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<SEC-DOCUMENT>0001013228-97-000106.txt : 19970320
<SEC-HEADER>0001013228-97-000106.hdr.sgml : 19970320
ACCESSION NUMBER:		0001013228-97-000106
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	19961231
FILED AS OF DATE:		19970319
SROS:			NASD

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FIRST BUSEY CORP /NV/
		CENTRAL INDEX KEY:			0000314489
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				371078406
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-15950
		FILM NUMBER:		97558876

	BUSINESS ADDRESS:	
		STREET 1:		102 E MAIN ST STE 305
		CITY:			URBANA
		STATE:			IL
		ZIP:			61801
		BUSINESS PHONE:		2173844513

	MAIL ADDRESS:	
		STREET 1:		201 W MAIN STREET
		STREET 2:		PO BOX 123
		CITY:			URBANA
		STATE:			IL
		ZIP:			61801
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<DESCRIPTION>FORM 10-K
<TEXT>

                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549
                                     
                                 FORM 10-K
                                     
           [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934
                For the fiscal year ended December 31, 1996
                                     
           [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                      Commission file number 0-15950
                                     
                          FIRST BUSEY CORPORATION
          (Exact name of registrant as specified in its Charter)
                                     
               Nevada                              37-1078406
  (State or other jurisdiction of               (I.R.S. Employer
   incorporation of organization)              Identification No.)
                                     
        201 West Main Street                            
          Urbana, Illinois                            61801
  (Address of principal executive                  (Zip Code)
              offices)
                                     
                               (217) 384-4513
           (Registrant's telephone number, including area code)
        Securities registered pursuant to Section 12(b) of the Act:
                                   None
        Securities registered pursuant to Section 12(g) of the Act:
                  Class A Common Stock without par value
                                     
     Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days.
Yes  X                  No 
    ---                    ---

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

     As of February 28, 1997, the aggregate market value of the Class A
Common Stock held by non-affiliates was $89,195,556.  Class B Common Stock
is held by affiliates.  The market value of the Class A Common Stock is
based on the "Bid" price for such stock as reported in the National
Quotation Bureau's "Pink Sheets" on that date.  Affiliates include all
directors, executive officers and beneficial holders owning 5% or more of
the shares.

     Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.

<TABLE>
<CAPTION>
   Class                                     Outstanding at February 28, 1997
   ---------------------------------------   --------------------------------
   <S>                                       <C>
   Class A Common Stock, without par value            5,794,378
   Class B Common Stock. without par value            1,125,000
</TABLE>

                    DOCUMENTS INCORPORATED BY REFERENCE
     
     Portions of the definitive Proxy Statement dated March 18, 1997 for
First Busey Corporation's Annual Meeting of Stockholders to be held April
16, 1997 (the "1997 Proxy Statement") are incorporated by reference into
Part III.

<PAGE>
                          FIRST BUSEY CORPORATION
                          Form 10-K Annual Report

                             Table of Contents
                                     
<TABLE>
<CAPTION>
PART I                                                                  Page Number
<S>       <C>                                                           <C>
Item 1    Business..............................................             3
Item 2    Properties............................................             9
Item 3    Legal Proceedings.....................................            10
Item 4    Submission of Matters to a Vote of Security          
          Holders...............................................            10
                                                             
PART II
                                                             
Item 5    Market for Registrant's Common Equity and Related    
          Stockholder Matters...................................            10
Item 6    Selected Financial Data...............................            11
                                                            
Item 7    Management's Discussion and Analysis of Financial     
          Condition and Results of Operations...................            13
Item 8    Financial Statements and Supplementary Data...........            27
Item 9    Changes in and Disagreements with Accountants on      
          Accounting and Financial Disclosure...................            27
                                                             
Item 10   Directors and Executive Officers of the Registrant....            27
Item 11   Executive Compensation................................            27
Item 12   Security Ownership of Certain Beneficial Owners and  
          Management............................................            27
Item 13   Certain Relationships and Related Transactions........            27
                                                             
PART IV
                                                             
Item 14   Exhibits, Financial Statement Schedules and Reports  
          on Form 8-K...........................................            28
                                                             
</TABLE>

                                    2                        

<PAGE>
                                  PART I
                                     
ITEM 1. BUSINESS

INTRODUCTION

  First Busey Corporation ("First Busey"), a Nevada corporation, is a
multi-bank holding company located in Urbana,  Illinois.  As of December
31, 1996, First Busey owned one community bank subsidiary, a trust company
subsidiary and a securities broker-dealer subsidiary.  First Busey is
engaged in commercial, retail and correspondent banking and provides trust
services.  Based on assets of $865 million as of December 31, 1996, First
Busey, with deposits of $767 million and stockholders' equity of $73
million, is one of the largest financial institutions headquartered in
east central Illinois.  First Busey's largest subsidiary, Busey Bank, with
continuous operations since 1868, is one of the oldest banks chartered in
Illinois.

  First Busey's strategic plan is to continue providing commercial, retail
and correspondent banking services through its banking subsidiaries, with
emphasis on commercial and retail services.  The strategic plan also
emphasizes the operation of its banking centers autonomously, allowing
them to tailor their service and products to the particular market they
serve while consolidating back-room operations.  First Busey intends to
continue its expansion and growth in the three counties it currently
serves in Illinois, Champaign, McLean and Ford County, as well as its Loan
Production Offices in Springfield, Indianapolis, and Ft. Myers.  First
Busey engages in exploratory discussions regarding potential acquisitions
from time to time; however, First Busey does not currently have any
commitments to acquire or merge with any financial institution.

  First Busey Corporation's operations are conducted primarily through its
lead bank, Busey Bank (nineteen locations),   the trust company and the
securities broker-dealer subsidiary.  First Busey provides its
subsidiaries with both financial and managerial support.  Each subsidiary
operates under the direction of its own Board of Directors.

BUSEY BANK

  Busey Bank was established on January 13, 1868 and is a state-chartered
bank.  As of December 31, 1996,  Busey Bank had total assets of $850.2
million, representing 98% of First Busey's assets, and had total revenues
of $67.3 million, representing 96% of First Busey's revenues.  Busey Bank
provides a full range of banking services including commercial and retail
banking products.  The services available to its commercial and retail
customers include a broad selection of depository and lending activities.
In the commercial lending area, Busey Bank is designated a Small Business
Administration Preferred Lender authorized to fund government guaranteed
loans on an expedited basis and is also an approved lender under the
Federal National Mortgage Association Program, permitting expedited
origination of single- and multi-family mortgage loans. Busey Bank's other
commercial lending activities consist primarily of secured loans to
borrowers in many different industries.  Busey Bank's retail services
include consumer lending, numerous types of deposit accounts and certain
specialized programs such as the Fortune Five-O  Program for the mature
market.

  Management's philosophy is to develop programs tailored to specific
market segments of its customer base with particular emphasis on retail
services.  Busey Bank has adopted a strategy to increase other income by
emphasizing fee-based services, including transaction accounts, full
service brokerage, mortgage origination and other loan services generating
fees.

                                    3                        

<PAGE>
  Guidelines for Busey Bank for various collateral advance ratios are set
forth in the Loan Review Grading System under "Collateral Position."  Loan
Officers are required to use the grading system in determining an
acceptable collateral position on any given credit request.  Collateral
coverage percentages for various types of credit are set forth in the
following table:

<TABLE>
                               Collateral Type          Coverage Ratio
                               ---------------          --------------
<S>                            <C>                           <C>
Commercial Loans:              Real Estate                    125%
                               Accounts Receivable            125%
                               Inventory & Equipment          150%

Consumer Real Estate Loans:    Real Estate                    125%

Installment Loans:             Cash or Equivalent             110%
                               Vehicle                        140%
                               Mobile Homes                   150%
                               Other Collateral               160%
</TABLE>

  All commercial loans must be supported by a completed and signed
financial statement which should include a minimum of a balance sheet and
income statement.  Loan Officers are encouraged to require borrowers to
provide annual statements prepared by a CPA firm.  Where possible, an
audit should be obtained, however, a review or compilation is acceptable.
The Credit Analysis Department tracks delinquent financial statements and
provides weekly reports to the Commercial Loan Department.  In addition,
the Senior Loan Committee receives a monthly report detailing delinquent
financial statements for customers with large loan balances.

  A borrower's financial position including cash flow is monitored at
least annually through an annual review process.


OTHER SUBSIDIARIES
  First Busey Trust & Investment Co. began operation on January 1, 1987 as
a successor to the combined trust departments of Busey Bank and Champaign
County Bank & Trust Co., which began trust operations in 1967 and 1947,
respectively.  Through First Busey Trust & Investment Co., First Busey
plans to expand its trust activities by increasing assets under care,
currently approximating $518 million, and by developing new financial
services.  During 1996, revenues from trust activities were $2.7 million.

  Busey Bank established a full service securities broker-dealer
subsidiary, First Busey Securities,  Inc., on April 1, 1991.  Through the
offering of full service brokerage, along with various insurance and
annuity products, new sources of fee income are available to Busey Bank.

COMPETITION
  First Busey faces intense competition in all phases of its banking
business from other banks and financial institutions.  First Busey's
subsidiary bank competes for deposits with a large number of depository
institutions including commercial banks, savings and loan associations,
credit unions,  money market funds and other financial institutions and
financial intermediaries serving Champaign County and McLean County.
Principal competitive factors with respect to deposits include interest
rates paid on deposits, customer service, convenience and location.

  First Busey's subsidiary bank competes for loans with other banks
headquartered in Illinois, with loan production offices of large money
center banks headquartered in other states, as well as with savings and
loan associations, credit unions, finance companies, mortgage bankers,
leasing companies and other institutions.  Competitive factors with
respect to loans include interest rates charged, customer service and
responsiveness in tailoring financial products to the needs of customers.
First Busey's subsidiary bank competes for loans primarily by designing
their products for and directing their marketing efforts to businesses in
Champaign County and McLean County which are locally owned, well-
capitalized and well-managed.

                                    4                        

<PAGE>
  Many of the entities that compete with First Busey's subsidiary bank are
substantially larger in size than First Busey and First Busey's subsidiary
bank, and many non-bank financial intermediaries are not subject to the
regulatory restrictions applicable to First Busey's bank subsidiary.
First Busey and its subsidiary bank have experienced an increase in the
level of competition as well as the number of competitors in recent years.
See "Supervision and Regulation."

EMPLOYEES
  First Busey and its subsidiaries employed 383 employees (full-time
equivalent) on December 31, 1996.  Management considers its relationship
with its employees to be good.

SUPERVISION AND REGULATION

GENERAL
  Financial institutions and their holding companies are extensively
regulated under federal and state laws.  As a result, the business,
financial condition and prospects of First Busey and its subsidiary bank
can be materially affected not only by management decisions and general
economic conditions, but also by applicable statutes and regulations and
other regulatory pronouncements and policies promulgated by regulatory
agencies with jurisdiction over First Busey and its subsidiary bank, such
as the Federal Reserve Board ("FRB"), Federal Deposit Insurance
Corporation ("FDIC") and the State of Illinois Office of Banks and Real
Estate.  The effect of such statutes, regulations and other pronouncements
and policies can be significant, cannot be predicted with a high degree of
certainty and can change over time.  Furthermore, such statutes,
regulations and other pronouncements and policies are intended to protect
the depositors and the FDIC's deposit insurance funds, not to protect
stockholders.

  Bank holding companies and banks are subject to enforcement actions by
their regulators for regulatory violations. In addition to compliance with
statutory and regulatory limitations and requirements concerning financial
and operating matters, regulated financial institutions such as First
Busey and its subsidiary bank must file periodic and other reports and
information with their regulators and are subject to examination by each
of their regulators.

  The statutory requirements applicable to and regulatory supervision of
bank holding companies and banks have increased significantly and have
undergone substantial change in recent years.  To a great extent, these
changes are embodied in the Financial Institutions Reform, Recovery and
Enforcement Act ("FIRREA"), enacted in August 1989, the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"), enacted in
December 1991, and the regulations promulgated under FIRREA and FDICIA.
Many of the regulations promulgated pursuant to FDICIA have only recently
been finalized and their impact on the business, financial condition and
prospects of First Busey and its subsidiary bank cannot be predicted with
certainty.

  The following discussion and other references to and descriptions of the
regulation of financial institutions contained herein constitute brief
summaries thereof.  This discussion is not intended to constitute and does
not purport to be a complete statement of all legal restrictions and
requirements applicable to First Busey and its subsidiary bank and all
such descriptions are qualified in their entirety by reference to
applicable statutes, regulations and other regulatory pronouncements.

ILLINOIS BANKING LAW
  Interstate banking legislation permits adequately capitalized and
managed bank holding companies to acquire control of a bank in any state.
States may prohibit acquisitions of banks that have not been in existence
for at least five years.  Recently enacted interstate branching
legislation permits banks to merge across state lines.  This legislation
becomes effective June 1, 1997, unless a state takes legislative action
prior to that date to "opt-in" prior to the June 1, 1997 effective date or
they may "opt-out" by expressly prohibiting merger transactions involving
out-of-state banks, provided the legislative action is taken before June
1, 1997.

  The effects on First Busey of such recent changes in interstate
banking and branching laws cannot be accurately predicted, but it is
likely that there will be increased competition from national and regional
banking firms headquartered outside of Illinois.

                                    5                        

<PAGE>
REGULATION OF BANK HOLDING COMPANIES AND THEIR NON-BANK SUBSIDIARIES
  First Busey is a registered bank holding company within the meaning of
the Bank Holding Company Act of 1956, as amended ("BHCA").  As such, First
Busey is subject to regulation, supervision and examination by the FRB.
First Busey is also subject to the limitations and requirements of the
Illinois Bank Holding Company Act ("IBHCA").  These limitations and
requirements, however, are no more restrictive in most instances than
those imposed by the BHCA and the FRB.  The business and affairs of First
Busey are regulated in a variety of ways, including limitations on
acquiring control of other banks and bank holding companies, limitations
on activities and investments, limitations on interstate acquisitions,
regulatory capital requirements and limitations on payment of dividends.
In addition, it is the FRB's policy that a bank holding company is
expected to act as a source of financial strength to banks that it owns or
controls and, as a result, the FRB could require First Busey to commit
resources to support its subsidiary bank in circumstances in which First
Busey might not do so absent the FRB's policy.

  First Busey Trust & Investment Co. is subject to regulation and
examination by the State of Illinois Office of Banks and Real Estate and
the FRB.  The federal and state laws generally applicable to a trust
company subsidiary of a bank holding company regulate, among other things,
the scope of its business, investments and other activities.

ACQUISITION OF BANKS AND BANK HOLDING COMPANIES
  The BHCA generally prohibits a bank holding company from (1)
acquiring, directly or indirectly, more than 5% of the outstanding shares
of any class of voting securities of a bank or bank holding company,  (2)
acquiring control of a bank or another bank holding company, (3) acquiring
all or substantially all the assets of a bank, or (4) merging or
consolidating with another bank holding company, without first obtaining
FRB approval.  In considering an application with respect to any such
transaction, the FRB is required to consider a variety of factors,
including the potential anti-competitive effects of the transaction, the
financial condition and future prospects of the combining and resulting
institutions, the managerial resources of the resulting institution, the
convenience and needs of the communities the combined organization would
serve, the record of performance of each combining organization under the
Community Reinvestment Act and the Equal Credit Opportunity Act,  and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws.

  In addition, both the federal Change in Bank Control Act and the
Illinois Banking Act ("IBA") impose limitations on the ability of one or
more individuals or other entities to acquire control of First Busey or
its subsidiary bank.

  The BHCA generally imposes certain limitations on extensions of credit
and other transactions by and between banks that are members of the
Federal Reserve System and other banks and non-bank companies in the same
holding company.  Under the BHCA and the FRB's regulations, a bank holding
company and its subsidiaries are prohibited from engaging in certain tie-
in arrangements in connection with any extension of credit, lease or sale
of property or furnishing of services.

  The BHCA prohibits a bank holding company from acquiring control of a
bank whose principal office is located outside of the state in which its
principal place of business is located unless specifically authorized by
applicable state law.  The IBHCA permits Illinois bank holding companies
to acquire control of banks in any state and permits bank holding
companies whose principal place of business is in another state to acquire
control of Illinois banks or bank holding companies if  that state affords
reciprocal rights to Illinois bank holding companies and certain other
requirements are met.

  The restrictions described above represent limitations on expansion by
First Busey and its subsidiary bank, the acquisition of control of First
Busey by another company and the disposition by First Busey of all or a
portion of the stock of its subsidiary bank or by its subsidiary bank of
all or a substantial portion of its assets.

PERMITTED NON-BANKING ACTIVITIES
  The BHCA generally prohibits a bank holding company from engaging in
activities or acquiring or controlling, directly  or  indirectly,  the
voting  securities  or assets  of any  company  engaged in  any activity
other  than banking, managing or controlling banks and bank subsidiaries
or another activity that the FRB has determined, by regulation or
otherwise, to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto.  

                                    6                        

<PAGE>
Subject to certain exceptions, before making any such acquisition or 
engaging in any such activity, a bank holding company must obtain the 
prior approval of the FRB as provided in applicable regulations.

  In evaluating such applications, the FRB will consider, among other
relevant factors, whether permitting the bank holding company to engage in
the activity in question can reasonably be expected to produce benefits to
the public (such as increased convenience, competition or efficiency) that
outweigh any possible adverse effects (such as undue concentration of
resources, decreased or unfair competition, conflicts of interest or
safety and soundness concerns).  Those activities that the FRB has
determined by regulation to be closely related to banking include making,
acquiring and servicing loans or other extensions of credit by consumer
finance companies.

  Notwithstanding applicable restrictions on acquisition or control of
banks, bank assets, bank holding companies and companies engaged in
permitted non-banking activities, a bank holding company  may acquire,
without the prior approval of the FRB, 5% or less of the outstanding
shares of any class of voting securities of a company assuming the
investment does not otherwise result in control of such company.  The BHCA
prohibits bank holding companies, with certain exceptions, from acquiring
direct or indirect ownership of more than five percent of the voting
securities of any company that is not a bank or does not engage in any of
the activities described in the preceding paragraph.

CAPITAL REQUIREMENTS
  Regulatory capital requirements applicable to all regulated financial
institutions, including bank holding companies and banks, have increased
significantly in recent years and further increases are possible in future
periods.  The FRB has adopted risk-based capital standards for bank
holding companies.  The articulated objectives of Congress and the FRB in
establishing a risk-based method of measuring capital adequacy are (i) to
make regulatory capital requirements applicable to bank holding companies
more sensitive to differences in risk profiles among bank holding
companies, (ii) to factor off-balance sheet liabilities into the
assessment of capital adequacy, (iii) to reduce disincentives for bank
holding companies to hold liquid, low risk assets and (iv) to achieve
greater consistency in the evaluation of capital adequacy of major banking
organizations throughout the world by conforming to the framework
developed jointly by supervisory authorities from countries that are
parties to the so-called "Basle Accord" adopted by such supervisory
authorities in July 1988.

  The FRB requires bank holding companies to maintain a minimum ratio of
risk-weighted capital to total risk-adjusted assets.  Banking
organizations, however, generally are expected to operate well above the
minimum risk-based ratios.  Risk-adjusted assets include a "credit
equivalent amount" of off-balance sheet items, determined in accordance
with conversion formulae set forth in the FRB's regulations.  Each asset
and off-balance sheet item, after certain adjustments, is assigned to one
of four risk-weighting categories, 0%, 20%, 50% or 100%, and the risk-
adjusted values are then added together to determine risk-weighted assets.

  A bank holding company must meet two risk-based capital standards, a
"core" or "Tier 1" capital requirement and a total capital requirement.
The current regulations require that a bank holding company maintain Tier
1 capital equal to 4% of risk-adjusted assets and total capital equal to
8% of risk-adjusted assets.  Tier 1 capital must represent at least 50% of
total capital and may consist of those items defined in applicable
regulations as core capital elements. Core capital elements include common
stockholders' equity; qualifying noncumulative, nonredeemable perpetual
preferred stock; qualifying (i.e., up to 25% of total Tier 1 capital)
cumulative, nonredeemable perpetual preferred stock; and minority
interests in the equity accounts of consolidated subsidiaries.  Core
capital excludes goodwill and other intangible assets required to be
deducted in accordance with applicable regulations.

  Total capital represents the sum of Tier 1 capital plus "Tier 2"
capital, less certain deductions.  Tier 2 or "supplementary" capital
consists of allowances for loan and lease losses; perpetual preferred
stock (to the extent not included in Tier 1 capital); hybrid capital
instruments; perpetual debt; mandatory convertible debt securities; term
subordinated debt; and intermediate term preferred stock, in each case
subject to applicable regulatory limitations.  The maximum amount of Tier
2 capital that may be included in an organization's qualifying  total
capital cannot exceed 100%  of  Tier 1 capital.  In determining  total
capital, a bank holding company  must deduct  from the sum of Tier 1 and
Tier 2  capital  its  investments  in unconsolidated  subsidiaries;
reciprocal  holdings  of certain  securities  of  banking organizations;
and other deductions required by regulation or determined on a case-by-
case basis by the appropriate supervisory authority.

                                    7                        

<PAGE>
  Another capital measure, the Tier 1 leverage ratio, is defined as Tier
1 capital divided by average total assets (net of allowance for losses and
goodwill).  The minimum leverage ratio is 3% for banking organizations
that do not anticipate significant growth and that have well-diversified
risk (including no undue interest rate risk), excellent asset quality,
high liquidity and good earnings.  Other banking organizations are
expected to have ratios of at least 4% to 5%, depending upon their
particular condition and growth plans.  Higher capital ratios could be
required if warranted by the particular circumstances or risk profile of a
given banking organization.  The FRB has not advised First Busey of any
specific minimum Tier 1 leverage ratio applicable to it.

  As of December 31, 1996,  First Busey's Tier 1 and total risk-based
capital ratios were 11.35% and 12.48%, respectively, and its Tier 1
leverage ratio was 7.14%.

  The failure of a bank holding company to meet its risk-weighted capital
ratios may result in supervisory action, as well as inability to obtain
approval of any regulatory applications and, potentially, increased
frequency of examination.  The nature and intensity of the supervisory
action will depend upon the level of noncompliance.  Under the IBHCA, no
bank holding company may acquire control of a bank if, at the time it
applies for approval or at the time the transaction is consummated, its
ratio of total capital to total assets, as determined in accordance with
then applicable FRB regulations, is or will be less than 7%.

  Risk-based capital ratios focus principally on broad categories of
credit risk and do not incorporate factors that can affect the Company's
financial condition, such as overall interest rate risk exposure,
liquidity, funding and market risks, the quality and level of earnings,
investment or loan portfolio concentrations, the quality of loans and
investments, the effectiveness of loan and investment policies and
management's ability to monitor and control financial and operating risks.
For this reason, the overall financial health of First Busey and its
subsidiary bank and the assessment of First Busey and its subsidiary bank
by various regulatory agencies may differ from conclusions that might be
drawn solely from the level of First Busey or its subsidiary bank's risk-
based capital ratios.

  During 1994, the federal banking regulators announced a joint decision
not to modify risk-based capital and leverage requirements for regulatory
capital to reflect the impact of unrealized gains and losses for
securities classified as "available for sale."  This decision was made in
response to the Financial Accounting Standards Board's issuance of
Statement No. 115 "Accounting for Certain Investments in Debt and Equity
Securities".

                            REGULATION OF BANKS

  First Busey's bank subsidiary is a banking corporation organized under
the IBA.  As such, it is subject to regulation, supervision and
examination by the State of Illinois Office of Banks and Real Estate.  The
deposit accounts of the bank subsidiary are insured up to applicable
limits by the FDIC's Bank Insurance Fund (the "BIF").  Thus, the bank
subsidiary is also subject to regulation, supervision and examination by
the FDIC.  In certain instances, the statutes administered by and
regulations promulgated by certain of these agencies are more stringent
than those of other agencies with jurisdiction.  In these instances, the
bank subsidiary must comply with the more stringent restrictions,
prohibitions or requirements.

  The business and affairs of the bank subsidiary are regulated in a
variety of ways.  Regulations apply to, among other things, insurance of
deposit accounts, capital ratios, payment of dividends, liquidity
requirements, the nature and amount of the investments that the bank
subsidiary may make, transactions with affiliates, community and consumer
lending laws, internal policies and controls, reporting by and examination
of the bank subsidiary and changes in control of the bank subsidiary.

                                 DIVIDENDS

  The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed its
view that a bank holding company experiencing weak earnings should not pay
cash dividends  which  exceed  its  net  income  or  which  could  only
be funded in  ways  that  would  weaken  its  financial health, such as by
borrowing.  The FRB also may impose limitations on the payment of

                                    8                        

<PAGE>
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions.  First
Busey uses funds derived primarily from the payment of dividends by its
banking subsidiary for, among other purposes, the payment of dividends to
First Busey's stockholders.  Under provisions of the IBA, dividends may
not be declared by banking subsidiaries except out of the bank's net
profit (as defined), and unless the bank has transferred to surplus at
least one-tenth of its net profits since the date of the declaration of
the last preceding dividend, until the amount of its surplus is at least
equal to its capital.  Presently, the surplus of Busey Bank exceeds its
capital.

  All dividends paid by First Busey's banking subsidiary are restricted by
capital adequacy requirements imposed by federal regulators regarding the
maintenance of the risk-weighted asset ratios and the leverage ratio (as
defined by regulatory agencies).  At December 31, 1996,  Busey Bank had
$17,299,000 available for the payment of dividends to First Busey.  Sound
banking practices require the maintenance of adequate levels of capital.
State and federal regulatory authorities have adopted standards for the
maintenance of capital by banks and adherence to such standards further
limits the ability of banks to pay dividends.

  First Busey Trust & Investment Co., as an Illinois corporation, is
permitted to make distributions to its stockholder as authorized by its
Board of Directors, except that as long as it continues in a fiduciary
business, it may not withdraw for purposes of payment of dividends or
otherwise any portion of its capital account except with the approval of
the State of Illinois Office of Banks and Real Estate.


MONETARY POLICY AND ECONOMIC CONDITION
  The earnings of commercial banks and bank holding companies are affected
not only by general economic conditions but also by the policies of
various governmental regulatory authorities.  In particular, the FRB
influences conditions in the money and capital markets, which affect
interest rates and the growth in bank credit and deposits.  FRB monetary
policies have had a significant effect on the operating results of
commercial banks in the past and this is expected to continue in the
future.  The general effect, if any, of such policies upon the future
business and earnings of First Busey and its subsidiary bank cannot be
predicted.

ITEM 2. PROPERTIES

  As of February 28, 1997,  First Busey and its subsidiaries conduct
business in twenty locations.  Busey Bank has its headquarters at the
Busey Bank Building, a 40,000 square foot building owned by Busey Bank.
In addition to the Busey Bank Building, First Busey and/or its
subsidiaries own the land and building for fifteen locations, own the
building and lease the land for one location and lease five locations.
Two supermarket locations, the Bloomington facility and the Busey Plaza
Building are the only facilities not fully occupied by First Busey or its
subsidiaries.  The Busey Plaza Building, a five-story 90,000 square foot
office building, is the location of the headquarters of First Busey Trust
& Investment Co., with the remainder leased to unaffiliated tenants.

                                    9                        

<PAGE>
ITEM 3. LEGAL PROCEEDINGS

  There are no material pending legal proceedings, other than routine
litigation incidental to the business, to which First Busey or its
subsidiaries are a part of or which any of their property is the subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  Not applicable

EXECUTIVE OFFICERS OF THE REGISTRANT
  (Provided pursuant to Instruction 3 of Item 401(b) of Regulation S-K under 
the Securities Act of 1933.)

<TABLE>
<CAPTION>
Name                      Office (year first elected as an officer)       Age
- ----------------------    --------------------------------------------    ---
<S>                       <C>                                             <C>
Douglas C. Mills*         Chairman of the Board, President and             56
                          Chief Executive Officer of First Busey (1971)

Edwin A. Scharlau II*     Chairman of the Board of First Busey Trust &     52
                          Investment Co. and First Busey Securities Inc.
                          (1967)

P. David Kuhl*            President and Chief Executive                    47
                          Officer of Busey Bank (1979)
</TABLE>

*  Director

                                  PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

  Since July 1, 1988, First Busey Class A Common Stock has been traded in
the over-the-counter market and quoted in the National Quotation Bureau's
"Pink Sheets." The "Pink Sheets" include approximately 14,000 thinly
traded stocks.  The market quotations reflect inter-dealer prices, without
retail-markup, markdown or commission and may not necessarily represent
actual transactions.  The investment banking firm of Stephens Inc., Little
Rock, Arkansas, is the principal market maker for First Busey Class A
Common Stock.  The last reported "Bid" price for First Busey Class A
Common Stock is reported daily in the News-Gazette, a Champaign-Urbana
newspaper.  Prior to July 1, 1988, there was no public market for First
Busey Class A Common Stock.  Although,  a limited trading market for
shares of First Busey Class A Common Stock has developed recently, there
can be no assurance that it will continue.

  The following table presents for the periods indicated the high and low
"Bid" quotations for First Busey Class A Common Stock as reported in the
National Quotation Bureau's "Pink Sheets."
  
<TABLE>
<CAPTION>
                                           1996                   1995
                                      ---------------        ---------------
MARKET PRICES OF COMMON STOCK         High        Low        High        Low
- -----------------------------         ----        ---        ----        ---
<S>                                  <C>        <C>         <C>        <C>
First Quarter                        $19.17     $18.00      $17.17     $16.00
Second Quarter                       $21.00     $18.50      $17.67     $16.50
Third Quarter                        $22.00     $20.00      $18.17     $17.00
Fourth Quarter                       $23.75     $21.25      $18.50     $17.33
</TABLE>

                                    10                        

<PAGE>
During 1996 and 1995, First Busey, declared cash dividends per share as
follows:
<TABLE>
<CAPTION>
                  Class A                Class B
1996            Common Stock          Common Stock
- ---------       ------------          ------------
<S>             <C>                   <C>
January            $.1667                $.1515
April              $.1667                $.1515
July               $.1600                $.1455
October            $.1600                $.1455
                          
1995                                        
- ---------
January            $.1467                $.1333
April              $.1467                $.1333
July               $.1467                $.1333
October            $.1467                $.1333
</TABLE>

     Three-for-two stock splits on both Class A and Class B Common Stock
occurred on May 7, 1996, and May 7, 1993.
          
     For a discussion of restrictions on dividends, please see the
discussion of dividend restrictions under Item 1, Business, Dividends on
page 9.

     As of February 28, 1997 there were approximately 978 holders of First
Busey Class A Common Stock.

ITEM 6. SELECTED FINANCIAL DATA

SELECTED CONSOLIDATED FINANCIAL INFORMATION
     The following selected financial data for each of the five years in
the period ended December 31, 1996, have been derived from First Busey's
annual consolidated financial statements audited by McGladrey & Pullen,
LLP, independent certified public accountants, whose report on the
financial position as of December 31, 1996 and December 31, 1995, and the
results of operations for each of the three years in the period ended
December 31, 1996, appears elsewhere in this report.  This financial data
should be read in conjunction with the financial statements and the
related notes thereto appearing in this report.
     
<TABLE>
<CAPTION>
                                     1996        1995        1994        1993        1992
                                     ----        ----        ----        ----        ----
BALANCE SHEET ITEMS                     (dollars in thousands, except per share data)
- --------------------
<S>                               <C>         <C>         <C>         <C>         <C>
  Securities                       $226,350    $284,517    $210,525    $230,359    $229,574
  Loans, net of unearned interest   569,500     481,772     451,051     412,905     330,137
  Allowance for loan losses           6,131       5,473       5,235       5,205       4,456
  Total assets                      864,918     844,666     728,459     709,257     630,548
  Total deposits                    766,927     744,897     635,694     636,418     572,417
  Long-term debt                      5,000       5,000       5,000       6,645       3,338
  Stockholders' equity               73,417      67,778      59,016      56,332      44,620

RESULTS OF OPERATIONS                                       
  Interest income                  $ 61,197    $ 54,494    $ 47,126    $ 46,003    $ 45,978
  Interest expense                   30,033      26,515      20,212      20,363      23,067
                                  ---------   ---------   ---------   ---------   ---------
  Net interest income                31,164      27,979      26,914      25,640      22,911
  Provision for loan losses           1,100         395         240       1,125       1,000
  Net income                        $ 9,306     $ 8,775     $ 8,238     $ 7,364     $ 5,938
</TABLE>

                                    11                        

<PAGE>
<TABLE>
<CAPTION>
                                     1996        1995        1994        1993        1992
                                     ----        ----        ----        ----        ----
Per Share Data (1)                      (dollars in thousands, except per share data)
- --------------------
<S>                               <C>         <C>         <C>         <C>         <C>
  Net income                        $  1.34     $  1.27     $  1.19     $  1.07     $  0.96
  Cash dividends (Class A)              .65        0.59        0.53        0.53        0.46
  Book value                          10.72        9.95        8.64        8.13        7.23
  Closing "Bid" price                 22.25       18.00       16.17       14.33       10.89
                                                            
OTHER INFORMATION                                           
  Return on average assets            1.08%       1.15%       1.14%       1.07%        .96%
  Return on average equity           13.40%      13.86%      14.16%      13.87%      13.91%
  Net interest margin (2)             4.13%       4.20%       4.30%       4.33%       4.33%
  Stockholders' equity to assets      8.49%       8.02%       8.10%       7.94%       7.08%
</TABLE>

(1) Per share amounts have been restated to give retroactive effect to the
    three-for-two stock splits which occurred May 7, 1996, and May 7, 1993.

(2) Calculated as a percent of average earning assets.


                                    12                        

<PAGE>
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
                   AND RESULTS OF OPERATIONS

     The following is management's discussion and analysis of the
financial condition and results of operations of First Busey Corporation
and Subsidiaries (the "Corporation") for the years ended December 31,
1996, 1995 and 1994.  It should be read in conjunction with "Business",
"Selected Financial Data", the consolidated financial statements and the
related notes to the consolidated financial statements and other data
included in this Annual Report.  All per share amounts have been restated
to give retroactive effect to the three-for-two stock splits which
occurred May 7, 1996, and May 7, 1993.

GENERAL

     The Corporation's consolidated income is generated primarily by the
financial services activities of its subsidiaries.  Since January 1, 1982,
the Corporation has acquired eleven banks and sold two; acquired six
savings and loan branches and two bank branches; acquired a bank branch in
an FDIC assisted acquisition of a failed bank; formed a trust company
subsidiary; and acquired a marketing and communications company.  All of
the banks acquired during those years were accounted for using the
purchase method of accounting, except for Bank of Urbana which was
accounted for using the pooling of interests method.  All subsidiary banks
owned by the Corporation as of November 1991 were merged with Busey Bank.
Under the purchase method of accounting, the earnings of the acquired
subsidiaries are included in the Corporation's earnings only for the
periods subsequent to acquisition.  The following table illustrates the
amounts of net income contributed by each subsidiary (on a pre-
consolidation basis) since January 1, 1994, less purchase accounting
adjustments.

<TABLE>
<CAPTION>
Subsidiary                            Acquired           1995               1994              1993
- - - ----------------------------------------------------------------------------------------------------------
                                                           (dollars in thousands)
<S>                                    <C>         <C>     <C>       <C>     <C>        <C>     <C>
Busey Bank (1)                         3/20/80     $9,093    91.9%   $8,664    92.8%    $8,464    93.8%
First Busey Trust & Investment Co. (2)    --          651     6.6%      596     6.4%       510     5.6%
First Busey Securities, Inc. (3)          --          148     1.5%       76     0.8%        57     0.6%
                                       -------------------------------------------------------------------
Total                                              $9,892   100.0%   $9,336   100.0%    $9,031   100.0%
                                       ===================================================================
</TABLE>

(1)      City Bank of Champaign and Champaign County Bank & Trust were
merged into Busey Bank as of January 1, 1987.  First National Bank of
Thomasboro was merged into Busey Bank as of January 1,  1988.  State Bank
of St. Joseph was merged into Busey Bank as of November 3, 1989.  The Bank
of Urbana, Citizens Bank of Tolono, and the assets of Community Bank of
Mahomet subject to its liabilities were merged into Busey Bank as of
November 16, 1991.  Busey Bank of McLean County was merged into Busey Bank
as of January 1, 1996.

(2)      Formed as a subsidiary of the Corporation as of January 1, 1987 as
a successor to the combined trust departments of Busey Bank and Champaign
County Bank & Trust.

(3)      Formed as a subsidiary of Busey Bank as of April 1, 1991.

RESULTS OF OPERATIONS-THREE YEARS ENDED DECEMBER 31, 1996

SUMMARY
     The Corporation reported net income of $9,306,000 in 1996, up 6.1%
from $8,775,000 in 1995, which had increased 6.5% from $8,238,000 in 1994.
Net income per share in 1996 increased 5.5% to $1.34 from $1.27 in 1995,
which was a 6.7% increase from $1.19 in 1994. The main factor contributing
to the increase in net income for 1996 was the increase in net interest
income resulting from the large increase in loans outstanding.
Contributing to the 1995 increase in net income were increases in net
interest income and trust income. These increases were countered in part
by the increase in other expenses.  Operating earnings, which exclude
security gains and gains on sales of pooled loans and the related tax
expense, were $8,965,000 or $1.29 per share for 1996; $8,217,000, or $1.19
per share for 1995; and $7,479,000, or $1.08 per share for 1994.

     There were no material changes in average shares outstanding from
1994 to 1996 to affect earnings per share.

     Operating earnings, when excluding the impact of charges for assets
acquired in the FDIC-assisted acquisition and the 1994 writedown of the
Busey Plaza Building, were $8,965,000, or $1.29 per share for 1996;
$8,217,000, or $1.19 per share for 1995;  and $7,707,000 or $1.11 per
share for 1994.

                                    13                        

<PAGE>
     Security gains after the related tax expense were $166,000 or 1.8% of
net income in 1996; $134,000 or 1.5% of net income in 1995; and $199,000
or 2.4% of net income in 1994.

     The Corporation's return on average assets was 1.08%, 1.15%, and
1.14% for 1996, 1995, and 1994, respectively, and return on average equity
was 13.40%, 13.86%, and 14.16% for 1996, 1995, and 1994, respectively.  On
an operating earnings basis, return on average assets was 1.04%, 1.08%,
and 1.04%  for 1996, 1995, and 1994, respectively, and return on average
equity was 12.91%, 12.98%, and 12.86% for 1996, 1995, and 1994,
respectively.

NET INTEREST INCOME
     Net interest income on a tax equivalent basis for 1996 increased
11.0% to $32,574,000 from $29,349,000 for 1995, which reflected a 4.0%
increase from $28,212,000 in 1994.  Net interest income increased in 1996
because of a large increase in average loans outstanding.  Net interest
income increased in 1995 because of an increase in average earning assets,
which was partially offset by a modestly declining net interest margin.

     Average interest-earning assets increased to $788,158,000 in 1996
from $699,567,000 and $655,328,000 in 1995 and 1994, respectively. The
growth in 1996 is primarily due to the effect of the investment in loans
and securities of the assumption of $77,988,000 of deposits in December
1995. The growth in 1995 and 1994 is primarily due to increases in net
loans of $32,578,000 and $38,116,000, respectively.

     The net interest margin was 4.13% in 1996, 4.20% in 1995 and 4.30% in
1994. The decrease in net interest margin for 1996 was due to a 6 basis
point decline in the net interest spread which resulted from a decline in
the yield on interest-earning assets and an increase on the weighted rate
paid on interest-bearing liabilities when comparing the year ended
December 31, 1996, to the prior year period.  The slight decrease in net
interest margin for 1995 was due to a 22 basis point reduction in the net
interest spread which resulted from a greater increase in the rate paid on
average interest-bearing liabilities than the increase on the yield on
average interest-earning assets when comparing the year ended December 31,
1995 to the prior year period.

     During 1996 and 1995, interest rate trends had a significant impact
on the Corporation's yields and costs.  In 1996, the average yield on
interest-earning assets decreased 5 basis points, while the average cost
of interest-bearing liabilities increased 1 basis point.  This resulted in
the net interest margin declining to 4.13% for 1996 from 4.20% for 1995.
The average yield on interest-earning assets increased 60 basis points in
1995 and the average cost of interest-bearing liabilities increased 82
basis points when compared to the prior year.  The overall effect dropped
the net interest margin to 4.20% from 4.30%, while the net interest spread
dropped 22 basis points. [See "Statistical Information, Consolidated
Average Balance Sheets and Interest Rates."]

PROVISION FOR LOAN LOSSES
     The provision for loan losses, which is a current charge against
income, represents an amount which management believes is sufficient to
maintain an adequate allowance for future loan losses.  In assessing the
adequacy of the allowance for loan losses, management considers the size
and quality of the loan portfolio measured against prevailing economic
conditions and historical loan loss experience.  When a determination is
made by management to charge off a loan balance, such write-off is charged
against the allowance for loan losses.

     The provision for loan losses increased to $1,100,000 in 1996 from
$395,000 in 1995 and $240,000 in 1994.  Net charge-offs increased to
$442,000 in 1996 from $157,000 in 1995 which had decreased from $210,000
in 1994.  The increase in the provision for 1996 was primarily made in
order to fund the reserve for the $87,728,000 increase in loans during the
year.  The increased provision in 1995 was also primarily due to overall
growth of the loan portfolio.

OTHER INCOME
     Other income increased 2.5% in 1996 to $8,769,000 from $8,559,000 in
1995, which reflected a 6.9% increase from $8,006,000 in 1994.  The
increase in 1995 is due primarily to increases in service charges and
trust income. As a percentage of total income, other income was 12.5%,
13.6.%, and 14.5% in 1996, 1995, and 1994, respectively.  Gains on the
sale of securities, as a component of other income, totaled $256,000
(2.9%) in 1996, $206,000 (2.4%) in 1995, and $302,000 (3.8%) in 1994.
Other income also includes gains on the sale of pooled loans, as a
component of other income, of $268,000 (3.1%), $653,000 (7.6%), and
$865,000 (10.8%) in 1996, 1995, and 1994, respectively.

                                    14                        

<PAGE>
     Additional components of other income were fee income and trust
revenues.  Service charges and other fee income increased 18.2% to
$4,698,000 in 1996 from $3,973,000 in 1995, which was a 6.7% increase from
$3,725,000 in 1994.  The growth in fee income in 1996 and 1995 was due to
increases in service charges on deposit accounts. Trust revenues increased
3.9% in 1996 and 9.4% in 1995;  revenues were $2,651,000 in 1996,
$2,551,000 in 1995, and $2,332,000 in 1994.  Increases in trust department
revenues in each year were primarily due to increases in assets under
care to $518,367,000 at December 31, 1996 from  $418,086,000 at  December
31, 1995.   Remaining other income decreased 13.4% to $996,000 in 1996
from $1,150,000 in 1995 which was an 18.6%  increase from $970,000 in
1994.

OTHER EXPENSES
     Other expenses increased 7.1% in 1996 to $25,786,000 from $24,069,000
in 1995 which reflected a 4.2% increase from $23,100,000 in 1994.  As a
percentage of total income, other expenses were 36.9%, 38.2%, and 41.9% in
1996, 1995 and 1994, respectively.  Employee related expenses, including
salaries and wages and employee benefits, increased 10.5% in 1996 to
$13,868,000 as compared to $12,546,000 in 1995, which was a 4.4% increase
from $12,017,000 in 1994.  As a percent of average assets, employee
related expenses were 1.61%, 1.64%, and 1.67% in 1996, 1995, and 1994,
respectively.  The Corporation's full-time equivalent employees were 383,
375, and 366 at December 31, 1996, 1995, and 1994, respectively.  Net
occupancy expense of bank premises and furniture and equipment expenses
increased 0.8% in 1996 to $3,587,000 as compared to $3,559,000 in 1995 and
$3,414,000 in 1994.  The increases were primarily due to expenses
associated with expanded facilities.  As a percent of average assets,
occupancy and equipment expenses were .42%, .46%, and .47% in 1996, 1995,
and 1994, respectively.

     Foreclosed property write-down and expense decreased to $150,000 in
1996 from $226,000 in 1995 which had increased from $94,000 in 1994.
Other expenses were charged $350,000 in 1994 in order to write-down the
carrying value of the Busey Plaza Building, a fully leased 90,000 square
foot office building, to its net realizable value.  Remaining other
expenses increased 5.7% to $8,181,000 in 1996 from $7,738,000 in 1995
which was a 7.1% increase from $7,225,000 in 1994.  The increase in 1996
was primarily due to increased amortization expenses related to
acquisitions in December 1995. This increase was partially offset by
reduced data processing expenses.  The increase in 1995 was primarily due
to increased data processing expense and uncategorized expenses, offset in
part by reduced FDIC insurance assessment expense.

INCOME TAXES
     Income tax expense in 1996 was $3,741,000 as compared to $3,299,000
in 1995 and $3,342,000 in 1994.  The provision for income taxes as a
percent of income before income taxes was 28.7%, 27.3%, and 28.9% for
1996, 1995, and 1994, respectively.  The slightly lower rate  in 1995 was
due to the  reclassification of expenses of certain acquisition costs.

STATEMENTS OF CONDITION-DECEMBER 31, 1996 AND DECEMBER 31, 1995

     Total assets on December 31, 1996 were $864,918,000, an increase of
2.4% from $844,666,000 on December 31, 1995.  Total loans, net of unearned
interest, increased 18.2% to $569,500,000 on December 31, 1996 as compared
to $481,772,000 on December 31, 1995.  Deposits increased 3.0% to
$766,927,000 on December 31, 1996 as compared to $744,897,000 on December
31, 1995.  Interest bearing deposits increased $16,339,000 or 2.4% during
1996.  Non-interest bearing deposits increased $5,691,000 or 7.9% during
1996.  Total stockholders' equity increased 8.3% to $73,417,000 on
December 31, 1996 as compared to $67,778,000 on December 31, 1995.


EARNING ASSETS
     The average interest-earning assets of the Corporation were 91.7%,
91.6%, and 90.9% of average total assets for the years ended December 31,
1996, 1995, and 1994, respectively.

INVESTMENT SECURITIES
     Effective January 1, 1994, the Corporation adopted Financial
Accounting Standards Board Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," ("Statement No. 115").  The

                                    15                        

<PAGE>
adoption and cumulative effect of adopting Statement No. 115 had the
effect of an increase of $4,446,000 on stockholders' equity, net of
deferred taxes of $2,290,000 at the adoption date.

     The Corporation has classified certain investment securities as
securities available for sale.  These securities are held with the option
of their disposal in the foreseeable future to meet investment objectives
or for other operational needs.  Securities available for sale are carried
at fair value.  As of December 31, 1996, the fair value of these
securities was $171,243,000 and the amortized cost was $166,189,000.
There were $5,682,000 of gross unrealized gains and $628,000 of gross
unrealized losses for a net unrealized gain of $5,054,000.  The after-tax
effect ($3,285,000) of this unrealized gain has been included in
stockholders' equity as called for in Statement No. 115. The decrease in
market value for the debt securities in this classification was a result
of rising interest rates.  The fair value increase in the equity
securities was primarily due to a 41.1% ($1,606,000) increase in the value
of 59,200 shares of Student Loan Marketing Association (SLMA) common stock
owned by the Corporation throughout the year.

The composition of securities available for sale is as follows:

<TABLE>
<CAPTION>
                                                                Years ended December 31,
                                            -----------------------------------------------------------------
                                               1996         1995         1994          1993          1992
                                            -----------------------------------------------------------------
                                                                 (dollars in thousands)
<S>                                         <C>           <C>           <C>          <C>             <C>
U.S. Treasuries and Agencies                 $159,044     $213,862      $137,724         -             -
Equity securities                               9,065        7,589         5,156        1,037         1,037
States and political subdivisions               1,253          202          -            -             -
Other                                           1,881        1,363         1,138         -             -
                                            -----------------------------------------------------------------
Fair value of securities available for sale  $171,243     $223,016      $144,018       $1,037        $1,037
                                            =================================================================
Fair value of securities under LOCOM1            -            -             -          $3,052        $1,316
                                            =================================================================
Amortized cost                               $166,189     $218,257      $145,293       $1,037        $1,037
                                            =================================================================
Fair value as a percentage of amortized cost  103.04%      102.18%       99.12%       294.31%        126.90%
                                            =================================================================
</TABLE>
(1)  Lower of cost or market                                 

The maturities, fair values and weighted average yields of securities
available for sale as of December 31, 1996 are:

<TABLE>
<CAPTION>
                                  Due in 1 year or less        Due after 1 year        Due after 5 years        Due after 10 years
                                                               through 5 years         through 10 years                     
                                  -------------------------------------------------------------------------------------------------
                                  Fair         Weighted     Fair         Weighted      Fair       Weighted      Fair       Weighted 
                                  Value        Average      Value        Average       Value      Average       Value      Average 
Investment Securities(1)                        Yield                     Yield                    Yield                    Yield 
                                  -------------------------------------------------------------------------------------------------
                                                                         (dollars in thousands)
<S>                               <C>           <C>         <C>           <C>          <C>         <C>          <C>         <C>
U.S. Treasuries and Agencies       $87,401      6.24%       $69,734       5.62%        $1,909      5.98%         -           -
States and political 
     subdivisions(2)                   756      8.54%           497       8.65%          -          -            -           -
Other                                  978      5.33%           596       6.12%           307      7.19%         -           -
                                  -------------------------------------------------------------------------------------------------
Total                              $89,135      6.25%       $70,827       5.65%        $2,216      6.15%         -           -
                                 ==================================================================================================
</TABLE>
(1)  Excludes equity securities
(2)  On a tax-equivalent basis, assuming a federal income tax rate of 35%
     (the effective federal income tax rate as of December 31, 1996)
     
     The securities held to maturity portfolio consists of debt securities
which provide the Corporation with a relatively stable source of income.
Additionally, the investment portfolio provides a balance to interest rate
and credit risk in other categories of the balance sheet while providing a
vehicle for the investment of available funds and supplying securities to
pledge as required collateral for certain deposits.

     On December 31, 1996, the fair value of securities held to maturity
as a percentage of their book value was 101.3%, down slightly from 101.8%
a year earlier.  For securities held to maturity, the fair value of the
portfolio may increase or decrease without a resulting gain or loss in the
income statement.  At December 31, 1996, the portfolio had gross
unrealized gains of $967,000 and gross unrealized losses of $274,000 for a
net unrealized gain of $693,000.  The fair value decrease experienced in
1996 was primarily due to the effects of slightly higher interest rates on
the bond portfolio.

                                    16                        

<PAGE>
The composition of securities held to maturity is as follows:

<TABLE>
<CAPTION>
                                                                Years ended December 31,
                                            -----------------------------------------------------------------
                                               1996         1995         1994          1993          1992
                                            -----------------------------------------------------------------
                                                                 (dollars in thousands)
<S>                                         <C>           <C>           <C>          <C>             <C>
U.S. Treasuries and Agencies                $   8,635     $ 13,198      $ 17,031     $174,581        $176,557
States and political subdivisions              36,607       37,043        32,957       34,507          28,907
Student Loan Marketing Ass'n common stock        -            -             -            -                 68
Other                                           9,865       11,260        16,519       20,234          23,005
                                            -----------------------------------------------------------------
Amortized cost of securities held 
     to maturity                             $ 55,107     $ 61,501      $ 66,507     $229,322        $228,537
                                            =================================================================
Fair value of securities held to maturity    $ 55,800     $ 62,625      $ 65,386     $236,264        $238,981
                                            =================================================================
Fair value as a percentage of book value      101.26%      101.83%        98.31%      103.03%         104.57%
                                            =================================================================
</TABLE>

The maturities, book value and weighted average yields of securities held
to maturity as of December 31, 1996 are:
                   
<TABLE>
<CAPTION>
                                  Due in 1 year or less        Due after 1 year        Due after 5 years        Due after 10 years
                                                               through 5 years         through 10 years                     
                                  -------------------------------------------------------------------------------------------------
                                  Fair         Weighted     Fair         Weighted      Fair       Weighted      Fair       Weighted 
                                  Value        Average      Value        Average       Value      Average       Value      Average 
Investment Securities(1)                        Yield                     Yield                    Yield                    Yield 
                                  -------------------------------------------------------------------------------------------------
                                                                         (dollars in thousands)
<S>                               <C>           <C>         <C>           <C>          <C>         <C>          <C>         <C>
U.S. Treasuries and Agencies       $ 1,499      4.72%      $  6,500       4.50%          $ 636     6.06%          -          -
States and political 
     subdivisions(2)                 6,757      8.46%        12,700       8.86%         13,306     8.31%         3,844      7.60%
Other                                  500      6.59%         5,105       6.63%          1,035     5.44%          -          -
                                  -------------------------------------------------------------------------------------------------
Total                              $ 8,756      7.71%       $24,305       7.23%        $14,977     8.02%        $3,844      7.60%
                                 ==================================================================================================
</TABLE>

(1)  Excludes mortgage-backed securities
(2)  On a tax-equivalent basis, assuming a federal income tax rate of 35%
     (the effective federal income tax rate as of December 31, 1996)

     The Corporation also uses its investment portfolio to manage its tax
position.  Depending upon projected levels of taxable income for the
Corporation, periodic changes are made in the mix of tax-exempt and
taxable securities to achieve maximum yields on a tax-equivalent basis.
U.S. government and agency securities as a percentage of total securities
decreased to 74.1% at December 31, 1996 from 79.8% at December 31, 1995,
while obligations of state and political subdivisions (tax-exempt
obligations) as a percentage of total securities increased to 16.7% at
December 31, 1996 from 13.1% at December 31, 1995.

LOAN PORTFOLIO
     Loans, before allowance for loan losses, increased 18.2% to
$569,500,000 in 1996 from $481,772,000 in 1995.  Non-farm non-residential
real estate mortgage loans increased $33,344,000, or 34.0%, to
$131,350,000 in 1996 from $98,006,000 in 1995.  This increase reflects
management's emphasis on commercial loans secured by mortgages.  Also, 1
to 4 family residential real estate mortgage loans (not held for sale)
increased $29,255,000, or 16.5%, to $206,499,000 in 1996 from $177,244,000
in 1995.  It is intended that residential mortgage loan origination will
generate income and develop retail and other banking relationships.  The
Corporation has no loans to customers engaged in oil and gas exploration
or to foreign companies or governments.  Commitments under standby letters
of credit, unused lines of credit and other conditionally approved credit
lines, totaled approximately $125,768,000 as of December 31, 1996.

                                    17                        

<PAGE>
The composition of loans is as follows:
<TABLE>
<CAPTION>
                                                        Years ended December 31,
                                     ----------------------------------------------------------------
                                        1996          1995          1994           1993         1992  
                                     ----------------------------------------------------------------
                                                          (dollars in thousands)
<S>                                  <C>           <C>           <C>           <C>           <C>
Commercial and financial              $62,065       $55,687       $57,878       $44,419       $38,093
Agricultural                           16,537        12,594        12,750        11,735         6,366
Real estate-farmland                   11,468        11,162        11,769        10,777         5,871
Real estate-construction               26,184        25,566        21,759        16,228         8,004
Real estate-mortgage                  413,541       334,417       303,046       276,404       235,304
Installment loans to individuals       39,707        42,353        43,854        53,483        36,727
                                     ----------------------------------------------------------------
                                     $569,502      $481,779      $451,056      $413,046      $330,365
Unearned interest                          (2)           (7)           (5)         (141)         (228)
                                     ----------------------------------------------------------------
Loans                                $569,500      $481,772      $451,051      $412,905      $330,137
                                     ================================================================
</TABLE>

     The following table sets forth remaining maturities of selected loans
(excluding certain real estate-farmland, real estate-mortgage  loans and
installment loans to individuals) at December 31, 1996.

<TABLE>
<CAPTION>
                                                1 Year or Less           1 to 5 Years           Over 5 Years         Total
                                                ---------------------------------------------------------------------------
                                                                              (dollars in thousands)
<S>                                             <C>                      <C>                    <C>               <C>
Commercial, financial and agricultural              $56,421                $21,021                $1,160             $78,602
Real estate-construction                             20,798                  4,052                 1,334              26,184
                                                ---------------------------------------------------------------------------
Total                                               $77,219                $25,073                $2,494            $104,786
                                                ---------------------------------------------------------------------------
Interest rate sensitivity of selected loans                    
Fixed rate                                          $11,643               $  7,901                $2,494             $22,038
Adjustable rate                                      65,576                 17,172                  -                 82,748
                                                ---------------------------------------------------------------------------
Total                                               $77,219                $25,073                $2,494            $104,786
                                                ---------------------------------------------------------------------------
</TABLE>

ALLOWANCE FOR LOAN LOSSES
     Management has established an allowance for loan losses which reduces
the total loans outstanding by an estimate of uncollectible loans.  Loans
deemed uncollectible are charged against and reduce the allowance.
Periodically, a provision for loan losses is charged to current expense.
This provision acts to replenish the allowance for loan losses and to
maintain the allowance at a level that management deems adequate.

     There is no precise method of predicting specific loan losses or
amounts which ultimately may be charged off on segments of the loan
portfolio.  The determination that a loan may become uncollectible, in
whole or in part, is a matter of judgment.  Similarly, the adequacy of the
allowance for loan losses can be determined only on a judgmental basis,
after full review, including (a) consideration of economic conditions and
their effect on particular industries and specific borrowers; (b) a review
of borrowers' financial data, together with industry data, the competitive
situation, the borrowers' management capabilities and other factors; (c) a
continuing evaluation of the loan portfolio, including monitoring by
lending officers and staff credit personnel of all loans which are
identified as being of less than acceptable quality; (d) an in-depth
appraisal, on a monthly basis, of all loans judged to present a
possibility of loss (if, as a result of such monthly appraisals, the loan
is judged to be not fully collectible, the carrying value of the loan is
reduced to that portion considered collectible); and (e) an evaluation of
the underlying collateral for secured lending, including the use of
independent appraisals of real estate properties securing loans.

     Periodic provisions for loan losses are determined by management
based upon the size and the quality of the loan portfolio measured against
prevailing economic conditions and historical loan loss experience and
also based on specific exposures in the portfolio.  Management has
instituted a formal loan review system supported by an effective credit
analysis and control process.  The Corporation will maintain the allowance
for loan losses at a level sufficient to absorb estimated uncollectible
loans and, therefore, expects to make periodic additions to the allowance
for loan losses.

                                    18                        

<PAGE>
The following table shows activity affecting the allowance for loan
losses:

<TABLE>
<CAPTION>
                                                                   Years ended December 31,
                                                    ------------------------------------------------------
                                                      1996      1995      1994        1993       1992     
                                                    ------------------------------------------------------
                                                                    (dollars in thousands)
<S>                                              <C>          <C>         <C>       <C>          <C>
Allowance for loan losses:
   Balance at beginning of period                     $5,235    $5,205      $4,456     $3,833       $3,566
                                                    ------------------------------------------------------

Average loans outstanding during period             $525,311   $453,915   $421,337   $366,859     $324,983
                                                    ======================================================
Allowance for loan losses:                         
     Balance at beginning of period                   $5,473     $5,235     $5,205     $4,456       $3,833
                                                    ------------------------------------------------------
                         
Loans charged-off:                         
     Commercial, financial and agricultural             $227       $339        $99       $397         $137
     Real estate-construction                             19       -          -          -            -
     Real estate-mortgage                                 32         55        153        405          279
     Installment loans to individuals                    404        286        253        329          146
                                                    ------------------------------------------------------
Total charge-offs                                       $682       $680        $505    $1,131         $562
                                                    ------------------------------------------------------
Recoveries:                        
     Commercial, financial and agricultural              $43       $414         $62       $66          $74
     Real estate-construction                             50       -           -         -            -
     Real estate-mortgage                               -             3         128       156           39
     Installment loans to individuals                    147        106         105       111           72
                                                    ------------------------------------------------------
Total recoveries                                        $240       $523        $295      $333         $185
                                                    ------------------------------------------------------
Net loans charged-off                                   $442       $157        $210      $798         $377
                                                    ------------------------------------------------------
Provision for loan losses                             $1,100       $395        $240    $1,125       $1,000
                                                    ------------------------------------------------------
Net additions (due to acquisitions)                     -          -           -          422         -
                                                    ------------------------------------------------------
Balance at end of period                              $6,131     $5,473      $5,235    $5,205       $4,456
                                                    ======================================================
Ratios:                         
     Net charge-offs to average loans                  0.08%      0.03%       0.05%     0.22%        0.12%
                                                    ======================================================
     Allowance for loan losses to total loans 
     at period end                                     1.08%      1.14%       1.16%     1.26%        1.35%
                                                    ======================================================
</TABLE>


     The following table sets forth the allowance for loan losses by loan
categories as of December 31 for each of the years indicated:

<TABLE>
<CAPTION>
                                            1996               1995               1994                1993             1992       
                                      ---------------------------------------------------------------------------------------------
                                                % of               % of                % of              % of               % of 
                                                Total              Total               Total             Total              Total 
                                      Amount    Loans     Amount   Loans      Amount   Loans   Amount    Loans    Amount    Loans
                                      ---------------------------------------------------------------------------------------------
                                                                           (dollars in thousands)
<S>                                   <C>       <C>       <C>       <C>       <C>       <C>     <C>      <C>      <C>       <C>
Commercial, financial, agri-
cultural  and real estate-farmland      $766     15.8%      $785     16.5%    $1,122     18.3%  $3,513    16.2%   $3,099     15.2%
Real estate-construction                -         4.6%      -         5.3%      -         4.8%    -        3.9%     -         2.4%
Real estate-mortgage                   3,505     72.6%     3,476     69.4%     3,013     67.2%     779    67.0%      523     71.3%
Installment loans to individuals       1,189      7.0%     1,097      8.8%       943      9.7%     785    12.9%      186     11.1%
Unallocated                              671      N/A        115      N/A        157      N/A      128     N/A       648      N/A
                                      ---------------------------------------------------------------------------------------------
Total                                 $6,131      100%    $5,473      100%    $5,235      100%  $5,205     100%   $4,456      100%
                                     ==============================================================================================
</TABLE>

                                    19                        

<PAGE>
NON-PERFORMING LOANS
     It is management's policy to place commercial and mortgage loans on
non-accrual status when interest or principal is 90 days or more past due.
Such loans may continue on accrual status only if they are both well-
secured and in the process of collection.

The following table sets forth information concerning non-performing loans
at December 31 for each of the years indicated:

<TABLE>
<CAPTION>
                                                                 Years ended December 31,
                                                     -----------------------------------------------
                                                       1996      1995      1994      1993      1992
                                                     -----------------------------------------------
                                                                    (dollars in thousands)
<S>                                                   <C>       <C>       <C>       <C>       <C>
Non-accrual loans                                     $ -       $  532    $  636    $  247    $ -
Loans 90 days past due and still accruing              1,002       897     1,336     1,450       492
Restructured loans                                      -         -         -         -         -
                                                     -----------------------------------------------
Total non-performing loans                            $1,002    $1,429    $1,972    $1,697    $  492
                                                     -----------------------------------------------
Repossessed assets                                    $  805    $1,380    $1,645    $1,180    $1,803
Other assets acquired in satisfaction of debts
           previously contracted                           1         1         1         1         1
                                                     -----------------------------------------------
Total non-performing other assets                     $  806    $1,381    $1,646    $1,181    $1,804
                                                     -----------------------------------------------
Total non-performing loans and non-
      performing other assets                         $1,808    $2,810    $3,618    $2,878    $2,296
                                                     ===============================================
Non-performing loans to loans, before
      allowance for loan losses                        0.18%     0.30%     0.44%     0.41%     0.15%
                                                     ===============================================
Non-performing loans and non-performing
      other assets to loans, before allowance for
      loan losses, and repossessed assets              0.32%     0.58%     0.80%     0.70%     0.69%
                                                     ===============================================
</TABLE>

     On January 1, 1995, the Corporation adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for Impairment of a
Loan," as amended by Statement No. 118, which requires loans to be
considered impaired when, based on current information and events, it is
probable the Corporation will not be able to collect all amounts due.  The
accrual of interest income on impaired loans is discontinued when there is
reasonable doubt as to the borrower's ability to meet contractual payments
of interest or principal.  Interest income on these loans is recognized to
the extent interest payments are received and the principal is considered
fully collectible.  For the year ended December 31, 1996, there was no
interest recognized from impaired loans.

     The gross interest income that would have been recorded in the years
ended December 31, 1994 and 1993 if the non-accrual and restructured loans
had been current in accordance with their original terms was $47,000 and
$22,000, respectively.  The amount of interest collected on those loans
that was included in interest income for the year ended December 31, 1994
was $38,000.  There was no interest collected on these loans for the year
ended December 31, 1993.

POTENTIAL PROBLEM LOANS
     Potential  problem loans are those loans which are not categorized
as impaired,  non-accrual,  past  due or  restructured, but  where current
information  indicates that  the  borrower  may  not be able to comply
with present loan repayment terms.  Management assesses the potential for
loss on such loans as it would with other problem loans and has considered
the effect of any potential loss in determining its provision for possible
loan losses.  Potential problem loans totaled $687,000 at December 31,
1996. There are no other loans identified which management believes
represent or result from trends or uncertainties which management
reasonably expects will materially impact future operating results,
liquidity or capital resources.  There are no other credits identified
about which management is aware of any information which causes management
to have serious doubts as to the ability of such borrower(s) to comply
with the loan repayment terms.

                                    20                        

<PAGE>
DEPOSITS
     As indicated in the following table, average interest bearing
deposits as a percentage of average total deposits have increased to 90.9%
for the year ended December 31, 1996 from 90.5% for the year ended
December 31, 1995.

<TABLE>
<CAPTION>
                                                                  December 31,
                           -------------------------------------------------------------------------------------------
                                       1996                           1995                           1994
                           -------------------------------------------------------------------------------------------
                                                            (dollars in thousands)
                           Average     % Total   Average  Average     % Total   Average  Average     % Total   Average
                           Balance                Rate    Balance                Rate    Balance                Rate  
<S>                        <C>         <C>       <C>      <C>         <C>       <C>      <C>         <C>       <C>
                           -------------------------------------------------------------------------------------------
Non-interest bearing
     demand deposits        $69,562      9.1%       -%     $63,165      9.5%       -%     $58,906      9.3%       -%
Interest bearing demand 
     deposits               130,365     17.1%     1.62%    123,369     18.4%    1.79%     129,530     20.6%    1.82%
Savings/Money Market        216,498     28.4%     3.57%    193,658     29.0%    3.49%     186,308     29.6%    2.73%
Time deposits               345,726     45.4%     5.46%    288,125     43.1%    5.44%     255,154     40.5%    4.43%
                           -------------------------------------------------------------------------------------------
Total                      $762,151    100.0%     4.15%   $668,317    100.0%    4.07%    $629,898    100.0%    3.29%
                           ===========================================================================================
</TABLE>

Certificates of deposit of $100,000 and over and other time deposits of
$100,000 and over at December 31, 1996 had the following maturities
(dollars in thousands):
<TABLE>
                       <S>                       <C>
                       Under 3 months            $25,702
                       3 to 6 months               8,121
                       6 to 12 months             19,494
                       Over 12 months             12,145
                                                   -----
                       Total                     $65,462
                                                 =======
</TABLE>

SHORT-TERM BORROWINGS
     The following table sets forth the distribution of short-term
borrowings and weighted average interest rates thereon at the end of each
of the last three years.  Federal funds purchased and securities sold
under agreements to repurchase generally represent overnight borrowing
transactions.  Other short-term borrowings consist of various demand notes
and notes with maturities of less than one year.

                                    21                        

<PAGE>
<TABLE>
<CAPTION>
                                                    Federal funds purchased                              
                                                   and securities sold under          Other short-term    
                                                   agreements to repurchase              borrowings       
                                                   ----------------------------------------------------
1996                                                              (dollars in thousands)     
<S>                                                <C>                              <C>     
Balance, December 31, 1996                                 $ 6,405                       8,000
Weighted average interest rate at end of period              7.19%                       7.39%
Maximum outstanding at any month end                       $20,072                      $9,250
Average daily balance                                      $ 8,804                      $8,092
Weighted average interest rate during period(1)              5.34%                       7.10%

1995                                                             
Balance, December 31, 1995                                 $12,101                      $9,573
Weighted average interest rate at end of period              5.75%                       7.35%

Maximum outstanding at any month end                       $19,648                     $10,573
Average daily balance                                      $14,269                      $8,428
Weighted average interest rate during period(1)              6.23%                       8.50%

1994                                                             
Balance, December 31, 1994                                 $20,430                      $5,130
Weighted average interest rate at end of period              4.86%                       8.29%

Maximum outstanding at any month end                       $21,812                      $7,330
Average daily balance                                      $17,330                      $6,398
Weighted average interest rate during period(1)              4.06%                       7.25%
</TABLE>

(1) The weighted average interest rate is computed by dividing total interest
    for the year by the average daily balance outstanding.

LIQUIDITY
     Liquidity is the availability of funds to meet all present and future
cash flow obligations arising in the daily operations of the business at a
minimal cost.  These financial obligations consist of needs for funds to
meet extensions of credit, deposit withdrawals and debt servicing.

     The sources of short-term liquidity utilized by the Corporation
consist of asset maturities, sales, deposits and capital funds.
Additional liquidity is provided by bank lines of credit, repurchase
agreements and the ability to borrow from the Federal Reserve Bank and
Federal Home Loan Bank.  The Corporation does not deal in or use brokered
deposits as a source of liquidity.  The Corporation purchases federal
funds as a service to its correspondent banks, but does not rely upon
these purchases for liquidity needs.  Long-term liquidity needs will be
satisfied primarily through retention of capital funds.  An additional
source of liquidity that can be managed for short-term and long-term needs
is the Corporation's ability to securitize or package loans (primarily
mortgage loans) for sale.

     The objective of liquidity management by the Corporation is to ensure
that funds will be available to meet demand in a timely and efficient
manner.  Based upon the level of investment securities that reprice within
30 days and 90 days, management believes that adequate liquidity exists to
meet all projected cash flow obligations.

                                    22                        

<PAGE>
     The Corporation achieves a satisfactory degree of liquidity through
actively managing both assets and liabilities.  Asset management guides
the proportion of liquid assets to total assets, while liability
management monitors future funding requirements and prices liabilities
accordingly.  Average liquid assets are shown in the table below:

LIQUID ASSETS

<TABLE>
<CAPTION>
                                              Years Ended December 31,
                                           -----------------------------
       Average Balances                      1996      1995       1994
                                           -----------------------------
                                               (dollars in thousands)
<S>                                        <C>        <C>       <C>
       Federal funds sold                   $8,159   $15,000     $5,651
                                           =============================
       Percentage of average total assets    0.95%     1.96%      0.78%
                                           =============================
</TABLE>

RATE SENSITIVE ASSETS AND LIABILITIES
     Interest rate sensitivity is a measure of the volatility of the net
interest margin as a consequence of changes in market rates.  The rate-
sensitivity chart shows the interval of time in which given volumes of
rate-sensitive earning assets and rate-sensitive interest bearing
liabilities would be responsive to changes in market interest rates based
on their contractual maturities or terms for repricing.  It is however,
only a static, single-day depiction of the Corporation's rate sensitivity
structure, which can be adjusted in response to changes in forecasted
interest rates.

The following table sets forth the static rate-sensitivity analysis of the
Corporation as of December 31, 1996:

<TABLE>
<CAPTION>
                                                                             Rate Sensitive Within
                                                  ---------------------------------------------------------------------------------
                                                     1-30 Days    31-90 Days   91-180 Days  181 Days-1 Yr  Over 1 Year      Total
                                                  ---------------------------------------------------------------------------------
                                                                                   (dollars in thousands)
                                                  ---------------------------------------------------------------------------------
<S>                                                <C>            <C>          <C>          <C>            <C>           <C>
Investment securities                                   
     U.S. Treasuries and Agencies                     $19,184       $27,719      $20,945      $27,047       $72,784      $167,679 
     States and political subdivisions                  1,105           200          557        5,652        30,346        37,860 
     Other securities                                   2,214           108           87          671        17,731        20,811 
Loans (net of unearned interest)                      166,899        22,817       47,268       57,996       274,520       569,500 
                                                  ---------------------------------------------------------------------------------
     Total rate-sensitive assets                     $189,402       $50,844      $68,857      $91,366      $395,381      $795,850 
                                                  ---------------------------------------------------------------------------------
Interest bearing transaction deposits                $129,992          -            -            -             -         $129,992 
Savings deposits                                       84,063          -            -            -             -           84,063 
Money market deposits                                 127,933          -            -            -             -          127,933 
Time deposits                                          40,498        53,434       62,164       86,363       104,403       346,862 
Short-term borrowings:                                   
     Federal funds purchased & 
          repurchase agreements                         6,400          -            -            -                5         6,405 
     Other                                              8,000          -            -            -             -            8,000 
Long-term debt                                           -             -            -            -            5,000         5,000 
                                                  ---------------------------------------------------------------------------------
     Total rate-sensitive liabilities                $396,886       $53,434      $62,164      $86,363      $109,408      $708,255 
                                                  ---------------------------------------------------------------------------------
Rate-sensitive assets less rate-
     sensitive liabilities                          $(207,484)      $(2,590)     $ 6,693       $5,003      $285,973      $ 87,595 
                                                  ---------------------------------------------------------------------------------
Cumulative Gap                                      $(207,484)    $(210,074)   $(203,381)   $(198,378)     $ 87,595      
                                                  ====================================================================
Cumulative amounts as a percentage of 
     total rate-sensitive assets                      -26.07%       -26.40%      -25.56%      -24.93%        11.01%     
                                                  ====================================================================
Cumulative Ratio                                        0.48X         0.53X        0.60X        0.67X         1.12X     
                                                  ====================================================================
</TABLE>

                                    23                        

<PAGE>
     The foregoing table shows a negative (liability sensitive) cumulative
unadjusted gap of $207 million in the 1-30 day repricing category.  The
gap from 31 to 90 days is nearly matched, and beyond 90 days becomes less
liability sensitive as rate-sensitive assets that reprice beyond 91 days
gradually become greater in volume than rate-sensitive liabilities that
are subject to repricing in the same respective time periods.  The
composition of the gap structure at December 31, 1996 will benefit the
Corporation more if interest rates fall during the next 30 days by
allowing the net interest margin to grow as liability rates would reprice
more quickly than rates on rate-sensitive assets.

CAPITAL RESOURCES
     Other than from the issuance of common stock, the Corporation's
primary source of capital is net income retained by the Corporation.
During the year ended December 31, 1996, the Corporation earned $9,306,000
and paid dividends of $4,378,000 to stockholders, resulting in a retention
of current earnings of $4,928,000.

     The Federal Reserve Board uses capital adequacy guidelines in its
examination and regulation of bank holding companies and their subsidiary
banks.  Risk-based capital ratios are established by allocating assets and
certain off-balance sheet commitments into four risk-weighted categories.
These balances are then multiplied by the factor appropriate for that risk-
weighted category.  The guidelines require bank holding companies and
their subsidiary banks to maintain a total capital to total risk-weighted
asset ratio of not less than 8.00%, of which at least one half must be
Tier 1 capital, and a Tier 1 leverage ratio of not less than 3.00%.  As of
December 31, 1996, the Corporation had a total capital to total risk-
weighted asset ratio of 12.48%, a Tier 1 capital to risk-weighted asset
ratio of 11.35% and a Tier 1 leverage ratio of 7.14%; the Corporation's
bank subsidiary, Busey Bank, had ratios of 12.28%, 11.12%, and 6.93%,
respectively.  As these ratios show, the Corporation and its bank
subsidiary significantly exceed the regulatory capital guidelines.

REGULATORY CONSIDERATIONS
     It is management's belief that there are no current recommendations
by the regulatory authorities which if implemented, would have a material
effect on the Corporation's liquidity, capital resources, or operations.

NEW ACCOUNTING PRONOUNCEMENTS
     The Financial Accounting Standards Board ("FASB") issued Statement
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishements of Liabilities," in June, 1996.  This statement is
effective for transactions after December 31, 1996, except for
transactions related to secured borrowings and collateral for which the
effective date is December 31, 1997.  The effect on the Corporation's
financial position and results of operations will not be material.
     
EFFECTS OF INFLATION
     The effect of inflation on a financial institution differs
significantly from the effect on an industrial company.  While a financial
institution's operating expenses, particularly salary and employee
benefits, are affected by general inflation, the asset and liability
structure of a financial institution consists largely of monetary items.
Monetary items, such as cash, loans and deposits, are those assets and
liabilities which are or will be converted into a fixed number of dollars
regardless of changes in prices.  As a result, changes in interest rates
have a more significant impact on a financial institution's performance
than does general inflation.  For additional information regarding
interest rates and changes in net interest income see "Selected
Statistical Information."

SELECTED STATISTICAL INFORMATION
     The following tables contain information concerning the consolidated
financial condition and operations of the Corporation for the periods, or
as of the dates, shown.  All average information is provided on a daily
average basis.

     The following table shows the consolidated average balance sheets,
detailing the major categories of assets and liabilities, the interest
income earned on interest-earning assets, the interest expense paid for
interest-bearing liabilities, and the related interest rates:

                                    24                        

<PAGE>
Consolidated Average Balance Sheets and Interest Rates

<TABLE>
<CAPTION>
                                                                    Years Ended December 31,
                                                 1996                          1995                          1994
                                      --------------------------------------------------------------------------------------
                                      Average   Income/   Yield/    Average   Income/   Yield/    Average   Income/   Yield/
                                      Balance   Expense   Rate      Balance   Expense   Rate      Balance   Expense   Rate  
                                      --------------------------------------------------------------------------------------
                                                                     (dollars in thousands)
<S>                                   <C>       <C>        <C>     <C>        <C>       <C>      <C>       <C>       <C>
Total interest-earning assets(1)      $699,567  $55,864     7.99%  $655,328   $48,424     7.39%  $622,453   $47,295    7.60%
                                      ======================================================================================
ASSETS                                             
Federal funds sold                    $  8,159   $  441     5.40%  $ 15,000   $   884     5.89%  $  5,651   $   222    3.93%
Investment securities:                                             
     U.S. Treasuries and Agencies      193,295   11,427     5.91%   172,960    10,452     6.04%   171,204     9,945    5.81%
     States and political 
        subdivisions1                   38,794    3,248     8.37%    36,668     3,126     8.52%    34,405     2,887    8.39%
     Other securities                   22,599    1,270     5.62%    21,024     1,361     6.47%    22,731     1,454    6.40%
Loans (net of unearned discount)(1,2)  525,311   46,221     8.80%   453,915    40,041     8.82%   421,337    33,916    8.05%
                                      --------------------------------------------------------------------------------------
Total interest-earning assets1        $788,158  $62,607     7.94%  $699,567   $55,864     7.99%  $655,328   $48,424    7.39%
                                      ======================================================================================
Cash and due from banks                 34,784                       30,694                        31,823           
Premises and equipment                  21,555                       21,501                        22,173           
Allowance for loan losses               (5,619)                      (5,421)                       (5,340)          
Other assets                            20,392                       17,604                        17,065           
                                      --------                     --------                      --------
Total assets                          $859,270                     $763,945                      $721,049           
                                      ========                     ========                      ========
                                             
Liabilities and Stockholders' Equity                                        
Interest bearing transaction deposits $130,365  $ 2,105     1.62%  $123,369    $2,209     1.79%  $129,530    $2,357    1.82%
Savings deposits                        80,516    2,554     3.17%    57,073     1,659     2.91%    48,814     1,068    2.19%
Money market deposits                  135,982    5,167     3.80%   136,585     5,095     3.73%   137,494     4,019    2.92%
Time deposits                          345,726   18,884     5.46%   288,125    15,670     5.44%   255,154    11,316    4.43%
Short-term borrowings:                                             
     Federal funds purchased and 
        repurchase agreements            8,804      470     5.34%    14,269       889     6.23%    17,330       703    4.06%
     Other                               8,092      575     7.10%     8,428       716     8.50%     6,398       463    7.25%
Long-term debt                           5,000      278     5.55%     5,000       277     5.54%     5,127       286    5.56%
                                      --------------------------------------------------------------------------------------
Total interest-bearing liabilities    $714,485  $30,033     4.20%  $632,849   $26,515     4.19%  $599,847   $20,212    3.37%
                                      ======================================================================================
Net interest spread                                         3.74%                         3.80%                        4.02%
                                                          ========                       =======                      ======
Demand deposits                         69,562                       63,165                        58,906          
Other liabilities                        5,798                        4,630                         4,133          
     Stockholders' equity               69,425                       63,301                        58,163          
                                      --------                     --------                      --------
Total liabilities and                                             
     stockholders' equity             $859,270                     $763,945                      $721,049          
                                      ========                     ========                      ========
Interest income/earning assets(1)     $788,158  $62,607     7.94%  $699,567   $55,864     7.99%  $655,328   $48,424    7.39%
Interest expense/earning assets        788,158   30,033     3.81%   699,567    26,515     3.79%   655,328    20,212    3.09%
                                      --------------------------------------------------------------------------------------
Net interest margin(1)                          $32,574     4.13%             $29,349     4.20%             $28,212    4.30%
                                               ====================          ===================           =================
</TABLE>


(1)  On a tax equivalent basis, assuming a federal income tax rate of 35%
(2)  Non-accrual loans have been included in average loans, net of unearned
     discount

                                    25                        

<PAGE>
Changes In Net Interest Income
<TABLE>
<CAPTION>
                                                                           Years Ended December 31, 1996, 1995 and 1994
                                                             ---------------------------------------------------------------------
                                                             Year 1996 vs 1995 Change due to(1)  Year 1995 vs 1994 Change due to(1)
                                                             ---------------------------------------------------------------------
                                                               Average    Average     Total      Average      Average      Total   
                                                               Volume    Yield/Rate   Change     Volume      Yield/Rate    Change
                                                             ---------------------------------------------------------------------
                                                                                        (dollars in thousands)
<S>                                                           <C>         <C>        <C>         <C>          <C>         <C>

Increase (decrease) in interest income:                              
     Federal funds sold                                       $ (375)     $  (68)    $ (443)     $  508       $  154      $  662 
     Investment securities:                              
     U.S. Treasuries and Agencies                              1,196        (221)       975         103          404         507 
     States and political subdivisions(2)                        177         (55)       122         192           47         239 
     Other securities                                            119        (210)       (91)       (110)          17         (93)
     Loans(2)                                                  6,282        (102)     6,180       2,734        3,391       6,125 
                                                              ---------------------------------------------------------------------
Change in interest income(2)                                  $7,399      $ (656)    $6,743      $3,427       $4,013      $7,440 
                                                              =====================================================================

Increase (decrease) in interest expense:                              
     Interest bearing transaction deposits                    $  142      $ (246)    $ (104)     $ (111)      $  (37)     $ (148)
     Savings deposits                                            732         163        895         201          390         591 
     Money market deposits                                       (22)         94         72         (26)       1,102       1,076 
     Time deposits                                             3,146          68      3,214       1,582        2,772       4,354 
     Federal funds purchased and repurchase
        agreements                                              (305)       (114)      (419)        (92)         278         186 
     Other                                                       (28)       (113)      (141)        164           89         253 
     Long-term debt                                             -              1          1          (7)          (2)         (9)
                                                              ---------------------------------------------------------------------
Change in interest expense                                    $3,665      $ (147)    $3,518      $1,711       $4,592      $6,303 
                                                              ---------------------------------------------------------------------
Increase (decrease) in net interest income(2)                 $3,734      $ (509)    $3,225      $1,716       $ (579)     $1,137 
                                                              =====================================================================

Percentage increase in net interest income over prior period                          11.0%                                 4.0%
                                                                                    =========                             =========
</TABLE>

(1)  Changes due to both rate and volume have been allocated proportionally
(2)  On a tax equivalent basis, assuming a federal income tax rate of 35%

                                    26                        

<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
     The financial statements are presented beginning on page 32

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.

                                 PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) Directors of the Registrant.  Incorporated by reference is the
information set forth on pages 5, 6 and 7 of the  1997 Proxy Statement.

(b) Executive Officers of the Registrant.  Incorporated by reference is
the information set forth in Part I of this  Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION

Incorporated by reference is the information set forth on pages 10 through
12 of the 1997 Proxy Statement (except the information set forth in the
sections "Report of the Compensation Committee on Executive Compensation"
and "Company Performance").

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated by reference is the information set forth on pages 8 through
10 of the 1997 Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference is the information set forth on page 14 of the
1997 Proxy Statement.

                                   27                        

<PAGE>
                                  PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

EXHIBITS
<TABLE>
<CAPTION>
Exhibit                                                                            Sequentially 
Number                  Description of Exhibit                                     Numbered Page
- ------                  ----------------------                                     -------------
<S>    <C>                                                                        <C>
3.1    Certificate of Incorporation of First Busey            
       Corporation (filed as Appendix B to First Busey's
       definitive proxy statement filed with the Commission
       on April 5, 1993 (Commission File No. 0-15950), and
       incorporated herein by reference)
                                                              
3.2    By-Laws of First Busey Corporation (filed as Appendix  
       C to First Busey's definitive proxy statement filed
       with the Commission on April 5, 1993 (Commission File
       No. 0-15950), and incorporated herein by reference)
                                                              
10.1   First Busey Corporation 1993 Restricted Stock Award    
       Plan (filed as Appendix E to First Busey's definitive
       proxy statement filed with the Commission on April 5,
       1993 (Commission File No. 0-15950), and incorporated
       herein by reference)
                                                              
10.2   First Busey Corporation 1986 Stock Option Plan (filed  
       as Exhibit 10.2 to First Busey's Registration
       Statement on Form S-1 (Registration No. 33-13973), and
       incorporated herein by reference)
                                                              
10.3   First Busey Corporation Profit Sharing Plan and Trust  
       (filed as Exhibit 10.3 to First Busey's Registration
       Statement on Form S-1 (Registration No. 33-13973), and
       incorporated herein by reference)
                                                              
10.4   Mortgage on County Plaza Building (filed as Exhibit    
       10.4 to First Busey's Registration Statement on Form S-
       1 (Registration No. 33-13973), and incorporated herein
       by reference)
                                                              
10.5   Affiliation Agreement dated October l3, 1988 between   
       Community Bank of Mahomet and CBM Bank, Mahomet and
       joined in by First Busey Corporation (filed as Exhibit
       2.1 to First Busey's Registration Statement on Form S-
       4 (Registration No. 33-25159), and incorporated herein
       by reference)
                                                              
10.6   Merger Agreement dated October 13, 1988 between        
       Community Bank of Mahomet and CBM Bank, Mahomet and
       joined in by Busey Corporation (filed as Exhibit 2.2
       to First Busey's Registration Statement on Form S-4
       (Registration No. 33-25159), and incorporated herein
       by reference)
                                                              
10.7   First Busey Corporation Employee Stock Ownership Plan  
       (filed as Exhibit 10.7 to First Busey's Annual Report
       on Form 10-K for the fiscal year ended December 31,
       1988 (Registration No. 2-66201), and incorporated
       herein by reference)
                                                              
10.8   First Busey Corporation 1988 Stock Option Plan (filed  
       as Exhibit 10.8 to First Busey's Annual Report on Form
       10-K for the fiscal year ended December 31, 1988
       (Registration No. 2-66201), and incorporated herein by
       reference)
                                                              
10.9   Affiliation Agreement dated as of April 10, 1989       
       between First Busey Corporation and St. Joseph
       Bancorp, Inc. (filed as Exhibit 2.1 to First Busey's
       Corporation Statement on Form S-4 (Registration No. 33-
       28926), and incorporated herein by reference)
</TABLE>

                                    28                        

<PAGE>
<TABLE>
<CAPTION>
Exhibit                                                                            Sequentially 
Number                  Description of Exhibit                                     Numbered Page
- ------                  ----------------------                                     -------------
<S>    <C>                                                                        <C>
10.10  Agreement and Plan of Merger dated April 10, 1989      
       between First Busey Corporation and St. Joseph
       Bancorp, Inc. (filed as Exhibit 2.2 to First Busey's
       Registration Statement on Form S-4 (Registration No 33-
       28926), and incorporated herein by reference)
                                                              
10.11  Affiliation Agreement dated as of October 2, 1992      
       between First Busey Corporation and Empire Capital
       Corporation (filed as Exhibit 2.1 to First Busey's
       Registration Statement on Form S-4 (Registration No.
       33-54664), and incorporated herein by reference)
                                                              
21.1   List of Subsidiaries of First Busey Corporation        
                                                              
23.1   Consent of Independent Public Accountants              
                                                              
</TABLE>

FINANCIAL STATEMENT SCHEDULES

Financial statement schedules not included in this Form 10-K have been
omitted because they are not applicable for the required information shown
in the financial statements or notes thereto.

            FIRST BUSEY CORPORATION INDEX TO FINANCIAL STATEMENTS
                                                   
<TABLE>
<CAPTION>
                                                           Page
                                                         ---------
             <S>                                         <C>
             Independent Auditor's Report                    34
             Consolidated Balance Sheets                     35
             Consolidated Statements of Income               36
             Consolidated Statements of                   37-40
             Stockholders' Equity
             Consolidated Statements of Cash Flows        41-43
             
             Notes to Consolidated Financial Statements   44-70
             
             Management Report                               71
             Independent Accountant's Report                 72
</TABLE>
                                     
REPORTS ON FORM 8-K
No reports on Form 8-K have been filed for or on behalf of First Busey
Corporation during the last quarter or the period covered by this Form 10-K.
                                     
FORM S-8 UNDERTAKING
For the purposes of complying with the amendments to the rules
governing Form S-8 (effective July 13, 1990) under the Securities Act of
1933, the undersigned registrant hereby undertakes as follows, which
undertaking shall be incorporated by reference into the registrant's
Registration Statement on Form S-8 File No. 33-30095.
                                     
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.  In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of the
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

                                    29                        

<PAGE>
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
                                     
                                SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Urbana, Illinois on March 18, 1997.

                                        FIRST BUSEY CORPORATION
                                        BY //DOUGLAS C. MILLS//
                                          ----------------------
                                        Douglas C. Mills
                                        Chairman of the Board, President
                                        and Chief Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of
1934, this report signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 18, 1997.


           Signature                    Title
           //DOUGLAS C. MILLS//         Chairman of the Board,
           --------------------         President and Chief
           Douglas C. Mills             Executive Officer
                                        (Principal Executive
                                        Officer)
                                        
           //SCOTT L. HENDRIE//         Senior Vice President
           --------------------         and Chief
           Scott L. Hendrie             Financial Officer
                                        (Principal Financial
                                        Officer)
                                        
           //JOSEPH M. AMBROSE//        Director
           ---------------------
           Joseph M. Ambrose
                                        
           //SAMUEL P. BANKS//          Director
           ---------------------
           Samuel P. Banks
                                        
           //T. O. DAWSON//             Director
           ---------------------
           T. O. Dawson
                                        
           //VICTOR F. FELDMAN//        Director
           ---------------------
           Victor F. Feldman

           //KENNETH M. HENDREN//       Director
           ---------------------
           Kenneth M. Hendren
                                        
           //JUDITH L. IKENBERRY//      Director
           ---------------------
           Judith L. Ikenberry
                                        
           //E. PHILLIPS KNOX//         Director
           ---------------------
           E. Phillips Knox
                                        
           //P. DAVID KUHL//            Director
           ---------------------
           P. David Kuhl
                                        
           //V. B. LEISTER, JR.//       Director
           ---------------------
           V. B. Leister, Jr.

                                    30                        

<PAGE>
           //LINDA M. MILLS//           Director
           ---------------------
           Linda M. Mills
                                        
           //ROBERT C. PARKER//         Director
           ---------------------
           Robert C. Parker
                                        
           //JOHN W. POLLARD//          Director
           ---------------------
           John W. Pollard
                                        
           //EDWIN A. SCHARLAU II//     Director
           ---------------------
           Edwin A. Scharlau II
                                        
           //BEN SNYDER//               Director
           ---------------------
           Ben Snyder
                                        
           //DAVID C. THIES//           Director
           ---------------------
           David C. Thies
                                        
           //ARTHUR R. WYATT//          Director
           ---------------------
           Arthur R. Wyatt

                                    31                        

<PAGE>
                                     
                                     
                                     
                          FIRST BUSEY CORPORATION
                             AND SUBSIDIARIES
                                     
                                     
                     CONSOLIDATED FINANCIAL STATEMENTS
                                     
                                     
                             DECEMBER 31, 1996
                                     
                                     
                                     

                                    32                        

<PAGE>

                 FIRST BUSEY CORPORATION AND SUBSIDIARIES
                                     
                                     
                                 CONTENTS
                                     
- ----------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT                                 34
- ----------------------------------------------------------------
                                                         
CONSOLIDATED FINANCIAL STATEMENTS                        
                                                         
Consolidated balance sheets                                  35
                                                         
Consolidated statements of income                            36
                                                         
Consolidated statements of stockholders' equity           37-40
                                                         
Consolidated statements of cash flows                     41-43
                                                         
Notes to consolidated financial statements                44-70
                                                         
- ----------------------------------------------------------------
                                                         
INTERNAL CONTROL STRUCTURE REPORTS                       
                                                         
Management Report - Effectiveness of the Internal            71
Control Structure
                                                         
Independent Accountant's Report                              72
                                                         
- ----------------------------------------------------------------
                                                         
                                                         

                                    33                        

<PAGE>

                  [McGladrey & Pullen, LLP Letterhead]

                       INDEPENDENT AUDITOR'S REPORT
                                     

To the Stockholders and Board of Directors
First Busey Corporation
Urbana, Illinois

We have audited the accompanying consolidated balance sheets of First
Busey Corporation and Subsidiaries as of December 31, 1996 and 1995, and
the related consolidated statements of income, stockholders' equity, and
cash flows for each of the years in the three-year period ended December
31, 1996.  These financial statements are the responsibility of the
Corporation's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of First
Busey Corporation and Subsidiaries as of December 31, 1996 and 1995, and
the results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 1996, in conformity with
generally accepted accounting principles.


//MCGLADREY & PULLEN, LLP//                              
                              
                              
Champaign, Illinois
January 31, 1997

                                    34                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES                         
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995

<TABLE>
<CAPTION>
                                                                                 1996               1995
- -----------------------------------------------------------------------------------------------------------
                                                                                (Dollars in thousands)

<S>                                                                         <C>               <C>
ASSETS                    
Cash and due from banks                                                     $     33,738      $     39,358 
Federal funds sold                                                                -                    650 
Securities held to maturity (fair value 1996 $55,800; 1995 $62,625)               55,107            61,501 
Securities available for sale                                                    171,243           223,016 
Loans held for sale (fair value 1996 $1,457; 1995 $1,840)                          1,447             1,803 
Loans (net of allowance for loan losses 1996 $6,131; 1995 $5,473)                561,922           474,496 
Premises and equipment                                                            21,588            21,857 
Other assets                                                                      19,873            21,985 
                                                                        -----------------------------------
          TOTAL ASSETS                                                     $     864,918      $    844,666 
                                                                        ===================================

LIABILITIES AND STOCKHOLDERS' EQUITY                    
Liabilities                    
  Deposits:                    
    Noninterest bearing                                                     $     78,077      $     72,386 
    Interest bearing                                                             688,850           672,511 
                                                                        -----------------------------------
          TOTAL DEPOSITS                                                         766,927           744,897 
  Short-term borrowings                                                           14,405            21,674 
  Long-term debt                                                                   5,000             5,000 
  Other liabilities                                                                5,169             5,317 
                                                                        -----------------------------------
          TOTAL LIABILITIES                                                      791,501           776,888 
                                                                        -----------------------------------
                    
Stockholders' Equity                    
  Preferred stock, no par value, 1,000,000 shares 
    authorized, no shares issued                                                    -                 - 
  Common stock:                    
    Class A common stock, no par value, authorized 40,000,000                     
      shares 1996 and 10,000,000 shares 1995; 5,952,353 shares                     
      issued 1996 and 1995                                                         5,291             5,291 
    Class B common stock, no par value, authorized 10,000,000                     
      shares 1996 and 2,500,000 shares 1995; 1,125,000 shares                    
      issued 1996 and 1995                                                         1,000             1,000 
  Surplus                                                                         20,594            20,380 
  Retained earnings                                                               47,402            42,474 
  Unrealized gain on securities available for sale, net                            3,285             3,093 
                                                                        -----------------------------------
                    
          TOTAL STOCKHOLDERS' EQUITY BEFORE TREASURY STOCK, UNEARNED                    
          ESOP SHARES AND DEFERRED COMPENSATION FOR                    
          STOCK GRANTS                                                            77,572           72,238 
  Treasury stock, at cost, 230,641 shares 1996; 265,395 shares 1995               (3,489)          (3,659)
  Unearned ESOP shares and deferred compensation for stock grants                   (666)            (801)
                                                                        -----------------------------------
          TOTAL STOCKHOLDERS' EQUITY                                              73,417           67,778 
                                                                        -----------------------------------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $    864,918      $   844,666 
                                                                        -----------------------------------
</TABLE>


See Accompanying Notes to Consolidated Financial Statements.

                                    35                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994                              

<TABLE>
<CAPTION>
                                                                        1996          1995          1994
- ---------------------------------------------------------------------------------------------------------------
                                                                (Dollars in thousands, except per share data)
                                                                <C>               <C>              <C>
Interest income:                              
Interest and fees on loans                                        $   45,948      $    39,763      $    33,628 
  Interest and dividends on securities                              
    Taxable interest income                                           12,579           11,681           11,276 
    Nontaxable interest income                                         2,111            2,034            1,877 
    Dividends                                                            118              132              123 
  Interest on federal funds sold                                         441              884              222 
                                                                -----------------------------------------------
          TOTAL INTEREST INCOME                                       61,197           54,494           47,126 
                                                                -----------------------------------------------
                              
Interest expense:                              
  Interest on deposits                                                28,710           24,632           18,760 
  Interest on short-term borrowings                                    1,045            1,606            1,166 
  Interest on long-term debt                                             278              277              286 
                                                                -----------------------------------------------
     TOTAL INTEREST EXPENSE                                           30,033           26,515           20,212 
                                                                -----------------------------------------------
     NET INTEREST INCOME                                              31,164           27,979           26,914 
Provision for loan losses                                              1,100              395              240 
                                                                -----------------------------------------------
     NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES              30,064           27,584           26,674 
                                                                -----------------------------------------------
                              
Other income:                              
  Service charges on deposit accounts                                  2,937            2,705            2,522 
  Trust                                                                2,651            2,551            2,332 
  Commissions and brokers fees, net                                      812              628              644 
  Other service charges and fees                                         949              640              559 
  Security gains, net                                                    256              206              302 
  Trading security (losses) gains, net                                  (100)              26             (188)
  Gain on sales of pooled loans                                          268              653              865 
  Other                                                                  996            1,150              970 
                                                                -----------------------------------------------
          TOTAL OTHER INCOME                                           8,769            8,559            8,006 
                                                                -----------------------------------------------
                              
Other expenses:                              
  Salaries and wages                                                  11,662           10,462           10,121 
  Employee benefits                                                    2,206            2,084            1,896 
  Net occupancy expense of premises                                    1,936            1,977            1,826 
  Furniture and equipment expenses                                     1,651            1,582            1,588 
  Data processing                                                      1,476            1,745            1,179 
  FDIC expense                                                           568              874            1,441 
  Amortization of intangible assets                                    1,321              860              860 
  Stationery, supplies and printing                                      715              690              632 
  Foreclosed property write-down and expense                             150              226               94 
  Other                                                                4,101            3,569            3,463 
                                                                -----------------------------------------------
          TOTAL OTHER EXPENSES                                        25,786           24,069           23,100 
                                                                -----------------------------------------------
          INCOME BEFORE INCOME TAXES                                  13,047           12,074           11,580 
Income taxes                                                           3,741            3,299            3,342 
                                                                -----------------------------------------------
          NET INCOME                                             $     9,306      $     8,775      $     8,238 
                                                                -----------------------------------------------
Net income per share of common stock and common                              
  stock equivalents                                              $      1.34      $     1.27       $      1.19 
                                                                -----------------------------------------------
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                    36                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                            Unrealized                      Deferred
                                                              Gain                          Compen-
                                                            (Loss) on                       sation
                       Class A  Class B                     Securities           Unearned   for
                       Common   Common           Retained   Available  Treasury  ESOP       Stock
                       Stock    Stock   Surplus  Earnings   for Sale     Stock   Shares     Grants     Total
                      -------  -------  -------  --------  ----------  --------  --------   --------   -----
                                         (Dollars in thousands except per share amounts)
<S>                    <C>     <C>     <C>        <C>      <C>          <C>       <C>       <C>       <C>       
Balance, December 31,                                                                                           
 1993                  $5,291  $1,000  $20,217    $33,010       $-       $(1,700)  $(1,400)   $(86)   $56,332   
 Implementation of                                                                                              
  change in                                                                                                     
  accounting                                                                                                    
  principle for                                                                                                 
  securities avail-                                                                                             
  able for sale             -       -        -          -    4,446             -         -       -      4,446   
 Net income                 -       -        -      8,238        -             -         -       -      8,238   
 Purchase of 75,200                                                                                             
  shares for the                                                                                                
  treasury                  -       -        -          -        -        (1,653)        -       -     (1,653)   
 Issuance of 8,500                                                                                              
  shares of treasury                                                                                            
  stock                     -       -       82          -        -           127         -    (124)        85   
 Cash dividends -                                                                                               
  Class A common                                                                                                
   stock $.80 per                                                                                               
   share                    -       -        -     (3,063)       -             -         -       -     (3,063)   
  Class B common                                                                                                
   stock $.73 per                                                                                               
   share                    -       -        -       (546)       -             -         -       -       (546)   
 Principal payments                                                                                             
  on employee stock                                                                                             
  ownership plan                                                                                                
  debt                      -       -        -          -        -             -       400       -        400   
 Amortization of                                                                                                
  restricted stock                                                                                              
  issued under                                                                                                  
  restricted stock                                                                                              
  award plan                -       -        -          -        -             -         -      65         65   
 Change in unrealized                                                                                           
  (loss) on invest-                                                                                             
  ment securities                                                                                               
  available for sale,                                                                                           
  net                       -       -        -          -   (5,288)            -         -       -     (5,288)   
                       ------  ------  -------    -------  -------      --------  --------  ------    -------   
Balance, December 31,                                                                                           
 1994                  $5,291  $1,000  $20,299    $37,639   $ (842)     $ (3,226) $ (1,000) $ (145)   $59,016   
 Net income                 -       -        -      8,775         -           -         -        -     8,775  
 Purchase of 28,096                                                                                           
  shares for the                                                                                              
  treasury                  -       -        -          -         -        (705)        -        -      (705)  
 Issuance of 18,000                                                                                           
  shares of treasury                                                                                          
  stock                     -       -       81          -         -         272         -        -       353  
 Cash dividends -                                                                                             
  Class A common                                                                                              
   stock $.88 per                                                                                             
   share                    -       -        -     (3,340)        -           -         -        -    (3,340)  
  Class B common                                                                                              
   stock $.80 per                                                                                             
   share                    -       -        -       (600)        -           -         -        -      (600)  
 Principal payments                                                                                           
  on employee stock                                                                                           
  ownership plan                                                                                              
  debt                      -       -        -          -         -           -       250        -       250  
 Amortization of                                                                                              
  restricted stock                                                                                            
  issued under                                                                                                
  restricted stock                                                                                            
  award plan                -       -        -          -         -           -         -       94        94  
 Change in unrealized                                                                                         
  gain on invest-                                                                                             
  ment securities                                                                                             
  available for sale,                                                                                         
  net                       -       -        -          -     3,935           -         -        -     3,935  
                       ------  ------  -------    -------    ------    --------  --------   ------   -------  
Balance, December 31,                                                                                         
 1995                  $5,291  $1,000  $20,380    $42,474    $3,093    $ (3,659)   $ (750)  $  (51)  $67,778  

                                    37&38                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


</TABLE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                            Unrealized                      Deferred
                                                              Gain                          Compen-
                                                            (Loss) on                       sation
                       Class A  Class B                     Securities           Unearned   for
                       Common   Common           Retained   Available  Treasury  ESOP       Stock
                       Stock    Stock   Surplus  Earnings   for Sale     Stock   Shares     Grants     Total
                      -------  -------  -------  --------  ----------  --------  --------   --------   -----
                                         (Dollars in thousands except per share amounts)
<S>                    <C>     <C>     <C>        <C>      <C>          <C>       <C>       <C>       <C>       
Balance, December 31,                                                                                           
 1995                  $5,291  $1,000  $20,380    $42,474    $3,093    $ (3,659)   $ (750)  $  (51)  $67,778  
 Net income                 -       -        -      9,306         -           -         -        -     9,306  
 Purchase of 28,096                                                                                           
  shares for the                                                                                              
  treasury                  -       -        -          -         -        (605)        -        -      (605)  
 Issuance of 18,000                                                                                           
  shares of treasury                                                                                          
  stock                     -       -      214          -         -         775         -     (192)      797  
 Cash dividends -                                                                                             
  Class A common                                                                                              
   stock $.88 per                                                                                             
   share                    -       -        -     (3,710)        -           -         -        -    (3,710)  
  Class B common                                                                                              
   stock $.80 per                                                                                             
   share                    -       -        -       (668)        -           -         -        -      (668)  
 Principal payments                                                                                           
  on employee stock                                                                                           
  ownership plan                                                                                              
  debt                      -       -        -          -         -           -       250        -       250  
 Amortization of                                                                                              
  restricted stock                                                                                            
  issued under                                                                                                
  restricted stock                                                                                            
  award plan                -       -        -          -         -           -         -       77        77  
 Change in unrealized                                                                                         
  gain on invest-                                                                                             
  ment securities                                                                                             
  available for sale,                                                                                         
  net                       -       -        -          -       192           -         -        -       192  
                       ------  ------  -------    -------    ------    --------  --------   ------   -------  
Balance, December 31,                                                                                         
 1995                  $5,291  $1,000  $20,594    $47,402    $3,285    $ (3,489)   $ (500)  $ (166)  $73,417  
                       ======  ======  =======    =======    ======    ========  ========   ======   =======  
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                    39&40                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                                                        1996          1995          1994
- ---------------------------------------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                                <C>               <C>              <C>
Cash Flows from Operating Activities                              
  Net income                                                      $    9,306      $     8,775      $     8,238 
  Adjustments to reconcile net income to net cash                              
    provided by operating activities:                              
    Depreciation and amortization                                      3,355            2,801            2,505 
    Write-down on real property                                         -                -                 350 
    Provision for loan losses                                          1,100              395              240 
    Provision for deferred income taxes                                 (373)            (705)            (182)
    Amortization of security discounts                                (1,000)            (820)            (214)
    Gain on sales of securities, net                                    (256)            (206)            (302)
    Proceeds from sales of pooled loans                               34,742           34,223           43,333 
    Loans originated for sale                                        (34,118)         (27,139)         (35,059)
    Gain on sales of pooled loans, net                                  (268)            (653)            (865)
    (Gain) loss on sales and dispositions of premises                              
      and equipment                                                       (6)               8              (40)
    Change in assets and liabilities:                              
      Decrease (increase) in other assets                              1,457           (4,682)            (595)
      (Decrease) increase in other liabilities                          (148)           2,128              237 
                                                              -------------------------------------------------
          NET CASH PROVIDED BY                               
          OPERATING ACTIVITIES                                        13,791           14,125           17,646 
                                                              -------------------------------------------------
Cash Flows from Investing Activities                              
  Securities held to maturity:                              
    Purchases                                                        (20,556)          (8,929)         (34,125)
    Proceeds from sales                                                 -                -                  60 
    Proceeds from maturities                                          26,889           14,360           27,704 
  Securities available for sale:                              
    Purchases                                                       (357,712)        (229,274)         (51,110)
    Proceeds from sales                                               15,948           55,189           48,824 
    Proceeds from maturities                                         395,149          101,722           27,721 
  Decrease (increase) in federal funds sold                              650             (650)           3,025 
  Increase in loans                                                  (88,922)         (37,998)         (46,513)
  Purchases of premises and equipment                                 (1,713)          (1,788)          (2,765)
  Proceeds from sales of premises and equipment                           31             -                 184 
                                                              -------------------------------------------------
          NET CASH USED IN INVESTING ACTIVITIES                      (30,236)        (107,368)         (26,995)
                                                              -------------------------------------------------
</TABLE>
                                                                          
                                                               (Continued)

                                    41                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES                   
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                                                      1996           1995             1994
- ---------------------------------------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                                <C>               <C>              <C>
Cash Flows from Financing Activities                              
  Net increase (decrease) in certificates of deposit              $    1,102      $    24,233      $   (19,686)
  Net increase in demand deposits, money market and                              
    savings accounts                                                  20,928            6,982           18,962 
  Certificates of deposit assumed from First of America                 -              67,506             - 
  Demand deposits, money market and savings accounts                         
    assumed from First of America                                       -              10,482             - 
  Cash dividends paid                                                 (4,378)          (3,940)          (3,609)
  Purchase of treasury stock                                            (605)            (705)          (1,653)
  Proceeds from sales of treasury stock                                  797              353               85 
  Proceeds from short-term notes payable                               1,000            5,750            3,300 
  Principal payments on short-term notes payable                      (2,000)          (1,250)          (3,800)
  Principal payments on long-term debt                                  -                -              (1,645)
  Net (decrease) increase in federal funds purchased,                              
    repurchase agreements and federal reserve discount                         
    obligations                                                       (6,019)          (8,136)          19,550 
                                                              -------------------------------------------------
          NET CASH PROVIDED BY FINANCING ACTIVITIES                   10,825          101,275           11,504 
                                                              -------------------------------------------------
                              
          NET (DECREASE) INCREASE IN CASH AND                              
            DUE FROM BANKS                                            (5,620)           8,032            2,155 
                              
Cash and due from banks, beginning                                    39,358           31,326           29,171 
                                                              -------------------------------------------------
                              
Cash and due from banks, ending                                   $   33,738      $    39,358     $     31,326 
                                                              =================================================
                              
Supplemental Disclosures of Cash Flow Information                              
  Cash payments for:                              
    Interest                                                      $   30,573      $    25,795     $     20,091 
                                                              -------------------------------------------------
                              
    Income taxes                                                  $    3,661      $    3,894      $      3,564 
                                                              =================================================
</TABLE>
                                                                          
                                                               (CONTINUED)

                                    42                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                                                      1996           1995             1994
- ---------------------------------------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                                <C>               <C>              <C>
Supplemental Schedule of Noncash Investing and                              
  Financing Activities                              
  Other real estate acquired in settlement of loans               $      396      $       689      $       748 
                                                              =================================================
                              
  Reduction in ESOP debt                                          $      250      $       250      $       400 
                                                              =================================================
                              
  Change in unrealized gain (loss) on investment                              
    securities available for sale                                 $      295      $     6,034      $    (1,275)
                                                              =================================================
                              
  (Decrease) increase in deferred income taxes                               
    attributable to the unrealized (gain) loss on 
    investment securities available for sale                      $     (103)     $    (2,099)     $       433 
                                                              =================================================
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                    43                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

NOTE 1.        SIGNIFICANT ACCOUNTING POLICIES

Description of business:

First Busey Corporation (the Corporation) is a holding company whose bank
subsidiary provides a full range of banking services to individual and
corporate customers through its seventeen locations throughout central
Illinois.  The Bank is subject to competition from other financial
institutions and nonfinancial institutions providing financial products.
First Busey Securities, Inc. offers security broker/dealer services, and
First Busey Trust & Investment Co. provides investment management and
fiduciary services to institutional, corporate and personal trust clients.
First Busey Corporation, the Bank, First Busey Securities, Inc. and First
Busey Trust & Investment Co. are subject to the regulations of certain
regulatory agencies and undergo periodic examinations by those regulatory
agencies.

The significant accounting and reporting policies for First Busey
Corporation and its subsidiaries follow:

Basis of consolidation

The consolidated financial statements include the accounts of First Busey
Corporation and its subsidiaries:  Busey Bank and its subsidiaries:  First
Busey Securities, Inc. and Busey Commerce Technologies, Inc.; First Busey
Trust & Investment Co.; and First Busey Resources, Inc.  All material
intercompany balances and transactions have been eliminated in
consolidation.

The consolidated financial statements of First Busey Corporation have been
prepared in conformity with generally accepted accounting principles and
conform to predominate practice within the banking industry.

Use of estimates

In preparing the consolidated financial statements, the Corporation's
management is required to make estimates and assumptions which
significantly affect the amounts reported in the consolidated financial
statements.  Significant estimates which are particularly susceptible to
change in a short period of time include the determination of the
allowance for loan losses and valuation of real estate and other
properties acquired in connection with foreclosures or in satisfaction of
amounts due from borrowers on loans.  Actual results could differ from
those estimates.

Trust assets

Other than trust cash on deposit at the Corporation's bank subsidiary,
trust assets are not included in the accompanying consolidated financial
statements because they are not assets of the Corporation.

Cash flows

For purposes of reporting cash flows, cash and due from banks include cash
on hand and amounts due from banks.  Cash flows from federal funds
purchased and sold are reported net, since their original maturities are
less than three months.

                                    44                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Securities

Securities classified as held to maturity are those debt securities the
Corporation has both the positive intent and ability to hold to maturity
regardless of changes in market conditions, liquidity needs or changes in
general economic conditions.  These securities are carried at cost
adjusted for amortization of premium and accretion of discount which are
recognized in interest income using the interest method over the period to
maturity.

Securities classified as available for sale are those debt securities that
the Corporation intends to hold for an indefinite period of time, but not
necessarily to maturity, and marketable equity securities.  Any decision
to sell a security classified as available for sale would be based on
various factors, including significant movements in interest rates,
changes in the maturity mix of the Corporation's assets and liabilities,
liquidity needs, regulatory capital considerations and other similar
factors.  Securities available for sale are carried at fair value.  The
difference between fair value and amortized cost results in an unrealized
gain or loss.  Unrealized gains or losses are reported as increases or
decreases in stockholders' equity, net of the related deferred tax effect.
Realized gains or losses, determined on the basis of the cost of specific
securities sold, are included in earnings.  Where applicable, amortization
of premiums and accretion of discounts are recognized in interest income
using the interest method over the period to maturity.

Securities purchased with the intent to earn a profit by trading or
reselling them in a short period of time are classified as trading
securities and are carried at fair value.  Realized and unrealized gains
and losses are included in income.  At December 31, 1996 and 1995, there
were no securities classified in this category.

Loans

Loans are stated at the principal amount outstanding, net of unearned
interest and the allowance for loan losses.

Unearned interest on discounted loans is credited to income over the
duration of the loans using the interest method.  For all other loans,
interest is credited to income as earned using the simple interest method
applied to the daily balances of principal outstanding.

The accrual of interest income on loans is discontinued when, in the
opinion of management, there is reasonable doubt as to the borrower's
ability to meet payments of interest or principal when they become due.
Interest income on these loans is recognized to the extent interest
payments are received and the principal is considered fully collectible.

For collateralized impaired loans, loan balances in excess of net
realizable value are deemed impaired.  In the determination of the
valuation, the major risk classifications such as historical charge-offs
for each category of loans, local economic trends, the source of loans and
concentrations of credit in specific industries, if any, are considered.

                                    45                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Allowance for loan losses

The allowance for loan losses is maintained at a level considered adequate
by management to provide for known and inherent risks in the loan
portfolio.  The allowance is increased through a provision charged to
operating expense and by recoveries applicable to loans previously charged
to the allowance, and is reduced by loan balances which are considered
uncollectible.  The allowance is based upon continuous credit reviews of
the loan portfolio and considers changes in the nature and volume of the
loan portfolio, overall portfolio quality, loan concentrations, specific
problem loans, current and anticipated economic conditions that may affect
the borrowers' ability to pay, historical loan loss experience and other
factors, which, in management's opinion, deserve current recognition in
estimating loan losses.

In addition, various regulatory agencies periodically review the allowance
for loan losses, and may require the Bank to make additions to the
allowance based on their judgment of collectibility based on information
available to them at the time of their examination.

Loans held for sale

Loans held for sale consist of fixed rate mortgage loans conforming to
established guidelines and held for sale to investors and the secondary
mortgage market.  Mortgage loans held for sale are carried at the lower of
aggregate cost or estimated fair value.

Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed principally by the straight-line method over the
estimated useful lives of the assets.

Other real estate owned

Other real estate owned (OREO) represents properties acquired through
foreclosure or other proceedings in settlement of loans.  OREO is held for
sale and is recorded at the date of foreclosure at the fair value of the
properties less estimated costs of disposal.  Any write-down to fair value
at the time of transfer to OREO is charged to the allowance for loan
losses.  Property is evaluated regularly to ensure the recorded amount is
supported by its current fair value and valuation allowances to reduce the
carrying amount to fair value less estimated costs to dispose are recorded
as necessary.

Amortization

The excess of the purchase price of subsidiaries over the fair value of
identifiable assets acquired, which excess aggregated approximately
$10,480,000, is amortized using the straight-line method over 15 years.
Amortization of this excess is $691,000, $479,000 and $479,000 for the
years ended December 31, 1996, 1995 and 1994, respectively.  Accumulated
amortization at December 31, 1996, is $3,992,000.

Core deposit and other identifiable intangible assets which aggregated
approximately $4,917,000 are amortized on an accelerated basis over the
estimated periods benefited.  Amortization of these intangibles is
$630,000, $381,000 and $381,000 for the years ended December 31, 1996,
1995 and 1994 respectively.  Accumulated amortization at December  31,
1996 is $2,463,000.

                                    46                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

The Corporation reviews its intangible assets periodically to determine
potential impairment by comparing the carrying value of the intangibles
with the anticipated future cash flows of the related businesses.

Income taxes

The Corporation and its subsidiaries file consolidated Federal and State
income tax returns with each organization computing its taxes on a
separate entity basis.  The provision for income taxes is based on income
as reported in the financial statements.

Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the
future.  The deferred tax assets and liabilities are computed based on
enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income.  Valuation allowances
are established when necessary to reduce deferred tax assets to an amount
expected to be realized.  Income tax expense is the tax payable or
refundable for the period plus or minus the change during the period in
deferred tax assets and liabilities.

Earnings per common share and common share equivalents

Earnings per share are computed by dividing net income by the weighted
average number of shares outstanding as increased by common stock
equivalents.  This increase is the number of shares issuable upon exercise
of stock options less common shares assumed to have been purchased by the
Corporation with the proceeds received upon exercise.  Certain options are
not included in computing the common stock equivalents because their
inclusion would have an antidilutive effect.

The weighted average number of shares used in computing earnings per share
are:

<TABLE>
     <S>                                  <C>
     Year ended December 31, 1996         6,936,508
                                          =========
     Year ended December 31, 1995         6,911,246
                                          =========
     Year ended December 31, 1994         6,943,773
                                          =========
</TABLE>

Stock split

In April 1996, the Board of Directors approved a three-for-two stock split
for stockholders of record on April 26, 1996 and was effected on May 7,
1996.  All share amounts in the consolidated financial statements have
been restated to reflect the stock split.

Reclassifications

Certain reclassifications have been made to the balances as of and for the
years ended December 31, 1995 and 1994 to be consistent with the
classifications adopted for 1996.

                                    47                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Recent accounting pronouncements

Accounting for mortgage servicing rights

On January 1, 1996, the Corporation adopted Statement of Financial
Accounting Standards No. 122 (SFAS 122), "Accounting for Mortgage
Servicing Rights."  SFAS 122 requires the Corporation to recognize as
separate assets rights to service mortgage loans for others, however those
servicing rights are acquired.  If the Bank acquires mortgage servicing
rights through either the purchase or origination of mortgage loans and
sells or securitizes those loans with servicing rights retained, the
Corporation should allocate the total cost of the mortgage loans to
mortgage servicing rights and the loans (without the mortgage servicing
rights) based on their relative fair values.  The mortgage servicing
rights should be amortized in proportion to and over the period of
estimated net servicing income.  Adoption of SFAS 122 did not have a
material effect on the Corporation's consolidated financial statements.

Accounting for stock based compensation

On January 1, 1996, the Corporation adopted Statement of Financial
Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation".  SFAS 123 establishes financial accounting and reporting
standards for stock-based employee compensation plans and also applies to
transactions in which an entity issues its equity instruments to acquire
goods or services from nonemployees.  SFAS 123 defines a fair value-based
method of accounting for an employee stock option or similar equity
instruments and encourages all entities to adopt that method of
accounting.  SFAS 123 allows an entity to continue to measure compensation
cost for those plans using the intrinsic value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees".

Proforma disclosures are required for entities that elect to continue to
measure compensation cost using APB 25, and must include the effect of all
awards granted in fiscal years beginning after December 31, 1994.  The
Corporation plans to continue measuring compensation cost using APB 25.

Accounting for transfers and servicing of financial assets and
extinguishments of liabilities

In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 125 (SFAS 125), "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities".  SFAS 125 distinguishes transfers of financial assets that
are sales from transfers that are secured borrowings.  A transfer of
financial assets in which the transferor surrenders control over those
assets is accounted for as a sale to the extent that consideration other
than beneficial interest in the transferred assets is received in
exchange.  SFAS 125 also establishes standards on the initial recognition
and measurement of servicing assets and other retained interests and
servicing liabilities, and their subsequent measurement.

SFAS 125 requires that debtors reclassify financial assets pledged as
collateral and that secured parties recognize those assets and their
obligation in return in certain circumstances in which the secured party
has taken control of those assets.  In addition, SFAS 125 requires that a
liability be derecognized only if the debtor is relieved of its obligation
through payment to the creditor or by being legally released from being
the primary obligor under the liability either judicially or by the
creditor.

                                    48                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

SFAS 125 is effective for transactions occurring after December 31, 1996,
except for transactions relating to secured borrowings and collateral for
which the effective date is December 31, 1997.  The Company believes the
adoption of SFAS 125 will not have a material impact on its consolidated
financial statements.


NOTE 2.       CASH AND DUE FROM BANKS

The Corporation's banking subsidiary is required to maintain certain
average cash reserve balances with the Federal Reserve Bank of Chicago,
which may be offset by cash on hand.  The required reserve balances as of
December 31, 1996 and 1995 were approximately $14,474,000 and $12,846,000,
respectively.


NOTE 3.        SECURITIES

The  amortized  cost and fair values of securities held  to  maturity  are
summarized as follows:

<TABLE>
<CAPTION>
                                                                    Gross                         Gross      
                                                   Amortized     Unrealized     Unrealized        Fair       
                                                     Cost           Gains         Losses          Value      
                                             ----------------------------------------------------------------
<S>                                             <C>               <C>           <C>           <C>
HELD TO MATURITY SECURITIES:                                             (Dollars in thousands)
                                   
December 31, 1996:                                        
U.S. Treasury securities and obligations                                        
of U.S. government corporations and                                        
agencies                                        $       8,635     $    -        $     119     $       8,516
Obligations of states and political                                        
subdivisions                                           36,607           789           153            37,243
Corporate securities                                    6,640            80          -                6,720
Mortgage-backed securities                              3,225            98             2             3,321
                                             ----------------------------------------------------------------
                                                $      55,107     $     967     $     274     $      55,800
                                             ================================================================

December 31, 1995:                                        
U.S. Treasury securities and obligations                                        
of U.S. government corporations and                                        
agencies                                        $      13,198     $       3     $     233     $      12,968
Obligations of states and political                                        
subdivisions                                           37,043         1,079            59            38,063
Corporate securities                                    7,147           195          -                7,342
Mortgage-backed securities                              4,113           139          -                4,252
                                             ----------------------------------------------------------------
                                                $      61,501     $   1,416     $     292     $      62,625
                                             ================================================================
</TABLE>

                                    49                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

The  amortized cost and fair values of securities available for  sale  are
summarized as follows:

<TABLE>
<CAPTION>
                                                                    Gross                         Gross      
                                                   Amortized     Unrealized     Unrealized        Fair       
                                                     Cost           Gains         Losses          Value      
                                             ----------------------------------------------------------------
<S>                                             <C>               <C>           <C>           <C>
AVAILABLE FOR SALE SECURITIES:                                             (Dollars in thousands)
                                   
December 31, 1996:                                        
U.S. Treasury securities and obligations                                        
  of U.S. government corporations and                                        
  agencies                                      $     159,354     $     255     $     565     $     159,044
Obligations of states and political                                        
  subdivisions                                          1,250             4             1             1,253
Corporate securities                                    1,025             6             3             1,028
Equity securities                                       3,707         5,417            59             9,065
Other debt securities                                     853          -             -                  853
                                             ----------------------------------------------------------------
                                                $     166,189     $   5,682     $     628     $     171,243
                                             ================================================================
December 31, 1995:                                        
U.S. Treasury securities and obligations                                        
  of U.S. government corporations and                                        
  agencies                                      $     212,797     $   1,169     $     104     $     213,862
Obligations of states and political                                        
subdivisions                                              200             2          -                  202
Corporate securities                                      721            13             4               730
Equity securities                                       3,906         3,726            43             7,589
Other debt securities                                     633          -             -                  633
                                             ----------------------------------------------------------------
                                                $     218,257     $   4,910     $     151     $     223,016
                                             ================================================================
</TABLE>

                                    50                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

The amortized cost and fair value of securities, other than equity
securities, as of December 31, 1996, by contractual maturity, are shown
below.  Expected maturities may differ from contractual maturities because
the mortgage-backed securities may be called or prepaid without penalty.
Therefore, these securities are not included in the maturity categories in
the following maturity summary.

<TABLE>
<CAPTION>
                                             Held to Maturity            Available for Sale  
                                        ---------------------------------------------------------
                                          Amortized        Fair         Amortized       Fair  
                                            Cost          Value            Cost         Value  
                                        ---------------------------------------------------------
                                           (Dollars in thousands)         (Dollars in thousands)
<S>                                       <C>            <C>            <C>            <C>
Due in one year or less                    $   8,756     $  8,812        $ 89,144      $ 89,135
Due after one year through five years         24,305       24,608          71,084        70,827
Due after five years through ten years        14,977       15,238           2,254         2,216
Due after ten years                            3,844        3,821            -             -
                                        ---------------------------------------------------------
                                              51,882       52,479         162,482       162,178
Mortgage-backed securities                     3,225        3,321            -             -
                                        ---------------------------------------------------------
                                           $  55,107     $ 55,800        $162,482      $162,178
                                        =========================================================
</TABLE>

Gains  and  losses  related to sales of securities  for  the  years  ended
December 31, 1996, 1995 and 1994 are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                      1996          1995          1994
                                 -----------------------------------------
<S>                                 <C>           <C>            <C>
Gross security gains                $   258       $    351       $   374
Gross security losses                     2            145            72
                                 -----------------------------------------
     Net security gains             $   256       $   206        $   302
                                 =========================================
</TABLE>

Investment securities with carrying values of $127,955,000 and
$141,602,000 on December 31, 1996 and 1995, respectively, were pledged as
collateral on public deposits and for other purposes as required or
permitted by law.

                                    51                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

NOTE 4.        LOANS

The composition of net loans is as follows:

<TABLE>
<CAPTION>
                                                            December 31,
                                                      -------------------------
                                                          1996          1995
                                                      -------------------------
                                                        (Dollars in thousands)
<S>                                                    <C>           <C>
Commercial                                             $   62,065    $   55,687
Real estate construction                                   26,184        25,566
Real estate - farmland                                     11,468        11,162
Real estate - 1 to 4 family residential mortgage          206,499       177,244
Real estate - multifamily mortgage                         74,245        57,364
Real estate - non-farm nonresidential mortgage            131,350        98,006
Installment                                                39,707        42,353
Agricultural                                               16,537        12,594
                                                      -------------------------
                                                          568,055       479,976
                                                      -------------------------
Less:                                                           
Unearned interest                                               2             7
Allowance for loan losses                                   6,131         5,473
                                                      -------------------------
                                                            6,133         5,480
                                                      -------------------------
                                                                
Net loans                                              $  561,922    $  474,496
                                                      =========================
</TABLE>

The amount of loans serviced by the Corporation for the benefit of others
is not included in the accompanying consolidated balance sheets.  The
unpaid principal balances of these loans were $101,344,000 and $93,478,000
as of December 31, 1996 and 1995, respectively.

The loan portfolio includes a concentration of loans for commercial real
estate amounting to approximately $205,595,000 and $155,370,000 as of
December 31, 1996 and 1995, respectively.  Generally these loans are
collateralized by assets of the borrowers.  The loans are expected to be
repaid from cash flows or from proceeds from the sale of selected assets
of the borrowers.  Credit losses arising from lending transactions for
commercial real estate entities are comparable with the Corporation's
credit loss experience on its loan portfolio as a whole.

The Corporation's opinion as to the ultimate collectibility of loans is
subject to estimates regarding future cash flows from operations and the
value of property, real and personal, pledged as collateral.  These
estimates are reflected by changing economic conditions and the economic
prospects of borrowers.

                                    52                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
      
The following table presents data on impaired loans:

<TABLE>
<CAPTION>
                                                                         1996           1995
                                                                   -----------------------------
                                                                      (Dollars in thousands)
<S>                                                                   <C>            <C>
Impaired loans for which an allowance has been provided               $      -       $      -

Impaired loans for which no allowance has been provided                      -            410
                                                                   -----------------------------
                                                          
Total loans determined to be impaired                                 $      -       $    410
                                                                   =============================
                                                          
Allowance for loan loss for impaired loans included in the               
  allowance for loan losses                                           $      -       $      -
                                                                   =============================
Average recorded investment in impaired loans                         $    201       $    480
                                                                   =============================
Interest income recognized from impaired loans                        $      -       $      -
                                                                   =============================
Cash basis interest income recognized from impaired loans             $      -       $     37
                                                                   =============================
</TABLE>

Nonaccruing loans were $636,000 on December 31, 1994.  The gross interest
income that would have been recorded in the year ended December 31, 1994,
if the nonaccrual and restructured loans had been current in accordance
with their original terms, was $47,000.  The amount of interest collected
on these loans that was included in interest income for the year ended
December 31, 1994 was $38,000.


NOTE 5.        ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>
                                                    Years Ended December 31,
                                              ------------------------------------
                                                     1996     1995      1994
                                              ------------------------------------
                                                     (Dollars in thousands)
<S>                                            <C>          <C>          <C>
Balance, beginning of year                     $  5,473     $  5,235     $  5,205
  Provision charged to operating expense          1,100          395          240

  Recoveries applicable to loan                             
    balances previously charged off                 240          523          295
                                              ------------------------------------
                                                  6,813        6,153        5,740
  Loan balances charged off                         682          680          505
                                              ------------------------------------
                                                          
Balance, ending of year                        $  6,131     $  5,473     $  5,235
                                              ====================================
</TABLE>

                                    53                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

NOTE 6.     PREMISES AND EQUIPMENT

Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                  December 31,
                                          --------------------------
                                                 1996      1995
                                          --------------------------
                                             (Dollars in thousands)
<S>                                          <C>         <C>
Land                                         $ 4,899     $  4,908
Buildings and improvements                    21,781       21,547
Furniture and equipment                        8,633        7,902
                                          --------------------------
                                              35,313       34,357
Less accumulated depreciation                 13,725       12,500
                                          --------------------------
                                                         
                                             $21,588     $ 21,857
                                          ==========================
</TABLE>

Depreciation expense was $1,957,000, $1,847,000 and $1,580,000 for the
years ending December 31, 1996, 1995 and 1994, respectively.


NOTE 7.        DEPOSITS

The aggregate amount of time deposits with a minimum denomination of
$100,000, was approximately $65,462,000 and $52,569,000 at December 31,
1996 and 1995, respectively.

As of December 31, 1996, the scheduled maturities of certificates of
deposit are as follows:

<TABLE>
<S>                                                    <C>
1997                                                   $ 242,459
1998                                                      60,565
1999                                                      23,413
2000                                                      15,724
2001 and thereafter                                        4,701
                                                      -----------
                                                       $ 346,862
                                                      ===========
</TABLE>

                                    54                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

NOTE 8.       SHORT-TERM BORROWINGS

Short-term borrowings are summarized as follows:
<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                          ---------------------------
                                                                                1996         1995
                                                                          ---------------------------
                                                                             (Dollars in thousands)
<S>                                                                          <C>          <C>
Notes payable, American National Bank of Chicago, due January 31,
1997, interest payable quarterly at LIBOR plus 1.50% (effective rate
of 7.39% at December 31, 1996):                              
                                                              
      $10,000,000 line of credit, collateralized by all of the capital
      stock of Busey Bank.                                                   $  7,500     $   8,500
                                                              
      Collateralized by 36,905 shares of First Busey Corporation
      Class A common stock owned by employee stock ownership plan.                250          375
     
                                                              
      Collateralized by 36,905 shares of First Busey Corporation
      Class A common stock owned by employee stock ownership plan.                250          375
     
                                                              
Federal funds purchased                                                         6,400         -
                                                              
Securities sold under agreements to repurchase                                      5       12,101
U.S. Treasury Note accounts                                                      -             323
                                                                          ---------------------------
                                                                             $ 14,405     $ 21,674
                                                                          ===========================
</TABLE>

Information  concerning securities sold under agreements to repurchase  is
summarized as follows:

<TABLE>
<CAPTION>
                                               Years Ended December 31,
                                              --------------------------
                                                   1996         1995
                                              --------------------------
                                                 (Dollars in thousands)
<S>                                             <C>           <C>
Maximum month-end balance during the year       $  12,029     $ 18,611
Average balance during the year                     5,243       13,462
Weighted average interest rate for the year         5.04%        6.22%
</TABLE>

                                    55                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

In accordance with the consensus reached on Issue Number 89-10 at the June
1989 meeting of the Financial Accounting Standards Board's Emerging Issues
Task Force, the Company has recorded the debt of the employee stock
ownership plan (ESOP), which totaled $500,000 and $750,000 at December 31,
1996 and 1995, respectively as short-term borrowings and a reduction of
stockholders' equity.

NOTE 9.        LONG-TERM DEBT

Long-term debt is summarized as follows:

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                           --------------------------
                                                                                1996      1995
                                                                           --------------------------
                                                                              (Dollars in thousands)
<S>                                                                            <C>         <C>
Note payable, Federal Home Loan Bank of Chicago, 5.46%, monthly
installments of interest through June 25, 1998, balance due June 25,
1998, collateralized by all unpledged U.S. Treasury and U.S. Agency
securities, first mortgages on residential real estate and Federal Home
Loan Bank stock                                                                $ 5,000     $  5,000
                                                                           ==========================
</TABLE>



NOTE 10.     INCOME TAXES

The components of income tax expense consist of:

<TABLE>
<CAPTION>
                                        Years Ended December 31,
                                  -------------------------------------
                                      1996          1995        1994
                                  -------------------------------------
                                          (Dollars in thousands)
<S>                                  <C>         <C>          <C>
Current                              $ 4,114     $  4,004     $ 3,524
                                                               
Deferred                                (373)        (705)       (182)
                                  -------------------------------------

TOTAL INCOME TAX EXPENSE             $ 3,741     $  3,299     $ 3,342
                                  =====================================
</TABLE>

                                    56                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
A reconciliation of federal income taxes at statutory rates to the income
taxes included in the statements of income is as follows:

<TABLE>
<CAPTION>
                                          Years ended December 31,
                    ------------------------------------------------------------------------
                              1996                   1995                          1994
                    ------------------------------------------------------------------------
                                    % of                    % of                    % of
                                   Pretax                  Pretax                  Pretax
                        Amount     Income     Amount       Income       Amount     Income
                    ------------------------------------------------------------------------
                                            (Dollars in thousands)
<S>                   <C>          <C>       <C>           <C>       <C>           <C>
Income tax at
  statutory rate      $  4,566     35.0%     $   4,226     35.0%     $   4,053     35.0%

Effect of:                                                 
  Benefit of                                                 
    income taxed
    at lower rates        (100)     (0.8)         (100)     (0.9)         (100)     (0.9)

  Tax-exempt                                                 
    interest, net         (805)     (6.2)         (788)     (6.5)         (744)     (6.3)

Amortization
  of intangibles           170       1.3           170       1.4           165       1.4

Other                      (90)     (0.6)         (209)     (1.7)          (32)     (0.3)
                    ------------------------------------------------------------------------
                                                           
                      $  3,741     28.7%     $   3,299     27.3%     $   3,342     28.9%
                    ========================================================================
</TABLE>

Income taxes related to realized gains on sales of securities were
$90,000, $72,000 and $106,000 for the years ended December 31, 1996, 1995
and 1994, respectively.

The net deferred tax asset, included in other assets, in the accompanying
balance sheets includes the following amounts of deferred tax assets and
liabilities:

<TABLE>
<CAPTION>
                                                   1996          1995
                                              -----------------------------
                                                  (Dollars in thousands)
<S>                                             <C>           <C>
Deferred tax liability                           $ (2,446)     $ (2,325)
Deferred tax asset                                  3,686         3,269
Valuation allowance for deferred tax assets          (507)         (481)
                                              -----------------------------
Net deferred tax asset                           $    733      $    463
                                              =============================
</TABLE>

                                    57                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

The  tax  effects  of principal temporary differences  are  shown  in  the
following table:

<TABLE>
<CAPTION>
                                                           1996         1995
                                                     -----------------------------
                                                         (Dollars in thousands)
<S>                                                    <C>            <C>
Investment securities:                                             
  Unrealized gain on securities available for sale     $  (1,769)     $ (1,666)
  Other                                                      219           219
Basis in premises and equipment                             (564)         (567)
Allowance for loan losses                                  2,432         2,156
Property acquired in settlement of loans                      41            79
Loans held for sale                                            4            15
Basis in deposit intangibles                                 419           298
Deferred compensation                                        388           275
Performance/restricted stock                                  10            29
State net operating loss carryforward                        173           198
Other                                                       (113)          (92)
                                                     -----------------------------
                                                           1,240           944
Valuation allowance                                         (507)         (481)
                                                     -----------------------------

                                                       $     733      $    463
                                                     =============================
</TABLE>

State net operating loss carryforwards of approximately $3,714,000 are
available to offset future taxable income.  The carryforwards expire as
follows:  2005 - $371,000; 2006 - $2,465,000; 2007 - $860,000 and 2008 -
$18,000.


NOTE 11.     EMPLOYEE BENEFIT PLANS

The Corporation established the First Busey Corporation Employees' Stock
Ownership Plan (ESOP) as of January 1, 1984.  All full time employees who
meet certain age and length of service requirements are eligible to
participate in the ESOP which purchased common shares of the Corporation
using the proceeds of bank borrowings secured by the stock.  The
borrowings are to be repaid using fully deductible contributions to the
trust fund.  As the ESOP makes each payment of principal, an appropriate
percentage of stock will be allocated to eligible employee's accounts in
accordance with applicable regulations under the Internal Revenue Code.
Allocations of common stock released and forfeitures are based on the
eligible compensation of each participant.  Dividends on allocated shares
of common stock are distributed directly to the participants and dividends
on unallocated shares are used to service the bank borrowings.  All shares
held by the ESOP are included in the computation of average common shares
and common share equivalents.  This accounting treatment is grandfathered
under Statement of Position 93-6, "Employers' Accounting for Employee
Stock Ownership Plans" for shares purchased prior to December 31, 1992.
All shares included in the Corporation's ESOP were purchased prior to this
date.


                                    58                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

During the year ended December 31, 1996, $250,000 of compensation expense
was recognized for the ESOP, releasing 36,905 common shares to participant
accounts, and is reflected in the chart below under "Employee Benefits."
As of December 31, 1996, the ESOP held 366,960 shares that were allocated
to participant accounts and 73,810 suspense shares.  The Corporation does
not have any repurchase obligation.

All full-time employees who meet certain age and length of service
requirements are eligible to participate in the Corporation's profit-
sharing plan.  The contributions, if any, are determined solely by the
Boards of Directors of the Corporation and its subsidiaries and in no case
may the annual contributions be greater than the amounts deductible for
federal income tax purposes for that year.  The rights of the participants
vest ratably over a seven-year period.

Employer contributions to the employee benefit plans are included in the
statements of income as follows:

                                          Years Ended December 31,
                                    ------------------------------------
                                       1996         1995        1994
                                    ------------------------------------
                                           (Dollars in Thousands)
[S]                                  [C]         [C]          [C]
Employee benefits                    $   703     $    623     $    617
Interest on employee stock
  ownership plan debt                     47           77           93
                                    ------------------------------------

     TOTAL EMPLOYER CONTRIBUTIONS    $   750     $    700     $    710
                                    ====================================


NOTE 12.      STOCK INCENTIVE PLANS

Stock Option Plan:

In March 1989, the Corporation adopted the 1988 Stock Option Plan pursuant
to which incentive stock options and nonqualified stock options for up to
450,000 shares of Class A common stock may be granted by the Compensation
Committee of the Board of Directors to certain executive officers and key
personnel of First Busey Corporation and its subsidiaries.  In March 1996,
the Board of Directors approved an increase in the number of shares
reserved for issuance as stock options from 450,000 to 750,000.

                                    59                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

A summary of the status of the Corporation's stock option plan as of
December 31, 1996, 1995 and 1994 and the changes during the years ending
on those dates is as follows:

<TABLE>
<CAPTION>
                                              1996                     1995                     1994
                                     -------------------------------------------------------------------------
                                                   Weighted-                Weighted-               Weighted-
                                                    Average                  Average                 Average
                                                   Exercise                  Exercise                Exercise
                                      Shares         Price      Shares        Price       Shares      Price
                                     -------------------------------------------------------------------------
<S>                                   <C>         <C>          <C>         <C>           <C>         <C>
Outstanding at beginning of year      393,917     $   13.62    264,957     $   10.73     233,682     $  9.79
Granted                                 6,000         18.50    163,500         17.50      36,900       16.50
Exercised                             (56,813)         9.33    (27,000)         9.31      (4,500)       9.00
Terminated and                                                   
reissuable                             (4,763)        16.37     (7,540)        11.67      (1,125)      10.11
                                     ----------                ---------                 ---------
Outstanding at of year                338,341         14.39    393,917         13.62     264,957       10.73
Exercisable at endof year               4,500                   60,750                   27,000
                                     =======================================================================
Weighted-average fair
  value per option of
  options granted during 
  the year                             $ 5.37                  $  1.88                      N/A
</TABLE>

The following table summarizes information about stock options outstanding
at December 31, 1996:

<TABLE>
<CAPTION>
                                                                    Options
                           Options Outstanding                     Exercisable
                 --------------------------------------------------------------
     Exercise        Number            Weighted-Average              Number
      Prices      Outstanding     Remaining Contractual Life      Outstanding
    ---------------------------------------------------------------------------
    <S>           <C>             <C>                             <C>
     $   9.44        4,500                1 year                     4,500
        10.00       58,500                3 years                     -
        10.11       73,698                3 years                     -
        14.33        1,243                3 years                     -
        16.50       33,900                3 years                     -
        17.50      160,500                5 years                     -
        18.50        6,000                5 years                     -
                 --------------------------------------------------------------
                   338,341                4 years                    4,500
                 ==============================================================
</TABLE>

                                    60                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Grants under the above plan are accounted for following APB No. 25 and
related Interpretations.  Accordingly, no compensation cost has been
recognized for grants under this plan.  Compensation expense of $689,000,
$202,000 and $24,000 was recognized for income tax purposes for the years
ended December 31, 1996, 1995 and 1994, respectively.  Had compensation
cost for stock-based compensation been determined based on the grant date
fair values of awards (the method described in SFAS 123), reported net
income and earnings per common share would have been reduced to the pro
forma amounts shown below:

<TABLE>
<CAPTION>
                                                   1996       1995
                                               ----------------------
<S>                                             <C>          <C>
Net Income (in thousands):                                 
  As reported                                    $ 9,306     $ 8,775
  Pro forma                                      $ 9,262     $ 8,735
                                                           
Earnings per share:                                        
  As reported                                    $  1.34     $  1.27
  Pro forma                                      $  1.34     $  1.26
</TABLE>

Restricted Stock Award Plan:

In January 1993, the Corporation adopted the 1993 Restricted Stock Award
Plan pursuant to which restricted stock awards for up to 225,000 shares of
Class A common stock may be granted by the Compensation Committee of the
Board of Directors to certain executive officers and key personnel of
First Busey Corporation and its subsidiaries.  As of December 31, 1996,
there were 9,000 shares under grant with performance restrictions allowed
by the plan which expire as follows:  1997 - 2,250 shares, 1998 - 2,250
shares, 1999 - 2,250 shares and 2000 - 2,250 shares.

<TABLE>
<CAPTION>
                                                Number of Shares
                                        ----------------------------------
                                          1996        1995         1994
                                        ----------------------------------
<S>                                     <C>         <C>         <C>
Under restriction, beginning of year       8,250      14,250       6,000
  Granted                                  9,000        -          8,250
  Restrictions released                    8,250       6,000       -
                                        ----------------------------------
                                                         
Under restriction, end of year             9,000       8,250      14,250
                                        ==================================
                                                         
Available to grant, end of year          201,750     210,750     210,750
                                        ==================================
</TABLE>

Compensation expense is recognized for financial statement purposes over
the period of performance.  Compensation expense of $77,000, $94,000, and
$65,000 was recognized for financial statement purposes during the years
ended December 31, 1996, 1995, and 1994, respectively.  Compensation
expense of $184,000 was recognized for income tax purposes for the year
ended December 31, 1996.

                                    61                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

NOTE 13.     TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS

The Corporation and its subsidiaries have had, and may be expected to have
in the future, banking transactions in the ordinary course of business
with directors, executive officers, their immediate families and
affiliated companies in which they have 10% or more beneficial ownership
(commonly referred to as related parties), on the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with others.

The following is an analysis of the changes in loans to related parties
during the year ended December 31, 1996:

<TABLE>
<CAPTION>
<S>                                                     <C>
Balance at the beginning of year                         $   7,503
  New loans                                                  3,084
  Repayments                                                (2,100)
  Other                                                     (3,109)
                                                        ------------
Balance at end of year                                   $   5,378
                                                        ============
</TABLE>

NOTE 14.     COMMON STOCK

The holders of Class A common stock are entitled to cash dividends per
share which are 10% greater than the cash dividends per share with respect
to Class B common stock.  Class A stockholders have one vote per share
whereas Class B stockholders have ten votes per share.  Class B common
stock may be converted to Class A common stock at any time on a one-for-
one basis.  All of the issued Class B common stock is owned by the
Chairman of the Board of the Corporation and his spouse.  There are no
other differences between the two classes of common stock.


NOTE 15.     CAPITAL RATIOS

The Corporation and its subsidiary Bank are subject to various regulatory
capital requirements administered by federal and state banking agencies.
Failure to meet minimum capital requirements can initiate certain
mandatory, and possibly additional discretionary, actions by regulators
that, if undertaken, could have a direct material effect on the
Corporation's financial statements.  Under capital adequacy guidelines and
the regulatory framework for prompt corrective action, the Corporation and
Bank must meet specific capital guidelines that involve quantitative
measures of their assets, liabilities, and certain off-balance-sheet items
as calculated under regulatory accounting practices.  The Corporation's
and Bank's capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings,
and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Corporation and Bank to maintain minimum amounts and ratios
(set forth in the table below) of total and Tier I capital (as defined in
the regulations) to risk-weighted assets (as defined), and Tier 1 capital
(as defined) to average assets (as defined).  Management believes, as of
December 31, 1996, that the Corporation and Bank meet all capital adequacy
requirements to which they are subject.

                                    62                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

As of December 31, 1996, the most recent notification from the federal and
state regulatory agencies categorized the Bank as well capitalized under
the regulatory framework for prompt corrective action.  To be categorized
as well capitalized, the Corporation and Bank must maintain minimum total
risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in
the table.  There are no conditions or events since that notification that
management believes have changed the Corporation's or  Bank's categories.

<TABLE>
<CAPTION>
                                                                                To Be Well
                                                                            Capitalized  Under
                                                 For Capital                 Prompt Corrective
                               Actual         Adequacy Purposes              Action Provisions
                             ------------------------------------------------------------------
                               Amount      Ratio       Amount     Ratio      Amount      Ratio
                             ------------------------------------------------------------------
                                                    (Dollars in Thousands)
<S>                          <C>           <C>       <C>           <C>      <C>         <C>
As of December 31, 1996:
  Total Capital (to Risk
    Weighted Assets)                                            
    Consolidated              $ 67,321     12.48%     $ 43,142     8.0%        N/A        N/A
    Busey Bank                $ 65,077     12.28%     $ 42,399     8.0%     $ 52,998     10.0%
                                                            
  Tier I Capital (to Risk
    Weighted Assets)                                            
    Consolidated              $ 61,190     11.35%     $ 21,571     4.0%        N/A        N/A
    Busey Bank                $ 58,946     11.12%     $ 21,199     4.0%     $ 31,799      6.0%
                                                            
  Tier I Capital (to                                               
    Average Assets)                                             
    Consolidated              $ 61,190      7.14%     $ 34,279     4.0%        N/A        N/A
    Busey Bank                $ 58,946      6.93%     $ 34,010     4.0%     $ 42,512      5.0%
</TABLE>

NOTE 16.     COMMITMENTS, CONTINGENCIES AND CREDIT RISK

The Corporation and its subsidiaries are parties to legal actions which
arise in the normal course of their business activities.  In the opinion
of management, the ultimate resolution of these matters is not expected to
have a material effect on the financial position or the results of
operations of the Corporation and its subsidiaries.

The Corporation and its subsidiaries are parties to financial instruments
with off-balance-sheet risk in the normal course of business to meet the
financing needs of its customers.  These financial instruments include
commitments to extend credit, standby letters of credit and financial
guarantees.  Those instruments involve, to varying degrees, elements of
credit and interest rate risk.  The contract or notional amounts of those
instruments reflect the extent of involvement the Corporation has in
particular classes of financial instruments.


                                    63                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

The Corporation and its subsidiaries' exposure to credit loss in the event
of nonperformance by the other party to the financial instrument for
commitments to extend credit and standby letters of credit and financial
guarantees written is represented by the contractual amount of those
instruments.  The Corporation and its subsidiaries use the same credit
policies in making commitments and conditional obligations as it does for
on-balance-sheet instruments.

Unless noted otherwise, the Corporation and its subsidiaries do not
require collateral or other security to support financial instruments with
credit risk.

A summary of the contractual amount of the Bank's exposure to off-balance-
sheet risk as of December 31, 1996 and 1995, is as follows:

<TABLE>
<CAPTION>
                                                      1996         1995
                                                 -------------------------
                                                   (Dollars in thousands)
<S>                                               <C>           <C>
Financial instruments whose contract amounts                  
represent credit risk:
Commitments to extend credit                       $ 120,525     $ 98,030
Standby letters of credit                              5,243        2,342
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
These commitments are generally at variable interest rates and generally
have fixed expiration dates or other termination clauses and may require
payment of a fee.  Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements.  The Corporation evaluates each
customer's credit worthiness on a case-by-case basis.  The amount of
collateral obtained, if it is deemed necessary by the Corporation upon
extension of credit, is based on management's credit evaluation of the
counterparty.  Collateral held varies but may include accounts receivable,
inventory, property and equipment and income-producing commercial
properties.

Standby letters of credit are conditional commitments issued by the
Corporation to guarantee the performance of a customer to a third party.
Those letters of credit are primarily issued to support public and private
borrowing arrangements, including bond financing and similar transactions.
The credit risk involved in issuing letters of credit is essentially the
same as that involved in extending loan facilities to customers.

As of December 31, 1996, the Corporation has no significant futures,
forwards, swaps or option contracts, or other financial instruments with
similar characteristics.


                                    64                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Note 17.      Disclosures about Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value
of each class of financial instrument for which it is practicable to
estimate that value:

Cash and cash equivalents

The carrying amounts reported in the balance sheet for cash and due from
banks and federal funds sold approximate those assets' fair values.

Securities

For securities held to maturity and available for sale, fair values are
based on quoted market prices or dealer quotes, where available.  If a
quoted market price is not available, fair value is estimated using quoted
market prices for similar securities.  The carrying amount of accrued
interest receivable approximates fair value.

Loans

For certain homogeneous categories of loans, such as some residential
mortgages, fair value is estimated using the quoted market prices for
securities backed by similar loans, adjusted for differences in loan
characteristics.  The fair value of other types of loans is estimated by
discounting the future cash flows using the current rates at which similar
loans would be made to borrowers with similar credit ratings and for the
same remaining maturities.  The carrying amount of accrued interest
receivable approximates fair value.

Deposits

The fair value of demand deposits, savings accounts, NOW accounts, and
certain money market deposits is defined as the amount payable on demand
at the reporting date.  The fair value of fixed-maturity certificates of
deposit is estimated using the rates currently offered for deposits of
similar remaining maturities.  The carrying amount of accrued interest
payable approximates fair value.

Short-term borrowings and long-term debt

Rates currently available to the Corporation for debt with similar terms
and remaining maturities are used to estimate fair value of existing debt.
The carrying amount of accrued interest payable approximates fair value.

                                    65                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Commitments to extend credit and standby letters of credit

The fair value of commitments is estimated using the fees currently
charged to enter into similar agreements, taking into account the
remaining terms of the agreements and the present creditworthiness of the
counterparties.  For fixed-rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates.  The fair value of letters of credit is based on fees
currently charged for similar agreements or on the estimated cost to
terminate them or otherwise settle the obligations with the counterparties
at the reporting date.  As of December  31, 1996, these items are
immaterial in nature.

The estimated fair values of the Corporation's financial instruments are
as follows:

<TABLE>
<CAPTION>
                                        1996                      1995
                              --------------------------------------------------
                                Carrying      Fair        Carrying       Fair
                                 Amount       Value        Amount       Value
                              --------------------------------------------------
                                             (Dollars in thousands)
<S>                           <C>            <C>          <C>          <C>
Financial assets:                                           
  Cash and cash equivalents     $ 33,738     $ 33,738     $ 40,008     $ 40,008
  Securities                     226,350      227,043      284,517      285,641
  Loans, net                     563,369      568,480      476,299      479,671
  Accrued interest receivable      7,412        7,412        7,146        7,146
                                                            
Financial liabilities:                                      
Deposits                       766,92727      768,090      744,897      750,293
Short-term borrowings             14,405       14,405       21,674       21,674
Long-term debt                     5,000        4,956        5,000        4,985
Accrued interest payable           3,448        3,448        3,988        3,988
</TABLE>

In addition, other assets and liabilities of the Corporation that are not
defined as financial instruments are not included in the above
disclosures, such as property and equipment.  Also, nonfinancial
instruments typically not recognized in financial statements nevertheless
may have value but are not included in the above disclosures.  These
include, among other items, the estimated earnings power of core deposit
accounts, the earnings potential of loan servicing rights, the earnings
potential of the trust operations, the trained work force, customer
goodwill and similar items.


NOTE 18.     FINANCIAL INFORMATION OF HOLDING COMPANY

The ability of the Corporation to pay cash dividends to its stockholders
and to service its debt is dependent on the receipt of cash dividends from
its subsidiaries.  State chartered banks have certain statutory and
regulatory restrictions on the amount of cash dividends they may pay.  As
a practical matter, dividend payments are restricted because of the desire
to maintain a strong capital position in the bank subsidiaries.


                                    66                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

Condensed  financial  data  for First Busey Corporation  (holding  company
only) is presented below.

                          BALANCE SHEETS
                                                             
<TABLE>
<CAPTION>
                                                      December 31,
                                              ----------------------------
                                                    1996        1995
                                              ----------------------------
<S>                                             <C>           <C>
ASSETS                                             (Dollars in thousands)
Cash and due from subsidiary bank               $   1,254     $     439
Securities available for sale                       1,258         1,034
Investments in subsidiaries:                                 
  Bank                                             66,521        62,451
  Non-bank                                          2,295         2,053
Premises and equipment, net                         4,931         5,145
Other assets                                        6,177         6,648
                                              ----------------------------
          TOTAL ASSETS                          $  82,436     $  77,770
                                              ============================
                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Liabilities:                                                 
  Short-term corporate borrowings               $   7,500     $   8,500
  Short-term ESOP borrowings                          500           750
  Other liabilities                                 1,019           742
                                              ----------------------------
          TOTAL LIABILITIES                         9,019         9,992
                                              ----------------------------
                                                             
Stockholders' equity before unearned ESOP 
  shares and deferred compensation for 
  stock grants                                     74,083        68,579
Unearned ESOP shares and deferred                    (666)         (801)
                                              ----------------------------
  compensation for stock grants
STOCKHOLDERS' EQUITy                               73,417        67,778
                                              ----------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $  82,436     $  77,770
                                              ============================
</TABLE>

                                    67                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------



                       STATEMENTS OF INCOME
                                                              
<TABLE>
<CAPTION>
                                                         Years Ended December 31,
                                                  ----------------------------------------
                                                      1996          1995          1994
                                                  ----------------------------------------
                                                          (Dollars in thousands)
<S>                                                <C>          <C>            <C>
Operating income:                                             
  Dividends from subsidiaries:                                  
    Bank                                            $  6,000     $   5,400     $   4,640
    Non-bank                                             400           300           250
  Interest and dividend income                            12            27            25
  Other income                                           579           451           473
                                                  ----------------------------------------
          TOTAL OPERATING INCOME                       6,991         6,178         5,388
                                                  ----------------------------------------
                                                              
Expenses:                                                     
  Salaries and employee benefits                       1,057         1,025           886
  Interest expense                                       527           740           719
  Write-down of real property                           -             -              350
  Operating expense                                    1,064         1,109           938
                                                  ----------------------------------------
          TOTAL EXPENSES                               2,648         2,874         2,893
                                                  ----------------------------------------
                                                              
          INCOME BEFORE INCOME TAX BENEFIT AND                           
             EQUITY IN UNDISTRIBUTED INCOME OF                           
             SUBSIDIARIES                              4,343         3,304         2,495
                                                              
Income tax benefit                                       730           980           737
                                                  ----------------------------------------
                                                              
          INCOME BEFORE EQUITY IN UNDISTRIBUTED
             INCOME OF SUBSIDIARIES                    5,073         4,284         3,232
                                                              
Equity in undistributed income of subsidiaries:
  Bank                                                 3,983         4,195         4,746
  Non-bank                                               250           296           260
                                                  ----------------------------------------
                                                              
          NET INCOME                                $  9,306     $   8,775     $   8,238
                                                  ========================================
</TABLE>

                                    68                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

                    STATEMENTS OF CASH FLOWS
                                                              
<TABLE>
<CAPTION>
                                                                 Years Ended December 31,
                                                         ------------------------------------
                                                             1996         1995         1994
                                                         ------------------------------------
                                                                 (Dollars in thousands)
                                                              
<S>                                                       <C>          <C>          <C>
Cash Flows from Operating Activities
  Net income                                               $  9,306     $  8,775     $  8,238
  Adjustments to reconcile net income to net cash
    provided by operating activities:                             
    Depreciation and amortization                             1,206        1,226        1,188
    Write-down of real property                                -            -             350
    Equity in undistributed net income of subsidiaries       (4,233)      (4,491)      (5,006)
    Gain on sales of securities                                -             (54)          (2)
    Loss on disposal of premises and equipment                    6         -               1
    Changes in assets and liabilities:                            
      Increase in other assets                                 (445)        (739)        (315)
      Increase in other liabilities                             277           27          120
                                                         ------------------------------------
          NET CASH PROVIDED BY OPERATING ACTIVITIES           6,117        4,744        4,574
                                                         ------------------------------------

Cash Flows from Investing Activities
  Proceeds from sales of securities                             
    available for sale                                          136          259            5
  Purchases of securities available for sale                   (186)         (10)         (45)
  Purchases of premises and equipment                           (66)        (184)         (52)
  Proceeds from capital distribution of subsidiary             -              91        1,000
                                                         ------------------------------------
          NET CASH (USED IN) PROVIDED BY                                 
             INVESTING ACTIVITIES                              (116)         156          908
                                                         ------------------------------------
                                                              
Cash Flows from Financing Activities
  Purchases of treasury stock                                  (605)        (705)      (1,653)
  Proceeds from sales of treasury stock                         797          353           85
  Proceeds from short-term borrowings                         1,000        5,750        3,300
  Dividends paid                                             (4,378)      (3,940)      (3,609)
  Principal payments on short-term borrowings                (2,000)      (1,250)      (3,800)
  Principal payments on long-term debt                         -          (4,891)         (54)
                                                         ------------------------------------
          NET CASH USED IN FINANCING ACTIVITIES              (5,186)      (4,683)      (5,731)
                                                         ------------------------------------
                                                              
          NET INCREASE (DECREASE) IN CASH AND                            
             DUE FROM BANKS                                     815          217         (249)
                                                              
Cash and due from banks, beginning                              439          222          471
                                                         ------------------------------------
                                                              
Cash and due from banks, ending                            $  1,254     $    439     $    222
                                                         ====================================
</TABLE>

                                    69                        

<PAGE>
FIRST BUSEY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------

                 STATEMENTS OF CASH FLOWS (Continued)
                                                         
<TABLE>
<CAPTION>
                                                           Years Ended December 31,
                                                       -----------------------------------
                                                          1996        1995       1994
                                                       -----------------------------------
                                                             (Dollars in thousands)
<S>                                                      <C>         <C>        <C>
Supplemental Schedule of Noncash Investing and
  Financing Activities                                     
    Reduction of ESOP debt                               $   250     $  250     $    400
                                                       ==================================
                                                         
    Change in unrealized gain on securities
    available for sale - holding company                 $   174     $  259     $     17
                                                       ==================================

    Increase in deferred income taxes attributable
      to the unrealized gain on securities
      available for sale - holding company               $   (61)    $  (91)    $     (6)
                                                       ==================================

Change in unrealized gain (loss) on securities
available for sale - subsidiaries                        $    79     $ 3,767    $   (853)
                                                       ==================================
</TABLE>

                                    70                        

<PAGE>
                             MANAGEMENT REPORT
                                BUSEY BANK
                          AS OF DECEMBER 31, 1996
                                     

FINANCIAL STATEMENTS
Management of Busey Bank is responsible for the preparation, integrity and
fair presentation of its published financial statements as of December 31,
1996, and for the year then ended.  The financial statements have been
prepared in accordance with generally accepted accounting principles and,
as such, include amounts, some of which are based on judgments and
estimates of management.

INTERNAL CONTROLS
Management is responsible for establishing and maintaining an effective
internal control structure over financial reporting.  The system contains
monitoring mechanisms, and actions are taken to correct deficiencies
identified.

There are inherent limitations in the effectiveness of any system of
internal control, including the possibility of human error and the
circumvention or overriding of controls.  Accordingly, even an effective
internal control system can provide only reasonable assurance with respect
to financial statement preparation.  Further, because of changes in
conditions, the effectiveness of an internal control system may vary over
time.

Management assessed its internal control structure over financial
reporting as of December 31, 1996.  This assessment was based on criteria
for effective internal control over financial reporting described in
"Internal Control - Integrated Framework" issued by the Committee of
Sponsoring Organizations of the Treadway Commission.  Based on this
assessment, management believes that Busey Bank maintained an effective
internal control structure over financial reporting as of December 31,
1996.

DESIGNATED LAWS
Management is also responsible for compliance with the federal and state
laws and regulations relating to safety and soundness, including those
designated laws and regulations regarding dividend restrictions and loans
to insiders.  Based on our assessment, management believes Busey Bank
complied, in all material respects, with those designated laws and
regulations for the year ended December 31, 1996.




                                 //Douglas C. Mills//
                         -----------------------------------------
                         Douglas C. Mills, Chairman of the Board
                         First Busey Corporation (Holding Company)


                                    //David Kuhl//
                         -----------------------------------------
                         P. David Kuhl, President
                         Busey Bank
                                     
                                     

                                    71                        

<PAGE>
                     [McGladrey & Pullen, LLP Letterhead]
                                     
                      INDEPENDENT ACCOUNTANT'S REPORT
                                     
                                     

To the Board of Directors
Busey Bank
Urbana, Illinois

We have examined management's assertion that Busey Bank maintained a
system of internal control over financial reporting which is designed to
provide reasonable assurance to the Bank's management and Board of
Directors regarding the preparation of reliable published financial
statements as of December 31, 1996, included in the accompanying
management report.

Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly,
included obtaining an understanding of the internal control structure over
financial reporting, testing and evaluating the design and operating
effectiveness of the internal control structure, and such other procedures
as we considered necessary in the circumstances.  We believe that our
examination provides a reasonable basis for our opinion.

Because of inherent limitations in any internal control structure, errors
or irregularities may occur and not be detected.  Also, projections of any
evaluation of the internal control structure over financial reporting to
future periods are subject to the risk that the internal control structure
may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

In our opinion, management's assertions that Busey Bank maintained a
system of internal control over financial reporting which is designed to
provide reasonable assurance to the Bank's management and Board of
Directors regarding the preparation of reliable published financial
statements as of December 31, 1996, is fairly stated, in all material
respects, based upon criteria established in "Internal Control -
Integrated Framework" issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO).


                              
//MCGLADREY & PULLEN, LLP//
                              
                              
Champaign, Illinois
January 31, 1997



                                    72                        

<PAGE>
                                                                          
                                                                          
                                                                          
                                                                          
                                                              EXHIBIT 21.1
                                                                          



                                     
              LIST OF SUBSIDIARIES OF FIRST BUSEY CORPORATION
                                     
                             December 31, 1996



                                Busey Bank

                    First Busey Trust & Investment Co.

                        First Busey Resources, Inc.



<PAGE>


                                                                          
                                                              EXHIBIT 23.1
                                                                          






                    CONSENT OF INDEPENDENT ACCOUNTANTS
                                     

We consent to the incorporation by reference in the Registration Statement
on Form S-8 (No. 33-30095) of our report, dated January 31, 1997, with
respect to the financial statements of First Busey Corporation and
Subsidiaries, appearing in this Annual Report on Form 10-K for the year
ended December 31, 1996.


MCGLADREY & PULLEN, LLP


Champaign, Illinois
March 18, 1997



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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