SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 8-K

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

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported): September 21, 1999

                                 PEOPLES BANCORP

             (Exact name of registrant as specified in its charter)

                                     INDIANA

                 (State or other jurisdiction of incorporation)

0-18991                                                 35-1811284
(Commission File Number)                       (IRS Employer Identification No.)

212 West Seventh Street
Auburn, Indiana                                                         46706
(Address of principal executive offices)                              (Zip Code)

       Registrant's telephone number, including area code: (219) 925-2500


<PAGE>



                                                                   2

Item 5.  Other Events

         On September 21, 1999,  Peoples  Bancorp (the  ARegistrant@)  and Three
Rivers  Financial  Corp.  (AThree  Rivers@)  jointly  announced the signing of a
definitive  agreement (the  "Agreement")  pursuant to which Three Rivers will be
merged with and into Registrant (the "Merger"). The Agreement provides that upon
the effective date of the Merger (the  "Effective  Time"),  each  shareholder of
Three Rivers will  receive in a tax-free  exchange  1.08 shares of  Registrant=s
common  stock  for  each  share  of  Three  Rivers  common  stock  owned by such
shareholder.  Based on the closing  price of  Registrant  on September  20, 1999
($17),  the transaction is valued at $18.36 per share and has an aggregate value
of approximately  $14.4 million  (assuming the exchange of all outstanding stock
options).

         Pursuant to General Instruction F to Form 8-K, the press release issued
September 21, 1999,  concerning the Merger is  incorporated  herein by reference
and is attached hereto as Exhibit 20.

Item 7.  Financial Statements and Exhibits

         (c)      Exhibits

                  Exhibit 2         Plan of  Reorganization  and Agreement and
                                    Plan of Merger by and among Peoples  Bancorp
                                    and Three Rivers Financial Corporation dated
                                    September 21, 1999.

                  Exhibit 20        Press Release dated September 21, 1999.


<PAGE>




iv






                                   SIGNATURES

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


                                                     By:   Roger J. Wertenberger

Dated: September 23, 1999


<PAGE>

                                                                      Exhibit 2

                             PLAN OF REORGANIZATION

                        AND AGREEMENT AND PLAN OF MERGER
                                  BY AND AMONG
                                 PEOPLES BANCORP
                                       AND
                       THREE RIVERS FINANCIAL CORPORATION

                            Dated September 21, 1999





<PAGE>


                                TABLE OF CONTENTS
                                                                            Page
ARTICLE I - CERTAIN DEFINITIONS................................................1

         Section 1.1  Definitions..............................................1

ARTICLE II - THE MERGER........................................................6

         Section 2.1  The Merger...............................................6

         Section 2.2  Closing..................................................6

         Section 2.3  Effective Time...........................................6

         Section 2.4.  Additional Activities...................................6

         Section 2.5.  Articles of Incorporation and Bylaws....................7

         Section 2.6.  Boards of Directors and Officers........................7

         Section 2.7.  Conversion of Securities................................7

         Section 2.8.  Exchange Procedures.....................................7

         Section 2.9.  No Fractional Shares....................................9

         Section 2.10.  Anti-Dilution Adjustments..............................9

         Section 2.11. Treatment of Stock Options..............................9

         Section 2.12.  Reservation of Right to Revise Transaction............10

ARTICLE III - FIRST SAVINGS...................................................10

         Section 3.1.  Liquidation Account....................................10

ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND FIRST SAVINGS..10

         Section 4.1.  Organization, Good Standing, Authority, Insurance, Etc.10

         Section 4.2.  Capitalization.........................................11

         Section 4.3.  Ownership of Subsidiaries..............................11

         Section 4.4.  Financial Statements and Reports.......................11

         Section 4.5.  Absence of Changes.....................................12

         Section 4.6.  No Broker's or Finder's Fees...........................12

         Section 4.7.  Litigation and Other Proceedings.......................12

         Section 4.8.  Compliance with Law....................................12

         Section 4.9.  Corporate Actions......................................13

         Section 4.10.  Authority.............................................13

         Section 4.11.  Employment Arrangements...............................14

         Section 4.12.  Employee Benefits.....................................14

         Section 4.13.  Information Furnished; Registration Statement.........15

         Section 4.14.  Property and Assets...................................15

         Section 4.15.  Agreements and Instruments............................16

         Section 4.16.  Material Contract Defaults............................17

         Section 4.17.  Tax Matters...........................................17

         Section 4.18.  Environmental Matters.................................17

         Section 4.19.  Loan Portfolio; Portfolio Management..................18

         Section 4.20.  Real Estate Loans and Investments.....................18

         Section 4.21.  Derivatives Contracts.................................18

         Section 4.22.  Insurance.............................................19

         Section 4.23.  Tax Treatment.........................................19

ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BANCORP AND THE BANK............19

         Section 5.1.  Organization, Good Standing, Authority, Insurance, Etc.19

         Section 5.2.  Capitalization.........................................20

         Section 5.3.  Ownership of Subsidiaries..............................20

         Section 5.4.  Financial Statements and Reports.......................20

         Section 5.5  Absence of Changes......................................21

         Section 5.6.  No Broker's or Finder's Fees...........................21

         Section 5.7.  Litigation and Other Proceedings.......................21

         Section 5.8.  Compliance With Law....................................21

         Section 5.9.  Corporate Actions......................................22

         Section 5.10.  Authority.............................................22

         Section 5.11.  Information Furnished; Registration Statement.........22

         Section 5.12.  Property and Assets...................................23

         Section 5.13.  Agreements and Instruments............................23

         Section 5.14.  Material Contract Defaults............................24

         Section 5.15.  Tax Matters...........................................24

         Section 5.16.  Environmental Matters.................................24

         Section 5.17.  Loan Portfolio; Portfolio Management..................25

         Section 5.18.  Real Estate Loans and Investments.....................25

         Section 5.19.  Derivatives Contracts.................................25

         Section 5.20.  Insurance.............................................26

         Section 5.21.  Tax Treatment.........................................26

ARTICLE VI - COVENANTS........................................................26

         Section 6.1.  Conduct of Business by the Company.....................26

         Section 6.2.  Maintenance of Records.................................28

         Section 6.3.  Salary and Benefits....................................28

         Section 6.4.  Efforts of Parties to Close............................29

         Section 6.5.  Confidentiality and Announcements......................30

         Section 6.6.  Access; Certain Communications.........................30

         Section 6.7.  Cooperation; Preparation of Documents..................31

         Section 6.8.  Notification of Certain Matters........................32

         Section 6.9.  Expenses...............................................33

         Section 6.10.  Third Party Proposals.................................33

         Section 6.11.  Stock Listing.........................................33

         Section 6.12.  Integration; Conforming Entries.......................33

         Section 6.13.  Tax-Free Treatment....................................34

         Section 6.14.  Agreements of Affiliates..............................34

         Section 6.15.  Stockholder Approval..................................34

         Section 6.16.  Indemnification.......................................35

         Section 6.17.  D&O Insurance.........................................35

         Section 6.18.  Environmental Reports.................................35

ARTICLE VII - CONDITIONS TO CONSUMMATION OF THE MERGER........................36

         Section 7.1.  Mutual Conditions......................................36

         Section 7.2.  Conditions to Bancorp's Obligations....................37

         Section 7.3.  Conditions to the Company's Obligations................38

ARTICLE VII - TERMINATION.....................................................38

         Section 8.1.  Termination............................................38

         Section 8.2.  Survival After Termination.............................39

         Section 8.3.  Termination Fee........................................39

ARTICLE IX - MISCELLANEOUS....................................................40

         Section 9.1.  Amendments; Waiver.....................................40

         Section 9.2.  Entire Agreement.......................................40

         Section 9.3.  Non-Survival of Representations, Warranties
                            and Agreements....................................40

         Section 9.4.  Interpretation.........................................40

         Section 9.5.  Severability...........................................40

         Section 9.6.  Notices................................................40

         Section 9.7.  Binding Effect; Persons Benefiting; No Assignment......41

         Section 9.8.  Counterparts...........................................41

         Section 9.9.  Governing Law..........................................42

         Section 9.10.  Specific Performance..................................42

         Section 9.11.  Waiver of Jury Trial..................................42








<PAGE>



                             PLAN OF REORGANIZATION
                        AND AGREEMENT AND PLAN OF MERGER

 ........THIS PLAN OF REORGANIZATION AND AGREEMENT AND PLAN OF MERGER,  dated as
of September 21, 1999 (the  "Agreement"),  is by and among Peoples  Bancorp,  an
Indiana  corporation  ("Bancorp")  and Three  Rivers  Financial  Corporation,  a
Delaware corporation (the "Company").

 .........WHEREAS,  Bancorp, a unitary savings and loan holding company, with its
principal  offices in Auburn,  Indiana,  owns all of the issued and  outstanding
capital  stock of Peoples  Federal  Savings Bank of DeKalb  County,  a federally
chartered savings bank and wholly-owned subsidiary of Bancorp (the "Bank"), with
its principal offices in Auburn, Indiana;

 .........WHEREAS,  the Company, a unitary savings and loan holding company, with
its  principal  offices in Three  Rivers,  Michigan,  owns all of the issued and
outstanding  capital  stock of First  Savings  Bank, A Federal  Savings  Bank, a
federally  chartered  savings  bank  and  wholly-owned   subsidiary  of  ("First
Savings"), with its principal offices in Three Rivers, Michigan;

 ............WHEREAS,   Bancorp  and  the   Company   desire  to  combine   their
respective  holding companies through a tax-free exchange so that the respective
shareholders  of both Bancorp and the Company  will have an equity  ownership in
the combined holding company;

 ...........WHEREAS, to accomplish  the foregoing,  the Board of Directors of the
Company  (the  "Company  Board")  and the Board of  Directors  of  Bancorp  (the
"Bancorp  Board")  have  approved the merger (the " Merger") of the Company with
and into  Bancorp,  pursuant to the terms and subject to the  conditions of this
Agreement;

 ...........WHEREAS,  for federal income  tax  purposes, it  is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Code (as  defined  below)  and this  Agreement  shall  constitute  a plan of
reorganization pursuant to Section 368 of the Code;

 ...........WHEREAS,   the parties  desire  that  First  Savings  shall  become a
separate wholly-owned subsidiary of Bancorp, and not be merged with and into the
Bank;

 ...........WHEREAS,  the parties desire  to  provide  for certain  undertakings,
conditions,  representations,  warranties,  and covenants in connection with the
transactions contemplated by this Agreement.

 ...........NOW,    THEREFORE,  in  consideration  of   the  foregoing   and  the
respective  representations,  warranties,  covenants  and  agreements  set forth
herein and  subject to the  conditions  and other  terms  herein set forth,  and
intending  to be legally  bound  hereby,  the  parties  hereto  hereby  agree as
follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

 .............Section 1.1. Definitions.  For all purposes of this Agreement, the
following terms shall have the respective meanings set forth in this Section 1.1
(such definitions to be equally applicable to both the singular and plural forms
of the terms herein defined):

 .............."Acquisition Proposal" shall have the meaning set forth in Section
6.10.

 .............."Affiliate" shall mean any individual,  partnership,  corporation,
entity,  or other  Person  that  directly,  or  indirectly  through  one or more
intermediaries,  controls or is controlled  by, or is under common control with,
the Person specified.

 .............."Agreement"  shall  have the  meaning  set forth on the first page
hereof.

 .............."Applicable  Law" shall  mean any  domestic  or  foreign  federal,
state, or local statute, law, ordinance,  rule,  administrative  interpretation,
regulation,  order,  writ,  injunction,  directive,  judgment,  decree,  policy,
guideline,  or other requirement  applicable to the Company,  Bancorp, or any of
their respective Affiliates, properties, assets, officers, directors, employees,
or agents, as the case may be.

 .............."Approval Date" shall have the meaning set forth in Section 2.3.

 .............."Asset Classification" shall have the meaning set forth in Section
4.19(b).

 .............."Bancorp"  has the  meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.

 .............."Bancorp  Board"  has the  meaning  set  forth on the  first  page
hereof.

 .............."Bancorp  Common  Stock"  shall mean the common  stock,  par value
$1.00 per share, of Bancorp.

 .............."Bancorp  Material  Adverse  Effect"  shall mean,  with respect to
Bancorp or any of its Affiliates, a material adverse effect on (i) the business,
financial  condition  or  results  of  operations  of  Bancorp  and the  Bancorp
Subsidiaries  taken as a whole or (ii) the  ability  of  Bancorp  or the Bank to
complete the transactions contemplated hereby; provided, however, that a Bancorp
Material  Adverse  Effect  shall  not be  defined  to  include  (w)  any  change
attributable  to or  resulting  from any  change  in  Applicable  Law or GAAP or
regulatory accounting principles, in each case which affects thrift institutions
generally,  or (x) the effects of any change  attributable  to or resulting from
changes in economic conditions applicable to depository  institutions  generally
or in general levels of interest rates affecting thrift institutions  generally,
or (y)  expenses  related  to  consummation  of the Merger  which are  otherwise
permitted  under  this  Agreement  (or  set  forth  in  the  Bancorp  Disclosure
Schedule), including, but not limited to, preparation, legal, investment banking
and auditing fees.

 .............."Bancorp Plans" shall have the meaning set forth in Section 6.3.

 .............."Bancorp  Subsidiary"  and "Bancorp  Subsidiaries"  shall have the
respective  meanings set forth in Section 5.1 and shall  include  First  Savings
after the Effective Time.

 .............."Bank"  has the  meaning  set forth on the first  page  hereof and
includes any direct or indirect successor or assign.

 .............."Benefit Arrangements" shall have the meaning set forth in Section
4.12(a)

 .............."Business  Day" shall mean any day that the NYSE is normally  open
for trading and that is not a Saturday,  a Sunday or a day on which banks in the
States of  Indiana  and  Michigan  are  generally  closed  for  regular  banking
business.

 .............."Certificates" shall have the meaning set forth in Section 2.8.

 .............."Closing" shall have the meaning set forth in Section 2.2.

 .............."Closing Date" shall have the meaning set forth in Section 2.2.

 .............."Code"  shall mean the Internal  Revenue Code of 1986, as amended,
together with the Treasury regulations thereunder.

 .............."Company"  has the  meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.

 .............."Company  Board"  has the  meaning  set  forth on the  first  page
hereof.

 .............."Company  Common  Stock"  shall mean the common  stock,  par value
$0.01 per share, of Company.

 .............."Company  Employee  Benefit  Plan"  has the  meaning  set forth in
Section 4.12(a).

 .............."Company  Material Adverse Effect" shall mean, with respect to the
Company or any of its Affiliates, a material adverse effect on (i) the business,
financial  condition  or results of  operations  of the  Company and the Company
Subsidiaries  taken as a whole  or (ii)  the  ability  of the  Company  or First
Savings to complete the transactions  contemplated  hereby;  provided,  however,
that a Company  Material  Adverse Effect shall not be defined to include (w) any
change attributable to or resulting from any change in Applicable Law or GAAP or
regulatory accounting principles, in each case which affects thrift institutions
generally,  or (x) the effects of any change  attributable  to or resulting from
changes in economic conditions applicable to depository  institutions  generally
or in general levels of interest rates affecting thrift institutions  generally,
or (y)  expenses  related  to  consummation  of the Merger  which are  otherwise
permitted  under  this  Agreement  (or  set  forth  in  the  Company  Disclosure
Schedule), including, but not limited to, preparation, legal, investment banking
and auditing fees.

 .............."Company Option" shall have the meaning set forth in Section 2.11.

 .............."Company  Preferred  Stock"  shall have the  meaning  set forth in
Section 4.2.

 .............."Company  Property"  shall have the  meaning  set forth in Section
6.18.

 .............."Company  Subsidiary"  and "Company  Subsidiaries"  shall have the
respective meanings set forth in Section 4.1.

 .............."Contract" has the meaning set forth in Section 10.

 .............."Current  Property"  shall have the  meaning  set forth in Section
6.18.

 .............."Derivatives Contract" shall mean the meaning set forth in Section
4.21.

 .............."DGCL" shall have the meaning set forth in Section 2.1.

 .............."Effective Time" shall have the meaning set forth in Section 2.3.

 .............."Encumbrance"  shall  mean any lien,  pledge,  security  interest,
claim, charge, easement, limitation, commitment,  encroachment,  restriction, or
encumbrance of any kind or nature whatsoever.

 .............."Environmental  Firm"  shall have the meaning set forth in Section
6.18.

 .............."ERISA"  shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder.

 .............."Exchange  Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.

 .............."Exchange Agent" shall have the meaning set forth in Section 2.8.

 .............."Exchange  Option"  shall  have the  meaning  set forth in Section
2.11.

 .............."Exchange  Ratio" shall mean, subject to Section 2.10, 1.08 shares
of Bancorp Common Stock for each one share of Company Common Stock.

 .............."Facility  Property"  shall have the  meaning set forth in Section
6.18.

 .............."FDIC"  shall mean the Federal Deposit  Insurance  Corporation and
any successor thereto.

 .............."GAAP" shall mean generally accepted accounting principles as used
in the  United  States  of  America  as in  effect  at the time  any  applicable
financial  statements were prepared or any act requiring the application of GAAP
was performed.

 .............."Governmental  Approval"  shall  have  the  meaning  set  forth in
Section 4.10.

 .............."Governmental  Authority" shall mean any government,  any state or
other  political   subdivision   thereof,   any  entity  exercising   executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government,  including any government agency, department,  board, commission,
or  instrumentality  of the United States, any state of the United States or any
political   subdivision   thereof,  and  any  court  or  tribunal  of  competent
jurisdiction,   and  any   governmental   or   nongovernmental   self-regulatory
organization,  agency,  or authority  (including the NASDAQ NMS and the National
Association of Securities Dealers, Inc.).

 .............."HOLA"  shall mean the Home Owners' Loan Act of 1933,  as amended,
and the rules and regulations promulgated thereunder.

 .............."IBCL" shall have the meaning set forth in Section 2.1.

 .............."Injunction" shall have the meaning set forth in Section 7.1(a).

 .............."IRS"  shall mean the Internal  Revenue  Service and any successor
thereto.

 .............."Insurance  Policies"  shall have the meaning set forth in Section
4.22.

 .............."Merger" has the meaning set forth on the first page hereof.

 .............."Merger Consideration" shall have the meaning set forth in Section
2.12.

 .............."NASDAQ  NMS" means the Nasdaq  National  Market and any successor
thereto.

 .............."NYSE"  means the New York Stock Exchange,  Inc. and any successor
thereto.

 .............."OTS"  shall  mean  the  Office  of  Thrift  Supervision  and  any
successor thereto.

 .............."Person"   shall  mean  any  individual,   corporation,   company,
partnership  (limited or general),  joint venture,  association,  trust or other
entity or similar contractual arrangement or relationship.

 .............."Previously Disclosed" by a party shall mean information set forth
in a schedule (with respect to Bancorp, the "Bancorp Disclosure  Schedule";  and
with respect to the Company, the "Company Disclosure Schedule"), correspondingly
enumerated  to the  representations,  warranties,  or  covenants  to which  such
information  relates,  that  is  delivered  by such  party  to the  other  party
contemporaneously   with  the  execution  of  this  Agreement  and  specifically
designated as information "Previously Disclosed" pursuant to this Agreement.

 .............."Prospectus" shall have the meaning set forth in Section 4.13.

 .............."Proxy  Statement"  shall  have the  meaning  set forth in Section
4.13.

 .............."Records"  shall mean, with respect to any Person, all records and
original  documents (and copies thereof) in the Person's  possession,  or in the
possession  of an  Affiliate  of such  Person,  as of the Closing Date (a) which
pertain to or are utilized by such Person or Affiliate to  administer,  reflect,
monitor,  evidence or record  information  respecting the business or conduct of
the Company or the Company Subsidiaries or Bancorp or the Bancorp  Subsidiaries,
or (b) necessary or appropriate  for the Company or the Company  Subsidiaries or
Bancorp and the Bancorp  Subsidiaries  to comply with any  Applicable  Law,  and
shall include in the case of (a) and (b) above,  all such records  maintained on
electronic or magnetic  media,  or in the electronic data base system of or used
by such Person or Affiliate.

 .............."Registration  Statement"  shall  have the  meaning  set  forth in
Section 4.13.

 .............."Regulatory  Documents" shall mean, with respect to a Person,  all
forms, reports,  registration statements,  schedules, and other documents filed,
or  required  to be filed by such  Person  with any  Governmental  Authority  or
pursuant to any Applicable Law.

 .............."Representatives"  shall  have the  meaning  set forth in  Section
6.10.

 .............."Right" shall have the meaning set forth in Section 6.1(ii).

 .............."SAIF"  shall have the  meaning  set forth in Section  4.1 and any
successor thereto.

 .............."SEC"  shall mean the Securities  and Exchange  Commission and any
successor thereto.

 .............."Securities  Act"  shall  mean  the  Securities  Act of  1933,  as
amended, and the rules and regulations of the SEC thereunder.

 .............."Surviving  Corporation"  shall  have  the  meaning  set  forth in
Section 2.1.

 .............."Tax Return" shall mean any return, report, information statement,
schedule or other document (including any related or supporting  information and
including any Form 1099 or other  document or report  required to be provided to
third  parties)  with respect to Taxes,  including  any document  required to be
retained  or  provided  to any  Governmental  Authority  pursuant  to 31  U.S.C.
Sections 5311-5328 and regulations promulgated thereunder.

 .............."Taxes" shall mean all federal,  provincial,  territorial,  state,
municipal,  local, foreign or other taxes, imposts,  rates, levies,  assessments
and other charges (and all interest and penalties thereon),  including,  without
limitation,  all income, excise,  franchise,  gains, real property, value added,
severance,  ad valorem,  personal  property,  sales, use,  license,  employment,
payroll,  social security,  unemployment,  disability,  estimated or withholding
taxes,  and all customs and import  duties,  and all  interest,  penalties,  and
losses thereon or associated therewith or associated with any Tax Return.

 .............."Transferred  Employees"  shall  have  the  meaning  set  forth in
Section 6.3.

                                   ARTICLE II
                                   THE MERGER

 ..............Section  2.1. The Merger.  Subject to the terms and  conditions of
this  Agreement  and to the HOLA,  the  Company  shall be  merged  with and into
Bancorp in accordance with the Indiana Business Corporation Law (the "IBCL") and
the Delaware General  Corporation Law (the "DGCL"),  and thereafter the separate
corporate  existence of the Company shall cease.  Bancorp shall be the surviving
corporation  of the  Merger  (sometimes  referred  to herein  as the  "Surviving
Corporation")  and shall  continue  to be  governed  by the laws of the State of
Indiana.  The  Merger  shall  have  the  effects  set  forth  in the  applicable
provisions of the IBCL and the DGCL.

 ..............Section  2.2.  Closing.  The closing (the "Closing") of the Merger
shall take place at the offices of Barnes & Thornburg, 11 South Meridian Street,
Indianapolis,  Indiana  46204,  counsel to Bancorp  (including by mail,  fax, or
otherwise as reasonably  agreed to by the parties hereto) or such other time and
place as the parties shall agree,  prior to the Effective  Time on the date that
the Effective Time occurs (the "Closing Date").

 ..............Section  2.3. Effective Time. The Merger shall become effective on
the date and at the time (the "Effective Time") on which  appropriate  documents
in respect of the Merger are filed with the  Secretaries  of State of the States
of Indiana and Delaware in such form as required by, and in accordance with, the
relevant provisions of the DGCL and IBCL, respectively. Subject to the terms and
conditions of this  Agreement,  the  Effective  Time shall occur on such date as
Bancorp  shall  notify the Company in writing  (such  notice to be at least five
full trading days in advance of the Effective Time) but (i) not earlier than the
satisfaction  or waiver of all  conditions  set forth in Article  VII (such date
being referred to herein as the "Approval Date") and (ii) subject to clause (i),
not  later  than  the  first  Business  Day of the  first  full  calendar  month
commencing  at least five full trading days after the Approval  Date, or at such
other time as Bancorp and the Company shall agree.

 ..............Section  2.4.  Additional  Actions.  If,  at any  time  after  the
Effective Time, the Surviving  Corporation shall consider or be advised that any
further  deeds,  assignments,  or  assurances or any other acts are necessary or
desirable  to (i) vest,  perfect  or  confirm,  of record or  otherwise,  in the
Surviving  Corporation its right, title, or interest in, to, or under any of the
rights, properties, or assets of Bancorp or the Company. or (ii) otherwise carry
out the  purposes of this  Agreement,  the Company and each of its  officers and
directors  shall be deemed  to have  granted  to the  Surviving  Corporation  an
irrevocable   power  of   attorney  to  execute  and  deliver  all  such  deeds,
assignments,  or assurances  and to do all acts  necessary or desirable to vest,
perfect or confirm title and possession to such rights, properties, or assets in
the  Surviving  Corporation  and  otherwise  to carry out the  purposes  of this
Agreement,  and the officers  and  directors of the  Surviving  Corporation  are
authorized  in the name of the  Company  or  otherwise  to take any and all such
action.

 ..............Section 2.5. Articles of Incorporation and Bylaws. The Articles of
Incorporation and Bylaws of Bancorp in effect immediately prior to the Effective
Time  shall  be the  Articles  of  Incorporation  and  Bylaws  of the  Surviving
Corporation following the Merger until otherwise amended or repealed.

 ..............Section  2.6.  Boards of Directors and Officers.  At the Effective
Time, the directors and officers of Bancorp  immediately  prior to the Effective
Time shall continue to be directors and officers, respectively, of the Surviving
Corporation  following the Merger; such directors and officers shall hold office
in  accordance  with the  Surviving  Corporation's  Bylaws and  applicable  law.
Promptly following the Effective Time, (i) Richard Gatton,  President,  CEO, and
Chairman of the Company, and one other  representative of the Company,  shall be
invited to serve as additional members of the Bancorp Board and, upon acceptance
thereof and appointment thereon,  shall be entitled to receive director fees and
other  benefits on the same basis as other  directors  of Bancorp,  and (ii) two
representatives of Bancorp shall be appointed to the Board of Directors of First
Savings.  Each director serving on the Board of Directors of First Savings as of
the date hereof and as of the  Effective  Time shall  remain a director of First
Savings for a period of not less than sixty (60) months  following the Effective
Time. Directors of First Savings shall be entitled to be compensated at the same
rate following the Effective  Time as the Board of Directors is currently  being
compensated,  subject to  increases in  accordance  with the policies of Bancorp
related to the compensation of directors of the Bank.

 ..............Section  2.7. Conversion of Securities.  At the Effective Time, by
virtue of the Merger and without any action on the part of Bancorp, the Company,
or the holder of any of the following securities:

 ..............  (a) Each  share of  Bancorp  Common  Stock  that is  issued  and
outstanding immediately prior to the Effective Time shall remain outstanding and
shall be unchanged after the Merger; and

 .............. (b) Subject to Sections 2.9, and 2.10 hereof:

 ..............  (i) each share of Company  Common Stock  issued and  outstanding
immediately  prior to the Effective Time shall cease to be outstanding and shall
be converted  into and become the right to receive a number of shares of Bancorp
Common Stock equal to the Exchange Ratio, provided,  however, that any shares of
Company Common Stock held by the Company,  Bancorp,  or any of their  respective
Subsidiaries,  in each case other than in a fiduciary capacity or as a result of
debts  previously  contracted,  shall be canceled and shall not be exchanged for
shares of Bancorp Common Stock; and

 ..............  (ii) each share of Company  Common Stock issued and  outstanding
pursuant to the Company's  recognition and retention plan  immediately  prior to
the Effective Time shall cease to be outstanding and shall be converted into and
become the right to receive a number of shares of Bancorp  Common Stock equal to
the Exchange Ratio and shall  continue to be subject to the same  conditions and
limitations  as such Company Common Stock was subject  immediately  prior to the
Effective Time.

 ..............Section 2.8. Exchange Procedures. (a) At or prior to the Effective
Time, Bancorp shall deposit,  or shall cause to be deposited,  with the Exchange
Agent,  for the benefit of the holders of  certificates  of Company Common Stock
for exchange in accordance with this Article II,  certificates  representing the
shares of Bancorp  Common  Stock and an  estimated  amount of cash to be paid in
lieu of fractional shares to be paid pursuant to this Article II in exchange for
outstanding shares of Company Common Stock.

 ..............  (b) Holders of record of certificates which immediately prior to
the Effective Time represented  outstanding  shares of Company Common Stock (the
"Certificates")  shall be instructed to tender such Certificates to Bancorp,  or
to an exchange agent designated by Bancorp (the "Exchange Agent"), pursuant to a
letter of  transmittal  that Bancorp  shall  deliver or cause to be delivered to
such holders as promptly as  practicable  following  the  Effective  Time.  Such
letter of transmittal  shall specify that risk of loss and title to Certificates
shall pass only upon  delivery of such  Certificates  to Bancorp or the Exchange
Agent.

 .............. (c) Subject to Section 2.9, after the Effective Time, each holder
of a Certificate(s)  that surrenders such  Certificate(s) to Bancorp,  or to the
Exchange Agent,  will, upon acceptance thereof by Bancorp or the Exchange Agent,
be entitled to (x) a  certificate  or  certificates  representing  the number of
whole shares of Bancorp  Common Stock into which the shares  represented  by the
Certificate(s) so surrendered  (aggregating all Certificates surrendered by such
holder)  shall have been  converted  pursuant to this  Agreement and (y) a check
representing  the amount of any cash in lieu of fractional  shares,  if any, and
dividends and distributions,  if any, which such holder has the right to receive
hereunder with respect to the Certificate(s) so surrendered,  in each case after
giving effect to any required withholding tax.

 ..............  (d) Bancorp or, at the election of Bancorp,  the Exchange Agent,
shall  accept  Certificates  upon  compliance  with  such  reasonable  terms and
conditions  as  Bancorp  or the  Exchange  Agent may impose to effect an orderly
exchange thereof in accordance with customary exchange  practices.  Certificates
shall be  appropriately  endorsed or accompanied by such instruments of transfer
as Bancorp or the Exchange Agent may reasonably require.

 ..............  (e) All shares of Bancorp  Common Stock issued upon surrender of
Certificates  in  accordance  with the  terms  hereof  (including  any cash paid
pursuant to this  Article II) shall be deemed to have been in full  satisfaction
of all rights  pertaining  to such shares of Company  Common  Stock  represented
thereby.  After the Effective Time,  holders of Certificates shall cease to have
rights with respect to the shares previously  represented by such  Certificates,
and  their  sole  rights  shall  be  to  exchange  such   Certificates  for  the
consideration provided for in this Agreement.

 ..............  (f) After the Effective Time, there shall be no further transfer
on the  records of the Company of  Certificates,  and if such  Certificates  are
presented to the Company for transfer,  they shall be canceled  against delivery
of the consideration  provided therefor in this Agreement.  Bancorp shall not be
obligated  to deliver the  consideration  to which any former  holder of Company
Common Stock is entitled as a result of the Merger until such holder  surrenders
the  Certificates as provided herein.  Certificates  surrendered for exchange by
any person  constituting  an "affiliate" of the Company for purposes of Rule 145
of the  Securities  Act,  shall not be exchanged for  certificates  representing
Bancorp  Common Stock until Bancorp has received a written  agreement  from such
person in the form attached  hereto as Exhibit A. Neither the Exchange Agent nor
any party to this  Agreement  nor any  Affiliate  thereof shall be liable to any
holder of stock represented by any Certificate for any  consideration  paid to a
public official pursuant to applicable  abandoned  property,  escheat or similar
laws.  Bancorp and the  Exchange  Agent shall be entitled to rely upon the stock
transfer  books of the  Company  to  establish  the  identity  of those  persons
entitled to receive consideration specified in this Agreement, which books shall
be conclusive  with respect  thereto.  In the event of a dispute with respect to
ownership  of stock  represented  by any  Certificate,  Bancorp and the Exchange
Agent  shall be entitled to deposit  any  consideration  represented  thereby in
escrow with an  independent  third party and thereafter be relieved with respect
to any claims thereto.

 ..............  (g) Notwithstanding  any other provisions of this Agreement,  no
dividends or other distributions  declared or made after the Effective Time with
respect to Bancorp  Common Stock having a record date after the  Effective  Time
shall  be paid  to the  holder  of any  unsurrendered  Certificate,  and no cash
payment in lieu of fractional shares shall be paid to any such holder, until the
holder shall surrender such Certificate as provided in this Section 2.8. Subject
to the effect of Applicable Laws,  following  surrender of any such Certificate,
there shall be paid to the holder of the certificates  representing whole shares
of Bancorp Common Stock issued in exchange  therefor,  without interest,  (i) at
the time of such surrender,  the amount of dividends or other distributions with
a record date on or after the Effective Time theretofore payable with respect to
such whole shares of Bancorp  Common Stock and not paid,  less the amount of any
withholding  taxes which may be required  thereon,  and (ii) at the  appropriate
payment  date  subsequent  to  surrender,  the  amount  of  dividends  or  other
distributions  with a record  date on or after the  Effective  Time but prior to
surrender  and a payment date  subsequent  to surrender  payable with respect to
such whole shares of Bancorp  Common Stock,  less the amount of any  withholding
taxes which may be required thereon.

 ..............Section  2.9.  No  Fractional  Shares.  Notwithstanding  any other
provision  of this  Agreement,  neither  certificates  nor scrip for  fractional
shares of Bancorp  Common  Stock shall be issued in the Merger.  Each holder who
otherwise  would have been  entitled to a fraction of a share of Bancorp  Common
Stock  shall  receive  in lieu  thereof  cash  (without  interest)  in an amount
determined by  multiplying  the  fractional  share interest to which such holder
would  otherwise  be entitled by the average of the closing  prices per share of
Bancorp  Common Stock for the five full trading days  immediately  preceding the
Closing  Date as  reported  on the NASDAQ NMS (as  reported  in The Wall  Street
Journal  or,  if  not  reported   therein,   in  another  mutually  agreed  upon
authoritative  source).  No such holder shall be entitled to  dividends,  voting
rights, or any other rights in respect of any fractional share.

 ..............Section 2.10. Anti-Dilution  Adjustments.  In the event that prior
to the Effective  Time Bancorp shall (or shall  establish a record date prior to
the  Effective  Time  for the  following)  declare  a stock  dividend  or  other
distribution  payable in Bancorp  Common Stock or  securities  convertible  into
Bancorp Common Stock or a distribution otherwise Previously Disclosed, or effect
a stock split,  reclassification,  combination,  or other change with respect to
Bancorp  Common Stock,  the Exchange Ratio or the Merger  Consideration,  as the
case  may  be,  shall  be  appropriately  adjusted  to  reflect  such  dividend,
distribution, stock split, reclassification,  combination, or other change, such
that  the  shareholders  of the  Company  shall  be  entitled  to same as if the
Effective Time had occurred prior thereto.

 ..............Section  2.11.  Treatment  of  Stock  Options.  (a)  Prior  to the
Effective  Time,  Bancorp and the Company  shall take all such actions as may be
necessary  to cause each  unexpired  and  unexercised  option under stock option
plans of the  Company  in effect on the date  hereof  which has been  granted to
current  or former  directors,  officers,  or  employees  of the  Company by the
Company  (each,  a  "Company  Option")  to be  automatically  converted  at  the
Effective Time into an option (an "Exchange  Option") to purchase that number of
shares of Bancorp  Common Stock equal to the number of shares of Company  Common
Stock  issuable  immediately  prior to the  Effective  Time upon exercise of the
Company  Option  (without  regard  to  actual  restrictions  on  exercisability)
multiplied by the Exchange  Ratio  (fractional  shares as a result thereof to be
subject  to the terms of the  respective  Company  Options  and the terms of the
plans governing same),  with an exercise price equal to the exercise price which
existed under the  corresponding  Company Option divided by the Exchange  Ratio,
and  with  other  terms  and  conditions  that  are the  same as the  terms  and
conditions  of such  Company  Option  immediately  before  the  Effective  Time,
provided  that with respect to any Company  Option that is an  "incentive  stock
option" within the meaning of Section 422 of the Code, the foregoing  conversion
shall be carried out in a manner  satisfying the  requirements of Section 424(a)
of the Code. In connection with the issuance of Exchange Options,  Bancorp shall
(i) reserve for issuance the number of shares of Bancorp  Common Stock that will
become subject to Exchange  Options  pursuant to this Section 2.11 and (ii) from
and after the Effective Time, upon exercise of Exchange Options,  make available
for issuance all shares of Bancorp Common Stock covered thereby,  subject to the
terms and conditions applicable thereto.

 ..............  (b) The Company agrees to issue treasury  shares of the Company,
to the extent  available,  upon the  exercise  of Company  Options  prior to the
Effective Time.

 ..............  (c)  Bancorp  agrees to file with the SEC within one month after
the Closing Date a registration  statement on Form S-8 or other appropriate form
under the  Securities  Act to register  shares of Bancorp  Common Stock issuable
upon exercise of the Exchange  Options and use its  reasonable  efforts to cause
such registration statement to remain effective until the exercise or expiration
of all of such Exchange Options. Such registration  statement may be in the form
of either an initial filing or a  post-effective  amendment to the  registration
statement  on  Form  S-4  filed  in  connection  with  this  Agreement  and  the
transactions contemplated hereby.

 ..............Section 2.12. Reservation of Right to Revise Transaction.  Bancorp
may at any time change the method of effecting the acquisition of the Company or
the Company  Subsidiaries  by Bancorp,  and the Company shall  cooperate in such
efforts,  if and to the extent  Bancorp  deems such change to be  desirable  and
subject to the Company's  approval  (which  approval  shall not be  unreasonably
withheld);  provided, however, that no such change shall (A) alter or change the
amount or kind of  consideration to be issued to holders of Company Common Stock
as provided for in this  Agreement (the "Merger  Consideration"),  (B) adversely
affect the tax treatment to the Company's  shareholders as a result of receiving
the  Merger  Consideration,  or (C)  materially  delay the  consummation  of the
transactions contemplated by this Agreement.

                                   ARTICLE III
                                  FIRST SAVINGS

 ..............Section   3.1.   Liquidation   Account.  The  liquidation  account
established  by First  Savings  pursuant  to the plan of  conversion  adopted in
connection  with its conversion  from mutual to stock form shall,  to the extent
required by Applicable Law, continue to be maintained by First Savings after the
Effective  Time for the benefit of those  persons and  entities who were savings
account holders of First Savings on the eligibility and supplemental eligibility
record  dates for such  conversion  and who  continue  from time to time to have
rights therein.

                                   ARTICLE IV
         REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND FIRST SAVINGS

 ..............The  Company and First Savings jointly and severally represent and
warrant to Bancorp and the Bank, except as otherwise  Previously  Disclosed,  as
follows:

 ..............Section 4.1. Organization,  Good Standing,  Authority,  Insurance,
Etc. (a) The Company is a corporation organized,  existing, and in good standing
under the laws of the State of Delaware, and is registered as a savings and loan
holding company with the OTS under the HOLA.  First Savings is a federal savings
association.  Each  "subsidiary"  of the  Company  within the meaning of Section
10(a)(1)(G) of HOLA  (individually a "Company  Subsidiary" and  collectively the
"Company  Subsidiaries"),  has been  Previously  Disclosed.  Each of the Company
Subsidiaries  is organized,  existing and in good standing under the laws of the
respective jurisdiction under which it is organized, as set forth in the Company
Disclosure  Schedule.  Each of the Company and the Company  Subsidiaries has all
requisite  corporate power and corporate authority and is qualified and licensed
to own,  lease and operate its  properties and conduct its business as it is now
being  conducted,  except for such  failure or  failures to be so  qualified  or
licensed as would not, in the aggregate, have a Company Material Adverse Effect.
The Company has made  available to Bancorp a true,  complete and correct copy of
the articles of incorporation, charter, or other organizing documents and of the
bylaws of the Company and each  Company  Subsidiary  as in effect on the date of
this Agreement. Each of the Company and the Company Subsidiaries is qualified to
do  business  as  a  foreign  corporation  and  is  in  good  standing  in  each
jurisdiction in which qualification is necessary under Applicable Law, except to
the extent that any failures to so qualify would not, in the  aggregate,  have a
Company Material  Adverse Effect.  First Savings is a member in good standing of
the Federal Home Loan Bank of Indianapolis,  and all eligible accounts issued by
First Savings are insured by the Savings Association  Insurance Fund ("SAIF") as
administered by the FDIC to the maximum extent  permitted under  Applicable Law,
and all premiums and assessments required in connection therewith have been paid
by First Savings. First Savings is a "domestic building and loan association" as
defined in Section  7701(a)(19) of the Code, and is a "qualified  thrift lender"
as defined in Section 10(m) of the HOLA.

 ..............  (b) The minute books of the Company and the Company Subsidiaries
contain  records of all  meetings and other  corporate  actions held or taken of
their respective  shareholders and Boards of Directors (including the committees
of such Boards) since  January 1, 1996,  which records are complete and accurate
in all material respects and have been made available to Bancorp.

 ..............Section 4.2.  Capitalization.  The authorized capital stock of the
Company  consists of 2,000,000  shares of Company Common Stock, of which 702,734
shares were issued and outstanding as of the date of this Agreement, and 500,000
shares of  preferred  stock,  par value of $0.01 per share  ("Company  Preferred
Stock"),  of which no shares were  outstanding as of the date of this Agreement.
No  other  class or  series  of  capital  stock  of the  Company  is or has been
authorized.  As of the date of this  Agreement,  there were no shares of Company
Common  Stock and no shares of Company  Preferred  Stock  held in the  Company's
treasury and,  except as Previously  Disclosed,  there were no shares of Company
Common Stock reserved for issuance. All issued and outstanding shares of Company
Common Stock are duly authorized, validly issued, fully paid, nonassessable, and
free  of  preemptive  rights.  As of the  date  of  this  Agreement,  except  as
Previously Disclosed, there are no outstanding Rights to purchase or acquire any
capital  stock  of the  Company  and no oral  or  written  agreement,  contract,
arrangement, understanding, plan, or instrument of any kind to which the Company
or any of its Affiliates is subject with respect to the issuance, voting or sale
of issued or unissued shares of the capital stock of the Company.

 ..............Section 4.3. Ownership of Subsidiaries. All the outstanding shares
of the  capital  stock  or  other  ownership  interests  in  all of the  Company
Subsidiaries   are  validly  issued,   fully  paid,   nonassessable   and  owned
beneficially and of record by the Company or a Company Subsidiary free and clear
of any Encumbrance.  There are no outstanding  Rights to purchase or acquire any
capital  stock  of any  Company  Subsidiary  and no oral or  written  agreement,
contract, arrangement,  understanding,  plan, or instrument of any kind to which
any of the  Company  or any of its  Affiliates  is subject  with  respect to the
issuance,  voting or sale of issued or unissued  shares of the capital  stock of
any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiary
owns any of the capital stock or other equity  securities  (including any Rights
with respect to such  securities) of or profit  participations  in any Person or
"company" (as defined in Section 10(a)(1)(C) of the HOLA) other than the Federal
Home Loan Bank of Indianapolis and the Company Subsidiaries.

 ..............Section  4.4. Financial Statements and Reports. For the past three
years, the Company and the Company Subsidiaries have timely filed all Regulatory
Documents  required to be filed by them,  except to the extent that all failures
to so file, in the aggregate,  would not have a Company Material Adverse Effect;
and all such documents,  as finally amended,  complied in all material  respects
with applicable  requirements of Applicable Law and, as of their respective date
or the date as amended,  did not contain any untrue statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading.  Except to the  extent  stated  therein,  all  financial
statements and schedules  included in the documents referred to in the preceding
sentences (i) are in accordance  with the Company's  books and records and those
of any of the Company  Subsidiaries,  which books and records are  complete  and
accurate in all  material  respects  and have been  maintained  in all  material
respects  in  accordance  with  Applicable  Law,  and (ii)  present  fairly  the
consolidated  financial position and the consolidated  results of operations and
cash  flows of the  Company  as of the dates and for the  periods  indicated  in
accordance with GAAP  consistently  applied during the periods  involved (except
for the  omission of notes to  unaudited  statements,  year-end  adjustments  to
interim  results  normal in nature and  amount,  and  changes in GAAP and except
where  regulatory  reporting   requirements  provide  otherwise).   The  audited
consolidated financial statements of the Company as of June 30, 1999 and for the
three years then ended last filed by the Company as part of a publicly available
Regulatory  Document  disclose  all  liabilities  (whether  accrued,   absolute,
contingent,  unliquidated,  or  otherwise,  whether  due or to  become  due  and
regardless of when asserted),  as of their respective  dates, of the Company and
the Company  Subsidiaries  required to be reflected in such financial statements
according  to GAAP,  other than  liabilities  which are not,  in the  aggregate,
material  to the Company and the  Company  Subsidiaries,  taken as a whole,  and
contain in the opinion of management,  adequate reserves for losses on loans and
properties  acquired  in  settlement  of loans,  Taxes,  and all other  material
accrued  liabilities  and for all  reasonably  anticipated  material  losses  in
accordance with GAAP, if any, as of such date.  Except for (i) those liabilities
that  are  fully  reflected  or  reserved  against  on  the  Company's   audited
consolidated  balance  sheet  last  filed by the  Company  as part of a publicly
available  Regulatory  Document  and (ii)  liabilities  incurred in the ordinary
course of business since the date of such audited consolidated balance sheet and
which  would not have,  individually  or in the  aggregate,  a Company  Material
Adverse  Effect,  the Company has no  liabilities  or obligations of any nature,
whether absolute, accrued, contingent, or otherwise and whether due or to become
due,  which  are or would be  required  by GAAP to be shown on its  consolidated
balance sheet.

 ..............Section  4.5.  Absence  of  Changes.  (a) Except as  disclosed  in
publicly available  Regulatory  Documents filed by the Company prior to the date
of this  Agreement,  since June 30, 1999,  there has been no event,  occurrence,
development,  fact, or set of  circumstances  of any nature  existing or, to the
knowledge of the Company,  threatened  which,  individually or in the aggregate,
has had or could  reasonably  be  expected  to have a Company  Material  Adverse
Effect.

 .............(b) Except as  Previously  Disclosed,  since  June 30,  1999,  each
of  the  Company  and  the  Company  Subsidiaries  has  owned  and  operated its
respectiveassets, properties, and businesses in the ordinary  course of business
and consistent with past practice and has not taken any action  or suffered  any
event that if taken or suffered  after the date  hereof  would  violate  Section
 6.1 of this Agreement.

 ..............Section  4.6.  No Broker's or  Finder's  Fees.  No agent,  broker,
investment  banker,  Person,  or firm acting on behalf or under authority of the
Company  or any of the  Company  Subsidiaries  is or  will  be  entitled  to any
broker's  or finder's  fee or any other  commission  or similar fee  directly or
indirectly in connection with the Merger or any other  transaction  contemplated
hereby,  except the  Company  has  engaged  Trident  Securities,  a Division  of
McDonald  Investments,  Inc., an investment  banking firm, to provide  financial
advisory services.

 ..............Section  4.7.  Litigation  and Other  Proceedings.  (a) Except for
matters  which would not have,  in the  aggregate,  a Company  Material  Adverse
Effect, neither the Company nor any Company Subsidiary is a defendant in, nor is
any of its property subject to, any pending or, to the knowledge of the Company,
threatened  claim,  action,  suit,  investigation,  or  proceeding.  There is no
judicial  order,  judgment,  or decree to which any of the Company,  the Company
Subsidiaries,  or their respective  properties is subject which has had or could
reasonably be expected to have a Company Material Adverse Effect.

 ..............  (b) All pending  claims,  actions,  suits,  investigations,  and
proceedings  in which the Company or any Company  Subsidiary  is a defendant and
all judicial orders,  judgments,  or decrees to which the Company or any Company
Subsidiary is subject have been Previously Disclosed.

 ..............Section  4.8.  Compliance  with Law.  The  Company and the Company
Subsidiaries  have been in compliance in all respects with all Applicable  Laws,
except where such  noncompliance  would not have,  in the  aggregate,  a Company
Material Adverse Effect,  and neither the Company nor any Company Subsidiary has
received notice from any  Governmental  Authority of any material  violation of,
and does not know of any material violations of, any Applicable Law.

 ..............Section  4.9.  Corporate  Actions.  The Board of  Directors of the
Company by at least a two-thirds vote of the Continuing  Directors (as such term
is defined in Article XV of the  Company's  Certificate  of  Incorporation)  has
authorized its appropriate officers to execute and deliver this Agreement and to
take all action  necessary to consummate  the Merger and the other  transactions
contemplated  hereby.  Except  for  obtaining  the  requisite  approval  of  the
Company's  shareholders as contemplated  hereby, all corporate  authorization by
the  Board  of  Directors  and  shareholders  of the  Company  required  for the
consummation  of the Merger and the  transactions  contemplated  hereby has been
obtained.

 ..............Section  4.10.  Authority.  Except as  Previously  Disclosed,  the
execution,  delivery,  and performance by the Company of its  obligations  under
this Agreement and the  consummation  thereby of the  transactions  contemplated
hereby do not, and will not,  violate or conflict with any of the provisions of,
or  constitute a breach or default (or an event  which,  with notice or lapse of
time, or both, would constitute a breach or default) under, terminate,  give any
Person the right to terminate, modify or accelerate payment or performance under
or  result  in  the  creation  of any  Encumbrance  upon  any of the  respective
properties  or assets of the  Company or any  Company  Subsidiary  under (i) the
articles  of  incorporation,  charter or bylaws of the  Company  or any  Company
Subsidiary,  (ii) subject to the Governmental  Approvals and the approval of the
Company's  shareholders described below, any Applicable Law to which the Company
or any of the Company  Subsidiaries  is subject or (iii)  except,  in each case,
where  such  violation,  conflict,  breach,  default,  termination  (or right to
terminate), modification, acceleration or Encumbrance would not, individually or
in the aggregate, have a Company Material Adverse Effect, any agreement,  lease,
contract,  note,  mortgage,  indenture,   arrangement  or  other  obligation  or
instrument, whether oral or written ("Contract"), to which the Company or any of
the  Company  Subsidiaries  is a party or is  subject  or by which  any of their
properties  or assets is bound or  affected.  The parties  acknowledge  that the
consummation  of the  Merger is subject to  various  regulatory  approvals.  The
Company has all requisite  corporate power and corporate authority to enter into
this Agreement and to perform its obligations hereunder. Other than the filings,
notices,  approvals,  and consents with or of the  Governmental  Authorities  as
Previously  Disclosed (the "Governmental  Approvals") and the requisite approval
of the Company's  shareholders  as  contemplated  hereby,  no filings,  notices,
approvals,  or  consents  are  required  on behalf of the Company or any Company
Subsidiary in connection with the consummation of the transactions  contemplated
by  this  Agreement.  The  Company  has no  knowledge  of  any  reason  why  the
Governmental  Approvals  cannot be obtained or granted on a timely  basis.  This
Agreement  constitutes  the valid and binding  obligation  of the Company and is
enforceable  in  accordance  with its  terms,  except as  enforceability  may be
limited by  Applicable  Laws  relating to  bankruptcy,  insolvency  or creditors
rights generally,  the rights of creditors of insured  depository  institutions,
and general principles of equity.

 .............Section   4.11.  Employment  Arrangements.   Except  as  Previously
Disclosed, there are no employment, incentive compensation,  severance, or other
agreements,  plans,  or  arrangements  with any  current  or  former  directors,
officers, or employees of the Company or any Company Subsidiary which may not be
terminated   without  penalty  or  liability   (including  any  augmentation  or
acceleration  of  benefits)  on thirty (30) days or less notice to such  Person.
Except as Previously Disclosed,  neither the execution of this Agreement nor the
consummation of the transactions  contemplated hereby will (either alone or upon
the  occurrence of additional  events or acts) result in, cause the  accelerated
vesting or  delivery  of, or  increase  the  amount or value of, any  payment or
benefit to any  employee,  officer,  or  director  of the Company or any Company
Subsidiary.  Except as  Previously  Disclosed,  no  amount  paid or  payable  to
directors,  officers, or employees of the Company or the Company Subsidiaries in
connection with the transactions  contemplated hereby (either solely as a result
of such transactions or as a result of such transactions in conjunction with any
other event) will cause the imposition of excise taxes under Section 4999 of the
Code or the  disallowance of a deduction  pursuant to Sections 162, 280G, or any
other section of the Code.

 ..............Section  4.12. Employee Benefits.  (a) Neither the Company nor any
of the Company  Subsidiaries  maintains,  contributes to, or sponsors any funded
deferred  compensation  plans (including profit sharing,  pension,  savings,  or
stock bonus plans),  unfunded deferred  compensation  arrangements,  or employee
benefit  plans as  defined  in  Section  3(3) of  ERISA,  other  than any  plans
("Company Employee Benefit Plans") Previously Disclosed (true and correct copies
of which  have been  delivered  to  Bancorp).  Except as  Previously  Disclosed,
neither the Company nor any of the Company  Subsidiaries  (i)  provides  health,
medical,  death,  or  survivor  benefits to any former  employee or  beneficiary
thereof,  or (ii)  maintains  any form of current  (exclusive of base salary and
base wages) or deferred  compensation,  bonus, stock option,  stock appreciation
right,  benefit,  severance pay,  retirement,  incentive,  group,  or individual
health insurance, welfare, or similar plan or arrangement for the benefit of any
single or class of directors,  officers, or employees, whether active or retired
(collectively "Benefit Arrangements").

 ..............  (b) All Company Employee Benefit Plans and Benefit  Arrangements
which are in effect were in effect for  substantially  all of calendar year 1998
and,  except  as  Previously  Disclosed,  there has been no  material  amendment
thereof  (other than  amendments  required to comply with  Applicable  Law) and,
except as  disclosed in publicly  available  Regulatory  Documents  filed by the
Company prior to the date of this  Agreement,  no material  increase in the cost
thereof, or benefits payable thereunder on or after January 1, 1999.

 .............  (c) To the knowledge of the Company,  with respect to all Company
Employee  Benefit Plans and Benefit  Arrangements,  the Company and each Company
Subsidiary are in substantial compliance with the requirements prescribed by any
and all Applicable Laws currently in effect,  including but not limited to ERISA
and the Code,  applicable  to such  Company  Employee  Benefit  Plans or Benefit
Arrangements.  None of the  Company  Employee  Benefit  Plans  which are defined
benefit  pension  plans  have  incurred  any  "accumulated  funding  deficiency"
(whether  or not  waived) as that term is defined in Section 412 of the Code and
the fair  market  value of the assets of each such plan  equals or  exceeds  the
accrued liabilities of such plan. To the knowledge of the Company, there are not
now nor have there been any non-exempt  "prohibited  transactions," as such term
is defined in Section  4975 of the Code or Section 406 of ERISA,  involving  the
Company Employee Benefit Plans which could subject Company or any of the Company
Subsidiaries  to the penalty or Tax  imposed  under  Section  502(i) of ERISA or
Section 4975 of the Code.

 .............  (d) No Company Employee Benefit Plan which is subject to Title IV
of ERISA  has  been  completely  or  partially  terminated;  no  proceedings  to
completely or partially  terminate any Company  Employee  Benefit Plan have been
instituted  within the meaning of  Subtitle C of said Title IV of ERISA;  and no
reportable  event,  within the meaning of Section 4043(c) of said Subtitle C for
which the 30-day notice  requirement of ERISA has not been waived,  has occurred
with respect to any Company Employee Benefit Plan.

 .............  (e) No Company Employee Benefit Plan or Benefit  Arrangement is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA or a plan
that has two or more  contributing  sponsors  at least two of whom are not under
common control, within the meaning of Section 4063 of ERISA.

 .............  (f) Neither the Company nor any Company Subsidiary has engaged in
any  transaction  described in Section 4069 of ERISA within the last five years.
There does not now exist, nor do any  circumstances  exist that could result in,
any liability of the Company or any Company Subsidiary (or any entity, trade, or
business that is or was at any time  required to be aggregated  with the Company
or any Company  Subsidiary  under Section 414(b),  (c), (m), or (o) of the Code)
under  Title IV of ERISA,  Section  302 of ERISA,  Sections  412 and 4971 of the
Code, the continuation coverage requirements of Section 601 et seq. of ERISA and
Section 4980B of the Code, other than such liabilities that arise solely out of,
or relate solely to, the Company Employee Benefit Plans or Benefit Arrangements,
that would be a liability of Bancorp, a Bancorp  Subsidiary,  the Company,  or a
Company Subsidiary following consummation of the Merger.

 .............  (g) Neither the Company nor any Company  Subsidiary has failed to
make any  contribution  or pay any amount due and owing as required by the terms
of any Company Employee Benefit Plan or Benefit Arrangement. None of the Company
or any of the Company  Subsidiaries has incurred or reasonably  expects to incur
any liability to the Pension Benefit  Guaranty  Corporation  except for required
premium  payments which,  to the extent due and payable,  have been paid. To the
knowledge of the Company,  the Company  Employee  Benefit  Plans  intended to be
qualified under Section 401(a) of the Code are so qualified,  and the Company is
not aware of any fact which would adversely  affect the qualified status of such
plans.

 ..............Section  4.13. Information Furnished;  Registration Statement. (a)
To the  knowledge  of the  Company,  no  statement  contained  in any  schedule,
certificate or other document  furnished  (whether prior to or subsequent to the
date of this  Agreement)  or to be  furnished  in writing by or on behalf of the
Company or any of its Affiliates to Bancorp pursuant to this Agreement  contains
or will  contain  any untrue  statement  of a  material  fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

 ..............  (b)  None of the  information  provided  by the  Company  or any
Company Subsidiary for inclusion in the registration statement on Form S-4 to be
filed with the SEC by Bancorp  under the  Securities  Act  relating to shares of
Bancorp Common Stock to be issued in the Merger,  including the prospectus  (the
"Prospectus")  relating to such issuance and the joint proxy statement and forms
of proxy relating to the vote of Bancorp  shareholders and Bancorp  shareholders
with respect to the Merger (as  amended,  supplemented  or modified,  the "Proxy
Statement")   contained  therein  (such   registration   statement  as  amended,
supplemented  or  modified,  the  "Registration  Statement"),  at the  time  the
Registration Statement becomes effective or, in the case of the Proxy Statement,
at the date of mailing,  will contain any untrue statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they are made,  not  misleading.  Each of the  Registration  Statement and Proxy
Statement,  except for such  portions  thereof  that relate only to Bancorp or a
Bancorp  Subsidiary,  will comply as to form in all material  respects  with the
provisions of the Securities Act and Exchange Act, as applicable.

 ..............Section  4.14.  Property  and Assets.  The Company and the Company
Subsidiaries  have  good and  marketable  title to all of  their  real  property
reflected in the consolidated  financial statements last filed by the Company as
part of a publicly available Regulatory Document or acquired subsequent thereto,
free and clear of all Encumbrances,  except for (a) such items reflected in such
financial  statements or in the notes  thereto,  (b) liens for current taxes not
yet  delinquent,  (c) customary title  exceptions that have no material  adverse
effect upon the current use of such  property,  (d) property sold or transferred
in the ordinary course of business  consistent with past practice since the date
of such financial  statements  and (e) as otherwise  Previously  Disclosed.  The
Company and the Company  Subsidiaries enjoy peaceful and undisturbed  possession
under all material  leases for the use of real property under which they are the
lessee;  all of such  leases are valid and  binding and in full force and effect
and neither the Company nor any Company  Subsidiary is in default in any respect
under any such lease,  except  where such failure to be valid and binding and in
full force and effect, or where such default,  would not have, in the aggregate,
a Company  Material Adverse Effect.  There has been no physical loss,  damage or
destruction,  whether or not covered by insurance, affecting the real properties
of the Company and the Company  Subsidiaries  since June 30,  1999,  except such
loss,  damage or destruction  which would not have, in the aggregate,  a Company
Material  Adverse Effect.  All property and assets material to their  businesses
and  currently  used by the  Company and the  Company  Subsidiaries  are, in all
material respects,  in good operating condition and repair, normal wear and tear
excepted.

 ..............Section  4.15.  Agreements and  Instruments.  Except as Previously
Disclosed, neither the Company nor any Company Subsidiary is a party to:

 ............. (a) any material Contract;

 ............. (b) any Contract relating to the borrowing of money by the Company
or any  Company  Subsidiary  or the  guarantee  by the  Company  or any  Company
Subsidiary  of any such  obligation  (other than Federal Home Loan Bank advances
with a maturity of one year or less from the date hereof);

 .............  (c) any Contract to make loans or for the provision, purchase, or
sale  of  goods,  services  or  property  between  the  Company  or any  Company
Subsidiary and any director or officer of the Company or any Company Subsidiary,
or any  member of the  immediate  family or  Affiliate  of any of the  foregoing
(other  than loans or  deposits  made on an  arms-length  basis in the  ordinary
course of business);

 .............  (d) any  Contract  with  or  concerning  any  labor  or  employee
organization;

 ............. (e) any Contract between the Company or any Company Subsidiary and
any Affiliate  thereof  (other than  Contracts  solely between the Company and a
Company Subsidiary or solely between Company Subsidiaries);

 .............  (f) any agreements,  directives,  orders, or similar arrangements
between or involving the Company or any Company  Subsidiary and any Governmental
Authority;

 .............  (g) any Contract with respect to the  employment,  retention,  or
severance of any directors, officers, employees, or consultants;

 .............  (h) any Contract  which  materially  restricts the conduct of any
line of business by the Company or any current or future Affiliates thereof; or

 .............  (i) any  Contract  pursuant  to which the  Company or any Company
Subsidiary is or may become obligated to invest in or contribute  capital to any
Company Subsidiary.

 ..............Section  4.16. Material Contract Defaults. Neither the Company nor
any Company  Subsidiary  nor, to the  knowledge of the Company,  the other party
thereto is in  default in any  respect  under any  Contract  to which any of the
Company  or the  Company  Subsidiaries  is a party  or by which  its  respective
assets,  business,  or operations  may be bound or affected or under which it or
its respective assets, business, or operations receives benefits, other than any
such  default or defaults  which  would not have,  in the  aggregate,  a Company
Material  Adverse  Effect,  and there has not occurred any event that,  with the
lapse of time or the giving of notice or both,  would constitute such a default.
To the knowledge of the Company,  all material Contracts to which the Company or
any of the Company Subsidiaries is a party are valid, binding, and in full force
and effect.

 ..............Section  4.17. Tax Matters.  (a) The Company,  each of the Company
Subsidiaries, and any affiliated group (within the meaning of Section 1504(a) of
the Code) of which the  Company or any of the Company  Subsidiaries  is a member
have filed all Tax  Returns  required  to be filed by them and have made  timely
payments of all Taxes due and payable, whether disputed or not; such Tax Returns
are true, correct, and complete in all material respects;  the current status of
audits of such Tax  Returns by the IRS and other  applicable  agencies  has been
Previously  Disclosed;  and there is no  agreement by the Company or any Company
Subsidiary  for the waiver or extension of time for the assessment or payment of
any  Taxes  payable.  Neither  the IRS nor any  other  taxing  authority  is now
asserting  or, to the  knowledge  of the  Company,  threatening  to  assert  any
deficiency or claim for additional Taxes, nor to the knowledge of the Company is
there any basis for any such  assertion  or claim.  The  Company and each of the
Company  Subsidiaries have complied in all material respects with applicable IRS
backup  withholding  requirements  and have  filed all  appropriate  information
reporting returns for all Tax years for which the statute of limitations has not
closed.

 .............. (b) Adequate provision for any Taxes due or to become due for the
Company or any of the Company Subsidiaries for any period or periods through and
including  June 30,  1999,  has been made and is  reflected on the June 30, 1999
consolidated  financial  statements  last  filed  by the  Company  as  part of a
publicly available Regulatory Document and has been or will be made with respect
to periods ending after June 30, 1999.

 ..............Section  4.18.  Environmental  Matters.  To the  knowledge  of the
Company,  neither the Company nor any  Company  Subsidiary  owns any  properties
affected by toxic waste, radon gas, or other hazardous conditions or constructed
in part with the use of asbestos. Neither the Company nor any Company Subsidiary
has knowledge of, nor has the Company or any Company Subsidiary received written
notice  from  any  Governmental   Authority  of,  any  conditions,   activities,
practices, or incidents which are reasonably likely to interfere with or prevent
compliance or continued compliance by the Company or any Company Subsidiary with
hazardous  substance  laws  or  any  regulation,  order,  decree,  judgment,  or
injunction,  issued, entered,  promulgated or approved thereunder,  or which may
give rise to any  legal  liability  on the part of the  Company  or any  Company
Subsidiary,  or otherwise form the basis of any claim, action, suit, proceeding,
hearing or  investigation  against or of the Company or any Company  Subsidiary,
based  on  or  related  to  the  manufacture,   processing,  distribution,  use,
treatment,   storage,  disposal,   transport,  or  handling,  or  the  emission,
discharge,   release,  or  threatened  release  into  the  environment,  of  any
pollutant,   contaminant,  or  chemical,  or  industrial,  toxic,  or  hazardous
substance  or  waste.  There is no civil,  criminal,  or  administrative  claim,
action, suit, proceeding, hearing, or investigation pending or, to the knowledge
of the  Company,  threatened  against  the  Company  or any  Company  Subsidiary
relating in any way to such hazardous  substance laws or any regulation,  order,
decree,  judgment  or  injunction  issued,  entered,   promulgated  or  approved
thereunder.  To the knowledge of the Company, none of the Company or the Company
Subsidiaries  has made or  participated in any loan to any Person who is subject
to any civil,  criminal,  or administrative  claim,  action,  suit,  proceeding,
hearing,  or investigation  relating in any way to such hazardous substance laws
or any regulation,  order,  decree,  judgment,  or injunction  issued,  entered,
promulgated or approved  thereunder and relating to the property secured by such
loan.

 ..............Section  4.19.  Loan  Portfolio;  Portfolio  Management.  (a)  All
evidences  of  indebtedness  reflected as assets in the  consolidated  financial
statements last filed by the Company as part of a publicly available  Regulatory
Document or acquired  since such date,  are (except with respect to those assets
which are no longer  assets of the  Company or any Company  Subsidiary)  binding
obligations of the respective  obligors named therein except as enforcement  may
be limited by  bankruptcy,  insolvency,  or other  similar  laws  affecting  the
enforcement of creditors rights  generally,  and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding  may be brought,  and the payment of no
material  amount  thereof  (either  individually  or in the aggregate with other
evidences of indebtedness) is subject to any defenses which have been threatened
or asserted against the Company or any Company Subsidiary. All such indebtedness
which is  secured  by an  interest  in real  property  is secured by a valid and
perfected mortgage lien having the priority specified in the loan documents. All
loans originated or purchased by the Company or any Company Subsidiaries were at
the time  entered  into and at all times  since have been in  compliance  in all
material  respects  with  all  Applicable  Laws.  The  Company  and the  Company
Subsidiaries  administer their loan and investment portfolios in accordance with
all Applicable Laws and the terms of applicable instruments.  The records of the
Company and the Company  Subsidiaries  regarding all loans  outstanding on their
books are accurate in all material respects and the risk  classification  system
has been established in accordance with the requirements of the OTS.

 ..............  (b) The Company and First  Savings have  Previously  Disclosed a
list,  accurate and complete in all material respects,  of the aggregate amounts
of loans,  extensions of credit, and other assets of the Company and the Company
Subsidiaries that have been adversely designated,  criticized,  or classified as
of June 30, 1999,  separated  by category of  classification  or criticism  (the
"Asset Classification"); and no amounts of loans, extensions of credit, or other
assets that have been adversely  designated,  classified or criticized as of the
date  hereof by any  representative  of any  Government  Authority  as  "Special
Mention,"  "Substandard,"  "Doubtful,"  "Loss," or words of  similar  import are
excluded  from the amounts  disclosed  in the Asset  Classification,  other than
amounts of loans, extensions of credit, or other assets that were charged off or
recovered  by the  Company or any of the  Company  Subsidiaries  before the date
hereof.

 ..............Section  4.20.  Real  Estate  Loans and  Investments.  Except  for
properties  acquired in settlement of loans, there are no facts,  circumstances,
or contingencies known to the Company which exist which would require a material
reduction  under GAAP in the  present  carrying  value of any of the real estate
investments,  joint ventures,  construction  loans, other investments,  or other
loans of the Company or any Company  Subsidiary  (either  individually or in the
aggregate with other loans and investments).

 ..............Section  4.21. Derivatives Contracts.  (a) Neither the Company nor
any of the  Company  Subsidiaries  is a party to or has  agreed to enter into an
exchange-traded or over-the-counter swap, forward, future, option, cap, floor or
collar financial contract or any other Contract not included on the consolidated
balance  sheet  last  filed  by the  Company  as  part of a  publicly  available
Regulatory Document which is a derivatives  contract or owns securities that are
identified  in Thrift  Bulletin  No.  13a as  "complex  securities,"  (including
various combinations thereof) (each, a "Derivatives Contract"), except for those
Derivatives Contracts Previously Disclosed,  including a list, as applicable, of
any of the  Company's  or  First  Savings'  assets  pledged  as  security  for a
Derivatives Contract.

 ..............  (b) All Derivative Contracts to which the Company or any Company
Subsidiary is a party or by which any of their properties or assets may be bound
were  entered into in the ordinary  course of business  and in  accordance  with
prudent banking practice, based on industry-wide standards at the time, and with
counterparties  believed by the  Company to be  financially  responsible  at the
time.

 ..............Section  4.22. Insurance. The Company and the Company Subsidiaries
have in effect insurance  coverage with reputable  insurers which, in respect of
amounts,  types, and risks insured,  is reasonably  adequate for the business in
which the Company and the Company  Subsidiaries  are engaged.  A schedule of all
insurance policies in effect as to the Company and the Company Subsidiaries (the
"Insurance  Policies")  has  been  Previously  Disclosed  (other  than  policies
pertaining  to  secured  loans made in the  ordinary  course of  business).  All
Insurance  Policies  are in full force and effect,  all  premiums  with  respect
thereto covering all periods up to and including the date of this Agreement have
been paid,  such  premiums  covering  all periods from the date hereof up to and
including  the  Effective  Date shall have been paid on or before the  Effective
Date,  to the extent then due and payable  (other  than  retrospective  premiums
which may be payable with respect to worker's  compensation  insurance policies,
adequate reserves for which are reflected in the Company's financial  statements
last filed by the Company as part of a publicly available Regulatory  Document).
The Insurance  Policies are valid,  outstanding,  and  enforceable in accordance
with  their  respective  terms  and  will  not in any  way be  affected  by,  or
terminated or lapsed solely by reason of, the transactions  contemplated by this
Agreement. To the knowledge of the Company,  neither the Company nor any Company
Subsidiary  has  been  refused  any  insurance  with  respect  to  any  material
properties,  assets  or  operations,  nor  has  any  coverage  been  limited  or
terminated  by any  insurance  carrier  to  which  it has  applied  for any such
insurance  or with  which it has  carried  insurance  during  the last three (3)
years.

 ..............Section  4.23. Tax  Treatment.  Neither the Company nor any of its
Affiliates has taken or agreed to take any action that or has failed to take any
action the result of which would (but without giving effect to any actions taken
or agreed to be taken by Bancorp or any of its  Affiliates)  prevent  the Merger
from qualifying as a "reorganization" under Section 368(a) of the Code.

                                    ARTICLE V
             REPRESENTATIONS AND WARRANTIES OF BANCORP AND THE BANK

 ..............Bancorp  and the Bank jointly and severally  represent and warrant
to the Company and First Savings,  except as otherwise Previously Disclosed,  as
follows:

 ..............Section 5.1. Organization,  Good Standing,  Authority,  Insurance,
Etc. (a) Bancorp is a  corporation  organized,  existing,  and in good  standing
under the laws of the State of Indiana,  and is registered as a savings and loan
holding  company  with the OTS  under the  HOLA.  The Bank is a federal  savings
association.  Each  "subsidiary"  of  Bancorp  within  the  meaning  of  Section
10(a)(1)(G) of HOLA  (individually a "Bancorp  Subsidiary" and  collectively the
"Bancorp  Subsidiaries")  has been  Previously  Disclosed.  Each of the  Bancorp
Subsidiaries is organized,  existing, and in good standing under the laws of the
respective  jurisdiction under which it is organized as set forth in the Bancorp
Disclosure  Schedule.  Each of  Bancorp  and the  Bancorp  Subsidiaries  has all
requisite  corporate power and corporate authority and is qualified and licensed
to own, lease,  and operate its properties and conduct its business as it is now
being  conducted,  except for such  failure or  failures to be so  qualified  or
licensed as would not, in the aggregate, have a Bancorp Material Adverse Effect.
Bancorp has made  available to the Company a true,  complete and correct copy of
the articles of incorporation,  charter or other organizing documents and of the
bylaws of Bancorp and each Bancorp  Subsidiary  as in effect on the date of this
Agreement.  Each of Bancorp  and the Bancorp  Subsidiaries  is  qualified  to do
business as a foreign  corporation and is in good standing in each  jurisdiction
in which  qualification  is necessary under Applicable Law, except to the extent
that any  failures  to so qualify  would not, in the  aggregate,  have a Bancorp
Material  Adverse  Effect.  The Bank is a member in good standing of the Federal
Home Loan Bank of Indianapolis, and all eligible accounts issued by the Bank are
insured by SAIF as  administered  by the FDIC to the  maximum  extent  permitted
under  Applicable Law, and all premiums and  assessments  required in connection
therewith have been paid by the Bank. The Bank is a "domestic  building and loan
association" as defined in Section  7701(a)(19) of the Code, and is a "qualified
thrift lender" as defined in Section 10(m) of the HOLA.

 ..............  (b) The minute  books of Bancorp  and the  Bancorp  Subsidiaries
contain  records of all  meetings and other  corporate  actions held or taken of
their respective  shareholders and Boards of Directors (including the committees
of such Boards) since  January 1, 1996,  which records are complete and accurate
in all material respects and have been made available to the Company.

 ..............Section  5.2.  Capitalization.  The  authorized  capital  stock of
Bancorp consists of 7,000,000 shares of Bancorp Common Stock, of which 3,183,717
shares  were  issued  and  outstanding  as of the  date of this  Agreement,  and
5,000,000  shares of serial  preferred  stock,  par value of $1.00 per share, of
which no shares were  outstanding  as of the date of this  Agreement.  As of the
date of this Agreement,  except as Previously Disclosed, there were no shares of
Bancorp Common Stock reserved for issuance. All issued and outstanding shares of
Bancorp  Common  Stock  are  duly  authorized,   validly  issued,   fully  paid,
nonassessable  and free of preemptive  rights. As of the date of this Agreement,
except as Previously Disclosed and as contemplated by this Agreement,  there are
no outstanding Rights to purchase or acquire any capital stock of Bancorp and no
oral  or  written  agreement,  contract,  arrangement,  understanding,  plan  or
instrument of any kind to which Bancorp or any of its Affiliates is subject with
respect  to the  issuance,  voting or sale of issued or  unissued  shares of the
capital  stock of  Bancorp.  The  shares of  Bancorp  Common  Stock to be issued
pursuant to the Merger will be duly  authorized  and validly  issued and, at the
Closing,  all  such  shares  will  be  fully  paid,  nonassessable  and  free of
preemptive  rights,  with  no  personal  liability  attaching  to the  ownership
thereof.

 .............Section 5.3. Ownership of Subsidiaries.  All the outstanding shares
of the  capital  stock  or  other  ownership  interests  in  all of the  Bancorp
Subsidiaries   are  validly  issued,   fully  paid,   nonassessable   and  owned
beneficially and of record by Bancorp or a Bancorp  Subsidiary free and clear of
any  Encumbrance.  There are no  outstanding  Rights to  purchase or acquire any
capital  stock  of any  Bancorp  Subsidiary  and no oral or  written  agreement,
contract,  arrangement,  understanding,  plan or instrument of any kind to which
Bancorp or any of its Affiliates is subject with respect to the issuance, voting
or sale of issued or unissued  shares of the capital stock of any of the Bancorp
Subsidiaries. Neither Bancorp nor any Bancorp Subsidiary owns any of the capital
stock or other  equity  securities  (including  any Rights with  respect to such
securities) of or profit  participations  in any Person or "company" (as defined
in Section  10(a)(1)(C)  of the HOLA) other than the  Federal  Home Loan Bank of
Indianapolis and the Bancorp Subsidiaries.

 ..............Section  5.4. Financial Statements and Reports. For the past three
years,  Bancorp and the Bancorp  Subsidiaries  have timely filed all  Regulatory
Documents  required to be filed by them,  except to the extent that all failures
to so file, in the aggregate,  would not have a Bancorp Material Adverse Effect;
and all such documents,  as finally amended,  complied in all material  respects
with applicable  requirements of Applicable Law and, as of their respective date
or the date as amended,  did not contain any untrue statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading.  Except to the  extent  stated  therein,  all  financial
statements and schedules  included in the documents referred to in the preceding
sentences (i) are in accordance  with  Bancorp's  books and records and those of
any of the  Bancorp  Subsidiaries,  which books and  records  are  complete  and
accurate in all  material  respects  and have been  maintained  in all  material
respects  in  accordance  with  Applicable  Law,  and (ii)  present  fairly  the
consolidated  financial position and the consolidated  results of operations and
cash  flows  of  Bancorp  as of the  dates  and for  the  periods  indicated  in
accordance with GAAP  consistently  applied during the periods  involved (except
for the  omission of notes to  unaudited  statements,  year-end  adjustments  to
interim results normal in nature and amount and changes in GAAP and except where
regulatory reporting  requirements provide otherwise).  The audited consolidated
financial statements of Bancorp as of September 30, 1998 and for the three years
then ended last  filed by  Bancorp  as part of a publicly  available  Regulatory
Document  disclose  all  liabilities  (whether  accrued,  absolute,  contingent,
unliquidated  or otherwise,  whether due or to become due and regardless of when
asserted), as of their respective dates, of Bancorp and the Bancorp Subsidiaries
required to be reflected in such financial  statements  according to GAAP, other
than  liabilities  which are not, in the aggregate,  material to Bancorp and the
Bancorp  Subsidiaries,  taken  as  a  whole,  and  contain  in  the  opinion  of
management,  adequate  reserves for losses on loans and  properties  acquired in
settlement of loans,  Taxes and all other material  accrued  liabilities and for
all reasonably  anticipated  material losses in accordance with GAAP, if any, as
of such  date.  Except for (i) those  liabilities  that are fully  reflected  or
reserved against on Bancorp's audited  consolidated  balance sheet last filed by
Bancorp as part of a publicly available Regulatory Document and (ii) liabilities
incurred  in the  ordinary  course of  business  since the date of such  audited
consolidated  balance  sheet and which  would not have,  individually  or in the
aggregate,  a Bancorp  Material  Adverse  Effect,  Bancorp has no liabilities or
obligations of any nature,  whether absolute,  accrued,  contingent or otherwise
and whether  due or to become due,  which are or would be required by GAAP to be
shown on its consolidated balance sheet.

 ..............Section  5.5.  Absence  of  Changes.  (a) Except as  disclosed  in
publicly  available  Regulatory  Documents filed by Bancorp prior to the date of
this Agreement,  since September 30, 1998, there has been no event,  occurrence,
development,  fact, or set of  circumstances  of any nature  existing or, to the
knowledge of Bancorp,  threatened which,  individually or in the aggregate,  has
had or could reasonably be expected to have a Bancorp Material Adverse Effect.

 ............. (b) Except as Previously Disclosed, since September 30, 1998, each
of Bancorp and the Bancorp  Subsidiaries  has owned and operated its  respective
assets,  properties,  and  businesses  in the  ordinary  course of business  and
consistent with past practice.

 ..............Section  5.6.  No Broker's or  Finder's  Fees.  No agent,  broker,
investment  banker,  Person,  or firm  acting on behalf  or under  authority  of
Bancorp  or any of the  Bancorp  Subsidiaries  is or  will  be  entitled  to any
broker's  or finder's  fee or any other  commission  or similar fee  directly or
indirectly  in  connection  with the  Merger,  except  Bancorp  has  engaged JMP
Financial,  Inc., an investment  banking  firm,  to provide  financial  advisory
services.

 ..............Section  5.7.  Litigation  and Other  Proceedings.  (a) Except for
matters  which would not have,  in the  aggregate,  a Bancorp  Material  Adverse
Effect, neither Bancorp nor any Bancorp Subsidiary is a defendant in, nor is any
of its  property  subject  to, any  pending,  or, to the  knowledge  of Bancorp,
threatened  claim,  action,  suit,  investigation,  or  proceeding.  There is no
judicial  order,  judgment,  or  decree  to which any of  Bancorp,  the  Bancorp
Subsidiaries  or their  respective  properties is subject which has had or could
reasonably be expected to have a Bancorp Material Adverse Effect.

 ..............  (b) All pending  claims,  actions,  suits,  investigations,  and
proceedings  in which  Bancorp or any Bancorp  Subsidiary is a defendant and all
judicial  orders,  judgments,  or  decrees to which the  Bancorp or any  Bancorp
Subsidiary is subject have been Previously Disclosed.

 ..............Section   5.8.  Compliance  With  Law.  Bancorp  and  the  Bancorp
Subsidiaries have been and are in compliance in all respects with all Applicable
Laws,  except  where such  noncompliance  would not have,  in the  aggregate,  a
Bancorp Material Adverse Effect,  and neither Bancorp nor any Bancorp Subsidiary
has received notice from any  Governmental  Authority of any material  violation
of, and does not know of any material violations of, any Applicable Law.

 ..............Section  5.9. Corporate Actions. The Board of Directors of Bancorp
has  authorized  its officers to execute and deliver this  Agreement and to take
all  action  necessary  to  consummate  the  Merger  and the other  transactions
contemplated hereby.  Except for obtaining the requisite approval of the Bancorp
shareholders as contemplated hereby, all corporate authorization by the Board of
Directors  of  Bancorp  required  for the  consummation  of the  Merger  and the
transactions contemplated hereby has been obtained.

 ..............Section  5.10.  Authority.  Except as  Previously  Disclosed,  the
execution,  delivery and  performance by Bancorp of its  obligations  under this
Agreement and the consummation  thereby of the transactions  contemplated hereby
do not,  and will not,  violate or conflict  with any of the  provisions  of, or
constitute a breach or default (or an event which, with notice or lapse of time,
or both, would constitute a breach or default) under, terminate, give any Person
the right to terminate,  modify or accelerate  payment or  performance  under or
result in the creation of any  Encumbrance  upon any of the properties or assets
of Bancorp  under (i) the  articles  of  incorporation,  charter,  or by-laws of
Bancorp,  the  Bank,  or any  other  Bancorp  Subsidiary,  (ii)  subject  to the
Governmental Approvals and the approval of Bancorp shareholders described below,
any  Applicable  Law to which  Bancorp  or any of the  Bancorp  Subsidiaries  is
subject, or (iii) except, in each case, where such violation,  conflict, breach,
default,  termination (or right to terminate),  modification,  acceleration,  or
Encumbrance would not, individually or in the aggregate, have a Bancorp Material
Adverse Effect, any Contract to which Bancorp or any of the Bancorp Subsidiaries
is a party or is subject or by which any of their  properties or assets is bound
or affected.  The parties  acknowledge  that the  consummation  of the Merger is
subject to various  regulatory  approvals.  Bancorp has all requisite  corporate
power and  corporate  authority to enter into this  Agreement and to perform its
obligations  hereunder.  Other than the Governmental Approvals and the requisite
approval of Bancorp  shareholders as contemplated  hereby, no filings,  notices,
approvals,  or  consents  are  required  on behalf  of  Bancorp  or any  Bancorp
Subsidiary in connection with the consummation of the transactions  contemplated
by this Agreement.  Bancorp has no knowledge of any reason why the  Governmental
Approvals  cannot be  obtained  or granted  on a timely  basis.  This  Agreement
constitutes  the valid and binding  obligation of Bancorp and is  enforceable in
accordance with its terms, except as enforceability may be limited by Applicable
Law relating to  bankruptcy,  insolvency or  creditors'  rights  generally,  the
rights of creditors of insured depository  institutions,  and general principles
of equity.

 ..............Section  5.11. Information Furnished;  Registration Statement. (a)
To  the  knowledge  of  Bancorp,   no  statement   contained  in  any  schedule,
certificate,  or other document furnished (whether prior to or subsequent to the
date of this Agreement) or to be furnished in writing by or on behalf of Bancorp
or any of its Affiliates to the Company  pursuant to this Agreement  contains or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.

 ..............  (b) None of the  information  provided by Bancorp or any Bancorp
Subsidiary  for  inclusion  in  the  Registration  Statement,  at the  time  the
Registration Statement becomes effective or, in the case of the Proxy Statement,
at the date of mailing,  will contain any untrue statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they are made,  not  misleading.  Each of the  Registration  Statement and Proxy
Statement, except for such portions thereof that relate only to the Company or a
Company  Subsidiary,  will comply as to form in all material  respects  with the
provisions of the Securities Act and Exchange Act, as applicable.

 ..............Section  5.12.  Property  and  Assets.  Bancorp  and  the  Bancorp
Subsidiaries  have  good and  marketable  title to all of  their  real  property
reflected in the consolidated financial statements last filed by Bancorp as part
of a publicly available Regulatory Document or acquired subsequent thereto, free
and clear of all  Encumbrances,  except  for (a) such  items  reflected  in such
financial  statements or in the notes  thereto,  (b) liens for current taxes not
yet  delinquent,  (c) customary title  exceptions that have no material  adverse
effect upon the current use of such  property,  (d) property sold or transferred
in the ordinary course of business  consistent with past practice since the date
of such financial statements and (e) as otherwise Previously Disclosed.  Bancorp
and the Bancorp Subsidiaries enjoy peaceful and undisturbed possession under all
material  leases for the use of real  property  under which they are the lessee;
all of such  leases  are valid and  binding  and in full  force and  effect  and
neither  Bancorp nor any Bancorp  Subsidiary  is in default in any respect under
any such lease,  except  where such  failure to be valid and binding and in full
force and effect,  or where such default,  would not have, in the  aggregate,  a
Bancorp Material  Adverse Effect.  No consent of the lessor of any material real
property or material personal property lease is required for consummation of the
Merger.  There has been no physical loss, damage or destruction,  whether or not
covered by insurance,  affecting the real  properties of Bancorp and the Bancorp
Subsidiaries  since September 30, 1998,  except such loss, damage or destruction
which would not have, in the aggregate,  a Bancorp Material Adverse Effect.  All
property and assets  material to their  businesses and currently used by Bancorp
and the Bancorp  Subsidiaries are, in all material  respects,  in good operating
condition and repair, normal wear and tear excepted.

 ..............Section  5.13.  Agreements and  Instruments.  Except as Previously
Disclosed, neither Bancorp nor any Bancorp Subsidiary is a party to:

 ............. (a) any material Contract;

 .............  (b) any Contract relating to the borrowing of money by Bancorp or
any Bancorp  Subsidiary or the guarantee by Bancorp or any Bancorp Subsidiary of
any such obligation  (other than Federal Home Loan Bank advances with a maturity
of one year or less from the date hereof);

 .............  (c) any Contract to make loans or for the provision, purchase, or
sale of goods,  services,  or property between Bancorp or any Bancorp Subsidiary
and any director or officer of Bancorp or any Bancorp Subsidiary,  or any member
of the immediate  family or Affiliate of any of the foregoing  (other than loans
or deposits made on an arms-length basis in the ordinary course of business);

 .............  (d) any  Contract  with  or  concerning  any  labor  or  employee
organization;

 ............. (e) any Contract between Bancorp or any Bancorp Subsidiary and any
Affiliate  thereof  (other than Contracts  solely between  Bancorp and a Bancorp
Subsidiary or solely between Bancorp Subsidiaries);

 .............  (f) any agreements,  directives,  orders, or similar arrangements
between or  involving  Bancorp or any Bancorp  Subsidiary  and any  Governmental
Authority;

 .............  (g) any Contract with respect to the  employment,  retention,  or
severance of any directors, officers, employees, or consultants;

 .............  (h) any Contract  which  materially  restricts the conduct of any
line of business by Bancorp or any current or future Affiliates thereof; or

 .............  (i)  any  Contract  pursuant  to  which  Bancorp  or any  Bancorp
Subsidiary is or may become obligated to invest in or contribute  capital to any
Bancorp Subsidiary.

 ..............Section  5.14. Material Contract Defaults. Neither Bancorp nor any
Bancorp Subsidiary nor, to the knowledge of Bancorp,  the other party thereto is
in  default in any  respect  under any  Contract  to which any of Bancorp or the
Bancorp Subsidiaries is a party or by which its respective assets,  business, or
operations may be bound or affected or under which it or its respective  assets,
business,  or  operations  receives  benefits,  other  than any such  default or
defaults  which would not have, in the  aggregate,  a Bancorp  Material  Adverse
Effect, and there has not occurred any event that, with the lapse of time or the
giving of notice or both, would  constitute such a default.  To the knowledge of
Bancorp,  all  material  Contracts  to  which  Bancorp  or any  of  the  Bancorp
Subsidiaries is a party are valid, binding, and in full force and effect.

 ..............Section  5.15.  Tax  Matters.  (a)  Bancorp,  each of the  Bancorp
Subsidiaries  and any affiliated group (within the meaning of Section 1504(a) of
the Code) of which Bancorp or any of the Bancorp  Subsidiaries  is a member have
filed all Tax Returns required to be filed by them and have made timely payments
of all Taxes due and payable,  whether disputed or not; and such Tax Returns are
true,  correct,  and complete in all material respects.  Neither the IRS nor any
other  taxing  authority  is now  asserting  or, to the  knowledge  of  Bancorp,
threatening to assert any deficiency or claim for additional  Taxes,  nor to the
knowledge of Bancorp is there any basis for any such assertion or claim. Bancorp
and each of the Bancorp Subsidiaries have complied in all material respects with
applicable IRS backup  withholding  requirements  and have filed all appropriate
information  reporting  returns  for all Tax  years for  which  the  statute  of
limitations  has not closed.  Bancorp and each Bancorp  Subsidiary have complied
with all  applicable  state  law  sales  and use Tax  collection  and  reporting
requirements.

 ..............  (b)  Adequate  provision  for any Taxes due or to become due for
Bancorp or any of the Bancorp Subsidiaries for any period or periods through and
including  September  30, 1998,  has been made and is reflected on the September
30, 1998 audited consolidated financial statements last filed by Bancorp as part
of a publicly  available  Regulatory  Document and has been or will be made with
respect to periods ending after September 30, 1998.

 ..............Section  5.16. Environmental Matters. To the knowledge of Bancorp,
neither  Bancorp  nor any  Bancorp  Subsidiary  owns or  leases  any  properties
affected by toxic waste, radon gas, or other hazardous conditions or constructed
in part with the use of asbestos. Neither Bancorp nor any Bancorp Subsidiary has
knowledge of, nor has Bancorp or any Bancorp Subsidiary  received written notice
from any Governmental Authority of, any conditions,  activities,  practices,  or
incidents which are reasonably likely to interfere with or prevent compliance or
continued  compliance  by  Bancorp  or any  Bancorp  Subsidiary  with  hazardous
substance  laws or any  regulation,  order,  decree,  judgment,  or  injunction,
issued, entered,  promulgated or approved thereunder,  or which may give rise to
any  legal  liability  on the part of  Bancorp  or any  Bancorp  Subsidiary,  or
otherwise form the basis of any claim,  action,  suit,  proceeding,  hearing, or
investigation  against  or of  Bancorp or any  Bancorp  Subsidiary,  based on or
related to the manufacture,  processing,  distribution, use, treatment, storage,
disposal,  transport,  or  handling,  or the  emission,  discharge,  release  or
threatened  release into the  environment,  of any  pollutant,  contaminant,  or
chemical,  or industrial,  toxic, or hazardous  substance or waste.  There is no
civil, criminal, or administrative claim, action, suit, proceeding,  hearing, or
investigation  pending  or, to the  knowledge  of  Bancorp,  threatened  against
Bancorp  or any  Bancorp  Subsidiary  relating  in any  way  to  such  hazardous
substance laws or any regulation, order, decree, judgment, or injunction issued,
entered,  promulgated or approved thereunder.  To the knowledge of Bancorp, none
of Bancorp or the Bancorp  Subsidiaries  has made or participated in any loan to
any  Person who is subject to any  civil,  criminal,  or  administrative  claim,
action, suit, proceeding,  hearing, or investigation relating in any way to such
hazardous  substance  laws  or  any  regulation,  order,  decree,  judgment,  or
injunction issued,  entered,  promulgated or approved thereunder and relating to
the property secured by such loan.

 .............Section  5.17.  Loan  Portfolio;   Portfolio  Management.  (a)  All
evidences  of  indebtedness  reflected as assets in the  consolidated  financial
statements  last filed by Bancorp  as part of a  publicly  available  Regulatory
Document or acquired  since such date,  are (except with respect to those assets
which are no  longer  assets  of  Bancorp  or any  Bancorp  Subsidiary)  binding
obligations of the respective  obligors named therein except as enforcement  may
be limited by  bankruptcy,  insolvency,  or other  similar  laws  affecting  the
enforcement of creditors rights  generally,  and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding  may be brought,  and the payment of no
material  amount  thereof  (either  individually  or in the aggregate with other
evidences of indebtedness) is subject to any defenses which have been threatened
or asserted  against Bancorp or any Bancorp  Subsidiary.  All such  indebtedness
which is  secured  by an  interest  in real  property  is secured by a valid and
perfected mortgage lien having the priority specified in the loan documents. All
loans originated or purchased by Bancorp or any Bancorp Subsidiaries were at the
time entered into and at all times since have been in compliance in all material
respects  with  all  Applicable  Laws.  Bancorp  and  the  Bancorp  Subsidiaries
administer  their  loan  and  investment   portfolios  in  accordance  with  all
Applicable Laws and the terms of applicable instruments.  The records of Bancorp
and the Bancorp Subsidiaries  regarding all loans outstanding on their books are
accurate in all material  respects and the risk  classification  system has been
established in accordance with the requirements of the OTS.

 ..............  (b)  Bancorp  and the Bank  have  Previously  Disclosed  a list,
accurate and  complete in all material  respects,  of the  aggregate  amounts of
loans,  extensions  of  credit,  and other  assets of  Bancorp  and the  Bancorp
Subsidiaries that have been adversely designated,  criticized,  or classified as
of September  30, 1998,  separated  by Asset  Classification;  and no amounts of
loans,   extensions  of  credit,  or  other  assets  that  have  been  adversely
designated, classified or criticized as of the date hereof by any representative
of any Government  Authority as "Special  Mention,"  "Substandard,"  "Doubtful,"
"Loss," or words of similar  import are excluded  from the amounts  disclosed in
the Asset Classification,  other than amounts of loans, extensions of credit, or
other assets that were charged off or recovered by Bancorp or any of the Bancorp
Subsidiaries before the date hereof.

 ..............Section  5.18.  Real  Estate  Loans and  Investments.  Except  for
properties  acquired in settlement of loans, there are no facts,  circumstances,
or  contingencies  known to Bancorp  which exist which would  require a material
reduction  under GAAP in the  present  carrying  value of any of the real estate
investments,  joint ventures,  construction  loans, other investments,  or other
loans of  Bancorp  or any  Bancorp  Subsidiary  (either  individually  or in the
aggregate with other loans and investments).

 ..............Section  5.19. Derivatives Contracts.  (a) Neither Bancorp nor any
of the  Bancorp  Subsidiaries  is a party  to or has  agreed  to  enter  into an
exchange-traded or over-the-counter  Derivatives  Contract or any other Contract
not included on the consolidated  balance sheet last filed by Bancorp as part of
a publicly available Regulatory Document which is a Derivatives Contract, except
for those  Derivatives  Contracts  Previously  Disclosed,  including a list,  as
applicable,  of any of Bancorp's or the Bank's assets  pledged as security for a
Derivatives Contract.

 ..............  (b) All  Derivative  Contracts  to which  Bancorp or any Bancorp
Subsidiary is a party or by which any of their properties or assets may be bound
were  entered into in the ordinary  course of business  and in  accordance  with
prudent banking practice, based on industry-wide standards at the time, and with
counterparties believed by Bancorp to be financially responsible at the time.

 .............Section 5.20. Insurance.  Bancorp and the Bancorp Subsidiaries have
in effect  insurance  coverage  with  reputable  insurers  which,  in respect of
amounts,  types, and risks insured,  is reasonably  adequate for the business in
which Bancorp and the Bancorp  Subsidiaries are engaged.  All Insurance Policies
are in full force and effect, The Insurance Policies are valid, outstanding, and
enforceable in accordance with their respective terms and will not in any way be
affected  by, or  terminated  or lapsed  solely by reason of,  the  transactions
contemplated by this Agreement. To the knowledge of Bancorp, neither Bancorp nor
any Bancorp  Subsidiary  has been  refused  any  insurance  with  respect to any
material properties,  assets or operations, nor has any coverage been limited or
terminated  by any  insurance  carrier  to  which  it has  applied  for any such
insurance  or with  which it has  carried  insurance  during  the last three (3)
years.

 .............Section  5.21.  Tax  Treatment.  Neither  Bancorp  nor  any  of its
Affiliates has taken or agreed to take any action that or has failed to take any
action the result of which would (but without giving effect to any actions taken
or agreed  to be taken by the  Company  or any of its  Affiliates)  prevent  the
Merger from qualifying as a "reorganization" under Section 368(a) of the Code.

                                   ARTICLE VI
                                    COVENANTS

 ..............Section 6.1. Conduct of Business by the Company. During the period
from the date of this Agreement and continuing  through the Closing Date, except
as Previously  Disclosed and except as expressly  contemplated  and permitted by
this Agreement or with the prior written consent of Bancorp (which consent shall
not be unreasonably  withheld),  the Company shall cause each of the Company and
the Company  Subsidiaries  to (a) carry on its business in the  ordinary  course
consistent  with past practice;  (b) use its reasonable best efforts to preserve
its present business organization and relationships; (c) use its reasonable best
efforts to keep available the present  services of the Company's and the Company
Subsidiaries' employees; and (d) use its reasonable best efforts to preserve its
rights, franchises,  goodwill, and relations with customers and others with whom
it conducts business.  Without limiting the generality of the foregoing,  except
as  expressly  contemplated  and  permitted by this  Agreement,  consented to in
writing by Bancorp or  Previously  Disclosed,  the  Company  shall not,  and the
Company  shall not  permit  any of the  Company  Subsidiaries  to,  directly  or
indirectly:

 .............. (i) amend its articles/certificate of incorporation,  charter, or
bylaws  (or  comparable  governing   instruments)  or  merge  with  or  into  or
consolidate with any other Person,  subdivide,  combine or in any way reclassify
any  shares of its  capital  stock,  or change in any  manner  the rights of its
outstanding capital stock;

 ..............  (ii) issue or sell or purchase any shares of its capital  stock,
or issue or sell or purchase any option,  warrant,  convertible or  exchangeable
security,  right,  subscription,  call,  unsatisfied  pre-emptive right or other
agreement  or right of any kind to purchase  or  otherwise  acquire  (including,
without  limitation,  by exchange or conversion)  (each a "Right") any shares of
its capital  stock  (except that the Company may issue shares of Company  Common
Stock upon (i)  exercise  of  Company  Options  outstanding  on the date of this
Agreement or (ii) as Previously Disclosed);

 ..............  (iv)  waive  any  right of value to its  business  other  than a
waiver,  together  with all other  such  waivers,  that would not have a Company
Material Adverse Effect;

 ..............  (v) make any change in its  accounting  methods or practices for
Tax or accounting  purposes or make any change in  depreciation  or amortization
policies or rates adopted by it for Tax or accounting  purposes,  except in each
case as required by GAAP or Applicable Law;

 ..............  (vi) materially  change, or agree to change,  any of its lending
activities,  policies or practices,  except as required by Applicable  Law or by
any Governmental Authority;

 ..............  (vii)  make  any  loan  or  advance  to any  of its  Affiliates,
officers, directors,  employees,  consultants,  agents, or other representatives
(other than travel advances made in the ordinary  course of business  consistent
with past  practice),  or make any other loan or advance  otherwise  than in the
ordinary course of business consistent with past practice;

 .............. (viii) sell, offer to sell, abandon or make any other disposition
of any of its material  assets,  including  selling or closing any branches;  or
grant or suffer any Encumbrance on any of its material assets;

 ..............  (ix) except in the ordinary  course of business  consistent with
past practice,  incur or assume,  or agree to incur or assume,  any liability or
obligation  (whether or not currently due and payable)  relating to its business
or any of its assets;

 ..............  (x) create, renew, amend, terminate or cancel, or take any other
action that may result in the  creation,  renewal,  amendment,  termination,  or
cancellation of, any Contract with any of its Affiliates;

 ..............  (xi) declare,  set aside or pay any dividends or declare or make
any other distributions of any kind on or in respect of its capital stock (other
than  dividends  from a Company  Subsidiary  to the  Company or another  Company
Subsidiary), or make any direct or indirect redemption, retirement, purchase, or
other  acquisition  of any shares of its capital stock or Rights,  provided that
the Company may declare and pay its  regular  quarterly  cash  dividends  on the
Company  Common  Stock of not more than $0.115 per share per  quarterly  period,
provided  further that the parties agree that after the date of this  Agreement,
each of Bancorp and the Company shall  coordinate with the other the declaration
of any  dividends in respects of Bancorp  Common Stock and Company  Common Stock
and the record dates and payment dates relating thereto,  it being the intention
of the parties hereto that holders of Company Common Stock shall not receive two
dividends, or fail to receive one dividend, for any single calendar quarter with
respect to their shares of Company Common Stock and any shares of Bancorp Common
Stock any such holder receives in exchange therefore in the Merger;

 ..............  (xii) create,  renew,  amend,  terminate or cancel,  or take any
other action that may result in the creation, renewal,  amendment,  termination,
or  cancellation  of, any  Contract,  except in the ordinary  course of business
consistent with past practice and as would not, in the aggregate, have a Company
Material Adverse Effect;  enter into or amend any Contract  pursuant to which it
agrees to indemnify  any party on behalf of its business or pursuant to which it
agrees to refrain from competing with any party with respect to its business;

 ..............  (xiii)  except as Previously  Disclosed,  adopt,  amend,  renew,
terminate or accelerate or vest benefits under any Company Employee Benefit Plan
or  Benefit  Arrangement  or  any  other  employee  program,   plan,  agreement,
arrangement,  or policy  between the Company or a Company  Subsidiary and one or
more of employees or directors of the Company or a Company Subsidiary, except as
required by Applicable Law;

 ..............  (xiv) commit any act or omission  which  constitutes a breach or
default  under any  Contract or license to which it is a party or by which it or
any of its  properties  or  assets is bound  except  as would  not have,  in the
aggregate, a Company Material Adverse Effect;

 ..............  (xv)  acquire  in  any  manner,  including  by  way  of  merger,
consolidation,  or purchase of an equity interest or assets, any business or any
corporation,   partnership,  association,  or  other  business  organization  or
division  thereof (other than by way of  foreclosures or acquisitions of control
in a bona  fide  fiduciary  capacity  or in  satisfaction  of  debts  previously
contracted  in good  faith,  in each case in the  ordinary  and usual  course of
business consistent with past practice);

 ..............  (xvi)  increase  the  salary  or wages of any  employees  of the
Company or of any Company  Subsidiary;  or pay any incentive,  bonus, or similar
payments to employees  or  directors  other than as required by the terms of any
Company  Employee  Benefit Plan or Benefit  Arrangement in effect as of the date
hereof and Previously Disclosed;

 .............. (xvii) purchase any debt securities or derivative securities that
are  defined as "complex  securities"  under OTS Thrift  Bulletin  No. 13a dated
December 1, 1998 as revised or purchase any Derivatives Contracts;

 ..............  (xviii) make any  investment  which would cause First Savings to
not be a qualified thrift lender under Section 10(m) of the HOLA, or not to be a
"domestic  building and loan  association" as defined in Section  7701(a)(19) of
the Code;

 ..............  (xix)  change  its  existing  investment  guidelines  Previously
Disclosed,  except as required by Applicable Law or any Governmental  Authority,
or the manner in which its  investment  securities  portfolio is  classified  or
reported;

 ..............  (xx)  authorize  or  make  capital  expenditures  in  excess  of
$100,000, individually, or $500,000, in the aggregate;

 ..............  (xxi) take any action that or fail to take any action the result
of which would (but without  giving  effect to any actions taken or agreed to be
taken  by the  Company  or  any  of its  Affiliates)  prevent  the  Merger  from
qualifying as a "reorganization" under Section 368(a) of the Code; or

 ...............  (xxii)  agree  (by  Contract  or  otherwise)  to do  any of the
foregoing.

 .............Section  6.2. Maintenance of Records. Through the Closing Date, the
Company and the Company  Subsidiaries  will  maintain  their Records in the same
manner and with the same care that such  Records have been  maintained  prior to
the execution of this Agreement.

 .............Section 6.3. Salary and Benefits. (a) Bancorp shall, or shall cause
the appropriate  Bancorp  Subsidiary to, permit  employees of the Company or any
Company  Subsidiary who are employees with the Company or any Company Subsidiary
as of immediately prior to the Effective Time and become employees of Bancorp or
a Bancorp  Subsidiary  as of the Effective  Time  ("Transferred  Employees")  to
participate in the employee benefit plans, programs, and arrangements of Bancorp
or the Bancorp  Subsidiaries,  as applicable (the "Bancorp Plans"),  on the same
terms as such plans and benefits are offered to similarly  situated employees of
Bancorp or the Bancorp Subsidiaries, as applicable.  Bancorp shall recognize, or
shall cause the appropriate  Bancorp  Subsidiary to recognize,  each Transferred
Employee's  service with the Company or any Company  Subsidiary  for purposes of
determining  eligibility to participate in and vest under the Bancorp Plans, but
not  for  purposes  of  benefit  accruals  under  any  such  plans  and no  such
Transferred  Employees or dependents  shall be subject to any uninsured  waiting
periods or  preexisting  condition  exclusions  under any plan of Bancorp or the
Bank.  Furthermore,  benefit levels under the welfare plans sponsored by Bancorp
or the Bank shall be determined based upon prior service with the Company or any
Company Subsidiaries.

 ..............  (b)  Bancorp  shall,  or shall  cause  the  appropriate  Bancorp
Subsidiary  to, use its best  efforts to employ  employees of the Company or any
Company  Subsidiary who are employees with the Company or any Company Subsidiary
as of  immediately  prior to the Effective Time on the same terms and conditions
as are  offered to  similarly  situated  employees  of  Bancorp  or the  Bancorp
Subsidiaries,  as applicable;  provided, however, that for a period of 12 months
after the Effective Time, salaries of Transferred Employees shall not be reduced
below the level of such  salaries for such  employees  immediately  prior to the
Effective Time.

 ..............  (c) Bancorp shall enter into a six-year employment contract with
Richard Gatton which shall contain such provisions as are  customarily  included
in such agreements with key management  personnel.  The employment contract also
shall include the provisions included in Exhibit B attached hereto.

 ..............  (d) Bancorp  shall enter into a three-year  employment  contract
with Jeffrey  Gatton  which shall  contain such  provisions  as are  customarily
included  in such  agreements  with key  management  personnel.  The  employment
contract  also  shall  include  the  provisions  included  in Exhibit B attached
hereto.

 ..............  (e) Notwithstanding the foregoing, Bancorp shall, or shall cause
the appropriate  Bancorp  Subsidiary to, (A) provide severance benefits equal to
one  week  of pay for  each  year of  service  with  the  Company  or a  Company
Subsidiary  (including  any  service  as an  employee  of  Bancorp  or a Bancorp
Subsidiary)  to Persons  who (i) were  employees  of the  Company or any Company
Subsidiary  immediately prior to the Effective Time, (ii) are terminated without
cause as of or within 12 months after the Effective Time by Bancorp or a Bancorp
Subsidiary (but not upon termination by the employee or termination for cause by
Bancorp or a Bancorp  Subsidiary),  and (iii) are not otherwise  entitled to any
severance  benefits  under  any  Contract  as a  result  or in  respect  of such
termination,  in the  amounts  as  Previously  Disclosed,  which  amounts,  less
applicable  withholding  taxes,  shall be paid  upon the  effectiveness  of such
termination  and (B) recognize  and carry  forward as of the Effective  Time all
sick leave and vacation accrued by each Transferred Employee during the 12 month
period ending on (and including) the Closing Date under the respective  policies
of Bancorp or the appropriate  Bancorp Subsidiary (but (x) without giving effect
to any accrued  benefits  carried  forward from any time prior to such  12-month
period  under such Bancorp and Bancorp  Subsidiary  policies and (y) in no event
greater than such benefits as would accrue under such  policies  during one full
calendar year without  giving effect to accrued  benefits  carried  forward from
prior calendar years under such policies).

 ..............  (f)  Further,  Bancorp  shall,  or shall  cause the  appropriate
Bancorp  Subsidiary to, perform after the Effective Time all of the  obligations
of the  Company or the  appropriate  Company  Subsidiary  under the terms of the
severance  agreements  existing  as of the date  hereof  which are  between  the
Company  or a Company  Subsidiary,  on the one hand,  and  management  employees
(other than G. Richard  Gatton) of the Company or a Company  Subsidiary,  on the
other  hand,  which  have been  Previously  Disclosed  and which by their  terms
survive the Effective Time,  provided,  however,  that the Company shall use its
best efforts to modify those  agreements or replace them with agreements so that
no benefits are payable solely as a result of the Merger.

 ..............Section  6.4. Efforts of Parties to Close.  During the period from
the  date of this  Agreement  through  the  Closing  Date,  each  party  to this
Agreement shall take such actions as may be reasonably required to carry out the
provisions hereof and the transactions contemplated hereby and each party hereto
shall use its  reasonable  best efforts to fulfill or obtain the  fulfillment of
the  conditions  precedent  to the  consummation  of the Merger,  including  the
execution  and delivery of any  documents,  certificates,  instruments  or other
papers that are reasonably  required for the  consummation  of the  transactions
contemplated  hereby.  During the  period  from the date of this  Agreement  and
continuing through the Closing, except as required by Applicable Law or with the
prior written consent of the other parties to this  Agreement,  no party to this
Agreement shall take any action which, or fail to take any action the failure of
which to be taken,  would, or could reasonably be expected to, (a) result in any
of the representations and warranties set forth in this Agreement on the part of
the party taking or failing to take such action being or becoming  untrue in any
material  respect;  (b) result in any  conditions  to the  Closing  set forth in
Article VII not being satisfied; or (c) adversely affect or materially delay the
receipt of any of the requisite  regulatory approvals or the consummation of the
Merger.

 ..............Section 6.5. Confidentiality and Announcements.  (a) Other than as
required  by  Applicable  Law upon  prior  notice  to the other  parties  (where
reasonably practicable), the Filing of a Form 8-K with respect to this Agreement
reasonably  acceptable to both  parties,  or with the prior consent of the other
parties,  none of Bancorp,  the Company,  the Bank, or First Savings shall,  and
each of the foregoing shall cause each of its Affiliates and Representatives not
to, disclose to any Person the fact of execution and delivery hereof, any of the
contents  hereof or any  information  with  respect  to the  Merger or the other
transactions  contemplated hereby, except that nothing herein shall prohibit any
party from providing any  information to its regulatory  authorities as required
by Applicable Law.

 ..............  (b)  Subject to  Section  6.7(a)  and (b),  the  parties to this
Agreement  shall agree with each other as to the form and substance of any press
release related to this Agreement or the  transactions  contemplated  hereby and
shall  consult  each  other  as to  the  form  and  substance  of  other  public
disclosures related hereto and thereto.

 ..............Section  6.6. Access; Certain Communications.  Between the date of
this Agreement and the Closing Date,  subject to any Applicable Laws relating to
the exchange of information:

 ..............  (a) The  Company and the Company  Subsidiaries  shall  afford to
Bancorp and its authorized agents and  representatives  reasonable access,  upon
reasonable  notice to an  executive  officer of the  Company  and during  normal
business hours, to all Contracts,  documents,  and information of or relating to
the assets, liabilities,  business, operations,  personnel, and other aspects of
the  business of the Company and the Company  Subsidiaries.  The Company and the
Company Subsidiaries shall cause their personnel,  attorneys, and accountants to
provide assistance to Bancorp in Bancorp's  investigation of matters relating to
the  Merger,   including   allowing  Bancorp  and  its  authorized   agents  and
representatives  access to their  operating sites and facilities and cooperating
therewith in an effort to coordinate and facilitate the integration of Bancorp's
and the  Company's  computer  systems in  anticipation  of  consummation  of the
Merger; provided,  however, that Bancorp's investigation shall be conducted in a
manner  which  does  not  unreasonably  interfere  with the  normal  operations,
customers,  and employee relations of the Company and the Company  Subsidiaries;
provided further,  however, that, in providing the foregoing access, the Company
shall not be required to jeopardize its  attorney-client  privilege (the Company
hereby agreeing to use all reasonable  efforts to make  appropriate  alternative
disclosure arrangements in such circumstances).

 .............. (b) Bancorp shall afford to the Company and its authorized agents
and  representatives  reasonable access,  upon reasonable notice to an executive
officer  of  Bancorp  and  during  normal  business  hours,  to  all  Contracts,
documents, and information of or relating to the assets, liabilities,  business,
operations,  personnel,  and other  aspects of the  business  of Bancorp and the
Bancorp  Subsidiaries.   Bancorp  shall  cause  its  personnel,   attorneys  and
accountants to provide assistance to the Company in the Company's  investigation
of matters  relating  to the  Merger,  including  allowing  the  Company and its
authorized  agents  and  representatives  access  to  its  operating  sites  and
facilities;  provided,  however,  that  the  Company's  investigation  shall  be
conducted  in a manner  which does not  unreasonably  interfere  with  Bancorp's
normal operations, customers, and employee relations; provided further, however,
that,  in  providing  the  foregoing  access,  Bancorp  shall not be required to
jeopardize its  attorney-client  privilege  (Bancorp  hereby agreeing to use all
reasonable efforts to make appropriate  alternative  disclosure  arrangements in
such circumstances).

 ..............  (c) The  investigations  of the parties pursuant to this Section
6.6 shall not affect any of the representations or warranties contained herein.

 ..............Section  6.7.  Cooperation;  Preparation  of  Documents.  (a)  The
parties  to this  Agreement  shall  cooperate  with  each  other  and use  their
reasonable   best   efforts   promptly  to  prepare   and  file  all   necessary
documentation, to effect all applications,  notices, petitions, and filings, and
to obtain as promptly as practicable all permits, consents,  approvals, waivers,
and  authorizations of all third parties and Governmental  Authorities which are
necessary or advisable  to  consummate  the  transactions  contemplated  by this
Agreement.  If any required  consent of or waiver by any third party  (excluding
any  Governmental  Authority)  is not obtained  prior to the Closing,  or if the
assignment of any Contract would be ineffective  or would  adversely  affect any
material rights or benefits thereunder so that Bancorp would not in fact receive
all such rights and benefits,  the parties hereto, each without cost, expense or
liability to the other,  shall cooperate in good faith to seek, if possible,  an
alternative arrangement to achieve the economic results intended. The parties to
this Agreement  will have the right to review in advance,  and will consult with
each other on, in each case subject to Applicable  Laws relating to the exchange
of  information,   all  the  information   relating  to  Bancorp,   the  Bancorp
Subsidiaries,  the  Company,  or the Company  Subsidiaries,  as the case may be,
which appear in any filing made with,  or written  materials  submitted  to, any
third party or any  Governmental  Authority in connection with the  transactions
contemplated by this Agreement; provided, however, that nothing contained herein
shall be deemed to provide  any party to this  Agreement  with a right to review
any information  provided to any Governmental  Authority on a confidential basis
in connection with the  transactions  contemplated  hereby.  The parties to this
Agreement  agree that they will  consult  with each  other  with  respect to the
obtaining of all permits,  consents,  approvals, and authorizations of all third
parties and  Governmental  Authorities  necessary or advisable to consummate the
transactions  contemplated by this Agreement and each party will keep the others
apprised of the status of matters  relating to  completion  of the  transactions
contemplated herein. The party responsible for a filing as set forth above shall
promptly  deliver  to the other  parties  hereto  evidence  of the filing of all
applications, filings, registrations, and notifications relating thereto (except
for any confidential portions thereof), and any supplement,  amendment,  or item
of additional  information in connection  therewith (except for any confidential
portions  thereof).  The party  responsible  for a filing  shall  also  promptly
deliver  to the other  parties  hereto a copy of each  material  notice,  order,
opinion, and other item of correspondence received by such filing party from any
Governmental  Authority  in  respect  of any such  application  (except  for any
confidential   portions  thereof).   In  exercising  the  foregoing  rights  and
obligations,  Bancorp,  the Bancorp  Subsidiaries,  the Company, and the Company
Subsidiaries shall each act reasonably and as promptly as practicable.

 ..............  (b) Bancorp and the Company shall jointly  prepare and file with
the SEC as soon as is reasonably  practicable the Registration Statement (or the
equivalent in the form of preliminary proxy material).  The parties hereto shall
use their  reasonable  best efforts (i) to cause the  Registration  Statement to
become  effective,  (ii) to  maintain  the  effectiveness  thereof  through  the
Effective  Time,  and (iii) to the extent any such  party  becomes  aware of any
information contained or omitted from the Registration Statement which makes any
material  statement   contained  therein  false  or  misleading,   to  file  the
information necessary to make such statements in the Registration  Statement not
false or  misleading.  Bancorp  also shall take such  other  reasonable  actions
(other than qualifying to do business in any  jurisdiction in which it is not so
qualified)  required to be taken under any applicable  state  securities laws in
connection  with the  issuance of Bancorp  Common  Stock under the  Registration
Statement  as  contemplated  hereby.  Bancorp  and the  Company  shall use their
respective  reasonable best efforts to mail at the earliest  practicable date to
Bancorp  shareholders  and  the  Company  shareholders,  respectively,  a  Proxy
Statement,  which shall include all information required under Applicable Law to
be furnished to Bancorp shareholders and Company shareholders,  respectively, in
connection with the Merger and the  transactions  contemplated  hereby and shall
include  the  recommendation  of the Bancorp  Board and of the Company  Board in
favor of the Merger, this Agreement,  and the transactions  contemplated hereby;
provided,  however,  that  the  parties  shall  not be  required  to  make  such
recommendation  if it  reasonably  determines  in good faith not to so recommend
based upon the advice of  counsel,  which  counsel  or is  otherwise  reasonably
acceptable  to the  other  party,  to the  effect  that  to so  recommend  would
constitute a violation of the Board's fiduciary duties under Applicable Law.

 ..............  (c) Each party to this Agreement shall,  upon request,  promptly
furnish  each  other with all  information  concerning  themselves,  Affiliates,
directors,  officers,  and  stockholders  and  such  other  matters  as  may  be
reasonably  necessary or advisable in connection  with any statement  (including
the Registration Statement), filing, notice, or application made by or on behalf
of  Bancorp,  the  Bank,  the  Company,  or First  Savings  to any  Governmental
Authority in connection with the transactions contemplated by this Agreement.

 ..............  (d) The parties to this  Agreement  shall  promptly  advise each
other upon receiving any  communication  from any  Governmental  Authority whose
consent  or  approval  is  required  for   consummation   of  the   transactions
contemplated  by this Agreement which causes such party to believe that there is
a reasonable  likelihood  that any  requisite  regulatory  approval  will not be
obtained or that the receipt of any such approval will be materially delayed.

 ..............Section  6.8.  Notification of Certain Matters.  (a) Each party to
this Agreement  shall give prompt notice to the other parties of the occurrence,
or any known failure to occur,  of any event or existence of any condition  that
has caused or could  reasonably be expected to cause any of its  representations
or  warranties  contained in this  Agreement to be untrue or  inaccurate  in any
material  respect  at any  time  after  the  date of this  Agreement,  up to and
including the Closing  Date,  and (ii) any failure on its part to comply with or
satisfy, in any material respect,  any covenant,  condition,  or agreement to be
complied with or satisfied by it under this Agreement.

 ..............  (b)  During the period  from the date of this  Agreement  to the
Closing Date,  each party will  promptly  notify the other party of any material
change in the conduct of its business or in the operation of its  properties and
of any governmental complaints,  investigations,  or hearings (or communications
indicating that the same may be contemplated),  or the institution or the threat
of significant  litigation  involving the party,  and will keep each other fully
informed of such events.

 ..............  (c) Bancorp  shall provide the Company with true,  correct,  and
complete copies of Bancorp's  audited  consolidated  financial  statements as of
September  30,  1999 and for the  three  years  then  ended  promptly  following
completion  thereof,  but in any  event on or  before  the date  such  financial
statements are first filed with the SEC or any other  Governmental  Authority in
any Regulatory Document.

 ..............  (d) The Company shall provide  Bancorp with true,  correct,  and
complete copies of the Company's audited consolidated financial statements as of
June 30, 1999 and for the three years then ended promptly  following  completion
thereof,  but in any event on or before the date such  financial  statements are
first filed with the SEC or any other  Governmental  Authority in any Regulatory
Document.

 ..............Section  6.9.  Expenses.  Except as otherwise  expressly  provided
herein,  the parties hereto shall each bear their respective direct and indirect
expenses  incurred in connection  with the  negotiation  and preparation of this
Agreement  and  the  consummation  of  the  transactions   contemplated   hereby
(including all fees and expenses payable to or on behalf of financial  advisors,
attorneys, accountants, and consultants).

 ..............Section  6.10. Third Party Proposals.  None of the Company, any of
the  Company  Subsidiaries,  any  of the  Affiliates  of  the  foregoing  or any
officers, directors,  employees,  representatives,  or advisors of the foregoing
("Representatives")   shall  directly  or  indirectly  solicit,   encourage,  or
facilitate inquiries or proposals, or enter into any definitive agreement,  with
respect to, or initiate or participate in any  negotiations or discussions  with
any Person  concerning,  any  acquisition  or  purchase  of all or any  material
portion of the assets of, or of any material  equity interest in, the Company or
any of the Company  Subsidiaries or any merger or business  combination  with or
involving  the  Company  or  any of  the  Company  Subsidiaries  other  than  as
contemplated by this Agreement (each, an "Acquisition  Proposal") or furnish any
information  regarding  the  Company  or the  Company  Subsidiaries  to any such
Person;  provided,  however, that the Board of Directors of the Company may, and
may  authorize  and  permit  its  Representatives  to,  furnish  or  cause to be
furnished nonpublic information,  subject to a binding confidentiality agreement
with the  Company to such Person and may  participate  in such  discussions  and
negotiations  directly or through its  Representatives  with such Person, if (i)
such Board of Directors has  reasonably  determined in good faith based upon the
written advice of counsel, which counsel is reasonably acceptable to Bancorp, to
the effect that the failure to provide such nonpublic information or participate
in such negotiations and discussions would constitute a violation of the Board's
fiduciary  duties under  Applicable  Law and (ii) copies of all  information  so
furnished  to such Person and the terms of such  Person's  Acquisition  Proposal
(and any supplements or amendments  thereto) are furnished  promptly to Bancorp.
The Company, the Company  Subsidiaries,  and any of their respective  Affiliates
and Representatives shall notify Bancorp immediately if any Acquisition Proposal
(including the terms thereof) is received by, any such  information is requested
from, or any such  negotiations  or discussions  are sought to be initiated with
any of the  Company,  the  Company  Subsidiaries,  or any of the  Affiliates  or
Representatives of the foregoing. None of the Company, the Company Subsidiaries,
or any of their respective  Affiliates and Representatives  shall amend, modify,
waive or  terminate,  or  otherwise  release any Person  from,  any  standstill,
confidentiality,  or similar  agreement or arrangement  currently in effect with
respect to the Company or any of the Company Subsidiaries.  Nothing contained in
this Agreement shall require the Company or the Company Board to take any action
or fail to take any action in violation of Applicable Laws.

 .............Section  6.11. Stock Listing. Bancorp shall use its reasonable best
efforts to cause to be listed on the NASDAQ NMS,  subject to official  notice of
issuance,   the  shares  of  Bancorp   Common  Stock  to  be  issued  as  Merger
Consideration.

 ..............Section 6.12. Integration; Conforming Entries. (a) The Company and
First  Savings,  prior to the  Closing,  shall (i)  consult and  cooperate  with
Bancorp regarding the implementation as of the Effective Time of those policies,
procedures,  and systems  (including  computer stems) established by Bancorp for
its governance and operations and for that of the Bancorp  Subsidiaries  and not
otherwise  referenced  in  Sections  6.12(b)  and  6.12(c),  including,  without
limitation,  policies,  procedures,  and systems  pertaining to the  accounting,
asset/liability management, audit, credit, human resources,  treasury, and legal
functions,  and (ii) at the request of Bancorp,  conform the  Company's  and the
Company  Subsidiaries'  existing  policies,  procedures and systems to Bancorp's
policies,  procedures, and systems or, in the absence of any existing Company or
Company  Subsidiary  policy,   procedure,  or  system  regarding  any  function,
introduce  Bancorp's  policies,  procedures,  and systems in respect thereof, in
each case  effective as of the Effective  Time,  unless to do so would cause the
Company  or  any  of  the  Company's  Subsidiaries  to be in  violation  of  any
Applicable Law.

 ..............  (b)  Notwithstanding  that the Company believes that the Company
and the  Company  Subsidiaries  have  established  all  reserves  and  taken all
provisions for possible loan losses  required by GAAP and  Applicable  Laws, the
Company  recognizes that Bancorp may have adopted different loan,  accrual,  and
reserve  policies  (including  loan  classifications  and levels of reserves for
possible loan losses). From and after the date of this Agreement to the Closing,
Bancorp and the Company shall consult and cooperate with each other with respect
to conforming as of the Effective Time the loan,  accrual,  and reserve policies
of Company  and the  Company  Subsidiaries  to those  policies  of  Bancorp,  as
specified in each case in writing to the Company and the Company Subsidiaries.

 ..............  (c) Subject to Applicable  Laws, the Company shall (i) establish
and take such  reserves  and accruals at such time as Bancorp  shall  reasonably
request  to conform  the  Company's  loan,  accrual,  and  reserve  policies  to
Bancorp's  policies,  and (ii) establish and take such accruals,  reserves,  and
charges in order to implement such policies in respect of excess  facilities and
equipment capacity, severance costs, litigation matters, write-off or write-down
of  various  assets,  and  other  appropriate  accounting  adjustments,  and  to
recognize  for  financial  accounting  purposes  such expenses of the Merger and
restructuring charges related to or to be incurred in connection  therewith,  in
each  case at such  times as are  reasonably  requested  by  Bancorp;  provided,
however, that on the date such reserves,  accruals, and charges are to be taken,
Bancorp shall certify to the Company that the  conditions  set forth in Sections
7.1, 7.2, and 7.3 have been  satisfied or waived  (except to the extent that any
waiting  period  associated  therewith may then have commenced but not expired);
and provided  further,  however,  that the Company shall not be required to take
any such  action  that is not  consistent  with GAAP and  regulatory  accounting
principles.

 ..............Section 6.13. Tax-Free Treatment. Each of the parties hereto shall
use  its   reasonable   best  efforts  to  cause  the  Merger  to  constitute  a
"reorganization" under Section 368(a) of the Code.

 ..............Section  6.14.  Agreements of Affiliates.  The Company shall cause
each  Person  who may be at the  Effective  Time or was on the  date  hereof  an
"affiliate"  of the Company for purposes of Rule 145 under the Securities Act to
execute  and deliver to the  Company,  no less than 45 days prior to the date of
the  meeting  of  Company  shareholders  to  approve  the  Merger,  the  written
undertakings  in the form  attached  hereto  as  Exhibit  A. On or prior to such
delivery date, the Company shall provide  Bancorp with a letter  specifying,  to
its knowledge,  all of the Persons who may be deemed to be  "affiliates"  of the
Company under the preceding sentence.

 ..............Section  6.15.  Stockholder Approval.  (a) Each of Bancorp and the
Company  shall  call a  meeting  of its  shareholders  to be  held  as  soon  as
practicable  for the  purpose of voting  upon and  approving  the  Merger,  this
Agreement and the transactions contemplated hereby.

 ..............  (b) The  Company  Board  shall  submit for  approval  of Company
shareholders  the matters to be voted upon in order to authorize  the Merger and
hereby does and will recommend the Merger,  this Agreement and the  transactions
contemplated  hereby to Company  shareholders  and will use its best  efforts to
obtain any vote of Company  shareholders  that is necessary  for the approval of
the Merger and the approval and adoption of this Agreement and  consummation  of
the transactions  contemplated hereby, provided that Company shall have received
an opinion of Trident Securities,  a Division of McDonald Investments,  Inc., or
such  other  nationally  recognized  investment  banking  firm as is  reasonably
acceptable to Bancorp and the Company,  dated within five days of mailing of the
Proxy  Statement  to Company  shareholders  that the  Exchange  Ratio is fair to
Company  shareholders  from a financial  point of view (Bancorp  hereby agreeing
that the terms of this proviso are subject to the Company's using all reasonable
efforts to obtain such opinion from Trident  Securities,  a Division of McDonald
Investments,  Inc. and, if not forthcoming  therefrom within a reasonable period
of time following a request made therefor,  to obtain such opinion from at least
one such other reasonably acceptable investment banking firm); provided further,
however,   that  the   Company   Board  shall  not  be  required  to  make  such
recommendation  if it  reasonably  determines  in good faith not to so recommend
based upon the written  advice of counsel,  which  counsel  either is reasonably
acceptable  to Bancorp,  to the effect that to so recommend  would  constitute a
violation of the Board's fiduciary duties under Applicable Law.

 ..............  (c) The  Bancorp  Board  shall  submit for  approval  of Bancorp
shareholders  the matters to be voted upon in order to authorize  the Merger and
hereby does and will recommend the Merger,  this Agreement and the  transactions
contemplated  hereby to Bancorp  shareholders  and will use its best  efforts to
obtain any vote of Bancorp  shareholders  that is necessary  for the approval of
the Merger and the approval and adoption of this Agreement and  consummation  of
the transactions  contemplated  hereby provided that Bancorp shall have received
an  opinion  of  JMP  Financial,  Inc.,  or  such  other  nationally  recognized
investment banking firm as is reasonably  acceptable to Bancorp and the Company,
dated within five days of mailing of the Proxy Statement to Bancorp shareholders
that the Exchange Ratio is fair to Bancorp  shareholders  from a financial point
of view (the Company hereby  agreeing that the terms of this proviso are subject
to the Bancorp's  using all  reasonable  efforts to obtain such opinion from JMP
Financial,  Inc. and, if not forthcoming therefrom within a reasonable period of
time following a request made therefor, to obtain such opinion from at least one
such other reasonably  acceptable  investment  banking firm);  provided further,
however,   that  the   Bancorp   Board  shall  not  be  required  to  make  such
recommendation  if it  reasonably  determines  in good faith not to so recommend
based upon the written  advice of counsel,  which  counsel  either is reasonably
acceptable to the Company, to the effect that to so recommend would constitute a
violation of the Board's fiduciary duties under Applicable Law.

 ...............Section 6.16. Indemnification. From and after the Effective Time,
Bancorp shall indemnify, defend and hold harmless, and advance expenses for, the
present and former  officers and  directors  of the Company  against all losses,
expenses,  claims,  damages or liabilities arising from any acts or omissions by
such person in his or her  capacity  as such  occurring  prior to the  Effective
Time,   including  any  of  the  foregoing   arising  out  of  the  transactions
contemplated  by this  Agreement,  to the fullest  extent  permitted or required
under the Articles of Incorporation  and Bylaws of Bancorp,  in each case, as in
effect on the date hereof. This Section shall be construed as an agreement as to
which the  directors  and  officers of the Company and the Company  Subsidiaries
referred to herein are  intended to be third  party  beneficiaries  and shall be
enforceable by such persons and their heirs and representatives.

 ..............Section  6.17. D&O Insurance.  From and after the Effective  Time,
Bancorp  shall  maintain in effect,  for not less than three years,  policies of
directors and officers  liability  insurance  providing coverage with respect to
matters  occurring prior to the Effective Time, which policies shall cover those
present  and former  officers  and  directors  of the  Company  and the  Company
Subsidiaries  that are  covered by and shall  provide  coverage  that is no less
beneficial,  in the aggregate,  than those covered and that coverage provided by
the current policies of the Company;  provided,  however, that Bancorp shall not
be required to pay aggregate  premiums for such  insurance in excess of $50,000,
but in such case shall purchase as much coverage as possible for such amount.

 ..............Section  6.18. Environmental Reports. Bancorp, at its expense, may
order within  thirty (30) days of the Agreement a reputable  environmental  firm
selected  by  Bancorp  (the  "Environmental   Firm")  to  perform  a  phase  one
environmental investigation and/or asbestos survey on (i) each parcel of Company
real  estate  ("Company  Property")  owned or leased  by,  (ii) each  office and
premise used as a facility  ("Facility  Property")  by, and (iii) each  property
that  serves as  security  for any  Company  real estate loan having an original
principal  balance  greater  than  $500,000  made by, the Company or any Company
Subsidiary (collectively,  clauses (i), (ii) and (iii), the "Current Property");
provided,  however,  that  Bancorp  shall use  reasonable  efforts  to cause the
Environmental  Firm to  complete  any such  investigation  or  survey as soon as
reasonably  practicable,  but not later  than  sixty  (60)  days  after the date
hereof. In addition,  Bancorp, at its expense,  may cause the Environmental Firm
to perform a phase one environmental  examination  and/or asbestos survey on any
Company Property or Facility Property acquired, leased or used by the Company or
any of the Company Subsidiaries after the date hereof (together with the Current
Property,  the "Company Property");  provided,  however,  that Bancorp shall use
reasonable  efforts  to  cause  the  Environmental  Firm to  complete  any  such
investigation  or survey as soon as reasonably  practicable,  but not later than
fifteen (15) days after being notified by the Company of the acquisition, lease,
or commencement of use of such Company Property or Facility Property. If a phase
one  report  provided  by the  Environmental  Firm  recommends  that a phase two
environmental  survey be  performed  with  respect to any parcel of the  Company
Property,  then Bancorp,  at its expense,  may cause the  Environmental  Firm to
perform  a phase  two  environmental  investigation  of such  Company  Property;
provided,  however,  that  Bancorp  shall use  reasonable  efforts  to cause the
Environmental  Firm to  complete  any such  phase two  investigation  as soon as
reasonably  practicable,  but not later than forty-five (45) days after the date
that such phase one report is received by Bancorp. Should the cost of taking all
remedial or other corrective actions and measures (i) required by Applicable Law
or (ii)  recommended  by the  Environmental  Firm in such phase one or phase two
report or  reports  in light of  potentially  serious  life,  health,  or safety
concerns, in the aggregate,  exceed the sum of $250,000, as reasonably estimated
by the Environmental  Firm, or if the cost of such actions or measures cannot be
so  reasonably  estimated by the  Environmental  Firm to be such amounts or less
with any reasonable  degree of certainty,  Bancorp shall have the right pursuant
to  Section  8.1(a)(vi)  hereof,  for a period of  fifteen  (15)  Business  Days
following  receipt of such estimate or indication  that the cost of such actions
and measures cannot be so reasonably estimated, to terminate this Agreement.

                                   ARTICLE VII
                    CONDITIONS TO CONSUMMATION OF THE MERGER

 ..............Section  7.1. Mutual Conditions.  The obligations of each party to
this  Agreement  to  consummate  the Merger  shall be  subject to the  following
conditions:

 ..............  (a) No statute, rule, regulation, order, injunction,  decree, or
other Applicable Law shall have been enacted,  entered,  issued,  promulgated or
enforced by any  Governmental  Authority  which  prohibits,  restricts  or makes
illegal  consummation of the Merger pursuant hereto (an  "Injunction") and which
remains in effect;  and no proceeding  initiated by any  Governmental  Authority
seeking an Injunction shall be pending;

 .............. (b) All consents, waivers, authorizations, and approvals required
from all Governmental  Authorities to consummate Merger shall have been obtained
and shall  remain  in full  force  and  effect  and all  waiting  periods  under
Applicable Law in respect thereof shall have expired or terminated;

 .............. (c) The Merger, this Agreement, and the transactions contemplated
hereby  shall have been  approved  by the Bancorp  shareholders  and the Company
shareholders, in each case, in the manner required by Applicable Law;

 ..............  (d) The SEC  shall  have  declared  the  Registration  Statement
effective;  and on the Closing  Date and at the  Effective  Time,  no stop order
suspending  the  effectiveness  of the  Registration  Statement  shall have been
issued and no  proceedings  for that purpose  shall have been  initiated or then
threatened by the SEC;

 ..............  (e) The shares of Bancorp Common Stock,  if any, to be issued as
Merger  Consideration  in the Merger shall have been approved for listing on the
NASDAQ NMS, subject to official notice of issuance;

 .............  (g)  Bancorp and the  Company  shall have  received an opinion of
Manatt, Phelps & Phillips,  LLP, or of such other reasonably qualified Person as
Bancorp  and the  Company  shall  reasonably  determine,  in form and  substance
reasonably  acceptable  to Bancorp  and the  Company,  dated the  Closing  Date,
substantially  to the effect that,  on the basis of facts,  representations  and
assumptions  set forth in such opinion  which are  consistent  with the state of
facts  existing  at the  Effective  Time,  (i) the Merger  should  constitute  a
"reorganization"  within the  meaning of Section  368(a) of the Code and (ii) no
gain or loss should be recognized  by Company  shareholders  who receive  solely
Bancorp  Common Stock in exchange for shares of Company Common Stock pursuant to
the Merger  (except with respect to cash received in lieu of a fractional  share
interest in Bancorp  Common  Stock).  In  rendering  such  opinion,  counsel may
require and rely upon  representations  contained in certificates of officers of
the Company, Bancorp, and others.

 ..............Section 7.2. Conditions to Bancorp's Obligations.  The obligations
of  Bancorp  to  consummate  the  Merger  shall  be  subject  to  the  following
conditions:

 ..............  (a) The  representations and warranties of the Company set forth
in this Agreement  shall be true and correct in all material  respects as of the
date of this  Agreement  and  (except  to the  extent  such  representation  and
warranty  speaks as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date;

 ..............  (b) Each of the Company and the Company  Subsidiaries shall have
performed and complied in all material  respects with each agreement,  covenant,
obligation, and condition required by this Agreement to be performed or complied
with by it at or prior to the Closing Date;

 ..............  (c) The Company shall have  delivered to Bancorp a  certificate,
dated as of the  Closing  Date,  signed on behalf  of the  Company  by its Chief
Executive  Officer and Chief Financial  Officer,  confirming the satisfaction of
the conditions contained in paragraphs (a) and (b) of this Section 7.2;

 ..............  (d) Bancorp,  at its expense,  shall have  received  from Crowe,
Chizek and Company LLP letters dated the date of mailing the  Prospectus and the
date of the Closing to the effect that: (i) with respect to the Company they are
independent  accountants  within  the  meaning  of the  Securities  Act  and the
Exchange Act, (ii) it is their opinion that the audited  consolidated  financial
statements  of the Company  included in or  incorporated  by reference  into the
Prospectus  comply  as to form in all  material  respects  with  the  applicable
accounting  requirements  of the  Securities  Act and Exchange Act, (iii) on the
basis of such  procedures  as are set forth  therein but without  performing  an
examination in accordance with generally accepted auditing standards nothing has
come to their attention which would cause them to believe that (A) any unaudited
interim  financial  statements  appearing in the  Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and Exchange Act; (B) said financial statements are not stated on
a basis substantially  consistent with that of the audited financial statements;
(C) (1) at the date of the latest available consolidated financial statements of
the Company and at a specific date not more than five (5) Business Days prior to
the date of each such letter there has been, except as specified in such letter,
any increase in the  outstanding  capital stock,  or  indebtedness  for borrowed
money of the Company  (other than  deposits and Federal Home Loan Bank  advances
with a maturity of one year or less) or any decrease in the shareholders' equity
thereof as compared  with  amounts  shown in the latest  statement  of financial
condition included in the Prospectus, or (2) for the period from the date of the
latest audited  financial  statements of the Company included in or incorporated
by  reference  into the  Prospectus  to a  specific  date not more than five (5)
Business  Days  prior to the date of each such  letter,  there  were,  except as
specified in such letter,  any  decreases,  as compared  with the  corresponding
period in the  preceding  year,  in  consolidated  net  income  for the  Company
excluding expenses associated with the Merger or any increase,  as compared with
the corresponding period in the preceding year, in the provision for loan losses
for the Company,  (iv) they have  performed  certain  specific  procedures  as a
result of which they  determined  that  certain  information  of an  accounting,
financial or  statistical  nature  included in the  Prospectus  and requested by
Bancorp and agreed upon by such  accountants,  which is expressed in dollars (or
percentages  obtained  from such dollar  amounts) and obtained  from  accounting
records which are subject to the internal  controls of the Company's  accounting
system or which  has been  derived  directly  from such  accounting  records  by
analysis or computation is in agreement with such records or  computations  made
therefrom  (excluding  any  questions of legal  interpretation),  and (v) on the
basis of such procedures as are set forth in such letter,  nothing came to their
attention with respect to the Company which would cause them to believe that the
pro forma financial  statements had not been properly  compiled on the pro forma
basis described therein; and

 ..............  (e) Each Person who may be at the  Effective  Time or was on the
date of this  Agreement an  "affiliate"  of the Company for purposes of Rule 145
under the  Securities  Act shall have executed and delivered to the Company,  at
least 45 days prior to the date of the  meeting of the Company  shareholders  to
approve the Merger,  the written  undertakings  in the form  attached  hereto as
Exhibit A.

 ..............Section   7.3.  Conditions  to  the  Company's  Obligations.   The
obligations  of the  Company to  consummate  the Merger  shall be subject to the
following conditions:

 ..............  (a) The  representations  and warranties of Bancorp set forth in
this Agreement shall be true and correct in all material respects as of the date
of this  Agreement  and (except to the extent such  representation  and warranty
speaks as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date;

 ..............  (b) Each of  Bancorp  and the  Bancorp  Subsidiaries  shall have
performed and complied in all material  respects with each agreement,  covenant,
obligation, and condition required by this Agreement to be performed or complied
with by it at or prior to the Closing Date; and

 .............  (c)  Bancorp  shall have  delivered  to Bancorp and the Company a
certificate,  dated as of the Closing  Date,  signed on behalf of Bancorp by its
Chief Executive Officer and Chief Financial Officer, confirming the satisfaction
of the conditions contained in paragraphs (a) and (b) of this Section 7.3.

                                  ARTICLE VIII
                                   TERMINATION

 ..............Section 8.1. Termination.  (a) This Agreement may be terminated at
any time prior to the  Effective  Time,  whether  before or after  approval  and
adoption  of  this  Agreement  by  the  Bancorp   shareholders  or  the  Company
shareholders, as follows:

 .............. (i) by written consent of the parties hereto;

 ..............  (ii) by Bancorp or the Company if a condition to the terminating
party's  obligation to close set forth in Article VII cannot be satisfied  prior
to the date set forth in Section 8.1(a)(iv) below unless caused by the breach of
any covenant or agreement  under this  Agreement  (x) by Bancorp or the Bank, in
the  case of a  termination  by the  Company,  or (y) by the  Company  or  First
Savings, in the case of termination by Bancorp;

 ..............  (iii) by  Bancorp  or the  Company  (provided  that  none of the
terminating party or any of its Affiliates is not then in material breach of any
representation,  warranty,  covenant,  or other agreement  contained  herein) if
there shall have been a material breach of any of the covenants or agreements or
any of the representations or warranties set forth in this Agreement on the part
of Bancorp or the Bank, in the case of a termination  by the Company,  or on the
part of the Company or First  Savings,  in the case of a termination by Bancorp,
which breach is not cured within thirty (30) days following written notice given
by the terminating party to the party committing such breach, or, by its nature,
cannot be cured  prior to the date set forth in Section  8.1(a)(iv)  below,  and
which breach would entitle the  terminating  party to not  consummate the Merger
pursuant to Article VII;

 ..............  (iv) by Bancorp or the Company,  if the Closing has not occurred
on or before March 31, 2000 (provided that the right to terminate this Agreement
under this Section  8.1(a)(iv) shall not be available to any party whose failure
or whose  Affiliate's  failure to perform any covenant of obligation  under this
Agreement  has been the cause of or  resulted  in the  failure  of the Merger to
occur on or before such date);

 ..............  (v) by Bancorp if the Company  Board shall  withdraw,  modify or
change in a manner  adverse to Bancorp its  recommendation  with  respect to the
Merger,  this Agreement,  or the  transactions  contemplated  hereby,  or by the
Company  if the  Bancorp  Board  shall  withdraw,  modify  or change in a manner
adverse to the  Company its  recommendation  with  respect to the  Merger,  this
Agreement, or the transactions contemplated hereby;

 ..............  (vi) by Bancorp pursuant to and in accordance with the provision
of the last sentence of Section 6.18.

 .............. (b) The termination of this Agreement shall be effectuated by the
delivery by the party terminating this Agreement to the other party of a written
notice  of such  termination.  If this  Agreement  terminates  pursuant  to this
Section 8.1, it shall become null and void and have no further  force or effect,
except as provided in Section 8.2.

 ..............Section  8.2.  Survival  After  Termination.  If this Agreement is
terminated  in  accordance   with  Section  8.1  hereof  and  the   transactions
contemplated hereby are not consummated, this Agreement shall become void and of
no further  force and  effect,  without any  liability  on the part of any party
hereto,  except for the provisions of Sections 6.5 and 6.9.  Notwithstanding the
foregoing, nothing in this Section 8.2 shall relieve any party to this Agreement
of liability for a willful breach of any provision of this Agreement.

 ..............Section  8.3.  Termination  Fee. If, prior to the Effective  Time,
this  Agreement is terminated by the Company and within 12 months of the date of
termination, the Company agrees to be acquired by, merged, or otherwise combined
with any third party,  in  consideration  for Bancorp's  expenditure of time and
money in  connection  with the  drafting  of this  Agreement  and the actions of
Bancorp connected hereto, the Company shall pay Bancorp the amount of $250,000.


                                   ARTICLE IX
                                  MISCELLANEOUS

 ..............Section 9.1. Amendments;  Waiver. This Agreement may be amended by
the parties hereto,  by action taken by or on behalf of their respective  Boards
of  Directors,  at any time before or after  approval of this  Agreement  by the
Bancorp shareholders or Company shareholders;  provided, however, that after any
such  approval  by the Bancorp  shareholders  or Company  shareholders,  no such
amendment  shall be made  which  under  Applicable  Law  would  require  further
approval or authorization by the Bancorp  shareholders or Company  shareholders,
without  obtaining such further approval or authorization.  Notwithstanding  the
foregoing,  this Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any agreement on the part of any
party  to waive  (i) any  inaccuracies  in the  representations  and  warranties
contained  herein made by any other  party or in any  document,  certificate  or
writing  delivered  pursuant  hereto by any other party, or (ii) compliance with
any of the agreements, covenants, or conditions contained herein, shall be valid
only if set forth in an instrument in writing signed on behalf of such party. No
such  waiver  shall  constitute  a waiver of, or estoppel  with  respect to, any
subsequent or other  inaccuracy,  breach, or failure to strictly comply with the
provisions of this  Agreement.  The failure of any party at any time or times to
enforce or require  performance of any provision  hereof shall in no way operate
as a waiver or affect the right of such  party at a later  time to  enforce  the
same.

 ..............Section   9.2.  Entire   Agreement.   This  Agreement   (including
Disclosure  Schedules,  Annexes,  Exhibits,  certificates,  lists and  documents
referred to herein,  and any  documents  executed by the parties  simultaneously
herewith or pursuant  hereto,)  constitute  the entire  agreement of the parties
hereto and supersede all prior agreements and understandings,  written and oral,
among the parties with respect to the subject matter hereof.

 ..............Section  9.3.  Non-Survival  of  Representations,  Warranties  and
Agreements.  No investigation by the parties hereto made heretofore or hereafter
shall  affect  the  representations  and  warranties  of the  parties  which are
contained  herein and each such  representation  and warranty shall survive such
investigation. The representations, warranties, covenants, and agreements of the
parties  contained herein shall not survive the Effective Time, except for those
covenants and agreements which by their terms contemplate  performance after the
Effective Time.

 ..............Section  9.4.  Interpretation.  When a  reference  is made in this
Agreement  to  Sections,   Annexes,  Exhibits,  or  Disclosure  Schedules,  such
reference shall be to a Section of or Annex or Exhibit or Disclosure Schedule to
this Agreement  unless otherwise  indicated.  The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation  of this Agreement.  Whenever the words
"include,"  "includes" or "including" are used in this Agreement,  they shall be
deemed to be followed by the words "without  limitation."  The phrases "the date
of this  Agreement,"  "the date hereof" and terms of similar import,  unless the
context  otherwise  requires,  shall be deemed to refer to the date set forth in
the first paragraph of this Agreement.

 ..............Section 9.5. Severability. Any term or provision of this Agreement
which  is  invalid  or  unenforceable  in any  jurisdiction  shall,  as to  that
jurisdiction,   be   ineffective   to  the   extent   of  such   invalidity   or
unenforceability  without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or  enforceability of
any of the terms or provisions of this Agreement in any other  jurisdiction.  If
any  provision  of this  Agreement  is so  broad as to be  unenforceable  in any
jurisdiction,  the  provision  shall  be  interpreted  to be only so broad as is
enforceable in that jurisdiction.

 ..............Section   9.6.  Notices.  All  notices  and  other  communications
hereunder  shall be in writing  and shall be deemed  given (a) upon  delivery in
person, (b) upon transmission by telecopy (with written confirmation),  (c) upon
receipt if mailed by registered or certified mail (return receipt requested), or
(d) on the business date after being delivered to a reputable overnight delivery
service,  in each case,  to the parties at the  following  addresses (or at such
other address for a party as shall be specified by like notice):

   If to Bancorp or the Bank:

        Peoples Bancorp
        212 West 7th Street
        Auburn, Indiana  46706
        Attention: Mr. Maurice F. Winkler, III, President
        and Chief Operating Officer
        Telecopy:

   With a copy to:

        Barnes & Thornburg
        11 South Meridian Street
        Indianapolis, Indiana  46204
        Attention:  Claudia Swhier, Esq.
        Telecopy:  317-231-7433

   If to the Company or First Savings:

        Three Rivers Financial Corporation
        123 Portage Avenue
        Three Rivers, Michigan  49093
        Attention:  Mr. G. Richard Gatton, President and Chief Executive Officer
        Telecopy:

    With copies to:

        Manatt, Phelps & Phillips, LLP 1501 M Street, N.W.
        Suite 700
        Washington, D.C.  20005
        Attention:  Edward L. Lublin, Esq.
        Telecopy:  202-463-4394

 ..............Section  9.7. Binding Effect;  Persons Benefiting;  No Assignment.
Subject to the last sentence of this Section 9.7, this Agreement  shall inure to
the  benefit  of and be binding  upon the  parties  hereto and their  respective
successors and permitted assigns. Except for the provisions of Sections 6.16 and
6.17, nothing in this Agreement is intended or shall be construed to confer upon
any Person other than the parties  hereto and their  respective  successors  and
permitted  assigns  any  right,  remedy,  or claim  under or by  reason of their
Agreement  or any part hereof or to create any third party  beneficiaries.  This
Agreement  may not be assigned by any of the  parties  hereto  without the prior
written consent of each of the other parties hereto.

 ..............Section  9.8. Counterparts.  This Agreement may be executed in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which taken  together  shall  constitute  one and the same  agreement,  it being
understood that all of the parties need not sign the same counterpart.

 ..............Section  9.9.  Governing Law. This agreement,  the legal relations
between the parties and the adjudication and the enforcement  thereof,  shall be
governed by and  interpreted  and construed in accordance  with the  substantive
laws of the  State of  Indiana,  without  regard  to  applicable  choice  of law
provisions thereof.

 ..............Section  9.10.  Specific  Performance.  The  parties  hereto  each
acknowledge that, in view of the uniqueness of its business and the transactions
contemplated by this Agreement,  each party would not have an adequate remedy at
law for money damages in the event that the covenants to be performed  hereunder
have not been performed in accordance with their terms, and therefore agree that
the other parties shall be entitled to specific  enforcement of the terms hereof
in addition to any other equitable remedy to which such parties may be entitled.

 ..............Section  9.11. WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT
AGREE TO WAIVE ANY RIGHT TO A JURY TRIAL AS TO ALL DISPUTES HEREUNDER.

 ..............IN WITNESS WHEREOF the parties have hereunto caused this Agreement
to be duly executed as of the date first above written.





                             PEOPLES BANCORP


                             By:
                             Name:
                             Title:



                       THREE RIVERS FINANCIAL CORPORATION


                             By:
                             Name:
                             Title:




<PAGE>


NEWS RELEASE Exhibit 20 For Additional Information, contact:

Peoples Bancorp                                     Three Rivers Financial Corp.
Roger J. Wertenberger, Chairman                     G. Richard Gatton, President
Maurice F. Winkler III, President                   (616) 279-5117
(219) 925-2500


                PEOPLES BANCORP AND THREE RIVERS FINANCIAL CORP.
                      ANNOUNCE SIGNING OF MERGER AGREEMENT

         AUBURN,  INDIANA and THREE  RIVERS,  MICHIGAN -- SEPTEMBER  21, 1999 --
Peoples Bancorp  (NASDAQ:  PFDC),  headquartered in Auburn,  Indiana,  and Three
Rivers Financial Corp.  (AMEX:  THR),  headquartered in Three Rivers,  Michigan,
jointly announced today that they have signed a definitive  agreement  providing
for the merger of Three Rivers  Financial Corp., a $101 million savings and loan
holding company,  with and into Peoples Bancorp, a $317 million savings and loan
holding company.

         Under the terms of the  agreement,  each  shareholder  of Three  Rivers
Financial  Corp.  would  receive in a tax-free  exchange  1.08 shares of Peoples
Bancorp  common stock for each share of Three Rivers  common stock owned by such
shareholder. Based on the closing price of Peoples Bancorp on September 20, 1999
($17),  the transaction is valued at $18.36 per share and has an aggregate value
of approximately  $14.4 million  (assuming the exercise of all outstanding stock
options).  Three Rivers=  common stock closed on the AMEX on September 20, 1999,
at $11 per share.

         The proposed  merger is subject to the approval of the  shareholders of
Peoples  Bancorp and of Three Rivers,  and of the Office of Thrift  Supervision,
receipt of  fairness  opinions,  and other  customary  conditions.  The  parties
contemplate  that the merger will become  effective  during the first quarter of
2000.

         Following  the  completion  of  the  transaction,  G.  Richard  Gatton,
president  of Three  Rivers  Financial  Corp.,  and one other  director of Three
Rivers,  will join the Board of  Directors  of Peoples  Bancorp.  Three  Rivers=
savings association subsidiary will retain its name and separate identity.

         AThe  merger  with Three  Rivers  represents  an  expansion  of Peoples
Bancorp=s  operations  into  southwestern  Michigan,@  said Roger  Wertenberger,
Peoples Bancorp=s chairman of the board. AWe are excited by this increase in our
market penetration and our ability to offer our services to new customers.



<PAGE>



                                                                  44

         Three Rivers= President,  G. Richard Gatton,  said, when announcing the
combination,  AThe joining of Three Rivers with Peoples Bancorp will allow us to
increase  our  number  of  banking  locations  and to offer a  broader  array of
products  and  services to our  customers.  This  transaction  also allows us to
retain banking  decision-making  here in Three Rivers.  We are excited about the
opportunities  presented  by this  partnership,  and we  feel it is in the  best
interests  of  our  shareholders,  customers  and  employees,  as  well  as  the
communities we serve.

         Three Rivers  Financial  Corp. is the holding company for First Savings
Bank, A Federal Savings Bank.  First Savings Bank conducts its banking  business
from its main  office in Three  Rivers,  Michigan,  and from  five full  service
branch offices in Three Rivers, Schoolcraft,  and Union in Michigan and Howe and
Middlebury in Indiana.

         Upon completion of the merger, Peoples Bancorp, an Auburn-based savings
and loan holding company,  will have total assets of approximately  $418 million
and will operate two savings association subsidiaries with a total of 14 banking
offices in northeastern Indiana and southwestern Michigan.
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K EFFECTIVE 09-23-99", "secsgml_size_bytes": 187993}]
{"company-data": {"conformed-name": "PEOPLES BANCORP", "cik": "0000869004", "assigned-sic": "6022", "irs-number": "351811284", "state-of-incorporation": "IN", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-18991", "film-number": "99716728"}, "business-address": {"street1": "212 WEST 7TH ST", "city": "AUBURN", "state": "IN", "zip": "46706", "phone": "2199252500"}, "mail-address": {"street1": "212 WEST SEVENTH ST", "city": "AUBURN", "state": "IN", "zip": "46706"}}
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 8-K

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

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported): September 21, 1999

                                 PEOPLES BANCORP

             (Exact name of registrant as specified in its charter)

                                     INDIANA

                 (State or other jurisdiction of incorporation)

0-18991                                                 35-1811284
(Commission File Number)                       (IRS Employer Identification No.)

212 West Seventh Street
Auburn, Indiana                                                         46706
(Address of principal executive offices)                              (Zip Code)

       Registrant's telephone number, including area code: (219) 925-2500
2

Item 5.  Other Events

         On September 21, 1999,  Peoples  Bancorp (the  ARegistrant@)  and Three
Rivers  Financial  Corp.  (AThree  Rivers@)  jointly  announced the signing of a
definitive  agreement (the  "Agreement")  pursuant to which Three Rivers will be
merged with and into Registrant (the "Merger"). The Agreement provides that upon
the effective date of the Merger (the  "Effective  Time"),  each  shareholder of
Three Rivers will  receive in a tax-free  exchange  1.08 shares of  Registrant=s
common  stock  for  each  share  of  Three  Rivers  common  stock  owned by such
shareholder.  Based on the closing  price of  Registrant  on September  20, 1999
($17),  the transaction is valued at $18.36 per share and has an aggregate value
of approximately  $14.4 million  (assuming the exchange of all outstanding stock
options).

         Pursuant to General Instruction F to Form 8-K, the press release issued
September 21, 1999,  concerning the Merger is  incorporated  herein by reference
and is attached hereto as Exhibit 20.

Item 7.  Financial Statements and Exhibits

         (c)      Exhibits

                  Exhibit 2         Plan of  Reorganization  and Agreement and
                                    Plan of Merger by and among Peoples  Bancorp
                                    and Three Rivers Financial Corporation dated
                                    September 21, 1999.

                  Exhibit 20        Press Release dated September 21, 1999.
iv

                                   SIGNATURES

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

                                                     By:   Roger J. Wertenberger

Dated: September 23, 1999
Exhibit 2

                             PLAN OF REORGANIZATION

                        AND AGREEMENT AND PLAN OF MERGER
                                  BY AND AMONG
                                 PEOPLES BANCORP
                                       AND
                       THREE RIVERS FINANCIAL CORPORATION

                            Dated September 21, 1999
TABLE OF CONTENTS
                                                                            Page
ARTICLE I - CERTAIN DEFINITIONS................................................1

         Section 1.1  Definitions..............................................1

ARTICLE II - THE MERGER........................................................6

         Section 2.1  The Merger...............................................6

         Section 2.2  Closing..................................................6

         Section 2.3  Effective Time...........................................6

         Section 2.4.  Additional Activities...................................6

         Section 2.5.  Articles of Incorporation and Bylaws....................7

         Section 2.6.  Boards of Directors and Officers........................7

         Section 2.7.  Conversion of Securities................................7

         Section 2.8.  Exchange Procedures.....................................7

         Section 2.9.  No Fractional Shares....................................9

         Section 2.10.  Anti-Dilution Adjustments..............................9

         Section 2.11. Treatment of Stock Options..............................9

         Section 2.12.  Reservation of Right to Revise Transaction............10

ARTICLE III - FIRST SAVINGS...................................................10

         Section 3.1.  Liquidation Account....................................10

ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND FIRST SAVINGS..10

         Section 4.1.  Organization, Good Standing, Authority, Insurance, Etc.10

         Section 4.2.  Capitalization.........................................11

         Section 4.3.  Ownership of Subsidiaries..............................11

         Section 4.4.  Financial Statements and Reports.......................11

         Section 4.5.  Absence of Changes.....................................12

         Section 4.6.  No Broker's or Finder's Fees...........................12

         Section 4.7.  Litigation and Other Proceedings.......................12

         Section 4.8.  Compliance with Law....................................12

         Section 4.9.  Corporate Actions......................................13

         Section 4.10.  Authority.............................................13

         Section 4.11.  Employment Arrangements...............................14

         Section 4.12.  Employee Benefits.....................................14

         Section 4.13.  Information Furnished; Registration Statement.........15

         Section 4.14.  Property and Assets...................................15

         Section 4.15.  Agreements and Instruments............................16

         Section 4.16.  Material Contract Defaults............................17

         Section 4.17.  Tax Matters...........................................17

         Section 4.18.  Environmental Matters.................................17

         Section 4.19.  Loan Portfolio; Portfolio Management..................18

         Section 4.20.  Real Estate Loans and Investments.....................18

         Section 4.21.  Derivatives Contracts.................................18

         Section 4.22.  Insurance.............................................19

         Section 4.23.  Tax Treatment.........................................19

ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BANCORP AND THE BANK............19

         Section 5.1.  Organization, Good Standing, Authority, Insurance, Etc.19

         Section 5.2.  Capitalization.........................................20

         Section 5.3.  Ownership of Subsidiaries..............................20

         Section 5.4.  Financial Statements and Reports.......................20

         Section 5.5  Absence of Changes......................................21

         Section 5.6.  No Broker's or Finder's Fees...........................21

         Section 5.7.  Litigation and Other Proceedings.......................21

         Section 5.8.  Compliance With Law....................................21

         Section 5.9.  Corporate Actions......................................22

         Section 5.10.  Authority.............................................22

         Section 5.11.  Information Furnished; Registration Statement.........22

         Section 5.12.  Property and Assets...................................23

         Section 5.13.  Agreements and Instruments............................23

         Section 5.14.  Material Contract Defaults............................24

         Section 5.15.  Tax Matters...........................................24

         Section 5.16.  Environmental Matters.................................24

         Section 5.17.  Loan Portfolio; Portfolio Management..................25

         Section 5.18.  Real Estate Loans and Investments.....................25

         Section 5.19.  Derivatives Contracts.................................25

         Section 5.20.  Insurance.............................................26

         Section 5.21.  Tax Treatment.........................................26

ARTICLE VI - COVENANTS........................................................26

         Section 6.1.  Conduct of Business by the Company.....................26

         Section 6.2.  Maintenance of Records.................................28

         Section 6.3.  Salary and Benefits....................................28

         Section 6.4.  Efforts of Parties to Close............................29

         Section 6.5.  Confidentiality and Announcements......................30

         Section 6.6.  Access; Certain Communications.........................30

         Section 6.7.  Cooperation; Preparation of Documents..................31

         Section 6.8.  Notification of Certain Matters........................32

         Section 6.9.  Expenses...............................................33

         Section 6.10.  Third Party Proposals.................................33

         Section 6.11.  Stock Listing.........................................33

         Section 6.12.  Integration; Conforming Entries.......................33

         Section 6.13.  Tax-Free Treatment....................................34

         Section 6.14.  Agreements of Affiliates..............................34

         Section 6.15.  Stockholder Approval..................................34

         Section 6.16.  Indemnification.......................................35

         Section 6.17.  D&O Insurance.........................................35

         Section 6.18.  Environmental Reports.................................35

ARTICLE VII - CONDITIONS TO CONSUMMATION OF THE MERGER........................36

         Section 7.1.  Mutual Conditions......................................36

         Section 7.2.  Conditions to Bancorp's Obligations....................37

         Section 7.3.  Conditions to the Company's Obligations................38

ARTICLE VII - TERMINATION.....................................................38

         Section 8.1.  Termination............................................38

         Section 8.2.  Survival After Termination.............................39

         Section 8.3.  Termination Fee........................................39

ARTICLE IX - MISCELLANEOUS....................................................40

         Section 9.1.  Amendments; Waiver.....................................40

         Section 9.2.  Entire Agreement.......................................40

         Section 9.3.  Non-Survival of Representations, Warranties
                            and Agreements....................................40

         Section 9.4.  Interpretation.........................................40

         Section 9.5.  Severability...........................................40

         Section 9.6.  Notices................................................40

         Section 9.7.  Binding Effect; Persons Benefiting; No Assignment......41

         Section 9.8.  Counterparts...........................................41

         Section 9.9.  Governing Law..........................................42

         Section 9.10.  Specific Performance..................................42

         Section 9.11.  Waiver of Jury Trial..................................42
PLAN OF REORGANIZATION
                        AND AGREEMENT AND PLAN OF MERGER

 ........THIS PLAN OF REORGANIZATION AND AGREEMENT AND PLAN OF MERGER,  dated as
of September 21, 1999 (the  "Agreement"),  is by and among Peoples  Bancorp,  an
Indiana  corporation  ("Bancorp")  and Three  Rivers  Financial  Corporation,  a
Delaware corporation (the "Company").

 .........WHEREAS,  Bancorp, a unitary savings and loan holding company, with its
principal  offices in Auburn,  Indiana,  owns all of the issued and  outstanding
capital  stock of Peoples  Federal  Savings Bank of DeKalb  County,  a federally
chartered savings bank and wholly-owned subsidiary of Bancorp (the "Bank"), with
its principal offices in Auburn, Indiana;

 .........WHEREAS,  the Company, a unitary savings and loan holding company, with
its  principal  offices in Three  Rivers,  Michigan,  owns all of the issued and
outstanding  capital  stock of First  Savings  Bank, A Federal  Savings  Bank, a
federally  chartered  savings  bank  and  wholly-owned   subsidiary  of  ("First
Savings"), with its principal offices in Three Rivers, Michigan;

 ............WHEREAS,   Bancorp  and  the   Company   desire  to  combine   their
respective  holding companies through a tax-free exchange so that the respective
shareholders  of both Bancorp and the Company  will have an equity  ownership in
the combined holding company;

 ...........WHEREAS, to accomplish  the foregoing,  the Board of Directors of the
Company  (the  "Company  Board")  and the Board of  Directors  of  Bancorp  (the
"Bancorp  Board")  have  approved the merger (the " Merger") of the Company with
and into  Bancorp,  pursuant to the terms and subject to the  conditions of this
Agreement;

 ...........WHEREAS,  for federal income  tax  purposes, it  is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Code (as  defined  below)  and this  Agreement  shall  constitute  a plan of
reorganization pursuant to Section 368 of the Code;

 ...........WHEREAS,   the parties  desire  that  First  Savings  shall  become a
separate wholly-owned subsidiary of Bancorp, and not be merged with and into the
Bank;

 ...........WHEREAS,  the parties desire  to  provide  for certain  undertakings,
conditions,  representations,  warranties,  and covenants in connection with the
transactions contemplated by this Agreement.

 ...........NOW,    THEREFORE,  in  consideration  of   the  foregoing   and  the
respective  representations,  warranties,  covenants  and  agreements  set forth
herein and  subject to the  conditions  and other  terms  herein set forth,  and
intending  to be legally  bound  hereby,  the  parties  hereto  hereby  agree as
follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

 .............Section 1.1. Definitions.  For all purposes of this Agreement, the
following terms shall have the respective meanings set forth in this Section 1.1
(such definitions to be equally applicable to both the singular and plural forms
of the terms herein defined):

 .............."Acquisition Proposal" shall have the meaning set forth in Section
6.10.

 .............."Affiliate" shall mean any individual,  partnership,  corporation,
entity,  or other  Person  that  directly,  or  indirectly  through  one or more
intermediaries,  controls or is controlled  by, or is under common control with,
the Person specified.

 .............."Agreement"  shall  have the  meaning  set forth on the first page
hereof.

 .............."Applicable  Law" shall  mean any  domestic  or  foreign  federal,
state, or local statute, law, ordinance,  rule,  administrative  interpretation,
regulation,  order,  writ,  injunction,  directive,  judgment,  decree,  policy,
guideline,  or other requirement  applicable to the Company,  Bancorp, or any of
their respective Affiliates, properties, assets, officers, directors, employees,
or agents, as the case may be.

 .............."Approval Date" shall have the meaning set forth in Section 2.3.

 .............."Asset Classification" shall have the meaning set forth in Section
4.19(b).

 .............."Bancorp"  has the  meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.

 .............."Bancorp  Board"  has the  meaning  set  forth on the  first  page
hereof.

 .............."Bancorp  Common  Stock"  shall mean the common  stock,  par value
$1.00 per share, of Bancorp.

 .............."Bancorp  Material  Adverse  Effect"  shall mean,  with respect to
Bancorp or any of its Affiliates, a material adverse effect on (i) the business,
financial  condition  or  results  of  operations  of  Bancorp  and the  Bancorp
Subsidiaries  taken as a whole or (ii) the  ability  of  Bancorp  or the Bank to
complete the transactions contemplated hereby; provided, however, that a Bancorp
Material  Adverse  Effect  shall  not be  defined  to  include  (w)  any  change
attributable  to or  resulting  from any  change  in  Applicable  Law or GAAP or
regulatory accounting principles, in each case which affects thrift institutions
generally,  or (x) the effects of any change  attributable  to or resulting from
changes in economic conditions applicable to depository  institutions  generally
or in general levels of interest rates affecting thrift institutions  generally,
or (y)  expenses  related  to  consummation  of the Merger  which are  otherwise
permitted  under  this  Agreement  (or  set  forth  in  the  Bancorp  Disclosure
Schedule), including, but not limited to, preparation, legal, investment banking
and auditing fees.

 .............."Bancorp Plans" shall have the meaning set forth in Section 6.3.

 .............."Bancorp  Subsidiary"  and "Bancorp  Subsidiaries"  shall have the
respective  meanings set forth in Section 5.1 and shall  include  First  Savings
after the Effective Time.

 .............."Bank"  has the  meaning  set forth on the first  page  hereof and
includes any direct or indirect successor or assign.

 .............."Benefit Arrangements" shall have the meaning set forth in Section
4.12(a)

 .............."Business  Day" shall mean any day that the NYSE is normally  open
for trading and that is not a Saturday,  a Sunday or a day on which banks in the
States of  Indiana  and  Michigan  are  generally  closed  for  regular  banking
business.

 .............."Certificates" shall have the meaning set forth in Section 2.8.

 .............."Closing" shall have the meaning set forth in Section 2.2.

 .............."Closing Date" shall have the meaning set forth in Section 2.2.

 .............."Code"  shall mean the Internal  Revenue Code of 1986, as amended,
together with the Treasury regulations thereunder.

 .............."Company"  has the  meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.

 .............."Company  Board"  has the  meaning  set  forth on the  first  page
hereof.

 .............."Company  Common  Stock"  shall mean the common  stock,  par value
$0.01 per share, of Company.

 .............."Company  Employee  Benefit  Plan"  has the  meaning  set forth in
Section 4.12(a).

 .............."Company  Material Adverse Effect" shall mean, with respect to the
Company or any of its Affiliates, a material adverse effect on (i) the business,
financial  condition  or results of  operations  of the  Company and the Company
Subsidiaries  taken as a whole  or (ii)  the  ability  of the  Company  or First
Savings to complete the transactions  contemplated  hereby;  provided,  however,
that a Company  Material  Adverse Effect shall not be defined to include (w) any
change attributable to or resulting from any change in Applicable Law or GAAP or
regulatory accounting principles, in each case which affects thrift institutions
generally,  or (x) the effects of any change  attributable  to or resulting from
changes in economic conditions applicable to depository  institutions  generally
or in general levels of interest rates affecting thrift institutions  generally,
or (y)  expenses  related  to  consummation  of the Merger  which are  otherwise
permitted  under  this  Agreement  (or  set  forth  in  the  Company  Disclosure
Schedule), including, but not limited to, preparation, legal, investment banking
and auditing fees.

 .............."Company Option" shall have the meaning set forth in Section 2.11.

 .............."Company  Preferred  Stock"  shall have the  meaning  set forth in
Section 4.2.

 .............."Company  Property"  shall have the  meaning  set forth in Section
6.18.

 .............."Company  Subsidiary"  and "Company  Subsidiaries"  shall have the
respective meanings set forth in Section 4.1.

 .............."Contract" has the meaning set forth in Section 10.

 .............."Current  Property"  shall have the  meaning  set forth in Section
6.18.

 .............."Derivatives Contract" shall mean the meaning set forth in Section
4.21.

 .............."DGCL" shall have the meaning set forth in Section 2.1.

 .............."Effective Time" shall have the meaning set forth in Section 2.3.

 .............."Encumbrance"  shall  mean any lien,  pledge,  security  interest,
claim, charge, easement, limitation, commitment,  encroachment,  restriction, or
encumbrance of any kind or nature whatsoever.

 .............."Environmental  Firm"  shall have the meaning set forth in Section
6.18.

 .............."ERISA"  shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder.

 .............."Exchange  Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.

 .............."Exchange Agent" shall have the meaning set forth in Section 2.8.

 .............."Exchange  Option"  shall  have the  meaning  set forth in Section
2.11.

 .............."Exchange  Ratio" shall mean, subject to Section 2.10, 1.08 shares
of Bancorp Common Stock for each one share of Company Common Stock.

 .............."Facility  Property"  shall have the  meaning set forth in Section
6.18.

 .............."FDIC"  shall mean the Federal Deposit  Insurance  Corporation and
any successor thereto.

 .............."GAAP" shall mean generally accepted accounting principles as used
in the  United  States  of  America  as in  effect  at the time  any  applicable
financial  statements were prepared or any act requiring the application of GAAP
was performed.

 .............."Governmental  Approval"  shall  have  the  meaning  set  forth in
Section 4.10.

 .............."Governmental  Authority" shall mean any government,  any state or
other  political   subdivision   thereof,   any  entity  exercising   executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government,  including any government agency, department,  board, commission,
or  instrumentality  of the United States, any state of the United States or any
political   subdivision   thereof,  and  any  court  or  tribunal  of  competent
jurisdiction,   and  any   governmental   or   nongovernmental   self-regulatory
organization,  agency,  or authority  (including the NASDAQ NMS and the National
Association of Securities Dealers, Inc.).

 .............."HOLA"  shall mean the Home Owners' Loan Act of 1933,  as amended,
and the rules and regulations promulgated thereunder.

 .............."IBCL" shall have the meaning set forth in Section 2.1.

 .............."Injunction" shall have the meaning set forth in Section 7.1(a).

 .............."IRS"  shall mean the Internal  Revenue  Service and any successor
thereto.

 .............."Insurance  Policies"  shall have the meaning set forth in Section
4.22.

 .............."Merger" has the meaning set forth on the first page hereof.

 .............."Merger Consideration" shall have the meaning set forth in Section
2.12.

 .............."NASDAQ  NMS" means the Nasdaq  National  Market and any successor
thereto.

 .............."NYSE"  means the New York Stock Exchange,  Inc. and any successor
thereto.

 .............."OTS"  shall  mean  the  Office  of  Thrift  Supervision  and  any
successor thereto.

 .............."Person"   shall  mean  any  individual,   corporation,   company,
partnership  (limited or general),  joint venture,  association,  trust or other
entity or similar contractual arrangement or relationship.

 .............."Previously Disclosed" by a party shall mean information set forth
in a schedule (with respect to Bancorp, the "Bancorp Disclosure  Schedule";  and
with respect to the Company, the "Company Disclosure Schedule"), correspondingly
enumerated  to the  representations,  warranties,  or  covenants  to which  such
information  relates,  that  is  delivered  by such  party  to the  other  party
contemporaneously   with  the  execution  of  this  Agreement  and  specifically
designated as information "Previously Disclosed" pursuant to this Agreement.

 .............."Prospectus" shall have the meaning set forth in Section 4.13.

 .............."Proxy  Statement"  shall  have the  meaning  set forth in Section
4.13.

 .............."Records"  shall mean, with respect to any Person, all records and
original  documents (and copies thereof) in the Person's  possession,  or in the
possession  of an  Affiliate  of such  Person,  as of the Closing Date (a) which
pertain to or are utilized by such Person or Affiliate to  administer,  reflect,
monitor,  evidence or record  information  respecting the business or conduct of
the Company or the Company Subsidiaries or Bancorp or the Bancorp  Subsidiaries,
or (b) necessary or appropriate  for the Company or the Company  Subsidiaries or
Bancorp and the Bancorp  Subsidiaries  to comply with any  Applicable  Law,  and
shall include in the case of (a) and (b) above,  all such records  maintained on
electronic or magnetic  media,  or in the electronic data base system of or used
by such Person or Affiliate.

 .............."Registration  Statement"  shall  have the  meaning  set  forth in
Section 4.13.

 .............."Regulatory  Documents" shall mean, with respect to a Person,  all
forms, reports,  registration statements,  schedules, and other documents filed,
or  required  to be filed by such  Person  with any  Governmental  Authority  or
pursuant to any Applicable Law.

 .............."Representatives"  shall  have the  meaning  set forth in  Section
6.10.

 .............."Right" shall have the meaning set forth in Section 6.1(ii).

 .............."SAIF"  shall have the  meaning  set forth in Section  4.1 and any
successor thereto.

 .............."SEC"  shall mean the Securities  and Exchange  Commission and any
successor thereto.

 .............."Securities  Act"  shall  mean  the  Securities  Act of  1933,  as
amended, and the rules and regulations of the SEC thereunder.

 .............."Surviving  Corporation"  shall  have  the  meaning  set  forth in
Section 2.1.

 .............."Tax Return" shall mean any return, report, information statement,
schedule or other document (including any related or supporting  information and
including any Form 1099 or other  document or report  required to be provided to
third  parties)  with respect to Taxes,  including  any document  required to be
retained  or  provided  to any  Governmental  Authority  pursuant  to 31  U.S.C.
Sections 5311-5328 and regulations promulgated thereunder.

 .............."Taxes" shall mean all federal,  provincial,  territorial,  state,
municipal,  local, foreign or other taxes, imposts,  rates, levies,  assessments
and other charges (and all interest and penalties thereon),  including,  without
limitation,  all income, excise,  franchise,  gains, real property, value added,
severance,  ad valorem,  personal  property,  sales, use,  license,  employment,
payroll,  social security,  unemployment,  disability,  estimated or withholding
taxes,  and all customs and import  duties,  and all  interest,  penalties,  and
losses thereon or associated therewith or associated with any Tax Return.

 .............."Transferred  Employees"  shall  have  the  meaning  set  forth in
Section 6.3.

                                   ARTICLE II
                                   THE MERGER

 ..............Section  2.1. The Merger.  Subject to the terms and  conditions of
this  Agreement  and to the HOLA,  the  Company  shall be  merged  with and into
Bancorp in accordance with the Indiana Business Corporation Law (the "IBCL") and
the Delaware General  Corporation Law (the "DGCL"),  and thereafter the separate
corporate  existence of the Company shall cease.  Bancorp shall be the surviving
corporation  of the  Merger  (sometimes  referred  to herein  as the  "Surviving
Corporation")  and shall  continue  to be  governed  by the laws of the State of
Indiana.  The  Merger  shall  have  the  effects  set  forth  in the  applicable
provisions of the IBCL and the DGCL.

 ..............Section  2.2.  Closing.  The closing (the "Closing") of the Merger
shall take place at the offices of Barnes & Thornburg, 11 South Meridian Street,
Indianapolis,  Indiana  46204,  counsel to Bancorp  (including by mail,  fax, or
otherwise as reasonably  agreed to by the parties hereto) or such other time and
place as the parties shall agree,  prior to the Effective  Time on the date that
the Effective Time occurs (the "Closing Date").

 ..............Section  2.3. Effective Time. The Merger shall become effective on
the date and at the time (the "Effective Time") on which  appropriate  documents
in respect of the Merger are filed with the  Secretaries  of State of the States
of Indiana and Delaware in such form as required by, and in accordance with, the
relevant provisions of the DGCL and IBCL, respectively. Subject to the terms and
conditions of this  Agreement,  the  Effective  Time shall occur on such date as
Bancorp  shall  notify the Company in writing  (such  notice to be at least five
full trading days in advance of the Effective Time) but (i) not earlier than the
satisfaction  or waiver of all  conditions  set forth in Article  VII (such date
being referred to herein as the "Approval Date") and (ii) subject to clause (i),
not  later  than  the  first  Business  Day of the  first  full  calendar  month
commencing  at least five full trading days after the Approval  Date, or at such
other time as Bancorp and the Company shall agree.

 ..............Section  2.4.  Additional  Actions.  If,  at any  time  after  the
Effective Time, the Surviving  Corporation shall consider or be advised that any
further  deeds,  assignments,  or  assurances or any other acts are necessary or
desirable  to (i) vest,  perfect  or  confirm,  of record or  otherwise,  in the
Surviving  Corporation its right, title, or interest in, to, or under any of the
rights, properties, or assets of Bancorp or the Company. or (ii) otherwise carry
out the  purposes of this  Agreement,  the Company and each of its  officers and
directors  shall be deemed  to have  granted  to the  Surviving  Corporation  an
irrevocable   power  of   attorney  to  execute  and  deliver  all  such  deeds,
assignments,  or assurances  and to do all acts  necessary or desirable to vest,
perfect or confirm title and possession to such rights, properties, or assets in
the  Surviving  Corporation  and  otherwise  to carry out the  purposes  of this
Agreement,  and the officers  and  directors of the  Surviving  Corporation  are
authorized  in the name of the  Company  or  otherwise  to take any and all such
action.

 ..............Section 2.5. Articles of Incorporation and Bylaws. The Articles of
Incorporation and Bylaws of Bancorp in effect immediately prior to the Effective
Time  shall  be the  Articles  of  Incorporation  and  Bylaws  of the  Surviving
Corporation following the Merger until otherwise amended or repealed.

 ..............Section  2.6.  Boards of Directors and Officers.  At the Effective
Time, the directors and officers of Bancorp  immediately  prior to the Effective
Time shall continue to be directors and officers, respectively, of the Surviving
Corporation  following the Merger; such directors and officers shall hold office
in  accordance  with the  Surviving  Corporation's  Bylaws and  applicable  law.
Promptly following the Effective Time, (i) Richard Gatton,  President,  CEO, and
Chairman of the Company, and one other  representative of the Company,  shall be
invited to serve as additional members of the Bancorp Board and, upon acceptance
thereof and appointment thereon,  shall be entitled to receive director fees and
other  benefits on the same basis as other  directors  of Bancorp,  and (ii) two
representatives of Bancorp shall be appointed to the Board of Directors of First
Savings.  Each director serving on the Board of Directors of First Savings as of
the date hereof and as of the  Effective  Time shall  remain a director of First
Savings for a period of not less than sixty (60) months  following the Effective
Time. Directors of First Savings shall be entitled to be compensated at the same
rate following the Effective  Time as the Board of Directors is currently  being
compensated,  subject to  increases in  accordance  with the policies of Bancorp
related to the compensation of directors of the Bank.

 ..............Section  2.7. Conversion of Securities.  At the Effective Time, by
virtue of the Merger and without any action on the part of Bancorp, the Company,
or the holder of any of the following securities:

 ..............  (a) Each  share of  Bancorp  Common  Stock  that is  issued  and
outstanding immediately prior to the Effective Time shall remain outstanding and
shall be unchanged after the Merger; and

 .............. (b) Subject to Sections 2.9, and 2.10 hereof:

 ..............  (i) each share of Company  Common Stock  issued and  outstanding
immediately  prior to the Effective Time shall cease to be outstanding and shall
be converted  into and become the right to receive a number of shares of Bancorp
Common Stock equal to the Exchange Ratio, provided,  however, that any shares of
Company Common Stock held by the Company,  Bancorp,  or any of their  respective
Subsidiaries,  in each case other than in a fiduciary capacity or as a result of
debts  previously  contracted,  shall be canceled and shall not be exchanged for
shares of Bancorp Common Stock; and

 ..............  (ii) each share of Company  Common Stock issued and  outstanding
pursuant to the Company's  recognition and retention plan  immediately  prior to
the Effective Time shall cease to be outstanding and shall be converted into and
become the right to receive a number of shares of Bancorp  Common Stock equal to
the Exchange Ratio and shall  continue to be subject to the same  conditions and
limitations  as such Company Common Stock was subject  immediately  prior to the
Effective Time.

 ..............Section 2.8. Exchange Procedures. (a) At or prior to the Effective
Time, Bancorp shall deposit,  or shall cause to be deposited,  with the Exchange
Agent,  for the benefit of the holders of  certificates  of Company Common Stock
for exchange in accordance with this Article II,  certificates  representing the
shares of Bancorp  Common  Stock and an  estimated  amount of cash to be paid in
lieu of fractional shares to be paid pursuant to this Article II in exchange for
outstanding shares of Company Common Stock.

 ..............  (b) Holders of record of certificates which immediately prior to
the Effective Time represented  outstanding  shares of Company Common Stock (the
"Certificates")  shall be instructed to tender such Certificates to Bancorp,  or
to an exchange agent designated by Bancorp (the "Exchange Agent"), pursuant to a
letter of  transmittal  that Bancorp  shall  deliver or cause to be delivered to
such holders as promptly as  practicable  following  the  Effective  Time.  Such
letter of transmittal  shall specify that risk of loss and title to Certificates
shall pass only upon  delivery of such  Certificates  to Bancorp or the Exchange
Agent.

 .............. (c) Subject to Section 2.9, after the Effective Time, each holder
of a Certificate(s)  that surrenders such  Certificate(s) to Bancorp,  or to the
Exchange Agent,  will, upon acceptance thereof by Bancorp or the Exchange Agent,
be entitled to (x) a  certificate  or  certificates  representing  the number of
whole shares of Bancorp  Common Stock into which the shares  represented  by the
Certificate(s) so surrendered  (aggregating all Certificates surrendered by such
holder)  shall have been  converted  pursuant to this  Agreement and (y) a check
representing  the amount of any cash in lieu of fractional  shares,  if any, and
dividends and distributions,  if any, which such holder has the right to receive
hereunder with respect to the Certificate(s) so surrendered,  in each case after
giving effect to any required withholding tax.

 ..............  (d) Bancorp or, at the election of Bancorp,  the Exchange Agent,
shall  accept  Certificates  upon  compliance  with  such  reasonable  terms and
conditions  as  Bancorp  or the  Exchange  Agent may impose to effect an orderly
exchange thereof in accordance with customary exchange  practices.  Certificates
shall be  appropriately  endorsed or accompanied by such instruments of transfer
as Bancorp or the Exchange Agent may reasonably require.

 ..............  (e) All shares of Bancorp  Common Stock issued upon surrender of
Certificates  in  accordance  with the  terms  hereof  (including  any cash paid
pursuant to this  Article II) shall be deemed to have been in full  satisfaction
of all rights  pertaining  to such shares of Company  Common  Stock  represented
thereby.  After the Effective Time,  holders of Certificates shall cease to have
rights with respect to the shares previously  represented by such  Certificates,
and  their  sole  rights  shall  be  to  exchange  such   Certificates  for  the
consideration provided for in this Agreement.

 ..............  (f) After the Effective Time, there shall be no further transfer
on the  records of the Company of  Certificates,  and if such  Certificates  are
presented to the Company for transfer,  they shall be canceled  against delivery
of the consideration  provided therefor in this Agreement.  Bancorp shall not be
obligated  to deliver the  consideration  to which any former  holder of Company
Common Stock is entitled as a result of the Merger until such holder  surrenders
the  Certificates as provided herein.  Certificates  surrendered for exchange by
any person  constituting  an "affiliate" of the Company for purposes of Rule 145
of the  Securities  Act,  shall not be exchanged for  certificates  representing
Bancorp  Common Stock until Bancorp has received a written  agreement  from such
person in the form attached  hereto as Exhibit A. Neither the Exchange Agent nor
any party to this  Agreement  nor any  Affiliate  thereof shall be liable to any
holder of stock represented by any Certificate for any  consideration  paid to a
public official pursuant to applicable  abandoned  property,  escheat or similar
laws.  Bancorp and the  Exchange  Agent shall be entitled to rely upon the stock
transfer  books of the  Company  to  establish  the  identity  of those  persons
entitled to receive consideration specified in this Agreement, which books shall
be conclusive  with respect  thereto.  In the event of a dispute with respect to
ownership  of stock  represented  by any  Certificate,  Bancorp and the Exchange
Agent  shall be entitled to deposit  any  consideration  represented  thereby in
escrow with an  independent  third party and thereafter be relieved with respect
to any claims thereto.

 ..............  (g) Notwithstanding  any other provisions of this Agreement,  no
dividends or other distributions  declared or made after the Effective Time with
respect to Bancorp  Common Stock having a record date after the  Effective  Time
shall  be paid  to the  holder  of any  unsurrendered  Certificate,  and no cash
payment in lieu of fractional shares shall be paid to any such holder, until the
holder shall surrender such Certificate as provided in this Section 2.8. Subject
to the effect of Applicable Laws,  following  surrender of any such Certificate,
there shall be paid to the holder of the certificates  representing whole shares
of Bancorp Common Stock issued in exchange  therefor,  without interest,  (i) at
the time of such surrender,  the amount of dividends or other distributions with
a record date on or after the Effective Time theretofore payable with respect to
such whole shares of Bancorp  Common Stock and not paid,  less the amount of any
withholding  taxes which may be required  thereon,  and (ii) at the  appropriate
payment  date  subsequent  to  surrender,  the  amount  of  dividends  or  other
distributions  with a record  date on or after the  Effective  Time but prior to
surrender  and a payment date  subsequent  to surrender  payable with respect to
such whole shares of Bancorp  Common Stock,  less the amount of any  withholding
taxes which may be required thereon.

 ..............Section  2.9.  No  Fractional  Shares.  Notwithstanding  any other
provision  of this  Agreement,  neither  certificates  nor scrip for  fractional
shares of Bancorp  Common  Stock shall be issued in the Merger.  Each holder who
otherwise  would have been  entitled to a fraction of a share of Bancorp  Common
Stock  shall  receive  in lieu  thereof  cash  (without  interest)  in an amount
determined by  multiplying  the  fractional  share interest to which such holder
would  otherwise  be entitled by the average of the closing  prices per share of
Bancorp  Common Stock for the five full trading days  immediately  preceding the
Closing  Date as  reported  on the NASDAQ NMS (as  reported  in The Wall  Street
Journal  or,  if  not  reported   therein,   in  another  mutually  agreed  upon
authoritative  source).  No such holder shall be entitled to  dividends,  voting
rights, or any other rights in respect of any fractional share.

 ..............Section 2.10. Anti-Dilution  Adjustments.  In the event that prior
to the Effective  Time Bancorp shall (or shall  establish a record date prior to
the  Effective  Time  for the  following)  declare  a stock  dividend  or  other
distribution  payable in Bancorp  Common Stock or  securities  convertible  into
Bancorp Common Stock or a distribution otherwise Previously Disclosed, or effect
a stock split,  reclassification,  combination,  or other change with respect to
Bancorp  Common Stock,  the Exchange Ratio or the Merger  Consideration,  as the
case  may  be,  shall  be  appropriately  adjusted  to  reflect  such  dividend,
distribution, stock split, reclassification,  combination, or other change, such
that  the  shareholders  of the  Company  shall  be  entitled  to same as if the
Effective Time had occurred prior thereto.

 ..............Section  2.11.  Treatment  of  Stock  Options.  (a)  Prior  to the
Effective  Time,  Bancorp and the Company  shall take all such actions as may be
necessary  to cause each  unexpired  and  unexercised  option under stock option
plans of the  Company  in effect on the date  hereof  which has been  granted to
current  or former  directors,  officers,  or  employees  of the  Company by the
Company  (each,  a  "Company  Option")  to be  automatically  converted  at  the
Effective Time into an option (an "Exchange  Option") to purchase that number of
shares of Bancorp  Common Stock equal to the number of shares of Company  Common
Stock  issuable  immediately  prior to the  Effective  Time upon exercise of the
Company  Option  (without  regard  to  actual  restrictions  on  exercisability)
multiplied by the Exchange  Ratio  (fractional  shares as a result thereof to be
subject  to the terms of the  respective  Company  Options  and the terms of the
plans governing same),  with an exercise price equal to the exercise price which
existed under the  corresponding  Company Option divided by the Exchange  Ratio,
and  with  other  terms  and  conditions  that  are the  same as the  terms  and
conditions  of such  Company  Option  immediately  before  the  Effective  Time,
provided  that with respect to any Company  Option that is an  "incentive  stock
option" within the meaning of Section 422 of the Code, the foregoing  conversion
shall be carried out in a manner  satisfying the  requirements of Section 424(a)
of the Code. In connection with the issuance of Exchange Options,  Bancorp shall
(i) reserve for issuance the number of shares of Bancorp  Common Stock that will
become subject to Exchange  Options  pursuant to this Section 2.11 and (ii) from
and after the Effective Time, upon exercise of Exchange Options,  make available
for issuance all shares of Bancorp Common Stock covered thereby,  subject to the
terms and conditions applicable thereto.

 ..............  (b) The Company agrees to issue treasury  shares of the Company,
to the extent  available,  upon the  exercise  of Company  Options  prior to the
Effective Time.

 ..............  (c)  Bancorp  agrees to file with the SEC within one month after
the Closing Date a registration  statement on Form S-8 or other appropriate form
under the  Securities  Act to register  shares of Bancorp  Common Stock issuable
upon exercise of the Exchange  Options and use its  reasonable  efforts to cause
such registration statement to remain effective until the exercise or expiration
of all of such Exchange Options. Such registration  statement may be in the form
of either an initial filing or a  post-effective  amendment to the  registration
statement  on  Form  S-4  filed  in  connection  with  this  Agreement  and  the
transactions contemplated hereby.

 ..............Section 2.12. Reservation of Right to Revise Transaction.  Bancorp
may at any time change the method of effecting the acquisition of the Company or
the Company  Subsidiaries  by Bancorp,  and the Company shall  cooperate in such
efforts,  if and to the extent  Bancorp  deems such change to be  desirable  and
subject to the Company's  approval  (which  approval  shall not be  unreasonably
withheld);  provided, however, that no such change shall (A) alter or change the
amount or kind of  consideration to be issued to holders of Company Common Stock
as provided for in this  Agreement (the "Merger  Consideration"),  (B) adversely
affect the tax treatment to the Company's  shareholders as a result of receiving
the  Merger  Consideration,  or (C)  materially  delay the  consummation  of the
transactions contemplated by this Agreement.

                                   ARTICLE III
                                  FIRST SAVINGS

 ..............Section   3.1.   Liquidation   Account.  The  liquidation  account
established  by First  Savings  pursuant  to the plan of  conversion  adopted in
connection  with its conversion  from mutual to stock form shall,  to the extent
required by Applicable Law, continue to be maintained by First Savings after the
Effective  Time for the benefit of those  persons and  entities who were savings
account holders of First Savings on the eligibility and supplemental eligibility
record  dates for such  conversion  and who  continue  from time to time to have
rights therein.

                                   ARTICLE IV
         REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND FIRST SAVINGS

 ..............The  Company and First Savings jointly and severally represent and
warrant to Bancorp and the Bank, except as otherwise  Previously  Disclosed,  as
follows:

 ..............Section 4.1. Organization,  Good Standing,  Authority,  Insurance,
Etc. (a) The Company is a corporation organized,  existing, and in good standing
under the laws of the State of Delaware, and is registered as a savings and loan
holding company with the OTS under the HOLA.  First Savings is a federal savings
association.  Each  "subsidiary"  of the  Company  within the meaning of Section
10(a)(1)(G) of HOLA  (individually a "Company  Subsidiary" and  collectively the
"Company  Subsidiaries"),  has been  Previously  Disclosed.  Each of the Company
Subsidiaries  is organized,  existing and in good standing under the laws of the
respective jurisdiction under which it is organized, as set forth in the Company
Disclosure  Schedule.  Each of the Company and the Company  Subsidiaries has all
requisite  corporate power and corporate authority and is qualified and licensed
to own,  lease and operate its  properties and conduct its business as it is now
being  conducted,  except for such  failure or  failures to be so  qualified  or
licensed as would not, in the aggregate, have a Company Material Adverse Effect.
The Company has made  available to Bancorp a true,  complete and correct copy of
the articles of incorporation, charter, or other organizing documents and of the
bylaws of the Company and each  Company  Subsidiary  as in effect on the date of
this Agreement. Each of the Company and the Company Subsidiaries is qualified to
do  business  as  a  foreign  corporation  and  is  in  good  standing  in  each
jurisdiction in which qualification is necessary under Applicable Law, except to
the extent that any failures to so qualify would not, in the  aggregate,  have a
Company Material  Adverse Effect.  First Savings is a member in good standing of
the Federal Home Loan Bank of Indianapolis,  and all eligible accounts issued by
First Savings are insured by the Savings Association  Insurance Fund ("SAIF") as
administered by the FDIC to the maximum extent  permitted under  Applicable Law,
and all premiums and assessments required in connection therewith have been paid
by First Savings. First Savings is a "domestic building and loan association" as
defined in Section  7701(a)(19) of the Code, and is a "qualified  thrift lender"
as defined in Section 10(m) of the HOLA.

 ..............  (b) The minute books of the Company and the Company Subsidiaries
contain  records of all  meetings and other  corporate  actions held or taken of
their respective  shareholders and Boards of Directors (including the committees
of such Boards) since  January 1, 1996,  which records are complete and accurate
in all material respects and have been made available to Bancorp.

 ..............Section 4.2.  Capitalization.  The authorized capital stock of the
Company  consists of 2,000,000  shares of Company Common Stock, of which 702,734
shares were issued and outstanding as of the date of this Agreement, and 500,000
shares of  preferred  stock,  par value of $0.01 per share  ("Company  Preferred
Stock"),  of which no shares were  outstanding as of the date of this Agreement.
No  other  class or  series  of  capital  stock  of the  Company  is or has been
authorized.  As of the date of this  Agreement,  there were no shares of Company
Common  Stock and no shares of Company  Preferred  Stock  held in the  Company's
treasury and,  except as Previously  Disclosed,  there were no shares of Company
Common Stock reserved for issuance. All issued and outstanding shares of Company
Common Stock are duly authorized, validly issued, fully paid, nonassessable, and
free  of  preemptive  rights.  As of the  date  of  this  Agreement,  except  as
Previously Disclosed, there are no outstanding Rights to purchase or acquire any
capital  stock  of the  Company  and no oral  or  written  agreement,  contract,
arrangement, understanding, plan, or instrument of any kind to which the Company
or any of its Affiliates is subject with respect to the issuance, voting or sale
of issued or unissued shares of the capital stock of the Company.

 ..............Section 4.3. Ownership of Subsidiaries. All the outstanding shares
of the  capital  stock  or  other  ownership  interests  in  all of the  Company
Subsidiaries   are  validly  issued,   fully  paid,   nonassessable   and  owned
beneficially and of record by the Company or a Company Subsidiary free and clear
of any Encumbrance.  There are no outstanding  Rights to purchase or acquire any
capital  stock  of any  Company  Subsidiary  and no oral or  written  agreement,
contract, arrangement,  understanding,  plan, or instrument of any kind to which
any of the  Company  or any of its  Affiliates  is subject  with  respect to the
issuance,  voting or sale of issued or unissued  shares of the capital  stock of
any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiary
owns any of the capital stock or other equity  securities  (including any Rights
with respect to such  securities) of or profit  participations  in any Person or
"company" (as defined in Section 10(a)(1)(C) of the HOLA) other than the Federal
Home Loan Bank of Indianapolis and the Company Subsidiaries.

 ..............Section  4.4. Financial Statements and Reports. For the past three
years, the Company and the Company Subsidiaries have timely filed all Regulatory
Documents  required to be filed by them,  except to the extent that all failures
to so file, in the aggregate,  would not have a Company Material Adverse Effect;
and all such documents,  as finally amended,  complied in all material  respects
with applicable  requirements of Applicable Law and, as of their respective date
or the date as amended,  did not contain any untrue statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading.  Except to the  extent  stated  therein,  all  financial
statements and schedules  included in the documents referred to in the preceding
sentences (i) are in accordance  with the Company's  books and records and those
of any of the Company  Subsidiaries,  which books and records are  complete  and
accurate in all  material  respects  and have been  maintained  in all  material
respects  in  accordance  with  Applicable  Law,  and (ii)  present  fairly  the
consolidated  financial position and the consolidated  results of operations and
cash  flows of the  Company  as of the dates and for the  periods  indicated  in
accordance with GAAP  consistently  applied during the periods  involved (except
for the  omission of notes to  unaudited  statements,  year-end  adjustments  to
interim  results  normal in nature and  amount,  and  changes in GAAP and except
where  regulatory  reporting   requirements  provide  otherwise).   The  audited
consolidated financial statements of the Company as of June 30, 1999 and for the
three years then ended last filed by the Company as part of a publicly available
Regulatory  Document  disclose  all  liabilities  (whether  accrued,   absolute,
contingent,  unliquidated,  or  otherwise,  whether  due or to  become  due  and
regardless of when asserted),  as of their respective  dates, of the Company and
the Company  Subsidiaries  required to be reflected in such financial statements
according  to GAAP,  other than  liabilities  which are not,  in the  aggregate,
material  to the Company and the  Company  Subsidiaries,  taken as a whole,  and
contain in the opinion of management,  adequate reserves for losses on loans and
properties  acquired  in  settlement  of loans,  Taxes,  and all other  material
accrued  liabilities  and for all  reasonably  anticipated  material  losses  in
accordance with GAAP, if any, as of such date.  Except for (i) those liabilities
that  are  fully  reflected  or  reserved  against  on  the  Company's   audited
consolidated  balance  sheet  last  filed by the  Company  as part of a publicly
available  Regulatory  Document  and (ii)  liabilities  incurred in the ordinary
course of business since the date of such audited consolidated balance sheet and
which  would not have,  individually  or in the  aggregate,  a Company  Material
Adverse  Effect,  the Company has no  liabilities  or obligations of any nature,
whether absolute, accrued, contingent, or otherwise and whether due or to become
due,  which  are or would be  required  by GAAP to be shown on its  consolidated
balance sheet.

 ..............Section  4.5.  Absence  of  Changes.  (a) Except as  disclosed  in
publicly available  Regulatory  Documents filed by the Company prior to the date
of this  Agreement,  since June 30, 1999,  there has been no event,  occurrence,
development,  fact, or set of  circumstances  of any nature  existing or, to the
knowledge of the Company,  threatened  which,  individually or in the aggregate,
has had or could  reasonably  be  expected  to have a Company  Material  Adverse
Effect.

 .............(b) Except as  Previously  Disclosed,  since  June 30,  1999,  each
of  the  Company  and  the  Company  Subsidiaries  has  owned  and  operated its
respectiveassets, properties, and businesses in the ordinary  course of business
and consistent with past practice and has not taken any action  or suffered  any
event that if taken or suffered  after the date  hereof  would  violate  Section
 6.1 of this Agreement.

 ..............Section  4.6.  No Broker's or  Finder's  Fees.  No agent,  broker,
investment  banker,  Person,  or firm acting on behalf or under authority of the
Company  or any of the  Company  Subsidiaries  is or  will  be  entitled  to any
broker's  or finder's  fee or any other  commission  or similar fee  directly or
indirectly in connection with the Merger or any other  transaction  contemplated
hereby,  except the  Company  has  engaged  Trident  Securities,  a Division  of
McDonald  Investments,  Inc., an investment  banking firm, to provide  financial
advisory services.

 ..............Section  4.7.  Litigation  and Other  Proceedings.  (a) Except for
matters  which would not have,  in the  aggregate,  a Company  Material  Adverse
Effect, neither the Company nor any Company Subsidiary is a defendant in, nor is
any of its property subject to, any pending or, to the knowledge of the Company,
threatened  claim,  action,  suit,  investigation,  or  proceeding.  There is no
judicial  order,  judgment,  or decree to which any of the Company,  the Company
Subsidiaries,  or their respective  properties is subject which has had or could
reasonably be expected to have a Company Material Adverse Effect.

 ..............  (b) All pending  claims,  actions,  suits,  investigations,  and
proceedings  in which the Company or any Company  Subsidiary  is a defendant and
all judicial orders,  judgments,  or decrees to which the Company or any Company
Subsidiary is subject have been Previously Disclosed.

 ..............Section  4.8.  Compliance  with Law.  The  Company and the Company
Subsidiaries  have been in compliance in all respects with all Applicable  Laws,
except where such  noncompliance  would not have,  in the  aggregate,  a Company
Material Adverse Effect,  and neither the Company nor any Company Subsidiary has
received notice from any  Governmental  Authority of any material  violation of,
and does not know of any material violations of, any Applicable Law.

 ..............Section  4.9.  Corporate  Actions.  The Board of  Directors of the
Company by at least a two-thirds vote of the Continuing  Directors (as such term
is defined in Article XV of the  Company's  Certificate  of  Incorporation)  has
authorized its appropriate officers to execute and deliver this Agreement and to
take all action  necessary to consummate  the Merger and the other  transactions
contemplated  hereby.  Except  for  obtaining  the  requisite  approval  of  the
Company's  shareholders as contemplated  hereby, all corporate  authorization by
the  Board  of  Directors  and  shareholders  of the  Company  required  for the
consummation  of the Merger and the  transactions  contemplated  hereby has been
obtained.

 ..............Section  4.10.  Authority.  Except as  Previously  Disclosed,  the
execution,  delivery,  and performance by the Company of its  obligations  under
this Agreement and the  consummation  thereby of the  transactions  contemplated
hereby do not, and will not,  violate or conflict with any of the provisions of,
or  constitute a breach or default (or an event  which,  with notice or lapse of
time, or both, would constitute a breach or default) under, terminate,  give any
Person the right to terminate, modify or accelerate payment or performance under
or  result  in  the  creation  of any  Encumbrance  upon  any of the  respective
properties  or assets of the  Company or any  Company  Subsidiary  under (i) the
articles  of  incorporation,  charter or bylaws of the  Company  or any  Company
Subsidiary,  (ii) subject to the Governmental  Approvals and the approval of the
Company's  shareholders described below, any Applicable Law to which the Company
or any of the Company  Subsidiaries  is subject or (iii)  except,  in each case,
where  such  violation,  conflict,  breach,  default,  termination  (or right to
terminate), modification, acceleration or Encumbrance would not, individually or
in the aggregate, have a Company Material Adverse Effect, any agreement,  lease,
contract,  note,  mortgage,  indenture,   arrangement  or  other  obligation  or
instrument, whether oral or written ("Contract"), to which the Company or any of
the  Company  Subsidiaries  is a party or is  subject  or by which  any of their
properties  or assets is bound or  affected.  The parties  acknowledge  that the
consummation  of the  Merger is subject to  various  regulatory  approvals.  The
Company has all requisite  corporate power and corporate authority to enter into
this Agreement and to perform its obligations hereunder. Other than the filings,
notices,  approvals,  and consents with or of the  Governmental  Authorities  as
Previously  Disclosed (the "Governmental  Approvals") and the requisite approval
of the Company's  shareholders  as  contemplated  hereby,  no filings,  notices,
approvals,  or  consents  are  required  on behalf of the Company or any Company
Subsidiary in connection with the consummation of the transactions  contemplated
by  this  Agreement.  The  Company  has no  knowledge  of  any  reason  why  the
Governmental  Approvals  cannot be obtained or granted on a timely  basis.  This
Agreement  constitutes  the valid and binding  obligation  of the Company and is
enforceable  in  accordance  with its  terms,  except as  enforceability  may be
limited by  Applicable  Laws  relating to  bankruptcy,  insolvency  or creditors
rights generally,  the rights of creditors of insured  depository  institutions,
and general principles of equity.

 .............Section   4.11.  Employment  Arrangements.   Except  as  Previously
Disclosed, there are no employment, incentive compensation,  severance, or other
agreements,  plans,  or  arrangements  with any  current  or  former  directors,
officers, or employees of the Company or any Company Subsidiary which may not be
terminated   without  penalty  or  liability   (including  any  augmentation  or
acceleration  of  benefits)  on thirty (30) days or less notice to such  Person.
Except as Previously Disclosed,  neither the execution of this Agreement nor the
consummation of the transactions  contemplated hereby will (either alone or upon
the  occurrence of additional  events or acts) result in, cause the  accelerated
vesting or  delivery  of, or  increase  the  amount or value of, any  payment or
benefit to any  employee,  officer,  or  director  of the Company or any Company
Subsidiary.  Except as  Previously  Disclosed,  no  amount  paid or  payable  to
directors,  officers, or employees of the Company or the Company Subsidiaries in
connection with the transactions  contemplated hereby (either solely as a result
of such transactions or as a result of such transactions in conjunction with any
other event) will cause the imposition of excise taxes under Section 4999 of the
Code or the  disallowance of a deduction  pursuant to Sections 162, 280G, or any
other section of the Code.

 ..............Section  4.12. Employee Benefits.  (a) Neither the Company nor any
of the Company  Subsidiaries  maintains,  contributes to, or sponsors any funded
deferred  compensation  plans (including profit sharing,  pension,  savings,  or
stock bonus plans),  unfunded deferred  compensation  arrangements,  or employee
benefit  plans as  defined  in  Section  3(3) of  ERISA,  other  than any  plans
("Company Employee Benefit Plans") Previously Disclosed (true and correct copies
of which  have been  delivered  to  Bancorp).  Except as  Previously  Disclosed,
neither the Company nor any of the Company  Subsidiaries  (i)  provides  health,
medical,  death,  or  survivor  benefits to any former  employee or  beneficiary
thereof,  or (ii)  maintains  any form of current  (exclusive of base salary and
base wages) or deferred  compensation,  bonus, stock option,  stock appreciation
right,  benefit,  severance pay,  retirement,  incentive,  group,  or individual
health insurance, welfare, or similar plan or arrangement for the benefit of any
single or class of directors,  officers, or employees, whether active or retired
(collectively "Benefit Arrangements").

 ..............  (b) All Company Employee Benefit Plans and Benefit  Arrangements
which are in effect were in effect for  substantially  all of calendar year 1998
and,  except  as  Previously  Disclosed,  there has been no  material  amendment
thereof  (other than  amendments  required to comply with  Applicable  Law) and,
except as  disclosed in publicly  available  Regulatory  Documents  filed by the
Company prior to the date of this  Agreement,  no material  increase in the cost
thereof, or benefits payable thereunder on or after January 1, 1999.

 .............  (c) To the knowledge of the Company,  with respect to all Company
Employee  Benefit Plans and Benefit  Arrangements,  the Company and each Company
Subsidiary are in substantial compliance with the requirements prescribed by any
and all Applicable Laws currently in effect,  including but not limited to ERISA
and the Code,  applicable  to such  Company  Employee  Benefit  Plans or Benefit
Arrangements.  None of the  Company  Employee  Benefit  Plans  which are defined
benefit  pension  plans  have  incurred  any  "accumulated  funding  deficiency"
(whether  or not  waived) as that term is defined in Section 412 of the Code and
the fair  market  value of the assets of each such plan  equals or  exceeds  the
accrued liabilities of such plan. To the knowledge of the Company, there are not
now nor have there been any non-exempt  "prohibited  transactions," as such term
is defined in Section  4975 of the Code or Section 406 of ERISA,  involving  the
Company Employee Benefit Plans which could subject Company or any of the Company
Subsidiaries  to the penalty or Tax  imposed  under  Section  502(i) of ERISA or
Section 4975 of the Code.

 .............  (d) No Company Employee Benefit Plan which is subject to Title IV
of ERISA  has  been  completely  or  partially  terminated;  no  proceedings  to
completely or partially  terminate any Company  Employee  Benefit Plan have been
instituted  within the meaning of  Subtitle C of said Title IV of ERISA;  and no
reportable  event,  within the meaning of Section 4043(c) of said Subtitle C for
which the 30-day notice  requirement of ERISA has not been waived,  has occurred
with respect to any Company Employee Benefit Plan.

 .............  (e) No Company Employee Benefit Plan or Benefit  Arrangement is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA or a plan
that has two or more  contributing  sponsors  at least two of whom are not under
common control, within the meaning of Section 4063 of ERISA.

 .............  (f) Neither the Company nor any Company Subsidiary has engaged in
any  transaction  described in Section 4069 of ERISA within the last five years.
There does not now exist, nor do any  circumstances  exist that could result in,
any liability of the Company or any Company Subsidiary (or any entity, trade, or
business that is or was at any time  required to be aggregated  with the Company
or any Company  Subsidiary  under Section 414(b),  (c), (m), or (o) of the Code)
under  Title IV of ERISA,  Section  302 of ERISA,  Sections  412 and 4971 of the
Code, the continuation coverage requirements of Section 601 et seq. of ERISA and
Section 4980B of the Code, other than such liabilities that arise solely out of,
or relate solely to, the Company Employee Benefit Plans or Benefit Arrangements,
that would be a liability of Bancorp, a Bancorp  Subsidiary,  the Company,  or a
Company Subsidiary following consummation of the Merger.

 .............  (g) Neither the Company nor any Company  Subsidiary has failed to
make any  contribution  or pay any amount due and owing as required by the terms
of any Company Employee Benefit Plan or Benefit Arrangement. None of the Company
or any of the Company  Subsidiaries has incurred or reasonably  expects to incur
any liability to the Pension Benefit  Guaranty  Corporation  except for required
premium  payments which,  to the extent due and payable,  have been paid. To the
knowledge of the Company,  the Company  Employee  Benefit  Plans  intended to be
qualified under Section 401(a) of the Code are so qualified,  and the Company is
not aware of any fact which would adversely  affect the qualified status of such
plans.

 ..............Section  4.13. Information Furnished;  Registration Statement. (a)
To the  knowledge  of the  Company,  no  statement  contained  in any  schedule,
certificate or other document  furnished  (whether prior to or subsequent to the
date of this  Agreement)  or to be  furnished  in writing by or on behalf of the
Company or any of its Affiliates to Bancorp pursuant to this Agreement  contains
or will  contain  any untrue  statement  of a  material  fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

 ..............  (b)  None of the  information  provided  by the  Company  or any
Company Subsidiary for inclusion in the registration statement on Form S-4 to be
filed with the SEC by Bancorp  under the  Securities  Act  relating to shares of
Bancorp Common Stock to be issued in the Merger,  including the prospectus  (the
"Prospectus")  relating to such issuance and the joint proxy statement and forms
of proxy relating to the vote of Bancorp  shareholders and Bancorp  shareholders
with respect to the Merger (as  amended,  supplemented  or modified,  the "Proxy
Statement")   contained  therein  (such   registration   statement  as  amended,
supplemented  or  modified,  the  "Registration  Statement"),  at the  time  the
Registration Statement becomes effective or, in the case of the Proxy Statement,
at the date of mailing,  will contain any untrue statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they are made,  not  misleading.  Each of the  Registration  Statement and Proxy
Statement,  except for such  portions  thereof  that relate only to Bancorp or a
Bancorp  Subsidiary,  will comply as to form in all material  respects  with the
provisions of the Securities Act and Exchange Act, as applicable.

 ..............Section  4.14.  Property  and Assets.  The Company and the Company
Subsidiaries  have  good and  marketable  title to all of  their  real  property
reflected in the consolidated  financial statements last filed by the Company as
part of a publicly available Regulatory Document or acquired subsequent thereto,
free and clear of all Encumbrances,  except for (a) such items reflected in such
financial  statements or in the notes  thereto,  (b) liens for current taxes not
yet  delinquent,  (c) customary title  exceptions that have no material  adverse
effect upon the current use of such  property,  (d) property sold or transferred
in the ordinary course of business  consistent with past practice since the date
of such financial  statements  and (e) as otherwise  Previously  Disclosed.  The
Company and the Company  Subsidiaries enjoy peaceful and undisturbed  possession
under all material  leases for the use of real property under which they are the
lessee;  all of such  leases are valid and  binding and in full force and effect
and neither the Company nor any Company  Subsidiary is in default in any respect
under any such lease,  except  where such failure to be valid and binding and in
full force and effect, or where such default,  would not have, in the aggregate,
a Company  Material Adverse Effect.  There has been no physical loss,  damage or
destruction,  whether or not covered by insurance, affecting the real properties
of the Company and the Company  Subsidiaries  since June 30,  1999,  except such
loss,  damage or destruction  which would not have, in the aggregate,  a Company
Material  Adverse Effect.  All property and assets material to their  businesses
and  currently  used by the  Company and the  Company  Subsidiaries  are, in all
material respects,  in good operating condition and repair, normal wear and tear
excepted.

 ..............Section  4.15.  Agreements and  Instruments.  Except as Previously
Disclosed, neither the Company nor any Company Subsidiary is a party to:

 ............. (a) any material Contract;

 ............. (b) any Contract relating to the borrowing of money by the Company
or any  Company  Subsidiary  or the  guarantee  by the  Company  or any  Company
Subsidiary  of any such  obligation  (other than Federal Home Loan Bank advances
with a maturity of one year or less from the date hereof);

 .............  (c) any Contract to make loans or for the provision, purchase, or
sale  of  goods,  services  or  property  between  the  Company  or any  Company
Subsidiary and any director or officer of the Company or any Company Subsidiary,
or any  member of the  immediate  family or  Affiliate  of any of the  foregoing
(other  than loans or  deposits  made on an  arms-length  basis in the  ordinary
course of business);

 .............  (d) any  Contract  with  or  concerning  any  labor  or  employee
organization;

 ............. (e) any Contract between the Company or any Company Subsidiary and
any Affiliate  thereof  (other than  Contracts  solely between the Company and a
Company Subsidiary or solely between Company Subsidiaries);

 .............  (f) any agreements,  directives,  orders, or similar arrangements
between or involving the Company or any Company  Subsidiary and any Governmental
Authority;

 .............  (g) any Contract with respect to the  employment,  retention,  or
severance of any directors, officers, employees, or consultants;

 .............  (h) any Contract  which  materially  restricts the conduct of any
line of business by the Company or any current or future Affiliates thereof; or

 .............  (i) any  Contract  pursuant  to which the  Company or any Company
Subsidiary is or may become obligated to invest in or contribute  capital to any
Company Subsidiary.

 ..............Section  4.16. Material Contract Defaults. Neither the Company nor
any Company  Subsidiary  nor, to the  knowledge of the Company,  the other party
thereto is in  default in any  respect  under any  Contract  to which any of the
Company  or the  Company  Subsidiaries  is a party  or by which  its  respective
assets,  business,  or operations  may be bound or affected or under which it or
its respective assets, business, or operations receives benefits, other than any
such  default or defaults  which  would not have,  in the  aggregate,  a Company
Material  Adverse  Effect,  and there has not occurred any event that,  with the
lapse of time or the giving of notice or both,  would constitute such a default.
To the knowledge of the Company,  all material Contracts to which the Company or
any of the Company Subsidiaries is a party are valid, binding, and in full force
and effect.

 ..............Section  4.17. Tax Matters.  (a) The Company,  each of the Company
Subsidiaries, and any affiliated group (within the meaning of Section 1504(a) of
the Code) of which the  Company or any of the Company  Subsidiaries  is a member
have filed all Tax  Returns  required  to be filed by them and have made  timely
payments of all Taxes due and payable, whether disputed or not; such Tax Returns
are true, correct, and complete in all material respects;  the current status of
audits of such Tax  Returns by the IRS and other  applicable  agencies  has been
Previously  Disclosed;  and there is no  agreement by the Company or any Company
Subsidiary  for the waiver or extension of time for the assessment or payment of
any  Taxes  payable.  Neither  the IRS nor any  other  taxing  authority  is now
asserting  or, to the  knowledge  of the  Company,  threatening  to  assert  any
deficiency or claim for additional Taxes, nor to the knowledge of the Company is
there any basis for any such  assertion  or claim.  The  Company and each of the
Company  Subsidiaries have complied in all material respects with applicable IRS
backup  withholding  requirements  and have  filed all  appropriate  information
reporting returns for all Tax years for which the statute of limitations has not
closed.

 .............. (b) Adequate provision for any Taxes due or to become due for the
Company or any of the Company Subsidiaries for any period or periods through and
including  June 30,  1999,  has been made and is  reflected on the June 30, 1999
consolidated  financial  statements  last  filed  by the  Company  as  part of a
publicly available Regulatory Document and has been or will be made with respect
to periods ending after June 30, 1999.

 ..............Section  4.18.  Environmental  Matters.  To the  knowledge  of the
Company,  neither the Company nor any  Company  Subsidiary  owns any  properties
affected by toxic waste, radon gas, or other hazardous conditions or constructed
in part with the use of asbestos. Neither the Company nor any Company Subsidiary
has knowledge of, nor has the Company or any Company Subsidiary received written
notice  from  any  Governmental   Authority  of,  any  conditions,   activities,
practices, or incidents which are reasonably likely to interfere with or prevent
compliance or continued compliance by the Company or any Company Subsidiary with
hazardous  substance  laws  or  any  regulation,  order,  decree,  judgment,  or
injunction,  issued, entered,  promulgated or approved thereunder,  or which may
give rise to any  legal  liability  on the part of the  Company  or any  Company
Subsidiary,  or otherwise form the basis of any claim, action, suit, proceeding,
hearing or  investigation  against or of the Company or any Company  Subsidiary,
based  on  or  related  to  the  manufacture,   processing,  distribution,  use,
treatment,   storage,  disposal,   transport,  or  handling,  or  the  emission,
discharge,   release,  or  threatened  release  into  the  environment,  of  any
pollutant,   contaminant,  or  chemical,  or  industrial,  toxic,  or  hazardous
substance  or  waste.  There is no civil,  criminal,  or  administrative  claim,
action, suit, proceeding, hearing, or investigation pending or, to the knowledge
of the  Company,  threatened  against  the  Company  or any  Company  Subsidiary
relating in any way to such hazardous  substance laws or any regulation,  order,
decree,  judgment  or  injunction  issued,  entered,   promulgated  or  approved
thereunder.  To the knowledge of the Company, none of the Company or the Company
Subsidiaries  has made or  participated in any loan to any Person who is subject
to any civil,  criminal,  or administrative  claim,  action,  suit,  proceeding,
hearing,  or investigation  relating in any way to such hazardous substance laws
or any regulation,  order,  decree,  judgment,  or injunction  issued,  entered,
promulgated or approved  thereunder and relating to the property secured by such
loan.

 ..............Section  4.19.  Loan  Portfolio;  Portfolio  Management.  (a)  All
evidences  of  indebtedness  reflected as assets in the  consolidated  financial
statements last filed by the Company as part of a publicly available  Regulatory
Document or acquired  since such date,  are (except with respect to those assets
which are no longer  assets of the  Company or any Company  Subsidiary)  binding
obligations of the respective  obligors named therein except as enforcement  may
be limited by  bankruptcy,  insolvency,  or other  similar  laws  affecting  the
enforcement of creditors rights  generally,  and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding  may be brought,  and the payment of no
material  amount  thereof  (either  individually  or in the aggregate with other
evidences of indebtedness) is subject to any defenses which have been threatened
or asserted against the Company or any Company Subsidiary. All such indebtedness
which is  secured  by an  interest  in real  property  is secured by a valid and
perfected mortgage lien having the priority specified in the loan documents. All
loans originated or purchased by the Company or any Company Subsidiaries were at
the time  entered  into and at all times  since have been in  compliance  in all
material  respects  with  all  Applicable  Laws.  The  Company  and the  Company
Subsidiaries  administer their loan and investment portfolios in accordance with
all Applicable Laws and the terms of applicable instruments.  The records of the
Company and the Company  Subsidiaries  regarding all loans  outstanding on their
books are accurate in all material respects and the risk  classification  system
has been established in accordance with the requirements of the OTS.

 ..............  (b) The Company and First  Savings have  Previously  Disclosed a
list,  accurate and complete in all material respects,  of the aggregate amounts
of loans,  extensions of credit, and other assets of the Company and the Company
Subsidiaries that have been adversely designated,  criticized,  or classified as
of June 30, 1999,  separated  by category of  classification  or criticism  (the
"Asset Classification"); and no amounts of loans, extensions of credit, or other
assets that have been adversely  designated,  classified or criticized as of the
date  hereof by any  representative  of any  Government  Authority  as  "Special
Mention,"  "Substandard,"  "Doubtful,"  "Loss," or words of  similar  import are
excluded  from the amounts  disclosed  in the Asset  Classification,  other than
amounts of loans, extensions of credit, or other assets that were charged off or
recovered  by the  Company or any of the  Company  Subsidiaries  before the date
hereof.

 ..............Section  4.20.  Real  Estate  Loans and  Investments.  Except  for
properties  acquired in settlement of loans, there are no facts,  circumstances,
or contingencies known to the Company which exist which would require a material
reduction  under GAAP in the  present  carrying  value of any of the real estate
investments,  joint ventures,  construction  loans, other investments,  or other
loans of the Company or any Company  Subsidiary  (either  individually or in the
aggregate with other loans and investments).

 ..............Section  4.21. Derivatives Contracts.  (a) Neither the Company nor
any of the  Company  Subsidiaries  is a party to or has  agreed to enter into an
exchange-traded or over-the-counter swap, forward, future, option, cap, floor or
collar financial contract or any other Contract not included on the consolidated
balance  sheet  last  filed  by the  Company  as  part of a  publicly  available
Regulatory Document which is a derivatives  contract or owns securities that are
identified  in Thrift  Bulletin  No.  13a as  "complex  securities,"  (including
various combinations thereof) (each, a "Derivatives Contract"), except for those
Derivatives Contracts Previously Disclosed,  including a list, as applicable, of
any of the  Company's  or  First  Savings'  assets  pledged  as  security  for a
Derivatives Contract.

 ..............  (b) All Derivative Contracts to which the Company or any Company
Subsidiary is a party or by which any of their properties or assets may be bound
were  entered into in the ordinary  course of business  and in  accordance  with
prudent banking practice, based on industry-wide standards at the time, and with
counterparties  believed by the  Company to be  financially  responsible  at the
time.

 ..............Section  4.22. Insurance. The Company and the Company Subsidiaries
have in effect insurance  coverage with reputable  insurers which, in respect of
amounts,  types, and risks insured,  is reasonably  adequate for the business in
which the Company and the Company  Subsidiaries  are engaged.  A schedule of all
insurance policies in effect as to the Company and the Company Subsidiaries (the
"Insurance  Policies")  has  been  Previously  Disclosed  (other  than  policies
pertaining  to  secured  loans made in the  ordinary  course of  business).  All
Insurance  Policies  are in full force and effect,  all  premiums  with  respect
thereto covering all periods up to and including the date of this Agreement have
been paid,  such  premiums  covering  all periods from the date hereof up to and
including  the  Effective  Date shall have been paid on or before the  Effective
Date,  to the extent then due and payable  (other  than  retrospective  premiums
which may be payable with respect to worker's  compensation  insurance policies,
adequate reserves for which are reflected in the Company's financial  statements
last filed by the Company as part of a publicly available Regulatory  Document).
The Insurance  Policies are valid,  outstanding,  and  enforceable in accordance
with  their  respective  terms  and  will  not in any  way be  affected  by,  or
terminated or lapsed solely by reason of, the transactions  contemplated by this
Agreement. To the knowledge of the Company,  neither the Company nor any Company
Subsidiary  has  been  refused  any  insurance  with  respect  to  any  material
properties,  assets  or  operations,  nor  has  any  coverage  been  limited  or
terminated  by any  insurance  carrier  to  which  it has  applied  for any such
insurance  or with  which it has  carried  insurance  during  the last three (3)
years.

 ..............Section  4.23. Tax  Treatment.  Neither the Company nor any of its
Affiliates has taken or agreed to take any action that or has failed to take any
action the result of which would (but without giving effect to any actions taken
or agreed to be taken by Bancorp or any of its  Affiliates)  prevent  the Merger
from qualifying as a "reorganization" under Section 368(a) of the Code.

                                    ARTICLE V
             REPRESENTATIONS AND WARRANTIES OF BANCORP AND THE BANK

 ..............Bancorp  and the Bank jointly and severally  represent and warrant
to the Company and First Savings,  except as otherwise Previously Disclosed,  as
follows:

 ..............Section 5.1. Organization,  Good Standing,  Authority,  Insurance,
Etc. (a) Bancorp is a  corporation  organized,  existing,  and in good  standing
under the laws of the State of Indiana,  and is registered as a savings and loan
holding  company  with the OTS  under the  HOLA.  The Bank is a federal  savings
association.  Each  "subsidiary"  of  Bancorp  within  the  meaning  of  Section
10(a)(1)(G) of HOLA  (individually a "Bancorp  Subsidiary" and  collectively the
"Bancorp  Subsidiaries")  has been  Previously  Disclosed.  Each of the  Bancorp
Subsidiaries is organized,  existing, and in good standing under the laws of the
respective  jurisdiction under which it is organized as set forth in the Bancorp
Disclosure  Schedule.  Each of  Bancorp  and the  Bancorp  Subsidiaries  has all
requisite  corporate power and corporate authority and is qualified and licensed
to own, lease,  and operate its properties and conduct its business as it is now
being  conducted,  except for such  failure or  failures to be so  qualified  or
licensed as would not, in the aggregate, have a Bancorp Material Adverse Effect.
Bancorp has made  available to the Company a true,  complete and correct copy of
the articles of incorporation,  charter or other organizing documents and of the
bylaws of Bancorp and each Bancorp  Subsidiary  as in effect on the date of this
Agreement.  Each of Bancorp  and the Bancorp  Subsidiaries  is  qualified  to do
business as a foreign  corporation and is in good standing in each  jurisdiction
in which  qualification  is necessary under Applicable Law, except to the extent
that any  failures  to so qualify  would not, in the  aggregate,  have a Bancorp
Material  Adverse  Effect.  The Bank is a member in good standing of the Federal
Home Loan Bank of Indianapolis, and all eligible accounts issued by the Bank are
insured by SAIF as  administered  by the FDIC to the  maximum  extent  permitted
under  Applicable Law, and all premiums and  assessments  required in connection
therewith have been paid by the Bank. The Bank is a "domestic  building and loan
association" as defined in Section  7701(a)(19) of the Code, and is a "qualified
thrift lender" as defined in Section 10(m) of the HOLA.

 ..............  (b) The minute  books of Bancorp  and the  Bancorp  Subsidiaries
contain  records of all  meetings and other  corporate  actions held or taken of
their respective  shareholders and Boards of Directors (including the committees
of such Boards) since  January 1, 1996,  which records are complete and accurate
in all material respects and have been made available to the Company.

 ..............Section  5.2.  Capitalization.  The  authorized  capital  stock of
Bancorp consists of 7,000,000 shares of Bancorp Common Stock, of which 3,183,717
shares  were  issued  and  outstanding  as of the  date of this  Agreement,  and
5,000,000  shares of serial  preferred  stock,  par value of $1.00 per share, of
which no shares were  outstanding  as of the date of this  Agreement.  As of the
date of this Agreement,  except as Previously Disclosed, there were no shares of
Bancorp Common Stock reserved for issuance. All issued and outstanding shares of
Bancorp  Common  Stock  are  duly  authorized,   validly  issued,   fully  paid,
nonassessable  and free of preemptive  rights. As of the date of this Agreement,
except as Previously Disclosed and as contemplated by this Agreement,  there are
no outstanding Rights to purchase or acquire any capital stock of Bancorp and no
oral  or  written  agreement,  contract,  arrangement,  understanding,  plan  or
instrument of any kind to which Bancorp or any of its Affiliates is subject with
respect  to the  issuance,  voting or sale of issued or  unissued  shares of the
capital  stock of  Bancorp.  The  shares of  Bancorp  Common  Stock to be issued
pursuant to the Merger will be duly  authorized  and validly  issued and, at the
Closing,  all  such  shares  will  be  fully  paid,  nonassessable  and  free of
preemptive  rights,  with  no  personal  liability  attaching  to the  ownership
thereof.

 .............Section 5.3. Ownership of Subsidiaries.  All the outstanding shares
of the  capital  stock  or  other  ownership  interests  in  all of the  Bancorp
Subsidiaries   are  validly  issued,   fully  paid,   nonassessable   and  owned
beneficially and of record by Bancorp or a Bancorp  Subsidiary free and clear of
any  Encumbrance.  There are no  outstanding  Rights to  purchase or acquire any
capital  stock  of any  Bancorp  Subsidiary  and no oral or  written  agreement,
contract,  arrangement,  understanding,  plan or instrument of any kind to which
Bancorp or any of its Affiliates is subject with respect to the issuance, voting
or sale of issued or unissued  shares of the capital stock of any of the Bancorp
Subsidiaries. Neither Bancorp nor any Bancorp Subsidiary owns any of the capital
stock or other  equity  securities  (including  any Rights with  respect to such
securities) of or profit  participations  in any Person or "company" (as defined
in Section  10(a)(1)(C)  of the HOLA) other than the  Federal  Home Loan Bank of
Indianapolis and the Bancorp Subsidiaries.

 ..............Section  5.4. Financial Statements and Reports. For the past three
years,  Bancorp and the Bancorp  Subsidiaries  have timely filed all  Regulatory
Documents  required to be filed by them,  except to the extent that all failures
to so file, in the aggregate,  would not have a Bancorp Material Adverse Effect;
and all such documents,  as finally amended,  complied in all material  respects
with applicable  requirements of Applicable Law and, as of their respective date
or the date as amended,  did not contain any untrue statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading.  Except to the  extent  stated  therein,  all  financial
statements and schedules  included in the documents referred to in the preceding
sentences (i) are in accordance  with  Bancorp's  books and records and those of
any of the  Bancorp  Subsidiaries,  which books and  records  are  complete  and
accurate in all  material  respects  and have been  maintained  in all  material
respects  in  accordance  with  Applicable  Law,  and (ii)  present  fairly  the
consolidated  financial position and the consolidated  results of operations and
cash  flows  of  Bancorp  as of the  dates  and for  the  periods  indicated  in
accordance with GAAP  consistently  applied during the periods  involved (except
for the  omission of notes to  unaudited  statements,  year-end  adjustments  to
interim results normal in nature and amount and changes in GAAP and except where
regulatory reporting  requirements provide otherwise).  The audited consolidated
financial statements of Bancorp as of September 30, 1998 and for the three years
then ended last  filed by  Bancorp  as part of a publicly  available  Regulatory
Document  disclose  all  liabilities  (whether  accrued,  absolute,  contingent,
unliquidated  or otherwise,  whether due or to become due and regardless of when
asserted), as of their respective dates, of Bancorp and the Bancorp Subsidiaries
required to be reflected in such financial  statements  according to GAAP, other
than  liabilities  which are not, in the aggregate,  material to Bancorp and the
Bancorp  Subsidiaries,  taken  as  a  whole,  and  contain  in  the  opinion  of
management,  adequate  reserves for losses on loans and  properties  acquired in
settlement of loans,  Taxes and all other material  accrued  liabilities and for
all reasonably  anticipated  material losses in accordance with GAAP, if any, as
of such  date.  Except for (i) those  liabilities  that are fully  reflected  or
reserved against on Bancorp's audited  consolidated  balance sheet last filed by
Bancorp as part of a publicly available Regulatory Document and (ii) liabilities
incurred  in the  ordinary  course of  business  since the date of such  audited
consolidated  balance  sheet and which  would not have,  individually  or in the
aggregate,  a Bancorp  Material  Adverse  Effect,  Bancorp has no liabilities or
obligations of any nature,  whether absolute,  accrued,  contingent or otherwise
and whether  due or to become due,  which are or would be required by GAAP to be
shown on its consolidated balance sheet.

 ..............Section  5.5.  Absence  of  Changes.  (a) Except as  disclosed  in
publicly  available  Regulatory  Documents filed by Bancorp prior to the date of
this Agreement,  since September 30, 1998, there has been no event,  occurrence,
development,  fact, or set of  circumstances  of any nature  existing or, to the
knowledge of Bancorp,  threatened which,  individually or in the aggregate,  has
had or could reasonably be expected to have a Bancorp Material Adverse Effect.

 ............. (b) Except as Previously Disclosed, since September 30, 1998, each
of Bancorp and the Bancorp  Subsidiaries  has owned and operated its  respective
assets,  properties,  and  businesses  in the  ordinary  course of business  and
consistent with past practice.

 ..............Section  5.6.  No Broker's or  Finder's  Fees.  No agent,  broker,
investment  banker,  Person,  or firm  acting on behalf  or under  authority  of
Bancorp  or any of the  Bancorp  Subsidiaries  is or  will  be  entitled  to any
broker's  or finder's  fee or any other  commission  or similar fee  directly or
indirectly  in  connection  with the  Merger,  except  Bancorp  has  engaged JMP
Financial,  Inc., an investment  banking  firm,  to provide  financial  advisory
services.

 ..............Section  5.7.  Litigation  and Other  Proceedings.  (a) Except for
matters  which would not have,  in the  aggregate,  a Bancorp  Material  Adverse
Effect, neither Bancorp nor any Bancorp Subsidiary is a defendant in, nor is any
of its  property  subject  to, any  pending,  or, to the  knowledge  of Bancorp,
threatened  claim,  action,  suit,  investigation,  or  proceeding.  There is no
judicial  order,  judgment,  or  decree  to which any of  Bancorp,  the  Bancorp
Subsidiaries  or their  respective  properties is subject which has had or could
reasonably be expected to have a Bancorp Material Adverse Effect.

 ..............  (b) All pending  claims,  actions,  suits,  investigations,  and
proceedings  in which  Bancorp or any Bancorp  Subsidiary is a defendant and all
judicial  orders,  judgments,  or  decrees to which the  Bancorp or any  Bancorp
Subsidiary is subject have been Previously Disclosed.

 ..............Section   5.8.  Compliance  With  Law.  Bancorp  and  the  Bancorp
Subsidiaries have been and are in compliance in all respects with all Applicable
Laws,  except  where such  noncompliance  would not have,  in the  aggregate,  a
Bancorp Material Adverse Effect,  and neither Bancorp nor any Bancorp Subsidiary
has received notice from any  Governmental  Authority of any material  violation
of, and does not know of any material violations of, any Applicable Law.

 ..............Section  5.9. Corporate Actions. The Board of Directors of Bancorp
has  authorized  its officers to execute and deliver this  Agreement and to take
all  action  necessary  to  consummate  the  Merger  and the other  transactions
contemplated hereby.  Except for obtaining the requisite approval of the Bancorp
shareholders as contemplated hereby, all corporate authorization by the Board of
Directors  of  Bancorp  required  for the  consummation  of the  Merger  and the
transactions contemplated hereby has been obtained.

 ..............Section  5.10.  Authority.  Except as  Previously  Disclosed,  the
execution,  delivery and  performance by Bancorp of its  obligations  under this
Agreement and the consummation  thereby of the transactions  contemplated hereby
do not,  and will not,  violate or conflict  with any of the  provisions  of, or
constitute a breach or default (or an event which, with notice or lapse of time,
or both, would constitute a breach or default) under, terminate, give any Person
the right to terminate,  modify or accelerate  payment or  performance  under or
result in the creation of any  Encumbrance  upon any of the properties or assets
of Bancorp  under (i) the  articles  of  incorporation,  charter,  or by-laws of
Bancorp,  the  Bank,  or any  other  Bancorp  Subsidiary,  (ii)  subject  to the
Governmental Approvals and the approval of Bancorp shareholders described below,
any  Applicable  Law to which  Bancorp  or any of the  Bancorp  Subsidiaries  is
subject, or (iii) except, in each case, where such violation,  conflict, breach,
default,  termination (or right to terminate),  modification,  acceleration,  or
Encumbrance would not, individually or in the aggregate, have a Bancorp Material
Adverse Effect, any Contract to which Bancorp or any of the Bancorp Subsidiaries
is a party or is subject or by which any of their  properties or assets is bound
or affected.  The parties  acknowledge  that the  consummation  of the Merger is
subject to various  regulatory  approvals.  Bancorp has all requisite  corporate
power and  corporate  authority to enter into this  Agreement and to perform its
obligations  hereunder.  Other than the Governmental Approvals and the requisite
approval of Bancorp  shareholders as contemplated  hereby, no filings,  notices,
approvals,  or  consents  are  required  on behalf  of  Bancorp  or any  Bancorp
Subsidiary in connection with the consummation of the transactions  contemplated
by this Agreement.  Bancorp has no knowledge of any reason why the  Governmental
Approvals  cannot be  obtained  or granted  on a timely  basis.  This  Agreement
constitutes  the valid and binding  obligation of Bancorp and is  enforceable in
accordance with its terms, except as enforceability may be limited by Applicable
Law relating to  bankruptcy,  insolvency or  creditors'  rights  generally,  the
rights of creditors of insured depository  institutions,  and general principles
of equity.

 ..............Section  5.11. Information Furnished;  Registration Statement. (a)
To  the  knowledge  of  Bancorp,   no  statement   contained  in  any  schedule,
certificate,  or other document furnished (whether prior to or subsequent to the
date of this Agreement) or to be furnished in writing by or on behalf of Bancorp
or any of its Affiliates to the Company  pursuant to this Agreement  contains or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.

 ..............  (b) None of the  information  provided by Bancorp or any Bancorp
Subsidiary  for  inclusion  in  the  Registration  Statement,  at the  time  the
Registration Statement becomes effective or, in the case of the Proxy Statement,
at the date of mailing,  will contain any untrue statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they are made,  not  misleading.  Each of the  Registration  Statement and Proxy
Statement, except for such portions thereof that relate only to the Company or a
Company  Subsidiary,  will comply as to form in all material  respects  with the
provisions of the Securities Act and Exchange Act, as applicable.

 ..............Section  5.12.  Property  and  Assets.  Bancorp  and  the  Bancorp
Subsidiaries  have  good and  marketable  title to all of  their  real  property
reflected in the consolidated financial statements last filed by Bancorp as part
of a publicly available Regulatory Document or acquired subsequent thereto, free
and clear of all  Encumbrances,  except  for (a) such  items  reflected  in such
financial  statements or in the notes  thereto,  (b) liens for current taxes not
yet  delinquent,  (c) customary title  exceptions that have no material  adverse
effect upon the current use of such  property,  (d) property sold or transferred
in the ordinary course of business  consistent with past practice since the date
of such financial statements and (e) as otherwise Previously Disclosed.  Bancorp
and the Bancorp Subsidiaries enjoy peaceful and undisturbed possession under all
material  leases for the use of real  property  under which they are the lessee;
all of such  leases  are valid and  binding  and in full  force and  effect  and
neither  Bancorp nor any Bancorp  Subsidiary  is in default in any respect under
any such lease,  except  where such  failure to be valid and binding and in full
force and effect,  or where such default,  would not have, in the  aggregate,  a
Bancorp Material  Adverse Effect.  No consent of the lessor of any material real
property or material personal property lease is required for consummation of the
Merger.  There has been no physical loss, damage or destruction,  whether or not
covered by insurance,  affecting the real  properties of Bancorp and the Bancorp
Subsidiaries  since September 30, 1998,  except such loss, damage or destruction
which would not have, in the aggregate,  a Bancorp Material Adverse Effect.  All
property and assets  material to their  businesses and currently used by Bancorp
and the Bancorp  Subsidiaries are, in all material  respects,  in good operating
condition and repair, normal wear and tear excepted.

 ..............Section  5.13.  Agreements and  Instruments.  Except as Previously
Disclosed, neither Bancorp nor any Bancorp Subsidiary is a party to:

 ............. (a) any material Contract;

 .............  (b) any Contract relating to the borrowing of money by Bancorp or
any Bancorp  Subsidiary or the guarantee by Bancorp or any Bancorp Subsidiary of
any such obligation  (other than Federal Home Loan Bank advances with a maturity
of one year or less from the date hereof);

 .............  (c) any Contract to make loans or for the provision, purchase, or
sale of goods,  services,  or property between Bancorp or any Bancorp Subsidiary
and any director or officer of Bancorp or any Bancorp Subsidiary,  or any member
of the immediate  family or Affiliate of any of the foregoing  (other than loans
or deposits made on an arms-length basis in the ordinary course of business);

 .............  (d) any  Contract  with  or  concerning  any  labor  or  employee
organization;

 ............. (e) any Contract between Bancorp or any Bancorp Subsidiary and any
Affiliate  thereof  (other than Contracts  solely between  Bancorp and a Bancorp
Subsidiary or solely between Bancorp Subsidiaries);

 .............  (f) any agreements,  directives,  orders, or similar arrangements
between or  involving  Bancorp or any Bancorp  Subsidiary  and any  Governmental
Authority;

 .............  (g) any Contract with respect to the  employment,  retention,  or
severance of any directors, officers, employees, or consultants;

 .............  (h) any Contract  which  materially  restricts the conduct of any
line of business by Bancorp or any current or future Affiliates thereof; or

 .............  (i)  any  Contract  pursuant  to  which  Bancorp  or any  Bancorp
Subsidiary is or may become obligated to invest in or contribute  capital to any
Bancorp Subsidiary.

 ..............Section  5.14. Material Contract Defaults. Neither Bancorp nor any
Bancorp Subsidiary nor, to the knowledge of Bancorp,  the other party thereto is
in  default in any  respect  under any  Contract  to which any of Bancorp or the
Bancorp Subsidiaries is a party or by which its respective assets,  business, or
operations may be bound or affected or under which it or its respective  assets,
business,  or  operations  receives  benefits,  other  than any such  default or
defaults  which would not have, in the  aggregate,  a Bancorp  Material  Adverse
Effect, and there has not occurred any event that, with the lapse of time or the
giving of notice or both, would  constitute such a default.  To the knowledge of
Bancorp,  all  material  Contracts  to  which  Bancorp  or any  of  the  Bancorp
Subsidiaries is a party are valid, binding, and in full force and effect.

 ..............Section  5.15.  Tax  Matters.  (a)  Bancorp,  each of the  Bancorp
Subsidiaries  and any affiliated group (within the meaning of Section 1504(a) of
the Code) of which Bancorp or any of the Bancorp  Subsidiaries  is a member have
filed all Tax Returns required to be filed by them and have made timely payments
of all Taxes due and payable,  whether disputed or not; and such Tax Returns are
true,  correct,  and complete in all material respects.  Neither the IRS nor any
other  taxing  authority  is now  asserting  or, to the  knowledge  of  Bancorp,
threatening to assert any deficiency or claim for additional  Taxes,  nor to the
knowledge of Bancorp is there any basis for any such assertion or claim. Bancorp
and each of the Bancorp Subsidiaries have complied in all material respects with
applicable IRS backup  withholding  requirements  and have filed all appropriate
information  reporting  returns  for all Tax  years for  which  the  statute  of
limitations  has not closed.  Bancorp and each Bancorp  Subsidiary have complied
with all  applicable  state  law  sales  and use Tax  collection  and  reporting
requirements.

 ..............  (b)  Adequate  provision  for any Taxes due or to become due for
Bancorp or any of the Bancorp Subsidiaries for any period or periods through and
including  September  30, 1998,  has been made and is reflected on the September
30, 1998 audited consolidated financial statements last filed by Bancorp as part
of a publicly  available  Regulatory  Document and has been or will be made with
respect to periods ending after September 30, 1998.

 ..............Section  5.16. Environmental Matters. To the knowledge of Bancorp,
neither  Bancorp  nor any  Bancorp  Subsidiary  owns or  leases  any  properties
affected by toxic waste, radon gas, or other hazardous conditions or constructed
in part with the use of asbestos. Neither Bancorp nor any Bancorp Subsidiary has
knowledge of, nor has Bancorp or any Bancorp Subsidiary  received written notice
from any Governmental Authority of, any conditions,  activities,  practices,  or
incidents which are reasonably likely to interfere with or prevent compliance or
continued  compliance  by  Bancorp  or any  Bancorp  Subsidiary  with  hazardous
substance  laws or any  regulation,  order,  decree,  judgment,  or  injunction,
issued, entered,  promulgated or approved thereunder,  or which may give rise to
any  legal  liability  on the part of  Bancorp  or any  Bancorp  Subsidiary,  or
otherwise form the basis of any claim,  action,  suit,  proceeding,  hearing, or
investigation  against  or of  Bancorp or any  Bancorp  Subsidiary,  based on or
related to the manufacture,  processing,  distribution, use, treatment, storage,
disposal,  transport,  or  handling,  or the  emission,  discharge,  release  or
threatened  release into the  environment,  of any  pollutant,  contaminant,  or
chemical,  or industrial,  toxic, or hazardous  substance or waste.  There is no
civil, criminal, or administrative claim, action, suit, proceeding,  hearing, or
investigation  pending  or, to the  knowledge  of  Bancorp,  threatened  against
Bancorp  or any  Bancorp  Subsidiary  relating  in any  way  to  such  hazardous
substance laws or any regulation, order, decree, judgment, or injunction issued,
entered,  promulgated or approved thereunder.  To the knowledge of Bancorp, none
of Bancorp or the Bancorp  Subsidiaries  has made or participated in any loan to
any  Person who is subject to any  civil,  criminal,  or  administrative  claim,
action, suit, proceeding,  hearing, or investigation relating in any way to such
hazardous  substance  laws  or  any  regulation,  order,  decree,  judgment,  or
injunction issued,  entered,  promulgated or approved thereunder and relating to
the property secured by such loan.

 .............Section  5.17.  Loan  Portfolio;   Portfolio  Management.  (a)  All
evidences  of  indebtedness  reflected as assets in the  consolidated  financial
statements  last filed by Bancorp  as part of a  publicly  available  Regulatory
Document or acquired  since such date,  are (except with respect to those assets
which are no  longer  assets  of  Bancorp  or any  Bancorp  Subsidiary)  binding
obligations of the respective  obligors named therein except as enforcement  may
be limited by  bankruptcy,  insolvency,  or other  similar  laws  affecting  the
enforcement of creditors rights  generally,  and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding  may be brought,  and the payment of no
material  amount  thereof  (either  individually  or in the aggregate with other
evidences of indebtedness) is subject to any defenses which have been threatened
or asserted  against Bancorp or any Bancorp  Subsidiary.  All such  indebtedness
which is  secured  by an  interest  in real  property  is secured by a valid and
perfected mortgage lien having the priority specified in the loan documents. All
loans originated or purchased by Bancorp or any Bancorp Subsidiaries were at the
time entered into and at all times since have been in compliance in all material
respects  with  all  Applicable  Laws.  Bancorp  and  the  Bancorp  Subsidiaries
administer  their  loan  and  investment   portfolios  in  accordance  with  all
Applicable Laws and the terms of applicable instruments.  The records of Bancorp
and the Bancorp Subsidiaries  regarding all loans outstanding on their books are
accurate in all material  respects and the risk  classification  system has been
established in accordance with the requirements of the OTS.

 ..............  (b)  Bancorp  and the Bank  have  Previously  Disclosed  a list,
accurate and  complete in all material  respects,  of the  aggregate  amounts of
loans,  extensions  of  credit,  and other  assets of  Bancorp  and the  Bancorp
Subsidiaries that have been adversely designated,  criticized,  or classified as
of September  30, 1998,  separated  by Asset  Classification;  and no amounts of
loans,   extensions  of  credit,  or  other  assets  that  have  been  adversely
designated, classified or criticized as of the date hereof by any representative
of any Government  Authority as "Special  Mention,"  "Substandard,"  "Doubtful,"
"Loss," or words of similar  import are excluded  from the amounts  disclosed in
the Asset Classification,  other than amounts of loans, extensions of credit, or
other assets that were charged off or recovered by Bancorp or any of the Bancorp
Subsidiaries before the date hereof.

 ..............Section  5.18.  Real  Estate  Loans and  Investments.  Except  for
properties  acquired in settlement of loans, there are no facts,  circumstances,
or  contingencies  known to Bancorp  which exist which would  require a material
reduction  under GAAP in the  present  carrying  value of any of the real estate
investments,  joint ventures,  construction  loans, other investments,  or other
loans of  Bancorp  or any  Bancorp  Subsidiary  (either  individually  or in the
aggregate with other loans and investments).

 ..............Section  5.19. Derivatives Contracts.  (a) Neither Bancorp nor any
of the  Bancorp  Subsidiaries  is a party  to or has  agreed  to  enter  into an
exchange-traded or over-the-counter  Derivatives  Contract or any other Contract
not included on the consolidated  balance sheet last filed by Bancorp as part of
a publicly available Regulatory Document which is a Derivatives Contract, except
for those  Derivatives  Contracts  Previously  Disclosed,  including a list,  as
applicable,  of any of Bancorp's or the Bank's assets  pledged as security for a
Derivatives Contract.

 ..............  (b) All  Derivative  Contracts  to which  Bancorp or any Bancorp
Subsidiary is a party or by which any of their properties or assets may be bound
were  entered into in the ordinary  course of business  and in  accordance  with
prudent banking practice, based on industry-wide standards at the time, and with
counterparties believed by Bancorp to be financially responsible at the time.

 .............Section 5.20. Insurance.  Bancorp and the Bancorp Subsidiaries have
in effect  insurance  coverage  with  reputable  insurers  which,  in respect of
amounts,  types, and risks insured,  is reasonably  adequate for the business in
which Bancorp and the Bancorp  Subsidiaries are engaged.  All Insurance Policies
are in full force and effect, The Insurance Policies are valid, outstanding, and
enforceable in accordance with their respective terms and will not in any way be
affected  by, or  terminated  or lapsed  solely by reason of,  the  transactions
contemplated by this Agreement. To the knowledge of Bancorp, neither Bancorp nor
any Bancorp  Subsidiary  has been  refused  any  insurance  with  respect to any
material properties,  assets or operations, nor has any coverage been limited or
terminated  by any  insurance  carrier  to  which  it has  applied  for any such
insurance  or with  which it has  carried  insurance  during  the last three (3)
years.

 .............Section  5.21.  Tax  Treatment.  Neither  Bancorp  nor  any  of its
Affiliates has taken or agreed to take any action that or has failed to take any
action the result of which would (but without giving effect to any actions taken
or agreed  to be taken by the  Company  or any of its  Affiliates)  prevent  the
Merger from qualifying as a "reorganization" under Section 368(a) of the Code.

                                   ARTICLE VI
                                    COVENANTS

 ..............Section 6.1. Conduct of Business by the Company. During the period
from the date of this Agreement and continuing  through the Closing Date, except
as Previously  Disclosed and except as expressly  contemplated  and permitted by
this Agreement or with the prior written consent of Bancorp (which consent shall
not be unreasonably  withheld),  the Company shall cause each of the Company and
the Company  Subsidiaries  to (a) carry on its business in the  ordinary  course
consistent  with past practice;  (b) use its reasonable best efforts to preserve
its present business organization and relationships; (c) use its reasonable best
efforts to keep available the present  services of the Company's and the Company
Subsidiaries' employees; and (d) use its reasonable best efforts to preserve its
rights, franchises,  goodwill, and relations with customers and others with whom
it conducts business.  Without limiting the generality of the foregoing,  except
as  expressly  contemplated  and  permitted by this  Agreement,  consented to in
writing by Bancorp or  Previously  Disclosed,  the  Company  shall not,  and the
Company  shall not  permit  any of the  Company  Subsidiaries  to,  directly  or
indirectly:

 .............. (i) amend its articles/certificate of incorporation,  charter, or
bylaws  (or  comparable  governing   instruments)  or  merge  with  or  into  or
consolidate with any other Person,  subdivide,  combine or in any way reclassify
any  shares of its  capital  stock,  or change in any  manner  the rights of its
outstanding capital stock;

 ..............  (ii) issue or sell or purchase any shares of its capital  stock,
or issue or sell or purchase any option,  warrant,  convertible or  exchangeable
security,  right,  subscription,  call,  unsatisfied  pre-emptive right or other
agreement  or right of any kind to purchase  or  otherwise  acquire  (including,
without  limitation,  by exchange or conversion)  (each a "Right") any shares of
its capital  stock  (except that the Company may issue shares of Company  Common
Stock upon (i)  exercise  of  Company  Options  outstanding  on the date of this
Agreement or (ii) as Previously Disclosed);

 ..............  (iv)  waive  any  right of value to its  business  other  than a
waiver,  together  with all other  such  waivers,  that would not have a Company
Material Adverse Effect;

 ..............  (v) make any change in its  accounting  methods or practices for
Tax or accounting  purposes or make any change in  depreciation  or amortization
policies or rates adopted by it for Tax or accounting  purposes,  except in each
case as required by GAAP or Applicable Law;

 ..............  (vi) materially  change, or agree to change,  any of its lending
activities,  policies or practices,  except as required by Applicable  Law or by
any Governmental Authority;

 ..............  (vii)  make  any  loan  or  advance  to any  of its  Affiliates,
officers, directors,  employees,  consultants,  agents, or other representatives
(other than travel advances made in the ordinary  course of business  consistent
with past  practice),  or make any other loan or advance  otherwise  than in the
ordinary course of business consistent with past practice;

 .............. (viii) sell, offer to sell, abandon or make any other disposition
of any of its material  assets,  including  selling or closing any branches;  or
grant or suffer any Encumbrance on any of its material assets;

 ..............  (ix) except in the ordinary  course of business  consistent with
past practice,  incur or assume,  or agree to incur or assume,  any liability or
obligation  (whether or not currently due and payable)  relating to its business
or any of its assets;

 ..............  (x) create, renew, amend, terminate or cancel, or take any other
action that may result in the  creation,  renewal,  amendment,  termination,  or
cancellation of, any Contract with any of its Affiliates;

 ..............  (xi) declare,  set aside or pay any dividends or declare or make
any other distributions of any kind on or in respect of its capital stock (other
than  dividends  from a Company  Subsidiary  to the  Company or another  Company
Subsidiary), or make any direct or indirect redemption, retirement, purchase, or
other  acquisition  of any shares of its capital stock or Rights,  provided that
the Company may declare and pay its  regular  quarterly  cash  dividends  on the
Company  Common  Stock of not more than $0.115 per share per  quarterly  period,
provided  further that the parties agree that after the date of this  Agreement,
each of Bancorp and the Company shall  coordinate with the other the declaration
of any  dividends in respects of Bancorp  Common Stock and Company  Common Stock
and the record dates and payment dates relating thereto,  it being the intention
of the parties hereto that holders of Company Common Stock shall not receive two
dividends, or fail to receive one dividend, for any single calendar quarter with
respect to their shares of Company Common Stock and any shares of Bancorp Common
Stock any such holder receives in exchange therefore in the Merger;

 ..............  (xii) create,  renew,  amend,  terminate or cancel,  or take any
other action that may result in the creation, renewal,  amendment,  termination,
or  cancellation  of, any  Contract,  except in the ordinary  course of business
consistent with past practice and as would not, in the aggregate, have a Company
Material Adverse Effect;  enter into or amend any Contract  pursuant to which it
agrees to indemnify  any party on behalf of its business or pursuant to which it
agrees to refrain from competing with any party with respect to its business;

 ..............  (xiii)  except as Previously  Disclosed,  adopt,  amend,  renew,
terminate or accelerate or vest benefits under any Company Employee Benefit Plan
or  Benefit  Arrangement  or  any  other  employee  program,   plan,  agreement,
arrangement,  or policy  between the Company or a Company  Subsidiary and one or
more of employees or directors of the Company or a Company Subsidiary, except as
required by Applicable Law;

 ..............  (xiv) commit any act or omission  which  constitutes a breach or
default  under any  Contract or license to which it is a party or by which it or
any of its  properties  or  assets is bound  except  as would  not have,  in the
aggregate, a Company Material Adverse Effect;

 ..............  (xv)  acquire  in  any  manner,  including  by  way  of  merger,
consolidation,  or purchase of an equity interest or assets, any business or any
corporation,   partnership,  association,  or  other  business  organization  or
division  thereof (other than by way of  foreclosures or acquisitions of control
in a bona  fide  fiduciary  capacity  or in  satisfaction  of  debts  previously
contracted  in good  faith,  in each case in the  ordinary  and usual  course of
business consistent with past practice);

 ..............  (xvi)  increase  the  salary  or wages of any  employees  of the
Company or of any Company  Subsidiary;  or pay any incentive,  bonus, or similar
payments to employees  or  directors  other than as required by the terms of any
Company  Employee  Benefit Plan or Benefit  Arrangement in effect as of the date
hereof and Previously Disclosed;

 .............. (xvii) purchase any debt securities or derivative securities that
are  defined as "complex  securities"  under OTS Thrift  Bulletin  No. 13a dated
December 1, 1998 as revised or purchase any Derivatives Contracts;

 ..............  (xviii) make any  investment  which would cause First Savings to
not be a qualified thrift lender under Section 10(m) of the HOLA, or not to be a
"domestic  building and loan  association" as defined in Section  7701(a)(19) of
the Code;

 ..............  (xix)  change  its  existing  investment  guidelines  Previously
Disclosed,  except as required by Applicable Law or any Governmental  Authority,
or the manner in which its  investment  securities  portfolio is  classified  or
reported;

 ..............  (xx)  authorize  or  make  capital  expenditures  in  excess  of
$100,000, individually, or $500,000, in the aggregate;

 ..............  (xxi) take any action that or fail to take any action the result
of which would (but without  giving  effect to any actions taken or agreed to be
taken  by the  Company  or  any  of its  Affiliates)  prevent  the  Merger  from
qualifying as a "reorganization" under Section 368(a) of the Code; or

 ...............  (xxii)  agree  (by  Contract  or  otherwise)  to do  any of the
foregoing.

 .............Section  6.2. Maintenance of Records. Through the Closing Date, the
Company and the Company  Subsidiaries  will  maintain  their Records in the same
manner and with the same care that such  Records have been  maintained  prior to
the execution of this Agreement.

 .............Section 6.3. Salary and Benefits. (a) Bancorp shall, or shall cause
the appropriate  Bancorp  Subsidiary to, permit  employees of the Company or any
Company  Subsidiary who are employees with the Company or any Company Subsidiary
as of immediately prior to the Effective Time and become employees of Bancorp or
a Bancorp  Subsidiary  as of the Effective  Time  ("Transferred  Employees")  to
participate in the employee benefit plans, programs, and arrangements of Bancorp
or the Bancorp  Subsidiaries,  as applicable (the "Bancorp Plans"),  on the same
terms as such plans and benefits are offered to similarly  situated employees of
Bancorp or the Bancorp Subsidiaries, as applicable.  Bancorp shall recognize, or
shall cause the appropriate  Bancorp  Subsidiary to recognize,  each Transferred
Employee's  service with the Company or any Company  Subsidiary  for purposes of
determining  eligibility to participate in and vest under the Bancorp Plans, but
not  for  purposes  of  benefit  accruals  under  any  such  plans  and no  such
Transferred  Employees or dependents  shall be subject to any uninsured  waiting
periods or  preexisting  condition  exclusions  under any plan of Bancorp or the
Bank.  Furthermore,  benefit levels under the welfare plans sponsored by Bancorp
or the Bank shall be determined based upon prior service with the Company or any
Company Subsidiaries.

 ..............  (b)  Bancorp  shall,  or shall  cause  the  appropriate  Bancorp
Subsidiary  to, use its best  efforts to employ  employees of the Company or any
Company  Subsidiary who are employees with the Company or any Company Subsidiary
as of  immediately  prior to the Effective Time on the same terms and conditions
as are  offered to  similarly  situated  employees  of  Bancorp  or the  Bancorp
Subsidiaries,  as applicable;  provided, however, that for a period of 12 months
after the Effective Time, salaries of Transferred Employees shall not be reduced
below the level of such  salaries for such  employees  immediately  prior to the
Effective Time.

 ..............  (c) Bancorp shall enter into a six-year employment contract with
Richard Gatton which shall contain such provisions as are  customarily  included
in such agreements with key management  personnel.  The employment contract also
shall include the provisions included in Exhibit B attached hereto.

 ..............  (d) Bancorp  shall enter into a three-year  employment  contract
with Jeffrey  Gatton  which shall  contain such  provisions  as are  customarily
included  in such  agreements  with key  management  personnel.  The  employment
contract  also  shall  include  the  provisions  included  in Exhibit B attached
hereto.

 ..............  (e) Notwithstanding the foregoing, Bancorp shall, or shall cause
the appropriate  Bancorp  Subsidiary to, (A) provide severance benefits equal to
one  week  of pay for  each  year of  service  with  the  Company  or a  Company
Subsidiary  (including  any  service  as an  employee  of  Bancorp  or a Bancorp
Subsidiary)  to Persons  who (i) were  employees  of the  Company or any Company
Subsidiary  immediately prior to the Effective Time, (ii) are terminated without
cause as of or within 12 months after the Effective Time by Bancorp or a Bancorp
Subsidiary (but not upon termination by the employee or termination for cause by
Bancorp or a Bancorp  Subsidiary),  and (iii) are not otherwise  entitled to any
severance  benefits  under  any  Contract  as a  result  or in  respect  of such
termination,  in the  amounts  as  Previously  Disclosed,  which  amounts,  less
applicable  withholding  taxes,  shall be paid  upon the  effectiveness  of such
termination  and (B) recognize  and carry  forward as of the Effective  Time all
sick leave and vacation accrued by each Transferred Employee during the 12 month
period ending on (and including) the Closing Date under the respective  policies
of Bancorp or the appropriate  Bancorp Subsidiary (but (x) without giving effect
to any accrued  benefits  carried  forward from any time prior to such  12-month
period  under such Bancorp and Bancorp  Subsidiary  policies and (y) in no event
greater than such benefits as would accrue under such  policies  during one full
calendar year without  giving effect to accrued  benefits  carried  forward from
prior calendar years under such policies).

 ..............  (f)  Further,  Bancorp  shall,  or shall  cause the  appropriate
Bancorp  Subsidiary to, perform after the Effective Time all of the  obligations
of the  Company or the  appropriate  Company  Subsidiary  under the terms of the
severance  agreements  existing  as of the date  hereof  which are  between  the
Company  or a Company  Subsidiary,  on the one hand,  and  management  employees
(other than G. Richard  Gatton) of the Company or a Company  Subsidiary,  on the
other  hand,  which  have been  Previously  Disclosed  and which by their  terms
survive the Effective Time,  provided,  however,  that the Company shall use its
best efforts to modify those  agreements or replace them with agreements so that
no benefits are payable solely as a result of the Merger.

 ..............Section  6.4. Efforts of Parties to Close.  During the period from
the  date of this  Agreement  through  the  Closing  Date,  each  party  to this
Agreement shall take such actions as may be reasonably required to carry out the
provisions hereof and the transactions contemplated hereby and each party hereto
shall use its  reasonable  best efforts to fulfill or obtain the  fulfillment of
the  conditions  precedent  to the  consummation  of the Merger,  including  the
execution  and delivery of any  documents,  certificates,  instruments  or other
papers that are reasonably  required for the  consummation  of the  transactions
contemplated  hereby.  During the  period  from the date of this  Agreement  and
continuing through the Closing, except as required by Applicable Law or with the
prior written consent of the other parties to this  Agreement,  no party to this
Agreement shall take any action which, or fail to take any action the failure of
which to be taken,  would, or could reasonably be expected to, (a) result in any
of the representations and warranties set forth in this Agreement on the part of
the party taking or failing to take such action being or becoming  untrue in any
material  respect;  (b) result in any  conditions  to the  Closing  set forth in
Article VII not being satisfied; or (c) adversely affect or materially delay the
receipt of any of the requisite  regulatory approvals or the consummation of the
Merger.

 ..............Section 6.5. Confidentiality and Announcements.  (a) Other than as
required  by  Applicable  Law upon  prior  notice  to the other  parties  (where
reasonably practicable), the Filing of a Form 8-K with respect to this Agreement
reasonably  acceptable to both  parties,  or with the prior consent of the other
parties,  none of Bancorp,  the Company,  the Bank, or First Savings shall,  and
each of the foregoing shall cause each of its Affiliates and Representatives not
to, disclose to any Person the fact of execution and delivery hereof, any of the
contents  hereof or any  information  with  respect  to the  Merger or the other
transactions  contemplated hereby, except that nothing herein shall prohibit any
party from providing any  information to its regulatory  authorities as required
by Applicable Law.

 ..............  (b)  Subject to  Section  6.7(a)  and (b),  the  parties to this
Agreement  shall agree with each other as to the form and substance of any press
release related to this Agreement or the  transactions  contemplated  hereby and
shall  consult  each  other  as to  the  form  and  substance  of  other  public
disclosures related hereto and thereto.

 ..............Section  6.6. Access; Certain Communications.  Between the date of
this Agreement and the Closing Date,  subject to any Applicable Laws relating to
the exchange of information:

 ..............  (a) The  Company and the Company  Subsidiaries  shall  afford to
Bancorp and its authorized agents and  representatives  reasonable access,  upon
reasonable  notice to an  executive  officer of the  Company  and during  normal
business hours, to all Contracts,  documents,  and information of or relating to
the assets, liabilities,  business, operations,  personnel, and other aspects of
the  business of the Company and the Company  Subsidiaries.  The Company and the
Company Subsidiaries shall cause their personnel,  attorneys, and accountants to
provide assistance to Bancorp in Bancorp's  investigation of matters relating to
the  Merger,   including   allowing  Bancorp  and  its  authorized   agents  and
representatives  access to their  operating sites and facilities and cooperating
therewith in an effort to coordinate and facilitate the integration of Bancorp's
and the  Company's  computer  systems in  anticipation  of  consummation  of the
Merger; provided,  however, that Bancorp's investigation shall be conducted in a
manner  which  does  not  unreasonably  interfere  with the  normal  operations,
customers,  and employee relations of the Company and the Company  Subsidiaries;
provided further,  however, that, in providing the foregoing access, the Company
shall not be required to jeopardize its  attorney-client  privilege (the Company
hereby agreeing to use all reasonable  efforts to make  appropriate  alternative
disclosure arrangements in such circumstances).

 .............. (b) Bancorp shall afford to the Company and its authorized agents
and  representatives  reasonable access,  upon reasonable notice to an executive
officer  of  Bancorp  and  during  normal  business  hours,  to  all  Contracts,
documents, and information of or relating to the assets, liabilities,  business,
operations,  personnel,  and other  aspects of the  business  of Bancorp and the
Bancorp  Subsidiaries.   Bancorp  shall  cause  its  personnel,   attorneys  and
accountants to provide assistance to the Company in the Company's  investigation
of matters  relating  to the  Merger,  including  allowing  the  Company and its
authorized  agents  and  representatives  access  to  its  operating  sites  and
facilities;  provided,  however,  that  the  Company's  investigation  shall  be
conducted  in a manner  which does not  unreasonably  interfere  with  Bancorp's
normal operations, customers, and employee relations; provided further, however,
that,  in  providing  the  foregoing  access,  Bancorp  shall not be required to
jeopardize its  attorney-client  privilege  (Bancorp  hereby agreeing to use all
reasonable efforts to make appropriate  alternative  disclosure  arrangements in
such circumstances).

 ..............  (c) The  investigations  of the parties pursuant to this Section
6.6 shall not affect any of the representations or warranties contained herein.

 ..............Section  6.7.  Cooperation;  Preparation  of  Documents.  (a)  The
parties  to this  Agreement  shall  cooperate  with  each  other  and use  their
reasonable   best   efforts   promptly  to  prepare   and  file  all   necessary
documentation, to effect all applications,  notices, petitions, and filings, and
to obtain as promptly as practicable all permits, consents,  approvals, waivers,
and  authorizations of all third parties and Governmental  Authorities which are
necessary or advisable  to  consummate  the  transactions  contemplated  by this
Agreement.  If any required  consent of or waiver by any third party  (excluding
any  Governmental  Authority)  is not obtained  prior to the Closing,  or if the
assignment of any Contract would be ineffective  or would  adversely  affect any
material rights or benefits thereunder so that Bancorp would not in fact receive
all such rights and benefits,  the parties hereto, each without cost, expense or
liability to the other,  shall cooperate in good faith to seek, if possible,  an
alternative arrangement to achieve the economic results intended. The parties to
this Agreement  will have the right to review in advance,  and will consult with
each other on, in each case subject to Applicable  Laws relating to the exchange
of  information,   all  the  information   relating  to  Bancorp,   the  Bancorp
Subsidiaries,  the  Company,  or the Company  Subsidiaries,  as the case may be,
which appear in any filing made with,  or written  materials  submitted  to, any
third party or any  Governmental  Authority in connection with the  transactions
contemplated by this Agreement; provided, however, that nothing contained herein
shall be deemed to provide  any party to this  Agreement  with a right to review
any information  provided to any Governmental  Authority on a confidential basis
in connection with the  transactions  contemplated  hereby.  The parties to this
Agreement  agree that they will  consult  with each  other  with  respect to the
obtaining of all permits,  consents,  approvals, and authorizations of all third
parties and  Governmental  Authorities  necessary or advisable to consummate the
transactions  contemplated by this Agreement and each party will keep the others
apprised of the status of matters  relating to  completion  of the  transactions
contemplated herein. The party responsible for a filing as set forth above shall
promptly  deliver  to the other  parties  hereto  evidence  of the filing of all
applications, filings, registrations, and notifications relating thereto (except
for any confidential portions thereof), and any supplement,  amendment,  or item
of additional  information in connection  therewith (except for any confidential
portions  thereof).  The party  responsible  for a filing  shall  also  promptly
deliver  to the other  parties  hereto a copy of each  material  notice,  order,
opinion, and other item of correspondence received by such filing party from any
Governmental  Authority  in  respect  of any such  application  (except  for any
confidential   portions  thereof).   In  exercising  the  foregoing  rights  and
obligations,  Bancorp,  the Bancorp  Subsidiaries,  the Company, and the Company
Subsidiaries shall each act reasonably and as promptly as practicable.

 ..............  (b) Bancorp and the Company shall jointly  prepare and file with
the SEC as soon as is reasonably  practicable the Registration Statement (or the
equivalent in the form of preliminary proxy material).  The parties hereto shall
use their  reasonable  best efforts (i) to cause the  Registration  Statement to
become  effective,  (ii) to  maintain  the  effectiveness  thereof  through  the
Effective  Time,  and (iii) to the extent any such  party  becomes  aware of any
information contained or omitted from the Registration Statement which makes any
material  statement   contained  therein  false  or  misleading,   to  file  the
information necessary to make such statements in the Registration  Statement not
false or  misleading.  Bancorp  also shall take such  other  reasonable  actions
(other than qualifying to do business in any  jurisdiction in which it is not so
qualified)  required to be taken under any applicable  state  securities laws in
connection  with the  issuance of Bancorp  Common  Stock under the  Registration
Statement  as  contemplated  hereby.  Bancorp  and the  Company  shall use their
respective  reasonable best efforts to mail at the earliest  practicable date to
Bancorp  shareholders  and  the  Company  shareholders,  respectively,  a  Proxy
Statement,  which shall include all information required under Applicable Law to
be furnished to Bancorp shareholders and Company shareholders,  respectively, in
connection with the Merger and the  transactions  contemplated  hereby and shall
include  the  recommendation  of the Bancorp  Board and of the Company  Board in
favor of the Merger, this Agreement,  and the transactions  contemplated hereby;
provided,  however,  that  the  parties  shall  not be  required  to  make  such
recommendation  if it  reasonably  determines  in good faith not to so recommend
based upon the advice of  counsel,  which  counsel  or is  otherwise  reasonably
acceptable  to the  other  party,  to the  effect  that  to so  recommend  would
constitute a violation of the Board's fiduciary duties under Applicable Law.

 ..............  (c) Each party to this Agreement shall,  upon request,  promptly
furnish  each  other with all  information  concerning  themselves,  Affiliates,
directors,  officers,  and  stockholders  and  such  other  matters  as  may  be
reasonably  necessary or advisable in connection  with any statement  (including
the Registration Statement), filing, notice, or application made by or on behalf
of  Bancorp,  the  Bank,  the  Company,  or First  Savings  to any  Governmental
Authority in connection with the transactions contemplated by this Agreement.

 ..............  (d) The parties to this  Agreement  shall  promptly  advise each
other upon receiving any  communication  from any  Governmental  Authority whose
consent  or  approval  is  required  for   consummation   of  the   transactions
contemplated  by this Agreement which causes such party to believe that there is
a reasonable  likelihood  that any  requisite  regulatory  approval  will not be
obtained or that the receipt of any such approval will be materially delayed.

 ..............Section  6.8.  Notification of Certain Matters.  (a) Each party to
this Agreement  shall give prompt notice to the other parties of the occurrence,
or any known failure to occur,  of any event or existence of any condition  that
has caused or could  reasonably be expected to cause any of its  representations
or  warranties  contained in this  Agreement to be untrue or  inaccurate  in any
material  respect  at any  time  after  the  date of this  Agreement,  up to and
including the Closing  Date,  and (ii) any failure on its part to comply with or
satisfy, in any material respect,  any covenant,  condition,  or agreement to be
complied with or satisfied by it under this Agreement.

 ..............  (b)  During the period  from the date of this  Agreement  to the
Closing Date,  each party will  promptly  notify the other party of any material
change in the conduct of its business or in the operation of its  properties and
of any governmental complaints,  investigations,  or hearings (or communications
indicating that the same may be contemplated),  or the institution or the threat
of significant  litigation  involving the party,  and will keep each other fully
informed of such events.

 ..............  (c) Bancorp  shall provide the Company with true,  correct,  and
complete copies of Bancorp's  audited  consolidated  financial  statements as of
September  30,  1999 and for the  three  years  then  ended  promptly  following
completion  thereof,  but in any  event on or  before  the date  such  financial
statements are first filed with the SEC or any other  Governmental  Authority in
any Regulatory Document.

 ..............  (d) The Company shall provide  Bancorp with true,  correct,  and
complete copies of the Company's audited consolidated financial statements as of
June 30, 1999 and for the three years then ended promptly  following  completion
thereof,  but in any event on or before the date such  financial  statements are
first filed with the SEC or any other  Governmental  Authority in any Regulatory
Document.

 ..............Section  6.9.  Expenses.  Except as otherwise  expressly  provided
herein,  the parties hereto shall each bear their respective direct and indirect
expenses  incurred in connection  with the  negotiation  and preparation of this
Agreement  and  the  consummation  of  the  transactions   contemplated   hereby
(including all fees and expenses payable to or on behalf of financial  advisors,
attorneys, accountants, and consultants).

 ..............Section  6.10. Third Party Proposals.  None of the Company, any of
the  Company  Subsidiaries,  any  of the  Affiliates  of  the  foregoing  or any
officers, directors,  employees,  representatives,  or advisors of the foregoing
("Representatives")   shall  directly  or  indirectly  solicit,   encourage,  or
facilitate inquiries or proposals, or enter into any definitive agreement,  with
respect to, or initiate or participate in any  negotiations or discussions  with
any Person  concerning,  any  acquisition  or  purchase  of all or any  material
portion of the assets of, or of any material  equity interest in, the Company or
any of the Company  Subsidiaries or any merger or business  combination  with or
involving  the  Company  or  any of  the  Company  Subsidiaries  other  than  as
contemplated by this Agreement (each, an "Acquisition  Proposal") or furnish any
information  regarding  the  Company  or the  Company  Subsidiaries  to any such
Person;  provided,  however, that the Board of Directors of the Company may, and
may  authorize  and  permit  its  Representatives  to,  furnish  or  cause to be
furnished nonpublic information,  subject to a binding confidentiality agreement
with the  Company to such Person and may  participate  in such  discussions  and
negotiations  directly or through its  Representatives  with such Person, if (i)
such Board of Directors has  reasonably  determined in good faith based upon the
written advice of counsel, which counsel is reasonably acceptable to Bancorp, to
the effect that the failure to provide such nonpublic information or participate
in such negotiations and discussions would constitute a violation of the Board's
fiduciary  duties under  Applicable  Law and (ii) copies of all  information  so
furnished  to such Person and the terms of such  Person's  Acquisition  Proposal
(and any supplements or amendments  thereto) are furnished  promptly to Bancorp.
The Company, the Company  Subsidiaries,  and any of their respective  Affiliates
and Representatives shall notify Bancorp immediately if any Acquisition Proposal
(including the terms thereof) is received by, any such  information is requested
from, or any such  negotiations  or discussions  are sought to be initiated with
any of the  Company,  the  Company  Subsidiaries,  or any of the  Affiliates  or
Representatives of the foregoing. None of the Company, the Company Subsidiaries,
or any of their respective  Affiliates and Representatives  shall amend, modify,
waive or  terminate,  or  otherwise  release any Person  from,  any  standstill,
confidentiality,  or similar  agreement or arrangement  currently in effect with
respect to the Company or any of the Company Subsidiaries.  Nothing contained in
this Agreement shall require the Company or the Company Board to take any action
or fail to take any action in violation of Applicable Laws.

 .............Section  6.11. Stock Listing. Bancorp shall use its reasonable best
efforts to cause to be listed on the NASDAQ NMS,  subject to official  notice of
issuance,   the  shares  of  Bancorp   Common  Stock  to  be  issued  as  Merger
Consideration.

 ..............Section 6.12. Integration; Conforming Entries. (a) The Company and
First  Savings,  prior to the  Closing,  shall (i)  consult and  cooperate  with
Bancorp regarding the implementation as of the Effective Time of those policies,
procedures,  and systems  (including  computer stems) established by Bancorp for
its governance and operations and for that of the Bancorp  Subsidiaries  and not
otherwise  referenced  in  Sections  6.12(b)  and  6.12(c),  including,  without
limitation,  policies,  procedures,  and systems  pertaining to the  accounting,
asset/liability management, audit, credit, human resources,  treasury, and legal
functions,  and (ii) at the request of Bancorp,  conform the  Company's  and the
Company  Subsidiaries'  existing  policies,  procedures and systems to Bancorp's
policies,  procedures, and systems or, in the absence of any existing Company or
Company  Subsidiary  policy,   procedure,  or  system  regarding  any  function,
introduce  Bancorp's  policies,  procedures,  and systems in respect thereof, in
each case  effective as of the Effective  Time,  unless to do so would cause the
Company  or  any  of  the  Company's  Subsidiaries  to be in  violation  of  any
Applicable Law.

 ..............  (b)  Notwithstanding  that the Company believes that the Company
and the  Company  Subsidiaries  have  established  all  reserves  and  taken all
provisions for possible loan losses  required by GAAP and  Applicable  Laws, the
Company  recognizes that Bancorp may have adopted different loan,  accrual,  and
reserve  policies  (including  loan  classifications  and levels of reserves for
possible loan losses). From and after the date of this Agreement to the Closing,
Bancorp and the Company shall consult and cooperate with each other with respect
to conforming as of the Effective Time the loan,  accrual,  and reserve policies
of Company  and the  Company  Subsidiaries  to those  policies  of  Bancorp,  as
specified in each case in writing to the Company and the Company Subsidiaries.

 ..............  (c) Subject to Applicable  Laws, the Company shall (i) establish
and take such  reserves  and accruals at such time as Bancorp  shall  reasonably
request  to conform  the  Company's  loan,  accrual,  and  reserve  policies  to
Bancorp's  policies,  and (ii) establish and take such accruals,  reserves,  and
charges in order to implement such policies in respect of excess  facilities and
equipment capacity, severance costs, litigation matters, write-off or write-down
of  various  assets,  and  other  appropriate  accounting  adjustments,  and  to
recognize  for  financial  accounting  purposes  such expenses of the Merger and
restructuring charges related to or to be incurred in connection  therewith,  in
each  case at such  times as are  reasonably  requested  by  Bancorp;  provided,
however, that on the date such reserves,  accruals, and charges are to be taken,
Bancorp shall certify to the Company that the  conditions  set forth in Sections
7.1, 7.2, and 7.3 have been  satisfied or waived  (except to the extent that any
waiting  period  associated  therewith may then have commenced but not expired);
and provided  further,  however,  that the Company shall not be required to take
any such  action  that is not  consistent  with GAAP and  regulatory  accounting
principles.

 ..............Section 6.13. Tax-Free Treatment. Each of the parties hereto shall
use  its   reasonable   best  efforts  to  cause  the  Merger  to  constitute  a
"reorganization" under Section 368(a) of the Code.

 ..............Section  6.14.  Agreements of Affiliates.  The Company shall cause
each  Person  who may be at the  Effective  Time or was on the  date  hereof  an
"affiliate"  of the Company for purposes of Rule 145 under the Securities Act to
execute  and deliver to the  Company,  no less than 45 days prior to the date of
the  meeting  of  Company  shareholders  to  approve  the  Merger,  the  written
undertakings  in the form  attached  hereto  as  Exhibit  A. On or prior to such
delivery date, the Company shall provide  Bancorp with a letter  specifying,  to
its knowledge,  all of the Persons who may be deemed to be  "affiliates"  of the
Company under the preceding sentence.

 ..............Section  6.15.  Stockholder Approval.  (a) Each of Bancorp and the
Company  shall  call a  meeting  of its  shareholders  to be  held  as  soon  as
practicable  for the  purpose of voting  upon and  approving  the  Merger,  this
Agreement and the transactions contemplated hereby.

 ..............  (b) The  Company  Board  shall  submit for  approval  of Company
shareholders  the matters to be voted upon in order to authorize  the Merger and
hereby does and will recommend the Merger,  this Agreement and the  transactions
contemplated  hereby to Company  shareholders  and will use its best  efforts to
obtain any vote of Company  shareholders  that is necessary  for the approval of
the Merger and the approval and adoption of this Agreement and  consummation  of
the transactions  contemplated hereby, provided that Company shall have received
an opinion of Trident Securities,  a Division of McDonald Investments,  Inc., or
such  other  nationally  recognized  investment  banking  firm as is  reasonably
acceptable to Bancorp and the Company,  dated within five days of mailing of the
Proxy  Statement  to Company  shareholders  that the  Exchange  Ratio is fair to
Company  shareholders  from a financial  point of view (Bancorp  hereby agreeing
that the terms of this proviso are subject to the Company's using all reasonable
efforts to obtain such opinion from Trident  Securities,  a Division of McDonald
Investments,  Inc. and, if not forthcoming  therefrom within a reasonable period
of time following a request made therefor,  to obtain such opinion from at least
one such other reasonably acceptable investment banking firm); provided further,
however,   that  the   Company   Board  shall  not  be  required  to  make  such
recommendation  if it  reasonably  determines  in good faith not to so recommend
based upon the written  advice of counsel,  which  counsel  either is reasonably
acceptable  to Bancorp,  to the effect that to so recommend  would  constitute a
violation of the Board's fiduciary duties under Applicable Law.

 ..............  (c) The  Bancorp  Board  shall  submit for  approval  of Bancorp
shareholders  the matters to be voted upon in order to authorize  the Merger and
hereby does and will recommend the Merger,  this Agreement and the  transactions
contemplated  hereby to Bancorp  shareholders  and will use its best  efforts to
obtain any vote of Bancorp  shareholders  that is necessary  for the approval of
the Merger and the approval and adoption of this Agreement and  consummation  of
the transactions  contemplated  hereby provided that Bancorp shall have received
an  opinion  of  JMP  Financial,  Inc.,  or  such  other  nationally  recognized
investment banking firm as is reasonably  acceptable to Bancorp and the Company,
dated within five days of mailing of the Proxy Statement to Bancorp shareholders
that the Exchange Ratio is fair to Bancorp  shareholders  from a financial point
of view (the Company hereby  agreeing that the terms of this proviso are subject
to the Bancorp's  using all  reasonable  efforts to obtain such opinion from JMP
Financial,  Inc. and, if not forthcoming therefrom within a reasonable period of
time following a request made therefor, to obtain such opinion from at least one
such other reasonably  acceptable  investment  banking firm);  provided further,
however,   that  the   Bancorp   Board  shall  not  be  required  to  make  such
recommendation  if it  reasonably  determines  in good faith not to so recommend
based upon the written  advice of counsel,  which  counsel  either is reasonably
acceptable to the Company, to the effect that to so recommend would constitute a
violation of the Board's fiduciary duties under Applicable Law.

 ...............Section 6.16. Indemnification. From and after the Effective Time,
Bancorp shall indemnify, defend and hold harmless, and advance expenses for, the
present and former  officers and  directors  of the Company  against all losses,
expenses,  claims,  damages or liabilities arising from any acts or omissions by
such person in his or her  capacity  as such  occurring  prior to the  Effective
Time,   including  any  of  the  foregoing   arising  out  of  the  transactions
contemplated  by this  Agreement,  to the fullest  extent  permitted or required
under the Articles of Incorporation  and Bylaws of Bancorp,  in each case, as in
effect on the date hereof. This Section shall be construed as an agreement as to
which the  directors  and  officers of the Company and the Company  Subsidiaries
referred to herein are  intended to be third  party  beneficiaries  and shall be
enforceable by such persons and their heirs and representatives.

 ..............Section  6.17. D&O Insurance.  From and after the Effective  Time,
Bancorp  shall  maintain in effect,  for not less than three years,  policies of
directors and officers  liability  insurance  providing coverage with respect to
matters  occurring prior to the Effective Time, which policies shall cover those
present  and former  officers  and  directors  of the  Company  and the  Company
Subsidiaries  that are  covered by and shall  provide  coverage  that is no less
beneficial,  in the aggregate,  than those covered and that coverage provided by
the current policies of the Company;  provided,  however, that Bancorp shall not
be required to pay aggregate  premiums for such  insurance in excess of $50,000,
but in such case shall purchase as much coverage as possible for such amount.

 ..............Section  6.18. Environmental Reports. Bancorp, at its expense, may
order within  thirty (30) days of the Agreement a reputable  environmental  firm
selected  by  Bancorp  (the  "Environmental   Firm")  to  perform  a  phase  one
environmental investigation and/or asbestos survey on (i) each parcel of Company
real  estate  ("Company  Property")  owned or leased  by,  (ii) each  office and
premise used as a facility  ("Facility  Property")  by, and (iii) each  property
that  serves as  security  for any  Company  real estate loan having an original
principal  balance  greater  than  $500,000  made by, the Company or any Company
Subsidiary (collectively,  clauses (i), (ii) and (iii), the "Current Property");
provided,  however,  that  Bancorp  shall use  reasonable  efforts  to cause the
Environmental  Firm to  complete  any such  investigation  or  survey as soon as
reasonably  practicable,  but not later  than  sixty  (60)  days  after the date
hereof. In addition,  Bancorp, at its expense,  may cause the Environmental Firm
to perform a phase one environmental  examination  and/or asbestos survey on any
Company Property or Facility Property acquired, leased or used by the Company or
any of the Company Subsidiaries after the date hereof (together with the Current
Property,  the "Company Property");  provided,  however,  that Bancorp shall use
reasonable  efforts  to  cause  the  Environmental  Firm to  complete  any  such
investigation  or survey as soon as reasonably  practicable,  but not later than
fifteen (15) days after being notified by the Company of the acquisition, lease,
or commencement of use of such Company Property or Facility Property. If a phase
one  report  provided  by the  Environmental  Firm  recommends  that a phase two
environmental  survey be  performed  with  respect to any parcel of the  Company
Property,  then Bancorp,  at its expense,  may cause the  Environmental  Firm to
perform  a phase  two  environmental  investigation  of such  Company  Property;
provided,  however,  that  Bancorp  shall use  reasonable  efforts  to cause the
Environmental  Firm to  complete  any such  phase two  investigation  as soon as
reasonably  practicable,  but not later than forty-five (45) days after the date
that such phase one report is received by Bancorp. Should the cost of taking all
remedial or other corrective actions and measures (i) required by Applicable Law
or (ii)  recommended  by the  Environmental  Firm in such phase one or phase two
report or  reports  in light of  potentially  serious  life,  health,  or safety
concerns, in the aggregate,  exceed the sum of $250,000, as reasonably estimated
by the Environmental  Firm, or if the cost of such actions or measures cannot be
so  reasonably  estimated by the  Environmental  Firm to be such amounts or less
with any reasonable  degree of certainty,  Bancorp shall have the right pursuant
to  Section  8.1(a)(vi)  hereof,  for a period of  fifteen  (15)  Business  Days
following  receipt of such estimate or indication  that the cost of such actions
and measures cannot be so reasonably estimated, to terminate this Agreement.

                                   ARTICLE VII
                    CONDITIONS TO CONSUMMATION OF THE MERGER

 ..............Section  7.1. Mutual Conditions.  The obligations of each party to
this  Agreement  to  consummate  the Merger  shall be  subject to the  following
conditions:

 ..............  (a) No statute, rule, regulation, order, injunction,  decree, or
other Applicable Law shall have been enacted,  entered,  issued,  promulgated or
enforced by any  Governmental  Authority  which  prohibits,  restricts  or makes
illegal  consummation of the Merger pursuant hereto (an  "Injunction") and which
remains in effect;  and no proceeding  initiated by any  Governmental  Authority
seeking an Injunction shall be pending;

 .............. (b) All consents, waivers, authorizations, and approvals required
from all Governmental  Authorities to consummate Merger shall have been obtained
and shall  remain  in full  force  and  effect  and all  waiting  periods  under
Applicable Law in respect thereof shall have expired or terminated;

 .............. (c) The Merger, this Agreement, and the transactions contemplated
hereby  shall have been  approved  by the Bancorp  shareholders  and the Company
shareholders, in each case, in the manner required by Applicable Law;

 ..............  (d) The SEC  shall  have  declared  the  Registration  Statement
effective;  and on the Closing  Date and at the  Effective  Time,  no stop order
suspending  the  effectiveness  of the  Registration  Statement  shall have been
issued and no  proceedings  for that purpose  shall have been  initiated or then
threatened by the SEC;

 ..............  (e) The shares of Bancorp Common Stock,  if any, to be issued as
Merger  Consideration  in the Merger shall have been approved for listing on the
NASDAQ NMS, subject to official notice of issuance;

 .............  (g)  Bancorp and the  Company  shall have  received an opinion of
Manatt, Phelps & Phillips,  LLP, or of such other reasonably qualified Person as
Bancorp  and the  Company  shall  reasonably  determine,  in form and  substance
reasonably  acceptable  to Bancorp  and the  Company,  dated the  Closing  Date,
substantially  to the effect that,  on the basis of facts,  representations  and
assumptions  set forth in such opinion  which are  consistent  with the state of
facts  existing  at the  Effective  Time,  (i) the Merger  should  constitute  a
"reorganization"  within the  meaning of Section  368(a) of the Code and (ii) no
gain or loss should be recognized  by Company  shareholders  who receive  solely
Bancorp  Common Stock in exchange for shares of Company Common Stock pursuant to
the Merger  (except with respect to cash received in lieu of a fractional  share
interest in Bancorp  Common  Stock).  In  rendering  such  opinion,  counsel may
require and rely upon  representations  contained in certificates of officers of
the Company, Bancorp, and others.

 ..............Section 7.2. Conditions to Bancorp's Obligations.  The obligations
of  Bancorp  to  consummate  the  Merger  shall  be  subject  to  the  following
conditions:

 ..............  (a) The  representations and warranties of the Company set forth
in this Agreement  shall be true and correct in all material  respects as of the
date of this  Agreement  and  (except  to the  extent  such  representation  and
warranty  speaks as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date;

 ..............  (b) Each of the Company and the Company  Subsidiaries shall have
performed and complied in all material  respects with each agreement,  covenant,
obligation, and condition required by this Agreement to be performed or complied
with by it at or prior to the Closing Date;

 ..............  (c) The Company shall have  delivered to Bancorp a  certificate,
dated as of the  Closing  Date,  signed on behalf  of the  Company  by its Chief
Executive  Officer and Chief Financial  Officer,  confirming the satisfaction of
the conditions contained in paragraphs (a) and (b) of this Section 7.2;

 ..............  (d) Bancorp,  at its expense,  shall have  received  from Crowe,
Chizek and Company LLP letters dated the date of mailing the  Prospectus and the
date of the Closing to the effect that: (i) with respect to the Company they are
independent  accountants  within  the  meaning  of the  Securities  Act  and the
Exchange Act, (ii) it is their opinion that the audited  consolidated  financial
statements  of the Company  included in or  incorporated  by reference  into the
Prospectus  comply  as to form in all  material  respects  with  the  applicable
accounting  requirements  of the  Securities  Act and Exchange Act, (iii) on the
basis of such  procedures  as are set forth  therein but without  performing  an
examination in accordance with generally accepted auditing standards nothing has
come to their attention which would cause them to believe that (A) any unaudited
interim  financial  statements  appearing in the  Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and Exchange Act; (B) said financial statements are not stated on
a basis substantially  consistent with that of the audited financial statements;
(C) (1) at the date of the latest available consolidated financial statements of
the Company and at a specific date not more than five (5) Business Days prior to
the date of each such letter there has been, except as specified in such letter,
any increase in the  outstanding  capital stock,  or  indebtedness  for borrowed
money of the Company  (other than  deposits and Federal Home Loan Bank  advances
with a maturity of one year or less) or any decrease in the shareholders' equity
thereof as compared  with  amounts  shown in the latest  statement  of financial
condition included in the Prospectus, or (2) for the period from the date of the
latest audited  financial  statements of the Company included in or incorporated
by  reference  into the  Prospectus  to a  specific  date not more than five (5)
Business  Days  prior to the date of each such  letter,  there  were,  except as
specified in such letter,  any  decreases,  as compared  with the  corresponding
period in the  preceding  year,  in  consolidated  net  income  for the  Company
excluding expenses associated with the Merger or any increase,  as compared with
the corresponding period in the preceding year, in the provision for loan losses
for the Company,  (iv) they have  performed  certain  specific  procedures  as a
result of which they  determined  that  certain  information  of an  accounting,
financial or  statistical  nature  included in the  Prospectus  and requested by
Bancorp and agreed upon by such  accountants,  which is expressed in dollars (or
percentages  obtained  from such dollar  amounts) and obtained  from  accounting
records which are subject to the internal  controls of the Company's  accounting
system or which  has been  derived  directly  from such  accounting  records  by
analysis or computation is in agreement with such records or  computations  made
therefrom  (excluding  any  questions of legal  interpretation),  and (v) on the
basis of such procedures as are set forth in such letter,  nothing came to their
attention with respect to the Company which would cause them to believe that the
pro forma financial  statements had not been properly  compiled on the pro forma
basis described therein; and

 ..............  (e) Each Person who may be at the  Effective  Time or was on the
date of this  Agreement an  "affiliate"  of the Company for purposes of Rule 145
under the  Securities  Act shall have executed and delivered to the Company,  at
least 45 days prior to the date of the  meeting of the Company  shareholders  to
approve the Merger,  the written  undertakings  in the form  attached  hereto as
Exhibit A.

 ..............Section   7.3.  Conditions  to  the  Company's  Obligations.   The
obligations  of the  Company to  consummate  the Merger  shall be subject to the
following conditions:

 ..............  (a) The  representations  and warranties of Bancorp set forth in
this Agreement shall be true and correct in all material respects as of the date
of this  Agreement  and (except to the extent such  representation  and warranty
speaks as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date;

 ..............  (b) Each of  Bancorp  and the  Bancorp  Subsidiaries  shall have
performed and complied in all material  respects with each agreement,  covenant,
obligation, and condition required by this Agreement to be performed or complied
with by it at or prior to the Closing Date; and

 .............  (c)  Bancorp  shall have  delivered  to Bancorp and the Company a
certificate,  dated as of the Closing  Date,  signed on behalf of Bancorp by its
Chief Executive Officer and Chief Financial Officer, confirming the satisfaction
of the conditions contained in paragraphs (a) and (b) of this Section 7.3.

                                  ARTICLE VIII
                                   TERMINATION

 ..............Section 8.1. Termination.  (a) This Agreement may be terminated at
any time prior to the  Effective  Time,  whether  before or after  approval  and
adoption  of  this  Agreement  by  the  Bancorp   shareholders  or  the  Company
shareholders, as follows:

 .............. (i) by written consent of the parties hereto;

 ..............  (ii) by Bancorp or the Company if a condition to the terminating
party's  obligation to close set forth in Article VII cannot be satisfied  prior
to the date set forth in Section 8.1(a)(iv) below unless caused by the breach of
any covenant or agreement  under this  Agreement  (x) by Bancorp or the Bank, in
the  case of a  termination  by the  Company,  or (y) by the  Company  or  First
Savings, in the case of termination by Bancorp;

 ..............  (iii) by  Bancorp  or the  Company  (provided  that  none of the
terminating party or any of its Affiliates is not then in material breach of any
representation,  warranty,  covenant,  or other agreement  contained  herein) if
there shall have been a material breach of any of the covenants or agreements or
any of the representations or warranties set forth in this Agreement on the part
of Bancorp or the Bank, in the case of a termination  by the Company,  or on the
part of the Company or First  Savings,  in the case of a termination by Bancorp,
which breach is not cured within thirty (30) days following written notice given
by the terminating party to the party committing such breach, or, by its nature,
cannot be cured  prior to the date set forth in Section  8.1(a)(iv)  below,  and
which breach would entitle the  terminating  party to not  consummate the Merger
pursuant to Article VII;

 ..............  (iv) by Bancorp or the Company,  if the Closing has not occurred
on or before March 31, 2000 (provided that the right to terminate this Agreement
under this Section  8.1(a)(iv) shall not be available to any party whose failure
or whose  Affiliate's  failure to perform any covenant of obligation  under this
Agreement  has been the cause of or  resulted  in the  failure  of the Merger to
occur on or before such date);

 ..............  (v) by Bancorp if the Company  Board shall  withdraw,  modify or
change in a manner  adverse to Bancorp its  recommendation  with  respect to the
Merger,  this Agreement,  or the  transactions  contemplated  hereby,  or by the
Company  if the  Bancorp  Board  shall  withdraw,  modify  or change in a manner
adverse to the  Company its  recommendation  with  respect to the  Merger,  this
Agreement, or the transactions contemplated hereby;

 ..............  (vi) by Bancorp pursuant to and in accordance with the provision
of the last sentence of Section 6.18.

 .............. (b) The termination of this Agreement shall be effectuated by the
delivery by the party terminating this Agreement to the other party of a written
notice  of such  termination.  If this  Agreement  terminates  pursuant  to this
Section 8.1, it shall become null and void and have no further  force or effect,
except as provided in Section 8.2.

 ..............Section  8.2.  Survival  After  Termination.  If this Agreement is
terminated  in  accordance   with  Section  8.1  hereof  and  the   transactions
contemplated hereby are not consummated, this Agreement shall become void and of
no further  force and  effect,  without any  liability  on the part of any party
hereto,  except for the provisions of Sections 6.5 and 6.9.  Notwithstanding the
foregoing, nothing in this Section 8.2 shall relieve any party to this Agreement
of liability for a willful breach of any provision of this Agreement.

 ..............Section  8.3.  Termination  Fee. If, prior to the Effective  Time,
this  Agreement is terminated by the Company and within 12 months of the date of
termination, the Company agrees to be acquired by, merged, or otherwise combined
with any third party,  in  consideration  for Bancorp's  expenditure of time and
money in  connection  with the  drafting  of this  Agreement  and the actions of
Bancorp connected hereto, the Company shall pay Bancorp the amount of $250,000.

                                   ARTICLE IX
                                  MISCELLANEOUS

 ..............Section 9.1. Amendments;  Waiver. This Agreement may be amended by
the parties hereto,  by action taken by or on behalf of their respective  Boards
of  Directors,  at any time before or after  approval of this  Agreement  by the
Bancorp shareholders or Company shareholders;  provided, however, that after any
such  approval  by the Bancorp  shareholders  or Company  shareholders,  no such
amendment  shall be made  which  under  Applicable  Law  would  require  further
approval or authorization by the Bancorp  shareholders or Company  shareholders,
without  obtaining such further approval or authorization.  Notwithstanding  the
foregoing,  this Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any agreement on the part of any
party  to waive  (i) any  inaccuracies  in the  representations  and  warranties
contained  herein made by any other  party or in any  document,  certificate  or
writing  delivered  pursuant  hereto by any other party, or (ii) compliance with
any of the agreements, covenants, or conditions contained herein, shall be valid
only if set forth in an instrument in writing signed on behalf of such party. No
such  waiver  shall  constitute  a waiver of, or estoppel  with  respect to, any
subsequent or other  inaccuracy,  breach, or failure to strictly comply with the
provisions of this  Agreement.  The failure of any party at any time or times to
enforce or require  performance of any provision  hereof shall in no way operate
as a waiver or affect the right of such  party at a later  time to  enforce  the
same.

 ..............Section   9.2.  Entire   Agreement.   This  Agreement   (including
Disclosure  Schedules,  Annexes,  Exhibits,  certificates,  lists and  documents
referred to herein,  and any  documents  executed by the parties  simultaneously
herewith or pursuant  hereto,)  constitute  the entire  agreement of the parties
hereto and supersede all prior agreements and understandings,  written and oral,
among the parties with respect to the subject matter hereof.

 ..............Section  9.3.  Non-Survival  of  Representations,  Warranties  and
Agreements.  No investigation by the parties hereto made heretofore or hereafter
shall  affect  the  representations  and  warranties  of the  parties  which are
contained  herein and each such  representation  and warranty shall survive such
investigation. The representations, warranties, covenants, and agreements of the
parties  contained herein shall not survive the Effective Time, except for those
covenants and agreements which by their terms contemplate  performance after the
Effective Time.

 ..............Section  9.4.  Interpretation.  When a  reference  is made in this
Agreement  to  Sections,   Annexes,  Exhibits,  or  Disclosure  Schedules,  such
reference shall be to a Section of or Annex or Exhibit or Disclosure Schedule to
this Agreement  unless otherwise  indicated.  The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation  of this Agreement.  Whenever the words
"include,"  "includes" or "including" are used in this Agreement,  they shall be
deemed to be followed by the words "without  limitation."  The phrases "the date
of this  Agreement,"  "the date hereof" and terms of similar import,  unless the
context  otherwise  requires,  shall be deemed to refer to the date set forth in
the first paragraph of this Agreement.

 ..............Section 9.5. Severability. Any term or provision of this Agreement
which  is  invalid  or  unenforceable  in any  jurisdiction  shall,  as to  that
jurisdiction,   be   ineffective   to  the   extent   of  such   invalidity   or
unenforceability  without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or  enforceability of
any of the terms or provisions of this Agreement in any other  jurisdiction.  If
any  provision  of this  Agreement  is so  broad as to be  unenforceable  in any
jurisdiction,  the  provision  shall  be  interpreted  to be only so broad as is
enforceable in that jurisdiction.

 ..............Section   9.6.  Notices.  All  notices  and  other  communications
hereunder  shall be in writing  and shall be deemed  given (a) upon  delivery in
person, (b) upon transmission by telecopy (with written confirmation),  (c) upon
receipt if mailed by registered or certified mail (return receipt requested), or
(d) on the business date after being delivered to a reputable overnight delivery
service,  in each case,  to the parties at the  following  addresses (or at such
other address for a party as shall be specified by like notice):

   If to Bancorp or the Bank:

        Peoples Bancorp
        212 West 7th Street
        Auburn, Indiana  46706
        Attention: Mr. Maurice F. Winkler, III, President
        and Chief Operating Officer
        Telecopy:

   With a copy to:

        Barnes & Thornburg
        11 South Meridian Street
        Indianapolis, Indiana  46204
        Attention:  Claudia Swhier, Esq.
        Telecopy:  317-231-7433

   If to the Company or First Savings:

        Three Rivers Financial Corporation
        123 Portage Avenue
        Three Rivers, Michigan  49093
        Attention:  Mr. G. Richard Gatton, President and Chief Executive Officer
        Telecopy:

    With copies to:

        Manatt, Phelps & Phillips, LLP 1501 M Street, N.W.
        Suite 700
        Washington, D.C.  20005
        Attention:  Edward L. Lublin, Esq.
        Telecopy:  202-463-4394

 ..............Section  9.7. Binding Effect;  Persons Benefiting;  No Assignment.
Subject to the last sentence of this Section 9.7, this Agreement  shall inure to
the  benefit  of and be binding  upon the  parties  hereto and their  respective
successors and permitted assigns. Except for the provisions of Sections 6.16 and
6.17, nothing in this Agreement is intended or shall be construed to confer upon
any Person other than the parties  hereto and their  respective  successors  and
permitted  assigns  any  right,  remedy,  or claim  under or by  reason of their
Agreement  or any part hereof or to create any third party  beneficiaries.  This
Agreement  may not be assigned by any of the  parties  hereto  without the prior
written consent of each of the other parties hereto.

 ..............Section  9.8. Counterparts.  This Agreement may be executed in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which taken  together  shall  constitute  one and the same  agreement,  it being
understood that all of the parties need not sign the same counterpart.

 ..............Section  9.9.  Governing Law. This agreement,  the legal relations
between the parties and the adjudication and the enforcement  thereof,  shall be
governed by and  interpreted  and construed in accordance  with the  substantive
laws of the  State of  Indiana,  without  regard  to  applicable  choice  of law
provisions thereof.

 ..............Section  9.10.  Specific  Performance.  The  parties  hereto  each
acknowledge that, in view of the uniqueness of its business and the transactions
contemplated by this Agreement,  each party would not have an adequate remedy at
law for money damages in the event that the covenants to be performed  hereunder
have not been performed in accordance with their terms, and therefore agree that
the other parties shall be entitled to specific  enforcement of the terms hereof
in addition to any other equitable remedy to which such parties may be entitled.

 ..............Section  9.11. WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT
AGREE TO WAIVE ANY RIGHT TO A JURY TRIAL AS TO ALL DISPUTES HEREUNDER.

 ..............IN WITNESS WHEREOF the parties have hereunto caused this Agreement
to be duly executed as of the date first above written.

                             PEOPLES BANCORP

                             By:
                             Name:
                             Title:

                       THREE RIVERS FINANCIAL CORPORATION

                             By:
                             Name:
                             Title:
NEWS RELEASE Exhibit 20 For Additional Information, contact:

Peoples Bancorp                                     Three Rivers Financial Corp.
Roger J. Wertenberger, Chairman                     G. Richard Gatton, President
Maurice F. Winkler III, President                   (616) 279-5117
(219) 925-2500

                PEOPLES BANCORP AND THREE RIVERS FINANCIAL CORP.
                      ANNOUNCE SIGNING OF MERGER AGREEMENT

         AUBURN,  INDIANA and THREE  RIVERS,  MICHIGAN -- SEPTEMBER  21, 1999 --
Peoples Bancorp  (NASDAQ:  PFDC),  headquartered in Auburn,  Indiana,  and Three
Rivers Financial Corp.  (AMEX:  THR),  headquartered in Three Rivers,  Michigan,
jointly announced today that they have signed a definitive  agreement  providing
for the merger of Three Rivers  Financial Corp., a $101 million savings and loan
holding company,  with and into Peoples Bancorp, a $317 million savings and loan
holding company.

         Under the terms of the  agreement,  each  shareholder  of Three  Rivers
Financial  Corp.  would  receive in a tax-free  exchange  1.08 shares of Peoples
Bancorp  common stock for each share of Three Rivers  common stock owned by such
shareholder. Based on the closing price of Peoples Bancorp on September 20, 1999
($17),  the transaction is valued at $18.36 per share and has an aggregate value
of approximately  $14.4 million  (assuming the exercise of all outstanding stock
options).  Three Rivers=  common stock closed on the AMEX on September 20, 1999,
at $11 per share.

         The proposed  merger is subject to the approval of the  shareholders of
Peoples  Bancorp and of Three Rivers,  and of the Office of Thrift  Supervision,
receipt of  fairness  opinions,  and other  customary  conditions.  The  parties
contemplate  that the merger will become  effective  during the first quarter of
2000.

         Following  the  completion  of  the  transaction,  G.  Richard  Gatton,
president  of Three  Rivers  Financial  Corp.,  and one other  director of Three
Rivers,  will join the Board of  Directors  of Peoples  Bancorp.  Three  Rivers=
savings association subsidiary will retain its name and separate identity.

         AThe  merger  with Three  Rivers  represents  an  expansion  of Peoples
Bancorp=s  operations  into  southwestern  Michigan,@  said Roger  Wertenberger,
Peoples Bancorp=s chairman of the board. AWe are excited by this increase in our
market penetration and our ability to offer our services to new customers.
44

         Three Rivers= President,  G. Richard Gatton,  said, when announcing the
combination,  AThe joining of Three Rivers with Peoples Bancorp will allow us to
increase  our  number  of  banking  locations  and to offer a  broader  array of
products  and  services to our  customers.  This  transaction  also allows us to
retain banking  decision-making  here in Three Rivers.  We are excited about the
opportunities  presented  by this  partnership,  and we  feel it is in the  best
interests  of  our  shareholders,  customers  and  employees,  as  well  as  the
communities we serve.

         Three Rivers  Financial  Corp. is the holding company for First Savings
Bank, A Federal Savings Bank.  First Savings Bank conducts its banking  business
from its main  office in Three  Rivers,  Michigan,  and from  five full  service
branch offices in Three Rivers, Schoolcraft,  and Union in Michigan and Howe and
Middlebury in Indiana.

         Upon completion of the merger, Peoples Bancorp, an Auburn-based savings
and loan holding company,  will have total assets of approximately  $418 million
and will operate two savings association subsidiaries with a total of 14 banking
offices in northeastern Indiana and southwestern Michigan.