, respectively)........................... (81,056) (320,726) (183,867) (264,890)
------------- --------- --------- ---------
Net unrealized gains (losses) on investment available for sale (net
of taxes of ($10,046) for the six months ended June 30, 1998 and
$94,469, ($63,440) and $356,090 for 1997, 1996 and 1995,
respectively).................................................... $ (13,190) $ 117,821 $ (81,731) $ 453,205
------------- --------- --------- ---------
------------- --------- --------- ---------

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

F-6

OFFITBANK

STATEMENTS OF CASH FLOWS

FOR THE PERIOD ENDED FOR THE YEAR ENDED
JUNE 30, DECEMBER 31,
--------------------- ----------------------------------
1998 1997 1997 1996 1995
---------- --------- ---------- ---------- ----------

(UNAUDITED)
Cash flows from operating activities:
Net income....................................... $2,829,089 $1,634,647 $3,280,579 $2,405,539 $1,437,895
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization.................. 350,202 375,132 738,610 724,170 791,707
Provision for doubtful accounts................ -- -- -- 40,000 --
Net realized gains on investments available for
sale......................................... (81,056) (56,833) (320,726) (183,867) (264,890)
Equity in losses of affiliate.................. -- 247,500 1,334,654 665,346 --
Change in bond premium/discount................ (1,490) (731) 176,477 70,858 76,761
Changes in assets and liabilities:
Management fees receivable................... (702,960) 1,025,526 650,667 (1,278,791) 1,383
Prepaid assets............................... (423,888) (136,682) (76,342) 240,800 89,123
Other assets................................. (346,291) 201,287 (124,096) 220,574 (1,310,128)
Accounts payable and accrued expenses........ (129,418) (371,385) 273,120 543,766 (666,558)
Accrued salaries and employee benefits....... 2,082,346 2,139,579 151,178 119,656 (131)
Deferred rent................................ 432,704 (43,390) (78,099) (127,466) (143,389)
Other liabilities............................ 193,172 (247,352) (159,495) 225,714 112,044
---------- --------- ---------- ---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES...... 4,202,410 4,767,298 5,846,527 3,666,299 123,817
---------- --------- ---------- ---------- ----------
Cash flows from investing activities:
Proceeds from sales of investments available for
sale........................................... 3,283,455 3,317,314 8,276,826 4,939,197 14,022,259
Proceeds from maturities of investments available
for sale....................................... 11,505,976 -- 1,113,306 5,896,508 4,294,968
Purchases of investments available for sale...... (15,478,477) (5,020,522) (11,973,424) (11,257,138) (19,520,998)
Investment in affiliate.......................... -- -- -- (2,000,000) --
Purchase of fixed assets......................... (259,488) (372,228) (567,020) (317,803) (118,623)
---------- --------- ---------- ---------- ----------
NET CASH USED IN INVESTING ACTIVITIES.......... (948,534) (2,075,436) (3,150,312) (2,739,236) (1,322,394)
---------- --------- ---------- ---------- ----------
Cash flows from financing activities:
Dividends paid................................... (3,082,936) (770,234) (1,848,562) (985,900) --
Proceeds from stock options exercised............ 100,000 -- -- -- 910,500
---------- --------- ---------- ---------- ----------
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES................................... (2,982,936) (770,234) (1,848,562) (985,900) 910,500
---------- --------- ---------- ---------- ----------
Net increase (decrease) in cash and
interest-bearing deposits with banks............. 270,940 1,921,628 847,653 (58,837) (288,077)
Cash and interest-bearing deposits with banks at
beginning of period.............................. 1,263,736 416,083 416,083 474,920 762,997
---------- --------- ---------- ---------- ----------
---------- --------- ---------- ---------- ----------
Cash and interest-bearing deposits with banks at
end of period.................................... $1,534,676 $2,337,711 $1,263,736 $ 416,083 $ 474,920
---------- --------- ---------- ---------- ----------
---------- --------- ---------- ---------- ----------
Supplemental disclosure of cash flow information:
Cash paid during the year for income taxes....... $2,315,425 $1,464,582 $2,675,582 $1,316,808 $1,098,570
---------- --------- ---------- ---------- ----------
---------- --------- ---------- ---------- ----------

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

F-7

OFFITBANK

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997, 1996 AND 1995

1. RECAPITALIZATION

On July 30, 1998, the Board of Directors approved the formation of OFFITBANK
HOLDINGS Inc. and declared a 3-for-1 stock split of its common stock
outstanding. The financial statements and the notes to the financial statements
have been retroactively restated to reflect the stock split.

2. ORGANIZATION

The Bank is engaged in providing investment management and advisory services
to wealthy individuals/family groups, corporations and non-profit organizations
and institutions primarily in North America, Europe, Asia and Latin America. The
Bank is an Article III Banking Organization chartered with trust powers under
New York State banking laws and was organized in 1990. The Bank is the successor
to Offit Associates, Inc., a Registered Investment Advisor established in 1983.
Total assets under management at December 31, 1997 and 1996 were approximately
$9.3 billion and $8.0 billion, respectively. In addition, the Bank provides
master custody and trust services. In connection with its fiduciary
responsibilities, the Bank may engage in collateralized lending secured by
eligible securities within investment portfolios which it manages. The Bank also
purchases and sells various currencies in the interbank foreign exchange markets
on behalf of its clients.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Set forth below are the significant accounting policies followed by the Bank
in the preparation of its financial statements.

CASH AND INTEREST-BEARING DEPOSITS WITH BANKS

Cash and interest-bearing deposits with banks includes certain short term
investments recorded at cost, which approximates market value, and includes
holdings in money market mutual funds and highly-liquid investments with
maturities of three months or less.

INVESTMENTS AVAILABLE FOR SALE

Available for sale investments include debt securities and mutual fund
holdings for which the Bank acts as an investment advisor. These investments are
held for yield and liquidity management purposes and may be sold in response to
or in anticipation of changes in interest rates, liquidity considerations and
other factors.

Such investments are carried at fair value with unrealized gains and losses
reported within stockholders' equity, net of taxes, until realized. Premiums and
discounts on debt securities are amortized or accreted over the life of the
underlying security as an adjustment to interest income. Debt securities and
mutual fund investments are recorded on a trade date basis and realized gains or
losses on disposition are computed using the specific identification method.

PARTNERSHIP INVESTMENTS

The Bank's investments in certain limited partnerships it advises are
included in other assets and are carried at the lower of cost or market value
and accounted for under the cost method of accounting. Investment income,
realized gains and losses and net valuation adjustments, if any, are included in
other income.

F-8

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATION OF CREDIT RISK

Financial instruments which potentially expose the Bank to concentrations of
credit risk, as defined by Statement of Financial Accounting Standards ("SFAS")
No. 105, consist primarily of investments in U.S. government and agency
securities, municipal securities, money market accounts and affiliated fixed
income mutual funds and accounts receivable. Credit risk is believed to be
minimal in that the U.S. government and agency securities are backed by the full
faith and credit of the U.S. government, municipal securities are backed by the
full taxing power of the issuing municipality or revenues from a specific
project, and the affiliated mutual funds have substantial net assets.

FIXED ASSETS

Fixed assets are stated at cost. Depreciation of computer and office
equipment and furniture and fixtures is computed using the straight-line method
over the related estimated useful lives of the assets ranging between 3-5 years.
Amortization of leasehold improvements is computed using the straight-line
method over their respective lease terms or useful life, if shorter.

REVENUE RECOGNITION

Investment management fees are recorded as income during the period earned.
Performance fees are recorded as income during the period earned and no longer
subject to forfeiture.

DEFERRED RENT

Under a 1993 office space lease agreement and a subsequent 1997 amendment
acquiring additional space, the Bank made no rental payments during the initial
thirteen months of the ten-year lease period and the initial six months of the
five and a half-year amendment period. These rent benefits have been recorded as
deferred credits which are being applied against rent expense on a straight-line
basis over the remaining life of the lease.

FOREIGN EXCHANGE

The Bank engages in buying and selling foreign currencies as a principal in
the interbank market on behalf of its clients and earns a fixed spread on all
transactions in accordance with the terms of the investment management agreement
with its clients. Amounts receivable, pending settlement of such transactions,
are included in other assets.

INCOME TAXES

The Bank accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". In accordance with SFAS No. 109, deferred tax
assets and liabilities are established for the expected future tax consequences
of temporary differences between the carrying amounts and tax basis of assets
and liabilities using enacted tax rates.

F-9

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER SHARE

In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share". SFAS No. 128 replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings per share. Unlike
primary earnings per share, basic earnings per share excludes any dilutive
effects of options, warrants and convertible securities. Diluted earnings per
share replaces the previous calculation of fully diluted earnings per share. All
earnings per share amounts for all periods have been presented to conform to
SFAS No. 128 requirements.

COMPREHENSIVE INCOME

The Bank has adopted SFAS No. 130, "Reporting Comprehensive Income". SFAS
No. 130 requires the reporting of comprehensive income and its components.
Comprehensive income is defined as the change in equity from transactions and
other events and circumstances from non-owner sources, and excludes investments
by and distributions to owners. Comprehensive income includes net income and
other items of comprehensive income meeting the above criteria. The Bank's only
component of other comprehensive income is the unrealized gains and losses on
investments available-for-sale.

BASIS OF PREPARATION

The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

Certain prior period amounts have been reclassified to conform with 1997
classifications.

RECENT ACCOUNTING PRONOUNCEMENTS

In 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure About Segments of an Enterprise and Related Information," which is
effective for fiscal years beginning after December 15, 1997. The Statement
establishes standards for reporting information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial reports issued to stockholders. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. The Bank plans to adopt SFAS No. 131 in
the year ended December 31, 1998 and does not expect that financial reporting
and disclosures will be materially impacted.

SFAS No. 133, "Accounting for Derivative Instruments and for Hedging
Activities" is effective for fiscal years beginning after June 15, 1999. This
statement standardizes the accounting for derivative instruments and the
derivative portion of certain other contracts that have similar characteristics
by requiring that an entity recognize those instruments and derivative portions
of other contracts as assets or liabilities in the statement of financial
position and measure them at fair value. The Bank plans to adopt SFAS No. 133 in
the year ended December 31, 1998 and does not expect that financial reporting
and disclosures will be materially impacted.

F-10

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
UNAUDITED INTERIM FINANCIAL INFORMATION

In the opinion of management, all adjustments, consisting only of normal
recurring adjustments that are necessary for fair presentation, have been
included in the unaudited financial information for the interim periods ended
June 30, 1998 and 1997.

4. INVESTMENTS AVAILABLE FOR SALE

The amortized cost and fair value of available for sale debt securities and
mutual funds at December 31, 1997, 1996 and 1995 follows:

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------------- ----------- ----------- -------------

December 31, 1997
U.S. Treasury...................... $ 4,608,365 $ 94,754 $ -- $ 4,703,119
Mutual funds....................... 15,592,468 434,984 -- 16,027,452
----------------- ----------- ----------- -------------
TOTAL.......................... $ 20,200,833 $ 529,738 $ -- $ 20,730,571
----------------- ----------- ----------- -------------
----------------- ----------- ----------- -------------
December 31, 1996
U.S. Treasury...................... $ 6,933,075 $ 103,604 $ -- $ 7,036,679
Municipal.......................... 3,262,999 52,321 -- 3,315,320
----------------- ----------- ----------- -------------
Total debt securities.............. 10,196,074 155,925 -- 10,351,999
Mutual funds....................... 7,376,177 167,230 (10,197) 7,533,210
----------------- ----------- ----------- -------------
TOTAL.......................... $ 17,572,251 $ 323,155 $ (10,197) $ 17,885,209
----------------- ----------- ----------- -------------
----------------- ----------- ----------- -------------
December 31, 1995
U.S. Treasury...................... $ 7,521,678 $ 275,962 $ -- $ 7,797,640
Municipal.......................... 4,070,267 77,518 -- 4,147,785
----------------- ----------- ----------- -------------
Total debt securities.............. 11,591,945 353,480 -- 11,945,425
Mutual funds....................... 5,413,776 73,296 -- 5,487,072
----------------- ----------- ----------- -------------
TOTAL.......................... $ 17,005,721 $ 426,776 $ -- $ 17,432,497
----------------- ----------- ----------- -------------
----------------- ----------- ----------- -------------

Gross realized gains from the sale of debt securities for the year ended
December 31, 1997 were $183,082. Gross realized gains and losses from the sale
of debt securities for the year ended December 31, 1996 were $45,091 and $5,705,
respectively. Gross realized gains and losses from the sale of debt securities
for the year ended December 31, 1995 were $271,890 and $7,000, respectively.

Gross realized gains and losses from the sale of mutual funds for the year
ended December 31, 1997 were $141,403 and $3,759, respectively. Gross realized
gains and losses from the sale of mutual funds for

F-11

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

4. INVESTMENTS AVAILABLE FOR SALE (CONTINUED)
the year ended December 31, 1996 were $164,317 and $19,836, respectively.
Taxable and nontaxable interest and dividends for the years ended December 31,
1997, 1996 and 1995 follows:

FOR THE YEAR ENDED
DECEMBER 31,
----------------------------------------

1997 1996 1995
------------ ------------ ------------
Taxable interest.................................... $ 1,025,908 $ 836,389 $ 902,103
Nontaxable interest................................. 259,524 276,100 183,884
Dividends........................................... 78,018 87,936 66,656
------------ ------------ ------------
TOTAL........................................... $ 1,363,450 $ 1,200,425 $ 1,152,643
------------ ------------ ------------
------------ ------------ ------------

A maturity profile of U.S. Treasury securities at December 31, 1997 follows:

AFTER AFTER
ONE YEAR FIVE YEARS
WITHIN BUT WITHIN BUT WITHIN
ONE YEAR FIVE YEARS TEN YEARS TOTAL
------------ ------------ ------------ ------------

Amortized cost....................... $ 1,511,171 $ 1,278,903 $ 1,818,291 $ 4,608,365
Fair value........................... 1,515,753 1,301,197 1,886,169 4,703,119
------------ ------------ ------------ ------------
Unrealized gains..................... $ 4,582 $ 22,294 $ 67,878 $ 94,754
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------

5. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosure about Fair
Value of Financial Instruments", requires disclosures of estimated fair values
of certain on- and off-balance sheet financial instruments. The fair value
estimates, as well as the related methods and assumptions used to value each of
the Bank's significant financial instruments, are set forth below.

CASH AND INTEREST-BEARING DEPOSITS WITH BANKS

The carrying amount of cash and interest-bearing deposits with banks
approximates fair value due to the short maturities of these instruments.

MANAGEMENT FEES RECEIVABLE, NET

Fair value approximates the carrying amount reported in the balance sheet as
these receivables are generally collected within sixty days and are short-term
in nature.

INVESTMENTS AVAILABLE FOR SALE

Fair value approximates the carrying amounts reported in the balance sheet
as these investments are classified as available-for-sale securities and are
periodically marked-to-market per the guidance set forth in Statement of
Financial Standards No. 115. Fair value adjustments are reflected as a separate
component of stockholders' equity and accounted for in comprehensive income.

F-12

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

5. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES, ACCRUED SALARIES AND EMPLOYEE BENEFITS,
AND DIVIDENDS PAYABLE

Fair value approximates the carrying amounts reported in the balance sheet
as these liabilities are generally paid within sixty days and are short-term in
nature.

6. INVESTMENT IN AFFILIATE

As of December 31, 1997, the Bank has a 9.72% interest in Witan Company LLP
(the "Company") which is developing a portfolio accounting system to be marketed
to investment management firms and wealthy family group offices. The value of
the Bank's remaining investment outstanding at December 31, 1996 amounting to
$1,334,654 was expensed during 1997 due to the Bank's equity share in the
Company's current period operating losses and projected operating losses and
negative cash flows. The Bank has not made any oral or written commitments to
provide the Company with guarantees or additional equity or debt financing.

7. FIXED ASSETS

Fixed assets consisted of the following:

DECEMBER 31,
--------------------------

1997 1996
------------ ------------
Computer and office equipment..................................... $ 1,911,277 $ 1,409,865
Furniture and fixtures............................................ 564,793 552,635
Leasehold improvements............................................ 2,281,137 2,227,687
------------ ------------
------------ ------------
4,757,207 4,190,187
Less--Accumulated depreciation and amortization................... 2,435,928 1,697,318
------------ ------------
$ 2,321,279 $ 2,492,869
------------ ------------
------------ ------------

8. INCOME TAXES

The components of the income tax provision for the years ended December 31,
1997, 1996 and 1995 were as follows:

FOR THE YEAR ENDED
DECEMBER 31,
----------------------------------------

1997 1996 1995
------------ ------------ ------------
Current
Federal........................................... $ 1,773,000 $ 1,091,264 $ 660,000
State and local................................... 1,129,000 715,520 418,000
------------ ------------ ------------
2,902,000 1,806,784 1,078,000
------------ ------------ ------------
Deferred
Federal........................................... (173,000) 40,093 33,000
State and local................................... (99,000) 17,380 20,000
------------ ------------ ------------
(272,000) 57,473 53,000
------------ ------------ ------------
$ 2,630,000 $ 1,864,257 $ 1,131,000
------------ ------------ ------------
------------ ------------ ------------

F-13

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

8. INCOME TAXES (CONTINUED)

The provision for income taxes varies from amounts which would be computed
by applying the applicable U.S. federal income tax rate to income before income
taxes, primarily due to state and local taxes and nondeductible expenses. A
reconciliation of the federal statutory income tax rate with the Bank's
effective income tax rate is presented in the following table:

FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
1997 1996 1995
----------------------- ----------------------------- -----------------------

Tax expense at U.S. federal income tax
rate................................ $ 2,068,702 35.0% $ 1,494,428 35.0% $ 899,113 35.0%
Increase (decrease) in effective rate
resulting from:
Tax exempt interest income............ (168,691) (2.9%) (179,400) (4.2%) (119,470) (4.7%)
State and local income taxes.......... 669,500 11.3% 503,347 11.8% 284,700 11.1%
Miscellaneous other................... 60,489 1.1% 45,882 1.1% 66,657 2.6%
------------ --------- ------------------ --------- ------------ ---------
TOTAL............................. $ 2,630,000 44.5% $ 1,864,257 43.7% $ 1,131,000 44.0%
------------ --------- ------------------ --------- ------------ ---------
------------ --------- ------------------ --------- ------------ ---------

Deferred income taxes result primarily from depreciation and certain other
income or expenses being reported in different periods for financial statement
purposes than for income tax purposes. The tax effects of timing differences
that give rise to significant portions of deferred tax assets and liabilities
consist of the following:

DECEMBER 31,
----------------------

1997 1996
---------- ----------
Deferred tax assets:
Deferred rent....................................................... $ 352,099 $ 391,424
Fixed asset depreciation............................................ 277,312 141,329
Other............................................................... 6,939 101,050
---------- ----------
TOTAL GROSS DEFERRED TAX ASSETS................................... 636,350 633,803
Deferred tax liabilities:
Deferred gain....................................................... 235,981 139,039
Other............................................................... -- 206,277
---------- ----------
TOTAL GROSS DEFERRED TAX LIABILITIES.............................. 235,981 345,316
---------- ----------
Net deferred tax assets............................................... $ 400,369 $ 288,487
---------- ----------
---------- ----------

9. RELATED PARTY TRANSACTIONS

The Bank sponsors and is the investment manager for certain limited
partnerships (the "Partnerships"). At December 31, 1997, the Bank was the
general partner of each of the Partnerships. Investment management and
performance fees earned from the Partnerships for the years ended December 31,
1997, 1996 and 1995 were approximately $895,000, $2,053,000 and $971,000,
respectively. Additionally, the Bank acts as the investment advisor for certain
mutual funds which it sponsors and has investments carried at fair value
$14,645,352, $6,257,363 and $4,286,159 at December 31, 1997, 1996 and 1995,
respectively.

F-14

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

9. RELATED PARTY TRANSACTIONS (CONTINUED)
Investment management fees earned from these mutual funds for the years ended
December 31, 1997, 1996 and 1995 were approximately $10,852,000, $6,077,000 and
$2,884,000, respectively.

Included in Other Assets are amounts due from Officers and employees of
approximately $318,000 and $257,000 at December 31, 1997 and 1996, respectively.

10. EMPLOYEE BENEFIT PLANS

The employees of the Bank participate in a 401(k)/Profit Sharing Plan (the
"Plan").

(A) 401(K)

The Bank offers a 401(k) plan covering substantially all employees. Under
the 401(k) plan, employees can make contributions at a rate of one to fifteen
percent of their compensation (as defined in the 401(k) plan), subject to
Internal Revenue Code limitations. The Bank makes a matching contribution
annually on a discretionary basis. Any matching contributions will be allocated
to those participants who have made elective contributions during the Plan year,
who complete more than 500 hours of service in a Plan year and are employed by
the Bank on the last day of the Plan year.

Employees become fully vested in the matching contributions upon the
earliest of their retirement (as defined in the 401(k) Plan), death, termination
of employment after four years of service or upon termination of the plan or the
complete discontinuance of contributions thereunder. Employees are immediately
vested in their 401(k) elective contributions.

Matching contributions to the 401(k) plan amounted to $106,000, $93,000 and
$89,000, for each of the years ended December 31, 1997, 1996 and 1995,
respectively.

(B) PROFIT SHARING

The Bank may make discretionary contributions to the Plan. This contribution
will be allocated among participants in the proportion that each participant's
compensation (subject to statutory limitations) bears to the aggregate
compensation of all participants. This discretionary contribution will be
allocated by the Bank to those participants who complete more than 500 hours of
service in a Plan year and are employed by the Bank on the last day of the Plan
year.

In order to vest in the Bank's discretionary contributions, an employee must
be employed at least two years and work at least 1,000 hours per year. Upon
completion of two years of service, 20% of the employee's balance vests, with an
additional 20% vesting after three years of service. After four years of
service, the employee is fully vested.

Profit sharing contributions amounted to $407,000, $370,000 and $361,000,
for each of the years ended December 31, 1997, 1996 and 1995, respectively.

11. STOCK OPTION PLAN

Statement of Financial Accounting Standard No. 123 ("SFAS 123"), "Accounting
for Stock-Based Compensation" defines a fair value-based method of accounting
for stock-based employee compensation plans. Under the fair value-based method,
compensation cost is measured at the grant date based upon the

F-15

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

11. STOCK OPTION PLAN (CONTINUED)
value of the award and is recognized over the service period. While SFAS 123
encourages entities to adopt this method of accounting for employee stock
compensation plans, it also allows an entity to continue to measure compensation
costs for its plans as prescribed in APB Opinion No. 25, "Accounting for Stock
Issued to Employee" ("APB 25"). The Bank has elected to continue to apply APB 25
and has disclosed the pro forma effect on earnings under SFAS 123. As a result,
no compensation cost has been recognized on the Bank's stock options as the
exercise price of the options has equaled the estimated fair market value of the
underlying stock at date of grant.

The following is a combined summary of stock option activity during the
three-year period ended December 31, 1997.

WEIGHTED
AVERAGE
SHARES EXERCISE
UNDER OPTION PRICE PRICE
OPTION PER SHARE PER SHARE
---------- ------------------------------- -------------

Balance at 12/31/94..................... 763,248 $ 4.44 -- $ 8.33 $ 6.00
Exercised............................. (150,000) -- 4.44 4.44
---------- ------------------------------- ------
Balance at 12/31/95..................... 613,248 5.56 -- 8.33 6.38
Forfeited............................. (12,000) -- 8.33 8.33
---------- ------------------------------- ------
Balance at 12/31/96..................... 601,248 5.56 -- 8.33 6.34
Granted............................... 84,000 12.08 12.08
---------- ------------------------------- ------
Balance at 12/31/97..................... 685,248 $ 5.56 -- $ 12.08 $ 7.04
---------- ------------------------------- ------
---------- -------------------------------

During 1997, the Board of Directors approved additional issuance of stock
options for 84,000 shares of common stock to employees of the Bank with an
exercise price of $12.08 per share, the fair value at date of grant as
determined by an independent valuation. As a result, at December 31, 1997, the
Bank has 685,248 options outstanding (661,248 currently exercisable) with
exercise prices ranging from $5.56 to $12.08 and a weighted average exercise
price of $7.04. These options have expiration dates ranging from 1999 to 2003.

The minimum fair value of options granted during 1997, was determined using
a present value-based methodology which utilized a risk-free interest rate of
6.72% and assumed future bi-annual dividends of $0.1667 per share and resulted
in a minimum fair value of $2.55 per share. The Bank's pro forma net income,
basic earnings per share and diluted earnings per share for the year ended
December 31, 1997 would have been $3,176,558, $0.34 and $0.33, respectively, if
the fair value-based method had been adopted.

F-16

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

12. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Bank's lease agreement for office space expires in 2003. The following
is a schedule of future minimum lease payments under noncancelable lease
agreements.

YEAR ENDING AMOUNTS
- ------------------------------------------------------------------------------- -------------

1998........................................................................... $ 1,785,300
1999........................................................................... 2,295,700
2000........................................................................... 2,319,800
2001........................................................................... 2,319,800
2002........................................................................... 2,319,800
2003........................................................................... 1,367,000
-------------
Total...................................................................... $ 12,407,400
-------------
-------------

Lease expense for office space aggregated $1,171,000, $1,098,000 and
$1,089,000 in 1997, 1996 and 1995, respectively. Occupancy expense includes
sublease income of $57,000, $320,000 and $320,000 in 1997, 1996 and 1995,
respectively.

FINANCIAL INSTRUMENTS

The Bank engages in buying and selling foreign currencies as a principal in
the interbank market on behalf of its clients. The Bank will only enter into
transactions whereby the notional principal exposure is offset by a matched
position. As a consequence, the Bank's exposure is limited to the counterparty
failing to meet its contractual obligation. Such off-balance sheet credit
exposure is represented by the amount of unrealized gains associated with
outstanding foreign exchange contracts. At December 31, 1997, 1996 and 1995,
unrealized gains associated with such contracts totaled approximately
$2,943,000, $4,550,000 and $133,000, respectively.

The notional or contractual amounts used to express the volume of these
transactions do not necessarily represent the amounts potentially subject to
risk. In addition, the measurement of the risks associated with these
transactions is only meaningful when related and offsetting transactions are
identified. Commitments to purchase and sell foreign currencies at December 31,
1997 and 1996 totaled approximately $148 million and $139 million, respectively.

F-17

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

13. EARNINGS PER SHARE

The following table sets forth the computation of the basic and diluted
earnings per share:

FOR THE YEAR ENDED
DECEMBER 31,
----------------------------------------

1997 1996 1995
------------ ------------ ------------
Numerator
Income from continuing operations................. $ 3,280,579 $ 2,405,539 $ 1,437,895
------------ ------------ ------------
Numerator for basic and diluted earnings
per share for continuing operations............... $ 3,280,579 $ 2,405,539 $ 1,437,895
------------ ------------ ------------

FOR THE YEAR ENDED
DECEMBER 31,
----------------------------------------
1997 1996 1995
------------ ------------ ------------

Denominator
Denominator for basic earnings per
share-weighted-average shares................... 9,242,808 9,242,808 9,132,671
Effect of dilutive securities:
Employee stock options.......................... 326,579 257,690 266,668
------------ ------------ ------------
Denominator for diluted earnings per
share-adjusted weighted-average shares.......... 9,569,387 9,500,498 9,399,339
------------ ------------ ------------
Earnings per share--basic........................... $ 0.35 $ 0.26 $ 0.16
------------ ------------ ------------
------------ ------------ ------------
Earnings per share--assuming dilution............... $ 0.34 $ 0.25 $ 0.15
------------ ------------ ------------
------------ ------------ ------------

14. REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered
by the State of New York Banking Department. Failure to meet minimum capital
requirements can initiate certain mandatory, and possible additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Bank's financial statements. The Bank's capital amounts
and classifications are calculated under regulatory accounting practices and are
subject to qualitative judgments by the regulator about components, risk
weightings and other factors.

F-18

OFFITBANK

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

14. REGULATORY MATTERS (CONTINUED)
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum ratios of total defined capital as set
forth in the table below. As of December 31, 1997 and 1996, the Bank meets all
capital adequacy requirements to which it is subject.

REQUIRED FOR CAPITAL
ACTUAL ADEQUACY PURPOSES
------------------------ -------------------------

AMOUNT RATIO AMOUNT RATIO
------------- --------- ------------ -----
As of December 31, 1997:
- ------------------------------------------------------------------
Total capital
(to Risk-Weighted Assets)....................................... $ 25,385,324 87.80% $ 2,312,998 8.00%
Tier I capital
(to Risk-Weighted Assets)....................................... 25,385,324 87.80% 1,156,499 4.00%
Tier I capital
(to Average Assets)............................................. 25,385,324 75.29% 1,348,757 4.00%

As of December 31, 1996:
- ------------------------------------------------------------------
Total capital
(to Risk-Weighted Assets)....................................... $ 23,044,504 96.55% $ 1,909,360 8.00%
Tier I capital
(to Risk-Weighted Assets)....................................... 23,044,504 96.55% 954,680 4.00%
Tier I capital
(to Average Assets)............................................. 23,044,504 77.13% 1,195,060 4.00%

In addition to these standard capital adequacy quantitative measures, the
State of New York Banking Department requires that Article III Banking
Organizations maintain a ratio of Tier I capital to client assets under
discretionary management of 0.25%. At December 31, 1997 and 1996, the Bank
maintained a ratio of 0.29% and 0.31%, respectively.

F-19

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

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING CONTAINED HEREIN, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS NOT
LAWFUL TO MAKE ANY SUCH OFFER OF SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

PAGE
---------

Additional Information.......................... 2
Special Note Regarding Forward-Looking
Information................................... 2
Summary......................................... 3
Risk Factors.................................... 9
Use of Proceeds................................. 14
Dilution........................................ 14
Dividend Policy................................. 16
Capitalization.................................. 17
Selected Financial Data......................... 18
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 19
Business........................................ 25
Management...................................... 43
Certain Transactions............................ 51
Principal and Selling Shareholders.............. 52
Description of Capital Stock.................... 53
Certain Provisions of the Company's Certificate
of Incorporation and By-laws..................
Shares Eligible for Future Sale................. 56
Underwriting.................................... 58
Legal Matters................................... 58
Experts......................................... 58
Index to Financial Statements................... F-1

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

UNTIL , 1998 (25 DAYS AFTER THE DATE HEREOF), ALL DEALERS EFFECTING
TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT
IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING
AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

[LOGO]

OFFITBANK HOLDINGS, INC.

COMMON STOCK

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

PROSPECTUS

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

MERRILL LYNCH & CO.
SCHRODER & CO. INC.

, 1998

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

PART II

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table indicates the estimated expenses to be incurred in
connection with the Offering, all of which will be paid by the Company.

SEC registration fee............................................ $ 13,570
NASD fee........................................................ 5,100
Listing fee..................................................... *
Accounting fees and expenses.................................... *
Legal fees and expenses......................................... *
Printing and engraving.......................................... *
Transfer Agent's fees........................................... *
Blue Sky fees and expenses (including counsel fees)............. *
Miscellaneous expenses.......................................... *
---------
Total................................................... $ *
---------
---------

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

* To be supplied by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

In accordance with Section 145 of the General Corporation Law of the State
of Delaware, Article VII of the Company's Amended and Restated Certificate of
Incorporation provides that no director of the Company shall be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) in respect of certain unlawful dividend payments or
stock redemptions or repurchases, or (iv) for any transaction from which the
director derived an improper personal benefit. In addition, the Certificate
provides that if the Delaware General Corporation Law is amended to authorize
the further elimination or limitation of the liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.

Article V of the Company's Amended and Restated By-laws provides for
indemnification by the Company of its officers and certain non-officer employees
under certain circumstances against expenses (including attorneys fees,
judgments, fines and amounts paid in settlement) reasonably incurred in
connection with the defense or settlement of any threatened, pending or
completed legal proceeding in which any such person is involved by reason of the
fact that such person is or was an officer or employee of the Company if such
person acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Company, and, with respect to
criminal actions or proceedings, if such person had no reasonable cause to
believe his or her conduct was unlawful.

The form of Underwriting Agreement to be filed as Exhibit 1.1 will contain
agreements between the Company, the Selling Shareholders and the Underwriters
and their controlling persons providing for indemnification against civil
liabilities, including liabilities under the Securities Act, or for contribution
to payments which any of them may be required to make in respect thereof.

II-1

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Immediately prior to the closing of the Offering, the Company issued shares
of its Common Stock to all of the Existing Shareholders in exchange for all of
the outstanding shares of common stock of OFFITBANK. Such transactions were not
registered in reliance upon the exemption provided by Section 4(2) under the
Securities Act of 1933.

On March 28, 1998, James Campbell purchased 4,000 shares of OFFITBANK Common
Stock at $25.00 per share by exercising his incentive stock option granted in
1994 under the 1993 Stock Option Plan. This transaction was not registered in
reliance upon the exemption provided by Section 4(2) under the Securities Act of
1933.

On April 23, 1997, OFFITBANK granted incentive stock options under the 1993
Stock Option Plan (i) for 12,000 shares of OFFITBANK's Common Stock to Richard
M. Johnston, a Managing Director of OFFITBANK, and (ii) for 4,000 shares of
OFFITBANK's Common Stock each to four key employees, none of whom is an officer,
Director or Managing Director of the Company or OFFITBANK. Each option was
granted at $36.24, the market value per share of the OFFITBANK Common Stock at
the date of grant, and is exercisable until April 22, 2005. These transactions
were not registered in reliance upon the exemption provided by Section 4(2)
under the Securities Act of 1933.

ITEM 16. EXHIBITS

(a) Exhibits:

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ----------- -------------------------------------------------------------------------------------------------------

1.1* -- Form of Underwriting Agreement

3.1* -- Amended and Restated Certificate of Incorporation of the Company

3.2* -- Amended and Restated By-laws of the Company

4.1* -- Specimen Common Stock Certificates

5.1* -- Opinion of Goodkind Labaton Rudoff & Sucharow LLP regarding legality of securities being registered

10.1* -- 1993 Stock Option Plan

10.2* -- Forms of 1993 Stock Option Plan Option Agreements

10.3* -- Form of Non-competition Agreement

10.4* -- "Split-Dollar" Life Insurance Policy on the life of Morris W. Offit

21.1 -- Subsidiaries of the Company

23.1* -- Consent of Goodkind Labaton Rudoff & Sucharow LLP (included in Exhibit 5.1)

23.2* -- Consent of PricewaterhouseCoopers LLP

24.1 -- Powers of Attorney (included on page II-5 of this Registration Statement)

27.1 -- Financial Data Schedule

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

* To be filed by amendment.

II-2

ITEM 16. EXHIBITS (CONTINUED)
(b) Financial Statements and Schedules:

Financial statement schedules are omitted as not required or not applicable
or because the information is included in the Financial Statements or notes
thereto.

ITEM 17. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required
by the Underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant by the Registrant pursuant to the foregoing
provisions, the underwriting agreement, the Company's Certificate of
Incorporation, By-laws, Delaware law or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
adjudication of such issue.

(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the
time it was declared effective.

(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed a new registration statement relating to
the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York on August 6, 1998.

OFFIT HOLDINGS, INC.

By: /s/ MORRIS W. OFFIT
-----------------------------------------
Name: Morris W. Offit
Title: Chairman of the Board of
Directors and Chief
Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
Morris W. Offit, Wallace Mathai-Davis and Vincent M. Rella and each of them, his
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any additional Registration Statements
related to the offerings contemplated by this Registration Statement that are
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby grants to
such attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------

Chairman of the Board of
/s/ MORRIS W. OFFIT Directors and Chief
- ------------------------------ Executive Officer August 6, 1998
Morris W. Offit (Principal Executive
Officer)

/s/ WALLACE MATHAI-DAVIS Chief Financial Officer
- ------------------------------ August 6, 1998
Wallace Mathai-Davis

/s/ VINCENT M. RELLA Chief Accounting Officer
- ------------------------------ August 6, 1998
Vincent M. Rella

/s/ H. FURLONG BALDWIN Director
- ------------------------------ August 6, 1998
H. Furlong Baldwin

/s/ ALESSANDRO C. DI Director
MONTEZEMOLO
- ------------------------------ July 28, 1998
Alessandro C. di Montezemolo

II-4

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ DAVID I. MARGOLIS Director
- ------------------------------ August 6, 1998
David I. Margolis

/s/ HARVEY M. MEYERHOFF Director
- ------------------------------ July 29, 1998
Harvey M. Meyerhoff

/s/ GEORGE R. PACKARD Director
- ------------------------------ July 28, 1998
George R. Packard

/s/ EDWARD V. REGAN Director
- ------------------------------ August 6, 1998
Edward V. Regan

/s/ B. LANCE SAUERTEIG Director
- ------------------------------ August 6, 1998
B. Lance Sauerteig

Director
- ------------------------------
Ricardo Steinbruch

II-5

EXHIBIT INDEX

SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ------------- ------------------------------------------------------------------------------- -------------------

1.1* -- Form of Underwriting Agreement.................................................
3.1* -- Amended and Restated Certificate of Incorporation of the Company...............
3.2* -- Amended and Restated By-laws of the Company....................................
4.1* -- Specimen Common Stock Certificates.............................................
5.1* -- Opinion of Goodkind Labaton Rudoff & Sucharow LLP regarding legality of
securities being registered..................................................
10.1* -- 1993 Stock Option Plan.........................................................
10.2* -- Forms of 1993 Stock Option Plan Option Agreements..............................
10.3* -- Form of Non-competition Agreements.............................................
10.4* -- "Split Dollar" Life Insurance Policy on the life of Morris W. Offit............
21.1 -- Subsidiaries of the Company....................................................
23.1* -- Consent of Goodkind Labaton Rudoff & Sucharow LLP (included in Exhibit 5.1)....
23.2* -- Consent of PricewaterhouseCoopers LLP..........................................
24.1 -- Powers of Attorney (included on page II-5 of this Registration Statement)......
27.1 -- Financial Data Schedule........................................................

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

* To be filed by amendment.