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<SEC-DOCUMENT>0000950134-04-005136.txt : 20040413
<SEC-HEADER>0000950134-04-005136.hdr.sgml : 20040413
<ACCEPTANCE-DATETIME>20040413152144
ACCESSION NUMBER:		0000950134-04-005136
CONFORMED SUBMISSION TYPE:	S-4/A
PUBLIC DOCUMENT COUNT:		20
FILED AS OF DATE:		20040413

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTERNATIONAL BANCSHARES CORP
		CENTRAL INDEX KEY:			0000315709
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				742157138
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-4/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-113767
		FILM NUMBER:		04730539

	BUSINESS ADDRESS:	
		STREET 1:		12OO SAN BERNARDO AVE
		STREET 2:		PO BOX 1359
		CITY:			LAREDO
		STATE:			TX
		ZIP:			78040-1359
		BUSINESS PHONE:		9567227611

	MAIL ADDRESS:	
		STREET 1:		P O BOX 1359
		STREET 2:		1200 SAN BERNARDO
		CITY:			LAREDO
		STATE:			TX
		ZIP:			78040
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-4/A
<SEQUENCE>1
<FILENAME>d13787a1sv4za.htm
<DESCRIPTION>AMENDMENT TO FORM S-4
<TEXT>
<HTML>
<HEAD>
<TITLE>sv4za</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on April&nbsp;13, 2004.</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="right">
<B><FONT size="2">Registration No.&nbsp;333-113767</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="4" noshade color="#000000" style="margin-top: -5px">

<DIV align="left">
<HR size="1" noshade color="#000000" style="margin-top: -10px">
</DIV>

<P align="center">
<B><FONT size="4">UNITED STATES SECURITIES AND EXCHANGE
COMMISSION</FONT></B>

<DIV align="center">
<B>Washington,&nbsp;D.C. 20549</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B>Pre-Effective</B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B>Amendment No.&nbsp;1</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B>to</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B><FONT size="5">Form&nbsp;S-4</FONT></B>
</DIV>

<DIV align="center">
<B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">International Bancshares Corporation</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Texas</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">6022</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">74-157138</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(State or other jurisdiction of<BR>
    incorporation or organization)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(Primary Standard Industrial<BR>
    Classification Code Number)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(I.R.S. Employer<BR>
    Identification Number)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">1200 San&nbsp;Bernardo Ave.<BR>
    Laredo, Texas 78040<BR>
    (956) 722-7611<BR>
     </FONT></B><I><FONT size="2">(Address, including zip code, and
    telephone number, including area code, of registrant&#146;s
    principal executive offices)</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Dennis E. Nixon<BR>
    Chairman of the Board, President and<BR>
    Chief Executive Officer<BR>
    International Bancshares Corporation<BR>
    1200 San&nbsp;Bernardo Ave.<BR>
    Laredo, Texas 78040<BR>
    (956) 722-7611<BR>
     </FONT></B><I><FONT size="2">(Name, address, including zip
    code, and telephone<BR>
    number, including area code, of agent for service)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2">Copies to:</FONT></I></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Cary Plotkin Kavy<BR>
    William J. McDonough, Jr.<BR>
    Tobin E. Olson<BR>
    Cox&nbsp;&#38; Smith Incorporated<BR>
    112&nbsp;E.&nbsp;Pecan Street, Suite&nbsp;1800<BR>
    San&nbsp;Antonio, Texas 78205<BR>
    (210) 554-5250</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Norman B. Antin<BR>
    Jeffrey D. Haas<BR>
    David K. Teeples<BR>
    Patton Boggs LLP<BR>
    2550 M Street, N. W.<BR>
    Washington, D. C. 20037<BR>
    (202) 457-6000</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Approximate date of commencement of proposed
sale to the public:</FONT></B><FONT size="2"> As soon as
practicable following the effective date of this registration
statement and the effective time of the merger described in the
Agreement and Plan of Merger attached as <B>APPENDIX&nbsp;A</B>
to the proxy statement-prospectus forming a part of this
registration statement.
</FONT>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the securities being registered on this Form
are being offered in connection with the formation of a holding
company and there is compliance with General Instruction G,
check the following
box:&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is filed to register additional
securities for an offering pursuant to Rule&nbsp;462(b) under
the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Each Class of</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount to be</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Aggregate</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Securities to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registered(1)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Per Unit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price(2)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registration Fee</FONT></B></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock, $1.00&nbsp;share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">2,482,933
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">N/A
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$87,633,960
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$11,104(3)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents the number of shares of common stock
    that the registrant,&nbsp;International Bancshares Corporation
    (&#147;IBC&#148;), may be required to issue to holders of common
    stock of Local Financial Corporation (&#147;Local&#148;) upon
    consummation of the merger, calculated based on an IBC common
    stock value of $36.80&nbsp;per share, after giving effect to a
    25% stock dividend declared by IBC on April&nbsp;1, 2004 and
    payable to IBC stockholders of record on May&nbsp;3, 2004.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Pursuant to Rules&nbsp;457(c) and 457(f) under
    the Securities Act of 1933, and solely for the purpose of
    calculating the registration fee, the proposed maximum aggregate
    offering price is equal to the aggregate market value of the
    estimated number of shares of Local common stock to be received
    by the registrant or cancelled in the merger, based upon the
    value of the average of the high and low prices of shares of
    Local&#146;s common stock on the Nasdaq National Market on
    March&nbsp;15, 2004, which value was ($21.775), less the
    estimated amount of cash ($274,115,704) to be paid by the
    registrant for such shares of Local common stock.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Previously paid.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its
effective date until the registrant shall file a further
amendment which specifically states that this registration
statement shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act of 1933, or until the
registration statement shall become effective on such date as
the Commission, acting pursuant to said Section&nbsp;8(a), may
determine.</FONT></B>

<P align="left">
<HR size="1" noshade color="#000000" style="margin-top: -2px">

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -10px">
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<IMG src="d13787a1d1378700.gif" alt="(LOCAL FINANCIAL CORPORATION LETTERHEAD)">

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2">MERGER PROPOSAL&nbsp;&#151; YOUR VOTE IS VERY
IMPORTANT</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">Dear Local Stockholder:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your board of directors has unanimously agreed to
a transaction that will result in the merger of Local Financial
Corporation with International Bancshares Corporation. We are
asking each of the stockholders of Local to approve the merger
at the Annual Meeting of Stockholders to be held on May&nbsp;19,
2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the merger is completed, each share of Local
common stock will be converted into the right to receive an
aggregate value of $22.00 payable at the election of the
stockholder in the form of cash,&nbsp;IBC common stock or a
combination of cash and IBC common stock, but all elections will
be subject to the allocation procedures described in the merger
agreement. The receipt of cash or IBC common stock in the merger
will be a taxable transaction for U.S.&nbsp;federal income tax
purposes.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The number of IBC shares that those Local
stockholders receiving shares in the merger will receive will be
determined by the average price per share of IBC common stock
during a determination period prior to closing. However, if the
average price per share of IBC common stock during the
determination period is equal to or less than $36.80&nbsp;per
share, or is equal to or more than $44.80&nbsp;per share, the
exchange ratio will be based on a minimum of $36.80&nbsp;per
share or a maximum of $44.80&nbsp;per share. Based on the
closing price of IBC common stock of $40.38 on January&nbsp;22,
2004, the date prior to the public announcement of the merger,
and $43.52 on April&nbsp;12, 2004, the most recent practical
date prior to this mailing, each share of Local common stock
would have been converted into the right to receive either
$22.00 in cash or .5448&nbsp;shares of IBC common stock, and
$22.00 in cash or .5055&nbsp;shares of IBC common stock,
respectively, at such dates, assuming the average price of IBC
common stock during the determination period were equal to those
amounts. The foregoing per share values have been adjusted to
reflect a 25% stock dividend that IBC has declared to be paid to
IBC stockholders of record on May&nbsp;3, 2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Your vote is very
important.</FONT></B><FONT size="2"> We cannot complete the
merger unless the holders of a majority of the outstanding
shares of Local common stock approve the merger agreement.
Whether or not you plan to attend the Annual Meeting, please
vote promptly by returning the enclosed proxy card in the
envelope provided or use the Internet address or the toll-free
telephone number indicated on the enclosed proxy card.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the proposal to consider the
merger agreement, proposals to elect three (3)&nbsp;members of
the board of directors of Local, to ratify the selection of KPMG
LLP as the independent auditors of Local for the year ending
December&nbsp;31, 2004 and to adjourn the Annual Meeting, if
necessary, to permit further solicitation of proxies will be
presented. Important information regarding these proposals is
also included in the accompanying proxy statement&nbsp;&#151;
prospectus<B>. Your board of directors recommends that Local
stockholders vote &#147;FOR&#148; these proposals.</B>
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accompanying proxy statement-prospectus
provides important information about the proposed merger and the
other proposals. Please read it, including the appendices,
carefully and completely.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Sincerely,
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <IMG src="d13787a1d1378769.gif" alt="-s- EDWARD A. TOWNSEND"></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Edward A. Townsend
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Chief Executive Officer
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of the securities to be issued in the merger or determined if
this proxy statement-prospectus is truthful or complete. Any
representation to the contrary is a criminal offense. The
securities that IBC is offering through this proxy
statement-prospectus are not deposits or other obligations of
any bank subsidiary of IBC and are not insured by the Federal
Deposit Insurance Corporation or any other governmental
entity.</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<I><FONT size="2">This proxy statement-prospectus is dated
April&nbsp;13, 2004</FONT></I>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<I><FONT size="2">and was first mailed to Local stockholders on
or about April&nbsp;16, 2004.</FONT></I>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="4">LOCAL FINANCIAL CORPORATION</FONT></B>

<DIV align="center">
<B><FONT size="2">3601 N.W. 63rd&nbsp;Street</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Oklahoma City, Oklahoma 73116</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Telephone: 405-841-2100</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Fax: 405-841-2289</FONT></B>
</DIV>

<P align="center">
<B>NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B>TO BE HELD ON MAY&nbsp;19, 2004</B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">To the Local Stockholders:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local Financial Corporation will hold its Annual
Meeting of Stockholders on May&nbsp;19, 2004, at
10:00&nbsp;a.m., Central Time, at the Waterford Marriott Hotel,
located at 6300 Waterford Blvd., Oklahoma City, Oklahoma
73118-1104. The stockholders will meet to consider and vote upon:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;The adoption of the Agreement and Plan
    of Merger dated as of January&nbsp;22, 2004, among International
    Bancshares Corporation, LFC Acquisition Corp., an indirect
    subsidiary of IBC, and Local Financial Corporation, pursuant to
    which LFC Acquisition Corp. would merge with and into Local. As
    a result of the merger,&nbsp;IBC will acquire Local. A copy of
    the Agreement and Plan of Merger is included as <B>APPENDIX A
    </B>to the accompanying proxy statement-prospectus;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;The election of three
    (3)&nbsp;directors, each to serve for a term of three
    (3)&nbsp;years;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;The ratification of the appointment of
    KPMG LLP as independent auditors of Local Financial Corporation
    for the year ending December&nbsp;31, 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;A proposal to adjourn the Annual Meeting
    to a later date or dates, if necessary, to permit further
    solicitation of proxies if there are not sufficient votes at the
    time of the Annual Meeting to constitute a quorum or approve the
    proposals to be presented at the Annual Meeting;&nbsp;and
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;The transaction of such other business
    as may properly come before the Annual Meeting or any
    adjournment or postponement of the Annual Meeting.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The record date for the Annual Meeting is
April&nbsp;5, 2004. Only stockholders of record at the close of
business on that date can vote at the Annual Meeting.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Your vote is very important, so please act
today. The merger cannot be completed unless the merger
agreement is approved by the holders of a majority of the shares
of Local&#146;s common stock outstanding at the record date for
the Annual Meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED OR USE THE INTERNET ADDRESS OR THE TOLL-FREE
TELEPHONE NUMBER INDICATED ON THE ENCLOSED PROXY CARD. TO
ENCOURAGE THE USE OF PROXIES, WE HAVE ENCLOSED A SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE FOR YOUR USE.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Local board of directors has unanimously
approved the merger agreement and unanimously recommends that
Local stockholders vote &#147;FOR&#148; adoption of the merger
agreement. The Local board of directors also recommends that
Local stockholders vote &#147;FOR&#148; electing the nominees to
the board of directors, &#147;FOR&#148; ratification of the
independent auditors and &#147;FOR&#148; the adjournment
proposal.</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Sincerely,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <IMG src="d13787a1d1378701.gif" alt="-s- Alan L. Pollock"></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">ALAN L. POLLOCK
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Corporate Secretary</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">April&nbsp;13, 2004
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='101'></A>
</DIV>

<!-- link1 "ADDITIONAL INFORMATION" -->

<P align="center">
<B><FONT size="2">ADDITIONAL INFORMATION</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This proxy statement-prospectus incorporates
documents by reference which are not presented herein or
delivered herewith. These documents are available without charge
upon request. You can obtain documents incorporated by reference
in this proxy statement-prospectus but not otherwise
accompanying this proxy statement-prospectus by requesting them
in writing or by telephone from the appropriate company at the
following addresses:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">For IBC:</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">For Local:</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">International Bancshares Corporation<BR>
    P.O. Box&nbsp;1359<BR>
    1200 San&nbsp;Bernardo<BR>
    Laredo, Texas 78040<BR>
    Attn: Eliza Gonzalez, First Vice<BR>
    President-IBC Bank<BR>
    (956) 722-7611
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Local Financial Corporation<BR>
    3601 N.W. 63rd&nbsp;Street<BR>
    Oklahoma City, Oklahoma 73116<BR>
    Attn: Richard L. Park, Chief<BR>
    Financial Officer<BR>
    (405) 841-2298
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To obtain timely delivery of requested
information, we recommend that you request this information no
later than five (5)&nbsp;business days before the date you must
make your investment decision. Based on the date of the Annual
Meeting, the date by which you should request this information
is May&nbsp;12, 2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See &#147;Where You Can Find More
Information&#148; beginning on page&nbsp;96 for further
information.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">i
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">

</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#101'>ADDITIONAL INFORMATION</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">i</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#102'>QUESTIONS AND ANSWERS ABOUT
    THE MERGER</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#103'>SUMMARY</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#104'>The Proposed Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#105'>The Parties to the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#106'>What Local Stockholders Will
    Receive in the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#107'>Election of the Method of
    Payment for Local Stock</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#108'>Adjustments to Merger
    Consideration</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#214'>IBC Stock Dividend</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#109'>Effect of Changes in Price
    of IBC Common Stock</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#110'>Aggregate Amount of Cash and
    Number of Shares IBC Will Issue in the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#111'>Material U.S.&nbsp;Federal
    Income Tax Consequences</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#112'>Local&#146;s Board
    Recommends Approval of the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#113'>Opinion of Local&#146;s
    Financial Advisor</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#114'>Additional Merger Benefits
    to Local&#146;s Management</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#115'>Dissenters&#146; Rights of
    Appraisal</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#116'>Surrender of Local Shares</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#117'>Local Annual Meeting</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#118'>Vote Required to Approve
    Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#119'>Regulatory Approvals
    Required</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#120'>Other Conditions to
    Completing the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#121'>Termination of the Merger
    Agreement</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#122'>Termination Fee</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#123'>Local May Not Solicit Other
    Offers</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#124'>Effect of Merger on Rights
    of Local Stockholders</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#125'>IBC Will Control Local after
    the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#126'>Treatment of Local Stock
    Options</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#128'>SELECTED HISTORICAL AND PRO
    FORMA FINANCIAL DATA</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#129'>UNAUDITED COMPARATIVE PER
    COMMON SHARE DATA</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#130'>RISK FACTORS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#131'>CAUTIONARY STATEMENT
    CONCERNING FORWARD-LOOKING STATEMENTS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#132'>GENERAL INFORMATION</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#133'>ANNUAL MEETING</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#134'>THE MERGER (Proposal One)</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#135'>General</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#136'>Background of the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#137'>Reasons of Local for the
    Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#138'>Reasons of IBC for the
    Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#139'>Opinion of Local&#146;s
    Financial Advisor</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#140'>Additional Interests of
    Local Management</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#141'>Material U.S.&nbsp;Federal
    Income Tax Consequences of the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#142'>Dissenters&#146; Rights of
    Appraisal</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">ii
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#143'>Regulatory Approvals</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#144'>Certain Employee Matters</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#145'>Subsidiary Mergers</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#146'>Exchange of Certificates</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#147'>Sale of IBC Common Stock
    Issued in the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#148'>Stock Exchange Listing</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#149'>Accounting Treatment</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#150'>THE MERGER AGREEMENT</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#151'>The Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#152'>Determination of Merger
    Consideration</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#153'>Election Procedures</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#154'>Allocation Procedures</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#155'>Fractional Shares</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#156'>Representations and
    Warranties</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#157'>Conduct of Business Pending
    Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#158'>Control of Local&#146;s
    Business</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#159'>Conditions to the Merger</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#160'>No Solicitation</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#161'>Indemnification and
    Insurance</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#162'>Local Stockholder Meeting</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#163'>Reasonable Efforts</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#164'>Fees and Expenses</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#165'>Amendment, Extension or
    Waiver</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#166'>Termination of the Merger
    Agreement</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#167'>Termination Fee</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#168'>PRO FORMA FINANCIAL
    INFORMATION</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#169'>MARKET PRICES AND
    DIVIDENDS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#170'>THE COMPANIES</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#171'>IBC</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#215'>Acquisition Sub</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#172'>Local</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#173'>BENEFICIAL STOCK OWNERSHIP
    BY MANAGEMENT AND PRINCIPAL HOLDERS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#174'>Ownership of Local Common
    Stock</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#175'>Ownership of IBC Common
    Stock</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#176'>IBC CAPITAL STOCK</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#177'>General</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#178'>Restrictions on Payment of
    Dividends</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#179'>Restrictions on Ownership of
    IBC Common Stock</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#180'>Anti-takeover Provisions in
    IBC&#146;s Articles of Incorporation and Bylaws</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#181'>Preferred Stock</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#182'>COMPARISON OF STOCKHOLDER
    RIGHTS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#183'>Authorized Capital Stock</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#184'>Size of Board of
    Directors</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#185'>Cumulative Voting</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">iii
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#186'>Classes of Directors</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#187'>Filling Vacancies on the
    Board</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#188'>Removal of Directors</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#189'>Nomination of Directors and
    Submission of Stockholder Proposals</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#190'>Calling Special Meetings of
    Stockholders</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#191'>Stockholder Action Without a
    Meeting</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#192'>Anti-Takeover Statutes</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#193'>Stockholder Vote Required
    for Mergers, Sales of Assets and Other Transactions</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#194'>Transactions with Officers
    and Directors</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#196'>Dividends</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#197'>Dissenters&#146; Rights</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#198'>Stockholder Preemptive
    Rights</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#199'>Indemnification</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#200'>Limitations on
    Directors&#146; Liability</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#201'>Amendment of Articles of
    Incorporation or Certificate of Incorporation</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#202'>Amendment of Bylaws</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#203'>ELECTION OF DIRECTORS
    (Proposal Two)</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#204'>OTHER INFORMATION ABOUT
    DIRECTORS, OFFICERS AND CERTAIN STOCKHOLDERS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#205'>RATIFICATION OF INDEPENDENT
    AUDITORS (Proposal Three)</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#206'>ADJOURNMENT OF ANNUAL
    MEETING (Proposal Four)</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#207'>LEGAL MATTERS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#208'>EXPERTS</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#209'>OTHER INFORMATION ABOUT THE
    ANNUAL MEETING</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#210'>WHERE YOU CAN FIND MORE
    INFORMATION</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">APPENDICES:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#211'>APPENDIX A&nbsp;Agreement
    and Plan of Merger dated as of January&nbsp;22, 2004, among
    International Bancshares Corporation, LFC Acquisition Corp. and
    Local Financial Corporation</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">A-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#212'>APPENDIX B&nbsp;Opinion of
    Sandler O&#146;Neill&nbsp;&#38; Partners, L.P.</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">B-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#213'>APPENDIX C&nbsp;Delaware
    Dissenters&#146; Rights of Appraisal</A>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">C-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv5w1.htm">Opinion/Consent of Cox & Smith Incorporated</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv23w1.htm">Consent of KPMG LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv23w2.htm">Consent of KPMG LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv99w1.htm">Form of Proxy Card</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv99w2.htm">Form of Cover Letter for Election Form</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv99w3.htm">Form of Election Form and Letter of Transmittal</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv99w4.htm">Form of Notice of Guaranteed Delivery</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv99w5.htm">Form of Election Information for Brokers & Dealers</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv99w6.htm">Form of Election Information for Clients</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d13787a1exv99w7.htm">Consent of Sandler O'Neill & Partners, L.P.</A></FONT></TD></TR>
</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center"><FONT size="2">iv
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='102'></A>
</DIV>

<!-- link1 "QUESTIONS AND ANSWERS ABOUT THE MERGER" -->

<P align="center">
<B><FONT size="2">QUESTIONS AND ANSWERS ABOUT THE
MERGER</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">Why have you sent me this document?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We are delivering this document to you because it
    is serving as both a proxy statement for Local and a prospectus
    of IBC. It is a proxy statement because it is being used by
    Local&#146;s board of directors to solicit the proxies of its
    stockholders. It is a prospectus because IBC is offering shares
    of its common stock in exchange for shares of Local in the
    merger described below.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">This proxy statement-prospectus contains
    important information regarding the proposed merger, as well as
    information about IBC and Local. It also contains important
    information about what their respective boards of directors and
    management considered when evaluating this proposed merger. We
    urge you to read this proxy statement-prospectus carefully,
    including its appendices.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What is happening in this
    transaction?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The result of the transaction is Local will be
    merged into IBC and Local&#146;s separate corporate existence
    will cease. The merger is governed by the Agreement and Plan of
    Merger dated January&nbsp;22, 2004, a copy of which is included
    as <B>APPENDIX A </B>to this proxy statement-prospectus.
    Following the merger of Local into IBC, Local Oklahoma Bank will
    be merged into International Bank of Commerce, IBC&#146;s lead
    bank subsidiary, and the Local Oklahoma Bank branch offices will
    be operated as branches of International Bank of Commerce.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">Why is the merger proposed?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">IBC and Local are proposing the merger because
    their respective boards of directors have concluded that the
    merger is in the best interests of their respective institutions
    and their stockholders. We believe that the merger affords a
    fair price and an opportunity for the combined companies to
    offer customers a broader array of services and products.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What will I receive in the Merger?</FONT></B></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If the merger takes place, each share of Local
    common stock (other than dissenting shares) will be converted
    into the right to receive either:
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a number of shares of IBC common stock equal to
    $22.00 (subject to upward adjustment as further described
    herein) divided by the IBC common stock value (determined as set
    forth herein);&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$22.00 (subject to upward adjustment as further
    described herein) in cash.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Local stockholders will be given the opportunity
    to elect to receive either IBC common stock, cash or a
    combination of IBC common stock and cash for their shares of
    Local common stock, but all elections of Local stockholders will
    be subject to certain allocation procedures as provided in the
    merger agreement. See &#147;The Merger Agreement&nbsp;&#151;
    Determination of Merger Consideration&#148; beginning on
    page&nbsp;50, &#147;The Merger Agreement&nbsp;&#151; Election
    Procedures&#148; beginning on page&nbsp;51 and &#147;The Merger
    Agreement&nbsp;&#151; Allocation Procedures&#148; beginning on
    page&nbsp;51.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">Will IBC stockholders receive any
    consideration as a result of the merger?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">No.&nbsp;IBC stockholders will not receive any
    consideration as a result of the merger. The merger will not
    change the number of shares of IBC common stock owned by IBC
    stockholders.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What percentage of IBC will be held by former
    Local stockholders if the merger is completed?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If the merger is completed without any upward
    adjustment to the per share merger consideration, Local
    stockholders will own approximately 4.5% of the outstanding
    common stock of IBC, depending on the applicable IBC common
    stock value.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What are the federal tax consequences of the
    merger to a Local stockholder?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The receipt of IBC common stock, cash or a
    combination of IBC common stock and cash in connection with the
    surrender of Local common stock pursuant to the merger will be a
    taxable transaction for U.S.&nbsp;federal income tax purposes.
    Generally, Local stockholders will recognize gain or
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="center"><FONT size="2">1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">loss as a result of the merger measured by the
    difference, if any, between (a)&nbsp;the fair market value of
    any IBC common stock received, valued at the effective time of
    the merger, plus the amount of any cash received, and
    (b)&nbsp;the Local stockholder&#146;s adjusted tax basis in the
    Local common stock exchanged in the merger. <B>The
    U.S.&nbsp;federal income tax treatment described above may not
    apply to every Local stockholder. Tax matters can be complicated
    and the tax consequences to Local stockholders will depend on
    their own specific tax situations. As a result, you should
    consult your own tax advisor for a full understanding of the tax
    consequences of the merger to you.</B>
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">When do Local stockholders make their election
    to receive IBC common stock, cash or a combination
    thereof?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We will send you separate written instructions
    for exchanging your Local stock certificates and making the
    stock/cash election. We expect to send you written instructions
    for making the stock/cash election approximately 35&nbsp;days
    before the expected closing date of the merger, and all
    elections must be returned by a date approximately five days
    before the expected closing date. A press release will be issued
    announcing the election deadline near the time we mail the
    election form. See &#147;The Merger Agreement&nbsp;&#151;
    Election Procedures&#148; beginning on page&nbsp;51 for a
    description of the election mechanics. <B>Local stockholders
    should NOT return their stock certificates at this time.</B>
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What if&nbsp;I object to the merger?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">As a Local stockholder, you are not required to
    participate in the merger, even if it is approved by the other
    stockholders of Local. If you vote against the merger, and
    follow the other steps required by law to perfect your
    dissenters&#146; rights of appraisal under Delaware law, you
    will be entitled to receive cash for your Local shares. See
    &#147;The Merger&nbsp;&#151; Dissenters&#146; Rights of
    Appraisal&#148; beginning on page&nbsp;42.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What should&nbsp;I do now?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Simply indicate on your proxy card how you want
    to vote and then sign and mail your proxy card in the enclosed
    return envelope in time to be represented at the Annual Meeting.
    You may also vote by logging onto the Internet or by phone by
    following the instructions on your proxy card.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">If my shares are held in &#147;street
    name&#148; by my broker, will my broker vote my shares for
    me?</FONT></B></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Your broker will vote your shares for you only if
    you provide instructions on how to vote. You should instruct
    your broker how to vote your shares, following the directions
    your broker provides. If you fail to instruct your broker how to
    vote your shares, the effect will be the same as a vote against
    the merger.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What happens if&nbsp;I do not vote?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Not voting has the same effect as voting against
    the merger. In addition, if you do not vote, your shares will
    not be counted to help establish a quorum at the Annual Meeting.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">Can&nbsp;I change my vote?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Yes. You may change your vote at any time before
    your proxy is voted at the Annual Meeting. If your shares are
    held in your name you may do this in one of three ways:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Send a written notice to the Corporate Secretary
    of Local stating that you are revoking your proxy;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Complete and submit a later signed proxy;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Attend the Annual Meeting and vote in person, but
    only if you inform the Corporate Secretary before the voting
    begins that you want to cancel your proxy and vote in person.
    Simply attending the Annual Meeting, however, will not revoke
    your proxy.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If you choose either of the first two methods,
    you must submit your notice of revocation or your later signed
    proxy to Local at Local&#146;s address provided herein.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">Should Local stockholders send in their stock
    certificates now?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">No.&nbsp;We will send you written instructions
    for exchanging your stock certificates and making the stock/cash
    election at a later date.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">When do you expect the merger to be
    completed?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We are working toward completing the merger as
    quickly as possible. We expect the merger to be completed in the
    summer of 2004, assuming all conditions to the merger have been
    satisfied, including receipt of all required stockholder and
    regulatory approvals. If all conditions to the merger have not
    been satisfied at that time, the merger will be completed as
    soon as practicable once all the conditions have been satisfied.
    If the merger does not occur until after August&nbsp;15, 2004,
    the aggregate merger consideration to be paid to the holders of
    Local common stock would be increased by $76,667 for each day
    from and after August&nbsp;16, 2004 until the effective date of
    the merger. If the aggregate merger consideration payable to
    Local stockholders is increased, then the per share merger
    consideration payable for each share of Local common stock
    (whether paid for in cash or shares of IBC common stock) will
    automatically be increased.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">What risks should&nbsp;I consider?</FONT></B></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">You should review &#147;RISK FACTORS&#148;
    beginning on page&nbsp;19 of this proxy statement-prospectus.
    You should also review the factors considered by the board of
    directors of Local in approving the merger.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Q:</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <B><FONT size="2">Who can help answer my questions?</FONT></B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">A:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If you have more questions about the merger or
    the Annual Meeting, you should contact:
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">For IBC:</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">For Local:</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">International Bancshares Corporation<BR>
    P.O. Box&nbsp;1359<BR>
    1200 San&nbsp;Bernardo<BR>
    Laredo, Texas 78040<BR>
    Attn: Jonathan A. Nixon,<BR>
    General Counsel-IBC Bank<BR>
    (210) 518-2500
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">D.F. King&nbsp;&#38; Co.<BR>
    48&nbsp;Wall Street<BR>
    New&nbsp;York, New&nbsp;York 10005<BR>
    (800)&nbsp;431-9645
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='103'></A>
</DIV>

<!-- link1 "SUMMARY" -->

<P align="center">
<B><FONT size="2">SUMMARY</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This summary highlights selected information
from this proxy statement-prospectus and does not contain all of
the information that is important to you. To understand the
merger fully, and for a more complete description of the legal
terms of the merger, you should carefully read this entire proxy
statement-prospectus and the documents to which it refers you.
See &#147;Where You Can Find More Information&#148; beginning on
page&nbsp;96 of this proxy statement-prospectus.</FONT></I>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='104'></A>
</DIV>

<!-- link1 "The Proposed Merger (see page 50)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">The Proposed Merger (see
page&nbsp;50)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the proposed merger, LFC Acquisition Corp., an
indirect subsidiary of IBC formed for the purpose of the merger,
will merge with and into Local. Local will survive the merger
and become a wholly-owned subsidiary of IBC, and immediately
thereafter, Local will be merged into IBC and Local&#146;s
separate corporate existence will cease. As a result, Local
stockholders will exchange their Local common stock for shares
of IBC common stock, cash or a combination of cash and shares of
IBC common stock.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='105'></A>
</DIV>

<!-- link1 "The Parties to the Merger (see page 66)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">The Parties to the Merger (see
page&nbsp;66)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">International Bancshares
    Corporation</FONT></B><FONT size="2"> <BR>
     1200 San&nbsp;Bernardo <BR>
     Laredo, Texas 78040 <BR>
     Telephone: (956)&nbsp;722-7611
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">International Bancshares Corporation,
    headquartered in Laredo, Texas, is a Texas corporation and
    multi-bank financial holding company with $6.6&nbsp;billion in
    assets. IBC has more than 100 main banking and branch facilities
    located in 35 communities in South, Central and Southeast Texas.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">IBC&#146;s common stock trades on the Nasdaq
    National Market under the symbol &#147;IBOC.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">LFC Acquisition
    Corp.</FONT></B><FONT size="2"> <BR>
     1200 San&nbsp;Bernardo <BR>
     Laredo, Texas 78040 <BR>
     Telephone: (956)&nbsp;722-7611 <BR>
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">LFC Acquisition Corp. is a Delaware corporation
    and wholly-owned indirect subsidiary of IBC formed for the
    purpose of completing the merger and has conducted no other
    business. <BR>
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">Local Financial
    Corporation</FONT></B><FONT size="2"> <BR>
     3601 N.W. 63rd&nbsp;Street <BR>
     Oklahoma City, Oklahoma 73116 <BR>
     Telephone: (405)&nbsp;841-2100 <BR>
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Local Financial Corporation is the
    $2.9&nbsp;billion parent company of Local Oklahoma Bank, which
    provides a full range of commercial and personal banking
    services at 52 locations across Oklahoma. Its primary markets
    include Oklahoma&#146;s largest population and business centers:
    Oklahoma City, Tulsa and Lawton, as well as cities from Miami in
    the northeastern corner of the state, to Elk City in the west
    and Ardmore in southern Oklahoma.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Local&#146;s common stock trades on the Nasdaq
    National Market under the symbol &#147;LFIN.&#148;
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='106'></A>
</DIV>

<!-- link1 "What Local Stockholders Will Receive in the Merger (see page 50)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">What Local Stockholders Will Receive in the
Merger (see page&nbsp;50)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the effective time of the merger, each
outstanding share of Local common stock (except dissenting
shares) will be converted into the right to receive either:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a number of shares of IBC common stock equal to
    $22.00 (subject to upward adjustment as further described
    herein) divided by the IBC common stock value (determined as set
    forth herein),&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$22.00 (subject to upward adjustment as further
    described herein) in cash.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local stockholders will have the opportunity to
elect to receive IBC common stock, cash or a combination of IBC
common stock and cash for shares of Local common stock held by
them, but all elections will be subject to certain allocation
procedures as provided in the merger agreement. The allocation
procedures are intended to ensure that 25% of the outstanding
shares of Local common stock
</FONT>

<P align="center"><FONT size="2">4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">will be converted into the right to receive IBC
common stock and 75% of the outstanding shares of Local common
stock will be converted into the right to receive cash. The
number of whole shares of IBC common stock that Local
stockholders receive will be determined by dividing $22.00 by
the average closing price of the IBC common stock during the 10
trading-day period beginning 15 business days before the
effective time of the merger. For purposes of determining the
number of shares of IBC common stock to be received by Local
stockholders, the merger agreement provides that the IBC common
stock value cannot be less than $36.80 or more than $44.80, as
adjusted to reflect a stock dividend that IBC declared on
April&nbsp;1, 2004. Fractional shares of IBC common stock will
not be issued. Instead, a cash amount equal to the IBC common
stock value multiplied by the fractional share interest to be
received will be paid.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='107'></A>
</DIV>

<!-- link1 "Election of the Method of Payment for Local Stock (see page 51)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Election of the Method of Payment for Local
Stock (see page&nbsp;51)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local stockholders who wish to make an election
must complete the election form and related transmittal
materials that will be provided in a separate mailing. For an
election to be valid, a properly executed election form must be
received by the exchange agent before the election deadline. IBC
currently anticipates that the election deadline will be
approximately five (5)&nbsp;business days prior to the
anticipated effective time of the merger. A press release will
be issued announcing the election deadline near the time Local
mails the election form. See &#147;The Merger
Agreement&nbsp;&#151; Election Procedures&#148; beginning on
page&nbsp;51 for a description of the election mechanics.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='108'></A>
</DIV>

<!-- link1 "Adjustments to Merger Consideration (see page 50)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Adjustments to Merger Consideration (see
page&nbsp;50)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that, if the
effective time of the merger does not occur until after
August&nbsp;15, 2004, the aggregate consideration to be paid to
the holders of Local common stock would be increased by $76,667
for each day from and after August&nbsp;16, 2004 until the
effective time of the merger. In that event, each Local
stockholder would be entitled to a pro rata increase in the per
share merger consideration they would receive for each share of
Local common stock held.
</FONT>

<DIV align="left">
<A name='214'></A>
</DIV>

<!-- link1 "IBC Stock Dividend (see page 50)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">IBC Stock Dividend (see
page&nbsp;50)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On April&nbsp;1, 2004,&nbsp;IBC declared a 25%
stock dividend payable to IBC stockholders of record on
May&nbsp;3, 2004. As a result of the stock dividend, the minimum
and maximum values used in determining the IBC common stock
value will automatically be adjusted from the corresponding
amounts included in the merger agreement to reflect the stock
dividend. Accordingly, the IBC common stock value described in
Section&nbsp;3.1(c) of the merger agreement, a copy of which is
included as <B>APPENDIX&nbsp;A </B>to this proxy
statement-prospectus, does not reflect the IBC stock dividend.
Except as otherwise noted, all calculations in this proxy
statement-prospectus have been made as if the stock dividend had
already been paid, and the resulting adjustments required under
the merger agreement already made, at the time of such
calculation.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='109'></A>
</DIV>

<!-- link1 "Effect of Changes in Price of IBC Common Stock (see page 50)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Effect of Changes in Price of IBC Common Stock
(see page&nbsp;50)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depending on the average price per share of IBC
common stock during the 10 business day determination period,
which begins 15 business days prior to the effective time of the
merger, the exchange ratio by which shares of Local common stock
would be exchanged for IBC common stock may vary. If the IBC
common stock value during the determination period is equal to
or less than $36.80&nbsp;per share, the exchange ratio will be
based on $36.80&nbsp;per share, and if the IBC common stock
value during the determination period is equal to or more than
$44.80&nbsp;per share, the exchange ratio will be based on
$44.80&nbsp;per share. These values give effect to the IBC stock
dividend. The following chart illustrates the
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">5
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">differences in the exchange ratio that would
result based on the average price per share of IBC common stock
during the determination period:
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC Average Price Per Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC Common Stock Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exchange Ratio</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">35.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5978</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">36.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5978</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">38.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">40.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">42.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.5238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">44.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.4911</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="right" valign="top"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">46.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">.4911</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For example, if the IBC average price per share
during the determination period is $40.00, the exchange ratio by
which each share of Local common stock would be converted would
be .5500. In this example, each share of Local common stock
would be converted into the right to receive either $22.00 in
cash or .5500&nbsp;shares of IBC common stock.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='110'></A>
</DIV>

<!-- link1 "Aggregate Amount of Cash and Number of Shares IBC Will Issue in the Merger" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Aggregate Amount of Cash and Number of Shares
IBC Will Issue in the Merger</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IBC common stock value for purposes of
computing the exchange ratio can be no less than $36.80&nbsp;per
share and no more than $44.80&nbsp;per share. Based on
Local&#146;s approximately 16.6&nbsp;million shares of common
stock outstanding, and assuming no adjustment to the
$22.00&nbsp;per share merger consideration to be paid for the
shares of Local common stock in the merger:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the IBC common stock value is $44.80&nbsp;per
    share or more, the exchange ratio would be .4911 IBC common
    shares for each share of Local common stock. At that exchange
    ratio, an aggregate of approximately 2.0&nbsp;million IBC common
    shares would be issued to Local stockholders;&nbsp;and
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the IBC common stock value is $36.80&nbsp;per
    share or less, the exchange ratio would be .5978 IBC common
    shares for each Local share. At that exchange ratio, an
    aggregate of approximately 2.5&nbsp;million IBC common shares
    would be issued to Local stockholders.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate amount of cash that IBC will pay to
Local stockholders in connection with the merger is
approximately $274&nbsp;million.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='111'></A>
</DIV>

<!-- link1 "Material U.S. Federal Income Tax Consequences (see page 41)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Material U.S.&nbsp;Federal Income Tax
Consequences (see page&nbsp;41)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The receipt of IBC common stock, cash or a
combination of IBC common stock and cash in connection with the
surrender of Local common stock pursuant to the merger will be a
taxable transaction for U.S.&nbsp;federal income tax purposes.
Generally, Local stockholders will recognize gain or loss as a
result of the merger measured by the difference, if any, between
(a)&nbsp;the fair market value of any IBC common stock received,
valued at the effective time of the merger, plus the amount of
any cash received and (b)&nbsp;the Local stockholder&#146;s
adjusted tax basis in the Local common stock exchanged in the
merger.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The U.S.&nbsp;federal income tax treatment
described above might not apply to every Local stockholder. Tax
matters can be complicated and the tax consequences to Local
stockholders will depend on their own specific tax situations.
As a result, you should consult your own tax advisor for a full
understanding of the tax consequences of the merger to
you.</FONT></B>

<DIV align="left">
<A name='112'></A>
</DIV>

<!-- link1 "Local&#146;s Board Recommends Approval of the Merger (see page 29)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Local&#146;s Board Recommends Approval of the
Merger (see page&nbsp;29)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s board of directors believes that the
merger agreement and the merger are fair to, and in the best
interests of, Local&#146;s stockholders and has approved the
merger agreement and unanimously recommends that Local
stockholders vote &#147;FOR&#148; adoption of the merger
agreement.
</FONT>

<P align="center"><FONT size="2">6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='113'></A>
</DIV>

<!-- link1 "Opinion of Local&#146;s Financial Advisor (see page 31)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Opinion of Local&#146;s Financial Advisor (see
page&nbsp;31)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Among other factors considered in deciding to
approve the merger, the Local board of directors received the
opinion of its financial advisor, Sandler
O&#146;Neill&nbsp;&#38; Partners, L.P., that, as of
January&nbsp;22, 2004 (the date on which the Local board of
directors approved the merger agreement), the merger
consideration was fair to the holders of Local common stock from
a financial point of view. This opinion was subsequently
confirmed in writing as of the date of this document. The
opinion of Sandler O&#146;Neill dated as of the date of this
document is included as <B>APPENDIX B</B>. You should read this
opinion completely to understand the assumptions made, matters
considered and limitations of the review undertaken by Sandler
O&#146;Neill in providing its opinion. Sandler
O&#146;Neill&#146;s opinion is directed to the Local board of
directors and does not constitute a recommendation to any
stockholder as to any matters relating to the merger. Local has
agreed to pay Sandler O&#146;Neill a cash fee based on the
aggregate consideration received by Local stockholders. Local
will pay Sandler O&#146;Neill approximately $3.8&nbsp;million
(based on the closing price of IBC&#146;s common stock on
March&nbsp;15, 2004), of which approximately $750,000 has been
paid, $500,000 would be payable upon obtaining stockholder
approval of the merger and the remaining portion of
approximately $2.55&nbsp;million would be payable upon closing
of the merger.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='114'></A>
</DIV>

<!-- link1 "Additional Merger Benefits to Local&#146;s Management (see page 40)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Additional Merger Benefits to Local&#146;s
Management (see page&nbsp;40)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s directors and executive officers
have interests in the merger as individuals which are in
addition to, or different from, their interests as stockholders
of Local. These interests include, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The payment of cash amounts to executive officers
    of Local whose employment is being terminated in connection with
    the merger aggregating approximately $6.5&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The payment of cash amounts to certain executive
    officers of Local aggregating approximately $6.5&nbsp;million
    pursuant to their change of control agreements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The conversion of all stock options to purchase
    shares of Local&#146;s common stock into the right to receive
    the per share cash merger consideration, less the exercise price
    of the option, that are held by directors and executive officers
    of Local;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The payment to certain executive officers of an
    amount equal to their tax liability resulting from the exercise
    of their stock options. The amount of the payment is estimated
    to be, in the aggregate, $7.9&nbsp;million;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC&#146;s agreement to honor indemnification
    obligations of Local and to purchase liability insurance for
    Local&#146;s directors and officers following the merger,
    subject to the terms described in the merger agreement.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors of Local was aware of the
foregoing interests and considered them, among other matters, in
approving the merger agreement and the merger.
</FONT>

<DIV align="left">
<A name='115'></A>
</DIV>

<!-- link1 "Dissenters&#146; Rights of Appraisal (see page 42)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Dissenters&#146; Rights of Appraisal (see
page&nbsp;42)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Delaware law provides stockholders with appraisal
rights. This means that if the merger is consummated, in lieu of
accepting the merger consideration, you are entitled to have the
value of your shares of Local common stock independently
determined by the Delaware Court of Chancery, exclusive of any
element of value arising from the accomplishment or expectation
of the merger, and to receive payment based on that valuation,
provided you satisfy all the requirements of Delaware law to
perfect appraisal rights. To exercise your appraisal rights, you
must deliver a written demand for appraisal to Local before the
vote of Local stockholders at the Annual Meeting, on
May&nbsp;19, 2004, you must not vote in favor of the approval
and adoption of the merger agreement and you must comply with
the applicable Delaware law procedures. Your failure to follow
exactly the procedures specified under Delaware law will result
in the loss of your appraisal rights. These procedures are
described more fully beginning on page&nbsp;42 of this proxy
statement-prospectus, and a copy of the relevant Delaware
statutory provisions regarding dissenters&#146;
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">7
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">rights of appraisal is included in this proxy
statement-prospectus as <B>APPENDIX&nbsp;C</B>. The amount
awarded by the Delaware Court of Chancery could be greater than,
less than or equal to the per share merger consideration to be
paid to holders of Local common stock in the merger.
</FONT>
</DIV>

<DIV align="left">
<A name='116'></A>
</DIV>

<!-- link1 "Surrender of Local Shares (see page 47)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Surrender of Local Shares (see
page&nbsp;47)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To receive the merger consideration, you will
need to surrender your Local share certificates. If you submit
the election form and related transmittal materials that will be
provided to you in a separate mailing, you will be required to
submit your Local share certificates at that time. Otherwise,
after the merger is completed, the exchange agent will send you
written instructions for exchanging your stock certificates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Please do <U>NOT</U> send in your stock
certificates until you receive further instructions.</FONT></B>

<DIV align="left">
<A name='117'></A>
</DIV>

<!-- link1 "Local Annual Meeting (see page 23)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Local Annual Meeting (see
page&nbsp;23)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local will hold its Annual Meeting at
10:00&nbsp;a.m., local time, on May&nbsp;19, 2004, at the
Waterford Marriott Hotel, located at 6300 Waterford Blvd.,
Oklahoma City, Oklahoma 73118-1104. You can vote at the Annual
Meeting if you owned Local common stock at the close of business
on April&nbsp;5, 2004, the record date for the meeting. At the
Annual Meeting, you will be asked to vote on proposals to adopt
the merger agreement, to elect three (3)&nbsp;directors, to
ratify the appointment of independent auditors, to adjourn the
Annual Meeting, if necessary, to permit further solicitation of
proxies if there are not sufficient votes at the time of the
Annual Meeting to constitute a quorum or approve the proposals
to be presented at the Annual Meeting and to act on any other
matters that may properly come before the Annual Meeting or any
adjournment or postponement of the Annual Meeting. Such matters
are more fully discussed in this proxy statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='118'></A>
</DIV>

<!-- link1 "Vote Required to Approve Merger (see page 24)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Vote Required to Approve Merger (see
page&nbsp;24)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To complete the merger, the holders of a majority
of the shares of Local common stock outstanding at the record
date must adopt the merger agreement. No vote of IBC
stockholders is required to complete the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the record date:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">there were 16,613,073&nbsp;shares of Local common
    stock issued and outstanding and entitled to vote at the Annual
    Meeting;&nbsp;and
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local&#146;s directors and executive officers and
    their affiliates beneficially owned a total of
    322,308&nbsp;shares of Local common stock (excluding shares
    issuable upon exercise of outstanding options and warrants),
    representing approximately 1.9% of the shares of Local common
    stock outstanding.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s board of directors unanimously
approved the merger agreement. It is currently anticipated that
the directors and executive officers of Local will vote the
shares of Local common stock held by them in favor of the merger.
</FONT>

<DIV align="left">
<A name='119'></A>
</DIV>

<!-- link1 "Regulatory Approvals Required (see page 45)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Regulatory Approvals Required (see
page&nbsp;45)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation and the Texas
Department of Banking must approve the merger and the subsidiary
mergers, and the Oklahoma Department of Banking must approve IBC
Bank&#146;s ownership and operation of Local Oklahoma&#146;s
branches. On or about March&nbsp;11, 2004,&nbsp;IBC filed
applications with these agencies requesting approval of the
merger and the subsidiary mergers. In addition,&nbsp;IBC and
Local will be required to file applications with the National
Association of Securities Dealers and the Oklahoma Department of
Insurance in connection with the change of control of certain
Local subsidiaries that will occur as a result
</FONT>

<P align="center"><FONT size="2">8
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">of the merger. To the extent that any materially
burdensome conditions are imposed on Local or IBC by such
regulatory agencies, each of Local and IBC has the right to
terminate the merger agreement.
</FONT>
</DIV>

<DIV align="left">
<A name='120'></A>
</DIV>

<!-- link1 "Other Conditions to Completing the Merger (see page 54)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Other Conditions to Completing the Merger (see
page&nbsp;54)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to stockholder and regulatory
approvals, a number of other conditions must be met before the
merger can be completed. These conditions include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">authorization for listing on the Nasdaq National
    Market of the shares of IBC common stock to be issued to Local
    stockholders pursuant to the merger agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">absence of any court or governmental authority
    order prohibiting the merger;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">accuracy in all material respects of the
    representations and warranties in the merger agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">compliance in all material respects with the
    covenants, agreements and conditions of the merger agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">absence since the date of the merger agreement of
    any change or circumstance which has had or is likely to result
    in or cause any material adverse effect on Local or IBC;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">resignation of certain officers of Local;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC shall have taken all steps necessary to
    assume certain debt obligations of Local.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC or Local can waive a condition it is entitled
to assert as long as there is not a legal requirement that the
condition be met.
</FONT>

<DIV align="left">
<A name='121'></A>
</DIV>

<!-- link1 "Termination of the Merger Agreement (see page 58)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Termination of the Merger Agreement (see
page&nbsp;58)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC and Local can mutually agree to terminate the
merger agreement and abandon the merger at any time prior to
completion of the merger, even if Local stockholders have
already voted to approve the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Also, either company can terminate the merger
agreement without the consent of the other if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the merger is not completed by October&nbsp;31,
    2004, unless the failure to complete the merger on or before
    that date has to any extent been caused by or has resulted from
    the failure of the party seeking to terminate to fulfill any
    obligation under the merger agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a court or other governmental authority prohibits
    the merger or fails to approve the merger;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the Local stockholders do not approve the merger
    agreement; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the other party breaches any representation,
    warranty or covenant contained in the merger agreement so that
    the conditions to the merger agreement would be unable to be
    satisfied.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC can terminate the merger agreement at any
time before the merger is completed if Local&#146;s board of
directors:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">fails to recommend, withdraws, changes or
    modifies in a manner adverse to IBC, its approval or
    recommendation of the merger agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">approves an acquisition proposal from a third
    party after concluding in good faith, taking into account all
    legal, financial, regulatory and other aspects, that such
    proposal is more favorable to its stockholders from a financial
    point of view;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">fails to reject a tender offer commenced by a
    third party unaffiliated with IBC for 15% or more of the capital
    stock of Local.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local may terminate the merger agreement at any
time prior to receiving stockholder approval if it receives an
acquisition proposal from a third party and the Local board of
directors concludes in good faith, taking into account all
legal, financial, regulatory and other aspects, that such
proposal is more
</FONT>

<P align="center"><FONT size="2">9
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">favorable to its stockholders from a financial
point of view and approves the third party acquisition proposal,
provided that IBC has been given an opportunity to renegotiate
the terms of the merger agreement.
</FONT>
</DIV>

<DIV align="left">
<A name='122'></A>
</DIV>

<!-- link1 "Termination Fee (see page 59)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Termination Fee (see page&nbsp;59)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local must pay IBC a termination fee of
$12.0&nbsp;million if the merger agreement is terminated under
various circumstances described in the merger agreement. See
&#147;The Merger Agreement&nbsp;&#151; Termination Fee&#148;
beginning on page&nbsp;59.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='123'></A>
</DIV>

<!-- link1 "Local May Not Solicit Other Offers (see page 55)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Local May Not Solicit Other Offers (see
page&nbsp;55)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local has agreed that while the merger is
pending, it will not initiate or, subject to its fiduciary
obligations, engage in discussions with any third party other
than IBC regarding extraordinary transactions such as a merger,
business combination or sale of a material amount of its assets
or capital stock.
</FONT>

<DIV align="left">
<A name='124'></A>
</DIV>

<!-- link1 "Effect of Merger on Rights of Local Stockholders (see page 70)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Effect of Merger on Rights of Local
Stockholders (see page&nbsp;70)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The rights of Local stockholders are governed by
Delaware law, as well as Local&#146;s certificate of
incorporation and bylaws. After completion of the merger,
however, the rights of the former Local stockholders who receive
IBC common stock in the merger will be governed by Texas law, as
well as IBC&#146;s articles of incorporation and bylaws.
Although Texas law and IBC&#146;s articles of incorporation and
bylaws are similar in many ways to Delaware law and Local&#146;s
certificate of incorporation and bylaws, there are some
substantive and procedural differences that will affect the
rights of Local stockholders.
</FONT>

<DIV align="left">
<A name='125'></A>
</DIV>

<!-- link1 "IBC Will Control Local After the Merger" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">IBC Will Control Local After the
Merger</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the merger, Local&#146;s separate
corporate existence will cease. Immediately following the
merger, Local Oklahoma Bank will be merged into International
Bank of Commerce and the Local Oklahoma Bank branch offices will
be operated as branches of International Bank of Commerce.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='126'></A>
</DIV>

<!-- link1 "Treatment of Local Stock Options (see page 40)" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Treatment of Local Stock Options (see
page&nbsp;40)</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each option to purchase shares of Local common
stock will be cancelled in connection with the merger and the
option holder will be entitled to receive an amount in cash
equal to the excess, if any, of the per share cash consideration
to be paid in the merger over the exercise price of each
cancelled option.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='128'></A>
</DIV>

<!-- link1 "SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA" -->

<P align="center">
<B><FONT size="2">SELECTED HISTORICAL AND PRO FORMA FINANCIAL
DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables present (1)&nbsp;selected
historical financial data of IBC, (2)&nbsp;selected historical
financial data of Local and (3)&nbsp;selected unaudited pro
forma consolidated financial data of IBC, which reflect the
merger.
</FONT>

<P align="left">
<B><FONT size="2">Selected Consolidated Historical Financial
Data of IBC and Local</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following selected financial information is
to aid you in your analysis of the financial aspects of the
merger. The annual IBC historical information is derived from
the consolidated financial statements of IBC as of and for each
of the fiscal years ended December&nbsp;31, 1999 through 2003.
The annual Local historical information is derived from the
consolidated financial statements of Local as of and for each of
the fiscal years ended December&nbsp;31, 1999 through 2003. The
historical results set forth below and incorporated by reference
into this proxy statement-prospectus are not necessarily
indicative of the future performance of IBC or Local.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following information is only a summary and
should be read in conjunction with each company&#146;s
historical consolidated financial statements and related notes
contained in that company&#146;s Annual Report on Form&nbsp;10-K
for the year ended December&nbsp;31, 2003, which are
incorporated by reference into this proxy statement-prospectus,
as well as other information filed by that company with the SEC.
See &#147;Where You Can Find More Information&#148; on
page&nbsp;96 of this proxy statement-prospectus. You should not
rely on historical results as indicating the future performance
of IBC, Local or the combined company.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<!-- link1 "International Bancshares Corporation and Subsidiaries" -->

<DIV align="center">
<B><FONT size="2">International Bancshares Corporation and
Subsidiaries</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">As of or for the Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Dollars in thousands except per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,578,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,495,635</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,381,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,860,714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,421,804</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,700,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,725,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,608,467</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,212,467</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,876,754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,435,699</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,239,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,332,834</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,744,598</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,527,212</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other borrowed funds(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">845,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,185,857</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">777,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,432,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,380,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Junior subordinated deferrable interest
    debentures(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shareholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">577,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">547,264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">497,028</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">416,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">353,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income Statement Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318,051</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">353,928</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">390,355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">415,332</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">337,219</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116,415</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">251,756</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185,205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223,326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">237,513</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">189,547</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163,576</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for possible loan losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,824</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85,645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,588</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,796</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">159,754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">154,843</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,983</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income before income taxes and cumulative change
    in accounting principle
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">182,554</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">159,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,063</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,013</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cumulative effect of a change in accounting
    principle, net of taxes(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,130</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">122,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,342</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted net income(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">122,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">As of or for the Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Dollars in thousands except per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per common share(3):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted per common share(2)(3):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Selected Ratios (4):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on Common Equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.68</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.44</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.78</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.92</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.88</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on Assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Percentage of Average Shareholders&#146; Equity
    to Average Total Assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Percentage of Cash Dividends Per Share to Net
    Income Per Share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31.23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Efficiency Ratio(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net Interest Spread(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">See note&nbsp;9 of the notes to the consolidated
    financial statements of IBC contained in IBC&#146;s Annual
    Report on Form&nbsp;10-K for the year ended December&nbsp;31,
    2003 regarding the adoption of Financial Accounting Standards
    Board Interpretation No.&nbsp;46R (FIN&nbsp;46R). IBC
    early-adopted the provisions of FIN&nbsp;46R as of
    December&nbsp;31, 2003 and thus deconsolidated its investment in
    eight special purpose business trusts established for the
    issuance of trust preferred securities.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">See note&nbsp;14 of the notes to the consolidated
    financial statements of IBC contained in IBC&#146;s Annual
    Report on Form&nbsp;10-K for the year ended December&nbsp;31,
    2003 regarding the discontinuation of goodwill amortization. On
    January&nbsp;1, 2002,&nbsp;IBC adopted the remaining provisions
    of Statement of Financial Accounting Standards
    (SFAS)&nbsp;No.&nbsp;142, which discontinued amortization of
    goodwill. Accordingly, there is no adjusted net income or per
    common share data for the years ended December&nbsp;31, 2003 or
    2002.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Per share amounts have been retroactively
    adjusted to reflect the 25% stock dividend declared by IBC on
    April&nbsp;1, 2004 and payable to IBC stockholders of record on
    May&nbsp;3, 2004.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The average balances for purposes of the above
    table are calculated on the basis of month-end balances.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents noninterest expense (exclusive of
    amortization of intangibles) divided by the aggregate of net
    interest income before provision for loan losses and noninterest
    income (exclusive of gains and losses on sales of assets).
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Net interest spread represents the difference
    between the weighted average yield on interest-earning assets
    less the weighted average cost of interest-bearing liabilities.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="center"><FONT size="2">12
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Local Financial Corporation and
Subsidiaries</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">As of or for the Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Dollars in thousands except per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Statement of Financial Condition and Other
    Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,881,543</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,839,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,820,051</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,377,011</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,381,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and due from banks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loans receivable, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,240,565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,084,144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,972,145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,848,876</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,685,550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Securities available for sale
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,853</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163,473</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">193,736</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">354,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">529,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Securities held to maturity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277,571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">364,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">430,956</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nonperforming assets(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,627</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,536</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,898,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,829,439</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,809,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,931,793</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,848,340</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Securities sold under agreements to repurchase
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,367</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,696</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior Notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FHLB advances
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">637,219</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">684,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">728,205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190,028</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">302,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mandatorily redeemable trust preferred securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Junior subordinated debentures(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">167,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">163,536</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">156,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">128,294</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Number of full service customer facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Approximate number of full-time equivalent
    employees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">835</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">818</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operations Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,804</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">193,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190,202</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,307</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,852</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,787</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84,497</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for loan losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,600</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,600</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,700</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest income after provision for loan
    losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86,031</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,094</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Noninterest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,489</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,840</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Noninterest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,547</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,851</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,871</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income before provision for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,966</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,029</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,974</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,489</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,992</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earnings per share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Performance Ratios(5):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.99</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.04</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.01</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.99</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on common equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">As of or for the Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Dollars in thousands except per share amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend payout ratio(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest spread(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest margin(8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Noninterest expense to average assets(9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Efficiency ratio(10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58.62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58.33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Capital Ratios of Local:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Leverage capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Core capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Capital Ratios of Local Oklahoma:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Leverage capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Core capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Asset Quality Ratios:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nonperforming assets to total assets at end of
    period(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nonperforming loans to total loans at end of
    period(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for loan losses to total loans at end
    of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for loan losses to nonperforming loans
    at end of period(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.62</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.58</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.83</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.15</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Nonperforming loans consist of nonaccrual loans
    and loans delinquent 90&nbsp;days or more but still accruing
    interest, and nonperforming assets consist of nonperforming
    loans, real estate acquired through foreclosure or deed-in-lieu
    thereof and repossessions, net of writedowns and reserves.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">See note&nbsp;1(r) of the notes to the
    consolidated financial statements of Local contained in
    Local&#146;s Annual Report on Form&nbsp;10-K for the year ended
    December&nbsp;31, 2003 regarding the adoption of FIN&nbsp;46R.
    Local early-adopted the provisions of FIN&nbsp;46R as of
    December&nbsp;31, 2003 and thus deconsolidated its investment in
    three special purpose business trusts established for the
    issuance of trust preferred securities.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">See note&nbsp;1(r) of the notes to the
    consolidated financial statements of Local contained in
    Local&#146;s Annual Report on Form&nbsp;10-K for the year ended
    December&nbsp;31, 2003 regarding the discontinuation of goodwill
    amortization. On January&nbsp;1, 2002, Local adopted the
    remaining provisions of SFAS No.&nbsp;142, which discontinued
    amortization of goodwill.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Net income per share and dividends per share are
    based upon the weighted average number of shares outstanding
    during the period. For the years ended December&nbsp;31, 2003,
    2002, 2001, 2000 and 1999, the weighted average number of shares
    for basic net income per share are 17,052,297, 18,912,354,
    20,368,028, 20,537,209 and 20,537,209, respectively. Basic and
    diluted shares were the same for each year except in 2003, 2002
    and 2001 where diluted shares were 17,758,565, 19,616,663 and
    20,966,531, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">With the exception of end of period ratios, all
    ratios are based on average monthly balances during the periods
    presented.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">14
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The dividend payout ratio represents dividends
    declared per share divided by net income per share. Local does
    not presently pay dividends.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Net interest spread represents the difference
    between the weighted average yield on interest-earning assets
    less the weighted average cost of interest-bearing liabilities.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(8)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Net interest margin represents net interest
    income divided by average interest-earning assets.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(9)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Noninterest expense excludes the amortization of
    intangibles.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(10)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents noninterest expense (exclusive of
    amortization of intangibles) divided by the aggregate of net
    interest income before provision for loan losses and noninterest
    income (exclusive of gains and losses on sales of assets).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Selected Unaudited Pro Forma Combined
Consolidated Financial Statements&#146; Data</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents selected unaudited
pro forma combined consolidated financial statements&#146; data
of IBC and Local, including per share data and financial ratios,
after giving effect to the merger and the IBC stock dividend.
The table sets forth the information as if the merger had become
effective on December&nbsp;31, 2003, with respect to statement
of condition data, and at the beginning of the earliest period
presented, with respect to income statement data. The pro forma
data in the tables assume that the merger is accounted for using
the purchase method of accounting. This table should be read in
conjunction with, and is qualified in its entirety by, the
historical consolidated financial statements, including the
notes thereto, of each of IBC and Local, which are incorporated
by reference herein, and the more detailed pro forma financial
information, including the notes thereto, appearing elsewhere in
this proxy statement-prospectus. See &#147;Where You Can Find
More Information&#148; on page&nbsp;96 and &#147;Pro Forma
Financial Information&#148; on page&nbsp;60.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pro forma financial information set forth
below does not necessarily reflect what the historical results
of the combined company would have been had the companies been
combined during this period.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">As of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Dollars in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Selected Statement of Condition Data (at
    period-end):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,665,463</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,416,524</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,051,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,969,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,345,626</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,997,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">668,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="67%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Dollars in thousands,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">except per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Selected Income Statement Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">460,649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">308,648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for possible loan losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,891</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest income after provision
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">293,757</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238,731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income before taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">216,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69,493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146,580</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Per Common Share Data(1):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of shares
    outstanding&nbsp;&#151; basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,636,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income&nbsp;&#151; basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average shares outstanding&nbsp;&#151;
    diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,610,415</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income&nbsp;&#151; diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Number of shares outstanding and per share
    amounts have been adjusted to reflect the 25% stock dividend
    declared by IBC on April&nbsp;1, 2004 and payable to IBC
    stockholders of record on May&nbsp;3, 2004.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='129'></A>
</DIV>

<!-- link1 "UNAUDITED COMPARATIVE PER COMMON SHARE DATA" -->

<P align="center">
<B><FONT size="2">UNAUDITED COMPARATIVE PER COMMON SHARE
DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents per share financial
information reflecting the merger of IBC and Local and summary
historical financial information for each of IBC and Local. The
pro forma information assumes that the acquisition of Local had
been completed on the date indicated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC expects that the merger will result in
certain merger, integration and restructuring expenses. The pro
forma income and dividends data do not reflect any anticipated
merger, integration and restructuring expenses resulting from
the merger. It is also anticipated that the merger will provide
the combined company with certain financial benefits that
include reduced operating expenses. The pro forma information
does not reflect any of these anticipated cost savings or
benefits. Therefore, the pro forma information, while helpful in
illustrating the financial characteristics of the merger under
one set of assumptions, does not attempt to show how the
combined company actually would have performed had IBC and Local
been combined throughout the indicated period.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The summary historical financial information of
Local and IBC has been derived from historical consolidated
financial information that IBC and Local have included in their
respective prior filings with the SEC. Historical consolidated
financial information for IBC can be found in its Annual Report
on Form&nbsp;10-K for the year ended December&nbsp;31, 2003, and
the historical consolidated financial information for Local can
be found in its Annual Report on Form&nbsp;10-K for the year
ended December&nbsp;31, 2003. See &#147;Where You Can Find More
Information&#148; beginning on page&nbsp;96 of this proxy
statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net Income Per Common Share:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Historical:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Local
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma combined:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equivalent pro forma amount of Local (2):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Dividends Per Common Share:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Historical
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Local
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equivalent pro forma amount of Local(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Book Value Per Common Share (at period
    end):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Historical:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Local
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma combined
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equivalent pro forma amount of Local(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">17
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC per share amounts have been retroactively
    adjusted to reflect the 25% stock dividend declared by IBC on
    April&nbsp;1, 2004 and payable to IBC stockholders of record on
    May&nbsp;3, 2004.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equivalent pro forma per share data for Local
    is computed by multiplying pro forma combined IBC and Local
    information by an exchange ratio of .5500 (which is the exchange
    ratio that would apply if the IBC common stock value is
    $40.00&nbsp;per share). The actual IBC common stock
    value&nbsp;&#151; and thus the actual share exchange
    ratio&nbsp;&#151; will not be known until immediately before the
    effective time of the merger.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equivalent pro forma cash dividends per
    common share represent the historical cash dividends per common
    share declared by IBC and assume no change will occur,
    multiplied by an exchange ratio of .5500 (which is the exchange
    ratio that would apply if the IBC common stock value is
    $40.00&nbsp;per share). The actual IBC common stock
    value&nbsp;&#151; and thus the actual share exchange
    ratio&nbsp;&#151; will not be known until immediately before the
    effective time of the merger.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="center"><FONT size="2">18
</FONT>

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<DIV align="left">
<A name='130'></A>
</DIV>

<!-- link1 "RISK FACTORS" -->

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Before deciding how to vote on the proposal to
adopt the merger agreement, Local stockholders should carefully
consider the following factors, in addition to the factors
discussed in the Local and IBC documents filed with the SEC and
the other information contained in this proxy
statement-prospectus. See &#147;Where You Can Find More
Information&#148; on page&nbsp;96 of this proxy
statement-prospectus</FONT></I>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Risks Related to the Merger</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Local stockholders may not receive the form
    of merger consideration they elect.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local stockholders will have the opportunity to
elect the form of consideration to be received for all shares of
Local common stock held by them, except that the right of a
Local stockholder to elect all stock or all cash for his or her
shares is limited because of allocation procedures described in
the merger agreement, which are intended to ensure that 25% of
the outstanding shares of Local common stock will be converted
into the right to receive IBC common stock and 75% of the
outstanding shares of Local common stock will be converted into
the right to receive cash. Elections will be reallocated, if
necessary, so that the resultant exchange for shares of IBC
common stock and cash equal as close as practicable to this
allocation. Therefore, Local stockholders may not receive
exactly the form of consideration that they elect and may
receive a pro rata amount of cash and IBC common stock. A
detailed discussion of the consideration provisions of the
merger agreement is described under &#147;The Merger
Agreement&nbsp;&#151; Election Procedures&#148; beginning on
page&nbsp;51 and &#147;The Merger Agreement&nbsp;&#151;
Allocation Procedures&#148; beginning on page&nbsp;51. We
recommend that stockholders carefully read it and the merger
agreement attached hereto as <B>APPENDIX A.</B>
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">You will not know the precise value of the
    IBC common stock you will receive in the merger when you vote on
    the merger.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The value of the consideration to be received by
Local stockholders at the time of the merger will depend upon
the market price of IBC common stock during the determination
period. Because the market price of IBC common stock varies, the
exchange ratio by which shares of Local common stock would be
exchanged for share of IBC common stock may be lower on the date
of closing than the market price of IBC common stock on the day
the merger was announced, the date of the Annual Meeting or
during the determination period.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;22, 2004, the last trading day
before the announcement of the merger, the closing price of IBC
common stock was $40.38. On April&nbsp;12, 2004, the latest
practicable date prior to the mailing of this proxy
statement-prospectus, the closing price of IBC common stock was
$43.52. The foregoing per share values have been adjusted to
reflect a 25% stock dividend declared by IBC on April&nbsp;1,
2004 and payable to IBC stockholders of record on May&nbsp;3,
2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><I><FONT size="2">&nbsp;</FONT></I></B></TD>
    <TD>
    <B><I><FONT size="2">The per share value of the merger
    consideration paid in shares of IBC common stock might be
    materially different than the per share value of the merger
    consideration paid in cash.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IBC stock value to be used in determining the
exchange ratio in the merger is subject to a maximum of $44.80
and a minimum of $36.80. Accordingly, the value of the IBC
common stock issued in the merger could be substantially
different than the IBC common stock value used in calculating
the exchange ratio. As a result, the per share value of the
merger consideration paid in shares of IBC common stock might be
materially different than the per share value of the merger
consideration paid in cash.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Resales of IBC common stock following the
    merger may cause the market price to fall.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of March&nbsp;5, 2004,&nbsp;IBC had
38,777,088&nbsp;shares of common stock outstanding and
1,369,534&nbsp;shares were issuable upon exercise of employee
stock options, in each case without adjustment to reflect the
IBC stock dividend. Assuming no adjustment to the merger
consideration, up to approximately 2.5&nbsp;million shares of
IBC common stock may be issued in the merger at the high end of
the exchange ratio assuming
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">19
</FONT>

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<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">a $36.80&nbsp;per share IBC common stock value
and approximately 2.0&nbsp;million shares at the low end of the
exchange ratio using a $44.80&nbsp;per share IBC common stock
value, in each case after adjustment to reflect the IBC stock
dividend. The issuance of these new shares of IBC common stock
to holders of Local common stock in the merger, and the sale of
additional shares that may become eligible for sale in the
public market from time to time upon exercise of stock options
previously or hereafter granted by IBC to its employees, will
increase the total number of shares of IBC common stock
outstanding after the merger. This increase will be substantial
relative to the average trading volume of IBC shares on the
Nasdaq National Market. Sales of a significant number of IBC
shares following the merger could depress the market price of
IBC common stock.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">You will have less influence as a
    stockholder of IBC than as a stockholder of Local.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local stockholders will own approximately 4.5% of
IBC&#146;s outstanding common stock. Consequently, the Local
stockholders will exercise much less influence over the
management and policies of IBC than they currently exercise over
the management and policies of Local.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The need for regulatory approvals may
    affect the date of completion of the merger or may diminish the
    benefits of the merger.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Before the merger can be completed, the Board of
Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation and the Texas Department of Banking must
approve the merger and the subsidiary mergers, and the Oklahoma
Department of Banking must approve IBC Bank&#146;s ownership and
operation of Local Oklahoma&#146;s branches. In
addition,&nbsp;IBC and Local will be required to file
applications with the National Association of Securities Dealers
and the Oklahoma Department of Insurance in connection with the
change of control of certain Local subsidiaries that will occur
as a result of the merger. Satisfying any requirements of these
regulatory agencies may affect the date of completion of the
merger. It is also possible that, among other things,
restrictions and conditions on the combined operations of the
two companies may be sought by governmental agencies as a
condition to obtaining the required regulatory approvals. This
may diminish the benefits of the merger. However, the terms of
the merger agreement permit IBC or Local to terminate the merger
agreement if any materially burdensome conditions are imposed on
Local or IBC.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Failure to complete the merger could
    negatively impact Local&#146;s stock price.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the merger is not completed for any reason,
the price of Local&#146;s common stock may decline to the extent
that the current market price of its common stock reflects a
market assumption that the merger will be completed. On
January&nbsp;22, 2004, the last trading day before the merger
was announced, Local&#146;s common stock closed at $22.57 a
share.
</FONT>

<DIV>&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Some of Local&#146;s directors and officers
    have substantial additional interests in the
    merger.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In deciding how to vote on the proposal to
approve the merger agreement, you should be aware that some of
Local&#146;s directors and officers have interests in the
proposed merger in addition to their interests as Local
stockholders. For example, as of the date of this proxy
statement-prospectus, Local&#146;s directors and executive
officers held options to acquire a total of
1,141,640&nbsp;shares of Local common stock at a weighted
average exercise price of $10.06 a share. At or immediately
prior to the effective time of the merger, all such options will
be cancelled and the holder of each cancelled option will
receive an amount in cash equal to the difference, if any,
between the per share cash consideration to be paid in the
merger and the exercise price of the cancelled option. In
addition, certain executive officers will receive an aggregate
of approximately $7.9&nbsp;million as payment for their tax
liability incurred as a result of the exercise of their options.
This amount has been accrued in Local&#146;s consolidated
financial statements at December&nbsp;31, 2003.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, as a result of the proposed merger,
certain members of Local&#146;s and Local Oklahoma&#146;s
management will receive cash payments under employment
agreements or change of control agreements with Local or a
subsidiary of Local. See &#147;The Merger&nbsp;&#151; Additional
Interests of Local Management&#148;
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">20
</FONT>

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<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">beginning on page&nbsp;40. The total estimated
value of the cash payments expected to be made to Local&#146;s
management under the employment agreements and change of control
agreements is approximately $13.0&nbsp;million.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s board of directors is aware of these
interests and considered them when it adopted the merger
agreement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The market price of IBC common stock may be
    affected by factors different from those affecting Local common
    stock.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of the merger, holders of Local
common stock, to the extent such holders elect to receive IBC
common stock in the merger, will become holders of IBC common
stock. Some of IBC&#146;s current businesses and markets differ
from those of Local and, accordingly, the results of operations
of IBC after the merger may be affected by factors different
from those currently affecting the results of operations of
Local. For information about the businesses of IBC and Local and
certain factors to consider in connection with those businesses,
see the documents incorporated by reference into this proxy
statement-prospectus and referred to under &#147;Where You Can
Find More Information&#148; on page&nbsp;96 of this proxy
statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Risks Related to IBC Following Completion of
the Merger</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The Federal Reserve Board may alter our
    ability to include trust preferred securities in Tier&nbsp;1
    capital.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Currently, the Federal Reserve Board allows bank
holding companies such as IBC to include trust preferred
securities in Tier&nbsp;1 capital up to a maximum of 25% of
Tier&nbsp;1 capital. Federal Reserve Board regulations,
including the regulation permitting trust preferred securities
to be included in Tier&nbsp;1 capital, are subject to change,
and the Federal Reserve Board could reduce or eliminate a bank
holding company&#146;s ability to include trust preferred
securities in the Tier&nbsp;1 capital calculation. If trust
preferred securities are excluded from the Tier&nbsp;1 capital
calculation, either altogether or to a greater extent than they
are currently, and if that exclusion is retroactive or otherwise
applies to IBC&#146;s and Local&#146;s previous issuances of
trust preferred securities, then it would have the effect of
reducing IBC&#146;s Tier&nbsp;1 capital ratio, perhaps below the
5% threshold required for IBC to be considered well capitalized.
If IBC is no longer considered well capitalized under the
Federal Reserve Board&#146;s standards, or if IBC&#146;s capital
is materially reduced to a level near the threshold for being
considered well capitalized,&nbsp;IBC may be limited in its
ability to grow and to take actions that would further reduce
its capital, such as share redemptions or dividend increases. If
the law or applicable regulations are hereafter changed or if
the trust preferred securities are otherwise excluded from
Tier&nbsp;1 capital, the terms of the trust preferred and the
related debentures will permit IBC to redeem the securities at
par.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">IBC may have difficulty adapting its
    business model to the market areas served by Local and may have
    difficulty combining the operations of Local with its own
    operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the acquisition of Local,&nbsp;IBC
will begin to operate in markets throughout the state of
Oklahoma, which are outside of its traditional market in South,
Central and Southeast Texas. There can be no certainty that
IBC&#146;s business model can be successfully adapted and
applied in the markets served by Local. Also,&nbsp;IBC may not
be able to integrate successfully Local&#146;s operations and to
realize the strategic objectives and operating efficiencies it
anticipates in connection with its acquisition of Local. In
addition, as a result of the proposed acquisition,&nbsp;IBC may
lose key Local personnel.
</FONT>

<DIV>&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">IBC relies heavily on its chief executive
    officer.</FONT></I></B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC has experienced substantial growth in assets
and deposits during the past, particularly since Dennis E. Nixon
became Chairman of the Board and President of IBC in 1979.
Although Mr.&nbsp;Nixon is a substantial stockholder of
IBC,&nbsp;IBC does not have an employment agreement with
Mr.&nbsp;Nixon and the loss of the services of Mr.&nbsp;Nixon
could have a material adverse effect on IBC&#146;s business and
prospects.
</FONT>

<P align="center"><FONT size="2">21
</FONT>

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<DIV align="left">
<A name='131'></A>
</DIV>

<!-- link1 "CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS" -->

<P align="center">
<B><FONT size="2">CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This proxy statement-prospectus, including
information incorporated by reference in this proxy
statement-prospectus, might contain forward-looking statements
about Local and IBC. Broadly speaking, forward-looking
statements include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">projections of revenues, income, earnings per
    share, capital expenditures, dividends, capital structure,
    credit quality or other financial items;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">consummation and anticipated timing of the merger;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">descriptions of plans or objectives of management
    for future operations, products or services, including pending
    acquisitions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">forecasts of future economic performance;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">descriptions of assumptions underlying or
    relating to any of the foregoing.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Forward-looking statements discuss matters that
are not historical facts. Because they discuss future events or
conditions, forward-looking statements often include words such
as &#147;anticipate,&#148; &#147;believe,&#148;
&#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148;
&#147;plan,&#148; &#147;project,&#148; &#147;target,&#148;
&#147;can,&#148; &#147;could,&#148; &#147;may,&#148;
&#147;should,&#148; &#147;will&#148; or similar expressions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Do not unduly rely on forward-looking
statements.</FONT></I><FONT size="2"> They are expectations
about the future and are not guarantees. All subsequent written
and oral forward-looking statements attributable to IBC or Local
or any person acting on their behalf are expressly qualified by
the cautionary statements contained or referred to in this
section. Forward-looking statements speak only as of the date of
the document in which they are made. Neither IBC nor Local
undertakes any obligation to update forward-looking statements
to reflect changes that occur after that date.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There are several factors&nbsp;&#151; many beyond
the control of IBC and Local&nbsp;&#151; that could cause
results to differ from expectations. Some of these factors are
described in &#147;Risk Factors&#148; beginning on page&nbsp;19
of this proxy statement-prospectus. Other factors are described
in IBC&#146;s and Local&#146;s reports filed with the SEC,
including their Annual Reports on Form&nbsp;10-K for the year
ended December&nbsp;31, 2003, and other subsequently filed
reports, which are incorporated by reference in this proxy
statement-prospectus. See &#147;Where You Can Find More
Information&#148; on page&nbsp;96 of this proxy
statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='132'></A>
</DIV>

<!-- link1 "GENERAL INFORMATION" -->

<P align="center">
<B><FONT size="2">GENERAL INFORMATION</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This document constitutes a proxy statement and
is being furnished to all record holders of Local common stock
in connection with the solicitation of proxies by the board of
directors of Local to be voted at the Annual Meeting to be held
on May&nbsp;19, 2004, at 10:00&nbsp;a.m., local time, at the
Waterford Marriott Hotel, located at 6300 Waterford Blvd.,
Oklahoma City, Oklahoma 73118-1104. The purposes of the Annual
Meeting are to consider and vote upon the following proposals:
(i)&nbsp;to adopt the merger agreement among IBC, Acquisition
Sub and Local, which provides for, among other things, the
merger of Acquisition Sub with and into Local, (ii)&nbsp;the
election of directors, (iii)&nbsp;the ratification of the
independent auditors and (iv)&nbsp;to adjourn the Annual
Meeting, if necessary, to permit further solicitation of proxies
if there are not sufficient votes at the time of the Annual
Meeting to constitute a quorum and/or approve the proposals
presented at the Annual Meeting.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This document also constitutes a prospectus of
IBC relating to the IBC common stock issuable to holders of
Local common stock upon completion of the merger. Based on
(i)&nbsp;the number of shares of Local common stock outstanding
on the record date for the Annual Meeting, (ii)&nbsp;an assumed
exchange ratio of .5500, (iii)&nbsp;the assumption that there is
no adjustment to the $22.00&nbsp;per share merger consideration
payable in the merger and (iv)&nbsp;the provisions of the merger
agreement that are intended to ensure that 25% of the
outstanding shares of Local common stock are converted into
shares of IBC common stock, approximately 2.27&nbsp;million
shares of IBC common stock will be issuable upon completion of
the merger. The actual total number of shares of IBC common
stock to be issued, as well as the actual
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">22
</FONT>

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<DIV align="left">
<FONT size="2">amount of cash to be paid, in the merger will
depend on the number of shares of Local common stock outstanding
at the time of the merger, the actual exchange ratio, and the
actual merger consideration payable in the merger.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC has filed with the Securities and Exchange
Commission, referred to as the SEC or as the Commission, a
registration statement on Form&nbsp;S-4 under the Securities Act
of 1933, as amended, for the registration of the IBC common
stock proposed to be issued in the merger transaction described
in this proxy statement-prospectus. This proxy
statement-prospectus was filed as part of such registration
statement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This proxy statement-prospectus does not contain
all of the information set forth in the registration statement,
as certain parts are permitted to be omitted by the rules and
regulations of the Commission. For further information
pertaining to IBC, the IBC common stock, and related matters,
reference is made to the registration statement, including the
exhibits filed as a part of the registration statement, which
may be obtained from the Commission&#146;s web site,
www.sec.gov, or which may be inspected at the Public Reference
Branch of the Commission referred to below.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Throughout this document, except as otherwise
specified, &#147;Local,&#148; &#147;we&#148; and &#147;our&#148;
refer to Local Financial Corporation, &#147;Local Oklahoma&#148;
refers to Local Oklahoma Bank, Local&#146;s banking subsidiary,
&#147;IBC&#148; refers to International Bancshares Corporation,
&#147;Acquisition Sub&#148; refers to LFC Acquisition Corp., an
indirect subsidiary of IBC, and &#147;IBC Bank&#148; refers to
International Bank of Commerce, a banking subsidiary of IBC.
Also, the merger between Acquisition Sub and Local is referred
to as the &#147;merger&#148; and the mergers between Local
Oklahoma and IBC Bank and between Local and IBC, each of which
will occur immediately following the merger, are together
referred to as the &#147;subsidiary mergers.&#148; The term
&#147;merger agreement&#148; in this proxy statement-prospectus
means the Agreement and Plan of Merger dated as of
January&nbsp;22, 2004, among International Bancshares
Corporation, LFC Acquisition Corp. and Local Financial
Corporation.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC is subject to the information requirements of
the Securities Exchange Act of 1934, as amended, and,
accordingly, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements
and other information which IBC files with the Commission can be
read and copied at the Commission&#146;s Public Reference Room
located at 450&nbsp;Fifth Street, N.W., Washington,&nbsp;D.C.
20549. The public may obtain information on the operation of the
Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission maintains an Internet site that
contains reports, proxy and information statements, and other
information regarding IBC and other issuers that file
electronically with the Commission. The Commission&#146;s home
page on the Internet is www.sec.gov. IBC also provides
information through its home page on the Internet at
www.ibc.com. Information on the Internet website of IBC or any
subsidiary of IBC is not part of this proxy
statement-prospectus, and you should not rely on that
information in deciding how to vote on the merger proposal
presented hereunder unless that information is also in this
proxy statement-prospectus or in a document that is incorporated
by reference into this proxy statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The approximate date on which this proxy
statement-prospectus and the accompanying form of proxy are
first sent or given to security holders is April&nbsp;16, 2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='133'></A>
</DIV>

<!-- link1 "ANNUAL MEETING" -->

<P align="center">
<B><FONT size="2">ANNUAL MEETING</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Who Votes.</FONT></I><FONT size="2"> If you
hold shares of Local common stock as of April&nbsp;5, 2004, you
may vote at the Annual Meeting. On April&nbsp;5, 2004, Local had
16,613,073&nbsp;shares of common stock outstanding. Each share
is entitled to one vote.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">HOW TO VOTE.</FONT></I><FONT size="2"> YOU CAN
VOTE IN ONE OF FOUR WAYS. YOU CAN VOTE BY MAIL,&nbsp;IN PERSON
AT THE MEETING, AT THE INTERNET ADDRESS INDICATED ON THE
ENCLOSED PROXY CARD OR BY USING THE TOLL-FREE TELEPHONE NUMBER
INDICATED ON THE ENCLOSED PROXY CARD.
</FONT>

<P align="center"><FONT size="2">23
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may vote by mail by completing and signing
the proxy card that accompanies this proxy statement-prospectus
and promptly mailing it in the enclosed envelope. We will vote
your shares according to your instructions. You can tell us to
vote for all, either or none of the nominees for director. You
can tell us to approve, disapprove or abstain from voting for
the merger agreement, the appointment of the independent
auditors and/or the proposal to adjourn the Annual Meeting, if
necessary, to permit further solicitation of proxies if there
are not sufficient votes at the time of the Annual Meeting to
constitute a quorum and/or approve the proposals presented at
the Annual Meeting. We have provided information about the
merger agreement and the proposed merger, director nominees, the
independent auditors and the adjournment proposal in the
following pages of this proxy statement-prospectus. If you
return a signed proxy card, but do not give any instructions,
the proxy will be voted &#147;FOR&#148; adoption of the merger
agreement, &#147;FOR&#148; the election of the nominees for
director described herein, &#147;FOR&#148; the ratification of
KPMG LLP as independent auditors for Local and &#147;FOR&#148;
the proposal to adjourn the Annual Meeting if necessary to
permit further solicitation of proxies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may vote in person. If you attend the Annual
Meeting, you may vote by delivering your completed proxy card in
person or you may vote by completing a ballot. Ballots will be
available at the meeting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may vote by logging on to the Internet
address indicated on your proxy card and following the
instructions at that site.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may vote using the toll-free telephone number
indicated on your proxy card and following the instructions
provided during the telephone call.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Voting Shares In &#147;Street Name.&#148;
</FONT></I><FONT size="2">If your shares are held in
&#147;street name,&#148; your bank or brokerage firm is the
record holder of your shares. We will send proxy materials to
the record holder and it will forward those materials to you. To
vote your shares, you must instruct your bank or brokerage firm
according to the directions it provides you. If you do not
instruct your bank or brokerage firm, it can vote your shares
with respect to certain &#147;discretionary&#148; items (such as
the election of directors, the ratification of the independent
auditors and the adjournment proposal) but cannot vote your
shares with respect to certain &#147;non-discretionary&#148;
items (such as the approval of the merger agreement and the
proposed merger). In the case of non-discretionary items, the
shares will be treated as &#147;broker non-votes,&#148; which
means they will be counted in determining a quorum but as a vote
against the non-discretionary item. Consequently, failure to
provide instructions to your bank or brokerage firm will have
the effect of a vote against the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If your shares are held in street name and you
wish to vote in person at the Annual Meeting, you will need to
obtain a proxy from your bank or brokerage firm.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Changing Your Proxy.</FONT></I><FONT size="2">
You can change or cancel your proxy at any time before we vote
your shares in any of three ways:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;By giving the Corporate Secretary a
    written notice stating that you are revoking your proxy;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;By giving a later signed proxy;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;By voting in person at the Annual
    Meeting (but only if you inform the Corporate Secretary before
    the voting begins that you want to cancel your proxy and vote in
    person).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Counting the Necessary
Votes.</FONT></I><FONT size="2"> The affirmative vote of the
holders of a majority of the outstanding shares of common stock
is required to approve the merger agreement and the proposed
merger. Directors are elected by a plurality of votes, which
means that the three director nominees (the number of positions
to be filled) receiving the highest number of votes will be
elected. A majority of the votes cast at the Annual Meeting is
required to ratify the independent auditors and the proposal to
adjourn the Annual Meeting, if necessary, to permit further
solicitation of proxies if there are not sufficient votes at the
time of the Annual Meeting to constitute a quorum and/or approve
the proposals presented at the Annual Meeting. If any incidental
business is transacted at the Annual Meeting, the incidental
business must receive a majority of the votes cast at the Annual
Meeting.
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The presence in person or by proxy of at least a
majority of the issued and outstanding shares of common stock
entitled to vote is necessary to constitute a quorum at the
Annual Meeting. Abstentions are counted as &#147;shares
present&#148; at the Annual Meeting for purposes of determining
whether a quorum exists. Abstentions and broker non-votes will
be counted for determining a quorum, provided that should you
abstain or fail to instruct to vote with respect to the merger
agreement and the proposed merger, the effect will be the same
as a vote against the merger agreement and the proposed merger.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Voting by Participants in the Local Employee
Stock Ownership Plan.</FONT></I><FONT size="2"> Local is sending
separate voting instruction forms to all plan participants who
hold Local common stock in their accounts under Local&#146;s
employee stock ownership plan. These forms instruct First
Bankers Trust, which acts as trustee for the Employee Stock
Ownership Plan, to vote these shares in accordance with
instructions from participants, or their beneficiaries, in the
case of deceased participants. For shares as to which no voting
instructions are received, the Employee Stock Ownership Plan
trustee will vote these shares as directed by a designated plan
fiduciary.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Participants may revoke their voting instructions
by executing and timely delivering to the Employee Stock
Ownership Plan trustee a duly executed form bearing a later date
or by giving advance notice to the Employee Stock Ownership Plan
trustee at:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="18%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">First Bankers Trust
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">P.O. Box&nbsp;3566
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Quincy,&nbsp;Illinois 62305-9988
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Attention: Linda Schultz
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the Employee Stock Ownership
Plan, only the Employee Stock Ownership Plan trustee can vote
the shares held under the Employee Stock Ownership Plan, even if
a participant or his or her beneficiaries attend the Annual
Meeting in person.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local has instructed the Employee Stock Ownership
Plan trustee to keep voting directions confidential and not to
reveal participants&#146; votes to Local or to IBC, except for
aggregate voting totals for participants.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Confidentiality of
Voting.</FONT></I><FONT size="2"> We will keep your vote
confidential. Your vote will be known only to the inspector of
election and others involved in the tabulation. The inspector
will not disclose your vote to the directors or the executive
officers. We will not disclose your vote unless (i)&nbsp;we are
required to do so by law (including in connection with the
pursuit or defense of a legal or administrative action or
proceeding), or (ii)&nbsp;there is a contested election for the
board of directors. The inspector of elections will forward any
written comments that you make on the proxy card to management
without providing your name, unless you expressly request
disclosure on your proxy.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Incidental Business.</FONT></I><FONT size="2">
Proxies customarily ask for authority to transact other business
that may come before the Annual Meeting. Much of this business
is procedural, such as a vote on adjournment. Except for the
proposal to approve the merger agreement, the election of
directors, ratification of the independent auditors and to
adjourn the Annual Meeting to further solicit proxies if there
are not sufficient votes at the time of the annual meeting to
constitute a quorum and/or approve the proposals presented at
the Annual Meeting, we do not know of any substantive business
to be presented or acted upon at the Annual Meeting. Under our
Bylaws, no substantive business besides that stated in the
meeting notice may be transacted at any meeting of stockholders.
If any matter is presented at the Annual Meeting on which a vote
may properly be taken, the designated proxies will vote your
shares as they think best unless you otherwise direct.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Solicitation of
Proxies.</FONT></I><FONT size="2"> Local will pay for the costs
of mailing this document to its stockholders, as well as all
other costs incurred by it in connection with the solicitation
of proxies from its stockholders on behalf of its board of
directors. In addition to solicitation by mail, the directors,
officers and employees of Local and its subsidiaries may solicit
proxies from stockholders of Local in person or by telephone,
telegram, facsimile or other electronic method without
compensation other than reimbursement for their actual expenses.
</FONT>

<P align="center"><FONT size="2">25
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Arrangements also will be made with brokerage
firms and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of
stock held of record by such person, and Local will reimburse
such custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses in connection therewith.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local has retained D.F. King&nbsp;&#38; Co., a
professional proxy solicitation firm, to assist in the
solicitation of proxies. The fee payable to D.F. King&nbsp;&#38;
Co. in connection with the merger is $5,000, plus reimbursement
for reasonable out-of pocket expenses.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

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<DIV align="left">
<A name='134'></A>
</DIV>

<!-- link1 "THE MERGER (Proposal One)" -->

<P align="center">
<B><FONT size="2">THE MERGER</FONT></B>

<DIV align="center">
<B><FONT size="2">(Proposal One)</FONT></B>
</DIV>

<DIV align="left">
<A name='135'></A>
</DIV>

<!-- link1 "General" -->

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms and conditions set forth in the
merger agreement, Acquisition Sub will be merged with and into
Local. Local will be the surviving corporation at the effective
time of the merger. Pursuant to the terms of the merger
agreement, each share of common stock of Local outstanding at
the effective time of the merger (other than dissenting shares)
will be converted into the right to receive either:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a number of shares of IBC common stock equal to
    $22.00 (subject to upward adjustment as further described
    herein) divided by the IBC common stock value (determined as set
    forth herein);&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$22.00 (subject to upward adjustment as further
    described herein) in cash.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local stockholders will have the opportunity to
elect to receive IBC common stock, cash or a combination of IBC
common stock and cash for shares of Local common stock held by
them, but all elections will be subject to certain allocation
procedures. The allocation procedures are intended to ensure
that 25% of the outstanding shares of Local common stock will be
converted into the right to receive IBC common stock and 75% of
the outstanding shares of Local common stock will be converted
into the right to receive cash. The number of whole shares of
IBC common stock that Local stockholders receive will be
determined by dividing $22.00 by the average closing price of
the IBC common stock during the 10&nbsp;trading-day period
beginning 15 business days before the effective time of the
merger. For purposes of determining the number of shares of IBC
common stock to be received by Local stockholders, the merger
agreement provides that the IBC common stock value cannot be
less than $36.80 or more than $44.80, each as adjusted for the
IBC stock dividend. Fractional shares of IBC common stock will
not be issued. Instead, a cash amount equal to the IBC common
stock value multiplied by the fractional share interest to be
received will be paid.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='136'></A>
</DIV>

<!-- link1 "Background of the Merger" -->

<P align="left">
<B><FONT size="2">Background of the Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of its continuing efforts to enhance
Local&#146;s banking franchise and maximize stockholder value,
Local&#146;s management and board of directors have regularly
considered various strategic alternatives, including continuing
as an independent institution, growing internally and entering
into a strategic merger with another institution. Local&#146;s
board of directors also has periodically reviewed the
competitive environment in its market area and the merger and
consolidation activity in the financial services industry in
general.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s board of directors had requested
that management continue to seek out opportunities that would
enhance shareholder value, including the possible sale of Local.
In recent years, Local&#146;s stock has sold at a price earnings
multiple usually no higher than 10 based on trailing
twelve-months earnings, except for a brief period in 2002 when
it rose to 12. This was consistently lower than multiples of
peer banks in Oklahoma. Since 2001, Edward Townsend,
Local&#146;s chief executive officer, had held informal
discussions with several institutions regarding the potential
business combination of Local with such institutions, including
an in-market combination, as well as with other institutions
known to be interested in expanding into Local&#146;s market
area. In addition, Mr.&nbsp;Townsend requested two investment
banking firms other than Sandler O&#146;Neill to conduct
discreet inquiries in an effort to ascertain whether any
out-of-state financial institutions had an interest in the
Oklahoma market. Although several companies expressed an
interest, the level of interest did not result in any
negotiations. IBC was not one of the institutions with which
Mr.&nbsp;Townsend held discussions during this time.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The rapid decline in interest rates that started
in 2001 and began to stabilize at historically unprecedented low
levels at the beginning of 2002 put pressure on interest rate
margins of Local. The prospects to obtain management&#146;s and
the board of directors&#146; goal for double-digit annual
increases in earnings per share were becoming less likely and
the growth of Local Oklahoma resulting from increased deposit
and loan market share was slowing. In August 2003, Sandler
O&#146;Neill introduced Mr.&nbsp;Townsend to
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">27
</FONT>

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<DIV align="left">
<FONT size="2">Dennis Nixon, president and chief executive
officer of IBC. Mr.&nbsp;Townsend and Mr.&nbsp;Nixon engaged in
informal discussions regarding their respective companies,
including the possibility of a business combination of Local and
IBC. On August&nbsp;25, 2003, representatives of Sandler
O&#146;Neill attended a meeting with Mr.&nbsp;Nixon and other
IBC officers in San&nbsp;Antonio, Texas to discuss the strategic
rationale for a potential acquisition of Local by IBC. As a
result of this meeting,&nbsp;IBC indicated that it would like to
perform a due diligence review of Local and IBC and Local
entered into a confidentiality agreement dated
September&nbsp;22, 2003. During September 2003,
Mr.&nbsp;Townsend held further discussions with contacts at
other financial institutions regarding a possible business
combination. On September&nbsp;30, 2003, a meeting was held with
Local&#146;s board of directors to update them on the status of
Mr.&nbsp;Townsend&#146;s various discussions.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By letter dated October&nbsp;8, 2003, Local
formally retained Sandler O&#146;Neill as its financial advisor
in connection with the possible sale of Local. In connection
with its regular meeting on October&nbsp;22, 2003, Local&#146;s
board of directors informally reviewed and discussed IBC&#146;s
indication of interest. With Local&#146;s authorization, on
October&nbsp;24, 2003, representatives of Sandler O&#146;Neill
met with Mr.&nbsp;Nixon to review various financial models
illustrating the pro forma effect of a merger of Local and IBC.
From October to early December 2003,&nbsp;IBC conducted on-site
due diligence visits to Local and held several meetings with
Local&#146;s management.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the engagement of Sandler O&#146;Neill,
a different investment banker introduced another company that
had expressed an interest in a possible transaction with Local.
Mr.&nbsp;Townsend then held a series of meetings with the chief
executive officer of such other company to discuss a possible
business combination between the two companies. On five
occasions during October, November and December 2003,
representatives from the other company met with various members
of Local&#146;s management to discuss how a merger might be
accomplished, and the probable effect such a merger might have
on each institution. The other company&#146;s initial price
discussion was below the price discussion with IBC as the other
company indicated that Local was only one of two opportunities
it was exploring.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On November&nbsp;6, 2003, Sandler O&#146;Neill
met with the chief executive officer of the other company to
determine the seriousness of its interest in a transaction with
Local. Based on that meeting and consistent with Local&#146;s
policy of investigating various strategic alternatives, Local
agreed that discussions with the other company should continue.
Accordingly, a confidentiality agreement with the other company
was entered into on November&nbsp;7, 2003. Based on the other
company&#146;s expression of interest, on December&nbsp;9, 2003,
representatives of Sandler O&#146;Neill and representatives of
the other investment bank met with Mr.&nbsp;Townsend and Richard
L. Park, Local&#146;s chief financial officer, to discuss the
other company&#146;s interest in a possible business combination
with Local.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;11, 2003, representatives of
Local and IBC met to discuss the two institutions&#146; business
philosophies and corporate cultures, and the competitive and
strategic advantages that might result from a merger of the two
institutions. At a regular meeting of Local&#146;s board of
directors on December&nbsp;17, 2003, Mr.&nbsp;Townsend informed
the board of directors of the status of discussions with both
IBC and the other company. On December&nbsp;20, 2003,&nbsp;IBC
submitted a written proposal to Sandler O&#146;Neill stating
IBC&#146;s interest in pursuing a business combination with
Local. Pursuant to IBC&#146;s written proposal,&nbsp;IBC offered
to acquire Local at a purchase price of $22.00&nbsp;per share
for Local&#146;s outstanding common stock. Further meetings
between representatives of Local and IBC were held on
December&nbsp;24 and&nbsp;29, 2003 to discuss the possible
merger of the two companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;10, 2003, Mr.&nbsp;Townsend met
with the chief executive officer and other officers of the other
company to discuss their interest in pursuing a possible merger.
After several subsequent phone calls, the other company
indicated its renewed interest in a possible merger and
requested that it be permitted to perform a due diligence review
of Local. On January&nbsp;7, 2004, representatives of the other
company commenced its on-site due diligence review of Local. The
other company indicated that it could not specify its offer
price until it had completed its due diligence review of Local.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s board of directors met on
January&nbsp;7, 2004 to consider the status of the negotiations
with IBC and the other company. During this meeting,
Local&#146;s board of directors reviewed information regarding a
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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<DIV align="left">
<FONT size="2">possible combination with each of IBC and the
other company. Representatives of Sandler O&#146;Neill attended
the meeting and representatives of Patton Boggs LLP,
Local&#146;s special counsel, briefed Local&#146;s board of
directors on the negotiations of the merger and related matters.
Local&#146;s board of directors instructed Mr.&nbsp;Townsend to
continue discussions with the other company and any other
parties that might show an interest, prior to signing any
definitive agreement with IBC.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;8, 2004,&nbsp;IBC provided Local
with a draft of the merger agreement. Over the course of the
next several days IBC, Local, the legal advisors for IBC and
Local and the financial advisor for Local negotiated the terms
of the merger agreement. During this time, the other company
also delivered a draft of a merger agreement to Local and its
legal counsel. Concurrent with Local&#146;s negotiations with
IBC, Local and its advisors negotiated the terms of the merger
agreement delivered by the other company with the other company
and its legal advisors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following Local&#146;s January&nbsp;7, 2004 board
of directors&#146; meeting,&nbsp;IBC and Local continued to
negotiate the terms of the definitive merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;17, 2004, Mr.&nbsp;Townsend
informed the chief executive officer of the other company that
in order to be considered by Local&#146;s board of directors,
the other company needed to meet the $22.00&nbsp;per share price
offered by IBC and provide price decline protection. The chief
executive officer of the other company indicated that it would
not be able to meet that offer price and provide the price
protection.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;21, 2004, Local&#146;s board of
directors held a meeting at which representatives of Sandler
O&#146;Neill made a presentation on the fairness of the merger
with IBC from a financial point of view. After the presentation,
Sandler O&#146;Neill delivered its oral opinion (later confirmed
in writing) that, as of the date of the opinion, and based on
and subject to the assumptions, qualifications and limitations
set forth in its opinion, the consideration to be paid by IBC to
the stockholders of Local in the merger was fair, from a
financial point of view, to stockholders of Local. The next day,
January&nbsp;22, 2004, Local&#146;s board of directors
reconvened to evaluate the merger agreement with IBC. Patton
Boggs LLP described to the Local board of directors the terms of
the merger agreement and other legal considerations and
responded to questions from directors. Following deliberations,
and after discussion with its financial and legal advisors,
Local&#146;s board of directors unanimously approved the merger
agreement and the transactions contemplated thereby and resolved
to recommend that its stockholders vote to approve the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;21, 2004, the IBC board of
directors unanimously approved the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Late on January&nbsp;22, 2004, following the
meeting of the Local board of directors, Mr.&nbsp;Nixon and
Mr.&nbsp;Townsend signed the merger agreement on behalf of IBC
and Local. That evening,&nbsp;IBC and Local issued a joint press
release announcing the merger.
</FONT>

<DIV align="left">
<A name='137'></A>
</DIV>

<!-- link1 "Reasons of Local for the Merger" -->

<P align="left">
<B><FONT size="2">Reasons of Local for the Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of the merger agreement, including the
consideration to be paid to Local stockholders, were the result
of arms length negotiations. The Local board consulted with
management as well as financial and legal advisors and
determined that the merger is in the best interests of Local and
its stockholders. In reaching its conclusion to approve the
merger agreement, the Local board considered a number of
factors, including the following:
</FONT>
<P>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the value to be received by holders of Local
    common stock pursuant to the merger agreement in relation to the
    historical trading prices of Local common stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the Local board&#146;s knowledge of Local&#146;s
    business, operations, financial condition, earnings, asset
    quality and prospects;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the historical stock price performance and
    liquidity of both Local and IBC common stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the potential for IBC stock price appreciation;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">29
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the financial and growth prospects for Local and
    its stockholders of a business combination with IBC as compared
    to continuing to operate as a stand-alone entity and the
    associated business risks, including seeking growth through
    strategic acquisition of one or more smaller financial
    institutions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the information presented by Sandler O&#146;Neill
    to the Local board with respect to the merger and the opinion of
    Sandler O&#146;Neill that, as of the date of that opinion, the
    merger consideration was fair to the holders of Local common
    stock from a financial point of view (see
    &#147;&#151;&nbsp;Opinion of Local&#146;s Financial
    Advisor&#148; beginning on page&nbsp;31 of this proxy
    statement-prospectus);
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the benefits to Local and its customers of
    operating as part of a larger organization, including
    enhancements in products and services, higher lending limits,
    and greater financial resources;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the similar community banking cultures and
    business philosophies of the two companies, particularly with
    respect to customer service, efficiency, credit quality and
    meeting local banking needs;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the current and prospective economic and
    competitive environment facing the financial services industry
    generally, and Local in particular, including the continued
    rapid consolidation in the financial services industry and the
    competitive effects of the increased consolidation on smaller
    financial institutions such as Local;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the increasing importance of operational scale
    and financial resources in maintaining efficiency and remaining
    competitive over the long term and in being able to capitalize
    on technological developments which significantly impact
    industry competitive conditions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the expected impact of the merger on the
    constituencies served by Local, including its customers,
    employees and communities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the employee and severance benefits to be
    provided to Local employees and career opportunities in a larger
    organization;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the experience of the management of IBC in
    successfully integrating its acquired financial institutions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the likelihood that IBC would obtain all
    regulatory approvals required for the merger;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the Local board&#146;s observation that, while
    the merger agreement prohibits Local from seeking alternative
    transactions, it permits Local to consider and react
    appropriately to alternative acquisition proposals made on an
    unsolicited basis and permits the board to comply with its
    fiduciary duties if Local receives a superior acquisition
    proposal.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the course of its deliberations regarding the
merger, the Local board also considered the following
information that the Local board determined did not outweigh the
benefits to Local and its stockholders expected to be generated
by the merger:
</FONT>
<P>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that the directors and officers of Local have
    interests in the merger different from, or in addition to, their
    interests generally as Local stockholders (see
    &#147;&#151;&nbsp;Additional Interests of Local Management&#148;
    beginning on page&nbsp;40 of this proxy statement-prospectus);
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the risks associated with possible delays in
    obtaining necessary regulatory and stockholders approvals and
    the terms of such regulatory approvals;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the challenges of integrating the businesses,
    customers and personnel of a regional community-based bank like
    Local with a another regional community-based financial
    institution like IBC and the possible impact on Local&#146;s
    businesses, customers and personnel; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effect of the $12.0&nbsp;million termination
    fee in favor of IBC, including the risk that the termination fee
    might discourage third parties from offering to acquire Local by
    increasing the cost of a third party acquisition, and
    recognizing that the termination fee was a condition to
    IBC&#146;s willingness to enter into the merger agreement.
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The foregoing discussion of the information
considered by the Local board is not intended to be exhaustive
but includes all of the material factors considered by the Local
board. In the course of its deliberations with respect to the
merger, the Local board discussed the anticipated impact of the
merger on Local, its stockholders, and its various other
constituencies, and determined that the benefits to Local and
its constituencies expected to result from the merger would
likely outweigh any disadvantages identified during the
board&#146;s deliberations. In reaching its determination to
approve and recommend the merger, the Local board did not assign
any relative or specific weights to the factors considered in
reaching that determination, and individual directors may have
given differing weights to different factors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Local board unanimously recommends that
Local stockholders vote &#147;FOR&#148; the adoption of the
merger agreement and thereby authorize the merger.</FONT></B>

<DIV align="left">
<A name='138'></A>
</DIV>

<!-- link1 "Reasons of IBC for the Merger" -->

<P align="left">
<B><FONT size="2">Reasons of IBC for the Merger</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger will enable IBC to enter into the
commercial and retail banking markets in the state of Oklahoma
and is consistent with IBC&#146;s strategy of pursuing
acquisitions to increase its presence along the
NAFTA&nbsp;&#151; IH 35 corridor. Local Oklahoma Bank is the
fourth largest Oklahoma-based bank. Local is headquartered in
Oklahoma, with 52 banking locations in the state of Oklahoma.
Local and IBC have similar approaches to community banking,
emphasizing customer service, local decision-making and
community involvement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In approving the proposed merger, the IBC board
considered, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the increase in the number of locations from
    which to offer financial products and services to the combined
    customer bases of IBC and Local;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the ability of the combined company to offer a
    broader array of products and services to Local&#146;s customers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the complementary strengths of the two
    organizations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC management&#146;s prior record of
    successfully integrating acquired financial institutions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the merger consideration relative to various
    share valuations for Local common stock such as price and book
    value per share and earnings per share;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the formula to be used to determine the amount of
    cash and the number of shares of IBC common stock to be issued
    in the merger; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">information concerning the financial condition
    and results of operations of Local and the projected results and
    prospects of the combined company.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='139'></A>
</DIV>

<!-- link1 "Opinion of Local&#146;s Financial Advisor" -->

<P align="left">
<B><FONT size="2">Opinion of Local&#146;s Financial
Advisor</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By letter dated October&nbsp;8, 2003, Local
retained Sandler O&#146;Neill to act as its financial advisor in
connection with a possible business combination with another
financial institution. Sandler O&#146;Neill is a
nationally-recognized investment banking firm whose principal
business specialty is financial institutions. In the ordinary
course of its investment banking business, Sandler O&#146;Neill
is regularly engaged in the valuation of financial institutions
and their securities in connection with mergers and acquisitions
and other corporate transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill acted as financial advisor
to Local in connection with the proposed merger and participated
in certain of the negotiations leading to the merger agreement.
At the January&nbsp;22, 2004 meeting at which Local&#146;s board
of directors considered and approved the merger agreement,
Sandler O&#146;Neill delivered to Local&#146;s board of
directors its oral opinion, subsequently confirmed in writing,
that, as of such date, the merger consideration was fair to
Local&#146;s stockholders from a financial point of view.
Sandler O&#146;Neill has confirmed its January&nbsp;22, 2004
opinion by delivering to Local&#146;s board of directors a
written opinion that bears the same date as this proxy
statement-prospectus. In rendering its updated opinion, Sandler
O&#146;Neill confirmed the appropriateness of its reliance on
the analyses used to render its
</FONT>

<P align="center"><FONT size="2">31
</FONT>

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<DIV align="left">
<FONT size="2">earlier opinion by reviewing the assumptions upon
which its analyses were based, performing procedures to update
certain of its analyses and reviewing the other factors
considered in rendering its opinion. <B>The full text of Sandler
O&#146;Neill&#146;s updated opinion is attached as APPENDIX B to
this proxy statement-prospectus. The opinion outlines the
procedures followed, assumptions made, matters considered and
qualifications and limitations on the review undertaken by
Sandler O&#146;Neill in rendering its opinion. The description
of the opinion set forth below is qualified in its entirety by
reference to the opinion. We urge you to read the entire opinion
carefully in connection with your consideration of the proposed
merger.</B>
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill&#146;s opinion speaks only
as of the date of the opinion. The opinion was directed to the
Local board of directors and is directed only to the fairness of
the merger consideration to Local stockholders from a financial
point of view. It does not address the underlying business
decision of Local to engage in the merger or any other aspect of
the merger and is not a recommendation to any Local stockholders
as to how such stockholder should vote at the Annual Meeting
with respect to the merger, the form of consideration a
shareholder should elect in the merger or any other matter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with rendering its January&nbsp;22,
2004 opinion, Sandler O&#146;Neill reviewed and considered,
among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the merger agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain publicly-available financial statements
    and other historical financial information of Local that Sandler
    O&#146;Neill deemed relevant;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain publicly-available financial statements
    and other historical financial information of IBC that Sandler
    O&#146;Neill deemed relevant;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">internal financial projections for Local for the
    years ending December&nbsp;31, 2004 and 2005 reviewed with
    management of Local;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">internal financial projections (in the form of
    operating budgets) for IBC for the year ending December&nbsp;31,
    2004 reviewed with management of IBC;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">earnings per share estimated for Local and IBC
    for the year ending December&nbsp;31, 2004 published by I/B/E/S;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the pro forma financial impact of the merger on
    IBC, based on assumptions relating to transaction expenses,
    purchase accounting adjustments and cost savings determined by
    senior managements of Local and IBC;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the publicly-reported historical price and
    trading activity for Local&#146;s and IBC&#146;s common stock,
    including a comparison of certain financial and stock market
    information for Local and IBC with similar publicly- available
    information for certain other companies the securities of which
    are publicly traded
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the financial terms of certain recent business
    combinations in the commercial banking industry, to the extent
    publicly available;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the current market environment generally and the
    banking environment in particular;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such other information, financial studies,
    analyses and investigations and financial, economic and market
    criteria as Sandler O&#146;Neill considered relevant.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill also discussed with certain
members of Local&#146;s senior management the business,
financial condition, results of operations and prospects of
Local and held similar discussions with certain members of
IBC&#146;s senior management regarding the business, financial
condition, results of operations and prospects of IBC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In performing its reviews and analyses and in
rendering its opinion, Sandler O&#146;Neill assumed and relied
upon the accuracy and completeness of all the financial
information, analyses and other information that was publicly
available or otherwise furnished to, reviewed by or discussed
with it and further relied on
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<DIV align="left">
<FONT size="2">the assurances of management of Local that they
were not aware of any facts or circumstances that would make
such information inaccurate or misleading. Sandler O&#146;Neill
was not asked to and did not independently verify the accuracy
or completeness of any of such information and they did not
assume any responsibility or liability for the accuracy or
completeness of any of such information. Sandler O&#146;Neill
did not make an independent evaluation or appraisal of the
assets, the collateral securing assets or the liabilities,
contingent or otherwise, of Local or IBC or any of their
respective subsidiaries, or the collectibility of any such
assets, nor was it furnished with any such evaluations or
appraisals. Sandler O&#146;Neill is not an expert in the
evaluation of allowances for loan losses and it did not make an
independent evaluation of the adequacy of the allowance for loan
losses of Local or IBC, nor did it review any individual credit
files relating to Local or IBC. With Local&#146;s consent,
Sandler O&#146;Neill assumed that the respective allowances for
loan losses for both Local and IBC were adequate to cover such
losses and would be adequate on a pro forma basis for the
combined entity. In addition, Sandler O&#146;Neill did not
conduct any physical inspection of the properties or facilities
of Local or IBC. Sandler O&#146;Neill&#146;s opinion was
necessarily based upon market, economic and other conditions as
they existed on, and could be evaluated as of, the date of its
opinion. Sandler O&#146;Neill assumed, in all respects material
to its analyses, that all of the representations and warranties
contained in the merger agreement and all related agreements
were true and correct; that each party to such agreements would
perform all of the covenants required to be performed by such
party under such agreements; and that the conditions precedent
in the merger agreement were not waived. Sandler O&#146;Neill
also assumed, with Local&#146;s consent, that there had been no
material change in Local&#146;s and IBC&#146;s assets, financial
condition, results of operations, business or prospects since
the date of the last financial statements made available to them
and that Local and IBC would remain as going concerns for all
periods relevant to its analyses. Finally, with Local&#146;s
consent, Sandler O&#146;Neill relied upon the advice Local
received from its legal, accounting and tax advisors as to all
legal, accounting and tax matters relating to the merger and the
other transactions contemplated by the merger agreement.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In rendering its January&nbsp;22, 2004, opinion,
Sandler O&#146;Neill performed a variety of financial analyses.
The following is a summary of the material analyses performed by
Sandler O&#146;Neill, but is not a complete description of all
the analyses underlying Sandler O&#146;Neill&#146;s opinion.
<B>The financial information in Sandler O&#146;Neill&#146;s
analyses has not been adjusted to reflect the 25% stock dividend
that IBC has declared to be paid to IBC stockholders of record
on May&nbsp;3, 2004.</B> The summary includes information
presented in tabular format. <B>In order to fully understand the
financial analyses, these tables must be read together with the
accompanying text. The tables alone do not constitute a complete
description of the financial analyses.</B> The preparation of a
fairness opinion is a complex process involving subjective
judgments as to the most appropriate and relevant methods of
financial analysis and the application of those methods to the
particular circumstances. The process, therefore, is not
necessarily susceptible to a partial analysis or summary
description. Sandler O&#146;Neill believes that its analyses
must be considered as a whole and that selecting portions of the
factors and analyses without considering all factors and
analyses, or attempting to ascribe relative weights to some or
all such factors and analyses, could create an incomplete view
of the evaluation process underlying its opinion. Also, no
company included in Sandler O&#146;Neill&#146;s comparative
analyses described below is identical to Local or IBC and no
transaction is identical to the merger. Accordingly, an analysis
of comparable companies or transactions involves complex
considerations and judgments concerning differences in financial
and operating characteristics of the companies and other factors
that could affect the public trading values or merger
transaction values, as the case may be, of Local or IBC and the
companies to which they are being compared.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The earnings projections used and relied upon by
Sandler O&#146;Neill for Local and IBC in its analyses were
based upon internal financial projections for the respective
companies prepared and furnished by the managements of Local and
IBC. With respect to such financial projections and all
projections of transaction costs, purchase accounting
adjustments and expected cost savings relating to the merger,
Local&#146;s and IBC&#146;s managements confirmed to Sandler
O&#146;Neill that they reflected the best currently-available
estimates and judgments of such managements of the future
financial performance of Local and IBC, respectively, and
Sandler O&#146;Neill assumed for purposes of its analyses that
such performances would be achieved. Sandler O&#146;Neill
expressed no opinion as to such financial projections or the
assumptions on
</FONT>

<P align="center"><FONT size="2">33
</FONT>
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<DIV align="left">
<FONT size="2">which they were based. The financial projections
for Local and IBC were prepared for internal purposes only and
not with a view towards public disclosure. These projections, as
well as the other estimates used by Sandler O&#146;Neill in its
analyses, were based on numerous variables and assumptions which
are inherently uncertain and, accordingly, actual results could
vary materially from those set forth in such projections.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In performing its analyses, Sandler O&#146;Neill
also made numerous assumptions with respect to industry
performance, business and economic conditions and various other
matters, many of which cannot be predicted and are beyond the
control of Local,&nbsp;IBC and Sandler O&#146;Neill. The
analyses performed by Sandler O&#146;Neill are not necessarily
indicative of actual values or future results, which may be
significantly more or less favorable than suggested by such
analyses. Sandler O&#146;Neill prepared its analyses solely for
purposes of rendering its opinion and provided such analyses to
the Local board of directors at the January&nbsp;22, 2004 board
meeting of Local. Estimates on the values of companies do not
purport to be appraisals or necessarily reflect the prices at
which companies or their securities may actually be sold. Such
estimates are inherently subject to uncertainty and actual
values may be materially different. Accordingly, Sandler
O&#146;Neill&#146;s analyses do not necessarily reflect the
value of Local&#146;s common stock or IBC&#146;s common stock or
the prices at which Local&#146;s or IBC&#146;s common stock may
be sold at any time.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Summary of Proposal.</FONT></I><FONT size="2">
Sandler O&#146;Neill reviewed the financial terms of the
proposed transaction. Based upon the closing price of the shares
of IBC&#146;s common stock on January&nbsp;21, 2004 and assuming
25% of Local&#146;s shares are converted into IBC common stock
and the remaining 75% are converted into cash in the merger,
Sandler O&#146;Neill calculated an implied transaction value of
$22.00&nbsp;per share. Based upon Local&#146;s
September&nbsp;30, 2003 financial information, Sandler
O&#146;Neill calculated the following ratios:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2">Transaction Ratios</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="87%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deal Price/ LTM September earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deal Price/ LTM December earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deal Price/ 2004 estimated earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deal Price/ Stated book value per share(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">215.60</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deal Price/ Tangible book value per share(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">243.70</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tangible book premium/ Core deposits(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For purposes of this calculation, Sandler
    O&#146;Neill used the number of shares of Local common stock
    outstanding of 16,536,773 as of December&nbsp;31, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Assumes Local&#146;s total core deposits are
    $1.62&nbsp;billion.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of Sandler O&#146;Neill&#146;s
analyses, earnings per share were based on fully diluted
earnings per share. The aggregate transaction value was
approximately $385&nbsp;million, based upon
16,536,773&nbsp;shares of Local common stock outstanding plus
the intrinsic value of outstanding options to purchase an
aggregate of 1,755,490&nbsp;shares of Local common stock with a
weighted average exercise price of $10.09 (based upon Local
management&#146;s calculations). Sandler O&#146;Neill noted that
the transaction value represented a discount of 4.56% to the
January&nbsp;21, 2004 closing price of Local&#146;s common stock
of $23.05.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock Trading
History.</FONT></I><FONT size="2"> Sandler O&#146;Neill reviewed
the history of the reported trading prices and volume of
Local&#146;s common stock and IBC&#146;s common stock and the
relationship between the movements in the prices of Local&#146;s
common stock and IBC&#146;s common stock, respectively, to
movements in certain stock indices, including the
Standard&nbsp;&#38; Poor&#146;s 500 Index, Standard&nbsp;&#38;
Poor&#146;s Bank Index, the Nasdaq Bank Index and the median
performance of composite peer groups of publicly traded
commercial banks selected by Sandler O&#146;Neill for Local and
IBC. During the one-year period ended January&nbsp;21, 2004,
each of Local&#146;s and IBC&#146;s common stock out-performed
all indices to which it was compared.
</FONT>

<P align="center"><FONT size="2">34
</FONT>
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<P align="center">
<B><FONT size="2">Local&#146;s and IBC&#146;s One-Year Stock
Performance</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beginning Index Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ending Index Value</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;21, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;21, 2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Local
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">142.64</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peer Group(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">129.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nasdaq Bank Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">S&#38;P Bank Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">S&#38;P 500 Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">128.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beginning Index Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ending Index Value</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;21, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;21, 2004</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">169.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peer Group(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nasdaq Bank Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">130.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">S&#38;P Bank Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">S&#38;P 500 Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">129.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The peer group used in this analysis is the Local
    Peer Group of commercial banks described below under
    &#147;Comparable Company Analysis.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The peer group used in this analysis is the IBC
    Peer Group of commercial banks described below under
    &#147;Comparable Company Analysis.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Comparable Company
Analysis.</FONT></I><FONT size="2"> Sandler O&#146;Neill used
publicly-available information to compare selected financial and
market trading information for Local and IBC to two groups of
financial institutions selected by Sandler O&#146;Neill for each
of Local and IBC, respectively. The first group selected by
Sandler O&#146;Neill for Local is a regional group of commercial
banks located in markets in states in the southeastern and
southwestern United States with slow growth characteristics
similar to those found in Oklahoma. The Local Peer Group
consisted of the following publicly-traded commercial banks:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">BancFirst Corporation<BR>
    First M&nbsp;&#38; F Corporation<BR>
    Gold Banc Corporation,&nbsp;Inc.<BR>
    Hancock Holding Company<BR>
    IBERIABANK Corporation<BR>
    NBC Capital Corporation
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Peoples Holding Company<BR>
    Simmons First National Corporation<BR>
    Southwest Bancorp,&nbsp;Inc.<BR>
    Trustmark Corporation<BR>
    Whitney Holding Corporation
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill also used publicly-available
information to compare selected financial and market trading
information for Local to a group of publicly-traded commercial
banks that had a return on average equity (based on earnings for
the twelve months ended September&nbsp;30, 2003) greater than
15% and a price-to-tangible book value greater than 199%. This
second group, or Local High-Performing Group, consisted of the
following publicly-traded commercial banks:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Alabama National BanCorporation<BR>
    Cathay General Bancorp,&nbsp;Inc.<BR>
    Central Pacific Financial Corp.<BR>
    CVB Financial Corp.<BR>
    East West Bancorp,&nbsp;Inc.<BR>
    Frontier Financial Corporation<BR>
    Glacier Bancorp,&nbsp;Inc.<BR>
    Harleysville National Corporation<BR>
    Independent Bank Corporation (MI)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Independent Bank Corp. (MA)<BR>
    National Penn Bancshares,&nbsp;Inc.<BR>
    NBT Bancorp Inc.<BR>
    Republic Bancorp,&nbsp;Inc.<BR>
    S&#38;T Bancorp,&nbsp;Inc.<BR>
    Sandy Spring Bancorp,&nbsp;Inc.<BR>
    Sterling Bancshares,&nbsp;Inc.<BR>
    Texas Regional Bancshares,&nbsp;Inc.<BR>
    U.S.B. Holding Co.,&nbsp;Inc.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The analysis compared publicly-available
financial information for Local and the median data for the
Local Peer Group and the Local High Performing Group as of or
for the twelve-month period ended
</FONT>

<P align="center"><FONT size="2">35
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">September&nbsp;30, 2003. The table below sets
forth the comparative data as of or for the twelve-month period
ended September&nbsp;30, 2003, with pricing data as of
January&nbsp;21, 2004.
</FONT>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Comparable Group Analysis</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Local High</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Performing</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Local(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Local Peer Group</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Group(2)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets <I>(in thousands)</I>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,940,697</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,082,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,923,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tangible equity/tangible assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.11</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.77</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.59</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible assets/total equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loans/total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross loans/total deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total borrowings/total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-Performing Assets/ total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loan loss reserve/gross loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest margin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest income/average assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest expense/average assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Efficiency ratio
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on average assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on average equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/stated book value per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">201.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/tangible book value per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">312.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/ LTM earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.78</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/ LTM Core earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.87</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.41</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.93</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/2003 Estimated EPS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.59</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.96</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.22</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/2004 Estimated EPS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.48</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.33</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend payout ratio
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30.36</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.22</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend yield
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.70</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.95</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For these calculations Sandler O&#146;Neill
    relied on data provided by a recognized third party vendor, SNL
    Financial. This data is not materially different from data
    reported publicly by Local.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The data for certain of these commercial banks
    was as of or for the period ending December&nbsp;31, 2003.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill used publicly-available
information to compare selected financial and market trading
information for IBC to a group of commercial banks selected by
Sandler O&#146;Neill and located in the state of Texas. This
first group, or the IBC Peer Group, consisted of the following
publicly-traded commercial banks:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Cullen/ Frost Bankers,&nbsp;Inc.<BR>
    First Financial Bankshares,&nbsp;Inc.<BR>
    Prosperity Bancshares,&nbsp;Inc.<BR>
    Southside Bancshares,&nbsp;Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Southwest Bancorporation of Texas,&nbsp;Inc.<BR>
    Sterling Bancshares,&nbsp;Inc.<BR>
    Texas Capital Bancshares,&nbsp;Inc.<BR>
    Texas Regional Bancshares,&nbsp;Inc.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill also used publicly-available
information to compare selected financial and market trading
information for IBC to a group of publicly-traded commercial
banks that had a return on average equity (based on earnings for
the twelve months ended September&nbsp;30, 2003) greater than
12% and a
</FONT>

<P align="center"><FONT size="2">36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">price-to-tangible book value greater than 233%.
This second group, or the IBC High Performing Group, consisted
of the following publicly-traded commercial banks:
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">BancorpSouth,&nbsp;Inc.<BR>
    Community First Bankshares,&nbsp;Inc.<BR>
    Cullen/ Frost Bankers,&nbsp;Inc.<BR>
    First Midwest Bancorp,&nbsp;Inc.<BR>
    FirstMerit Corporation<BR>
    Fulton Financial Corporation<BR>
    Hudson United Bancorp<BR>
    Irwin Financial Corporation<BR>
    Pacific Capital Bancorp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Park National Corporation<BR>
    Provident Bankshares Corporation<BR>
    Republic Bancorp Inc.<BR>
    TCF Financial Corporation<BR>
    Trustmark Corporation<BR>
    UCBH Holdings,&nbsp;Inc.<BR>
    United Bankshares,&nbsp;Inc.<BR>
    Wilmington Trust Corporation
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The analysis compared publicly-available
financial information for IBC and the median data for the IBC
Peer Group and IBC Highly Performing Group as of or for the
twelve-month period ended September&nbsp;30, 2003. The table
below sets forth the comparative data as of or for the
twelve-month period ended September&nbsp;30, 2003, with pricing
data as of January&nbsp;21, 2004.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Comparable Group Analysis</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC High Performing</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC Peer Group</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Group</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets <I>(in thousands)</I>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,511,624</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,636,981</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,299,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tangible equity/tangible assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.63</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.49</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible assets/total equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loans/total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross loans/total deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total borrowings/total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loan loss reserve/gross loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest margin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest income/average assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-interest expense/average assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Efficiency ratio
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on average assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Return on average equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EPS CAGR (1997&nbsp;&#151; 2002)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/stated book value per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">361.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">266.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/tangible book value per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">417.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">290.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">309.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/ LTM earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.75</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.56</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.88</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/ LTM Core earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.45</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.74</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/2003 Estimated EPS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.48</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.81</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.52</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price/2004 Estimated EPS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.25</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.06</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.89</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend payout ratio
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.67</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.60</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42.62</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend yield
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.65</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.76</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Analysis of Selected Merger
Transactions.</FONT></I><FONT size="2"> Sandler O&#146;Neill
reviewed 108 merger transactions announced nationwide from
January&nbsp;1, 2003 through January&nbsp;21, 2004 involving
commercial banks as acquired institutions with transaction
values greater than $15&nbsp;million. Sandler O&#146;Neill also
reviewed 19 merger transactions announced from January&nbsp;1,
2000 through January&nbsp;21, 2004 involving commercial banks as
acquired institutions in markets with slow-growth
characteristics similar to those found in Oklahoma. Each of
these regional transactions had a deal value greater than
$15&nbsp;million. Sandler O&#146;Neill reviewed the multiples of
transaction price at announcement to last twelve months&#146;
earnings per share, transaction price to estimated current year
earnings per share, transaction price to book value per share,
</FONT>

<P align="center"><FONT size="2">37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">transaction price to tangible book value per
share, tangible book premium to core deposits and premium to
market price and computed median multiples and premiums for both
groups of transactions. The median multiples were applied to
Local&#146;s financial information as of and for the twelve
months ended September&nbsp;30, 2003. As illustrated in the
following table, Sandler O&#146;Neill derived an imputed range
of values per share of Local&#146;s common stock of $23.31 to
$34.56 based upon the median multiples for the nationwide
commercial bank transactions and $17.14 to $21.39 based upon the
median multiples for the regional commercial bank transactions.
The implied transaction value of the merger as calculated by
Sandler O&#146;Neill was $22.00&nbsp;per share.
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">Nationwide&nbsp;&#38; Regional Transaction
Multiples</FONT></B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nationwide</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Regional</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Median</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Implied</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Median</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Implied</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Multiple</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Multiple</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transaction price/ LTM EPS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.74</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transaction price/ Est. 2004 EPS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.99</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/M</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/M</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transaction price/ Book value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">242.42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183.03</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transaction price/ Tangible book value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">258.23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">189.85</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tangible book premium/ Core deposits(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.96</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.88</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Premium to market(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36.28</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/M</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/M</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Not meaningful.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Assumes Local&#146;s total core deposits are
    $1.62&nbsp;billion.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Based on Local&#146;s January&nbsp;21, 2004
    closing price of $23.05.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Discounted Dividend Stream and Terminal Value
Analysis.</FONT></I><FONT size="2"> Sandler O&#146;Neill
performed an analysis that estimated the future stream of
after-tax dividend flows of Local through December&nbsp;31, 2006
under various circumstances, assuming Local&#146;s projected
dividend stream and that Local performed in accordance with the
earnings projections reviewed with management. For 2006, Sandler
O&#146;Neill assumed an annual growth rate of earning per share
of approximately 7% to 8%. To approximate the terminal value of
Local common stock at December&nbsp;31, 2006, Sandler
O&#146;Neill applied price/earnings multiples ranging from 8.0x
to 18.0x. The dividend income streams and terminal values were
then discounted to present values using different discount rates
ranging from 9% to 15% chosen to reflect different assumptions
regarding required rates of return of holders or prospective
buyers of Local common stock. As illustrated in the following
table, this analysis indicated an imputed range of values per
share of Local common stock of $11.16 to $29.89. The implied
transaction value of the merger as calculated by Sandler
O&#146;Neill was $22.00&nbsp;per share.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Earnings Per Share Multiples</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Discount Rate</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">8x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">10x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">12x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">14x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">16x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">18x</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;9.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">10.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">11.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">12.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">13.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">14.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">15.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill performed a similar analysis
that estimated the future stream of after-tax dividend flows of
IBC through December&nbsp;31, 2006 under various circumstances,
assuming IBC&#146;s projected dividend stream and that IBC
performed in accordance with the earnings projections reviewed
with management. For periods after 2004, Sandler O&#146;Neill
assumed an annual growth rate of earning per share of
approximately 4%. To approximate the terminal value of IBC
common stock at December&nbsp;31, 2006,
</FONT>

<P align="center"><FONT size="2">38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">Sandler O&#146;Neill applied price/earnings
multiples ranging from 10x to 25x. The dividend income streams
and terminal values were then discounted to present values using
different discount rates ranging from 9% to 15% chosen to
reflect different assumptions regarding required rates of return
of holders or prospective buyers of IBC common stock. As
illustrated in the following table, this analysis indicated an
imputed range of values per share of IBC common stock of $22.70
to $63.16. The closing price of IBC&#146;s common stock as of
January&nbsp;21, 2004 was $51.10 (which has not been adjusted to
reflect the IBC stock dividend).
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Earnings Per Share Multiples</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Discount Rate</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">10x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">13x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">16x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">19x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">22x</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">25x</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;9.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41.56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">10.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">11.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">12.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">13.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">14.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">15.0%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with its analyses, Sandler
O&#146;Neill considered and discussed with the Local board of
directors how the present value analyses would be affected by
changes in the underlying assumptions, including variations with
respect to net income. Sandler O&#146;Neill noted that the
discounted dividend stream and terminal value analysis is a
widely-used valuation methodology, but the results of such
methodology are highly dependent upon the numerous assumptions
that must be made, and the results thereof are not necessarily
indicative of actual values or future results.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Pro Forma Merger
Analysis.</FONT></I><FONT size="2"> Sandler O&#146;Neill
analyzed certain potential pro forma effects of the merger,
assuming the following: (1)&nbsp;the merger closes in the second
quarter of 2004; (2)&nbsp;75% of the Local shares are exchanged
for cash at a value of $22.00&nbsp;per share; (3)&nbsp;25% of
the Local shares are exchanged for IBC common stock at an
exchange ratio of 0.4305 (without giving effect to the IBC stock
dividend); (4)&nbsp;stock options are cashed out at their
intrinsic value based on a weighted average exercise price; and
(5)&nbsp;earnings projections, purchase accounting adjustments,
charges and transaction costs associated with the merger and
cost savings determined by the senior managements of Local and
IBC. The analysis indicated that for the year ending
December&nbsp;31, 2004, the merger would be accretive to
IBC&#146;s projected earnings per share and that, at closing,
the merger would be dilutive to IBC&#146;s tangible book value
per share. The actual results achieved by the combined company
may vary from projected results and the variations may be
material.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local has agreed to pay Sandler O&#146;Neill a
transaction fee in connection with the merger of approximately
$3.8&nbsp;million (based on the closing price of IBC&#146;s
common stock on March&nbsp;15, 2004. Of the transaction fee that
may become due to Sandler O&#146;Neill, approximately $500,000
has been paid, an additional approximately $500,000 would be
payable upon obtaining stockholder approval of the merger and
the remaining portion of approximately $2.55&nbsp;million would
be payable upon closing of the merger. Local also has paid
Sandler O&#146;Neill $250,000 for rendering its opinion, which
will be credited against that portion of the transaction fee due
upon closing of the merger. Local has also agreed to reimburse
certain of Sandler O&#146;Neill&#146;s reasonable out-of-pocket
expenses incurred in connection with its engagement and to
indemnify Sandler O&#146;Neill and its affiliates and their
respective partners, directors, officers, employees, agents, and
controlling persons against certain expenses and liabilities,
including liabilities under securities laws.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill has, in the past, provided
certain investment banking services to Local and has received
compensation for such services. A director of Local, Robert A.
Kotecki, is a managing director of Sandler O&#146;Neill and will
receive a portion of the fee paid to Sandler O&#146;Neill in
connection with the merger.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC is a minority limited partner in Sandler
O&#146;Neill, and Sandler O&#146;Neill has in the past provided
certain investment banking services to IBC and has received
compensation for such services and may
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">39
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">provide, and receive compensation for, such
services in the future, including during the pendency of the
merger. In the ordinary course of its business as a broker
dealer, Sandler O&#146;Neill may purchase securities from and
sell securities to Local and IBC and their respective affiliates
and may actively trade the debt and/or equity securities of
Local and IBC and their respective affiliates for its own
account and the accounts of customers and, accordingly, may at
any time hold a long or short position in such securities.
</FONT>
</DIV>

<DIV align="left">
<A name='140'></A>
</DIV>

<!-- link1 "Additional Interests of Local Management" -->

<P align="left">
<B><FONT size="2">Additional Interests of Local
Management</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">When you are considering the recommendation of
Local&#146;s board of directors with respect to approving the
merger agreement and the merger, you should be aware that some
directors and executive officers of Local may be deemed to have
interests in the merger in addition to their interests as
stockholders generally. The Local board of directors was aware
of these factors and considered them, among other matters, in
approving the merger agreement and the merger. These interests
are described below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Employment
Agreements.</FONT></I><FONT size="2"> Local and/or its
subsidiaries have entered into employment agreements with
Messrs.&nbsp;Edward A. Townsend, Jan A. Norton, Richard L. Park,
William Townsend and William Lee, which generally provide for
the payment of a severance payment and the provision of certain
other benefits to them in the event that their employment by
Local and/or its subsidiaries is terminated following a change
in control of Local and/or its subsidiaries. The merger would
constitute a change in control for purposes of the employment
agreements. The employment of each of the individuals named
above with Local and/or its subsidiaries will be terminated in
connection with the merger. In lieu of the payments due each of
the named executive officers under their respective employment
agreements, Messrs.&nbsp;Edward Townsend, Norton, Park, William
Townsend and Lee will receive from IBC quarterly cash payments
in the amount of $239,636, $118,750, $83,250, $63,531 and
$33,000, respectively. The payments will be made quarterly over
the next three years with the first payment being made five
business days after the effective time of the merger. The cost
of the named executive officers&#146; health and other insurance
benefits will be deducted from the payments received by them.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other officers of Local and its subsidiaries,
including Robert L. Vanden and Christopher C. Turner, are
entitled to receive payments pursuant to their employment
agreements with Local or its subsidiaries in the event their
employment is terminated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Change of Control, Non-Competition/
Non-Solicitation Agreements.</FONT></I><FONT size="2"> Local and
Local Oklahoma have entered into change of control
non-competition/non-solicitation agreements with two of their
executive officers, Messrs.&nbsp;Edward Townsend and Norton. The
agreements provide that in consideration for Messrs.&nbsp;Edward
Townsend and Norton agreeing not to compete and not to solicit
customers of Local and its subsidiaries after a change in
control of Local or Local Oklahoma, Local and Local Oklahoma
will pay Messrs.&nbsp;Edward Townsend and Norton a net payment
of $3.0&nbsp;million and $650,000, respectively, within ten
business days after such change in control. The agreement
further provides that Messrs.&nbsp;Edward Townsend and Norton
are to receive a gross cash payment sufficient to pay all taxes
incurred by each of them resulting from the payment made under
these agreements. The amount of the gross cash payment to be
made to Messrs.&nbsp;Edward Townsend and Norton under their
respective change in control, non-competition/non-solicitation
agreements is approximately $5.3&nbsp;million and
$1.2&nbsp;million, respectively. The merger would constitute a
change in control for purposes of the change of control
agreements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock Options.</FONT></I><FONT size="2"> The
merger agreement provides that all options to purchase shares of
Local not required to be assumed by IBC upon consummation of the
merger will be cancelled. The holder of a cancelled option will
receive a cash payment equal to the excess of the merger
consideration over the exercise price of the option, if any, for
each cancelled option held. At the effective time of the merger,
Local will cause all other outstanding options to purchase Local
common stock (i)&nbsp;to become fully vested and exercisable and
(ii)&nbsp;to be cancelled. In consideration for canceling these
options, the holders of these options will receive a cash
payment equal to the excess of the merger consideration over the
exercise price of the option, if any, for each such option held.
At the record date for the Annual Meeting, Local&#146;s
directors and the named executive officers set forth in the
compensation table held options to purchase an aggregate of
1,141,640&nbsp;shares of Local common stock.
</FONT>

<P align="center"><FONT size="2">40
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The stock option agreements entered into with
Messrs.&nbsp;Edward Townsend and Norton provide that upon any
exercise or cancellation of the options granted under the option
agreement Local will pay to the executive a cash payment equal
to all of the executive&#146;s applicable resulting federal and
state taxes. The cash payment is intended to allow
Messrs.&nbsp;Edward Townsend and Norton to receive, net of
taxes, the compensation income recognized from the exercise or
cancellation of their respective stock options. The cash payment
to Messrs.&nbsp;Edward Townsend and Norton under their
respective stock option agreements for the payment of their tax
liabilities is estimated to be $5.6&nbsp;million and
$2.3&nbsp;million, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Indemnification and
Insurance.</FONT></I><FONT size="2"> Local&#146;s and its
subsidiaries&#146; directors, officers and employees are
entitled to continuing indemnification against certain
liabilities by virtue of provisions contained in Local&#146;s or
its subsidiaries&#146; organizational documents, as applicable,
and the merger agreement. Pursuant to the merger
agreement,&nbsp;IBC agreed to indemnify and hold harmless each
present and former director, officer and employee of Local and
its subsidiaries against all claims, losses, liabilities,
damages, judgments, fines and reasonable fees, costs or expenses
(including reasonable attorneys&#146; fees) incurred in
connection with any claim, action, proceeding or investigation,
whether civil, criminal, administrative or investigative,
arising out of matters existing or occurring at or prior to the
effective time of the merger, whether asserted or claimed prior
to, at or after the effective time of the merger, arising out of
or pertaining to the fact that he or she is or was a director,
officer or employee of Local or a subsidiary of Local (including
matters related to the merger agreement or any of the
transactions contemplated by the merger agreement), to the same
extent to which such indemnified parties would be entitled under
the organizational documents of Local or a Local subsidiary, as
applicable, provided that an indemnified party may not settle
any claim without the prior approval of IBC. Pursuant to the
merger agreement, Local, as the surviving corporation of the
merger, will cause to be maintained all limitations on liability
existing in favor of these indemnified parties and the
advancement of expenses as provided in Local&#146;s articles of
incorporation and bylaws as in effect as of the date of the
merger agreement for a period of six years after the effective
time of the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the merger agreement, Local, as the
surviving corporation of the merger, agreed to use its
reasonable best efforts to maintain Local&#146;s current
policies of directors&#146; and officers&#146; liability
insurance and fiduciary liability insurance for a period of six
years after the effective time of the merger, provided that in
no event will Local, as the surviving corporation, be required
to expend in any one year an amount in excess of 150% of the
annual premiums currently paid by Local for such insurance, and
further provided that if Local, as the surviving corporation, is
unable to maintain or obtain the insurance specified above as a
result of the preceding provision, it will obtain an insurance
policy with the greatest coverage available for a cost not
exceeding 150% of its current annual premiums.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Employee Stock Ownership
Plan.</FONT></I><FONT size="2"> Local Oklahoma maintains an
Employee Stock Ownership Plan. Upon the closing of the merger,
the Employee Stock Ownership Plan will terminate and, after the
payment of all outstanding loans under the Employee Stock
Ownership Plan, all remaining assets will be allocated to the
participants of the Employee Stock Ownership Plan. Officers of
Local and Local Oklahoma participate in the Employee Stock
Ownership Plan on the same basis as all other participants.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='141'></A>
</DIV>

<!-- link1 "Material U.S. Federal Income Tax Consequences of the Merger" -->

<P align="left">
<B><FONT size="2">Material U.S.&nbsp;Federal Income Tax
Consequences of the Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of the material United
States federal income tax consequences of the merger to Local
stockholders whose shares of Local common stock are converted
into the right to receive cash and/or IBC common stock in the
merger. This summary is based upon the provisions of the
Internal Revenue Code of 1986, as amended, and applicable United
States Treasury Regulations, judicial authority and
administrative rulings and practice, all of which are subject to
change, possibly on a retroactive basis, at any time. This
discussion assumes that Local shares are held as capital assets
and does not address all aspects of U.S.&nbsp;federal income
taxation that may be relevant to a particular Local stockholder
in light of that stockholder&#146;s particular circumstances or
to a Local stockholder subject to special treatment under the
U.S.&nbsp;federal income tax laws. In addition, the discussion
does not address any aspect of foreign, state or local taxation
or estate and gift taxation that may be applicable to a
particular Local stockholder. We urge
</FONT>

<P align="center"><FONT size="2">41
</FONT>

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<DIV align="left">
<FONT size="2">each holder of Local common stock to consult
their tax advisor regarding the United States federal income or
other tax consequences of the merger to them.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The receipt of IBC common stock and/or cash in
exchange for Local shares in the merger will be a taxable
transaction for federal income tax purposes. In general, a Local
stockholder will recognize gain or loss for federal income tax
purposes equal to the difference between the (i)&nbsp;fair
market value of any IBC common stock received, valued at the
effective time of the merger, plus the amount of any cash
received, and (ii)&nbsp;the Local stockholder&#146;s adjusted
tax basis in the Local common stock exchanged in the merger.
Assuming the Local shares constitute capital assets in the hands
of the Local stockholder, such gain or loss will be capital gain
or loss, and it will be a long-term capital gain or loss if the
Local stockholder held the shares of Local common stock for more
than one year at the time of the merger. Gain or loss will be
calculated separately for each block of Local common stock owned
by a stockholder, with a &#147;block&#148; consisting of Local
common stock acquired at the same cost in a single transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain non-corporate Local stockholders may be
subject to backup withholding at a 28% rate on cash payments
received in exchange for Local common stock in the merger.
Backup withholding generally will apply only if the stockholder
fails to furnish a correct social security number or other
taxpayer identification number, or otherwise fails to comply
with applicable backup withholding rules and requirements.
Corporations generally are exempt from backup withholding. Local
stockholders should complete and sign the substitute
Form&nbsp;W-9 that will be part of the letter of transmittal to
be returned to the exchange agent in order to provide the
information and certification necessary to avoid backup
withholding, unless an applicable exemption exists and is
otherwise proved in a manner satisfactory to the exchange agent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The foregoing discussion may not be applicable
to certain types of Local stockholders, including stockholders
who acquired their shares pursuant to the exercise of options or
otherwise as compensation, individuals who are not citizens or
residents of the United States and corporations or other
entities organized under foreign law.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">THE FEDERAL INCOME TAX DISCUSSION ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT
LAW. LOCAL STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO THEM,&nbsp;INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX AND STATE, LOCAL AND FOREIGN TAX
LAWS.</FONT></B>

<DIV align="left">
<A name='142'></A>
</DIV>

<!-- link1 "Dissenters&#146; Rights of Appraisal" -->

<P align="left">
<B><FONT size="2">Dissenters&#146; Rights of Appraisal</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to the provisions of the Delaware General
Corporation Law (DGCL)&nbsp;which require the approval of
Local&#146;s stockholders in order to complete the merger, under
Section&nbsp;262 of the DGCL, if you do not vote in favor of or
consent to the approval of the merger and the approval and
adoption of the merger agreement, you will be entitled to elect
to have the fair value of your shares, exclusive of any element
of value arising from the accomplishment or expectation of the
merger, judicially determined and paid to you in cash.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion is not a complete
statement of the law pertaining to appraisal rights under the
DGCL and is qualified in its entirety by the full text of
Section&nbsp;262 of the DGCL, which is provided as <B>APPENDIX C
</B>to this proxy statement-prospectus. All references in
Section&nbsp;262 of the DGCL and in this summary to a
&#147;stockholder&#148; are to the record holder of the shares
of Local common stock as to which appraisal rights are asserted.
If you have a beneficial interest in shares of common stock held
of record in the name of another person, such as a broker or
nominee, you must act promptly to cause the record holder to
follow properly the steps summarized below in a timely manner to
perfect your appraisal rights.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Section&nbsp;262 of the DGCL, where a
proposed transaction is to be submitted for approval at a
meeting of stockholders, as in the case of the Annual Meeting
described in this proxy statement-prospectus, the corporation,
not less than 20&nbsp;days prior to the meeting, must notify
each of its stockholders
</FONT>

<P align="center"><FONT size="2">42
</FONT>

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<DIV align="left">
<FONT size="2">entitled to appraisal rights that such appraisal
rights are available and include in such notice a copy of
Section&nbsp;262 of the DGCL. This proxy statement-prospectus is
that notice to you, and the applicable statutory provisions of
the DGCL are attached to this proxy statement-prospectus as
<B>APPENDIX C.</B> If you wish to exercise such appraisal rights
or wish to preserve the right to do so, you should review
carefully Section&nbsp;262 of the DGCL and are urged to consider
seeking advice of legal counsel, since failure to comply fully
with the procedures of that Section will result in the loss of
appraisal rights.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you wish to exercise the right to dissent from
the merger and demand appraisal under Section&nbsp;262 of the
DGCL, you must satisfy each of the following conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">You must deliver to Local a written demand for
    appraisal of your shares before the vote on the merger at the
    Annual Meeting, which demand will be sufficient if it reasonably
    informs Local of your identity, and that you intend to demand
    the appraisal of your shares.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">You must not vote in favor of the merger and
    approval and adoption of the merger agreement. Because a proxy
    that does not contain voting instructions will, unless revoked,
    be voted in favor of the merger and approval and adoption of the
    merger agreement, if you vote by proxy and wish to exercise
    appraisal rights, you must vote against or abstain from voting
    on the merger and approval and adoption of the merger agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">You must continuously hold your shares from the
    date of making your demand through the effective time of the
    merger. If you hold shares of common stock on the date the
    written demand for appraisal is made but thereafter sell,
    transfer or otherwise dispose of your shares prior to the
    effective time of the merger, you will lose any right to
    appraisal in respect of the shares.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither voting in person or by proxy against,
abstaining from voting on nor failing to vote on the proposal to
approve the merger and approval and adoption of the merger
agreement will constitute a written demand for appraisal within
the meaning of Section&nbsp;262 of the DGCL. The written demand
for appraisal must be in addition to and separate from any such
proxy or vote.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only a holder of record of shares of Local common
stock is entitled to assert appraisal rights for the shares of
common stock registered in that holder&#146;s name. A demand for
appraisal should be executed by or on behalf of the stockholder
of record, fully and correctly, as that stockholder&#146;s name
appears on such stock certificates, should specify the
stockholder&#146;s name and mailing address, the number of
shares of common stock owned and that the stockholder intends
thereby to demand appraisal of the stockholder&#146;s common
stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If your shares are owned of record in a fiduciary
capacity, such as by a trustee, guardian or custodian, execution
of the demand must be made by or on behalf of the record owner.
If your shares are owned of record by more than one person as in
a joint tenancy or tenancy in common, the demand must be
executed by or on behalf of all owners. An authorized agent,
including an agent for two or more joint owners, may execute a
demand for appraisal on behalf of a stockholder of record;
however, the agent must identify the record owner or owners and
expressly disclose the fact that, in executing the demand, the
agent is acting as agent for the record owner or owners.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A record holder such as a broker who holds shares
as nominee for several beneficial owners may exercise appraisal
rights with respect to the shares held for one or more
beneficial owners while not exercising those rights with respect
to the shares held for one or more other beneficial owners; in
such case, the written demand should set forth the number of
shares as to which appraisal is sought, and where no number of
shares is expressly mentioned, the demand will be presumed to
cover all shares held in the name of the record owner. If you
hold your shares in brokerage accounts or other nominee forms
and wish to exercise appraisal rights, you are urged to consult
with your broker to determine the appropriate procedures for the
making of a demand for appraisal by such a nominee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A stockholder who elects to exercise appraisal
rights pursuant to Section&nbsp;262 of the DGCL must mail or
deliver a written demand to Local Financial Corporation, 3601
N.W. 63rd&nbsp;Street, Oklahoma City,
</FONT>

<P align="center"><FONT size="2">43
</FONT>

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<DIV align="left">
<FONT size="2">Oklahoma 73116, Attn: Alan L. Pollock, Corporate
Secretary, before the vote on the merger is taken at the Annual
Meeting.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within ten days after the effective time of the
merger, Local, as the surviving corporation, must send a notice
as to the effectiveness of the merger to each former Local
stockholder who has made a written demand for appraisal in
accordance with Section&nbsp;262 of the DGCL and who has not
voted in favor of the merger and approval and adoption of the
merger agreement. Within 120&nbsp;days after the effective time
of the merger, but not thereafter, either Local or any
stockholder who has complied with the requirements of
Section&nbsp;262 of the DGCL may file a petition in the Delaware
Chancery Court demanding a determination of the fair value of
all shares held by stockholders who have asserted appraisal
rights. The failure of any stockholders to file such a petition
within the period specified could effectively nullify all
demands for appraisal. If no such petition is filed, no
stockholder (including any who submitted written demands for
appraisal) will be entitled to pursue appraisal rights, and all
stockholders will instead be entitled to receive the merger
consideration to which they are entitled pursuant to the merger
agreement. Local is under no obligation to and has no present
intent to file a petition for appraisal, and you should not
assume that Local will file such a petition or that Local will
initiate any negotiations with respect to the fair value of the
shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 120&nbsp;days after the effective time of
the merger, any stockholder who has complied with the provisions
of Section&nbsp;262 of the DGCL to that point in time will be
entitled to receive from Local, as the surviving corporation,
upon written request, a statement setting forth the aggregate
number of shares of common stock not voted in favor of the
merger and approval and adoption of the merger agreement and
with respect to which demands for appraisal have been received
by Local and the aggregate number of holders of such shares.
Local must mail this statement to the stockholder within
10&nbsp;days of receipt of the request or within 10&nbsp;days
after expiration of the period for delivery of demands for
appraisal under Section&nbsp;262 of the DGCL, whichever is later.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A stockholder timely filing a petition for
appraisal with the Delaware Court of Chancery must deliver a
copy to Local, which will then be obligated within 20&nbsp;days
to file in the Delaware Court of Chancery a duly verified list
containing the names and addresses of all stockholders who have
demanded appraisal of their shares. After notice to the
stockholders, the Delaware Court of Chancery is empowered to
conduct a hearing on the petition to determine which
stockholders are entitled to appraisal rights. The Delaware
Court of Chancery may require stockholders who have demanded an
appraisal for their shares and who hold stock represented by
certificates to submit their certificates to the Register in
Chancery for notation thereon of the pendency of the appraisal
proceedings, and if any stockholder fails to comply with the
requirement, the Delaware Court of Chancery may dismiss the
proceedings as to that stockholder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After determining the stockholders entitled to an
appraisal, the Delaware Court of Chancery will appraise the
&#147;fair value&#148; of their shares, exclusive of any element
of value arising from the accomplishment or expectation of the
merger, together with a fair rate of interest, if any, to be
paid upon the amount determined to be the fair value. When the
value is determined, the Delaware Court of Chancery will direct
the payment of such value, with interest thereon accrued during
the pendency of the proceeding, if the Delaware Court of
Chancery so determines, to the stockholders entitled to receive
the same, upon surrender by such holders of the certificates
representing those shares of Local common stock. The costs of
the action may be determined by the Delaware Chancery Court and
taxed upon the parties as the Delaware Chancery Court deems
equitable. Upon application of a stockholder asserting appraisal
rights, the Delaware Chancery Court may also order that all or a
portion of the expenses incurred by any stockholder in
connection with the appraisal proceeding, including, without
limitation, reasonable attorneys&#146; fees and the fees and
expenses of experts, be charged pro rata against the value of
all of the shares entitled to appraisal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you consider seeking appraisal, you should be
aware that the fair value of your shares as determined under
Section&nbsp;262 of the DGCL could be more than, the same as or
less than the per share merger consideration you would receive
pursuant to the merger agreement if you did not seek appraisal
of your shares. You should also be aware that investment banking
opinions are not opinions as to fair value
</FONT>

<P align="center"><FONT size="2">44
</FONT>

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<DIV align="left">
<FONT size="2">under Section&nbsp;262 of the DGCL. Local, as the
surviving corporation, does not anticipate offering more than
the merger consideration to any stockholder exercising appraisal
rights and reserves the right to assert, in any appraisal
proceeding, that, for purposes of Section&nbsp;262 of the DGCL,
the &#147;fair value&#148; of a share of common stock is less
than the merger consideration. In determining fair value and, if
applicable, a fair rate of interest, the Delaware Chancery Court
is to take into account all relevant factors. In
Weinberger&nbsp;v. UOP,&nbsp;Inc., the Delaware Supreme Court
discussed the factors that could be considered in determining
fair value in an appraisal proceeding, stating that &#147;proof
of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise
admissible in court&#148; should be considered, and that
&#147;[f]air price obviously requires consideration of all
relevant factors involving the value of a company.&#148; The
Delaware Supreme Court stated that, in making this determination
of fair value, the court must consider market value, asset
value, dividends, earnings prospects, the nature of the
enterprise and any other facts that could be ascertained as of
the date of the merger that throw any light on future prospects
of the merged corporation. Section&nbsp;262 of the DGCL provides
that fair value is to be &#147;exclusive of any element of value
arising from the accomplishment or expectation of the
merger.&#148; In Cede&nbsp;&#38; Co.&nbsp;v.
Technicolor,&nbsp;Inc., the Delaware Supreme Court stated that
such exclusion is a &#147;narrow exclusion [that] does not
encompass known elements of value,&#148; but which rather
applies only to the speculative elements of value arising from
such accomplishment or expectation. In Weinberger, the Delaware
Supreme Court stated that &#147;elements of future value,
including the nature of the enterprise, which are known or
susceptible of proof as of the date of the merger and not the
product of speculation, may be considered.&#148; You should be
aware that the fair value of your shares as determined under
Section&nbsp;262 of the DGCL could be more, the same or less
than the value you are entitled to receive under the terms of
the merger agreement.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any stockholder who has duly demanded an
appraisal in compliance with Section&nbsp;262 of the DGCL will
not, from and after the effective time of the merger, be
entitled to vote such stockholder&#146;s shares of common stock
subject to such demand for any purpose or to receive payment of
dividends or other distributions on those shares (except
dividends or other distributions payable to holders of record of
shares as of a record date prior to the effective time of the
merger).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 120&nbsp;days of the effective time of the
merger, you may withdraw your demand for appraisal and accept
the per share merger consideration by delivering to Local, as
the surviving corporation, a written withdrawal of your demand
for appraisal as an acceptance of the merger, except that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any attempt to withdraw such demand made more
    than 60&nbsp;days after the effective time of the merger will
    require written approval of Local, as the surviving
    corporation,&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">no appraisal proceeding in the Delaware Chancery
    Court will be dismissed as to any stockholder without the
    approval of the Delaware Chancery Court, and that approval may
    be conditioned upon the terms as the Delaware Chancery Court
    deems just.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">In view of the complexity of Section&nbsp;262
of the DGCL, Local stockholders who may wish to dissent from the
merger and pursue appraisal rights should consult their legal
advisors.</FONT></B>

<DIV align="left">
<A name='143'></A>
</DIV>

<!-- link1 "Regulatory Approvals" -->

<P align="left">
<B><FONT size="2">Regulatory Approvals</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consummation of the merger is subject to prior
receipt of all required approvals of and consents to the merger
and the subsidiary mergers by all applicable federal and state
regulatory authorities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation and the Texas
Department of Banking must approve both the merger and the
subsidiary mergers before the merger can be completed. Federal
Reserve Board approval is required because IBC is a bank holding
company proposing to acquire another bank holding company,
Local. The FDIC and Texas Department of Banking approvals are
required because the merger involves a subsidiary of IBC Bank
and the subsequent merger of IBC Bank with Local Oklahoma.
Additionally,&nbsp;IBC Bank has requested that the Federal
Reserve Board waive certain bank holding company approvals that
would otherwise be required as a result of its proposed
ownership of Local for a moment in time upon consummation of the
merger and prior to
</FONT>

<P align="center"><FONT size="2">45
</FONT>

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<DIV align="left">
<FONT size="2">the subsidiary mergers, which waiver must also be
obtained prior to the merger. Further, the Oklahoma Department
of Banking must approve IBC Bank&#146;s ownership of Local
Oklahoma&#146;s branches that IBC Bank will acquire as a result
of the merger and the subsidiary mergers.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;11, 2004,&nbsp;IBC filed the
requisite applications with the bank regulatory agencies
requesting approval of the merger and the subsidiary mergers.
Copies of the applications have been or will be provided to the
U.S.&nbsp;Department of Justice and other governmental agencies.
The applications describe, among other things, the terms of the
merger, the parties involved, the activities to be conducted by
IBC as a result of the merger, the source of funds for the
merger and other financial and managerial information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In deciding to approve the applications, the bank
regulatory agencies will consider the financial and managerial
resources and prospects of the existing and combined
institutions and the benefits that may be expected from the
merger. The bank regulatory agencies also will evaluate the
capital adequacy of IBC before and after completion of the
merger,&nbsp;IBC&#146;s record of addressing the credit needs of
the communities it serves, including the needs of low and
moderate income neighborhoods, consistent with the safe and
sound operation of its subsidiary banks, under the Community
Reinvestment Act of 1977, and IBC&#146;s compliance with
applicable banking laws and regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The bank regulatory agencies can deny the
applications if they determine that the transaction would result
in a monopoly or be in furtherance of any combination or
conspiracy to monopolize or attempt to monopolize a given
business activity in any part of the United States. The bank
regulatory agencies can also deny an application if it
determines that the transaction would substantially lessen
competition or would tend to create a monopoly in any section of
the country, or would in any other manner result in a restraint
of trade, unless the bank regulatory agencies find that the
anti-competitive effects of the transaction are clearly
outweighed by the probable effects of the transaction in
providing benefits to the public. The bank regulatory agencies
also could require that, as a condition to its approval of the
merger, Local and IBC agree to divest one or more of the Local
bank branches.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Applicable federal law provides for the
publication of notice and public comment on the applications
filed by IBC with the bank regulatory agencies. The bank
regulatory agencies must consider timely filed substantive
comments on the applications from interested persons regarding,
among other things,&nbsp;IBC&#146;s performance under the
Community Reinvestment Act of 1977. The bank regulatory agencies
frequently receive protests from community groups and others
regarding various aspects of merger proposals and, in
particular, the extent to which the merging institutions are
complying with CRA and fair lending laws. The bank regulatory
agencies also will consider IBC Bank&#146;s efforts in combating
money laundering pursuant to the U.S.A. Patriot Act in
connection with their review of the applications.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger cannot be completed until approval of
the merger and the subsidiary mergers by the bank regulatory
agencies and the expiration of the waiting period imposed by the
U.S.&nbsp;Department of Justice, which will be either fifteen or
thirty days after the approval of the bank regulatory agencies.
There can be no assurance about if, when or on what terms the
bank regulatory agencies will approve the merger and the
subsidiary mergers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the foregoing, the National
Association of Securities Dealers (NASD)&nbsp;must receive an
application for approval of a change in ownership or control at
least 30&nbsp;days prior to the completion of the merger due to
the resulting change of control of Local&#146;s broker-dealer
subsidiary, Local Securities Corp. The NASD may disapprove of
the change of control within 30&nbsp;days of the filing of a
complete application if it determines that the transaction is
not in the public interest and/or for other reasons. Also, an
application will need to be filed with the Oklahoma Department
of Insurance due to the change of control of Local&#146;s
insurance subsidiary that will result from the merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The approval of an application means only that
the regulatory criteria for approval have been satisfied or
waived. It does not mean that the approving authority has
determined that the consideration to be received by Local
stockholders is fair. Regulatory approval does not constitute an
endorsement or recommendation of the merger.
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC and Local are not aware of any material
governmental approvals or compliance with banking laws and
regulations that are required for the merger to become effective
other than those described above. IBC and Local intend to seek
any other approval and to take any other action that may be
required to complete the merger. There can be no assurance that
any required approval or action can be obtained or taken.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger cannot be completed unless all
necessary regulatory approvals are granted. In
addition,&nbsp;IBC may elect not to complete the merger if any
condition under which any regulatory approval is granted is
unreasonably burdensome to IBC. See &#147;The Merger
Agreement&nbsp;&#151; Conditions to the Merger&#148; beginning
on page&nbsp;54 and &#147;&#151;&nbsp;Termination of the Merger
Agreement&#148; beginning on page&nbsp;58.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='144'></A>
</DIV>

<!-- link1 "Certain Employee Matters" -->

<P align="left">
<B><FONT size="2">Certain Employee Matters</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement contains certain agreements
of the parties with respect to various employee matters, which
are briefly described below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Employees of Local and its subsidiaries who are
retained by IBC will be entitled to participate in the IBC
employee benefit plans as newly hired employees of IBC and its
subsidiaries. For purposes of determining eligibility in the IBC
employee benefit plans,&nbsp;IBC will recognize years of service
with Local or its subsidiaries. If employees of Local or any of
its subsidiaries become eligible to participate in a health plan
of IBC,&nbsp;IBC will cause each such plan to waive any
preexisting condition exclusion and any waiting period
applicable to the IBC health plans. Within thirty days after the
effective time of the merger, Local employees retained by IBC
will be entitled to participate in IBC&#146;s profit sharing
plan. For purposes of determining eligibility and vesting of
benefits in the IBC profit sharing plan,&nbsp;IBC will recognize
years of service with Local or its subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An employee of Local whose employment is
terminated due to job displacement or termination within six
(6)&nbsp;months after the effective time of the merger will be
entitled to receive certain severance payments based upon the
employee&#146;s years of service with Local. Certain limitations
and exclusions apply to the separation pay policy. For example,
Local employees who are a party to an employment, change of
control or retention bonus agreement with Local or its
subsidiaries are not eligible to receive payment under the
separation pay policy.
</FONT>

<DIV align="left">
<A name='145'></A>
</DIV>

<!-- link1 "Subsidiary Mergers" -->

<P align="left">
<B><FONT size="2">Subsidiary Mergers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the merger agreement, immediately
following the consummation of the merger, Local Oklahoma will be
merged with and into IBC Bank and Local will be merged with and
into IBC.
</FONT>

<DIV align="left">
<A name='146'></A>
</DIV>

<!-- link1 "Exchange of Certificates" -->

<P align="left">
<B><FONT size="2">Exchange of Certificates</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An election form and related transmittal
materials will be mailed to Local stockholders approximately
thirty five (35)&nbsp;days prior to the anticipated effective
time of the merger. These materials will include instructions
for the delivery of Local stock certificates to an exchange
agent by Local stockholders who complete the election form and
the related transmittal materials. In order to be effective, the
election form, transmittal materials and share certificates
representing the related Local shares must be submitted by the
election deadline, which will be a date five (5)&nbsp;business
days prior to the anticipated effective time of the merger.
After the merger, the exchange agent will deliver to those Local
stockholders who validly submitted an election form and related
materials the merger consideration payable with respect to the
shares so submitted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within three business days after completion of
the merger, the exchange agent will mail to each holder of
record of shares of Local common stock who did not validly
submit an election form and related transmittal materials a
letter of transmittal, together with instructions for the
exchange of the holder&#146;s Local stock certificates for the
merger consideration allocated to them.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A stock certificate for IBC common stock may be
issued in a name other than the name in which the surrendered
certificate is registered if (a)&nbsp;the stock certificate
surrendered is properly endorsed and
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">accompanied by all documents required to transfer
the shares to the new holder and (b)&nbsp;the person requesting
the issuance of the IBC common stock certificate either pays to
the exchange agent in advance any transfer and other taxes due
or establishes to the satisfaction of the exchange agent that
such taxes have been paid or are not due.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No dividend or other distribution declared on IBC
common stock after completion of the merger will be paid to the
holder of any certificates for shares of Local common stock
until after the stock certificates have been surrendered for
exchange and only to the extent that you have not received
dividends from IBC for the same period. Only then will you be
entitled to receive all previously withheld dividends and
distributions, without interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The exchange agent will deliver the appropriate
merger consideration in exchange for lost, stolen or destroyed
certificates for Local common stock upon receipt of a lost
certificate affidavit and a bond indemnifying IBC for any claim
that may be made against IBC as a result of the lost, stolen or
destroyed certificates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After completion of the merger, no transfers will
be permitted on the books of Local. If, after completion of the
merger, certificates for Local common stock are presented for
transfer to the exchange agent, they will be cancelled and
exchanged for the appropriate merger consideration.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of IBC, Local, the exchange agent or any
other person will be liable to any former holder of Local common
stock for any amount delivered in good faith to a public
official pursuant to applicable abandoned property, escheat or
similar laws.
</FONT>

<DIV align="left">
<A name='147'></A>
</DIV>

<!-- link1 "Sale of IBC Common Stock Issued in the Merger" -->

<P align="left">
<B><FONT size="2">Sale of IBC Common Stock Issued in the
Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IBC common stock issued in the merger will be
freely transferable under the Securities Act of 1933, except for
shares issued to Local stockholders who are considered to be
&#147;affiliates&#148; of Local or IBC under Rule&nbsp;145 under
the Securities Act or of IBC under Rule&nbsp;144 under the
Securities Act. The definition of &#147;affiliate&#148; is
complex and depends on the specific facts, but generally
includes directors, executive officers, 10% stockholders and
other persons with the power to direct the management and
policies of the company in question.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Affiliates of Local may not sell the shares of
IBC common stock received in the merger except (a)&nbsp;pursuant
to an effective registration statement under the Securities Act,
(b)&nbsp;in compliance with an exemption from the registration
requirements of the Securities Act or (c)&nbsp;in compliance
with Rule&nbsp;144 and Rule&nbsp;145 under the Securities Act.
Generally, those rules permit resales of stock received by
affiliates so long as IBC has complied with certain reporting
requirements and the selling stockholder complies with certain
volume and manner of sale restrictions. As a practical matter,
the rules of the Securities Act generally would permit an
affiliate to sell the IBC shares received in the merger if the
shares are sold through a broker or dealer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local has agreed to use its best efforts to
deliver to IBC signed representations by each person who may be
deemed to be an affiliate of Local that the person will not
sell, transfer or otherwise dispose of the shares of IBC common
stock to be received by the person in the merger except in
compliance with the applicable provisions of the Securities Act
and the rules and regulations promulgated thereunder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This proxy statement-prospectus does not cover
resales of IBC common stock received in the merger by affiliates
of Local.
</FONT>

<DIV align="left">
<A name='148'></A>
</DIV>

<!-- link1 "Stock Exchange Listing" -->

<P align="left">
<B><FONT size="2">Stock Exchange Listing</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares of IBC common stock to be issued in
the merger will be listed on the Nasdaq National Market. The
listing of the IBC common stock to be issued in the merger is a
condition to Local&#146;s obligation to complete the merger. See
&#147;The Merger Agreement&nbsp;&#151; Conditions to the
Merger&#148; beginning on page&nbsp;54.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">48
</FONT>

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<DIV align="left">
<A name='149'></A>
</DIV>

<!-- link1 "Accounting Treatment" -->

<P align="left">
<B><FONT size="2">Accounting Treatment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC will account for the merger under the
purchase method of accounting. IBC will record, at fair value,
the acquired assets and assumed liabilities of Local. To the
extent the total purchase price exceeds the fair value of the
assets acquired and liabilities assumed, IBC will record
goodwill. IBC will include in its results of operations the
results of Local&#146;s operations after the merger.
</FONT>

<P align="center"><FONT size="2">49
</FONT>
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<DIV align="left">
<A name='150'></A>
</DIV>

<!-- link1 "THE MERGER AGREEMENT" -->

<P align="center">
<B><FONT size="2">THE MERGER AGREEMENT</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The following is a summary of the material
provisions of the merger agreement. A copy of the merger
agreement is included in this proxy statement-prospectus as
<B>APPENDIX A</B>. This summary is qualified in its entirety by
reference to the full text of the merger agreement. We urge you
to read the full text of the merger agreement.</FONT></I>

<DIV align="left">
<A name='151'></A>
</DIV>

<!-- link1 "The Merger" -->

<P align="left">
<B><FONT size="2">The Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that Acquisition
Sub will be merged with and into Local. Local will be the
surviving corporation. Each issued and outstanding share of
Local common stock (other than shares owned by IBC, Acquisition
Sub, Local, their subsidiaries, or by stockholders who properly
exercise dissenters&#146; rights) will be converted into the
right to receive shares of IBC common stock, cash or a
combination of IBC common stock and cash, without interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that IBC may change
the structure of the merger. However, no such change may reduce
the amount or change the form of merger consideration to be
delivered to Local stockholders, adversely affect the
anticipated tax consequences to Local stockholders in the
merger, or materially impede or delay the completion of the
merger.
</FONT>

<DIV align="left">
<A name='152'></A>
</DIV>

<!-- link1 "Determination of Merger Consideration" -->

<P align="left">
<B><FONT size="2">Determination of Merger
Consideration</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the election and allocation procedures
set forth below, each of the shares of Local common stock will
be converted into, and will be exchanged for, the right to
receive:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a number of shares of IBC common stock equal to
    $22.00 (subject to upward adjustment) divided by the IBC common
    stock value (as defined below);&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$22.00 in cash (subject to upward adjustment).
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IBC common stock value will be determined by
taking the average of the closing sale prices for a share of IBC
common stock during the ten (10)&nbsp;trading days beginning
fifteen (15)&nbsp;business days before the effective time of the
merger, so long as this value is between $36.80 and $44.80. If
this value is less than $36.80, then the IBC common stock value
will equal $36.80. If this value is more than $44.80, then the
IBC common stock value will equal $44.80. These IBC common stock
values have been adjusted to give effect to the 25% IBC stock
dividend declared on April&nbsp;1, 2004 and payable to IBC
stockholders of record on May&nbsp;3, 2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that if the
effective time of the merger does not occur until after
August&nbsp;15, 2004, the aggregate consideration to be paid to
the holders of Local common stock will be increased by $76,667
for each day from and after August&nbsp;16, 2004 until the
effective time of the merger. In that event, each Local
stockholder would be entitled to a pro rata increase in the per
share merger consideration they would receive for each share of
Local common stock held.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed below, you will have the opportunity
to elect the form of consideration that you will receive.
Whether or not you receive the form of consideration that you
elect will depend upon the elections of all other Local
stockholders as well as the allocation procedures described
below. The allocation procedures are intended to ensure that 25%
of the outstanding shares of Local common stock will be
converted into the right to receive IBC common stock and 75% of
the outstanding shares of Local common stock will be converted
into the right to receive cash.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event IBC changes (or establishes a record
date for changing) the number of shares of IBC common stock
issued or outstanding prior to the effective time of the merger
by way of a stock split, dividend, combination,
recapitalization, exchange of shares or other similar
transaction, then, to the extent necessary to provide the
holders of shares of Local common stock with the same economic
effect as provided in the merger agreement prior to such capital
adjustment, the IBC common stock value (or the prices for the
IBC common stock used in determining such value) will be
appropriately adjusted.
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<DIV align="left">
<A name='153'></A>
</DIV>

<!-- link1 "Election Procedures" -->

<P align="left">
<B><FONT size="2">Election Procedures</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An election form and related transmittal
materials will be mailed to Local stockholders approximately
thirty five (35)&nbsp;days prior to the anticipated effective
time of the merger. Local stockholders may elect to receive IBC
common stock, cash or a combination of IBC common stock and cash
for each share of Local common stock they hold. In addition,
Local stockholders may choose not to make an election for the
shares they hold. Any stockholders who validly exercise their
dissenters&#146; right of appraisal (see &#147;The
Merger&nbsp;&#151; Dissenters&#146; Rights of Appraisal&#148; on
page&nbsp;42) will be deemed to have elected to receive cash for
their shares. A person who holds Local shares as a nominee,
trustee or in another representative capacity may submit
multiple election forms, provided that the representative
certifies that each election form covers all of the Local shares
held by that representative for a particular beneficial owner.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To be effective, a properly completed election
form must be submitted to the exchange agent by the election
deadline. It is currently expected that the election deadline
will be approximately five (5)&nbsp;business days prior to the
anticipated effective time of the merger. The election form must
be accompanied by the executed transmittal materials and the
certificates representing all Local shares covered by the
election form. Prior to the election deadline, any Local
stockholder may change his or her election by providing a
written notice to the exchange agent accompanied by a revised
election form. In addition, prior to the election deadline, any
Local stockholder may revoke his or her election by providing a
written notice to the exchange agent or by withdrawing his or
her certificates, or the guarantee of delivery of those
certificates. All elections will be revoked automatically if the
exchange agent is notified in writing by IBC and Local that the
merger agreement has been terminated. If a stockholder does not
submit a properly completed election form by the election
deadline, or revokes his or her election form prior to the
election deadline and does not submit a new election form, the
shares held by that stockholder will be designated shares for
which no election was made. Subject to the terms of the merger
agreement and of the election form, the exchange agent will have
reasonable discretion to determine whether any election,
revocation or change has been properly or timely made and to
disregard immaterial defects in any election form, and any good
faith decisions of the exchange agent regarding such matters
will be binding and conclusive.
</FONT>

<DIV align="left">
<A name='154'></A>
</DIV>

<!-- link1 "Allocation Procedures" -->

<P align="left">
<B><FONT size="2">Allocation Procedures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The form of consideration that each Local
stockholder receives will depend upon the allocation procedures
described below which are intended to ensure that 25% of the
outstanding shares of Local common stock will be converted into
the right to receive IBC common stock and 75% of the outstanding
shares of Local common stock will be converted into the right to
receive cash. Accordingly, no guarantee can be given that your
choice will be honored.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">If holders of less than 25% of the outstanding
    shares of Local common stock have elected to receive IBC common
    stock, then (1)&nbsp;all of those shares will be converted into
    the right to receive IBC common stock as elected, and (2)&nbsp;a
    number of shares (to be determined pro rata by the exchange
    agent) for which no election was made will also be converted
    into the right to receive IBC common stock, so that a total of
    25% of the outstanding shares of Local common stock are
    converted into the right to receive IBC common stock. If the sum
    of the shares in (1)&nbsp;and (2)&nbsp;is less than 25% of the
    outstanding shares of Local common stock, then a number of
    shares (to be determined pro rata by the exchange agent) for
    which Local stockholders elected to receive cash will instead be
    converted into the right to receive IBC common stock, so that a
    total of 25% of the outstanding shares of Local common stock are
    converted into the right to receive IBC common stock. The
    remaining shares of Local common stock will be converted into
    the right to receive cash.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">If the holders of 25% or more of the outstanding
    shares of Local common stock elect to receive IBC common stock,
    then a portion of those shares (to be determined pro rata by the
    exchange agent) will be converted into the right to receive cash
    rather than shares of IBC common stock so that a maximum of 25%
    of the outstanding shares of Local common stock are converted
    into the right to receive IBC common stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">51
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='155'></A>
</DIV>

<!-- link1 "Fractional Shares" -->

<P align="left">
<B><FONT size="2">Fractional Shares</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Fractional shares will not be issued in exchange
for any Local shares. If a Local stockholder is entitled to a
fraction of a share, he or she will, instead, be paid cash in an
amount equal to the product of the IBC Common Stock Value
multiplied by the fraction of a share of IBC common stock that
would otherwise have been issued, rounded to the nearest whole
cent.
</FONT>

<DIV align="left">
<A name='156'></A>
</DIV>

<!-- link1 "Representations and Warranties" -->

<P align="left">
<B><FONT size="2">Representations and Warranties</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local and IBC each made a number of
representations and warranties in the merger agreement regarding
aspects of their respective businesses, financial condition,
structure and other facts pertinent to the merger. For detailed
information concerning the representations and warranties
contained in the merger agreement, reference is made to
Article&nbsp;IV of the merger agreement included as <B>APPENDIX
A </B>to this proxy statement-prospectus. You are urged to
carefully read Article&nbsp;IV of the merger agreement setting
forth the representations and warranties of Local,&nbsp;IBC and
Acquisition Sub. Such representations and warranties generally
must remain accurate in all material respects through the
completion of the merger. See &#147;&#151;&nbsp;Conditions to
the Merger,&#148; beginning on page&nbsp;54.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain representations and warranties are
qualified by a material adverse effect standard. For purposes of
the merger agreement, the term &#147;material adverse
effect&#148; means any adverse change, circumstance or effect
that is materially adverse to the business, financial condition
or results of operations Local or IBC and their subsidiaries, as
applicable, taken as a whole, other than any change,
circumstance or effect relating to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the economy or securities markets in general;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">regional economic conditions that have a similar
    effect on other participants in the region in the industries in
    which Local or IBC operates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the industries in which Local or IBC operates and
    not specifically relating to either Local or IBC;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in any tax laws or regulations or
    applicable accounting regulations or principles in each case not
    specifically relating Local or IBC;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">actions or omissions by either Local or IBC, or
    any of their subsidiaries, taken with the written permission of
    the other party in connection with the transactions contemplated
    by the merger agreement.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='157'></A>
</DIV>

<!-- link1 "Conduct of Business Pending Merger" -->

<P align="left">
<B><FONT size="2">Conduct of Business Pending Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement contains covenants of Local
regarding the conduct of its business pending consummation of
the merger. These covenants are contained in Article&nbsp;V of
the merger agreement included as <B>APPENDIX A </B>attached to
this proxy statement-prospectus. Among other things, Local
agreed that until completion of the merger, except as otherwise
specified in the merger agreement, it will, and will cause each
of its subsidiaries, to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">carry on their respective businesses in the
    usual, regular and ordinary course;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">extend credit in accordance with existing lending
    practices;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">maintain their properties in good repair, order
    and condition;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">timely file with all appropriate federal
    regulatory authorities all financial statements and other
    reports;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">comply with all applicable laws and regulations.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">52
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, Local has agreed to certain
restrictions on its, and its subsidiaries&#146;, activities that
are subject to certain exceptions described in the merger
agreement. The more significant of these restrictions are
described below. Under the merger agreement, Local has agreed
that it and its subsidiaries will not:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">declare or pay any dividends or distributions on
    any of its capital stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">split, combine or reclassify any of its capital
    stock or issue or authorize or propose the issuance of any other
    securities in respect of, in lieu of or in substitution for,
    shares of its capital stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">repurchase, redeem or otherwise acquire any
    shares of its capital stock or any securities convertible into
    or exercisable for any shares of its capital stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">issue, grant, deliver or sell, or authorize or
    propose the issuance, grant, delivery or sale of, any shares of
    its capital stock, or any securities convertible into or
    exercisable for, or any rights, warrants or options to acquire
    any such shares.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">amend or propose to amend their respective
    certificates of incorporation, by-laws or other governing
    documents;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">acquire or agree to acquire any business or any
    corporation, partnership, association or other business
    organization or division or otherwise acquire or agree to
    acquire any assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">sell, lease, encumber or otherwise dispose of, or
    agree to sell, lease, encumber or otherwise dispose of, any of
    its material assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other than deposit liabilities owed to deposit
    customers in the ordinary course of business, create, incur,
    assume or suffer to exist any indebtedness, issuances of debt
    securities, guarantees, loans or advances not in existence as of
    the date of the merger agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increase the amount of compensation of, or pay or
    agree to pay any bonus or like benefit to, any director,
    officer, employee or other person, make any increase in any
    employee benefits or change or modify the period of vesting or
    retirement age for any participant in any employee benefit plan;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">enter into or amend any employment, consulting or
    severance agreement or other agreement with any director,
    officer or employee;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">issue any stock options or any stock appreciation
    rights or phantom stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">adopt, amend, terminate or make any commitment to
    adopt any additional employee benefit plan or make any
    contribution, other than regularly scheduled contributions, to
    any employee benefit plan;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">change its accounting and tax accounting methods;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">cancel any debts, waive any claims, or otherwise
    dispose of any of its material assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">dispose of or permit to lapse any rights to use
    any material trademark, service mark, trade name or copyright or
    dispose of or disclose any material trade secret that is not a
    matter of public knowledge;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">acquire any capital stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make any capital expenditures of more than
    $500,000 in the aggregate;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make any tax election or settle any tax liability;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">enter into transactions, contract or commitment
    for a term greater than one year or exceeding $100,000, other
    than in the ordinary course of business;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make investments, except in the ordinary course
    of business;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">alter its deposit base, securities or loan
    portfolios or asset mix, other than in the ordinary course of
    business.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">53
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement also contains covenants of
IBC that apply until the consummation of the merger. These
covenants are contained in Article&nbsp;V of the merger
agreement included as <B>APPENDIX A </B>to this proxy
statement-prospectus. Among other things,&nbsp;IBC agreed that
until completion of the merger, except as otherwise specified in
the merger agreement, it will, and will cause each of its
subsidiaries, to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">not take any action that would, or fail to take
    any action that would, impair IBC&#146;s source of funds to pay
    the aggregate cash consideration to be paid pursuant to the
    merger agreement or otherwise satisfy its obligations under the
    merger agreement;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">not take any action, or fail to take any
    commercially reasonable action which failure would, reasonably
    be expected to impede or delay any consent required to be
    obtained by IBC or Local or otherwise impede or delay the
    consummation of the merger and the other transactions
    contemplated by the merger agreement.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='158'></A>
</DIV>

<!-- link1 "Control of Local&#146;s Business" -->

<P align="left">
<B><FONT size="2">Control of Local&#146;s Business</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that none of its
provisions will be deemed to give IBC the right to control or
direct Local&#146;s operations prior to the effective time of
the merger.
</FONT>

<DIV align="left">
<A name='159'></A>
</DIV>

<!-- link1 "Conditions to the Merger" -->

<P align="left">
<B><FONT size="2">Conditions to the Merger</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Completion of the merger is subject to the
satisfaction or waiver of certain conditions, including the
following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the holders of a majority of the outstanding
    shares of Local common stock must approve the merger agreement
    at a meeting of Local&#146;s stockholders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">no law or decree shall have been adopted or
    promulgated, and no temporary restraining order, or injunction
    making the merger illegal shall be in effect; except that this
    condition is not applicable to any party whose failure to
    fulfill its obligations was the cause of, or shall have resulted
    in, such order or injunction;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">all approvals required for the merger and the
    subsidiary mergers from governmental entities must be obtained
    other than those the failure of which to be obtained would not
    reasonably be expected to result in a material adverse effect on
    IBC and its subsidiaries, and such approvals shall not have
    imposed any condition or requirement that would materially and
    adversely impact the intended economic benefits to IBC or Local
    of the merger or otherwise be so burdensome as to render the
    merger reasonably inadvisable;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the registration statement of IBC of which this
    document is a part must have been declared effective by the
    Securities and Exchange Commission and IBC will have received
    all required approvals by state securities authorities with
    respect to the transactions contemplated by the merger
    agreement;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the shares of IBC common stock to be issued in
    the merger must be approved for listing on Nasdaq National
    Market, subject to official notice of issuance.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the foregoing conditions, the
obligation of IBC to consummate the merger under the merger
agreement is subject to the following conditions, which may be
waived by IBC:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the representations and warranties of Local in
    the merger agreement must be true and correct in all material
    respects as of the date of the merger agreement and as of the
    closing date of the merger, except as to any representation or
    warranty which specifically relates to an earlier date;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local must have performed in all material
    respects all obligations required to be performed by it under
    the merger agreement at or prior to consummation of the merger;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC must have received a certificate from
    specified officers of Local with respect to compliance with the
    conditions to the obligations of IBC;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">54
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">there must not have occurred any material adverse
    effect on Local or any event that is likely to result in or
    cause any material adverse effect on Local;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the resignation of certain officers of Local
    identified in the schedules to the merger agreement at least
    14&nbsp;days prior to the closing of the merger.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to other conditions set forth above,
the obligation of Local to consummate the merger under the
merger agreement is subject to the following conditions, which
may be waived by Local:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the representations and warranties of IBC in the
    merger agreement must be true and correct in all material
    respects as of the date of the merger agreement and as of the
    closing date of the merger, except as to any representation or
    warranty which specifically relates to an earlier date;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC must have performed in all material resects
    all obligations required to be performed by it under the merger
    agreement at or prior to consummation of the merger;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local must have received a certificate from
    specified officers of IBC with respect to compliance with the
    conditions to the obligations of Local;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">there must not have occurred any material adverse
    effect on IBC or any event likely to result in or cause any
    material adverse effect on IBC;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC taking all necessary and required actions to
    assume Local&#146;s obligations with respect to its
    11%&nbsp;Senior Notes due 2004.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='160'></A>
</DIV>

<!-- link1 "No Solicitation" -->

<P align="left">
<B><FONT size="2">No Solicitation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that Local shall
not directly or indirectly, and that it shall use all
commercially reasonable efforts to cause its officers,
directors, employees, representatives, agents or affiliates, not
to, solicit, initiate, encourage or otherwise facilitate any
inquiries or proposals that constitute, or could reasonably be
expected to lead to, a proposal or offer for a merger,
recapitalization, consolidation, business combination, sale of a
substantial portion of the assets of Local and its subsidiaries,
taken as a whole, sale of 15% or more of the shares of capital
stock or similar or comparable transactions involving Local or
any of its subsidiaries, other than the transactions
contemplated by the merger agreement (any such proposal or offer
by a third party is referred to as an &#147;acquisition
proposal&#148;).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the merger agreement, Local
also agreed that it would not directly or indirectly, and that
it would use all commercially reasonable efforts to cause its
officers, directors, employees, representatives, agents or
affiliates, not to, engage in negotiations or discussions
concerning, or provide any non-public information to any person
relating to, any acquisition proposal. However, the merger
agreement provides that the board of directors of Local may, at
any time prior to approval of the merger agreement by the
stockholders of Local, furnish information pursuant to a
confidentiality agreement to, or engage in discussions or
negotiations with, any person in response to an unsolicited bona
fide written acquisition proposal if,
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local has not violated any of the restrictions
    described under this &#147;&#151;&nbsp;No Solicitation;&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the board of directors of Local concludes in good
    faith after consultation with its outside legal counsel, that
    such action is reasonably necessary in order for the board of
    directors of Local to comply with its fiduciary obligation to
    the stockholders of Local under applicable law;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the board of directors of Local determines in
    good faith by a majority vote, after consultation with its
    financial advisors, that such acquisition proposal constitutes a
    &#147;superior proposal&#148; (as defined below).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In response to an unsolicited acquisition
proposal, Local&#146;s board of directors may, at any time prior
to the approval of the merger agreement by Local&#146;s
stockholders, (i)&nbsp;withdraw, modify or change, or propose to
withdraw, modify or change, the approval or recommendation by
the Local board of directors of the merger agreement, the merger
or the other transactions contemplated by the merger agreement or
</FONT>

<P align="center"><FONT size="2">55
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">(ii)&nbsp;approve or recommend, or propose to
approve or recommend, any acquisition proposal, but only if, in
each such case, the Local board of directors concludes in good
faith that (a)&nbsp;such acquisition proposal would, if
consummated, constitute a superior proposal and such proposal
has not been withdrawn and (b)&nbsp;in light of such superior
proposal, the failure to withdraw, withhold, amend, modify or
change its recommendation of the merger agreement would
constitute a breach of its fiduciary duties to the stockholders
of Local under applicable law. Local must immediately advise IBC
in writing if the board of directors makes any determination as
to any acquisition proposal as contemplated by the preceding
sentence.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of the merger agreement and this
proxy statement-prospectus, &#147;superior proposal&#148; means
a bona fide acquisition proposal the terms of which Local&#146;s
board of directors concludes in good faith (1)&nbsp;would, if
consummated, result in a transaction that is more favorable to
Local&#146;s stockholders from a financial point of view than
the transactions contemplated by the merger agreement and
(2)&nbsp;is reasonably capable of being completed. For purposes
of this definition the term &#147;acquisition proposal&#148;
means any proposal or offer by a third party for a merger,
recapitalization, consolidation, business combination, sale of a
substantial portion of the assets of Local and its subsidiaries,
taken as a whole, sale of 50% or more of the shares of capital
stock or similar or comparable transactions involving Local or
any of its subsidiaries, other than the transactions
contemplated by the merger agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that Local must
immediately advise IBC in writing of the receipt of any
inquiries, discussions, negotiations or proposals relating to an
acquisition proposal and furnish to IBC within 24&nbsp;hours of
receipt of any acquisition proposal an accurate description of
all material terms of any such written proposal in addition to
any information provided to any third party relating to the
proposal. The merger agreement also provides that upon execution
of the merger agreement Local and its subsidiaries must
immediately cease any and all existing activities, discussions
or negotiations with any parties conducted prior to the date of
the merger agreement with respect to any acquisition proposal.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Further, the merger agreement provides that upon
the approval by Local&#146;s board of directors of a superior
proposal,&nbsp;IBC would have the opportunity to make
adjustments in the terms and conditions of the merger agreement
sufficient to cause Local&#146;s board of directors to determine
that such proposal no longer constitutes a superior proposal
and, in such a case, Local would not have the right to terminate
the merger agreement. See &#147;&#151;&nbsp;Termination of the
Merger Agreement&#148; on page&nbsp;58.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='161'></A>
</DIV>

<!-- link1 "Indemnification and Insurance" -->

<P align="left">
<B><FONT size="2">Indemnification and Insurance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement requires IBC and Local, as
the surviving corporation in the merger, to jointly and
severally indemnify and hold harmless each present or former
officer, director or employee of Local and its subsidiaries,
against all claims, losses, liabilities, damages, judgments,
fines and reasonable fees, costs and expenses incurred in
connection with any claim, action, proceeding or investigation,
whether civil, criminal, administrative or investigative,
arising out of or pertaining to the fact that the indemnified
party is or was an officer, director or employee of Local or any
of its subsidiaries, or matters existing or occurring at or
prior to the effective time of the merger, but only to the
extent required under any indemnification provisions included in
Local&#146;s or any Local subsidiary&#146;s constituent or
organizational documents as in effect on the date of the merger
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the merger agreement provides that
for a period of six (6) years following the effective time of
the merger Local, as the surviving corporation of the merger,
will:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">maintain provisions regarding elimination of
    liability of directors and indemnification of, and advancement
    of expenses to, officers, directors and employees that are at
    least as favorable as those in Local&#146;s articles of
    incorporation and by-laws as of the date of the merger
    agreement;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">use its reasonable best efforts to maintain the
    current policies of directors&#146; and officers&#146; liability
    insurance and fiduciary liability insurance for claims arising
    from facts or events that occurred on or before the effective
    time of the merger; provided, however, that the surviving
    corporation will not be
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">56
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">required to expend in any one year an amount in
    excess of 150% of the annual premiums currently paid by Local
    for such insurance.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any claim, action, proceeding or investigation
is made against any indemnified party on or prior to the sixth
anniversary of the effective time of the merger, the provisions
described above would continue in effect until the final
disposition of such claim, action, proceeding or investigation.
</FONT>

<DIV align="left">
<A name='162'></A>
</DIV>

<!-- link1 "Local Stockholder Meeting" -->

<P align="left">
<B><FONT size="2">Local Stockholder Meeting</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that, as promptly
as practicable following the execution of the merger agreement:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local will hold a meeting of its stockholders for
    the purpose of obtaining the affirmative vote of a majority of
    the shares of Local common stock with respect to the
    transactions contemplated by the merger agreement,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local will take all lawful action to solicit
    stockholder approval of the merger agreement;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local&#146;s board of directors will recommend
    approval of the merger agreement, provided that nothing in the
    merger agreement prevents the board of directors of Local from
    withholding, withdrawing, amending or modifying its
    recommendation if the board of directors of Local determines,
    after consultation with its outside counsel, that such action is
    legally required in order for the directors to comply with their
    fiduciary duties.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='163'></A>
</DIV>

<!-- link1 "Reasonable Efforts" -->

<P align="left">
<B><FONT size="2">Reasonable Efforts</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that each party
will use all commercially reasonable efforts to take all actions
necessary, proper or advisable under applicable laws and
regulations to consummate the merger and the other transactions
contemplated by the merger agreement as soon as practicable
after the of execution of the merger agreement.
</FONT>

<DIV align="left">
<A name='164'></A>
</DIV>

<!-- link1 "Fees and Expenses" -->

<P align="left">
<B><FONT size="2">Fees and Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that, whether or
not the merger is consummated, all expenses incurred in
connection with the merger agreement will be paid by the party
incurring such expenses, except
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the merger is consummated,&nbsp;IBC will pay
    any and all property or transfer taxes imposed on Local or its
    subsidiaries resulting from the merger;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">as described below under
    &#147;&#151;&nbsp;Termination Fee&#148;;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the expenses of printing this proxy
    statement-prospectus will be shared equally by Local and IBC.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='165'></A>
</DIV>

<!-- link1 "Amendment, Extension or Waiver" -->

<P align="left">
<B><FONT size="2">Amendment, Extension or Waiver</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement may be amended by an action
taken or authorized by IBC&#146;s and Local&#146;s respective
boards of directors, at any time before or after approval of the
matters presented in connection with the merger by the
stockholders of Local. However, after the Local stockholders
have approved the merger agreement, no amendment may be made
without further approval by Local&#146;s stockholders if
required by law or applicable regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time prior to the effective time of the
merger, the parties may, by action taken or authorized by their
respective boards of directors, to the extent legally allowed:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">extend the time for the performance of any of the
    obligations or other acts of the other parties;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">57
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">waive any inaccuracies in the representations and
    warranties of the other parties contained in the merger
    agreement or in any document delivered pursuant to the merger
    agreement; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">waive compliance with any of the agreements or
    conditions contained in the merger agreement.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All extensions and waivers must be in writing and
signed by the party against whom the waiver is to be effective.
</FONT>

<DIV align="left">
<A name='166'></A>
</DIV>

<!-- link1 "Termination of the Merger Agreement" -->

<P align="left">
<B><FONT size="2">Termination of the Merger Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement may be terminated:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by the mutual written consent of IBC and Local,
    by action of their respective boards of directors;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by either IBC or Local, if
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effective time of the merger has not occurred
    on or before October&nbsp;31, 2004; except that this right to
    terminate the merger agreement will not be available to any
    party whose failure to fulfill any obligation under the merger
    agreement has to any extent been the cause of, or resulted in,
    the failure of the effective time of the merger to occur on or
    before October&nbsp;31, 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any governmental entity (i)&nbsp;has issued an
    order, decree or ruling or taken any other action permanently
    restraining, enjoining or otherwise prohibiting the merger, that
    has become final and nonappealable or (ii)&nbsp;has failed to
    issue an order, decree or ruling or to take any other action
    that is necessary to fulfill the conditions to the merger
    agreement and that failure has become final and nonappealable;
    except that this right to terminate the merger agreement is not
    available to any party whose failure to comply with certain
    provisions of the merger agreement requiring the parties to take
    reasonable actions to consummate the merger is the cause of such
    action or inaction;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local&#146;s stockholders do not approve the
    merger agreement at a duly held meeting of Local stockholders;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by IBC if, prior to approval of the merger
    agreement by Local&#146;s stockholders, Local&#146;s board of
    directors:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">withholds, withdraws, changes, modifies or amends
    its approval of the merger agreement any manner adverse to IBC;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">approves or recommends a superior proposal;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">agrees to take any of the actions described above;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">does not recommend in this proxy
    statement-prospectus that its stockholders adopt the merger
    agreement;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">within ten (10)&nbsp;business days after the
    commencement of a tender or exchange offer for 15% or more of
    Local&#146;s capital stock from a person unaffiliated with IBC,
    fails to send a statement to its stockholders disclosing that
    Local recommends rejection of such tender or exchange offer.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by Local at any time prior to approval of the
    merger agreement by the Local stockholders, if Local&#146;s
    board of directors approves a superior proposal; except that
    prior to any such termination, Local must provide IBC with a
    reasonable opportunity to make adjustments in the terms and
    conditions of the merger agreement sufficient to cause
    Local&#146;s board of directors to determine that such proposal
    no longer constitutes a superior proposal;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by IBC, if Local breaches any representation,
    warranty, covenant or agreement contained in the merger
    agreement, or if any representation or warranty of Local becomes
    untrue;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">by Local, if,&nbsp;IBC breaches any
    representation, warranty, covenant or agreement contained in the
    merger agreement, or if any representation or warranty of IBC
    becomes untrue.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">58
</FONT>

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<DIV align="left">
<A name='167'></A>
</DIV>

<!-- link1 "Termination Fee" -->

<P align="left">
<B><FONT size="2">Termination Fee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger agreement provides that Local must pay
IBC a termination fee of $12.0&nbsp;million under the
circumstances below:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the merger agreement is terminated by IBC
    pursuant to the provisions described in the third bullet point
    under &#147;&#151;&nbsp;Termination of the Merger
    Agreement&#148; on page&nbsp;58;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the merger agreement is terminated by either
    Local or IBC because (a)&nbsp;Local&#146;s stockholders do not
    approve the merger agreement at a duly held meeting of Local
    stockholders or (b)&nbsp;the effective time of the merger has
    not occurred on or before October&nbsp;31, 2004 without the
    meeting of Local&#146;s stockholder&#146;s to consider the
    merger agreement having occurred, and at the time of such
    termination an acquisition proposal exists and within
    12&nbsp;months after such termination Local enters into an
    agreement covering, or consummates, any acquisition proposal (as
    the term &#147;acquisition proposal&#148; is described under the
    definition of &#147;superior proposal&#148; on
    page&nbsp;56;&nbsp;or
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the merger agreement is terminated by Local
    pursuant to the provisions described in the third-to-last bullet
    point under &#147;&#151;&nbsp;Termination of the Merger
    Agreement&#148; on page&nbsp;58.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local must pay any termination fee that becomes
payable pursuant to the merger agreement by wire transfer of
immediately available funds to an account designated by IBC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The foregoing summary of the merger agreement is
qualified in its entirety by reference to the merger agreement,
a copy of which is attached as <B>APPENDIX A</B> to this proxy
statement-prospectus. The merger agreement should be read in its
entirety for a more complete description of the matters
summarized above.
</FONT>

<P align="center"><FONT size="2">59
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='168'></A>
</DIV>

<!-- link1 "PRO FORMA FINANCIAL INFORMATION" -->

<P align="center">
<B><FONT size="2">PRO FORMA FINANCIAL INFORMATION</FONT></B>

<P align="center">
<B><FONT size="2">International Bancshares Corporation and Local
Financial Corporation</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B><FONT size="2">Unaudited Pro Forma Combined Consolidated
Financial Statements</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following Unaudited Pro Forma Combined
Consolidated Financial Statements have been prepared assuming
the merger will be accounted for under the purchase method and
are based on the historical consolidated financial statements of
IBC and the historical consolidated financial statements of
Local, which have been adjusted to reflect the historical cost
of Local&#146;s assets and liabilities at their fair value and
to give effect to the IBC stock dividend. In addition, pro forma
adjustments have been included to give effect to events that are
directly attributable to the transaction and expected to have a
continuing impact on the combined company. Pro forma adjustments
for the Unaudited Pro Forma Combined Consolidated Statement of
Income include amortization of core deposit intangible and other
adjustments based on the allocated purchase price of net assets
acquired.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following Unaudited Pro Forma Combined
Consolidated Statement of Condition combines the historical
Consolidated Statement of Condition of IBC and its subsidiaries
and the historical Consolidated Statement of Condition of Local
and its subsidiaries giving effect to the consummation of the
merger on December&nbsp;31, 2003, using the purchase method of
accounting and giving effect to the related pro forma
adjustments described in the accompanying Notes to the Unaudited
Pro Forma Combined Consolidated Financial Statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following Unaudited Pro Forma Combined
Consolidated Statement of Income for the year ended
December&nbsp;31, 2003 combines the historical consolidated
statements of income of IBC and its subsidiaries and the
historical consolidated statements of income of Local and its
subsidiaries giving effect to the merger as if the merger had
become effective at the beginning of the period presented, using
the purchase method of accounting and giving effect to the
related pro forma adjustments described in the accompanying
Notes to the Unaudited Pro Forma Combined Consolidated Financial
Statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although pro forma financial information is not a
measure of performance calculated in accordance with generally
accepted accounting principles,&nbsp;IBC and Local believe that
pro forma financial information is important because it gives
effect to the merger as if the merger had become effective at
the beginning of the period presented. The manner in which IBC
and Local calculate pro forma financial information may differ
from similarly titled measures reported by other companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Unaudited Pro Forma Combined Consolidated
Financial Statements included herein are presented for
informational purposes only. This information includes various
estimates and may not necessarily be indicative of the financial
position or results of operations that would have occurred if
the merger had been consummated on the date or at the beginning
of the period indicated or which may be obtained in the future.
The unaudited pro forma combined consolidated financial
statements and accompanying notes should be read in conjunction
with and are qualified in their entirety by reference to the
historical consolidated financial statements and related notes
thereto of IBC and its subsidiaries and Local and its
subsidiaries which are incorporated by reference into this proxy
statement-prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Unaudited Pro Forma Combined Consolidated
Financial Statements included herein do not include the effects
of any potential cost savings that management believes will
result from operating the Local banking business as branches and
combining certain operating functions. They also do not
necessarily reflect what the historical results of the combined
company would have been had the companies been combined during
these periods.
</FONT>

<P align="center"><FONT size="2">60
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">INTERNATIONAL BANCSHARES CORPORATION AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF CONDITION</FONT></B>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2003</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(Dollars in thousands, Except Per Share Amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and due from banks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152,229</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal funds sold
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(56,723</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(1)(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">215,729</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,746</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(56,723</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">217,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Time deposits with banks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment securities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Held to maturity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277,571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,401</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">277,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Available for sale
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,039,341</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,853</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,139,194</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total investment securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,041,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">377,424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,401</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,416,524</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loans:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Real estate&nbsp;&#151; residential mortgage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">522,396</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">387,984</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">910,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Real estate&nbsp;&#151; all other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,513,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,260,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,410</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,802,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commercial, financial and agricultural
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">530,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">552,943</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,083,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consumer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">184,590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,495</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255,085</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,750,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,272,382</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,051,438</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less unearned discounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,646</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,419</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,065</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loans, net of unearned discounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,749,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,270,963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,048,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less allowance for possible loan losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(48,646</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30,398</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(79,044</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,700,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,240,565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,969,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bank premises and equipment, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">220,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">274,227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other real estate owned
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,463</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible assets and goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,390</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">188,368</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,890</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,944</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(5)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">307,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">317,227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,429</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,325</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">616</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(5)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">445,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,578,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,881,543</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">205,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,665,463</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Demand&nbsp;&#151; including interest bearing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,993,612</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">852,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,846,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Savings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">216,476</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">316,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Time
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,225,611</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">946,062</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,977</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,182,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,435,699</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,898,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,345,626</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal funds purchased and securities sold under
    repurchase agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">501,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,367</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">272,857</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">840,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other borrowed funds
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">845,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">658,514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,213</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21,508</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,502,491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Junior subordinated deferrable interest debentures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">172,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">234,369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,560</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(5)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,000,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,706,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">290,099</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,997,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shareholders&#146; equity:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,968</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,064</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Surplus
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(121,405</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">126,455</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">626,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(179,590</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">626,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,842</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(369</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,842</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less cost of shares in treasury
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165,616</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(214,811</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">214,811</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165,616</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total shareholders&#146; equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">577,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(84,489</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">668,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total liabilities and shareholders&#146;
    equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,578,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,881,543</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">205,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,665,463</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<FONT size="2">The accompanying Notes to the Unaudited Pro Forma
Combined Consolidated Statement of Condition are an integral
part of the pro forma financial statements.
</FONT>

<P align="center"><FONT size="2">61
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">INTERNATIONAL BANCSHARES CORPORATION AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF INCOME</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended December&nbsp;31,
2003</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Historical</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma Balance</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(Dollars in thousands, Except Per Share Amounts)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loans, including fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">176,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">131,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,297</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Time deposits with banks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal funds sold
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">594</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(594</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140,278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,292</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(115</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">800</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">158,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other investments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,272</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">318,051</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,804</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,206</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">460,649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,181</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,069</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal funds purchased and securities sold under
    repurchase agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,537</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other borrowings and junior subordinated
    deferrable interest debentures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,011</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,516</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,857</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(1)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,412</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,307</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,031</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223,326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84,497</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">308,648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for possible loan losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,291</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,600</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,891</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net interest income after provision
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">215,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">293,757</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Noninterest income:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service charges on deposit accounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,497</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other service charges, commissions and fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,905</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment securities, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,390</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,032</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,956</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,745</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total noninterest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">161,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Noninterest expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Compensation and benefits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Occupancy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,943</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation of bank premises and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,809</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Professional fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stationary and supplies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,855</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">986</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,841</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of identified intangible asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">320</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(320</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(4)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,750</FONT></TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;<FONT size="2">(5)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,026</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Advertising
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,011</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">685</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,696</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,169</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total noninterest expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">159,754</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72,547</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,430</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238,731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income before taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">182,554</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,605</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">216,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Provision for income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,029</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,962</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)(6)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69,493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">122,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,643</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146,580</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per common share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of shares outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,362,449</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(7)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,273,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,636,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.53</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(7)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fully diluted earnings per common share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of shares outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,336,609</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(7)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,273,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,610,415</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.48</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(7)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<FONT size="2">The accompanying Notes to the Unaudited Pro Forma
Combined Consolidated Statement of Income are an integral part
of the pro forma financial statements.
</FONT>

<P align="center"><FONT size="2">62
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">INTERNATIONAL BANCSHARES CORPORATION</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO THE UNAUDITED PRO FORMA
COMBINED</FONT></B>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Notes to Unaudited Pro Forma Combined
Consolidated Statement of Condition</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accompanying unaudited pro forma combined
consolidated statement of condition was derived from the
historical consolidated financial records of IBC and Local and
should be read in conjunction with their historical consolidated
financial statements.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of the pro forma
adjustments:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;Record Local&#146;s payment of change of
    control contracts and outstanding stock options, net of related
    tax benefit.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Eliminate senior notes based upon change
    of control covenant in indenture.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;Record estimated fair market value
    adjustment, including write off of existing goodwill and core
    deposit intangibles on Local&#146;s books, net of taxes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;Record $272,857,000 increase in Federal
    Funds purchased for payment to Local stockholders for 75% of
    their outstanding shares of Local common stock, the issuance of
    2,273,806&nbsp;shares of IBC common stock valued at $90,952,252
    (based on an IBC common stock value of $40.00&nbsp;per share) to
    Local&#146;s stockholders for the remaining 25% of their shares
    of Local common stock and the elimination of all of Local&#146;s
    equity accounts and the recording of goodwill.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;Record transaction costs of IBC, net of
    related tax benefits.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above unaudited pro forma combined
consolidated statement of condition assumes the merger
consideration will consist of 75% cash and 25% IBC common stock.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Notes to Unaudited Pro Forma Combined
Consolidated Statement of Income</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accompanying unaudited pro forma combined
consolidated statement of income was derived from the historical
consolidated financial records of IBC and Local and should be
read in conjunction with their historical consolidated financial
statements.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of the pro forma
adjustments:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;Record interest income/expense effect
    during the first year after consummation of the merger of the
    purchase adjustments set forth below. The aggregate amount of
    such effects for the second through fifth years
    post-consummation are also set forth below.
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Years 2-5</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year 1</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Aggregate)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income&nbsp;&#151; loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,297</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,777</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income&nbsp;&#151; investment securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense&nbsp;&#151; time deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,069</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,869</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense&nbsp;&#151; other borrowings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,857</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11,428</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Reverse interest expense on the senior
    notes payable to various investors on Local&#146;s books for the
    year ended December&nbsp;31, 2003 and record the corresponding
    decline in interest income due to a decline in earning assets.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;Record interest expense for the twelve
    months estimated to be 1.25% on $272,857,000 increase in Federal
    Funds purchased to fund payment to Local stockholders for 75% of
    their outstanding shares of Local common stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">63
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">INTERNATIONAL BANCSHARES CORPORATION</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO THE UNAUDITED PRO FORMA
COMBINED</FONT></B>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED
FINANCIAL&nbsp;STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<B><FONT size="2">Notes to Unaudited Pro Forma Combined
Consolidated Statement of Income&nbsp;&#151;
(Continued)</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;Reverse amortization of existing
    intangibles on Local&#146;s books which will be written off at
    acquisition.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;Record a full year&#146;s amortization
    of the estimated $45,000,000 core deposit premium. Amortization
    is based on an estimated deposit runoff of 15% during the first
    year of the estimated 10&nbsp;year life.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;Record income tax benefit of the pro
    forma adjustments using IBC&#146;s federal income tax rate.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;Weighted average shares outstanding and
    resulting per share information has been adjusted to reflect the
    25% IBC stock dividend declared on April&nbsp;1, 2004 and
    payable to stockholders of record on May&nbsp;3, 2004.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above unaudited pro forma combined
consolidated statement of income assumes the merger
consideration will consist of 75% cash and 25% IBC common stock.
IBC expects that the merger will result in certain merger,
integration and restructuring expenses. The pro forma income
data does not reflect any anticipated merger, integration and
restructuring expenses resulting from the merger. It is also
anticipated that the merger will provide the combined company
with certain financial benefits that include reduced operating
expenses. The pro forma information does not reflect any of
these anticipated cost savings or benefits.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">64
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='169'></A>
</DIV>

<!-- link1 "MARKET PRICES AND DIVIDENDS" -->

<P align="center">
<B><FONT size="2">MARKET PRICES AND DIVIDENDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IBC common stock currently is traded on the
Nasdaq National Market under the symbol &#147;IBOC.&#148; The
Local common stock is traded on the Nasdaq National Market under
the symbol &#147;LFIN.&#148;
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of March&nbsp;5, 2003, there were
38,777,088&nbsp;shares of IBC common stock outstanding, without
adjustment to reflect the IBC stock dividend which were held by
approximately 2,282 holders of record. As of March&nbsp;9, 2003,
there were 16,613,073&nbsp;shares of Local common stock
outstanding, which were held by approximately 28 holders of
record. Such numbers of stockholders do not reflect the number
of individuals or institutional investors holding stock in
nominee name through brokerage firms and others.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth during the periods
indicated the high and low bid prices of the IBC common stock
(adjusted for stock dividends paid during such periods) and the
Local common stock as reported on the Nasdaq National Market and
the cash dividends declared per share of IBC common stock and
Local common stock for the periods included. The market prices
for the IBC common stock have not been adjusted to reflect the
25% IBC stock dividend declared on April&nbsp;1, 2004 and
payable to IBC stockholders of record on May&nbsp;3, 2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Market Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Market Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Cash Dividends</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Cash Dividends</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Calendar Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Declared Per Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Declared Per Share</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2003</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended December&nbsp;31
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended September&nbsp;30
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended June&nbsp;30
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended March&nbsp;31
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended December&nbsp;31
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended September&nbsp;30
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended June&nbsp;30
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Quarter Ended March&nbsp;31
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows the closing prices of
IBC common stock (as adjusted for the IBC stock dividend) and
Local common stock as of January&nbsp;22, 2004, the last full
trading day before public announcement of the proposed merger,
and as of April&nbsp;12, 2004, the most recent practicable date
prior to the mailing of this proxy statement-prospectus. The
historical prices are as reported on the Nasdaq National Market.
The table also shows the equivalent market value per share of
Local common stock as of those dates. The equivalent market
value per share reflects the amount determined on the indicated
dates of the consideration to be received for a share of Local
common stock assuming there is no adjustment to the merger
consideration and the stockholders elected a fixed combination
of 25% IBC common stock (.1375&nbsp;shares of IBC common stock
per Local share) and 75% cash ($16.50&nbsp;per Local share).
Such an election conforms to the merger agreement election
procedures and is intended to ensure that 25% of the outstanding
shares of Local common stock will be converted into the right to
receive IBC common stock and 75% of the outstanding shares of
Local common stock will be converted into the right to receive
cash.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Historical Market</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Value Per Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Equivalent Market</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value Per Share of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Local(1)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">January&nbsp;22, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40.38</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">April&nbsp;12, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43.52</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(2)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The equivalent market value per share of Local
    common stock on the indicated dates was determined by adding
    (x)&nbsp;the product of an assumed exchange ratio of .5500
    (which is the share exchange that
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">65
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">would result if the IBC stock value was
    $40.00&nbsp;per share) multiplied by the closing price per share
    of the IBC common stock on the indicated date multiplied by 25%
    plus (y) $22.00 multiplied by 75%.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The historical market value per share of IBC
    common stock has been adjusted to give effect to the 25% IBC
    stock dividend declared on April&nbsp;1, 2004 and payable to IBC
    stockholders of record on May&nbsp;3, 2004.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should obtain current market quotations for
IBC common stock and Local common stock, as the market price of
IBC&#146;s common stock and Local&#146;s common stock will
fluctuate between the date of this proxy statement-prospectus,
the date of the annual meeting, the date on which the merger is
completed and the date you receive your IBC common stock after
completion of the merger. Because the number of shares of IBC
common stock that Local stockholders either elect to receive or
are allocated to receive is fixed and because the market price
of IBC common stock fluctuates, the number of shares of IBC
common stock that Local stockholders would actually receive may
increase or decrease prior to the effective time of the merger.
</FONT>

<DIV align="left">
<A name='170'></A>
</DIV>

<!-- link1 "THE COMPANIES" -->

<P align="center">
<B><FONT size="2">THE COMPANIES</FONT></B>

<DIV align="left">
<A name='171'></A>
</DIV>

<!-- link1 "IBC" -->

<P align="left">
<B><FONT size="2">IBC</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC is a financial holding company and bank
holding company registered under the Bank Holding Company Act of
1956, as amended, and is incorporated in Texas with its
principal corporate offices located in Laredo, Texas. Four bank
subsidiaries provide commercial and retail banking services
through over 100 main banking and branch facilities located in
35 communities in South, Central and Southeast Texas. As a
registered bank holding company,&nbsp;IBC may own one or more
banks and may engage directly, or through subsidiary
corporations, in those activities closely related to banking
which are specifically permitted under the Bank Holding Company
Act and by the Federal Reserve Bank. As a financial holding
company,&nbsp;IBC may engage in a broad list of financial and
non-financial activities. IBC&#146;s principal assets at
December&nbsp;31, 2003 consisted of all the outstanding capital
stock of its four Texas state banking subsidiaries. All of
IBC&#146;s bank subsidiaries are members of the Federal Deposit
Insurance Corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IBC bank subsidiaries are in the business of
gathering funds from various sources and investing these funds
in order to earn a return. Historically, the IBC bank
subsidiaries have primarily focused on providing commercial
banking services to small and medium sized businesses located in
IBC&#146;s trade area and international banking services. In
recent years, the IBC bank subsidiaries have also emphasized
consumer and retail banking, including mortgage lending, as well
as branches situated in retail locations and shopping malls.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;28, 1980,&nbsp;IBC acquired all of
the outstanding shares of its predecessor,&nbsp;IBC Bank, which
is today the flagship bank of IBC, representing 80% of
IBC&#146;s banking assets. Since the acquisition of the IBC Bank
in 1980,&nbsp;IBC has formed three banks: (i)&nbsp;Commerce
Bank, a Texas state banking association which commenced
operations in 1982, located in Laredo, Texas; (ii)&nbsp;IBC
Bank, Brownsville, a Texas state banking association which
commenced operations in 1984, located in Brownsville, Texas; and
(iii)&nbsp;IBC Bank, Zapata, a Texas state banking association
which commenced operations in 1984, located in Zapata, Texas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the last several years,&nbsp;IBC has
acquired various financial institutions and banking assets in
its trade area. The community focus of the IBC subsidiary banks
and the involvement of the local boards has resulted in IBC
becoming aware of acquisition possibilities in the ordinary
course of its business and in many instances before other
potential purchasers. IBC&#146;s decision to pursue an
acquisition is based on a multitude of factors, including the
ability to efficiently assimilate the operations and assets of
the acquired entity, the cost efficiencies to be attained and
the growth potential of the market.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000,&nbsp;IBC established an insurance
agency subsidiary and acquired the assets of two insurance
agencies in Texas. Effective October&nbsp;2, 2000,&nbsp;IBC
purchased a controlling interest in the Gulf Star Group, a
Houston-based investment banking firm serving middle-market
corporations primarily in Texas. Effective
</FONT>

<P align="center"><FONT size="2">66
</FONT>

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<DIV align="left">
<FONT size="2">February&nbsp;16, 2001,&nbsp;IBC acquired the
assets of First Equity Corporation, an Austin, Texas based
mortgage company. Effective April&nbsp;1, 2001,&nbsp;IBC through
its insurance subsidiary, acquired the assets of Grove Agency
Insurance,&nbsp;Inc., of Corpus Christi, Texas. Effective
December&nbsp;31, 2001,&nbsp;IBC completed its acquisition of
National Bancshares Corporation of Texas.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC also has four direct non-banking
subsidiaries. They are:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC Life Insurance Company, a Texas chartered
    subsidiary which reinsures a small percentage of credit life and
    accident and health risks related to loans made by bank
    subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC Trading Company, an export trading company
    which is currently inactive;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC Subsidiary Corporation, a second-tier bank
    holding company incorporated in the State of Delaware;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">IBC Capital Corporation, a corporation
    incorporated in the State of Delaware for the purpose of holding
    certain investments of IBC.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC also owns a controlling interest in Gulf Star
Group&nbsp;I, Ltd. and related entities, which are involved in
investment banking and merchant banking activities. IBC has also
formed eight Delaware business trusts for the purpose of issuing
trust preferred securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC&#146;s executive offices are located at 1200
San&nbsp;Bernardo, Laredo, Texas 78040.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Additional Information About
IBC.</FONT></I><FONT size="2"> Financial and other information
about IBC is set forth in IBC&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2003.
Information regarding the names, ages, positions and business
backgrounds of the executive officers and directors of IBC, as
well as additional information, including executive
compensation, security ownership of certain beneficial owners
and management, and certain relationships and related
transactions, is set forth in or incorporated by reference in
IBC&#146;s Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 2003. You can obtain this information by
contacting IBC as indicated under &#147;Where You Can Find More
Information&#148; on page&nbsp;96 of this proxy
statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Information on IBC&#146;s
Website.</FONT></I><FONT size="2"> Information on the Internet
website of IBC or any subsidiary of IBC is not part of this
proxy statement-prospectus, and you should not rely on that
information in deciding how to vote on the proposal to approve
the merger agreement unless that information is also in this
proxy statement-prospectus or in a document that is incorporated
by reference into this proxy statement-prospectus.
</FONT>

<DIV align="left">
<A name='215'></A>
</DIV>

<!-- link1 "Acquisition Sub" -->

<P align="left">
<B><FONT size="2">Acquisition Sub</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General. </FONT></I><FONT size="2">LFC
Acquisition Corp. is a Delaware corporation formed by IBC for
the sole purpose of effecting the merger and is an indirect
subsidiary of IBC. Acquisition Sub will not engage in any
business activity other than in connection with the transactions
contemplated by the merger agreement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='172'></A>
</DIV>

<!-- link1 "Local" -->

<P align="left">
<B><FONT size="2">Local</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General.</FONT></I><FONT size="2"> Local
Financial Corporation is a Delaware corporation and registered
bank holding company under the Bank Holding Company Act of 1956,
as amended. At December&nbsp;31, 2003, Local had consolidated
assets of $2.9&nbsp;billion, substantially all of which is
comprised of its 100% ownership interest in Local Oklahoma, an
Oklahoma-chartered commercial bank. As of February&nbsp;2, 2004,
Local Oklahoma was the fourth largest Oklahoma-based bank ranked
on total deposits. Local Oklahoma&#146;s deposits of
$1.9&nbsp;billion at December&nbsp;31, 2003, represented
approximately four percent of the Oklahoma market.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Through Local Oklahoma, Local offers a full range
of banking services and products to individuals and businesses
throughout its market areas, including commercial, consumer and
investment services. As of December&nbsp;31, 2003, Local
Oklahoma had 52 branch offices located primarily in the major
metropolitan areas of Oklahoma City, Tulsa and Lawton, Oklahoma.
</FONT>

<P align="center"><FONT size="2">67
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s executive offices are located at
3601 NW 63rd&nbsp;Street, Oklahoma City, Oklahoma 73116-2087.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Additional Information About
Local.</FONT></I><FONT size="2"> Financial and other information
about Local is set forth in Local&#146;s Annual Report on
Form&nbsp;10-K for the year ended December&nbsp;31, 2003.
Information regarding the names, ages, positions and business
backgrounds of the executive officers and directors of Local, as
well as additional information, including executive
compensation, security ownership of certain beneficial owners
and management, and certain relationships and related
transactions, is set forth in or incorporated by reference in
Local&#146;s Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 2003, and this proxy statement-prospectus. You
can obtain this information by contacting Local as indicated
under &#147;Where You Can Find More Information&#148; on
page&nbsp;96 of this proxy statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Information on Local&#146;s
Website.</FONT></I><FONT size="2"> Information on the Internet
website of Local or any subsidiary of Local is not part of this
proxy statement-prospectus, and you should not rely on that
information in deciding how to vote on the proposal to approve
the merger agreement unless that information is also in this
proxy statement-prospectus or in a document that is incorporated
by reference into this proxy statement-prospectus.
</FONT>

<DIV align="left">
<A name='173'></A>
</DIV>

<!-- link1 "BENEFICIAL STOCK OWNERSHIP BY MANAGEMENT AND PRINCIPAL HOLDERS" -->

<P align="center">
<B><FONT size="2">BENEFICIAL STOCK OWNERSHIP BY MANAGEMENT AND
PRINCIPAL HOLDERS</FONT></B>

<DIV align="left">
<A name='174'></A>
</DIV>

<!-- link1 "Ownership of Local Common Stock" -->

<P align="left">
<B><FONT size="2">Ownership of Local Common Stock</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For information concerning the ownership of Local
common stock by management and principal stockholders, see
&#147;Election of Directors&#148; beginning on page&nbsp;80.
Unless indicated otherwise therein, each person has sole voting
and dispositive power with respect to such shares.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='175'></A>
</DIV>

<!-- link1 "Ownership of IBC Common Stock" -->

<P align="left">
<B><FONT size="2">Ownership of IBC Common Stock</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information concerning the ownership of IBC
common stock by management and principal stockholders is
contained in IBC&#146;s Annual Report on Form&nbsp;10-K for the
year ended December&nbsp;31, 2003, filed with the SEC on
March&nbsp;12, 2004, and is incorporated by reference into this
proxy statement-prospectus. See &#147;Where You Can Find More
Information&#148; on page&nbsp;96 of this proxy
statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='176'></A>
</DIV>

<!-- link1 "IBC CAPITAL STOCK" -->

<P align="center">
<B><FONT size="2">IBC CAPITAL STOCK</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary of the terms of IBC capital
stock is not complete and is qualified by reference to
IBC&#146;s articles of incorporation, as amended, and to
IBC&#146;s bylaws. You should read these documents for complete
information on IBC capital stock. IBC&#146;s articles of
incorporation, as amended, and IBC&#146;s bylaws, as amended,
are incorporated by reference in this proxy
statement-prospectus. You can obtain copies of these documents
upon request as indicated under &#147;Where You Can Find More
Information&#148; on page&nbsp;96 of this proxy
statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC files instruments that define the rights of
holders of its capital stock as exhibits to its annual reports
on Form&nbsp;10-K and quarterly reports on Form&nbsp;10-Q filed
with the SEC. Also, from time to time IBC might file an
amendment to these documents or a new instrument that defines
the rights of holders of its capital stock as an exhibit to a
current report on Form&nbsp;8-K filed with the SEC.
</FONT>

<DIV align="left">
<A name='177'></A>
</DIV>

<!-- link1 "General" -->

<P align="left">
<B><FONT size="2">General</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Shares Authorized and
Outstanding.</FONT></I><FONT size="2"> As of the date of this
proxy statement-prospectus,&nbsp;IBC was authorized to issue
105,000,000&nbsp;shares of common stock. At March&nbsp;5,
2004,&nbsp;IBC had 38,777,088&nbsp;shares of common stock
outstanding, without adjustment to reflect the IBC stock
dividend.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Common Stock
Dividends.</FONT></I><FONT size="2"> Holders of IBC common stock
may receive dividends when declared by IBC&#146;s board of
directors out of funds that IBC can legally use to pay
dividends. IBC may pay dividends in cash, stock or other
property. Other restrictions on IBC&#146;s ability to pay
dividends are described below under
&#147;&#151;&nbsp;Restrictions on Payment of Dividends.&#148;
</FONT>

<P align="center"><FONT size="2">68
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Voting Rights.</FONT></I><FONT size="2">
Holders of IBC common stock have the exclusive right to vote on
all matters presented to IBC stockholders. Each holder of IBC
common stock is entitled to one vote per share. Holders of IBC
common stock have no cumulative voting rights for the election
of directors. This means a holder of a single share of common
stock cannot cast more than one vote for each position to be
filled on IBC&#146;s board of directors. It also means the
holders of a majority of the shares of common stock entitled to
vote in the election of directors can elect all directors
standing for election and the holders of the remaining shares
will not be able to elect any directors. IBC&#146;s board of
directors is not classified.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Other Rights.</FONT></I><FONT size="2"> If IBC
voluntarily or involuntarily liquidates, dissolves or winds up
its business, holders of its common stock will receive pro rata,
according to shares held by them, any of IBC&#146;s remaining
assets available for distribution to stockholders after IBC has
provided for payment of all debts and other liabilities. When
IBC issues securities in the future, holders of IBC common stock
have no preemptive rights with respect to those securities. This
means the holders of IBC common stock have no right, as holders
of IBC common stock, to buy any portion of those issued
securities. Holders of IBC common stock have no rights to have
their shares of common stock redeemed by IBC or to convert their
shares of common stock into shares of any other class of IBC
capital stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Listing.</FONT></I><FONT size="2"> Outstanding
shares of IBC common stock are listed on the Nasdaq National
Market under the symbol &#147;IBOC.&#148; IBC Bank is the
transfer agent and registrar for the IBC common stock.
</FONT>

<DIV align="left">
<A name='178'></A>
</DIV>

<!-- link1 "Restrictions on Payment of Dividends" -->

<P align="left">
<B><FONT size="2">Restrictions on Payment of Dividends</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ability of IBC to pay dividends is largely
dependent on the amount of cash derived from dividends declared
by its bank subsidiaries. The payment of dividends by any bank
or bank holding company is affected by the requirement to
maintain adequate capital. The ability of IBC&#146;s four
banking subsidiaries, as Texas banking associations, to pay
dividends is restricted under Texas law. A Texas bank generally
may not pay a dividend reducing its capital and surplus without
the prior approval of the Texas Banking Commissioner. Dividends
may not be paid from &#147;certified surplus,&#148; which is
designated by the board of directors of Texas banking
associations from undivided profits in connection with the
establishment of the bank&#146;s lending limit. Additionally,
the FDIC has the right to prohibit the payment of dividends by a
bank where the payment is deemed to be an unsafe and unsound
banking practice. At December&nbsp;31, 2003 there was an
aggregate of approximately $250&nbsp;million available for the
payment of dividends to IBC by IBC&#146;s four banking
subsidiaries under the applicable restrictions, assuming that
each of such banks continue to be classified as &#147;well
capitalized&#148;. Further,&nbsp;IBC could expend the entire
$250&nbsp;million and continue to be classified as &#147;well
capitalized&#148;. Note&nbsp;20 of notes to Consolidated
Financial Statements of IBC set forth in IBC&#146;s Annual
Report on Form&nbsp;10-K for the year ended December&nbsp;31,
2003 is incorporated herein by reference.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='179'></A>
</DIV>

<!-- link1 "Restrictions on Ownership of IBC Common Stock" -->

<P align="left">
<B><FONT size="2">Restrictions on Ownership of IBC Common
Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Bank Holding Company Act of 1956 requires any
&#147;bank holding company&#148; (as defined in that Act) to
obtain the approval of the Board of Governors of the Federal
Reserve System prior to acquiring more than 5% of IBC&#146;s
outstanding common stock. Any person other than a bank holding
company is required to obtain prior approval of the Federal
Reserve Board to acquire 10% or more of IBC&#146;s outstanding
common stock under the Change in Bank Control Act. Any holder of
25% or more of IBC&#146;s outstanding common stock, other than
an individual, is subject to regulation as a bank holding
company under the Bank Holding Company Act.
</FONT>

<DIV align="left">
<A name='180'></A>
</DIV>

<!-- link1 "Anti-takeover Provisions in IBC&#146;s Articles of Incorporation and Bylaws" -->

<P align="left">
<B><FONT size="2">Anti-takeover Provisions in IBC&#146;s
Articles of Incorporation and Bylaws</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain provisions of IBC&#146;s articles of
incorporation, as amended, could make it less likely that IBC
management would be changed or someone would acquire voting
control of IBC without the consent of its board of directors.
These provisions could delay, deter or prevent tender offers or
takeover attempts that stockholders might believe are in their
best interests, including tender offers or takeover attempts that
</FONT>

<P align="center"><FONT size="2">69
</FONT>

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<DIV align="left">
<FONT size="2">could allow stockholders to receive premiums over
the market price of their common stock. These provisions include
the following:
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Nomination
Procedures.</FONT></I><FONT size="2"> Holders of IBC common
stock can nominate candidates for IBC&#146;s board of directors.
A stockholder must follow the advance notice procedures
described in IBC bylaws. In general, to nominate a person for
election to the board of directors at an annual meeting of IBC
stockholders, a stockholder must submit a written notice of the
proposed nomination to IBC&#146;s corporate secretary at least
60 but not more than 90&nbsp;days before the first anniversary
of the preceding year&#146;s annual meeting of stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Proposal Procedures.</FONT></I><FONT size="2">
Under IBC&#146;s bylaws, a stockholder can propose at an annual
meeting of IBC stockholders that business other than nominations
to board of directors be considered only if the stockholder
follows the advance notice procedures described in IBC&#146;s
bylaws. In general, a stockholder must submit a written notice
of the proposal, the reasons for such proposal and the
stockholder&#146;s interest in the proposal to IBC&#146;s
corporate secretary at least 60 but not more than 90&nbsp;days
before the first anniversary of the preceding year&#146;s annual
meeting of stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Rights Plan.</FONT></I><FONT size="2">
Although IBC does not have a stockholder rights plan (commonly
referred to as a &#147;poison pill&#148;) as of the date of this
proxy statement-prospectus, under Texas law,&nbsp;IBC&#146;s
board of directors can adopt a rights plan without stockholder
approval. If adopted, a rights plan could operate to cause
substantial dilution to a person or group that attempts to
acquire IBC on terms not approved by IBC&#146;s board of
directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Amendment of Bylaws.</FONT></I><FONT size="2">
Under IBC&#146;s bylaws, the IBC board of directors or the
stockholders can adopt, amend or repeal the bylaws, subject to
limitations under the Texas Business Corporation Act.
</FONT>

<DIV align="left">
<A name='181'></A>
</DIV>

<!-- link1 "Preferred Stock" -->

<P align="left">
<B><FONT size="2">Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of the date of this proxy
statement-prospectus, there are no shares of preferred stock
that have been authorized or issued by IBC.
</FONT>

<DIV align="left">
<A name='182'></A>
</DIV>

<!-- link1 "COMPARISON OF STOCKHOLDER RIGHTS" -->

<P align="center">
<B><FONT size="2">COMPARISON OF STOCKHOLDER RIGHTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The following is a summary of the material
differences between the current rights of Local stockholders and
the rights of IBC stockholders. The summary is not a complete
statement of the provisions affecting, and the differences
between, the current rights of Local stockholders and those of
IBC stockholders, and is qualified in its entirety by reference
to the Delaware General Corporation Law and the Texas Business
Corporation Act, Local&#146;s certificate of incorporation and
bylaws, and IBC&#146;s articles of incorporation and bylaws. An
indication that some of the differences in the rights are
material does not mean that there are not other equally
important differences.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local is organized under the laws of the state of
Delaware. The rights of Local stockholders are currently
governed by the Delaware General Corporation Laws, which we
refer to as the DGCL, and Local&#146;s certificate of
incorporation and bylaws. IBC is organized under the laws of the
state of Texas. If you become an IBC stockholder, your rights
will be governed by the Texas Business Corporation Act, which we
refer to as the TBCA, and IBC&#146;s articles of incorporation
and bylaws.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should carefully read IBC&#146;s articles of
incorporation and bylaws, which are incorporated by reference
into this proxy statement-prospectus. See &#147;Where You Can
Find More Information&#148; on page&nbsp;96 of this proxy
statement-prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">70
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<A name='183'></A>

<!-- link1 "Authorized Capital Stock" -->

<P align="center">
<B><FONT size="2">Authorized Capital Stock</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Authorized:<BR>
    &#149;&nbsp;105,000,000&nbsp;shares of common stock, par value
    $1.00&nbsp;per share
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Authorized:<BR>
    &#149;&nbsp;25,000,000&nbsp;shares of common stock, par value
    $0.01&nbsp;per share.<BR>
    &#149;&nbsp;5,000,000&nbsp;shares of preferred stock, par value
    $0.01&nbsp;per share.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Outstanding as of March&nbsp;5, 2004<BR>
    &#149;&nbsp;38,777,088&nbsp;shares of common stock, without
    adjustment to reflect the IBC stock dividend
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Outstanding as of March&nbsp;9, 2004<BR>
    &#149;&nbsp;16,613,073&nbsp;shares of common stock<BR>
    &#149;&nbsp;No shares of preferred stock
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<A name='184'></A>
</DIV>

<!-- link1 "Size of Board of Directors" -->

<P align="center">
<B><FONT size="2">Size of Board of Directors</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC&#146;s bylaws provide that the board of
    directors shall consist of not less than three (3)&nbsp;persons
    and further provide that the exact number of directors shall be
    fixed from time to time by resolution of the board of directors.
    IBC&#146;s board of directors currently consists of eleven
    (11)&nbsp;members
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s bylaws provide that the board of
    directors shall consist of eight (8) persons.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='185'></A>
</DIV>

<!-- link1 "Cumulative Voting" -->

<P align="center">
<B><FONT size="2">Cumulative Voting</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cumulative voting entitles each stockholder to
cast an aggregate number of votes equal to the number of voting
shares held, multiplied by the number of directors to be
elected. Each stockholder may cast all of his or her votes for
one nominee or distribute them among two or more nominees. The
candidates receiving the highest number of votes are elected.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC&#146;s articles of incorporation expressly
    prohibit cumulative voting rights, as allowed by the TBCA
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Under the DGCL, stockholders do not have the
    right to cumulate their votes in the election of directors
    unless such right is granted by the certificate of
    incorporation. Local&#146;s certificate of incorporation does
    not allow for cumulative voting.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='186'></A>
</DIV>

<!-- link1 "Classes of Directors" -->

<P align="center">
<B><FONT size="2">Classes of Directors</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC&#146;s board is not classified, and all
    directors are elected annually
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s certificate incorporation provides
    that the board of directors will be divided into three classes
    of directors as nearly equal as possible, with each class being
    elected to a staggered three-year term.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='187'></A>
</DIV>

<!-- link1 "Filling Vacancies on the Board" -->

<P align="center">
<B><FONT size="2">Filling Vacancies on the Board</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">According to the articles of incorporation, the
    affirmative vote of a majority of the remaining directors may
    fill any vacancy occurring in the board of directors and, during
    the period between any two successive annual meetings of the
    stockholders, may fill a maximum of two (2)&nbsp;vacant
    directorships resulting from an increase in the number of
    directors
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Any vacancy occurring in the board of directors,
    including any vacancy created by reason of an increase in the
    number of directors, shall be filled by the concurring vote of a
    majority of the directors then in office, whether or not a
    quorum.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">71
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='188'></A>
</DIV>

<!-- link1 "Removal of Directors" -->

<P align="center">
<B><FONT size="2">Removal of Directors</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Any director may be removed, with or without
    cause, by the holders of a majority of the shares then entitled
    to vote at an election of directors
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s certificate of incorporation
    provides that any director may be removed only for cause by the
    affirmative vote of the holders of at least a majority of the
    total votes eligible to be cast at a meeting called expressly
    for such purpose. The following constitute &#147;cause&#148;
    under the certificate of incorporation (i)&nbsp;willful material
    misconduct, breach of material fiduciary duty involving personal
    profit or gross negligence as to material duties or
    (ii)&nbsp;conduct involving dishonesty or breach of trust. These
    minimum vote and cause requirements make it difficult for a
    person or entity to acquire control of Local&#146;s board of
    directors through director elections.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='189'></A>
</DIV>

<!-- link1 "Nomination of Directors and Submission of Stockholder Proposals" -->

<P align="center">
<B><FONT size="2">Nomination of Directors and Submission of
Stockholder Proposals</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC&#146;s bylaws provide detailed procedures
    that must be strictly complied with in order for stockholder
    nominations of candidates for directors or stockholder proposals
    to be considered at a stockholders&#146; meeting. These
    procedures include providing a specific form of notice to IBC of
    such proposals or nominees generally not less than 60&nbsp;days
    and not more than 90&nbsp;days prior to
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s bylaws provide detailed procedures
    that must be strictly complied with in order for stockholder
    nominations of candidates for directors or stockholder proposals
    to be considered at a stockholders&#146; meeting. These
    procedures include providing a specific form of notice to Local
    of such proposals or nominees generally not less than
    45&nbsp;days and not more than 90&nbsp;days prior to meeting.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Stockholders of IBC interested in submitting a
    proposal for inclusion in the proxy materials for a
    stockholders&#146; meeting must also comply with the rules and
    regulations of the SEC applicable to stockholder proposals
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Stockholders of Local interested in meeting.
    submitting a proposal for inclusion in the proxy materials for a
    stockholders&#146; meeting must also comply with the rules and
    regulations of the SEC applicable to stockholder proposals.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='190'></A>
</DIV>

<!-- link1 "Calling Special Meetings of Stockholders" -->

<P align="center">
<B><FONT size="2">Calling Special Meetings of
Stockholders</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC&#146;s articles of incorporation and bylaws
    provide that special meetings of the stockholders may be called
    at any time by the board of directors, the chairman of the board
    of directors, or the president. In addition, a special meeting
    of the stockholders shall be called by the chairman of the board
    of directors, president, or secretary whenever stockholders
    holding at least fifty percent (50%) of all the shares entitled
    to vote at the proposed special meeting make application
    therefore in writing. This restriction on who may call a special
    meeting of stockholders may deter hostile takeovers of IBC by
    making it more difficult for a person or entity to call a
    special meeting of stockholders for the purpose of considering
    an acquisition proposal or related matters
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s certificate of incorporation
    provides that special meetings of stockholders may be called
    only by the chairman of the board or the president, by an
    affirmative vote of a majority of the directors or by the
    president upon the written request of holders of at least a
    majority of the outstanding shares entitled to vote at the
    meeting. This restriction on who may call a special meeting of
    stockholders may deter hostile takeovers of Local by making it
    more difficult for a person or entity to call a special meeting
    of stockholders for the purpose of considering an acquisition
    proposal or related matters.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">72
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='191'></A>
</DIV>

<!-- link1 "Stockholder Action Without a Meeting" -->

<P align="center">
<B><FONT size="2">Stockholder Action Without a Meeting</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC&#146;s articles of incorporation provide that
    any action required or permitted to be taken at a
    stockholders&#146; meeting may be taken without a meeting
    pursuant to the written consent of the holders of the number of
    shares that would have been required to effect the action at an
    actual meeting of the stockholders
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Stockholder action that may be taken at a
    stockholders&#146; meeting may be taken without a meeting if
    written consents describing the action are signed by all
    stockholders entitled to vote on that matter.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='192'></A>
</DIV>

<!-- link1 "Anti-Takeover Statutes" -->

<P align="center">
<B><FONT size="2">Anti-Takeover Statutes</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Pursuant to the TBCA&#146;s Business Combination
    Law, Article 13.01 through 13.08 of the TBCA, an
    &#147;affiliated stockholder&#148; who beneficially owns 20% or
    more of a corporation&#146;s outstanding voting shares is
    generally prevented from entering into or engaging in a
    &#147;business combination,&#148; including mergers, sales and
    leases of assets, issuances of securities and similar
    transactions with a corporation or a subsidiary, during the
    three-year period immediately following the affiliated
    stockholder&#146;s acquisition of shares unless specific
    conditions are satisfied. The three-year restriction does not
    apply if either:<BR>
    <BR>
    &#149;&nbsp;before the date a person became an affiliated
    stockholder, the board of directors of the corporation approved
    the business combination or acquisition of shares made by the
    affiliated stockholder on that date;&nbsp;or<BR>
    <BR>
    &#149;&nbsp;not less than six (6)&nbsp;months after the date a
    person became an affiliated stockholder, the business
    combination is approved by the affirmative vote of at least
    two-thirds of the corporation&#146;s outstanding voting shares
    not beneficially owned by the affiliated stockholder or its
    affiliates or associates.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Section&nbsp;203 of the DGCL prohibits
    &#147;business combinations,&#148; including mergers, sales and
    leases of assets, issuances of securities and similar
    transactions by a corporation or a subsidiary with an
    &#147;interested stockholder&#148; who beneficially owns 15
    percent or more of a corporation&#146;s voting stock, within
    three years after the person or entity becomes an interested
    stockholder, unless:<BR>
    <BR>
    &#149;&nbsp;the transaction that will cause the person to become
    an interested stockholder is approved by the board of directors
    of the target prior to the transaction;<BR>
    <BR>
    &#149;&nbsp;after the completion of the transaction in which the
    person becomes an interested stockholder, the interested
    stockholder holds at least 85% of the voting stock of the
    corporation not including (a)&nbsp;shares held by officers and
    directors of interested stockholders and (b)&nbsp;shares held by
    specified employee benefit plans;<BR>
    <BR>
    &#149;&nbsp;after the person becomes an interested stockholder,
    the business combination is approved by the board of directors
    and holders of at least 66&nbsp;2/3% of the outstanding voting
    stock, excluding shares held by the interested stockholder.<BR>
    <BR>
    A Delaware corporation may elect not to be governed by
    Section&nbsp;203. Local has not made such an election.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">73
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='193'></A>
</DIV>

<!-- link1 "Stockholder Vote Required for Mergers, Sales of Assets and Other Transactions" -->

<P align="center">
<B><FONT size="2">Stockholder Vote Required for Mergers, Sales
of Assets and Other Transactions</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Texas law requires that a merger, a disposition
    of assets not in the regular course of business or a dissolution
    of a corporation be approved by the holders of at least
    two-thirds of the shares entitled to vote thereon, unless the
    corporation&#146;s articles of incorporation require the vote of
    a different number of shares which may not be less than a
    majority of the shares entitled to vote thereon. IBC&#146;s
    articles of incorporation provide that with respect to any
    matter for which the affirmative vote of the holders of a
    specified portion of the shares entitled to vote is required by
    the TBCA, the act of the stockholders on that matter shall only
    require the affirmative vote of the holders of at least a
    majority of the shares entitled to vote on such matter, rather
    than the affirmative vote otherwise required by the TBCA
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The DGCL requires certain mergers and share
    exchanges to be approved by the holders of a majority of the
    outstanding shares entitled to vote thereon. The DGCL similarly
    requires that a sale of all or substantially all of the assets
    of a corporation be approved by the holders of a majority of the
    outstanding shares entitled to vote thereon.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='194'></A>
</DIV>

<!-- link1 "Transactions with Officers and Directors" -->

<P align="center">
<B><FONT size="2">Transactions with Officers and
Directors</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">According to the TBCA, an otherwise valid
    contract or transaction between a corporation and one or more of
    its directors or officers shall be valid notwithstanding whether
    the director or officer is present at or participates in the
    meeting of the board or committee thereof which authorizes the
    contract or transaction, or solely because his or their votes
    are counted for such purpose, if any one of the following is
    satisfied:<BR>
    <BR>
    &#149;&nbsp;The material facts as to his relationship or
    interest and as to the contract or transaction are disclosed or
    are known to the board of directors or the committee, and the
    board or committee in good faith authorizes the contract or
    transaction by the affirmative vote of a majority of the
    disinterested directors, even though the disinterested directors
    be less than a quorum; or<BR>
    <BR>
    &#149;&nbsp;The material facts as to his relationship or
    interest and as to the contract or transaction are disclosed or
    are known to the stockholders entitled to vote thereon, and the
    contract or transaction is specifically approved in good faith
    by vote of the stockholders; or<BR>
    <BR>
    &#149;&nbsp;The contract or transaction is fair as to the
    corporation as of the time it is authorized, approved, or
    ratified by the board of directors, a committee thereof, or the
    stockholders.<BR>
    <BR>
    Common or interested directors may be counted in determining the
    presence of a quorum at a meeting of the board of directors or
    of a committee which authorizes the contract or transaction.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Under the DGCL, a contract between a corporation
    and one or more of its directors or officers may not be voided
    if: (a)&nbsp;the material facts as to the director&#146;s or
    officer&#146;s relationship or interest and as to the contract
    or transaction are disclosed or are known to the board of
    directors and the contract or transaction is approved by a
    majority of the disinterested directors, even though the
    disinterested directors may be less than a quorum; (b)&nbsp;the
    material facts as to the director&#146;s or officer&#146;s
    relationship or interest and as to the contract or transaction
    are disclosed or are known to stockholders entitled to vote
    thereon and the contract or transaction is approved by the
    stockholders; or (c)&nbsp;the contract or transaction is fair as
    to the corporation as of the time it is authorized, approved or
    ratified by the board of directors. Common or interested
    directors may be counted in determining the presence of a quorum
    at a meeting of the board of directors which authorizes the
    contract or transaction.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">74
</FONT>

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<DIV align="left">
<A name='196'></A>
</DIV>

<!-- link1 "Dividends" -->

<P align="center">
<B><FONT size="2">Dividends</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Under Texas law, a board of directors may
    authorize a corporation to make distributions to its
    stockholders out of its surplus, subject to any restriction in
    its articles of incorporation. Texas law does not permit a
    distribution if the distribution exceeds the surplus of the
    corporation or would render the corporation insolvent. Texas law
    provides that determinations of surplus, may, but are not
    required to, be based on:<BR>
    <BR>
    &#149;&nbsp;financial statements of the corporation that present
    the financial condition of the corporation in accordance with
    generally accepted accounting principles;<BR>
    <BR>
    &#149;&nbsp;financial statements prepared on the basis of
    accounting used to file the corporation&#146;s federal income
    tax return or any other accounting practices and principles that
    are reasonable in the circumstances;<BR>
    <BR>
    &#149;&nbsp;financial information, including without limitation
    condensed or summary financial statements, that is prepared on a
    basis consistent with the financial statements referred to
    above;<BR>
    <BR>
    &#149;&nbsp;projections, forecasts, or other forward looking
    information relating to the future economic performance,
    financial condition, or liquidity of the corporation that is
    reasonable in the circumstances;<BR>
    <BR>
    &#149;&nbsp;a fair valuation or information from any other
    method that is reasonable in the circumstances; or<BR>
    <BR>
    &#149;&nbsp;any combination of the foregoing.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Delaware law allows a corporation to pay
    dividends only out of surplus, as determined under Delaware law
    or, if there is no surplus, out of net profits for the fiscal
    year in which the dividend was declared and for the preceding
    fiscal year. Under Delaware law, however, Local cannot pay
    dividends out of net profits if, after payment of the dividend,
    its capital would be less than the capital represented by the
    outstanding stock of all classes having a preference upon the
    distribution of assets.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">75
</FONT>

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<DIV align="left">
<A name='197'></A>
</DIV>

<!-- link1 "Dissenters&#146; Rights" -->

<P align="center">
<B><FONT size="2">Dissenters&#146; Rights</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Generally, under Texas law, a stockholder has the
    right to dissent from any plan of merger or consolidation or
    disposition to which the corporation is a party if Texas law
    requires a stockholder vote and appraisal rights upon compliance
    with the statutory procedures.<BR>
    <BR>
    Under Texas law, a stockholder of a corporation does not have
    the right to dissent or to assert appraisal rights if:<BR>
    <BR>
    &#149;&nbsp;the shares held by the stockholder are part of a
    class or series, shares of which on the record date fixed to
    determine the stockholders entitled to vote on the plan of
    merger or plan of exchange are:<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;listed on a national securities
    exchange;<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;listed on the Nasdaq Stock Market
    Inc.&#146;s National Market System or designated as a national
    market system security by the National Association of Securities
    Dealers,&nbsp;Inc.; or<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;held of record by not less than
    2,000 holders;<BR>
    <BR>
    &#149;&nbsp;the stockholder is not required by the terms of the
    plan of merger or plan of exchange to accept for the
    stockholder&#146;s shares any consideration that is different
    than the consideration to be provided to any other holder of
    shares that are part of the same class or series, other than
    cash in lieu of fractional shares; and<BR>
    <BR>
    &#149;&nbsp;the stockholder is not required by the terms of the
    plan of merger or plan of exchange to accept for the
    stockholder&#146;s shares any consideration other than:<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;shares that, immediately after the
    effective time of the merger or exchange, will be part of a
    class or series, shares of which are:<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;listed, or authorized for listing
    upon official notice of issuance, on a national securities
    exchange;<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;approved for quotation as a national
    market security on an interdealer quotation system by the
    National Association of Securities Dealers,&nbsp;Inc.; or<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;held of record by not less than
    2,000 holders;<BR>
    <BR>
    &#149;&nbsp;cash in lieu of fractional shares; or<BR>
    <BR>
    &#149;&nbsp;any combination of securities and cash described
    above.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The DGCL provides stockholders of a corporation
    involved in a merger the right to demand and receive payment of
    the fair value of their stock in certain mergers. However,
    appraisal rights are not available to holders of shares:<BR>
    <BR>
    &#149;&nbsp;listed on a national securities exchange,<BR>
    <BR>
    &#149;&nbsp;designated as a national market system security on
    an interdealer quotation system operated by the National
    Association of Securities Dealers,&nbsp;Inc., or<BR>
    <BR>
    &#149;&nbsp;held of record by more than 2,000 stockholders
    unless holders of stock are required to accept in the merger
    anything other than any combination of:<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;shares of stock or depository
    receipts of the surviving corporation in the merger<BR>
    <BR>&nbsp;&nbsp;&#149;&nbsp;shares of stock or depository
    receipts of another corporation that, at the effective date of
    the merger, will be<BR>
    <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;listed on a
    national securities exchange;<BR>
    <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;designated as a
    national market system security on an interdealer quotation
    system operated by the National Association of Securities
    Dealers,&nbsp;Inc.; or<BR>
    <BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;held of record by
    more than 2,000 holders;<BR>
    <BR>
    &#149;&nbsp;cash instead of partial shares of the stock or
    depository receipts received.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">76
</FONT>

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<DIV align="left">
<A name='198'></A>
</DIV>

<!-- link1 "Stockholder Preemptive Rights" -->

<P align="center">
<B><FONT size="2">Stockholder Preemptive Rights</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Under the TBCA, stockholders of a corporation
    incorporated before September&nbsp;1, 2003 (such as IBC) have a
    preemptive right to acquire additional unissued or treasury
    shares of the corporation, or securities of the corporation
    convertible into or carrying a right to subscribe to or acquire
    shares, unless the corporation&#146;s articles of incorporation
    limit or deny such preemptive rights. IBC&#146;s articles of
    incorporation provide that no stockholder shall, by reason of
    holding shares of any class of the capital stock of the
    corporation, have any preemptive or preferential right, other
    than such preemptive or preferential rights, if any, as the
    board of directors in its discretion may fix.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Under the DGCL, a stockholder does not have
    preemptive rights unless the corporation&#146;s certificate of
    incorporation specifically grants those rights. Local&#146;s
    certificate of incorporation does not grant preemptive rights.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">77
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='199'></A>
</DIV>

<!-- link1 "Indemnification" -->

<P align="center">
<B><FONT size="2">Indemnification</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Texas law permits a corporation to provide
    indemnification or advancement of expenses against judgments,
    penalties, fines, settlements and reasonable expenses actually
    incurred by a person in connection with a proceeding if it is
    determined:<BR>
    <BR>
    &#149;&nbsp;that the person conducted himself or herself in good
    faith;<BR>
    <BR>
    &#149;&nbsp;in the case of conduct in his or her official
    capacity, reasonably believed that his or her conduct was in the
    corporation&#146;s best interest;<BR>
    <BR>
    &#149;&nbsp;in all other cases that his or her conduct was not
    opposed to the corporation&#146;s best interests;&nbsp;and<BR>
    <BR>
    &#149;&nbsp;in the case of a criminal proceeding, had no
    reasonable cause to believe his or her conduct was unlawful.<BR>
    <BR>
    Under Texas law, indemnification by the corporation is mandatory
    if the director is wholly successful on the merits or otherwise,
    in the defense of the proceeding.<BR>
    <BR>
    IBC&#146;s bylaws provide that IBC shall indemnify to the
    fullest extent permitted by Texas law any person who was, is or
    is threatened to be made a named defendant or respondent to any
    action, suit or proceeding, whether civil, criminal,
    administrative or investigative, by reason of the fact that the
    person is or was a director, officer, employee or agent of the
    corporation, or is or was serving at the request of the
    corporation as a director, officer, employee or agent of another
    corporation, partnership, joint venture, trust or other
    enterprise, against expenses (including attorneys&#146; fees),
    judgments, fines and amounts paid in settlement actually and
    reasonably incurred by him in connection with such action, suit
    or proceeding if he acted in good faith and in a manner he
    reasonably believed to be, in the case of conduct in his
    official capacity as a director, officer, employee or agent of
    the corporation, that his conduct was in the corporation&#146;s
    best interests, and in all other cases, that his conduct was at
    least no opposed to the best interests of the corporation, and,
    with respect to any criminal proceeding, had no reasonable cause
    to believe his conduct was unlawful.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The DGCL provides that, subject to certain
    limitations in the case of &#147;derivative&#148; suits brought
    by a corporation&#146;s stockholders in its name, a corporation
    may indemnify any person who is made a party to any third-party
    suit or proceeding on account of being a director, officer,
    employee or agent of the corporation against expenses, including
    attorney&#146;s fees, judgments, fines and amounts paid in
    settlement reasonably incurred by him or her in connection with
    the action, through, among other things, a majority vote of a
    quorum consisting of directors who were not parties to the suit
    or proceeding, if the person:<BR>
    <BR>
    &#149;&nbsp;acted in good faith and in a manner he or she
    reasonably believed to be in or not opposed to the best
    interests of the corporation or, in some circumstances, at least
    not opposed to its best interests; and<BR>
    <BR>
    &#149;&nbsp;in a criminal proceeding, had no reasonable cause to
    believe his or her conduct was unlawful.<BR>
    <BR>
    To the extent a director, officer, employee or agent is
    successful in the defense of such an action, suit or proceeding,
    the corporation is required by the DGCL to indemnify such person
    for reasonable expenses incurred thereby.<BR>
    <BR>
    Local&#146;s bylaws provide that Local must indemnify, to the
    fullest extent authorized by the DGCL, each person who was or is
    made a party to, is threatened to be made a party to or is
    involved in any action, suit or proceeding because he or she is
    or was a director or officer of Local (or was serving at the
    request of Local as a director, trustee, officer, employee, or
    agent of another entity) while serving in such capacity against
    all expenses, liabilities, or loss incurred by such person in
    connection therewith, provided that indemnification in
    connection with a proceeding brought by such person will be
    permitted only if the proceeding was authorized by Local&#146;s
    board of directors, independent counsel or the stockholders.<BR>
    <BR>
    Local&#146;s bylaws also provide that Local may pay expenses
    incurred in defending the proceedings specified above in advance
    of their final disposition, provided that such advance payments
    for expenses incurred by a director or officer may be made only
    if he or she undertakes to repay all amounts so advanced if it
    is ultimately determined that the person receiving such payments
    is not entitled to be indemnified. Local&#146;s bylaws authorize
    Local to provide similar indemnification to employees or agents
    of Local.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">78
</FONT>

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<DIV align="left">
<A name='200'></A>
</DIV>

<!-- link1 "Limitations on Directors&#146; Liability" -->

<P align="center">
<B><FONT size="2">Limitations on Directors&#146;
Liability</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Under Texas law, a corporation&#146;s articles of
    incorporation may eliminate all monetary liability of each
    director to the corporation or its stockholders for conduct in
    the performance of a director&#146;s duties other than some
    conduct specifically excluded from protection. IBC&#146;s
    articles of incorporation contain such a provision.<BR>
    <BR>
    Texas law does not permit any limitation of liability of a
    director for:<BR>
    <BR>
    &#149;&nbsp;breaching the duty of loyalty to the corporation or
    its stockholders;<BR>
    <BR>
    &#149;&nbsp;an act or omission not in good faith that
    constitutes a breach of duty of the director to the corporation
    or an act or omission that involves intentional misconduct or a
    knowing violation of law;<BR>
    <BR>
    &#149;&nbsp;a transaction from which the director received an
    improper benefit, whether or not the benefit resulted from an
    action taken within the scope of the director&#146;s
    office;&nbsp;or<BR>
    <BR>
    &#149;&nbsp;an act or omission for which the liability of a
    director is expressly provided by an applicable statute.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s certificate of incorporation, as
    amended, provides that a director (including an officer who is
    also a director) of Local shall not be liable personally to
    Local or its stockholders for monetary damages for breach of
    fiduciary duty as a director, except for liability arising out
    of:<BR>
    <BR>
    &#149;&nbsp;any breach of the director&#146;s duty of loyalty to
    Local or its stockholders,<BR>
    <BR>
    &#149;&nbsp;acts or omissions not in good faith or which involve
    intentional misconduct or a knowing violation of law,<BR>
    <BR>
    &#149;&nbsp;payment of a dividend or approval of a stock
    repurchase in violation of Section&nbsp;174 of the
    DGCL,&nbsp;or<BR>
    <BR>
    &#149;&nbsp;any transaction from which the director derived an
    improper personal benefit.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='201'></A>
</DIV>

<!-- link1 "Amendment of Articles of Incorporation or Certificate of Incorporation" -->

<P align="center">
<B><FONT size="2">Amendment of Articles of Incorporation or
Certificate of Incorporation</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Under Texas law and IBC&#146;s articles of
    incorporation,&nbsp;IBC&#146;s board of directors and
    stockholders may amend IBC&#146;s articles of incorporation
    if:<BR>
    <BR>
    &#149;&nbsp;the board of directors sets forth the proposed
    amendment in a resolution and directs that it be submitted to a
    vote at a meeting of stockholders; and<BR>
    <BR>
    &#149;&nbsp;the holders of a majority of the outstanding shares
    entitled to vote thereon approve it by affirmative vote.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s certificate of incorporation may be
    amended only if the proposed amendment is proposed by
    Local&#146;s board of directors and thereafter approved by at
    least a majority of the outstanding stock entitled to vote
    thereon and by at least a majority of the outstanding stock of
    each class entitled to vote thereon. Shares of Local preferred
    stock currently authorized in Local&#146;s certificate of
    incorporation may be issued by Local&#146;s board of directors
    without amending Local&#146;s certificate of incorporation or
    otherwise obtaining the approval of Local&#146;s stockholders.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<A name='202'></A>
</DIV>

<!-- link1 "Amendment of Bylaws" -->

<P align="center">
<B><FONT size="2">Amendment of Bylaws</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">IBC</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Local</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC&#146;s bylaws generally provide for
    amendment, repeal or adoption of new bylaws by a majority of
    IBC&#146;s board of directors or by a majority of the
    outstanding shares of IBC.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Local&#146;s bylaws generally provide for
    amendment, repeal or adoption of new bylaws by a two-thirds
    majority of Local&#146;s board of directors or by a majority of
    the outstanding shares of Local.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">79
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='203'></A>
</DIV>

<!-- link1 "ELECTION OF DIRECTORS (Proposal Two)" -->

<P align="center">
<B><FONT size="2">ELECTION OF DIRECTORS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Proposal Two)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Three directors will be elected at this
year&#146;s Annual Meeting. Except as otherwise provided upon
consummation of the merger (as described above), each director
will serve for a three-year term ending at the 2007 Annual
Meeting or until he is succeeded by another qualified director
who has been elected.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will vote your shares as instructed by you on
the enclosed proxy form. If you sign, date and return the proxy
form, but do not specify how you want your shares voted, we will
vote your shares for the election of the nominees listed below.
If unforeseen circumstances (such as death or disability) make
it necessary for the board of directors to substitute another
person for any of the nominees, we will vote your shares for
that other person. At this time, the board of directors knows of
no reason why the nominees listed below may not be able to serve
as directors if elected.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No director, executive officer or nominee for
director of Local is related to any other director or executive
officer of Local by blood, marriage or adoption. The three
nominees for director are presently members of the board of
directors.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2">Local recommends voting &#147;FOR&#148; the
nominees.</FONT></B>

<P align="left">
<B><FONT size="2">Biographical Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the name and age
of each director and director nominee, the year he became a
director, and the year his term of service will end.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Director</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Term</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Since</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expires</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward A. Townsend
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">Chairman of the Board</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William D. Breedlove
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Andrew M. Coats
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert A. Kotecki
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Joseph A. Leone
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">George P. Nigh
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jan A. Norton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">J. David Rosenberg
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1998</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The Director
Nominees.</FONT></I><FONT size="2"> The board of directors has
nominated three candidates for election. If elected, these
nominees will serve three-year terms expiring in 2007. A brief
summary of each director nominee&#146;s principal occupation,
business affiliations and other information follows:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Edward A. Townsend.</FONT></I><FONT size="2">
    Mr.&nbsp;Townsend was elected as a director of Local and Local
    Oklahoma in 1997. At the same time, Mr.&nbsp;Townsend became
    Chairman and Chief Executive Officer of Local and Local
    Oklahoma. From April 1994 to February 1998, Mr.&nbsp;Townsend
    served as Chairman and Chief Executive Officer of Green Country
    Bank, FSB, and Chief Executive Officer of its parent
    corporation, Green Country Banking Corporation. From January
    1993 through March 1994, Mr.&nbsp;Townsend served as Senior Vice
    President of Stifel, Nicolaus&nbsp;&#38; Company, an investment
    banking firm located in St.&nbsp;Louis, Missouri. From October
    1988 through September 1992, Mr.&nbsp;Townsend served as
    Chairman and President of Local Federal Bank, FSB (the
    predecessor of Local Oklahoma). From 1967 to 1987,
    Mr.&nbsp;Townsend was employed in various positions at First
    National Bank and later InterFirst Corporation, both in Dallas,
    Texas.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Robert A. Kotecki.</FONT></I><FONT size="2">
    Mr.&nbsp;Kotecki was elected as a director of Local in 1997.
    From 1997 until May 1999, Mr.&nbsp;Kotecki also served as a
    director of Local Oklahoma. Since October 2001, Mr.&nbsp;Kotecki
    has served as a Managing Director with the investment banking
    firm of Sandler O&#146;Neill&nbsp;&#38; Partners, L.P., in
    Chicago,&nbsp;Illinois. From March 1993 to September 2001,
    Mr.&nbsp;Kotecki served in various capacities with Friedman,
    Billings, Ramsey&nbsp;&#38; Co.,&nbsp;Inc., an investment
    banking firm
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="center"><FONT size="2">80
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">based in Arlington, Virginia. From November 1988
    through March 1993, Mr.&nbsp;Kotecki served as an Associate with
    Trident Financial Corp., an investment banking firm located in
    Raleigh, North Carolina. Mr.&nbsp;Kotecki is a Chartered
    Financial Analyst.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">J. David Rosenberg.</FONT></I><FONT size="2">
    Mr.&nbsp;Rosenberg was elected as a director of Local in
    February 1998. Mr.&nbsp;Rosenberg is a senior partner of
    Keating, Muething&nbsp;&#38; Klekamp, P.L.L., a Cincinnati, Ohio
    law firm, of which he has been a member since 1974.
    Mr.&nbsp;Rosenberg is a director of PFGI Capital Corporation,
    Hinkle Construction Co., Greycourt and Co.,&nbsp;Inc. and Niksun
    Inc.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The Continuing
Directors.</FONT></I><FONT size="2"> Since Local&#146;s
directors serve staggered, three-year terms, a majority of the
directors continue their service each year. The continuing
directors and their respective principal occupations, business
affiliations and other information are as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">William D.
    Breedlove.</FONT></I><FONT size="2"> Mr.&nbsp;Breedlove was
    elected as a director of Local and Local Oklahoma in August
    2001. Mr.&nbsp;Breedlove is Vice Chairman of HBW
    Holdings,&nbsp;Inc. and President of HBW Investments,&nbsp;Inc.,
    an investment banking firm based in Dallas, Texas. Prior to the
    firm&#146;s formation as a result of a merger with Hoak
    Securities Corporation, Mr.&nbsp;Breedlove was chairman,
    managing director and co-founder of Breedlove
    Wesneski&nbsp;&#38; Co., a private merchant banking firm. From
    1984 to 1989, Mr.&nbsp;Breedlove also served as president and
    director of Equus Capital Corporation, the corporate general
    partner of three public and private limited partnerships
    operating primarily as private equity funds. Mr.&nbsp;Breedlove
    received his B.B.A. degree in finance and banking from the
    University of Texas in 1962. Mr.&nbsp;Breedlove also serves as a
    director of NCI Building Systems,&nbsp;Inc. and Integrated
    Security Systems,&nbsp;Inc.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Andrew M. Coats.</FONT></I><FONT size="2">
    Mr.&nbsp;Coats was elected as a director of Local in 1999 and a
    director of Local Oklahoma 1997. On July&nbsp;1, 1996,
    Mr.&nbsp;Coats became the Dean of the University of Oklahoma
    College of Law. Mr.&nbsp;Coats served as President of the
    Oklahoma Bar Association in 1992 and served as President of the
    law firm of Crowe&nbsp;&#38; Dunlevy in 1987 and 1988. In 1983,
    Mr.&nbsp;Coats was elected Mayor of Oklahoma City where he
    served until April 1987. Mr.&nbsp;Coats won the Democratic
    nomination for U.S.&nbsp;Senate from Oklahoma in 1980.
    Mr.&nbsp;Coats served as the District Attorney of Oklahoma
    County from 1976 to 1980. Mr.&nbsp;Coats is a past President of
    the American College of Trial Lawyers.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Joseph A. Leone.</FONT></I><FONT size="2">
    Dr.&nbsp;Leone has served as a director of Local since 1997 and
    Local Oklahoma (including its predecessors) since 1973. Since
    1987, Dr.&nbsp;Leone has served as managing partner with
    MBI,&nbsp;Inc., a limited partnership, which owns several
    commercial real estate properties located within Oklahoma.
    Dr.&nbsp;Leone served 34&nbsp;years in the Oklahoma higher
    education administration and during which, from 1978 through
    1987, held the position of Executive Vice Chancellor of the
    Oklahoma State System of Higher Education. From 1978 through
    1987, Dr.&nbsp;Leone served as Executive Vice Chancellor and
    Chancellor of the Oklahoma State System of Higher Education.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">George P. Nigh.</FONT></I><FONT size="2">
    Governor Nigh was elected as a director of the Local and Local
    Oklahoma in 1997. From July 1992 through June 1997, Governor
    Nigh served as President of the University of Central Oklahoma,
    where he had served as Distinguished Statesman in Residence for
    the previous five years. From January 1979 through 1987,
    Governor Nigh served as Governor of the state of Oklahoma. Prior
    to 1979, Governor Nigh served 16&nbsp;years as Lt. Governor and
    eight years in the House of Representatives of the state of
    Oklahoma. Governor Nigh currently serves as a consultant for the
    Bank in the area of community relations.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">Jan A. Norton.</FONT></I><FONT size="2">
    Mr.&nbsp;Norton was elected as a director and President of Local
    and Local Oklahoma in 1997.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Service on the Board</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Board Meetings and
Committees.</FONT></I><FONT size="2"> The board of directors
held five meetings in 2003. Management also periodically
conferred with directors between meetings regarding Local
affairs. Local&#146;s non-employee directors meet periodically
without the Chief Executive Officer present. During 2003, all
directors attended
</FONT>

<P align="center"><FONT size="2">81
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">75% or more of the total aggregate number of
meetings of the board of directors and meetings of the
committees of the board of directors on which they served.
Members of the board of directors are encouraged to attend the
annual meetings of stockholders. Last year all members of the
board of directors attended the annual meeting.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit and Compliance Committee operates under
a written charter and is currently composed of Mr.&nbsp;William
D. Breedlove (Chairman), Mr.&nbsp;Andrew M. Coats and
Mr.&nbsp;Joseph A. Leone. The board of directors has designated
Mr.&nbsp;Breedlove as the Audit and Compliance Committee&#146;s
financial expert. The members of the Audit and Compliance
Committee are independent under the NASD&#146;s listing
standards and rules of the Securities and Exchange Commission.
The Audit and Compliance Committee met six times in 2003 with
all members attending 75% or more of these meetings. The Audit
and Compliance Committee is primarily concerned with the
effectiveness of Local&#146;s financial audits by its internal
audit staff and by the independent auditors. Its duties include:
(i)&nbsp;being directly responsible for the appointment and
approval, compensation and oversight of the audit work of the
independent auditors and such independent auditors report
directly to the Audit and Compliance Committee;
(ii)&nbsp;reviewing the scope of the audit to be conducted by
the independent auditors, as well as the results of such audit;
(iii)&nbsp;reviewing the organization and scope of Local&#146;s
internal system of audit and financial controls;
(iv)&nbsp;reviewing Local&#146;s financial reporting and the
accounting standards and principles followed; and
(v)&nbsp;examining other reports relating to Local&#146;s
compliance with financial institution laws and regulations. The
Audit and Compliance Committee&#146;s report is set forth below
under &#147;Proposal Three: Ratification of Auditors&#148;.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Compensation and Retirement Committee is
currently composed of Mr.&nbsp;Joseph A. Leone (Chairman),
Mr.&nbsp;Andrew M. Coats and Mr.&nbsp;Gene C. Howard, a director
of Local&#146;s subsidiary bank, each of whom is independent
under the NASD listing standards. The Compensation and
Retirement Committee met three times in 2003 with all members
participating. The Compensation and Retirement Committee sets
the compensation level of the Chief Executive Officer and
evaluates and reviews the reasonableness of all other executive
officer compensation, establishes a general framework for the
short-term incentive program and oversees the long-term
incentive programs. The Compensation and Retirement
Committee&#146;s report is set forth below.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Local board of directors has not delegated
its functions to any other standing committees, and thus has not
created executive or other similar committees. Although the
board of directors of Local does not have a standing nominating
committee, directors Breedlove, Coats, Kotecki, Leone and
Rosenberg, identify individuals qualified to become board
members consistent with the criteria approved by the entire
board of directors. Directors Breedlove, Coats, Kotecki, Leone
and Rosenberg, are independent under the NASD&#146;s listing
standards. The board of directors believes that the formation of
a nominating committee and the adoption of a formal charter is
unnecessary because, consistent with past practice, only
independent directors are involved in Local&#146;s process.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is the policy of Local to consider properly
submitted stockholder nominations for candidates for membership
on the board of directors. In evaluating such nominations, the
independent directors seek to achieve a balance of knowledge,
experience and capability on the board of directors to address
its membership criteria. Members of Local&#146;s board of
directors must have the highest professional and personal ethics
and values, consistent with the values of Local. They must also
be committed to enhancing stockholder value and have sufficient
time to carry out their duties and to provide insight and
practical wisdom based on experience. Furthermore, each director
must represent the interests of all stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The independent directors utilize a variety of
methods for identifying and evaluating director nominees.
Candidates may come to the attention of the independent
directors though current members of the board of directors,
stockholders or other persons. In evaluating such candidates the
independent directors seek to achieve a balance of knowledge,
experience and capability on the board of directors.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any stockholder nominations should include the
nominee&#146;s name and qualifications for membership on the
board of directors and be addressed to: Alan L. Pollock,
Corporate Secretary, Local Financial Corporation, 3601 N.W.
63rd&nbsp;Street, Oklahoma City, Oklahoma 73116. In addition the
bylaws of Local
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">82
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">permit stockholders to nominate directors for
consideration at an annual meeting. For a description of this
process, see &#147;Other Information About the Annual
Meeting&nbsp;&#151; Stockholder Proposals&#148; on page&nbsp;95.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Director
Compensation.</FONT></I><FONT size="2"> Local pays its
non-employee directors a quarterly retainer of $5,000. Those
directors who are also a director of Local Oklahoma receive a
per meeting fee of $500 (which includes telephonic board
meetings) and a $2,500 quarterly retainer for service as a Local
Oklahoma director. Local reimburses all ordinary and necessary
expenses incurred in the conduct of its business. Committee
members of each of the Audit and Compliance Committee and the
Compensation and Retirement Committee receive $500&nbsp;per
meeting attended, whereas the Chairman of each of such
committees receives $1,000&nbsp;per meeting attended. Governor
George P. Nigh also serves as community relations consultant to
Local Oklahoma, for which he receives $72,000&nbsp;per year and
an automobile.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Communications with the
Board.</FONT></I><FONT size="2"> Stockholders may communicate
with the board of directors, by sending a letter to Local&#146;s
board of directors, c/o&nbsp;Corporate Secretary, Local
Financial Corporation, 3601&nbsp;N.W. 63rd&nbsp;Street, Oklahoma
City, Oklahoma 73116. The Corporate Secretary has the authority
to disregard any inappropriate communications or to take other
appropriate actions with respect to any such inappropriate
communications. If deemed an appropriate communication, the
Corporate Secretary will submit stockholder correspondence to
the Chairman of the Board or to any specific director to whom
the correspondence is directed.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">83
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='204'></A>
</DIV>

<!-- link1 "OTHER INFORMATION ABOUT DIRECTORS, OFFICERS AND CERTAIN STOCKHOLDERS" -->

<P align="center">
<B><FONT size="2">OTHER INFORMATION ABOUT DIRECTORS,
OFFICERS</FONT></B>

<DIV align="center">
<B><FONT size="2">AND CERTAIN STOCKHOLDERS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Beneficial Ownership of Directors, Officers
and Certain Stockholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain
information regarding the beneficial ownership of Local&#146;s
common stock as of March&nbsp;9, 2004 by (i)&nbsp;each director
of Local, (ii)&nbsp;each named executive officer in the Summary
Compensation Table, (iii)&nbsp;each person known or believed by
Local to own beneficially five percent or more of the common
stock and (iv)&nbsp;all directors and executive officers as a
group. Unless indicated otherwise, each person has sole voting
and dispositive power with respect to such shares.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Beneficial Ownership(1)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Name of Director, Executive Officer or Stockholders Holding 5% or More</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent(2)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FMR Corporation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,651,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">82 Devonshire Street<BR>
    Boston, MA 02109
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dalton, Greiner, Hartman, Maher&nbsp;&#38; Company
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,292,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">565 Fifth Avenue, Suite&nbsp;2101<BR>
    New&nbsp;York, NY 10017-2413
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bryn Mawr Capital
    Management,&nbsp;Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,156,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">One Town Place, Suite&nbsp;700<BR>
    Bryn Mawr, PA 19010-3495
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Wellington Management Company, LLP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">950,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">75 State Street<BR>
    Boston, MA 02109
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Barclays Private Bank Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">842,706</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">59/60 Grosvenor Street<BR>
    London, WIX 9DA England
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward A. Townsend(3)(4)(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659,747</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jan A. Norton(3)(4)(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">263,365</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">J. David Rosenberg(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183,113</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert A. Kotecki(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard L. Park(3)(4)(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert L. Vanden(3)(4)(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,168</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Christopher C. Turner(3)(4)(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Joseph A. Leone(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Andrew M. Coats(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">George P. Nigh(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William D. Breedlove(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">All directors and named executive officers as a
    group (11&nbsp;persons)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,402,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">Less than one percent.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Shares of common stock that are not outstanding
    but that can be acquired by a person upon exercise of an option
    or warrant within 60&nbsp;days are included in computing the
    percentage for such person, but not included in computing the
    percentage for any other person.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Percentage of beneficial ownership is based on
    16,613,073&nbsp;shares of common stock outstanding as of
    March&nbsp;9, 2004.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">84
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The number of shares for the following persons
    includes presently exercisable stock options in the amounts
    shown below.
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Option Shares</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward A. Townsend
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">606,640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jan A. Norton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard L. Park
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert L. Vanden
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Christopher C. Turner
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Joseph A. Leone
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">George P. Nigh
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">J. David Rosenberg
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Andrew M. Coats
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert A. Kotecki
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William D. Breedlove
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The amount shown for the named executive officers
    as a group includes 13,615&nbsp;shares allocated to the accounts
    of the named executive officers under Local Oklahoma&#146;s
    Employee Stock Ownership Plan. These shares are allocated among
    the following named executive officers in the amounts shown
    below.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Allocated ESOP Shares</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward A. Townsend
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jan A. Norton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard L. Park
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert L. Vanden
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Christopher C. Turner
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The amount shown for the named executive officers
    as a group includes 2,110&nbsp;shares allocated to the accounts
    of the named executive officers under Local Oklahoma&#146;s
    401(k) Matching Contribution Plan. These shares are allocated
    among the following named executive officers in the amounts
    shown below.
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Allocated 401(k) Shares</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward A. Townsend
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jan A. Norton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">642</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard L. Park
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">315</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert L. Vanden
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Christopher C. Turner
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Executive Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the compensation
paid or accrued to the Chief Executive Officer and each of the
four other most highly compensated executive officers of Local,
including officers of Local Oklahoma (the five are sometimes
referred to as the &#147;named executive officers&#148;) for
services performed in 2003, 2002 and 2001. Local provides
various perquisites to certain employees including the named
executive officers. In each case, the aggregate value of the
perquisites provided to the named executive
</FONT>

<P align="center"><FONT size="2">85
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">officers did not exceed the lesser of $50,000 or
10% of such named executive officers&#146; annual salary and
bonus.
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Long Term</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Awards</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Salary($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options (#)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($)(1)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward A. Townsend
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">320,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265,530</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chief Executive Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">320,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">618,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">320,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jan A. Norton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">240,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">187,610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">President
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">240,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">240,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert L. Vanden
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,530</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Executive Vice President Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Real Estate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,412</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard L. Park
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,402</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Executive Vice President and Chief
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financial Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Christopher C. Turner
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,530</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Executive Vice President Consumer Banking
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The amounts shown under this column represent
    (i)&nbsp;the amount of tax gross-up bonus on stock options
    exercised, as applicable, for Mr.&nbsp;Townsend and
    Mr.&nbsp;Norton, (ii)&nbsp;the market value of shares allocated
    to the named executive officers&#146; accounts under the
    Employee Stock Ownership Plan as of the allocation dates, and
    (iii)&nbsp;the 401(k) matching contribution for named
    executives, as applicable.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Equity Compensation Plan Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth required
information with respect to equity compensation plans of Local
as of December&nbsp;31, 2003:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining Available</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities to be</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">for Further Issuance</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issued upon</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Under Equity</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">exercise of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise Price of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation Plans</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Excluding</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options, Warrants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Option, Warrants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Securities Reflected</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Plan Category</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and Rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and Rights</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">in First Column)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity compensation plans approved by security
    holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,755,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity compensation plans not approved by
    security holders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">TOTAL
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,755,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Stock Options Granted in 2003</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There were no grants of stock options during 2003
to executive officers.
</FONT>

<P align="center"><FONT size="2">86
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides information on
option exercises in fiscal 2003 by the named executive officers
and the value of such officers&#146; unexercised options at
December&nbsp;31, 2003.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Value of Unexercised</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Securities Underlying</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">In-the-Money Options at</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Unexercised Options</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Fiscal Year&nbsp;End(1)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares Acquired</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Upon Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Value Realized</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward A. Townsend
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">606,640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,557,778</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jan A. Norton
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">177,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,702,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert L. Vanden
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">466,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard L. Park
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">540,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Christopher C. Turner
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">449,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124,010</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Based on a per share market price of $20.81 at
    December&nbsp;31, 2003.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Compensation and Retirement Committee
Report</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Composition.</FONT></I><FONT size="2"> The
Committee is composed of two directors of Local, Mr.&nbsp;Joseph
A. Leone (Chairman) and Mr.&nbsp;Andrew M. Coats, and one
director of Local&#146;s subsidiary, Local Oklahoma,
Mr.&nbsp;Gene C. Howard. Each of these Committee members is
independent, defined as a person who is not an officer of Local
and who does not have a relationship with Local that would
interfere with the Committee member&#146;s exercise of
independent judgment.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Compensation
Approach.</FONT></I><FONT size="2"> The Compensation and
Retirement Committee (the &#147;Committee&#148;) sets the
compensation level of the Chief Executive Officer (CEO) (subject
to the terms of the CEO&#146;s existing employment agreement),
reviews compensation and performance of all other executive
officers, makes recommendations to the board of directors
relating to the compensation of the directors, establishes a
general framework for the short-term incentive program and
oversees the long-term incentive programs. The Committee uses a
set of guiding principles, which are designed to align executive
compensation with management&#146;s execution of business
strategies and initiatives as well as the achievement of
long-term financial performance and growth in stockholder value.
The principles are as follows:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local&#146;s salaries must be competitive with
    comparable banking institutions with which Local competes for
    highly qualified and experienced executive and senior officers.
    The Committee relies on its members&#146; knowledge of other
    comparable banking institutions and independent surveys of
    executive compensation in such institutions, and may retain
    outside consultants for advice, to ensure executive salaries are
    competitive.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local maintains annual incentive programs
    sufficient to provide motivation to achieve specific operating
    goals and to generate rewards that bring total compensation to
    competitive levels.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Local provides equity-based incentives for
    executive and senior officers and other key employees to ensure
    that they are motivated over the long term to respond to
    Local&#146;s business challenges and opportunities as
    stockholders as well as employees.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Compensation is closely tied to performance and
its impact on the growth in stockholder value. The primary
components of executive compensation are base salary, short-term
cash incentives and long-term equity incentives.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Base Salary.</FONT></I><FONT size="2"> Local
understands that base salaries must remain in a competitive
range to retain capable management. The minimum base salary for
the CEO is fixed by an employment agreement between Local, Local
Oklahoma and the CEO. The Committee reviews the salary level
annually based on a subjective mix of Local&#146;s performance,
the CEO&#146;s experience and contributions, and the levels of
compensation received by similarly situated chief executive
officers at comparable companies, and may increase (but not
decrease) the base salary if the Committee deems an increase is
warranted. The salaries
</FONT>

<P align="center"><FONT size="2">87
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">of the other executive and senior officers are
established by the CEO, who evaluates these salaries in
relationship to the base salary of the CEO and to their
respective levels of responsibility and contributions to Local
and based on the other criteria described by the Committee in
this report. The Committee reviews the reasonableness of all
executive and senior officers salaries as determined by the CEO.
Annual adjustments are made to maintain base salaries at levels
competitive with comparable companies and to maintain an
equitable relationship between the base salaries of executive
and senior officers and overall merit increases for Local&#146;s
other employees. In the case of an executive or senior officer
joining Local, base salaries are also determined as one
component of a total compensation package that is competitive
with compensation granted by that officer&#146;s prior employer
and/or other opportunities available to that officer.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Annual Incentive
Compensation.</FONT></I><FONT size="2"> Local provides annual
incentive compensation in the form of bonuses. For bonuses paid
to the CEO, the Committee assesses incentives accorded
comparable positions in other companies, the reporting of
pre-tax profits for the year, a comparison of return on equity,
return on assets and nonperforming asset levels at comparable
banking institutions and the size of the bonus in relationship
to the executive&#146;s base salary. The Committee analyzes the
bonus amount in relationship to Local&#146;s broader corporate
performance, its targeted growth objectives and its results of
operations. The Committee also analyzes the bonus amount for the
CEO in relationship to his responsibilities and his importance
to the Local&#146;s operating strategy. For bonuses other than
those paid to the CEO, the CEO applies similar criteria to
establish bonus amounts, which are ratified by the Committee,
for the other executive and senior officers. Consistent with
Local&#146;s inclination toward incentive compensation, the
bonus portion of the cash compensation package tends to be
weighted more than the base salary portion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Long-Term Incentive
Compensation.</FONT></I><FONT size="2"> Local provides long-term
incentive compensation primarily in the form of incentive and
non-qualified stock options under its 1998 Stock Option Plan
(the &#147;1998 Plan&#148;). In July 2000, Local amended the
1998 Plan to increase the number of shares available for awards
from 1,720,370&nbsp;shares to 2,100,370&nbsp;shares of
Local&#146;s common stock. As of December&nbsp;31, 2003, options
covering 1,755,490 remain outstanding at an average exercise
price of $10.09&nbsp;per share with 1,546,490 options
exercisable. Initial stock option awards for executive and
senior officers are individually determined at or prior to
employment at levels that are designed to attract qualified
executive and senior officers and in certain cases to be
competitive with options granted by their prior employers.
Local&#146;s inclination toward incentive compensation has
resulted in a gradual expansion of participation in the 1998
Plan and the making of option grants has become a more
significant component of Local&#146;s compensation plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management receives value from option grants only
if the common stock appreciates over the long term. The amount
of individual option grants is determined based in part on
competitive practices at comparable companies and on
Local&#146;s philosophy of significantly linking executive
compensation with stockholder interests. In determining the size
of individual grants, the Committee also considers the number of
shares subject to options previously granted to each executive
or senior officer or key employee, including the number of
shares that have vested and that remain unvested. The Committee
believes that option grants by Local to its management are
comparable to the average range for similarly situated companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In structuring the CEO&#146;s compensation
package, the Committee considered the possible tax implications
that the compensation would have on Local. Section&nbsp;162(m)
of the Internal Revenue Code (the &#147;Code&#148;) limits Local
to a deduction for federal income tax purposes of no more than
$1&nbsp;million of compensation paid to certain officers in a
taxable year; however, this limitation does not apply to
compensation that is performance based, paid pursuant to a
stockholder approved plan and compliant with other
Section&nbsp;162(m) requirements. Compensation deemed paid in
connection with the exercise of option grants made under
Local&#146;s 1998 Stock Option Plan, which satisfies
requirements of Section&nbsp;162(m), qualifies as
performance-based compensation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For additional information regarding options
awards, see the compensation tables preceding this report.
</FONT>

<P align="center"><FONT size="2">88
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Corporate Performance and Chief Executive
Officer Compensation.</FONT></I><FONT size="2"> Edward A.
Townsend became Chief Executive Officer in September 1997. Under
Mr.&nbsp;Townsend&#146;s employment agreement with Local and
Local Oklahoma, Mr.&nbsp;Townsend&#146;s annual base salary is
$320,000 through September&nbsp;8, 2004. In addition,
Mr.&nbsp;Townsend holds options granted to him in 1997, which
cover 606,640&nbsp;shares of Local&#146;s common stock and are
exercisable at $10.00&nbsp;per share as of February&nbsp;25,
2004. Local has granted no additional options to
Mr.&nbsp;Townsend since the original grant in 1997. The
employment agreement provides that Local may increase, but not
decrease, his base salary during the term of the agreement and
also provides for bonuses in amounts to be determined by the
Committee. The agreement was approved by the disinterested
members of the board of directors. While the Committee may
increase Mr.&nbsp;Townsend&#146;s base salary, the Committee
chose to compensate Mr.&nbsp;Townsend through a bonus award of
$500,000 and made no increase in his base salary.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In determining the compensation amounts, the
Committee focused largely upon Mr.&nbsp;Townsend&#146;s efforts
in executing Local&#146;s operating strategy and the success of
that strategy to date, as reflected in Local&#146;s steadily
increasing financial performance. The Committee also considered
Mr.&nbsp;Townsend&#146;s experience as an executive officer in
the banking industry and his role in expanding and motivating
executive personnel. In addition, the Committee compared
Mr.&nbsp;Townsend&#146;s cash compensation (base salary and
bonus) to the cash compensation of other chief executive
officers of comparable banking institutions, as indicated by an
independently prepared compensation survey. Based on
Mr.&nbsp;Townsend&#146;s efforts and on this survey and other
available information, the Committee chose to maintain the
existing base salary level and to use the bonus component to
bring Mr.&nbsp;Townsend&#146;s total cash compensation in line
with the compensation packages of similarly situated chief
executive officers in the banking industry. This somewhat lower
base salary level and the greater emphasis upon the bonus
component reflects the Committee&#146;s emphasis upon incentive
compensation and its belief that incentive compensation better
aligns executive compensation with Local&#146;s performance and,
ultimately, the interests of the stockholders.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local remains committed to a philosophy of pay
for performance.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">The Compensation and Retirement Committee of
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Local Financial Corporation
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Joseph A. Leone, Chairman
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Andrew M. Coats
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Gene C. Howard
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Dated: February&nbsp;25, 2004
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preceding &#147;Compensation and Retirement
Committee Report&#148; shall not be deemed incorporated by
reference by any general statement incorporating this Proxy
Statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as
amended, except to the extent that Local specifically
incorporates this information by reference, and shall not
otherwise be deemed filed under the Securities Act or the
Securities Exchange Act.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">89
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Performance Graph</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following graph compares the market values of
Local&#146;s common stock to the Nasdaq&nbsp;&#151; Total US
Index and the SNL $1B-$5B Bank Asset-Size Index. The graph
assumes an investment of $100 on April&nbsp;22, 1998 (the date
the common stock of Local was listed for trading), and that all
dividends were reinvested and are weighted on a market
capitalization basis.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2">LOCAL FINANCIAL CORPORATION</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B><FONT size="2">TOTAL RETURN PERFORMANCE</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<IMG src="d13787a1d1378746.gif" alt="(GRAPH)">

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Period Ending</FONT></B></TD>
</TR>

<TR>
    <TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">&nbsp;Index</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/98</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/99</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/00</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/01</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/02</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">12/31/03</FONT></B></TD>
</TR>

<TR>
    <TD colspan="25"></TD>
</TR>

<TR>
    <TD colspan="25" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;Local Financial Corporation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">115.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">162.78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">231.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;NASDAQ&nbsp;&#151; Total US
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">113.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;SNL $1B-$5B Bank Index
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91.91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">126.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">146.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Effective July&nbsp;15, 1999, Local delisted its
common shares from the American Stock Exchange and listed them
with the Nasdaq National Market, trading under the symbol
&#147;LFIN.&#148;
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Performance Graph shall not be deemed
incorporated by reference by any general statement incorporating
this proxy statement-prospectus into any filing under the
Securities Act or under the Securities Exchange Act, except to
the extent that Local specifically incorporates this information
by reference, and shall not otherwise be deemed filed under the
Securities Act or the Securities Exchange Act.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Compensation Committee Interlocks and Insider
Participation</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No executive officer or employee of Local
participated in board of directors&#146; decisions about
executive compensation. No member of the Board and no employee
of Local serves or has served on the compensation and retirement
committee (or board of directors of a corporation lacking a
compensation committee) of a corporation employing a member of
the Board.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Employment Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local and Local Oklahoma have entered into
employment agreements with Mr.&nbsp;Edward A. Townsend, their
Chairman of the Board and Chief Executive Officer
(&#147;CEO&#148;), and Mr.&nbsp;Jan A. Norton,
</FONT>

<P align="center"><FONT size="2">90
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">their President (&#147;President&#148;). In
addition, Local Oklahoma has entered into employment agreements
with Executive Vice Presidents, Mr.&nbsp;Robert L. Vanden,
Mr.&nbsp;Richard L. Park and Mr.&nbsp;Christopher C. Turner
(collectively, the &#147;Executive Vice Presidents&#148;). Under
these employment agreements, Local and Local Oklahoma employ the
CEO and the President, and Local Oklahoma employs the Executive
Vice Presidents for a term of three years, which term shall be
extended annually beginning on the first anniversary of the
effective date of each employment agreement for successive
additional one (1) year periods, upon express approval by the
board of directors of Local and Local Oklahoma as to the
CEO&#146;s employment agreement, and by the CEO as to the
employment agreements of the President and the Executive Vice
Presidents, unless either party to the employment agreements
elects, not less than 60&nbsp;days prior to the annual
anniversary date of that agreement, not to so extend the term
thereof for an additional year.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The annual base salaries for the CEO and for the
President are $320,000 and $240,000, respectively, which are
paid in monthly installments. The annual base salaries for
Messrs.&nbsp;Vanden, Park and Turner are $225,000, $150,000 and
$150,000, respectively, which are also paid in monthly
installments. These employment agreements further provide the
CEO, the President and the Executive Vice Presidents with the
same employee benefits that are provided by Local Oklahoma to
executive employees generally, provide for vacation and
participation in Local Oklahoma&#146;s benefit plans, membership
in a golf and country club in the city where they work, and for
an automobile of the type and kind comparable to that which
Local Oklahoma provides to its other executive officers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The employment agreements of the CEO and of the
President are terminable with or without cause by the board of
directors of Local and/or the board of directors of Local
Oklahoma. The employment agreements of the Executive Vice
Presidents are terminable with or without cause by the CEO
and/or by the board of directors of the Local Oklahoma. In the
event the employment of the CEO, the President or any of the
Executive Vice Presidents is terminated without cause, or they
resign from that employment for good reason, then each of them
will be entitled to receive their annual cash compensation and
their other fringe benefits under their employment agreements
for the remaining term of that agreement. The annual cash
compensation of the CEO, the President and the Chief Financial
Officer (CFO)&nbsp;is defined in their employment agreements as
their then annual base salary plus an amount equal to the
average of their respective bonuses for the three
(3)&nbsp;immediately prior years. The annual cash compensation
of the Executive Vice Presidents is defined in their employment
agreements as their then annual base salary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following a change of control of Local or of
Local Oklahoma, if the CEO, the President or the CFO resigns for
any reason, or their employment is terminated without cause,
they will receive a severance benefit equal to three
(3)&nbsp;times their annual cash compensation. They will also
receive their other fringe benefits under their employment
agreements. The employment agreements of the CEO, the President
and the CFO further provide, in the event of death, his estate
shall be entitled to his annual cash compensation for the
remaining term of his agreement. If any of the other Executive
Vice Presidents resigns from his employment for good reason, or
is terminated without cause, he will receive a severance benefit
equal to the higher of the amount of annual cash compensation
for the remaining term of his agreement or two times his then
annual cash compensation. Each Executive Vice President will
also receive his other fringe benefits under the employment
agreements for the remaining term of the agreement. The sum of
the said severance benefits, which can be paid to the CEO, the
President or any of the Executive Vice Presidents, is limited to
amounts that will not constitute &#147;excess parachute
payments&#148; under the Code.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The employment of each of Messrs.&nbsp;Edward
Townsend, Norton and Park with Local and Local Oklahoma will be
terminated in connection with the merger. In lieu of the
payments due each of them under their respective employment
agreements, Messrs.&nbsp;Edward Townsend, Norton and Park will
receive from IBC quarterly cash payments in the amount of
$239,636, $118,750 and $83,250, respectively. The payments will
be made quarterly over the next three years with the first
payment being made five business days after the effective time
of the merger. The cost of their health and other insurance
benefits will be deducted from the payments received by them
from IBC.
</FONT>

<P align="center"><FONT size="2">91
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Non-Compete/ Non-Solicitation
Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2001, Local and Local Oklahoma entered
into change of control non-compete/non-solicitation agreements
with Messrs.&nbsp;Edward Townsend and Norton. Under the
agreements, Messrs.&nbsp;Edward Townsend and Norton agreed that
they will not compete against Local and Local Oklahoma following
a change of control in either of Local or Local Oklahoma. The
scope of the covenant not-to-compete covers banking activity
within the state of Oklahoma. Messrs.&nbsp;Edward Townsend and
Norton further agreed not to solicit Local and Local Oklahoma
employees or customers on behalf of a competitor. The covenant
not-to-compete or solicit extends for a five year period
following the change of control. In exchange for such covenants,
Local and Local Oklahoma agreed to pay Mr.&nbsp;Townsend a
net-of-tax payment of $3.0&nbsp;million and to pay
Mr.&nbsp;Norton a net-of-tax payment of $650,000. The payments
are contingent upon a change of control in either Local or Local
Oklahoma. The payment obligation is voided if
Messrs.&nbsp;Edward Townsend and Norton voluntarily resign
without &#147;good reason&#148; or are terminated &#147;for
cause&#148; prior to a change of control (as those terms are
defined in the employment agreements) or if their employment
terminates more than one year from the beginning of negotiations
resulting in the change of control.
</FONT>

<P align="left">
<B><FONT size="2">Certain Transactions</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local Securities Corporation, the broker/ dealer
subsidiary of Local Oklahoma, committed $300,000 to HBW
Investment Partners&nbsp;II, LP on March&nbsp;10, 1999, to be
used for venture capital investments. William D. Breedlove is
Vice Chairman, general partner, of HBW Investments, and was
subsequently elected to the board of directors of Local on
September&nbsp;26, 2001. Local Securities invested $3,346,
$18,583, $91,660, $86,877 and $62,789 in HBW Investments in
2003, 2002, 2001, 2000 and 1999, respectively. Local
Securities&#146; aggregate investment in HBW Investments for the
preceding three years is approximately $113,589. The outstanding
balance of Local Securities&#146; initial investment commitment
is $36,745 as of December&nbsp;31, 2003.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal 2003, Governor George P. Nigh, a
director of Local, received consulting fees of $72,000 plus the
use of an automobile pursuant to a consulting agreement with
Local Oklahoma.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local Oklahoma provides loans to its directors
and officers in the ordinary course of business, on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons. Such loans do not involve more
than the normal risk of collectibility or present other
unfavorable features. As of December&nbsp;31, 2003, and
combining all loans to directors and executive officers of Local
and Local Oklahoma in excess of $60,000, Local Oklahoma had
$7,749,912 of outstanding loans to directors and executive
officers of Local and Local Oklahoma. This amount represented
4.4% of Local&#146;s consolidated stockholders&#146; equity as
of that date.
</FONT>

<P align="left">
<B><FONT size="2">Compliance with Section&nbsp;16(a) of the
Securities Exchange Act of 1934, as Amended</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;16(a) of the Securities Exchange Act
requires Local&#146;s directors and executive officers, and
persons who own more than ten percent of a registered class of
Local&#146;s equity securities, to file with the SEC initial
reports of ownership and reports of changes in ownership of
common stock and other equity securities of Local. Officers,
directors and greater than ten percent stockholders are required
by SEC regulation to furnish Local with copies of all
Section&nbsp;16(a) forms they file.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based solely on review of the copies of such
forms furnished to Local, or written representations from its
officers and directors, Local believes that with respect to the
year ended December&nbsp;31, 2003, Local&#146;s officers and
directors satisfied the reporting requirements promulgated under
Section&nbsp;16(a) of the Securities Exchange Act.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">92
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='205'></A>
</DIV>

<!-- link1 "RATIFICATION OF INDEPENDENT AUDITORS (Proposal Three)" -->

<P align="center">
<B><FONT size="2">RATIFICATION OF INDEPENDENT AUDITORS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Proposal Three)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Vote on the Independent Auditors</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the recommendation of the Audit and Compliance
Committee, the board of directors appointed KPMG LLP,
independent certified public accountants, to audit the
consolidated financial statements of Local for the year ending
December&nbsp;31, 2004. Local is advised that no member of KPMG
has any direct or material indirect financial interest in Local
or, during the past three years, has had any connection with
Local in the capacity of promoter, underwriter, voting trustee,
director, officer or employee. KPMG has audited Local&#146;s
consolidated financial statements since 1997. Ratification of
the board&#146;s appointment shall be effective upon receiving
the affirmative vote of the holders of a majority of the votes
cast at the Annual Meeting.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Audit Fees, Financial Information Systems
Design and Implementation Fees and All Other Fees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table presents fees for
professional audit services rendered by KPMG for the audit of
Local&#146;s annual consolidated financial statements for 2003
and 2002 and fees billed for other services rendered by KPMG.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Audit fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">306,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Audit related fees(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Audit and audit related fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">321,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tax fees(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">All other fees(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,036</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">381,686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">344,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Audit-related services included audits of
    financial statements of Local&#146;s 401(K) Plan and Local
    Oklahoma&#146;s Employee Stock Ownership Plan.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Tax consisted of tax compliance and consulting
    services.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">All other fees consisted of process reviews and
    executive financial planning in 2003 and an operational
    efficiency review and internal audit assistance in 2002.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit and Compliance Committee has considered
and determined that KPMG&#146;s non-audit services are
compatible with maintaining its independence as an auditor.
</FONT>

<P align="left">
<B><FONT size="2">Pre-Approval Policies and Procedures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit and Compliance Committee has adopted a
policy that requires advance approval of all audit,
audit-related, tax services and other services performed by the
independent auditor. The policy provides for pre-approval by the
Audit and Compliance Committee of specified audit and non-audit
services. Unless the specific service has been previously
pre-approved with respect to that year, the Audit and Compliance
Committee must approve the permitted service before the
independent auditor is engaged to perform it.
</FONT>

<P align="center">
<B><FONT size="2">The board of directors recommends voting
&#147;FOR&#148; this proposal.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the appointment is not ratified, the board of
directors may consider the appointment of other independent
auditors. A representative from KPMG is expected to be present
at the Annual Meeting, will be offered the opportunity to make a
statement, and will be available to respond to appropriate
questions.
</FONT>

<P align="center"><FONT size="2">93
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Audit and Compliance Committee
Report</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit and Compliance Committee of
Local&#146;s board of directors is composed of three directors,
each of whom is independent as defined by the NASD listing
standards, and operates under a written charter ratified by the
board of directors in February, 2004. A copy of the Charter can
be found at Addendum A to Local&#146;s Proxy Statement dated
April&nbsp;11, 2003. The Audit and Compliance Committee
recommends to the board of directors, subject to stockholder
ratification, the selection of Local&#146;s independent auditors.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management is responsible for Local&#146;s
internal controls and the financial reporting process. The
independent auditors are responsible for performing an
independent audit of Local&#146;s consolidated financial
statements in accordance with auditing standards generally
accepted in the United States of America and to issue a report
thereon. The Audit and Compliance Committee&#146;s
responsibility is to monitor and oversee these processes.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with these responsibilities, the
Audit and Compliance Committee has met and held discussions with
management and the independent auditors. Management represented
to the Audit and Compliance Committee that Local&#146;s
consolidated financial statements were prepared in accordance
with accounting principles generally accepted in the United
States of America and the Audit and Compliance Committee has
reviewed and discussed the consolidated financial statements
with management and the independent auditors. The Audit and
Compliance Committee discussed with the independent auditors
matters required to be discussed by Statement on Auditing
Standards No.&nbsp;61 (Communication with Audit Committees).
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local&#146;s independent auditors also provided
to the Audit and Compliance Committee the written disclosures
required by Independence Standards Board Standard No.&nbsp;1
(Independence Discussions with Audit Committees), and the
Committee discussed with the independent auditors that
firm&#146;s independence.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To the extent not already covered above,
Local&#146;s independent auditors discussed with the Audit and
Compliance Committee certain information required by
Section&nbsp;204 of the Sarbanes-Oxley Act of 2002.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on the Audit and Compliance
Committee&#146;s discussion with management and the independent
auditors and its review of the representation of management and
the report of the independent auditors to the Audit and
Compliance Committee, the Audit and Compliance Committee
recommended that the board of directors include the audited
consolidated financial statements in Local&#146;s Annual Report
on Form&nbsp;10-K for the year ended December&nbsp;31, 2003, to
be filed with the SEC.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">The Audit and Compliance Committee of
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Local Financial Corporation
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;William D. Breedlove, Chairman
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Joseph A. Leone
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Andrew M. Coats
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Dated: February&nbsp;25, 2004
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preceding &#147;Audit and Compliance
Committee Report&#148; shall not be deemed incorporated by
reference by any general statement incorporating this proxy
statement-prospectus into any filing under the Securities Act or
under the Securities Exchange Act, except to the extent that
Local specifically incorporates this information by reference,
and shall not otherwise be deemed filed under the Securities Act
or the Securities Exchange Act.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">94
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='206'></A>
</DIV>

<!-- link1 "ADJOURNMENT OF ANNUAL MEETING (Proposal Four)" -->

<P align="center">
<B><FONT size="2">ADJOURNMENT OF ANNUAL MEETING</FONT></B>

<DIV align="center">
<B><FONT size="2">(Proposal Four)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that there are not sufficient votes
to constitute a quorum and/or approve the proposals presented at
the Annual Meeting, such proposals cannot be approved unless the
Annual Meeting is adjourned to a later date or dates in order to
permit further solicitation of proxies. In order to allow
proxies that have been received by Local at the time of the
Annual Meeting to be voted for an adjournment, if deemed
necessary, Local has submitted the question of adjournment to
its stockholders as a separate matter for their consideration.
The board of directors of Local unanimously recommends that
stockholders vote &#147;FOR&#148; the adjournment proposal. If
it is deemed necessary to adjourn the Annual Meeting, no notice
of the adjourned meeting is required to be given to
stockholders, other than an announcement at the Annual Meeting
of the place, date and time to which the Annual Meeting is
adjourned.
</FONT>

<P align="center">
<B><FONT size="2">The board of directors recommends voting
&#147;FOR&#148; this proposal.</FONT></B>

<DIV align="left">
<A name='207'></A>
</DIV>

<!-- link1 "LEGAL MATTERS" -->

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the IBC common stock to be issued
in the merger will be passed upon for IBC by Cox&nbsp;&#38;
Smith Incorporated, San&nbsp;Antonio, Texas.
</FONT>

<DIV align="left">
<A name='208'></A>
</DIV>

<!-- link1 "EXPERTS" -->

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of IBC and
its subsidiaries as of December&nbsp;31, 2003 and 2002, and for
each of the years in the three-year period ended
December&nbsp;31, 2003, appearing in its Annual Report on
Form&nbsp;10-K have been incorporated by reference herein in
reliance upon the report of KPMG LLP, independent accountants,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The audit report
refers to IBC&#146;s change in method of accounting for its
investment in its statutory business trusts, effective
December&nbsp;31, 2003 and the change in method of accounting
for goodwill and other intangible assets, effective
January&nbsp;1, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of Local
and its subsidiaries as of December&nbsp;31, 2003 and 2002, and
for each of the years in the three-year period ended
December&nbsp;31, 2003, appearing in its Annual Report on
Form&nbsp;10-K have been incorporated by reference herein in
reliance upon the report of KPMG LLP, independent accountants,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The audit report
refers to Local&#146;s adoption of Financial Accounting
Standards Board Interpretation No.&nbsp;46R, <I>Consolidation of
Variable Interest Entities, an Interpretation of ARB
No.&nbsp;51</I>, effective December&nbsp;31, 2003 and the
adoption of Statement of Financial Accounting Standards
(SFAS)&nbsp;No.&nbsp;142, <I>Goodwill and Other Intangible
Assets</I>, effective January&nbsp;1, 2002.
</FONT>

<DIV align="left">
<A name='209'></A>
</DIV>

<!-- link1 "OTHER INFORMATION ABOUT THE ANNUAL MEETING" -->

<P align="center">
<B><FONT size="2">OTHER INFORMATION ABOUT THE ANNUAL
MEETING</FONT></B>

<P align="left">
<B><FONT size="2">Other Matters Coming Before the Annual
Meeting</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of the date of this proxy
statement-prospectus, Local knows of no business to come before
the Annual Meeting other than that referred to above.
Local&#146;s Bylaws and rules of conduct for the Annual Meeting
prohibit the introduction of substantive matters not previously
presented to the stockholders in a proxy statement. As to other
business, such as procedural matters, that may come before the
Annual Meeting, the person or persons holding proxies will vote
those proxies in the manner they believe to be in the best
interests of Local and its stockholders.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<B><FONT size="2">Stockholder Proposals for the 2005 Annual
Meeting</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local will hold an annual meeting of stockholders
in the year 2005 only if the merger is not completed. If Local
holds a 2005 annual meeting of stockholders, stockholders who
wish to present a proposal for inclusion in Local&#146;s proxy
statement for the 2005 annual meeting must submit the proposal to
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">95
</FONT>

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<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">Local at its principal executive offices, located
at 3601 N.W. 63rd&nbsp;Street, Oklahoma City, Oklahoma 73116,
Attention: Richard L. Park, no later than December&nbsp;17, 2004.
</FONT>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with Local&#146;s next annual
meeting, stockholder proposals which are not submitted for
inclusion in Local&#146;s proxy materials pursuant to
Rule&nbsp;14a-8 under the Securities Exchange Act may be brought
before an Annual meeting pursuant to Article&nbsp;II,
Section&nbsp;3 of Local&#146;s Bylaws, which provides that
business at an Annual meeting of stockholders must be
(a)&nbsp;properly brought before the meeting by or at the
direction of the board of directors, or (b)&nbsp;otherwise
properly brought before the meeting by a stockholder. For
business to be properly brought before an Annual meeting by a
stockholder, the stockholder must have given timely notice
thereof in writing to the Corporate Secretary of Local. To be
timely, a stockholder&#146;s notice must be delivered to, or
mailed and received at, the principal executive offices of Local
not less than 45&nbsp;days or more than 90&nbsp;days prior to
the Annual meeting; provided however, that in the event that
less than 60&nbsp;days notice of the date of the meeting is
given to stockholders or prior public disclosure of the date of
the meeting is made, notice by the stockholder to be timely must
be received not later than the close of business on the 15th day
following the day on which such notice of the date of the Annual
meeting was mailed or such public disclosure was made. Such
stockholder&#146;s notice is required to set forth as to each
matter the stockholder proposes to bring before an Annual
meeting certain information specified in the Bylaws.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local will report the voting results of the
Annual Meeting in its quarterly report on Form&nbsp;10-Q for the
period ended June&nbsp;30, 2004, which Local expects to file
with the SEC in August 2004, unless the merger is consummated
before such filing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A copy of Local&#146;s Annual Report on
Form&nbsp;10-K (excluding exhibits) for the year ended
December&nbsp;31, 2003, as filed with the SEC, accompanies this
proxy statement-prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">LOCAL&#146;S ANNUAL REPORT ON FORM
10-K,&nbsp;INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES
THERETO, FOR THE YEAR ENDED DECEMBER&nbsp;31, 2003, AS FILED
WITH THE SEC, WILL BE FURNISHED WITHOUT CHARGE TO ANY
STOCKHOLDER UPON REQUEST TO MR. RICHARD L. PARK, CHIEF FINANCIAL
OFFICER, LOCAL FINANCIAL CORPORATION, 3601 N.W. 63RD STREET,
OKLAHOMA CITY, OKLAHOMA 73116. STOCKHOLDERS REQUESTING EXHIBITS
TO THE FORM 10-K WILL BE PROVIDED THE SAME UPON PAYMENT OF
REPRODUCTION EXPENSES.
</FONT>

<DIV align="left">
<A name='210'></A>
</DIV>

<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">
<B><FONT size="2">Registration Statement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC has filed a registration statement on
Form&nbsp;S-4 to register with the SEC the IBC common stock to
be issued to Local stockholders in the merger. This proxy
statement-prospectus is part of that registration statement. The
registration statement and the exhibits to the registration
statement contain additional important information about IBC and
IBC common stock. As allowed by SEC rules, this proxy
statement-prospectus does not contain all the information you
can find in the registration statement or the exhibits to the
registration statement.
</FONT>

<P align="left">
<B><FONT size="2">Local and IBC SEC Filings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC and Local file annual, quarterly and current
reports, proxy statements and other information with the SEC.
You can read and copy any reports, statements or other
information filed by IBC or Local with the SEC at the SEC&#146;s
Public Reference Room located at 450&nbsp;Fifth Street, N.W.,
Washington,&nbsp;D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the
Public Reference Room. IBC&#146;s and Local&#146;s SEC filings
are also available to the public from commercial document
retrieval services and at the SEC&#146;s website at
http://www.sec.gov.
</FONT>

<P align="center"><FONT size="2">96
</FONT>

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<P align="left">
<B><FONT size="2">Documents Incorporated by Reference</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The SEC allows IBC and Local to &#147;incorporate
by reference&#148; information into this proxy statement-
prospectus information, which means that IBC and Local can
disclose important information to you by referring you to
another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this proxy
statement-prospectus, except for any information superseded by
information in, or incorporated by reference into, this proxy
statement-prospectus. This proxy statement-prospectus
incorporates by reference the documents set forth below that IBC
and Local have previously filed with the SEC.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">IBC SEC Filings (File No.&nbsp;0-9439)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Annual Report on Form&nbsp;10-K for the year
    ended December&nbsp;31, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Current Report on Form&nbsp;8-K filed
    January&nbsp;22, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Current Report on Form&nbsp;8-K filed
    April&nbsp;2, 2004.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Local SEC Filings (File No.&nbsp;001-13949)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Annual Report on Form&nbsp;10-K for the year
    ended December&nbsp;31, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Current Report on Form&nbsp;8-K filed
    January&nbsp;23, 2004.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, all future documents filed by IBC
and Local with the SEC pursuant to Sections&nbsp;13(a), 13(c),
14, or 15(d) of the Securities Exchange Act prior to the
election deadline are incorporated by reference into this proxy
statement-prospectus and are part of this proxy
statement-prospectus from the date of filing.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any statement contained in a document
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof
to the extent that a statement contained herein or in any other
subsequently filed document that also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to
constitute a part hereof.
</FONT>

<P align="left">
<B><FONT size="2">Documents Available Without Charge</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IBC and Local will provide, without charge,
copies of any report incorporated by reference into this proxy
statement-prospectus, excluding exhibits other than those that
are specifically incorporated by reference in this proxy
statement-prospectus. You may obtain a copy of any document
incorporated by reference by writing or calling the appropriate
company:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">International Bancshares Corporation<BR>
    P.O. Box&nbsp;1359<BR>
    1200 San&nbsp;Bernardo<BR>
    Laredo, Texas 78040<BR>
    Attn: Eliza Gonzalez,<BR>
    First Vice President-IBC Bank<BR>
    (956) 722-7611
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Local Financial Corporation<BR>
    3601 N.W. 63rd&nbsp;Street<BR>
    Oklahoma City, Oklahoma 73116<BR>
    Attn: Richard L. Park,<BR>
    Chief Financial Officer<BR>
    (405) 841-2298
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">To ensure delivery of the copies in time for
the Annual Meeting, your request should be received by
May&nbsp;12, 2004.</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">97
</FONT>

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<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">In deciding how to vote on the merger, you
should rely only on the information contained or incorporated by
reference in this proxy statement-prospectus. Neither IBC nor
Local has authorized any person to provide you with any
information that is different from what is contained in this
proxy statement-prospectus. This proxy statement-prospectus is
dated April&nbsp;13, 2004. You should not assume that the
information contained in this proxy statement-prospectus is
accurate as of any date other than such date, and neither the
mailing to you of this proxy statement-prospectus nor the
issuance to you of shares of IBC common stock will create any
implication to the contrary.</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">By Order of the Board of Directors
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <IMG src="d13787a1d1378701.gif" alt="-s- Alan L. Pollock"></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">ALAN L. POLLOCK
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Corporate Secretary</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">April&nbsp;13, 2004
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">

</DIV>

<P align="center"><FONT size="2">98
</FONT>

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<DIV align="left">
<A name='211'></A>
</DIV>

<!-- link1 "APPENDIX A" -->

<DIV align="right">
<B><FONT size="2">APPENDIX&nbsp;A</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">AGREEMENT AND PLAN OF MERGER</FONT></B>

<DIV align="center">
<B><FONT size="2">Dated as of January&nbsp;22, 2004</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">among</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">INTERNATIONAL BANCSHARES
CORPORATION,</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LFC ACQUISITION CORP.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">and</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LOCAL FINANCIAL CORPORATION</FONT></B>
</DIV>
<P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="14%"></TD>
    <TD width="86%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">[Note to Reader:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The per share values reflected herein have not
    been adjusted to reflect the 25% stock dividend declared by
    International Bancshares Corporation (&#147;IBC&#148;) on
    April&nbsp;1, 2004 and payable to IBC stockholders of record on
    May&nbsp;3, 2004.]
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

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<P align="center">
<B><FONT size="2">AGREEMENT AND PLAN OF MERGER</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">AGREEMENT AND PLAN OF MERGER, dated as of
January&nbsp;22, 2004 (this <I>&#147;Agreement&#148;</I>), among
INTERNATIONAL BANCSHARES CORPORATION, a Texas corporation
<I>(&#147;IBC&#148;)</I>, LFC ACQUISITION CORP., a Delaware
corporation and an indirect wholly owned subsidiary of IBC
<I>(&#147;Acquisition Sub&#148;)</I>, and LOCAL FINANCIAL
CORPORATION, a Delaware corporation <I>(&#147;LFC&#148;)</I>.
</FONT>

<P align="center">
<B><FONT size="2">WITNESSETH:</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, the respective Boards of Directors of
IBC, Acquisition Sub and LFC deem it advisable and in the best
interests of each corporation and its respective stockholders
that Acquisition Sub merge with, and in to, LFC (the
<I>&#147;Merger&#148;</I>), with LFC as the surviving
corporation (the <I>&#147;Surviving Corporation&#148;</I>) in
the Merger;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, the respective Boards of Directors of
each of IBC, Acquisition Sub and LFC have adopted resolutions
approving the Merger, this Agreement and the transactions
contemplated hereby to which each such party is a party, and the
Board of Directors of LFC has agreed, upon the terms and subject
to the conditions set forth herein, to recommend that LFC&#146;s
stockholders approve the Merger and this Agreement;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, the parties have agreed (subject to the
terms and conditions of this Agreement), as soon as practicable
following the approval by the stockholders of LFC of this
Agreement and the Merger, to effect the Merger, as more fully
described herein;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, IBC, Acquisition Sub and LFC desire to
make certain representations, warranties, covenants and
agreements in connection with the Merger and also to prescribe
various conditions to the Merger;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">WHEREAS, certain terms used herein have the
meanings ascribed to them in the respective Sections of this
Agreement set forth in Appendix&nbsp;A;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">NOW, THEREFORE, in consideration of the foregoing
premises and the representations, warranties and agreements
contained herein the parties hereto agree as follows:
</FONT>

<P align="center">
<FONT size="2">ARTICLE&nbsp;I
</FONT>

<P align="center">
<FONT size="2">THE MERGER
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The
Merger.</I> Upon the terms and subject to the conditions hereof,
at the Effective Time, Acquisition Sub shall be merged with and
into LFC and the separate existence of Acquisition Sub shall
thereupon cease, and LFC, as the Surviving Corporation, shall by
virtue of the Merger continue its corporate existence under the
laws of the State of Delaware.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effective
Time of the Merger.</I> The Merger shall become effective at the
date and time (the <I>&#147;Effective Time&#148;</I>) when a
Certificate of Merger meeting the requirements of the Delaware
General Corporation Law (the <I>&#147;DGCL&#148;</I>) shall have
been duly executed and filed in accordance with the DGCL, or at
such other time as is specified in such Certificate of Merger in
accordance with the DGCL, which Certificate of Merger shall be
filed as soon as practicable following fulfillment of the
conditions set forth in Article&nbsp;VII hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Closing.</I>
The closing of the transactions contemplated by this Agreement
(the <I>&#147;Closing&#148;</I>) shall take place at the offices
of Cox&nbsp;&#38; Smith Incorporated, San&nbsp;Antonio, Texas,
at 10:00&nbsp;a.m. local time on the day which is no later than
five (5)&nbsp;Business Days after the day on which the last of
the conditions set forth in Article&nbsp;VII (other than those
that can only be fulfilled at the Effective Time) is fulfilled
or waived or at such other time and place as IBC and LFC shall
agree in writing. The date on which the Closing is held is
sometimes referred to herein as the <I>&#147;Closing
Date.&#148;</I>
</FONT>

<P align="center"><FONT size="2">A-1
</FONT>

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<P align="center">
<FONT size="2">ARTICLE&nbsp;II
</FONT>

<P align="center">
<FONT size="2">THE SURVIVING CORPORATION
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Certificate
of Incorporation.</I> The Certificate of Incorporation of LFC as
in effect at the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation, until further
amended in accordance with its terms and as provided by law and
this Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>By-Laws.</I>
The By-laws of Acquisition Sub, as in effect at the Effective
Time, shall be the By-laws of the Surviving Corporation, and
thereafter may be amended in accordance with their terms and as
provided by law and this Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Board of
Directors and Officers.</I> The directors of Acquisition Sub
immediately prior to the Effective Time shall be the directors
of the Surviving Corporation and the officers of the Acquisition
Sub immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, in each case until their
respective successors are duly elected and qualified.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effects of
Merger.</I> The Merger shall have the effects set forth in the
DGCL.
</FONT>

<P align="center">
<FONT size="2">ARTICLE&nbsp;III
</FONT>

<P align="center">
<FONT size="2">CONVERSION OF SHARES
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect on
Capital Stock.</I> As of the Effective Time, by virtue of the
Merger and without any action on the part of IBC, Acquisition
Sub, LFC or any holder of capital stock of LFC:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Capital Stock of Acquisition Sub.</I>
    Each issued and outstanding share of the capital stock of
    Acquisition Sub shall be converted into and become one fully
    paid and nonassessable share of common stock, par value
    $.01&nbsp;per share, of the Surviving Corporation.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Cancellation of Treasury Shares and
    IBC Owned Shares.</I> All shares of common stock of LFC, par
    value $.01&nbsp;per share (the <I>&#147;Shares&#148;</I>), that
    are owned directly or indirectly by LFC as treasury stock or by
    any wholly owned subsidiary of LFC (other than Shares held in a
    fiduciary capacity or in satisfaction of a debt previously
    contracted) and any Shares owned by IBC, Acquisition Sub or any
    other wholly owned subsidiary of IBC shall be canceled and cease
    to exist, and no consideration shall be delivered in exchange
    therefor.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Conversion of Shares.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;Subject to other applicable provisions
    of this Agreement, including Section&nbsp;3.2, each issued and
    outstanding Share (other than Shares to be canceled in
    accordance with Section&nbsp;3.1(b) and Dissenters&#146; Shares)
    shall be converted into the right to receive, at the election of
    the holder thereof, either: (A)&nbsp;a number of fully paid and
    nonassessable shares of common stock, par value $1.00&nbsp;per
    share, of IBC <I>(&#147;IBC Common Stock&#148;)</I>equal to the
    Exchange Ratio (the <I>&#147;Per Share Stock
    Consideration&#148;</I>), or (B)&nbsp;the Per Share Cash
    Consideration. As used herein, the following terms have the
    respective meanings set forth below:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">&#147;Exchange
    Ratio&#148;</FONT></I><FONT size="2"> means the Per Share Merger
    Consideration divided by the IBC Common Stock Value.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">&#147;Per Share Merger
    Consideration&#148;</FONT></I><FONT size="2"> means $22.00;
    provided, however, that if the Effective Time shall not have
    occurred on or prior to August&nbsp;15, 2004, then the &#147;Per
    Share Merger Consideration&#148; shall mean the sum of (x)
    $22.00 <I>plus </I>(y)&nbsp;the Per Share Adjustment Amount.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">&#147;Per Share Adjustment
    Amount&#148;</FONT></I><FONT size="2"> means an amount equal to
    the quotient of (x)&nbsp;the Aggregate Adjustment Amount
    <I>divided by </I>(y)&nbsp;the sum of (1)&nbsp;the aggregate
    number of Shares issued and outstanding immediately prior to the
    Effective Time <I>plus </I>(2) the aggregate number of Shares
    issuable with respect to the LFC Stock Options outstanding
    immediately prior to the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-2
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Effective Time, assuming for purposes of this
    calculation that all outstanding LFC Stock Options are
    immediately exercisable and fully vested.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">&#147;Aggregate Adjustment
    Amount&#148;</FONT></I><FONT size="2"> means an amount equal to
    the product of (x) $76,667 multiplied by (y)&nbsp;the number of
    days in the period commencing on August&nbsp;16, 2004, and
    ending on the date on which the Effective Time occurs
    (including, for purposes of such calculation, August&nbsp;16,
    2004, and the date on which the Effective Time occurs)
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">&#147;IBC Common Stock
    Value&#148;</FONT></I><FONT size="2"> means the average of the
    closing sale prices for a share of IBC Common Stock as reported
    on the NASDAQ Stock Market,&nbsp;Inc. National Market System (as
    reported by The Wall Street Journal, or, if not reported
    thereby, as reported by any other authoritative source) during
    the ten (10)&nbsp;consecutive Business Days beginning fifteen
    (15)&nbsp;Business Days before the Effective Time (the
    <I>&#147;Determination Period&#148;</I>); provided, however,
    that (i)&nbsp;if the IBC Common Stock Value as otherwise
    determined pursuant to the preceding provisions of this sentence
    would be less than $46.00, then the IBC Common Stock Value shall
    be $46.00, and (ii)&nbsp;if the IBC Common Stock Value as
    otherwise determined pursuant to the preceding provisions of
    this sentence would be greater than $56.00, then the IBC Common
    Stock Value shall be $56.00. The Exchange Ratio shall be
    calculated to the nearest one-ten-thousandth of a share of IBC
    Common Stock.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">&#147;Merger
    Consideration&#148;</FONT></I><FONT size="2"> means the
    aggregate Per Share Cash Consideration and the aggregate Per
    Share Stock Consideration into which all outstanding Shares are
    converted pursuant to this Section&nbsp;3.1(c); provided,
    however, that the term &#147;Merger Consideration&#148; when
    used with respect to any Shares, holder(s) of Shares, and/or
    Certificate(s) representing Shares means the aggregate Per Share
    Cash Consideration and/or Per Share Stock Consideration into
    which such Shares are converted pursuant to this
    Section&nbsp;3.1(c).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I><FONT size="2">&#147;Per Share Cash
    Consideration&#148;</FONT></I><FONT size="2"> means an amount in
    cash equal to the Per Share Merger Consideration.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;<I>Anti-Dilution Adjustments.</I>
    Should IBC change (or establish a record date for changing) the
    number of shares of IBC Common Stock issued and outstanding
    prior to the Effective Time of the Merger by way of a split,
    dividend, combination, recapitalization, exchange of shares or
    similar transaction with respect to the outstanding IBC Common
    Stock having a record date preceding the Effective Time of the
    Merger, then, to the extent necessary to provide to the holders
    of Shares the same economic effect as contemplated by this
    Agreement prior to such split, dividend, combination,
    recapitalization, exchange of shares or similar transaction, the
    IBC Common Stock Value (or the prices for the IBC Common Stock
    used in determining the IBC Common Stock Value) shall be
    appropriately adjusted.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;<I>Fractional Shares.</I> Fractional
    shares shall not be issued under this Subsection&nbsp;(c), or
    otherwise, and any amount otherwise attributable to fractional
    shares shall be paid in cash in an amount equal to the product
    of the IBC Common Stock Value multiplied by the fraction of a
    share of IBC Common Stock that would otherwise have been issued,
    rounded to the nearest whole cent.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Election and
Allocation Procedures.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Subject to the allocation procedures set
forth in Subsection&nbsp;3.2(b), each record holder of Shares
will be entitled (i)&nbsp;to elect (a <I>&#147;Stock
Election&#148;</I>) to receive shares of IBC Common Stock for
all of the Shares <I>(&#147;Stock Election Shares&#148;)</I>
held by such record holder, (ii)&nbsp;to elect (a <I>&#147;Cash
Election&#148;)</I> to receive cash for all of the Shares
<I>(&#147;Cash Election Shares&#148;)</I> held by such record
holder; or (iii)&nbsp;to elect (a <I>&#147;Mixed
Election&#148;</I>) to receive part shares of IBC Common Stock
(such portion of the Shares attributable to the election to
receive shares being included in Stock Election Shares) and part
cash (such portion of the Shares attributable to the election to
receive cash being included in Cash Election Shares) for his,
her or its Shares; or (iv)&nbsp;to indicate (a
<I>&#147;Non-Election&#148;</I>) that such holder makes no such
election for all of the Shares <I>(&#147;No-Election
Shares&#148;)</I> held by such record holder, provided, that
notwithstanding anything in this Agreement to the contrary, the
number of Shares to be converted into the right to receive the
Per Share Stock Consideration in the Merger
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">(the <I>&#147;Stock Number&#148;</I>) will equal
as nearly as possible the product of (i)&nbsp;25% <I>multiplied
by </I>(ii)&nbsp;the total number of Shares outstanding
immediately prior to the Effective Time of the Merger (excluding
Shares to be canceled as provided in Section&nbsp;3.1(b) but
including Dissenters&#146; Shares). All such elections (each, an
<I>&#147;Election&#148;</I>) shall be made on an Election Form.
Any Shares for which the record holder has not, as of the
Election Deadline, properly submitted to IBC or the Exchange
Agent a properly completed Election Form (excluding any
Dissenters&#146; Shares) will be deemed No-Election Shares.
Notwithstanding anything else to the contrary herein, all
Dissenters&#146; Shares will be deemed Cash Election Shares.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The allocation among the holders of
Shares of rights to receive the Per Share Stock Consideration or
the Per Share Cash Consideration in the Merger will be made as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;<I>Number of Stock Election Shares Less
    Than 25%.</I> If the number of Stock Election Shares (on the
    basis of Election Forms received as of the Election Deadline) is
    less than 25% of the number of issued and outstanding Shares
    immediately prior to the Effective Time, then (1)&nbsp;each
    Stock Election Share will be, as of the Effective Time of the
    Merger, converted into the right to receive the Per Share Stock
    Consideration; (2)&nbsp;the Exchange Agent will allocate from
    among the No-Election Shares, pro rata to the holders of
    No-Election Shares in accordance with their respective numbers
    of No-Election Shares, a sufficient number of No-Election Shares
    so that the sum of such number and the number of Stock Election
    Shares equals as closely as practicable, but not less than, 25%
    of the Shares, and each such allocated No-Election Share (each,
    a <I>&#147;Stock-Selected No-Election Share&#148;</I>) will be,
    as of the Effective Time of the Merger, converted into the right
    to receive the Per Share Stock Consideration, provided that if
    the sum of all No-Election Shares and Stock Election Shares is
    less than or equal to 25% of the Shares, all No-Election Shares
    will be Stock-Selected No-Election Shares; (3)&nbsp;if the sum
    of Stock Election Shares and No-Election Shares is less than 25%
    of the Shares, the Exchange Agent will allocate from among the
    Cash Election Shares (other than Dissenters&#146; Shares, which
    shall in no event be deemed to be or treated as Converted Cash
    Election Shares), pro rata to the holders of such Cash Election
    Shares in accordance with their respective numbers of Cash
    Election Shares, a sufficient number of such Cash Election
    Shares so that the sum of such number, the number of all Stock
    Election Shares and the number of all No-Election Shares equals
    as closely as practicable, but not less than, 25% of the Shares,
    and each such allocated Cash Election Share (each, a
    <I>&#147;Converted Cash Election Share&#148;</I>) will be, as of
    the Effective Time of the Merger, converted into the right to
    receive the Per Share Stock Consideration; and (4)&nbsp;each
    No-Election Share and Cash Election Share that is not a
    Stock-Selected No-Election Share or a Converted Cash Election
    Share (as the case may be) will be, as of the Effective Time of
    the Merger, converted into the right to receive the Per Share
    Cash Consideration;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;<I>Number of Stock Election Shares
    Greater Than or Equal to 25%.</I> If the number of Stock
    Election Shares (on the basis of Election Forms received by the
    Election Deadline) is greater than or equal to 25% of the issued
    and outstanding Shares immediately prior to the Effective Time,
    then (1)&nbsp;each Cash Election Share and No-Election Share
    will be, as of the Effective Time of the Merger, converted into
    the right to receive the Per Share Cash Consideration; and
    (2)&nbsp;the Exchange Agent will allocate from among the Stock
    Election Shares, pro rata to the holders of Stock Election
    Shares in accordance with their respective numbers of Stock
    Election Shares, a sufficient number of Stock Election Shares so
    that the sum of such number and the number of Cash Election
    Shares and No-Election Shares equals as closely as practicable
    75% of the Shares, and each such allocated Stock-Election Share
    (each, a <I>&#147;Converted Stock Election Share&#148;</I>) will
    be, as of the Effective Time of the Merger, converted into the
    right to receive the Per Share Cash Consideration. The remaining
    Stock Election Shares (which are not Converted Stock Election
    Shares) will be, as of the Effective Time of the Merger,
    converted into the right to receive the Per Share Stock
    Consideration.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;An election form (an <I>&#147;Election
Form&#148;</I>) and other appropriate and customary transmittal
materials, which shall specify that delivery shall be effected,
and risk of loss and title to the certificates theretofore
representing Shares <I>(&#147;Certificates&#148;)</I> shall
pass, only upon proper delivery of such Certificates to a bank
or trust company designated by IBC and reasonably satisfactory
to LFC (the <I>&#147;Exchange Agent&#148;</I>) in such form as
LFC and IBC shall mutually agree shall be mailed on the Mailing
Date to each holder of record of Shares as of a record date (the
<I>&#147;Election Form&nbsp;Record Date&#148;</I>) five
(5)&nbsp;Business Days prior to the Mailing Date. The
</FONT>

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<DIV align="left">
<I><FONT size="2">&#147;Mailing
Date&#148;</FONT></I><FONT size="2"> shall be a date to be
mutually agreed upon by IBC and LFC that is at least thirty five
(35)&nbsp;days prior to the anticipated Effective Time (or such
other date as IBC and LFC may mutually agree). LFC shall make
available one or more Election Forms as may be reasonably
requested by all Persons who become holders (or beneficial
owners) of Shares after the Election Form&nbsp;Record Date and
prior to the Election Deadline, and LFC shall provide to the
Exchange Agent all information reasonably necessary for it to
perform its obligations as specified herein.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;Each Election Form shall entitle the
holder of Shares (or the beneficial owner through appropriate
and customary documentation and instructions) to make either a
Stock Election, Cash Election, Mixed Election or Non-Election.
Holders of record of Shares who hold such Shares as nominees,
trustees or in other representative capacities (a
<I>&#147;Representative&#148;</I>) may submit multiple Election
Forms, provided that such Representative certifies that each
such Election Form covers all the Shares held by that
Representative for a particular beneficial owner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;To be effective, a properly completed
Election Form shall be submitted to the Exchange Agent on or
before 5:00&nbsp;p.m., New&nbsp;York City time, on the date that
is thirty (30)&nbsp;days after the Mailing Date (or such other
time and date as LFC and IBC may mutually agree) (the
<I>&#147;Election Deadline&#148;</I>). An election shall have
been properly made only if the Exchange Agent shall have
actually received a properly completed Election Form by the
Election Deadline. An Election Form shall be deemed properly
completed only if accompanied by one or more Certificates (or
customary affidavits and, if required by IBC pursuant to
Section&nbsp;3.3(i), indemnification regarding the loss or
destruction of such Certificates or the guaranteed delivery of
such Certificates) representing all Shares covered by such
Election Form, together with duly executed transmittal materials
included with the Election Form. Any LFC stockholder may at any
time prior to the Election Deadline change his or her election
by written notice received by the Exchange Agent prior to the
Election Deadline accompanied by a properly completed and signed
revised Election Form. Any LFC stockholder may, at any time
prior to the Election Deadline, revoke his or her election by
written notice received by the Exchange Agent prior to the
Election Deadline or by withdrawal prior to the Election
Deadline of his or her Certificates, or of the guarantee of
delivery of such Certificates, previously deposited with the
Exchange Agent. All elections shall be revoked automatically if
the Exchange Agent is notified in writing by IBC and LFC that
this Agreement has been terminated. If a stockholder either
(i)&nbsp;does not submit a properly completed Election Form by
the Election Deadline, or (ii)&nbsp;revokes its Election Form
prior to the Election Deadline and does not submit a new
properly executed Election Form prior to the Election Deadline,
the Shares held by such stockholder shall be designated
No-Election Shares. IBC shall cause the Certificates
representing Shares described in (ii)&nbsp;to be promptly
returned without charge to the Person submitting the Election
Form upon written request to that effect from the Person who
submitted the Election Form. Subject to the terms of this
Agreement and of the Election Form, the Exchange Agent shall
have reasonable discretion to determine whether any election,
revocation or change has been properly or timely made and to
disregard immaterial defects in any Election Form, and any good
faith decisions of the Exchange Agent regarding such matters
shall be binding and conclusive.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange
Procedures.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Appropriate transmittal materials
<I>(&#147;Letter of Transmittal&#148;)</I> in a form
satisfactory to IBC and LFC shall be mailed within three
Business Days after the Effective Time to each holder of record
of Shares as of the Effective Time who did not previously submit
a completed Election Form. A Letter of Transmittal will be
deemed properly completed only if accompanied by certificates
representing all Shares to be converted thereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;At and after the Effective Time, each
Certificate shall represent only the right to receive the Merger
Consideration payable with respect thereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Prior to the Effective Time,&nbsp;IBC
shall deposit, or shall cause to be deposited, with the Exchange
Agent, for the benefit of the holders of Shares, for exchange in
accordance with this Section&nbsp;3.3, an amount of cash
sufficient to pay the aggregate Per Share Cash Consideration and
the aggregate amount of cash in lieu of fractional shares to be
paid pursuant to Section&nbsp;3.1, and IBC shall reserve for
issuance with its transfer agent
</FONT>

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<DIV align="left">
<FONT size="2">and registrar a sufficient number of shares of
IBC Common Stock to provide for payment of the aggregate Per
Share Stock Consideration.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;The Letter of Transmittal shall
(i)&nbsp;specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent, (ii)&nbsp;be
in a form and contain any other provisions as IBC may reasonably
determine and (iii)&nbsp;include instructions for use in
effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon the proper surrender of the
Certificates to the Exchange Agent, together with a properly
completed and duly executed Letter of Transmittal, the holder of
such Certificates shall be entitled to receive in exchange
therefor (m)&nbsp;a certificate representing that number of
whole shares of IBC Common Stock that such holder has the right
to receive pursuant to this Article&nbsp;III, if any, and
(n)&nbsp;a check in the amount equal to the cash that such
holder has the right to receive pursuant to this
Article&nbsp;III, if any (including any cash in lieu of
fractional shares, if any, that such holder has the right to
receive pursuant to Section&nbsp;3.1) and any dividends or other
distributions to which such holder is entitled pursuant to this
Section&nbsp;3.3. Certificates so surrendered shall forthwith be
canceled. As soon as practicable following receipt of the
properly completed Letter of Transmittal and any necessary
accompanying documentation, the Exchange Agent shall distribute
IBC Common Stock and cash as provided herein. The Exchange Agent
shall not be entitled to vote or exercise any rights of
ownership with respect to the shares of IBC Common Stock held by
it from time to time hereunder, except that it shall receive and
hold all dividends or other distributions paid or distributed
with respect to such shares for the account of the Persons
entitled thereto. If there is a transfer of ownership of any
Shares not registered in the transfer records of LFC, the Merger
Consideration shall be issued to the transferee thereof if the
Certificates representing such Shares are presented to the
Exchange Agent, accompanied by all documents required, in the
reasonable judgment of IBC and the Exchange Agent, (x)&nbsp;to
evidence and effect such transfer and (y)&nbsp;to evidence that
any applicable stock transfer taxes have been paid. The Merger
Consideration and any additional amounts paid upon the surrender
for exchange of certificates representing Shares in accordance
with the terms of this Article&nbsp;III shall be deemed to have
been paid in full satisfaction of all rights pertaining to the
Shares theretofore represented by such certificates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;No dividends or other distributions
declared or made after the Effective Time with respect to IBC
Common Stock issued pursuant to this Agreement shall be remitted
to any Person entitled to receive shares of IBC Common Stock
hereunder until such Person surrenders his or her Certificates
in accordance with this Section&nbsp;3.3. Upon the surrender of
such Person&#146;s Certificates, such Person shall be entitled
to receive any dividends or other distributions, without
interest thereon, which subsequent to the Effective Time had
become payable but not paid with respect to shares of IBC Common
Stock represented by such Person&#146;s Certificates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(f)&nbsp;The stock transfer books of LFC shall be
closed immediately upon the Effective Time and from and after
the Effective Time there shall be no transfers on the stock
transfer records of LFC of any Shares. If, after the Effective
Time, Certificates are presented to IBC, they shall be canceled
and exchanged for the Merger Consideration deliverable in
respect thereof pursuant to this Agreement in accordance with
the procedures set forth in this Section&nbsp;3.3.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(g)&nbsp;Any portion of the aggregate amount of
cash to be paid pursuant to Section&nbsp;3.1, any dividends or
other distributions to be paid pursuant to this Section&nbsp;3.3
or any proceeds from any investments thereof that remains
unclaimed by the stockholders of LFC for six months after the
Effective Time shall be repaid by the Exchange Agent to IBC upon
the written request of IBC. After such request is made, any
stockholders of LFC who have not theretofore complied with this
Section&nbsp;3.3 shall look only to IBC for the Merger
Consideration deliverable in respect of each share of Shares
such stockholder holds, as determined pursuant to this
Article&nbsp;III of this Agreement, without any interest
thereon. If outstanding Certificates are not surrendered prior
to the date on which such payments would otherwise escheat to or
become the property of any governmental unit or agency, the
unclaimed items shall, to the extent permitted by any abandoned
property, escheat or other applicable laws, become the property
of IBC (and, to the extent not in its possession, shall be paid
over to it), free and clear of all claims or interest of any
Person previously entitled to such claims. Notwithstanding the
foregoing, neither the Exchange Agent nor any party to this
Agreement (or any affiliate thereof) shall be liable to any
former holder of Shares for any amount delivered to a public
official pursuant to applicable abandoned property, escheat or
similar laws.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(h)&nbsp;IBC and the Exchange Agent shall be
entitled to rely upon LFC&#146;s stock transfer books to
establish the identity of those Persons entitled to receive the
Merger Consideration, which books shall be conclusive with
respect thereto. In the event of a dispute with respect to
ownership of stock represented by any Certificate,&nbsp;IBC and
the Exchange Agent shall be entitled to deposit any Merger
Consideration represented thereby in escrow with an independent
third party and thereafter be relieved with respect to any
claims thereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(i)&nbsp;If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen
or destroyed and, if required by the Exchange Agent of IBC, the
posting by such Person of a bond in such amount as the Exchange
Agent may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect
thereof pursuant to this Article&nbsp;III.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Dissenters&#146;
Shares.</I> Notwithstanding any other provision of this
Agreement to the contrary, Shares that are outstanding
immediately prior to the Effective Time and which are held by
stockholders who shall have not voted in favor of the Merger or
consented thereto in writing and who properly shall have
demanded appraisal for such shares in accordance with the DGCL
(collectively, the <I>&#147;Dissenters&#146; Shares&#148;</I>)
shall not be converted into or represent the right to receive
the Merger Consideration. Such stockholders instead shall be
entitled to receive payment of the appraised value of such
shares held by them in accordance with the provisions of the
DGCL, except that all Dissenters&#146; Shares held by
stockholders who shall have failed to perfect or who effectively
shall have withdrawn or otherwise lost their rights to appraisal
of such shares under the DGCL shall thereupon be deemed to have
been converted into and to have become exchangeable, as of the
Effective Time, for the right to receive, without any interest
thereon, the Merger Consideration upon surrender in the manner
provided in Section&nbsp;3.3 of the Certificate or Certificates
that, immediately prior to the Effective Time, evidenced such
Shares. LFC shall give IBC (i)&nbsp;prompt notice of any written
demands for appraisal of any Shares, attempted withdrawals of
such demands and any other instruments served pursuant to the
DGCL and received by LFC relating to stockholders&#146; rights
of appraisal, and (ii)&nbsp;the opportunity to participate in
all negotiations and proceedings with respect to demands under
the DGCL consistent with the obligations of LFC thereunder. LFC
shall not, except with the prior written consent of IBC, (x)
make any payment with respect to such demand, (y)&nbsp;offer to
settle or settle any demand for appraisal or (z)&nbsp;waive any
failure to timely deliver a written demand for appraisal or
timely take any other action to perfect appraisal rights in
accordance with the DGCL.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Further
Assurances.</I> If at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments or assurances or any other
acts or things are necessary, desirable or proper (a)&nbsp;to
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, privileges, powers, franchises,
properties or assets of either of the constituent corporations
to the Merger or (b)&nbsp;otherwise to carry out the purposes of
this Agreement, the Surviving Corporation and its appropriate
officers and directors or their designees shall be authorized to
execute and deliver, in the name and on behalf of either of the
constituent corporations to the Merger, all such deeds, bills of
sale, assignments and assurances and do, in the name and on
behalf of such constituent corporations, all such other acts and
things necessary, desirable or proper to vest, perfect or
confirm its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of
such constituent corporation and otherwise to carry out the
purposes of this Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Withholding
Taxes.</I> IBC and the Surviving Corporation shall be entitled
to deduct and withhold, or cause the Exchange Agent to deduct
and withhold, from the consideration otherwise payable to a
holder of Shares pursuant to the Merger any stock transfer taxes
and such amounts as are required under the Internal Revenue Code
of 1986, as amended (the <I>&#147;Code&#148;</I>), or any
applicable provision of state, local or foreign tax law. To the
extent that amounts are so withheld by IBC or the Surviving
Corporation, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of
the Shares in respect of which such deduction and withholding
was made by IBC or the Surviving Corporation, and IBC shall
provide, or cause the Exchange Agent to provide, to the holders
of such Certificates written notice of the amounts so deducted
or withheld.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Subsidiary
Mergers.</I> LFC shall take, and shall cause each of its
Subsidiaries to take, in advance of the Effective Time, any
action requested by IBC to facilitate the merger (the
<I>&#147;Holding Company Merger&#148;</I>) of LFC into IBC and
the merger (the <I>&#147;Bank Merger&#148;</I> and, together
with the Holding Company Merger, the <I>&#147;Subsidiary
Mergers&#148;</I>) of Local Oklahoma Bank, an Oklahoma banking
association and wholly-owned subsidiary of LFC <I>(&#147;LFC
Bank&#148;)</I>, into International Bank of Commerce, Laredo,
Texas, a Texas banking association and indirect wholly-owned
subsidiary of IBC (&#147;IBC Bank&#148;), including execution
and delivery of any required or appropriate regulatory filings,
Articles of Merger, Certificates of Merger, any requested
certificates of officers, and such other documents as may be
required to cause such mergers to become effective immediately
following the Effective Time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Alternative
Structure.</I> Notwithstanding anything to the contrary
contained in this Agreement, prior to the Effective
Time,&nbsp;IBC may specify that the structure of the
transactions contemplated by this Agreement be revised and the
parties shall enter into such alternative transactions as IBC
may determine to effect the purposes of this Agreement, subject
to the prior written consent of LFC, which consent shall not be
unreasonably withheld or delayed; provided, however, that such
revised structure shall not (i)&nbsp;alter or change the amount
or kind of the Merger Consideration, (ii)&nbsp;adversely change
the intended federal income tax consequences of the transactions
contemplated by this Agreement, or (iii)&nbsp;materially impede,
delay, or reduce the likelihood of, the receipt of any
regulatory approval referred to in, or the consummation of the
transactions contemplated by, this Agreement. The parties agree
to enter into such amendments of this Agreement and any related
documents, and to take such other actions, as IBC may request to
reflect any such revised structure.
</FONT>

<P align="center">
<FONT size="2">ARTICLE&nbsp;IV
</FONT>

<P align="center">
<FONT size="2">REPRESENTATIONS AND WARRANTIES
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
and Warranties of LFC.</I> Except as set forth in the Disclosure
Schedule delivered by LFC to IBC prior to the execution of this
Agreement (the <I>&#147;LFC Disclosure Schedule&#148;</I>), LFC
represents and warrants to IBC as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Organization and Operation of
    LFC.</I> LFC is a Delaware corporation, duly organized, validly
    existing and in good standing under the laws of the state of
    Delaware, and, except as would not reasonably be expected to
    result in a Material Adverse Effect on LFC, has the full power
    and authority (including all licenses, franchises, permits and
    other governmental authorizations which are legally required) to
    own its properties and to engage in the business and activities
    now conducted by it. Section&nbsp;4.1(a) of the LFC Disclosure
    Schedule sets forth a true and complete list of all of
    LFC&#146;s direct and indirect subsidiaries (the <I>&#147;LFC
    Subsidiaries&#148;</I>) and the percentage of the capital stock
    of each such subsidiary owned by LFC and its subsidiaries. LFC
    has not filed a declaration electing to be a financial holding
    company pursuant to the Bank Holding Company Act of 1956, as
    amended (the <I>&#147;BHC Act&#148;</I>). True and complete
    copies of the Certificate of Incorporation and Bylaws of LFC and
    each of the LFC Subsidiaries, as amended to date, have been
    delivered to IBC. The only material business of LFC is its
    ownership and operation of the LFC Subsidiaries. Except as
    specified on Section&nbsp;4.1(a) of the LFC Disclosure Schedule,
    neither LFC nor any of the LFC Subsidiaries is a member of any
    joint venture or partnership and neither LFC nor any of the LFC
    Subsidiaries owns any securities of any other entity (other than
    portfolio securities held in the ordinary course of business)
    other than as herein described.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Organization and Operation of LFC
    Subsidiaries.</I> Each of the LFC Subsidiaries is a corporation
    or a trust, duly organized, validly existing and in good
    standing under the laws of the state set forth in
    Section&nbsp;4.1(b) of the LFC Disclosure Schedule, and except
    as would not reasonably be expected to result in a Material
    Adverse Effect on LFC, has full power and authority (including
    all licenses, franchises, permits and other governmental
    authorizations which are legally required) to own its properties
    and to engage in the business and activities presently conducted
    by it.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Capitalization and Ownership.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

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<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;The authorized capital stock of LFC
    consists exclusively of 25,000,000&nbsp;Shares and
    5,000,000&nbsp;shares of Preferred Stock, $.01&nbsp;par value
    per share, of which as of the date of this
    </FONT></TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Agreement, 16,536,773&nbsp;Shares were
    outstanding and no shares of Preferred Stock were outstanding.
    Since September&nbsp;8, 1997, LFC has not issued any Shares or
    any shares of Preferred Stock, other than the issuance of Shares
    upon the valid exercise of LFC Stock Options and warrants. All
    issued and outstanding Shares are duly authorized, validly
    issued, fully paid and nonassessable and free of any preemptive
    rights and have not been issued in violation of any preemptive
    rights of any Person. No holders of Shares have any rights of
    rescission or other claims against LFC under the Securities Act
    of 1933, as amended (the <I>&#147;1933&nbsp;Act&#148;</I>),
    resulting from any failure of such Shares to have been sold by
    LFC pursuant to a valid exemption under the 1933&nbsp;Act or
    otherwise in compliance therewith. Neither LFC nor any of the
    LFC Subsidiaries has issued or otherwise has any liability or
    obligation with respect to any stock appreciation rights,
    phantom stock or other similar rights or interests.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;The authorized capital stock of each of
    the LFC Subsidiaries is set forth on Section&nbsp;4.1(c) of the
    LFC Disclosure Schedule. All of the issued and outstanding
    shares of capital stock of each of the LFC Subsidiaries are duly
    authorized, validly issued and outstanding, fully paid,
    nonassessable, and are owned beneficially and of record by the
    Person set forth in such Section&nbsp;4.1(c).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;There are no outstanding options,
    warrants, conversion rights, calls or commitments of any kind
    obligating LFC or any of the LFC Subsidiaries to issue, deliver
    or sell or cause to be issued, delivered or sold, directly or
    indirectly, additional shares of capital stock or any other
    securities convertible into or exercisable for, or evidencing
    the right to subscribe for any capital stock of LFC, and no
    authorization therefor has been given, except that as of the
    date of this Agreement, there are outstanding options to acquire
    an aggregate of 1,755,490&nbsp;Shares (the <I>&#147;LFC Stock
    Options&#148;</I>). Since October&nbsp;23, 2002, LFC has not
    granted any LFC Stock Options. Neither LFC nor any LFC
    Subsidiary has any outstanding commitment or obligation to
    repurchase, reacquire or redeem any of its outstanding capital
    stock or any LFC Stock Options.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iv)&nbsp;There are no voting trusts or
    stockholder agreements to which LFC is a party with respect to
    the voting of the capital stock of LFC.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;<I>Financial Statements.</I> LFC has
    delivered to IBC (i)&nbsp;the audited consolidated statements of
    financial condition of LFC and its subsidiaries as of
    December&nbsp;31, 2002 and 2001, and (ii)&nbsp;the related
    audited consolidated statements of income, shareholders&#146;
    equity and cash flows for the years ended December&nbsp;31,
    2002, 2001 and 2000, together with the notes thereto,
    accompanied by the report thereon of the independent certified
    public accountant who examined such statements (collectively,
    the <I>&#147;Audited Financial Statements&#148;</I>). Except to
    the extent qualified by footnotes contained in the Audited
    Financial Statements and the report of the independent
    accountant thereon, the Audited Financial Statements fairly
    present in all material respects the financial position of LFC
    and the LFC Subsidiaries as of the dates thereof and the results
    of LFC&#146;s operations for the periods indicated in conformity
    with United States generally accepted accounting principles
    <I>(&#147;GAAP&#148;) </I>applied on a consistent basis. In
    addition, LFC has delivered to IBC the unaudited consolidated
    statements of financial condition of LFC and its Subsidiaries as
    of September&nbsp;30, 2003, and the related unaudited statements
    of operations for the nine-month period then ended
    (collectively, the <I>&#147;Unaudited Financial
    Statements&#148;</I>). The Unaudited Financial Statements fairly
    present in all material respects the financial position of LFC
    as of the date thereof and the results of their respective
    operations for the period indicated in conformity with GAAP
    applied on a consistent basis, except (i)&nbsp;as described in
    the footnotes to such Unaudited Financial Statements,
    (ii)&nbsp;for year end closing adjustments that have not been
    applied, and (iii)&nbsp;the Unaudited Financial Statements may
    not include all footnote disclosures required by GAAP.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;<I>Loans.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

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<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;To the knowledge of LFC, each loan
    reflected on the books of LFC or any LFC Subsidiary, including,
    without limitation, each loan in which LFC and/or any LFC
    Subsidiary holds a participation interest (collectively,
    <I>&#147;Loans&#148;</I>), is the legal, valid and binding
    obligation of the obligor of each Loan, enforceable in
    accordance with its terms, subject to the effect of bankruptcy,
    insolvency, reorganization, moratorium, or other similar laws
    relating to creditors&#146; rights generally
    </FONT></TD>
</TR>

</TABLE>

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    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">and to general equitable principles; provided,
    however, that no representation or warranty is made as to the
    collectibility of such Loans. All such Loans were made in the
    ordinary course of LFC&#146;s or applicable LFC
    Subsidiary&#146;s business and have been made in accordance with
    reasonable and prudent banking practices. Any LFC Subsidiary
    which is a financial institution does not have in its portfolio
    any Loan exceeding its legal lending limit.
    Section&nbsp;4.1(e)(i) of the LFC Disclosure Schedule sets
    forth, as of September&nbsp;30, 2003, a list of all of
    LFC&#146;s and LFC Subsidiary&#146;s outstanding Loans that were
    classified as delinquent 60&nbsp;days or more, substandard,
    doubtful or loss, in connection with LFC&#146;s and LFC
    Subsidiary&#146;s most recent regulatory examination or were
    considered to be so classified at September&nbsp;30, 2003 under
    the LFC Subsidiaries&#146; policies and procedures (it being
    understood that no representation is being made that the
    applicable regulatory authorities would agree with the loan
    classification pursuant to the LFC Subsidiaries&#146;s policies
    and procedures).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;All loans to directors, executive
    officers and beneficial owners of 5% or more of the outstanding
    capital stock of LFC or any LFC Subsidiary, and, to the
    knowledge of LFC, loans to any affiliate thereof, as defined in
    Rule&nbsp;12b-2 promulgated under the Securities Exchange Act of
    1934, as amended (the <I>&#147;1934&nbsp;Act&#148;</I>), are
    listed on Section&nbsp;4.1(e)(ii) of the LFC Disclosure Schedule.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;<I>Absence of Certain Changes.</I>
    Except (i)&nbsp;as expressly contemplated by this Agreement or
    the transactions contemplated hereby, (ii)&nbsp;as discussed in
    documents filed with the Securities Exchange Commission (the
    <I>&#147;SEC&#148;</I>) by LFC prior to the date of this
    Agreement, (iii)&nbsp;as set forth in Section&nbsp;4.1(f) of the
    LFC Disclosure Schedule or (iv)&nbsp;to the extent the following
    items, individually, or in the aggregate, would not reasonably
    be expected to result in a Material Adverse Effect on LFC, since
    the date of the Audited Financial Statements, LFC and the LFC
    Subsidiaries have not (A)&nbsp;incurred or assumed any
    obligations or liabilities (absolute or contingent), other than
    obligations or liabilities incurred in the ordinary course of
    business and consistent with past practices and obligations or
    liabilities incurred in carrying out the transactions
    contemplated by this Agreement; (B)&nbsp;discharged or satisfied
    any lien or encumbrance or paid any obligation or liability
    (absolute or contingent), other than in the ordinary course of
    business and consistent with past practices; (C)&nbsp;sold,
    exchanged or otherwise disposed of any of its capital assets
    other than in the ordinary course of business and consistent
    with past practices; (D)&nbsp;suffered any damage, destruction
    or loss, whether or not covered by insurance, materially and
    adversely affecting its business, property of assets or waived
    any rights of value which in the aggregate are material; (E)
    materially increased, or experienced any material change in any
    material assumptions underlying or methods of calculating, any
    bad debt, contingency, tax or other reserves or materially
    changed its accounting practices, methods or assumptions
    (including changes in estimates or valuation methods);or (F)
    made any material change in the conduct of its business.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(g)&nbsp;<I>Environmental Matters.</I> LFC and
    LFC Subsidiaries have made available to IBC copies of all
    environmental assessments reports prepared by or for, or in the
    possession or control of LFC and the LFC Subsidiaries relating
    to the Real Property, a complete and correct list of which is
    contained in Section&nbsp;4.1(g) of the LFC Disclosure Schedule.
    In addition, LFC represents and warrants to IBC as follows:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;To the knowledge of LFC, each of LFC and
    the LFC Subsidiaries is in compliance with all Environmental
    Laws applicable to the ownership of its properties and the
    operations of the business and activities now conducted by it,
    and has obtained all Environmental Permits needed to operate the
    business and occupy the Real Property.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;Without in any manner limiting the
    generality of (a)&nbsp;above, except as expressly set forth in
    Section&nbsp;4.1(g) of the LFC Disclosure Schedule and as any of
    the following would not have Material Adverse Effect on LFC:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;no Materials of Environmental Concern
    have been disposed of or have been released (and no release is
    threatened) in connection with the ownership, use, maintenance,
    operation or conduct of the business or the Real Property except
    in compliance with Environmental Laws (including, without
    limitation, by obtaining necessary Environmental Permits);
    </FONT></TD>
</TR>

</TABLE>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;LFC and the LFC Subsidiaries are not and
    have not been subject to any claim or notice, respecting
    Environmental Laws in connection with the ownership, use,
    maintenance, operation or conduct of their business or the Real
    Property;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;LFC and the LFC Subsidiaries and all of
    the Real Property have been and are in material compliance with
    all terms and conditions of any and all required Environmental
    Permits. LFC and the LFC Subsidiaries have timely filed
    applications for renewal of any Environmental Permit if such
    application submission is required prior to the Closing;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;LFC and the LFC Subsidiaries have not
    undertaken, remediation or other cleanup of any facility or site
    or entered into any agreement for the payment of costs
    associated with such activity associated with a release or
    threatened release of Materials of Environmental Concern with
    respect to any of the Real Property;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;LFC and the LFC Subsidiaries and all of
    the Real Property have all environmental and pollution control
    equipment necessary to comply with all Environmental Laws
    applicable to the operation of the business as presently
    conducted; and.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;no underground storage tanks exist at or
    under any of the Real Property.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Environmental
Law(s)&#148;</FONT></I><FONT size="2"> means any federal, state,
or local law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, legal
doctrine, document, order, consent agreement, order or consent
judgment, decree, injunction, requirement or agreement with any
governmental entity or any judicial or administrative decision
relating to (x)&nbsp;the protection, preservation or restoration
of the environment (including, without limitation, air, water,
vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any
other natural resource) or to human health or safety,
(y)&nbsp;the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling,
labeling, application, production, release or disposal of
Materials of Environmental Concern, in each case as amended from
time to time, or (z) health, worker protection or
community&#146;s right to know. The term &#147;Environmental
Law&#148; includes, without limitation, (i)&nbsp;the Federal
Comprehensive Environmental Response Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act,
the Federal Water Pollution Control Act of 1972, the Federal
Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous
and Solid Waste Amendments thereto), the Federal Solid Waste
Disposal Act and the Federal Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, the Federal
Safe Drinking Water Act and the Federal Occupational Safety and
Health Act of 1970, each as amended from time to time, and
(ii)&nbsp;any common law or equitable doctrine (including,
without limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to,
or threatened as a result of, the presence of, effects of or
exposure to any Materials of Environmental Concern.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Environmental
Permit(s)&#148;</FONT></I><FONT size="2"> means all permits,
licenses, certificates, registrations, variances, notices of
intent, and exemptions necessary for the ownership, use and/or
operation of any current Real Property or to conduct the
business as currently conducted in compliance with Environmental
Laws.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Materials of Environmental
Concern&#148;</FONT></I><FONT size="2"> means (i)&nbsp;those
substances included within the statutory and/or regulatory
definitions or listings of &#147;hazardous substance,&#148;
&#147;special waste,&#148; &#147;hazardous waste,&#148;
&#147;extremely hazardous substance,&#148; &#147;regulated
substance,&#148; &#147;solid waste,&#148; &#147;hazardous
materials,&#148; &#147;pollutant,&#148; &#147;contaminant&#148;
or &#147;toxic substances,&#148; under any Environmental Law;
(ii)&nbsp;any material, waste or substance which is or contains:
(A)&nbsp;explosives or (B)&nbsp;radioactive materials (including
naturally occurring radioactive materials); (iii)&nbsp;petroleum
products, oil or any fraction thereof; and (iv)&nbsp;such other
substances, materials, or wastes that are or become classified
or regulated as hazardous or toxic under any applicable federal,
state or local law or regulation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Real
Property&#148;</FONT></I><FONT size="2"> means the real and
personal property owned, leased, or used by LFC or LFC
Subsidiaries (including property or other real estate owned or
acquired by LFC or the LFC Subsidiaries through or in-lieu of
foreclosure), provided that the representations and warranties
contained in this
</FONT>

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<DIV align="left">
<FONT size="2">Section&nbsp;4.1(g) are qualified in their
entirety to the knowledge of LFC with respect to any Real
Property leased, as lessee, by LFC or any LFC Subsidiary.
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(h)&nbsp;<I>Authority; No Violations.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;LFC has all requisite corporate power
    and authority to enter into this Agreement and to consummate the
    transactions contemplated hereby, subject in the case of the
    consummation of the Merger to the approval of this Agreement by
    the Required LFC Vote. The execution, delivery and performance
    of this Agreement and the consummation of the transactions
    contemplated hereby have been duly authorized by all necessary
    corporate action on the part of LFC and no other corporate
    action or other corporate proceedings on the part of LFC is
    necessary to authorize this Agreement or the transactions hereby
    contemplated, subject in the case of the consummation of the
    Merger to the approval of this Agreement by the Required LFC
    Vote. This Agreement has been duly executed and delivered by LFC
    and constitutes a valid and binding agreement of LFC,
    enforceable against it in accordance with its terms, except as
    such enforceability may be limited by bankruptcy, insolvency,
    reorganization, moratorium and similar laws relating to or
    affecting creditors generally, by general equity principles
    (regardless of whether such enforceability is considered in a
    proceeding in equity or at law) or by an implied covenant of
    good faith and fair dealing. Based on the representation and
    warranty of IBC contained in <I>Section&nbsp;4.2(h) </I>of this
    Agreement, no &#147;moratorium&#148;, &#147;control share&#148;,
    &#147;fair price&#148; or other antitakeover laws and
    regulations of any state, including, without limitation, the
    provisions of Section&nbsp;203 of the DGCL, are applicable to
    the Merger or other transactions contemplated by this Agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;The execution, delivery and performance
    of this Agreement by LFC does not and will not, as the case may
    be, and the consummation of the Merger by LFC and the other
    transactions contemplated hereby will not, result in any
    violation of, or constitute a default (with or without notice or
    lapse of time, or both) under, or give rise to a right of
    termination, amendment, cancellation or acceleration of any
    obligation or the loss of a material benefit under, or the
    creation of a lien, pledge, security interest, charge or other
    encumbrance on any assets (any such conflict, violation,
    default, right of termination, amendment, cancellation or
    acceleration, loss or creation, a <I>&#147;Violation&#148;</I>)
    pursuant to: (A)&nbsp;any provision of the certificate of
    incorporation or by-laws of LFC or any LFC Subsidiary or
    (B)&nbsp;except as would not reasonably be expected to result in
    a Material Adverse Effect on LFC or as set forth in
    Section&nbsp;4.1(h) of the LFC Disclosure Schedule, subject to
    obtaining or making the consents, approvals, orders,
    authorizations, registrations, declarations and filings referred
    to in paragraph (iii)&nbsp;below, any loan or credit agreement,
    note, mortgage, bond, indenture, lease, benefit plan or other
    agreement, obligation, instrument, permit, concession,
    franchise, license, judgment, order, decree, statute, law,
    ordinance, rule or regulation applicable to LFC or any LFC
    Subsidiary or their respective properties or assets.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;No consent, approval, order or
    authorization of, or registration, declaration or filing with,
    any supranational, national, state, municipal or local
    government, any instrumentality, subdivision, court,
    administrative agency or commission or other authority thereof,
    or any quasi-governmental or private body exercising any
    regulatory, or other governmental authority (a
    <I>&#147;Governmental Entity&#148;</I>), is required by or with
    respect to LFC or any LFC Subsidiary in connection with the
    execution, delivery and performance of this Agreement by LFC or
    the consummation of the Merger and the Subsidiary Mergers,
    except for those required under or in relation to (A)&nbsp;the
    BHC Act, (B)&nbsp;the DGCL with respect to the filing of the
    Certificate of Merger, (C)&nbsp;laws, rules, regulations,
    practices and orders of any applicable federal or state banking
    departments or of any federal or state regulatory body having
    jurisdiction over banking matters, (D)&nbsp;the SEC and state
    securities authorities, as applicable, in connection with the
    submission of this Agreement for the approval of the holders of
    the Shares and the issuance of IBC Common Stock in the Merger,
    (E)&nbsp;antitrust or other competition laws of other
    jurisdictions, (F)&nbsp;such consents and approvals specified in
    Section&nbsp;4.1(h) of the LFC Disclosure Schedule and
    (G)&nbsp;such consents, approvals, orders, authorizations,
    registrations, declarations and filings the failure of which to
    make or obtain would not reasonably be expected to result in a
    Material Adverse Effect on LFC. Consents, approvals, orders,
    authorizations,
    </FONT></TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">registrations, declarations and filings required
    under or in relation to clauses&nbsp;(A), (B), (C), (D), (E) and
    (F)&nbsp;above are hereinafter referred to as the <I>&#147;LFC
    Required Consents.&#148;</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;<I>Reports.</I> LFC has filed all
    reports, schedules, forms, statements and other documents
    required to be filed by it with the SEC since January&nbsp;1,
    2000 (collectively, including all exhibits thereto, the
    <I>&#147;LFC SEC Reports&#148;</I>). Except as set forth in
    <I>Section&nbsp;4.1(i) </I>of the LFC Disclosure Schedule, no
    LFC Subsidiary is or has been required to file any form, report
    or other document with the SEC. None of the LFC SEC Reports,
    including, without limitation, any financial statements or
    schedules included therein, as of their respective dates or, in
    the case of any registration statements, at the time of
    effectiveness (and, if amended or superseded by a filing prior
    to the date of this Agreement or the Closing, then on the date
    of such filing), contained or will contain any untrue statement
    of a material fact or omitted or will omit to state a material
    fact required to be stated therein or necessary to make the
    statements made therein, in light of the circumstances under
    which they were made, not misleading. All of such LFC SEC
    Reports, as of their respective dates (and as of the date of any
    amendment to the respective LFC SEC Report), complied as to form
    in all material respects with the applicable requirements of the
    1933&nbsp;Act and the 1934&nbsp;Act and the rules and
    regulations promulgated thereunder, including, without
    limitation, each of the consolidated financial statements of LFC
    (including any related notes thereto) included within the LFC
    SEC Reports comply as to form in all material respects with
    applicable accounting requirements and the published rules and
    regulations of the SEC with respect thereto. LFC has heretofore
    furnished or made available to IBC complete and correct copies
    of all amendments and modifications that have not been filed by
    LFC with the SEC to all agreements, documents and other
    instruments that previously had been filed by LFC with the SEC
    and are currently in effect.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(j)&nbsp;<I>Board Approval.</I> The Board of
    Directors of LFC, by resolutions duly adopted at a meeting duly
    called and held, and not subsequently rescinded or modified in
    any way (the <I>&#147;LFC Board Approval&#148;</I>), has duly
    (i)&nbsp;determined that this Agreement and the Merger are
    advisable and in the best interests of LFC and its stockholders,
    (ii)&nbsp;approved the execution, delivery and performance of
    this Agreement and the Merger and (iii)&nbsp;subject to
    <I>Section&nbsp;6.1(a), </I>recommended that the stockholders of
    LFC approve this Agreement and the Merger.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(k)&nbsp;<I>Vote Required.</I> The affirmative
    vote of the holders of a majority of the outstanding Shares to
    adopt this Agreement and approve the Merger (the
    <I>&#147;Required LFC Vote&#148;</I>) is the only vote of the
    holders of any class or series of capital stock of LFC necessary
    to adopt this Agreement and approve the transactions
    contemplated hereby.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(l)&nbsp;<I>Brokers or Finders.</I> No agent,
    broker, investment banker, financial advisor or other firm or
    Person is or will be entitled to any broker&#146;s or
    finder&#146;s fee or any other similar commission or fee in
    connection with any of the transactions contemplated by this
    Agreement based upon arrangements made by or on behalf of LFC or
    any of its Subsidiaries, except Sandler O&#146;Neill&nbsp;&#38;
    Partners, L.P., whose fees and expenses will be paid by LFC in
    accordance with LFC&#146;s agreement with such firm, based upon
    arrangements made by or on behalf of LFC and previously
    disclosed to IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(m)&nbsp;<I>Opinion of LFC Financial
    Advisers.</I> The Board of Directors of LFC has received the
    opinion of Sandler O&#146;Neill&nbsp;&#38; Partners, L.P., dated
    the date of this Agreement, to the effect that, as of such date,
    the consideration to be received in the Merger by the holders of
    Shares is fair, from a financial point of view, to such holders
    and such opinion has not been withdrawn or modified in any
    material respect as of the date of this Agreement, a copy of
    such opinion has been made available to IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(n)&nbsp;<I>Taxes.</I> Except as disclosed in
    Section&nbsp;4.1(n) of the LFC Disclosure Schedule, LFC and each
    of the LFC Subsidiaries (i)&nbsp;have timely filed all federal,
    state and local Tax Returns required to be filed by LFC or any
    of the LFC Subsidiaries for Tax years ended prior to the date of
    this Agreement, except for those Tax Returns for which requests
    for extensions have been timely filed, and all such returns are
    true, correct and complete in all material respects,
    (ii)&nbsp;have paid all Taxes shown to be due and payable on
    such Tax Returns other than Taxes which (x)&nbsp;are currently
    payable without penalty or interest or (y)&nbsp;are being
    contested in good faith and for which adequate reserves have
    been established on the books and records of LFC or one or more
    of the LFC Subsidiaries, as the case may be, in accordance with
    </FONT></TD>
</TR>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">GAAP, (iii)&nbsp;have accrued all such Taxes for
    such periods subsequent to the periods covered by such returns
    that are required by GAAP and (iv)&nbsp;have not waived any
    statute of limitations in respect of Taxes or agreed to any
    extension of time with respect to a Tax assessment or
    deficiency. LFC and the LFC Subsidiaries have withheld and paid
    all Taxes required to have been withheld and paid in connection
    with amounts paid or owing to any LFC or LFC Subsidiary
    employee, creditor, independent contractor or other third party;
    and LFC and the LFC Subsidiaries have collected and paid all
    Taxes required to have been collected and paid in connection
    with any amounts received from any customer or third party.
    There are no liens for Taxes on the assets of LFC or any of the
    LFC Subsidiaries, except for liens for Taxes not yet due and
    payable and except as set for in Section&nbsp;4.1(n) of the LFC
    Disclosure Schedule, there is no pending, nor has LFC or any of
    the LFC Subsidiaries received notice of any threatened audit,
    examination, notice of deficiency or assessment, refund
    litigation or adjustment in controversy with respect to any Tax.
    Except as disclosed in <I>Section&nbsp;4.1(n) </I>of the LFC
    Disclosure Schedule, neither LFC nor any of the LFC Subsidiaries
    is a party to any agreement providing for the allocation,
    sharing or indemnification of Taxes. Neither LFC nor any of the
    LFC Subsidiaries has made any payments, or is obligated to make
    any payments, or is a party any agreement which could obligate
    it to make any payments that will not be deductible under Code
    Section&nbsp;280G.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(o)&nbsp;<I>Employee Benefit Plans.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;Section&nbsp;4.1(o)(i) of the LFC
    Disclosure Schedule lists each &#147;employee welfare benefit
    plan&#148; (as defined in Section&nbsp;3(1) of the Employee
    Retirement Income Security Act of 1974, as amended
    <I>(&#147;ERISA&#148;)</I>) maintained by LFC or any of the LFC
    Subsidiaries or to which LFC or any of the LFC Subsidiaries
    contribute or are required to contribute, including any
    multiemployer welfare plan (such employee welfare benefit plans
    being hereinafter collectively referred to as the
    <I>&#147;Welfare Benefit Plans&#148;</I>) and sets forth the
    amount of any liability of LFC or any of the LFC Subsidiaries
    for contributions more than thirty days past due with respect to
    each Welfare Benefit Plan as of the date hereof and as of the
    end of any subsequent month ending prior to the Closing; except
    as set forth in Section&nbsp;4.1(o)(i) of the LFC Disclosure
    Schedule, no Welfare Benefit Plan provides for continuing
    benefits or coverage for any participant, beneficiary or former
    employee after such participant&#146;s or former employee&#146;s
    termination of employment except as may be required by
    Section&nbsp;4980B of the Code and Sections&nbsp;601-608 of
    ERISA;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;Section&nbsp;4.1(o)(ii) of the LFC
    Disclosure Schedule lists each &#147;employee pension benefit
    plan&#148; (as defined in Section&nbsp;3(2) of ERISA and not
    exempted under Section&nbsp;4(b) or 201 of ERISA) maintained by
    LFC or any of the LFC Subsidiaries or to which LFC or any of the
    LFC Subsidiaries contribute or are required to contribute,
    including any multiemployer plan (as defined in
    Section&nbsp;3(37) of ERISA) (such employee pension benefit
    plans being hereinafter collectively referred to as the
    <I>&#147;Pension Benefit Plans&#148;</I>);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;Except as set forth on
    Section&nbsp;4.1(o)(iii) of the LFC Disclosure Schedule, neither
    LFC nor any of the LFC Subsidiaries maintains, has or is a party
    to any plan, program, agreement, arrangement, understanding or
    commitment, whether written or oral, for the benefit of any of
    its employees, directors or officers relating to any of the
    following: severance pay, deferred compensation, bonuses, stock
    options, employee stock purchases, restricted stock, excess
    benefits, incentive compensation, stock bonuses, cash bonuses,
    golden parachutes, life insurance, rabbi trusts, cafeteria
    plans, dependent care, unfunded plans or any other
    employee-related plans, programs, agreements, arrangements or
    commitments (other than normal policies concerning holidays,
    vacations and salary continuation during short absences for
    illness or other reasons), or any program, plan, commitments, or
    practice of purchasing or otherwise compensating employees,
    including officers, for accrued vacation or sick leave upon
    termination of employment (such other compensatory programs
    being hereinafter collectively referred to as <I>&#147;Other
    Programs&#148;</I>);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iv)&nbsp;All of the Pension Benefit Plans and
    Welfare Benefit Plans and any related trust agreements or
    insurance or annuity contracts (or any other funding
    instruments) and all Other Programs comply currently, and have
    complied in the past, both as to form and operation, with the
    </FONT></TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">provisions of ERISA, the Code and with all other
    applicable laws, rules and regulations governing the
    establishment and operation of the Pension Benefit Plans,
    Welfare Benefit Plans and all Other Programs; except as set
    forth on Section&nbsp;4.1(o)(iv) of the LFC Disclosure Schedule,
    all necessary governmental approvals relating to the
    establishment of the Pension Benefit Plans have been obtained;
    and with respect to each Pension Benefit Plan that is intended
    to be tax-qualified under Section&nbsp;401(a) or 403(a) of the
    Code, a favorable determination letter as to the qualification
    under the Code of each such Pension Benefit Plan and each
    material amendment thereto has been issued by the Internal
    Revenue Service (and nothing has occurred since the date of the
    last such determination letter which resulted in, or is likely
    to result in the revocation of such determination);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(v)&nbsp;Except as set forth on
    Section&nbsp;4.1(o)(v) of the LFC Disclosure Schedule, each
    Welfare Benefit Plan, each Pension Benefit Plan and each Other
    Program has been administered in compliance with the
    requirements of the Code, ERISA, the Health Insurance
    Portability and Accountability Act of 1996 (&#147;HIPAA&#148;)
    and all other applicable laws, and all reports and disclosures
    required by ERISA, the Code and any other applicable laws with
    respect to each Welfare Benefit Plan, each Pension Benefit Plan
    and each Other Program have been timely filed;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vi)&nbsp;Except as set forth on
    Section&nbsp;4.1(o)(vi) of the LFC Disclosure Schedule, neither
    LFC nor any LFC Subsidiary nor any plan fiduciary of any Welfare
    Benefit Plan or Pension Benefit Plan has engaged in a breach of
    fiduciary duty (as defined in Section&nbsp;404 of ERISA) with
    respect to any Welfare Benefit Plan, Pension Benefit Plan or
    Other Program or in any transaction in violation of
    Section&nbsp;406 of ERISA (for which transaction no exemption
    exists under Section&nbsp;408 of ERISA) or in any
    &#147;prohibited transaction&#148; as defined in
    Section&nbsp;4975(c)(1) of the Code (for which no exemption
    exists under Section&nbsp;4975(c)(2) or 4975(d) of the Code);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vii)&nbsp;Except as set forth on
    Section&nbsp;4.1(o)(vii) of the LFC Disclosure Schedule, neither
    LFC nor any LFC Subsidiary nor any corporation or other trade or
    business controlled by or under common control with LFC (as
    determined under Sections&nbsp;414(b) and 414(c) of the Code)
    <I>(&#147;Common Control Entity&#148;)</I> is, or has been
    within the past three years, a contributing sponsor (as defined
    in Section&nbsp;4001(a)(13) of ERISA) of a Pension Benefit Plan
    subject to the provisions of Title IV of ERISA, nor has LFC, any
    LFC Subsidiary or a Common Control Entity maintained or
    participated in any employee pension benefit plan (defined in
    Section&nbsp;3(2) of ERISA) subject to the provision of Title IV
    of ERISA. In addition, except as set forth on
    Section&nbsp;4.1(o)(vii) of the LFC Disclosure Schedule, neither
    LFC nor any LFC Subsidiary nor a Common Control Entity
    (i)&nbsp;is a party to a collective bargaining agreement,
    (ii)&nbsp;has maintained or contributed to, or has participated
    in or agreed to participate in, a multiemployer plan (as defined
    in Section&nbsp;3(37) of ERISA), or (iii)&nbsp;has made a
    complete or partial withdrawal from a multiemployer plan (as
    defined in Section&nbsp;3(37) of ERISA) so as to incur
    withdrawal liability as defined in Section&nbsp;4201 of ERISA
    (without regard to subsequent reduction or waiver of such
    liability under Section&nbsp;4207 or 4208 of ERISA);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(viii)&nbsp;True and complete copies of each
    Welfare Benefit Plan, each Pension Benefit Plan and each Other
    Program, related trust agreements or insurance or annuity
    contracts (or any other funding instruments), summary plan
    descriptions, the most recent determination letter issued by the
    Internal Revenue Service with respect to each Pension Benefit
    Plan, the most recent application for a determination letter
    from the Internal Revenue Service with respect to each Pension
    Benefit Plan, the Annual Reports on Form&nbsp;5500 Series filed
    with any governmental agency for each Welfare Benefit Plan,
    Pension Benefit Plan and Other Program for the three most recent
    plan years, the Summary Annual Report provided to participants
    with respect to each Welfare Benefit Plan, Pension Benefit Plan,
    and Other Program for the three most recent plan years, and any
    correspondence to or from the IRS, Department of Labor, or bank
    examiner with respect to any Welfare Benefit Plan, Pension
    Benefit Plan, or Other Program during the three most recent plan
    years, have been furnished to IBC;
    </FONT></TD>
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    <TD width="6%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ix)&nbsp;All Welfare Benefit Plans, Pension
    Benefit Plans, and Other Programs related trust agreements or
    insurance or annuity contracts (or any other funding
    instruments), are legally valid and binding and in full force
    and effect and, except as set forth on Section&nbsp;4.1(o)(ix)
    of the LFC Disclosure Schedule, there are no promised increases
    in benefits (whether expressed, implied, oral or written) under
    any of these plans nor any obligations, commitments or
    understandings to continue any of these plans, (whether
    expressed, implied, oral or written) except as required by
    Section&nbsp;4980B of the Code and Sections&nbsp;601-608 of
    ERISA or under the terms of such plans; except as set forth on
    Section&nbsp;4.1(o)(ix) of the LFC Disclosure Schedule, LFC, its
    subsidiaries, or a Common Control Entity has the right to
    modify, amend, or terminate each Welfare Benefit Plan, Pension
    Benefit Plan, and Other Program at any time; except as set forth
    on Section&nbsp;4.1(o)(ix) of the LFC Disclosure Schedule, the
    termination of any Welfare Benefit Plan, Pension Benefit Plan,
    or Other Program would not accelerate or increase any benefits
    payable under such plan; and except as set forth on
    Section&nbsp;4.1(o)(ix) of the LFC Disclosure Schedule, in the
    event of termination of any Welfare Benefit Plan, Pension
    Benefit Plan, or Other Program, neither LFC, nor its
    subsidiaries, would have any liability with respect to such
    plan, other than the payment of benefits pursuant to such plan;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(x)&nbsp;Except as set forth on
    Section&nbsp;4.1(o)(x) of the LFC Disclosure Schedule, there are
    no claims pending with respect to, or under, any Pension Benefit
    Plan, Welfare Benefit Plan or any Other Program, other than
    routine claims for plan benefits, and there are no disputes or
    litigation pending or threatened with respect to any such plans;
    and all contributions, premiums, or other payments due from LFC
    or any of the LFC Subsidiaries have been fully paid or
    adequately provided for and disclosed on the books and financial
    statements of LFC and the LFC Subsidiaries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(xi)&nbsp;Except as set forth on
    Section&nbsp;4.1(o)(xi) of the LFC Disclosure Schedule, no
    action has been taken, nor has there been a failure to take any
    action that would subject any Person or entity to any liability
    for any income, excise or other tax or penalty in connection
    with any Pension Benefit Plan, Welfare Benefit Plan or any Other
    Program, other than for income taxes due with respect to
    benefits paid;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(xii)&nbsp;Except as otherwise set forth in
    Section&nbsp;4.1(o)(xii) of the LFC Disclosure Schedule, neither
    the execution and delivery of this Agreement nor the
    consummation of the transactions contemplated hereby will
    (i)&nbsp;result in any payment to be made by LFC or any of the
    LFC Subsidiaries (including, without limitation, severance,
    unemployment compensation, golden parachute (defined in
    Section&nbsp;280G of the Code), or otherwise) becoming due to
    any employee, director or consultant, or (ii)&nbsp;increase any
    benefits otherwise payable under any Welfare Benefit Plan,
    Pension Benefit Plan, or any Other Program.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(p)&nbsp;<I>Litigation.</I> Except as disclosed
    in the LFC SEC Reports or Section&nbsp;4.1(p) of the LFC
    Disclosure Schedule, there are no, actions, suits, proceedings,
    arbitrations, claims or investigations pending or, to LFC&#146;s
    knowledge, threatened against LFC or any of the LFC
    Subsidiaries, or any properties or rights of LFC or any of the
    LFC Subsidiaries.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(q)&nbsp;<I>No IBC Capital Stock.</I> LFC does
    not own or hold directly or indirectly any shares of common
    stock of IBC or any other capital stock of IBC, or any options,
    warrants or other rights to acquire any shares of common stock
    of IBC or any other capital stock of IBC, or in each case, any
    interests therein.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(r)&nbsp;<I>Employment Matters.</I> Except as
    disclosed on Section&nbsp;4.1(r) of the LFC Disclosure Schedule,
    neither LFC nor any LFC Subsidiary is a party to (i)&nbsp;any
    oral or written contracts, agreements, understandings or
    commitments, express or implied, granting any material benefits
    or rights to any employee(s), (ii)&nbsp;any collective
    bargaining agreement, or (iii)&nbsp;any conciliation agreement
    with the Department of Labor, the Equal Employment Opportunity
    Commission or any federal, state or local agency which requires
    equal employment opportunities or affirmative action in
    employment. There are no unfair labor practice complaints
    pending against LFC or any LFC Subsidiary before the National
    Labor Relations Board and no similar claims pending before any
    similar state, local or foreign agency. To the knowledge of LFC,
    there is no activity or proceeding of any labor organization (or
    representative thereof)
    </FONT></TD>
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    <TD align="left">
    <FONT size="2">or employee group to organize any employees of
    LFC or any LFC Subsidiary, nor of any strikes, slowdowns, work
    stoppages, lockouts, or threats thereof, by or with respect to
    any such employees. LFC and each LFC Subsidiary are in
    compliance in all material respects with all applicable laws
    respecting employment and employment practices, terms and
    conditions of employment and wages and hours, and neither LFC or
    any LFC Subsidiary are engaged in any unfair labor practice.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(s)&nbsp;<I>Regulatory Matters and Examination
    Reports.</I> Neither LFC nor any of the LFC Subsidiaries has any
    formal or informal agreements, arrangements or understandings
    with the Federal Reserve Board, the Federal Deposit Insurance
    Corporation, the Office of the Comptroller of the Currency, the
    Oklahoma State Banking Department, the Oklahoma State Insurance
    Commissioner, the SEC, the Oklahoma State Securities Board or
    any other regulatory authority (collectively, the
    <I>&#147;Regulatory Authorities&#148;</I>). To the extent
    permitted by law, LFC has made available to IBC complete and
    correct copies of (i)&nbsp;all examination reports by Regulatory
    Authorities forwarded to LFC or any LFC Subsidiary since
    December&nbsp;31, 1999; (ii)&nbsp;any correspondence between LFC
    or any LFC Subsidiary, on the one hand, and any Regulatory
    Authority, on the other hand, relating to examination issues
    during such periods, and (iii)&nbsp;any agreements, arrangements
    or understandings between LFC or any LFC Subsidiary and such
    Regulatory Authority, including any agreements, arrangements or
    understandings arising out of or related to any such
    examinations. Except as set forth in Section&nbsp;4.1(s) of the
    LFC Disclosure Schedule, LFC and the LFC Subsidiaries have not
    received or been made aware of any complaints or inquiries under
    the Community Reinvestment Act, the Fair Housing Act, the Equal
    Credit Opportunity Act or any other state or federal
    anti-discriminate fair lending law. Each of the LFC&#146;s
    insured depository institution subsidiaries is
    &#147;well-capitalized&#148; (as that term is defined at
    12&nbsp;C.F.R. 225.2(r)(2)(i)) and &#147;well managed&#148; (as
    that term is defined at 12&nbsp;C.F.R. 225.81(c)), and each
    institution&#146;s examination rating under the Community
    Reinvestment Act of 1977 is satisfactory or outstanding.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(t)&nbsp;<I>Title to Properties;
    Encumbrances.</I> Except as set forth in Section&nbsp;4.1(t) of
    the LFC Disclosure Schedule, LFC and each LFC Subsidiary has
    unencumbered, good, legal, and indefeasible title to all their
    respective material properties and assets, real and personal,
    including, without limitation, all the material properties and
    assets reflected in the Audited Financial Statements and
    Unaudited Financial Statements, except for (i)&nbsp;those
    properties and assets disposed of for fair market value in the
    ordinary course of business and consistent with prudent banking
    practice since the date of the Financial Statements,
    (ii)&nbsp;properties where the failure to have such title would
    not have a Material Adverse Effect, (iii)&nbsp;liens for current
    taxes not yet due or payable, (iv)&nbsp;pledges to secure
    deposits and borrowings and other liens incurred in the ordinary
    course of its banking business and (v)&nbsp;liens reflected on
    the statement of financial condition of LFC included in the
    Unaudited Financial Statements. LFC has made available to IBC
    all of the files and information in the possession of LFC or the
    LFC Subsidiaries concerning such properties, including any title
    exceptions which might affect indefeasible title or value of
    such property. LFC and the LFC Subsidiaries each hold good and
    legal title or good and valid leasehold rights to all assets
    that are necessary for them to conduct their respective
    businesses as they are currently being conducted.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(u)&nbsp;<I>Patents, Trademarks and
    Copyrights.</I> Except as set forth in Section&nbsp;4.1(u) of
    the LFC Disclosure Schedule, neither LFC nor any of the LFC
    Subsidiaries requires the use of any material patent, patent
    application, invention, process, trademark (whether registered
    or unregistered), trademark application, trade name, service
    mark, copyright, or any material trade secret for the business
    or operations of LFC or any LFC Subsidiary. LFC and/or the LFC
    Subsidiaries own or are licensed or otherwise have the right to
    use the items listed in Section&nbsp;4.1(u) of the LFC
    Disclosure Schedule.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(v)&nbsp;<I>Fiduciary Responsibilities.</I> LFC
    and the LFC Subsidiaries have performed in all respects all of
    their respective duties as a trustee, custodian, guardian or as
    an escrow agent in a manner which complies in all material
    respects with all applicable laws, regulations, orders,
    agreements, instruments and common law standards, except where
    the failure to so perform or comply would not have a Material
    Adverse Effect.
    </FONT></TD>
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    <TD width="3%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(w)&nbsp;<I>Insurance.</I> LFC and the LFC
    Subsidiaries have in effect the insurance coverage (including
    fidelity bonds) described in Section&nbsp;4.1(w) of the LFC
    Disclosure Schedule and have had similar insurance in force for
    the last 5&nbsp;years. Except as set forth on
    Section&nbsp;4.1(w) of the LFC Disclosure Schedule, there have
    been no claims under such fidelity bonds within the last
    5&nbsp;years and to the knowledge of LFC no facts exist which
    would form the basis of a claim under such bonds. To the
    knowledge of LFC, there is no reason to believe that the
    existing fidelity coverage would not be renewed by its carrier
    on substantially the same terms unless such failure to renew is
    based upon any pending claim.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(x)&nbsp;<I>Leases, Contracts and Agreements.</I>
    Section&nbsp;4.1(x) of the LFC Disclosure Schedule sets forth an
    accurate and complete list of all leases, subleases, licenses,
    contracts and agreements to which LFC or any LFC Subsidiary is a
    party or by which LFC or any LFC Subsidiary is bound which
    obligate or may obligate LFC or any LFC Subsidiary for an amount
    in excess of $100,000 over the entire term of any such agreement
    or related contracts of a similar nature which in the aggregate
    obligate or may obligate LFC or any LFC Subsidiary in the
    aggregate for an amount in excess of $100,000 over the entire
    term of such related contracts (the
    <I>&#147;Contracts&#148;</I>). LFC has delivered or made
    available to IBC true and correct copies of all Contracts. For
    the purposes of this Agreement, the Contracts shall be deemed
    not to include loans (including agreements covering same) made
    by, repurchase agreements made by, spot foreign exchange
    transactions of, bankers acceptances of, agreements with Bank
    customers for trust services, or deposits by LFC and any LFC
    Subsidiary, but shall include unfunded loan commitments and
    letters of credit issued by LFC or any LFC Subsidiary where the
    borrowers&#146; total direct and indirect indebtedness to the
    Bank is in excess of $100,000. Except as set forth in
    Section&nbsp;4.1(x) of the LFC Disclosure Schedule, no
    participations or loans have been sold which have buy back,
    recourse or guaranty provisions which create contingent or
    direct liabilities of LFC or any LFC Subsidiary. To the
    knowledge of LFC, all of the Contracts are legal, valid and
    binding obligations of the parties to the Contracts enforceable
    in accordance with their terms, subject to the effect of
    bankruptcy, insolvency, reorganization, moratorium, or other
    similar laws relating to creditors&#146; rights generally and to
    general equitable principles, and are in full force and effect.
    To the knowledge of LFC, except as described in
    Section&nbsp;4.1(x) of the LFC Disclosure Schedule, all rent and
    other payments by LFC and any LFC Subsidiary under the Contracts
    are current, except for defaults which would not reasonably be
    expected to result in a Material Adverse Effect on LFC, there
    are no existing defaults by LFC or any LFC Subsidiary under the
    Contracts and no termination, condition or other event has
    occurred which (whether with or without notice, lapse of time or
    the happening or occurrence of any other event) would constitute
    a default. LFC and any LFC Subsidiary has a good and valid
    leasehold interest in each parcel of real property leased by it
    free and clear of all mortgages, pledges, liens, encumbrances
    and security interests. Except for deposit accounts entered into
    with LFC or an LFC Subsidiary in the ordinary course of business
    or as set forth on Section&nbsp;4.1(x) of the LFC Disclosure
    Schedule, neither LFC nor any LFC Subsidiary is a party to or
    bound by any contract, agreement, commitment, arrangement or
    understanding with (i)&nbsp;any director or officer of LFC or
    any LFC Subsidiary or any beneficial owner of 5% or more of the
    outstanding capital stock of LFC, or (ii)&nbsp;any affiliate, as
    defined in Section&nbsp;12b-2 of the 1934&nbsp;Act, of any of
    the foregoing.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(y)&nbsp;<I>Knowledge.</I> Neither LFC nor any
    LFC Subsidiary has any knowledge of a fact or circumstance that
    could impede or delay the ability to obtain any of the LFC
    Required Consents or the IBC Required Consents.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(z)&nbsp;<I>Information Provided.</I> None of the
    information supplied or to be supplied by or on behalf of LFC
    for inclusion in (i)&nbsp;the Proxy Statement-Prospectus or the
    Registration Statement (each as defined in Section&nbsp;6.1
    hereof), (ii)&nbsp;any other applications or documents to be
    filed with the SEC, the Nasdaq Stock Market,&nbsp;Inc.
    <I>(&#147;Nasdaq&#148;)</I>, the Federal Reserve Board and any
    other regulatory authority seeking approval or providing
    notification of the transactions herein described, or
    (iii)&nbsp;any other filing with any banking, securities
    regulatory or other authority in connection with the
    transactions contemplated hereby, will, at the respective times
    such applications, notices or documents are filed, and, in the
    case of the Registration Statement, when it becomes effective,
    and with respect to such Proxy Statement-Prospectus, when first
    mailed to the stockholders of LFC, contain any untrue statement
    of a material fact, or omit to
    </FONT></TD>
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    <TD align="left">
    <FONT size="2">state any material fact necessary in order to
    make the statements made therein, in light of the circumstances
    under which they are made, not misleading. All information
    concerning LFC or its Subsidiaries, or for which it is
    responsible, that is included in documents that IBC is
    responsible for filing with the SEC, Nasdaq or any other
    regulatory authority in connection with the transactions
    contemplated hereby, will, to the best of LFC&#146; knowledge,
    comply in all material respects with the provisions of
    applicable law and any rules and regulations thereunder.
    Notwithstanding the foregoing or anything to the contrary set
    forth in this Agreement, LFC makes no representation or warranty
    with respect to any information supplied by or on behalf of IBC
    or Acquisition Sub which is contained in any of the foregoing
    documents.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(aa)&nbsp;<I>Absence of Certain Payments.</I>
    Neither LFC nor any of the LFC Subsidiaries, nor, to the
    knowledge of LFC or any of the LFC Subsidiaries, any of their
    respective directors, officers, agents, representatives or
    employees (in their capacity as directors, officers, agents,
    representatives or employees of LFC or any such subsidiary) has
    used any corporate or other funds for unlawful contributions,
    payments, gifts, or entertainment, or made any unlawful
    expenditures relating to political activity to government
    officials or others or established or maintained any unlawful
    funds. Neither LFC nor any of the LFC Subsidiaries, nor, to the
    knowledge of LFC or any of the LFC Subsidiaries, any of their
    respective directors, officers, agents, representatives or
    employees (in their capacity as directors, officers, agents,
    representatives or employees of LFC or any such subsidiary) has
    accepted or received any unlawful contributions, payments,
    gifts, or expenditures.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(bb)&nbsp;<I>Certain Agreements.</I> Neither LFC
    nor any of the LFC Subsidiaries is a party to, or bound by, any
    contract or agreement that materially limits the ability of LFC
    or any LFC Subsidiary, directly or indirectly, to compete in any
    line of business or with any Person in any geographic area
    during any period of time.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(cc)&nbsp;<I>Compliance with Law.</I> Except as
    set forth in Section&nbsp;4.1(cc) of the LFC Disclosure
    Schedule, neither LFC nor any of the LFC Subsidiaries is in
    violation of any applicable statute, rule, regulation, decree or
    order of any governmental or regulatory authority applicable to
    LFC or any of the LFC Subsidiaries, except for violations which
    would not have a Material Adverse Effect on LFC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(dd)&nbsp;<I>Derivative Transactions.</I> All
    Derivative Transactions entered into by LFC or any of its
    Subsidiaries were entered into in accordance with applicable
    rules, regulations and policies of any regulatory authority, and
    in accordance with the investment, securities, commodities, risk
    management and other policies, practices and procedures employed
    by LFC and its Subsidiaries, and were entered into with counter
    parties believed at the time to be financially responsible and
    able to understand (either alone or in consultation with their
    advisers) and to bear the risks of such Derivative Transactions;
    and LFC and each of its Subsidiaries have duly performed all of
    their obligations under the Derivative Transactions to the
    extent that such obligations to perform have accrued, and, to
    LFC&#146;s knowledge, there are no material breaches, violations
    or defaults or allegations or assertions of such by any party
    thereunder.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Derivative
Transactions&#148;</FONT></I><FONT size="2"> means any swap
transaction, option, warrant, forward purchase or sale
transaction, futures transaction, cap transaction, floor
transaction or collar transaction relating to one or more
currencies, commodities, bonds, equity securities, loans,
interest rates, credit-related events or conditions or any
indexes, or any other similar transaction or combination of any
of these transactions, including collateralized mortgage
obligations or other similar instruments or any debt or equity
instruments evidencing or embedding any such types of
transactions, and any related credit support, collateral or
other similar arrangements related to such transactions;
provided that the term &#147;Derivative Transactions&#148; shall
not include any of the LFC Stock Options.
</FONT>
<P>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ee)&nbsp;<I>ESOP.</I> The Local Oklahoma Bank
    Employee Stock Ownership Plan, as amended, effective
    November&nbsp;1, 1999 (the <I>&#147;ESOP&#148;</I>), is an
    employee stock ownership plan within the meaning of Code
    Section&nbsp;4975(e)(7) and is qualified under Code
    Section&nbsp;401(a). The trust forming part of the ESOP has been
    duly constituted in accordance with a valid and binding trust
    instrument, is validly existing and qualified under Code
    Section&nbsp;401(a) and tax-exempt under Code
    Section&nbsp;501(a). The Administrator of the ESOP has been duly
    and lawfully appointed by the board of directors of the LFC Bank
    and has the
    </FONT></TD>
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<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">power and authority to administer the ESOP. The
    Trustee of the ESOP is duly-authorized, and has all requisite
    power and authority necessary, to enter into and perform its
    obligations as trustee under the ESOP and the Trust Agreement.
    The ESOP has not incurred any indebtedness or other obligations
    or liabilities, and as of the Closing, will not have incurred
    any indebtedness or other obligations or liabilities. Except as
    disclosed in Section&nbsp;4.1(ee) of the LFC Disclosure
    Schedule, the ESOP constitutes an &#147;employee stock ownership
    plan&#148; as defined in Code Section&nbsp;4975(e)(7) and
    Section&nbsp;407(d)(6) of ERISA. Contributions by LFC or any of
    the LFC Subsidiaries to the ESOP are deductible by LFC pursuant
    to (but subject to the limitations of) Code Section&nbsp;404.
    For the purposes of this Section&nbsp;4.1(ee) capitalized terms
    used herein shall have the meaning ascribed to them in the ESOP
    plan document, as amended.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
and Warranties of IBC.</I> Except as set forth in the Disclosure
Schedule delivered by IBC to LFC prior to the execution of this
Agreement (the <I>&#147;IBC Disclosure
Schedule&#148;</I>),&nbsp;IBC represents and warrants to LFC as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Organization, Standing and Power.</I>
    IBC is a corporation duly organized, validly existing and in
    good standing under the laws of the state of Texas, and, except
    as would not reasonably be expected to result in a Material
    Adverse Effect on IBC, has the full power and authority
    (including all licenses, franchises, permits and other
    governmental authorizations which are legally required) to own
    its properties and to engage in the business and activities now
    conducted by it. Each of IBC&#146;s Subsidiaries is duly
    organized, validly existing and in good standing under the laws
    of the state of its organization, and except as would not
    reasonably be expected to result in a Material Adverse Effect on
    IBC, has full power and authority (including all licenses,
    franchises, permits and other governmental authorizations which
    are legally required) to own its properties and to engage in the
    business and activities presently conducted by it.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Capitalization and Ownership.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;The authorized capital stock of IBC
    consists exclusively of 105,000,000&nbsp;shares of IBC Common
    Stock, of which as of January&nbsp;19, 2004,
    38,711,713&nbsp;shares were outstanding. All issued and
    outstanding shares of IBC Common Stock are duly authorized,
    validly issued, fully paid and nonassessable and free of any
    preemptive rights and have not been issued in violation of any
    preemptive rights of any Person. No holders of shares of IBC
    Common Stock have any rights of rescission or other claims
    against IBC under the 1933&nbsp;Act resulting from any failure
    of such shares to have been sold by IBC pursuant to a valid
    exemption under the 1933&nbsp;Act or otherwise in compliance
    therewith.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;Except as set forth in
    Section&nbsp;4.2(b) of the IBC Disclosure Schedule, all of the
    issued and outstanding shares of capital stock of each of the
    IBC Subsidiaries are duly authorized, validly issued and
    outstanding, fully paid, nonassessable, and are owned directly
    or indirectly by IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;There are no outstanding options,
    warrants, conversion rights, calls or commitments of any kind
    obligating IBC or any of the IBC Subsidiaries to issue, deliver
    or sell or cause to be issued, delivered or sold, directly or
    indirectly, additional shares of capital stock or any other
    securities convertible into or exercisable for, or evidencing
    the right to subscribe for any capital stock of IBC, and no
    authorization therefor has been given, except that as of
    January&nbsp;19, 2004, there were outstanding options to acquire
    an aggregate of 1,444,900&nbsp;shares of IBC Common Stock (the
    <I>&#147;IBC Stock Options&#148;</I>). Neither IBC nor any IBC
    Subsidiary has any outstanding commitment or obligation to
    repurchase, reacquire or redeem any of its outstanding capital
    stock or any IBC Stock Options.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iv)&nbsp;There are no voting trusts or
    stockholder agreements to which IBC is a party with respect to
    the voting of the capital stock of IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(v)&nbsp;The shares of IBC Common Stock to be
    issued in exchange for Shares in the Merger, when issued in
    accordance with the terms of this Agreement, will be duly
    authorized, validly issued, fully paid and nonassessable and the
    issuance thereof is not subject to any preemptive right.
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Authority; No Violations.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;IBC has all requisite corporate power
    and authority to enter into this Agreement and to consummate the
    transactions contemplated hereby. The execution, delivery and
    performance of this Agreement and the consummation of the
    transactions contemplated hereby have been duly authorized by
    all necessary corporate action on the part of IBC and no other
    corporate action or other corporate proceedings on the part of
    IBC is necessary to authorize this Agreement or the transactions
    hereby contemplated. This Agreement has been duly executed and
    delivered by IBC and constitutes a valid and binding agreement
    of IBC, enforceable against it in accordance with its terms,
    except as such enforceability may be limited by bankruptcy,
    insolvency, reorganization, moratorium and similar laws relating
    to or affecting creditors generally, by general equity
    principles (regardless of whether such enforceability is
    considered in a proceeding in equity or at law) or by an implied
    covenant of good faith and fair dealing.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;The execution and delivery of this
    Agreement by IBC does not and will not, as the case may be, and
    the consummation by IBC of the Merger and the other transactions
    contemplated hereby will not, result in a Violation pursuant to:
    (A)&nbsp;any provision of the articles of incorporation or
    by-laws of IBC or any Subsidiary of IBC or (B)&nbsp;except as
    would not reasonably be expected to result in a Material Adverse
    Effect on IBC, subject to obtaining or making the consents,
    approvals, orders, authorizations, registrations, declarations
    and filings referred to in paragraph (iii)&nbsp;below, any loan
    or credit agreement, note, mortgage, bond, indenture, lease,
    benefit plan or other agreement, obligation, instrument, permit,
    concession, franchise, license, judgment, order, decree,
    statute, law, ordinance, rule or regulation applicable to IBC or
    any Subsidiary of IBC or their respective properties or assets.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;No consent, approval, order or
    authorization of, or registration, declaration or filing with,
    any Governmental Entity is required by or with respect to IBC or
    any Subsidiary of IBC in connection with the execution, delivery
    and performance of this Agreement by IBC and Acquisition Sub or
    the consummation of the Merger and the Subsidiary Mergers,
    except for those required under or in relation to (A)&nbsp;the
    BHC Act, (B)&nbsp;the DGCL with respect to the filing of the
    Certificate of Merger, (C)&nbsp;laws, rules, regulations,
    practices and orders of any applicable federal or state banking
    departments or of any federal or state regulatory body having
    jurisdiction over banking matters, (D) antitrust or other
    competition laws of other jurisdictions, (E)&nbsp;the
    registration under the 1933&nbsp;Act of the shares of IBC Common
    Stock to be issued in the Merger, (F)&nbsp;the registration or
    qualification of the shares of IBC Common Stock to be issued in
    the Merger under state securities or &#147;blue sky&#148; laws,
    (G)&nbsp;the listing of the shares of IBC Common Stock to be
    issued in the Merger on the Nasdaq National Market System,
    subject to official notice of issuance, (H)&nbsp;such consents
    and approvals specified in Section&nbsp;4.2(c) of the IBC
    Disclosure Schedule and (I)&nbsp;such consents, approvals,
    orders, authorizations, registrations, declarations and filings
    the failure of which to make or obtain would not reasonably be
    expected to result in a Material Adverse Effect on IBC.
    Consents, approvals, orders, authorizations, registrations,
    declarations and filings required under or in relation to
    clauses&nbsp;(A)-(H) above are hereinafter referred to as the
    <I>&#147;IBC Required Consents.&#148;</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;<I>Financial Statements.</I> IBC has
    delivered to LFC (i)&nbsp;the audited consolidated statements of
    condition of IBC and its Subsidiaries as of December&nbsp;31,
    2002 and 2001 and (ii)&nbsp;the related audited consolidated
    statements of income, shareholders&#146; equity and cash flows
    for the years ended December&nbsp;31, 2002, 2001 and 2000,
    together with the notes thereto, accompanied by the report
    thereon of the independent certified public accountant who
    examined such statements (collectively, the <I>&#147;IBC Audited
    Financial Statements&#148;</I>). Except to the extent qualified
    by footnotes contained in the IBC Audited Financial Statements
    and the report of the independent accountant thereon, the IBC
    Audited Financial Statements fairly present in all material
    respects the financial position of IBC and the IBC Subsidiaries
    as of the dates thereof and the results of IBC&#146;s operations
    for the periods indicated in conformity with GAAP applied on a
    consistent basis. In addition,&nbsp;IBC has delivered to LFC the
    unaudited consolidated statements of condition of IBC and its
    Subsidiaries as of September&nbsp;30, 2003, and the related
    unaudited statements of income for the nine-month period then
    ended (collectively, the <I>&#147;IBC Unaudited Financial
    Statements&#148;</I>). The IBC Unaudited Financial Statements
    fairly present in all material respects the
    </FONT></TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">financial position of IBC as of the date thereof
    and the results of its operations for the period indicated in
    conformity with GAAP applied on a consistent basis, except
    (i)&nbsp;as described in the footnotes to such IBC Unaudited
    Financial Statements, (ii)&nbsp;for year end closing adjustments
    that have not been applied, and (iii)&nbsp;the IBC Unaudited
    Financial Statements may not include all footnote disclosures
    required by GAAP.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;<I>Reports.</I> IBC has filed all
    reports, schedules, forms, statements and other documents
    required to be filed by it with the SEC since January&nbsp;1,
    2000 (collectively, including all exhibits thereto, the
    <I>&#147;IBC SEC Reports&#148;</I>). None of the IBC SEC
    Reports, including, without limitation, any financial statements
    or schedules included therein, as of their respective dates or,
    in the case of any registration statements, at the time of
    effectiveness (and, if amended or superseded by a filing prior
    to the date of this Agreement or the Closing, then on the date
    of such filing), contained or will contain any untrue statement
    of a material fact or omitted or will omit to state a material
    fact required to be stated therein or necessary to make the
    statements made therein, in light of the circumstances under
    which they were made, not misleading. All of such IBC SEC
    Reports, as of their respective dates (and as of the date of any
    amendment to the respective IBC SEC Report), complied as to form
    in all material respects with the applicable requirements of the
    1933&nbsp;Act and the 1934&nbsp;Act and the rules and
    regulations promulgated thereunder, including, without
    limitation, each of the consolidated financial statements of IBC
    (including any related notes thereto) included within the IBC
    SEC Reports comply as to form in all material respects with
    applicable accounting requirements and the published rules and
    regulations of the SEC with respect thereto.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;<I>Brokers or Finders.</I> No agent,
    broker, investment banker, financial advisor or other firm or
    Person is or will be entitled to any broker&#146;s or
    finder&#146;s fee or any other similar commission or fee in
    connection with any of the transactions contemplated by this
    Agreement based upon arrangements made by or on behalf of IBC or
    any of its Subsidiaries.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(g)&nbsp;<I>Litigation.</I> There are no actions,
    suits, proceedings, arbitrations, claims or investigations
    pending or, to IBC&#146;s knowledge, threatened against IBC or
    any of its Subsidiaries, or any properties or rights of IBC or
    any of its Subsidiaries, before any Governmental Entity that
    (i)&nbsp;seek to question, delay or prevent the consummation of
    the Merger or the other transactions contemplated hereby,
    (ii)&nbsp;would reasonably be expected to affect adversely the
    ability of IBC to fulfill its obligations hereunder, including
    without limitation,&nbsp;IBC&#146;s obligations under
    Article&nbsp;I, Article&nbsp;II and Article&nbsp;III, or
    (iii)&nbsp;would reasonably be expected to result in a Material
    Adverse Effect on IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(h)&nbsp;<I>No LFC Capital Stock.</I> IBC does
    not own or hold directly or indirectly any shares of common
    stock of LFC or any other capital stock of LFC, or any options,
    warrants or other rights to acquire any shares of common stock
    of LFC or any other capital stock of LFC, or in each case, any
    interests therein.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;<I>Regulatory Matters and Examination
    Reports.</I> Neither IBC nor any of the IBC Subsidiaries has any
    formal or informal agreements, arrangements or understandings
    with the Federal Reserve Board, the Federal Deposit Insurance
    Corporation, the Office of the Comptroller of the Currency, the
    Texas State Banking Department, the Texas State Insurance
    Commission, the SEC, the Texas State Securities Board or any
    other regulatory authority. Each of IBC&#146;s insured
    depository institution subsidiaries is
    &#147;well-capitalized&#148; (as that term is defined at
    12&nbsp;C.F.R. 225.2(r)(2)(i)) and &#147;well managed&#148; (as
    that term is defined at 12&nbsp;C.F.R. 225.81(c)), and each
    institution&#146;s examination rating under the Community
    Reinvestment Act of 1977 is satisfactory or outstanding.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(j)&nbsp;<I>Knowledge.</I> Neither IBC nor any
    IBC Subsidiary has any knowledge of a fact or circumstance that
    could impede or delay the ability to obtain any of the IBC
    Required Consents or the LFC Required Consents.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(k)&nbsp;<I>Information Provided.</I> None of the
    information supplied or to be supplied by or on behalf of IBC
    for inclusion in (i)&nbsp;the Proxy Statement-Prospectus or the
    Registration Statement, (ii)&nbsp;any other applications or
    documents to be filed with the SEC, Nasdaq, the Federal Reserve
    Board and any other regulatory authority seeking approval or
    providing notification of the transactions herein described, or
    </FONT></TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;any other filing with any banking,
    securities regulatory or other authority in connection with the
    transactions contemplated hereby, will, at the respective times
    such applications, notices or documents are filed, and, in the
    case of the Registration Statement, when it becomes effective,
    and with respect to such Proxy Statement-Prospectus, when first
    mailed to the stockholders of LFC, contain any untrue statement
    of a material fact, or omit to state any material fact necessary
    in order to make the statements made therein, in light of the
    circumstances under which they are made, not misleading. All
    information concerning IBC or its Subsidiaries, or for which it
    is responsible, that is included in documents that LFC is
    responsible for filing with the SEC, Nasdaq or any other
    regulatory authority in connection with the transactions
    contemplated hereby, will, to the best of IBC&#146;s knowledge,
    comply in all material respects with the provisions of
    applicable law and any rules and regulations thereunder.
    Notwithstanding the foregoing or anything to contrary set forth
    in this Agreement,&nbsp;IBC makes no representation or warranty
    with respect to any information supplied by or on behalf of LFC
    which is contained in any of the foregoing documents.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(l)&nbsp;<I>Compliance with Law.</I> Neither IBC
    nor any of the IBC Subsidiaries is in violation of any
    applicable statute, rule, regulation, decree or order of any
    governmental or regulatory authority applicable to IBC or any of
    the IBC Subsidiaries, except for violations which would not have
    a Material Adverse Effect on IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(m)&nbsp;<I>Financing.</I> IBC has cash, cash
    equivalents and/or available lines of credit sufficient to pay
    the aggregate Per Share Cash Consideration at the Effective
    Time, and through the date of payment of the Merger
    Consideration by IBC,&nbsp;IBC will have all funds necessary to
    pay the aggregate Per Share Cash Consideration. Each of IBC and
    IBC Bank is, and immediately following completion of the Merger
    and the Subsidiary Mergers will be, in compliance with all
    capital requirements applicable to it.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Representations
and Warranties of Acquisition Sub.</I> Acquisition Sub
represents and warrants to LFC as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Organization, Standing and Power.</I>
    Acquisition Sub is a corporation duly incorporated, validly
    existing and in good standing under the laws of Delaware.
    Acquisition Sub is an indirect wholly-owned subsidiary of IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Authority; No Violations.</I>
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;Acquisition Sub has all requisite
    corporate power and authority to enter into this Agreement and
    to consummate the transactions contemplated hereby. The
    execution, delivery and performance by Acquisition Sub of this
    Agreement and the consummation by Acquisition Sub of the
    transactions contemplated hereby have been duly authorized by
    all necessary corporate and stockholder action on the part of
    Acquisition Sub. This Agreement has been duly executed and
    delivered by Acquisition Sub and constitutes a valid and binding
    agreement of Acquisition Sub, enforceable against it in
    accordance with its terms, except as such enforceability may be
    limited by bankruptcy, insolvency, reorganization, moratorium
    and other similar laws relating to or affecting creditors
    generally, by general equity principles (regardless or whether
    such enforceability is considered in a proceeding in equity or
    at law) or by an implied covenant of good faith and fair dealing.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;The execution and delivery of this
    Agreement by Acquisition Sub does not or will not, as the case
    may be, and the consummation by Acquisition Sub of the and the
    other transactions contemplated hereby will not, result in a
    Violation pursuant to: any provision of the certificate of
    incorporation or by-laws of Acquisition Sub or any loan or
    credit agreement, note, mortgage, bond, indenture, lease,
    benefit plan or other agreement, obligation, instrument, permit,
    concession, franchise, license, judgment, order, decree,
    statute, law, ordinance, rule or regulation applicable to
    Acquisition Sub or its properties or assets.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>No Business Activities.</I>
    Acquisition Sub has not conducted any activities or operations
    other than in connection with the organization of Acquisition
    Sub, the negotiation and execution of this
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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    <FONT size="2">Agreement and the consummation of the
    transactions contemplated hereby. Acquisition Sub has no
    Subsidiaries.
    </FONT></TD>
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<P align="center">
<FONT size="2">ARTICLE&nbsp;V
</FONT>

<P align="center">
<FONT size="2">COVENANTS RELATING TO CONDUCT OF BUSINESS
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Covenants of
LFC.</I> During the period from the date of this Agreement and
continuing until the Effective Time, LFC agrees as to itself and
the LFC Subsidiaries that (except as expressly contemplated or
permitted by this Agreement or as otherwise indicated on the LFC
Disclosure Schedule or as required by a Governmental Entity of
competent jurisdiction or to the extent that IBC shall otherwise
consent in writing):
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    <FONT size="2">(a)&nbsp;<I>Ordinary Course.</I> LFC and the LFC
    Subsidiaries shall carry on their respective businesses in the
    usual, regular and ordinary course in all material respects, in
    substantially the same manner as heretofore conducted, and shall
    use all commercially reasonable efforts to preserve intact their
    present lines of business, maintain their rights and franchises
    and preserve their relationships with customers, suppliers and
    others having business dealings with them to the end that their
    ongoing businesses shall not be impaired in any material respect
    at the Effective Time; <I>provided, however,</I> that no action
    by LFC or its Subsidiaries with respect to matters specifically
    addressed by any other provision of this <I>Section&nbsp;5.1
    </I>shall be deemed a breach of this <I>Section&nbsp;5.1(a)
    </I>unless such action would constitute a breach of one or more
    of such other provisions. In furtherance of the foregoing, LFC
    shall, and shall cause each of the LFC Subsidiaries to:
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;extend credit in accordance with
    existing lending policies, except that it shall not, without the
    prior written consent of IBC, (A) make any new loan (except
    pursuant to commitments made prior to the date of this
    Agreement) to any Person if the amount of the new loan, when
    aggregated with all other loans or extensions of credit
    (including, without limitation, amounts funded pursuant to
    clause&nbsp;(B)&nbsp;below) made to such Person from and after
    the date of this Agreement, would exceed $1.5&nbsp;million, or
    (B)&nbsp;modify, restructure or renew any existing loan (except
    pursuant to commitments made prior to the date of this
    Agreement) if either (1)&nbsp;the modification, restructuring or
    renewal of the existing loan requires additional amounts to be
    funded which exceed in the aggregate $1.5&nbsp;million or
    (2)&nbsp;the loan to be modified, restructured or renewed is
    classified substandard, doubtful or loss and the modification,
    restructuring or renewal changes in any material respect the
    terms of the loan or requires the advancement of additional
    funds;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;maintain in a manner consistent with
    past practices all of LFC&#146;s and the LFC Subsidiaries&#146;
    properties in good repair, order and condition, reasonable wear
    and tear excepted, and maintain the insurance coverages
    described in Section&nbsp;4.1(w) of the LFC Disclosure Schedule
    or obtain comparable insurance coverages from reputable insurers
    which, in respect to amounts, types and risks insured, are
    adequate for the business conducted by LFC and the LFC
    Subsidiaries and consistent with the existing insurance
    coverages;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;timely file with all appropriate
    regulatory authorities all financial statements and other
    reports required to be so filed by LFC and/or the LFC
    Subsidiaries and to the extent permitted by applicable law,
    promptly thereafter deliver to IBC copies of all financial
    statements and other reports required to be so filed;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iv)&nbsp;comply in all respects with all
    applicable laws and regulations, domestic and foreign, except
    where the failure to so comply would not have a Material Adverse
    Effect on LFC;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(v)&nbsp;promptly give written notice to IBC upon
    obtaining knowledge of any event or fact that would cause any of
    the representations or warranties of LFC contained in or
    referred to in this Agreement to be untrue or misleading in any
    material respect;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vi)&nbsp;deliver to IBC a list, dated as of the
    Closing Date, showing (i)&nbsp;the name of each bank or
    institution where LFC and/or the LFC Subsidiaries have accounts
    or safe deposit boxes, (ii)&nbsp;the
    </FONT></TD>
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    <FONT size="2">name(s) in which such accounts or boxes are held
    and (iii)&nbsp;the name of each Person authorized to draw
    thereon or have access thereto;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vii)&nbsp;deliver to IBC a list, dated as of the
    Closing Date, showing all liabilities and obligations of LFC
    and/or the LFC Subsidiaries in excess of $200,000, except those
    arising in the ordinary course of their respective businesses,
    incurred since September&nbsp;30, 2003, certified by an officer
    of LFC;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(viii)&nbsp;promptly notify IBC of the knowledge
    on the part of LFC of any material change or inaccuracies in any
    data previously given or made available to IBC or Acquisition
    Sub pursuant to this Agreement;&nbsp;and
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ix)&nbsp;provide access, to the extent that LFC
    or the LFC Subsidiaries have the right to provide access, to any
    or all properties and facilities so as to enable IBC to
    physically inspect any structure or components of any structure
    on such property, including without limitation surface and
    subsurface testing and analyses.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Dividends; Changes in Share
    Capital.</I> LFC shall not, and shall not permit any of the LFC
    Subsidiaries to, and shall not propose to, (i)&nbsp;declare or
    pay any dividends on or make other distributions in respect of
    any of its capital stock, except dividends by wholly owned
    Subsidiaries of LFC to LFC and except as set forth in
    Section&nbsp;5.1(b) of the LFC Disclosure Schedule,
    (ii)&nbsp;split, combine or reclassify any of its capital stock
    or issue or authorize or propose the issuance of any other
    securities in respect of, in lieu of or in substitution for,
    shares of its capital stock, except for any such transaction by
    a wholly owned Subsidiary of LFC which remains a wholly owned
    Subsidiary of LFC after consummation of such transaction or
    (iii)&nbsp;repurchase, redeem or otherwise acquire any shares of
    its capital stock or any securities convertible into or
    exercisable for any shares of its capital stock except for the
    purchase from time to time by LFC of Shares in the ordinary
    course of business consistent with past practice in connection
    with LFC&#146;s employee benefit plans.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Issuance of Securities.</I> LFC shall
    not, and shall not permit any of the LFC Subsidiaries to, issue,
    grant, deliver or sell, or authorize or propose the issuance,
    grant, delivery or sale of, any shares of its capital stock of
    any class, or any securities convertible into or exercisable
    for, or any rights, warrants or options to acquire any such
    shares or enter into any agreement with respect to any of the
    foregoing, or any stock appreciation rights or any phantom stock
    other than (i)&nbsp;the issuance of Shares upon the exercise of
    stock options granted prior to the date of this Agreement,
    (ii)&nbsp;issuances by a wholly owned Subsidiary of LFC of
    capital stock to such Subsidiary&#146;s parent or another wholly
    owned Subsidiary of LFC, (iii)&nbsp;issuances of shares,
    options, rights or other awards and amendments to equity-related
    awards in numbers not greater than those set forth in
    Section&nbsp;5.1(c) of the LFC Disclosure Schedule and
    (iv)&nbsp;issuances in connection with actions permitted by
    Section&nbsp;5.1(e).
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;<I>Governing Documents.</I> Except to
    the extent required to comply with their respective obligations
    hereunder, required by law or required by the rules and
    regulations of Nasdaq, LFC and the LFC Subsidiaries shall not
    amend, in the case of the LFC Subsidiaries, in any material
    respect, or propose to so amend their respective certificates of
    incorporation, by-laws or other governing documents.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;<I>No Acquisitions.</I> LFC shall not,
    and shall not permit any of the LFC Subsidiaries to, acquire or
    agree to acquire by merging or consolidating with, or by
    purchasing a substantial equity interest in or a substantial
    portion of the assets of, or by any other manner, any business
    or any corporation, partnership, association or other business
    organization or division thereof or otherwise acquire or agree
    to acquire any assets (other than the acquisition of assets used
    in the operations of the business of LFC and its Subsidiaries in
    the ordinary course); <I>provided, however,</I> that the
    foregoing shall not prohibit (x)&nbsp;internal reorganizations
    or consolidations involving existing Subsidiaries of LFC or
    (y)&nbsp;the creation of new Subsidiaries of LFC organized to
    conduct or continue activities otherwise permitted by this
    Agreement.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;<I>No Dispositions.</I> Other than
    (i)&nbsp;internal reorganizations or consolidations involving
    existing Subsidiaries of LFC, (ii)&nbsp;dispositions referred to
    in the LFC SEC Reports filed prior to the date of this
    Agreement, (iii)&nbsp;as may be required by or in conformance
    with law or regulation in order to permit or facilitate the
    consummation of the transactions contemplated hereby, or
    (iv)&nbsp;in the ordinary course of
    </FONT></TD>
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    <FONT size="2">business (including, without limitation, sales of
    &#147;other real estate owned&#148; in the ordinary course of
    business), LFC shall not, and shall not permit any Subsidiary of
    LFC to, sell, lease, encumber or otherwise dispose of, or agree
    to sell, lease, encumber or otherwise dispose of, any of its
    assets (including capital stock of Subsidiaries of LFC) which
    are material to LFC.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(g)&nbsp;<I>Investments; Indebtedness.</I> LFC
    shall not, and shall not permit any of its Subsidiaries to,
    other than deposit liabilities owed to deposit customers in the
    ordinary course of business, including Certificates of Deposit,
    trade accounts payable incurred in the ordinary course of
    business, federal funds purchased, Federal Home Loan&nbsp;Bank
    borrowings and securities sold under agreements to repurchase,
    in each case (x)&nbsp;that mature within one year and
    (y)&nbsp;are incurred in the ordinary course of business
    consistent with past practice, other than in connection with
    actions permitted by <I>Section&nbsp;5.1(e)</I>, create, incur,
    assume or suffer to exist any indebtedness, issuances of debt
    securities, guarantees, loans or advances not in existence as of
    the date of this Agreement except pursuant to the credit
    facilities, indentures and other arrangements in existence on
    the date of this Agreement and in the ordinary course of
    business, and any other indebtedness existing on the date of
    this Agreement, in each case as such credit facilities,
    indentures, other arrangements and other existing indebtedness
    may be amended, extended, modified, refunded, renewed,
    refinanced or replaced after the date of this Agreement, but
    only if the aggregate principal amount thereof is not increased
    thereby, the term thereof is not extended thereby and the other
    terms and conditions thereof, taken as a whole, are not less
    advantageous to LFC and its Subsidiaries than those in existence
    as of the date of this Agreement.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(h)&nbsp;<I>Compensation.</I> Other than as
    contemplated by <I>Section&nbsp;6.5 </I>or as set forth in
    Section&nbsp;5.1(h) of the LFC Disclosure Schedule, LFC shall
    not, and shall not permit any of the LFC Subsidiaries to, except
    in the ordinary course of business consistent with past practice
    or as required by an existing agreement or plan, increase the
    amount of compensation of, or pay or agree to pay or accrue any
    bonus or like benefit to or for the credit of, any director,
    officer, employee or other Person (provided that nothing herein
    shall preclude LFC and the LFC Subsidiaries from increasing the
    amount of compensation or paying any bonuses to employees who
    are not executive officers to the extent such increases or
    bonuses are in the ordinary course of business and consistent
    with past practices), make any increase in or commitment to
    increase any employee benefits or change or modify the period of
    vesting or retirement age for any participant in any employee
    benefit plan, enter into or amend any employment, consulting or
    severance agreement or other agreement with any director,
    officer or employee, issue any LFC Stock Options or any stock
    appreciation rights or phantom stock, adopt, amend, terminate or
    make any commitment to adopt any additional employee benefit
    plan or make any contribution, other than regularly scheduled
    contributions, to any Benefit Plan. Further, unless IBC shall
    otherwise agree in writing, LFC shall, and shall cause each of
    the LFC Subsidiaries to, not permit the term of any employment
    agreement to which it is a party to be renewed or extended
    (including, without limitation, pursuant to any
    &#147;evergreen&#148; or similar provision) and shall take all
    actions necessary (including, without limitation, giving of any
    required notices) under the terms of any such employment
    agreement to ensure that the term of no such employment
    agreement is (or is permitted to be) renewed or extended.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;<I>Other Actions.</I> LFC shall not, and
    shall not permit any of its Subsidiaries to, take any action
    that would, or fail to take any commercially reasonable action
    which failure would, or that could reasonably be expected to,
    result in, except as otherwise permitted by
    <I>Section&nbsp;6.4</I>, any of the conditions to the Merger set
    forth in Article&nbsp;VII not being satisfied.
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(j)&nbsp;<I>Further Negative Covenants.</I>
    Except with the prior written consent of IBC or as otherwise
    specifically permitted by this Agreement, LFC shall not and
    shall cause the LFC Subsidiaries not to, from the date of this
    Agreement to the Closing:
    </FONT></TD>
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    <FONT size="2">(i)&nbsp;make any change in the methods used in
    allocating and charging costs, except as may be required by
    applicable law, regulation or GAAP, prompt notice of which shall
    be given to IBC;
    </FONT></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;cancel any debts, waive any claims or
    rights of value or sell, transfer, or otherwise dispose of any
    of its material properties or assets, except in the ordinary
    course of business and consistent with past practices;
    </FONT></TD>
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    <FONT size="2">(iii)&nbsp;dispose of or permit to lapse any
    rights to the use of any material trademark, service mark, trade
    name or copyright, or dispose of or disclose to any Person other
    than its employees any material trade secret not theretofore a
    matter of public knowledge;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iv)&nbsp;except through settlement of
    indebtedness, foreclosure, acquisition in lieu of foreclosure,
    the exercise of creditors&#146; remedies or in a fiduciary
    capacity, acquire the capital stock or other equity securities
    or interest of any Person;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(v)&nbsp;except for capital expenditures which
    are in process as of the date of this Agreement or are otherwise
    required pursuant to agreements in existence as of the date of
    this Agreement, make any capital expenditure or a series of
    expenditures of a similar nature in excess of $500,000 in the
    aggregate;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vi)&nbsp;make any income tax or franchise tax
    election or settle or compromise any federal, state, local or
    foreign income tax or franchise tax liability, or, except in the
    ordinary course of business consistent with past practices, make
    any other tax election or settle or compromise any other
    federal, state, local or foreign tax liability;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(vii)&nbsp;except for negotiations and
    discussions between the parties hereto relating to the
    transactions contemplated by this Agreement or as otherwise
    permitted hereunder, enter into any transaction, or enter into,
    extend, modify or amend any lease, contract or commitment by
    which any such transaction, contract, or commitment would
    obligate LFC in an amount which would either (x)&nbsp;have a
    term of greater than a year or (y)&nbsp;exceed $100,000, alone
    or in the aggregate, over the life thereof, other than
    transactions entered into in the ordinary course of business and
    consistent with past practices;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(viii)&nbsp;make any investments except in the
    ordinary course of business and in accordance with past
    practices;
    </FONT></TD>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ix)&nbsp;change any fiscal year or the length
    thereof;
    </FONT></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(x)&nbsp;alter the size or composition of the LFC
    Subsidiaries&#146; deposit base, securities portfolio, loan
    portfolio or asset mix, except in the ordinary course of
    business.
    </FONT></TD>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Covenants of
IBC.</I> During the period from the date of this Agreement and
continuing until the Effective Time,&nbsp;IBC agrees as to
itself and its Subsidiaries that (except as expressly
contemplated or permitted by this Agreement or as otherwise
indicated on the IBC Disclosure Schedule or as required by a
Governmental Entity of competent jurisdiction or to the extent
that LFC shall otherwise consent in writing):
</FONT>
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    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Financing.</I> IBC shall not, and
    shall not permit any of its Subsidiaries to, take any action
    that would, or fail to take any action which failure would,
    impair IBC&#146;s source of funds to pay the aggregate Per Share
    Cash Consideration pursuant to this Agreement and otherwise to
    satisfy its obligations hereunder.
    </FONT></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Regulatory Approvals.</I> IBC shall
    not, and shall not permit any of its Subsidiaries to, take any
    action that would, or fail to take any commercially reasonable
    action which failure would, reasonably be expected to impede or
    delay any LFC Required Consent or IBC Required Consent or
    otherwise impede or delay the consummation of the Merger and the
    other transactions contemplated by this Agreement.
    </FONT></TD>
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    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Other Actions.</I> IBC shall not, and
    shall not permit any of its Subsidiaries to, take any action
    that would, or fail to take any commercially reasonable action
    which failure would, or that could reasonably be expected to,
    result in any of the conditions to the Merger set forth in
    Article&nbsp;VII not being satisfied.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Advice of
Changes; Governmental Filings.</I> Each party shall
(a)&nbsp;confer on a regular and frequent basis with the other
and (b)&nbsp;report (to the extent permitted by law or
regulation or any applicable confidentiality agreement) on
operational matters. LFC shall file all reports required to be
filed by it with the SEC (and all other Governmental Entities)
between the date of this Agreement and the Effective Time and
shall (to the extent permitted by law or regulation or any
applicable confidentiality agreement) deliver to IBC
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">copies of all such reports, announcements and
publications promptly after the same are filed. Subject to
applicable laws relating to the exchange of information, each of
LFC and IBC shall have the right to review in advance, and will
consult with the other with respect to, all the information
relating to the other party and each of their respective
Subsidiaries, which appears in any filings, announcements or
publications made with, or written materials submitted to, any
third party or any Governmental Entity in connection with the
transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each party agrees
that, to the extent practicable and as timely as practicable, it
will consult with, and provide all appropriate and necessary
assistance to, the other party with respect to the obtaining of
all permits, consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable to
consummate the transactions contemplated by this Agreement and
each party will keep the other party apprised of any material
developments relating to completion of the transactions
contemplated hereby.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Data
Processing Conversion.</I> From and after the date
hereof,&nbsp;IBC and LFC shall meet on a regular basis to
discuss and plan for the conversion of LFC&#146;s and its
Subsidiaries&#146; data processing and related electronic
informational systems to those used by IBC and its Subsidiaries
with the goal of conducting such conversion simultaneously with
the consummation of the Bank Merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Establishment
of Accruals.</I> If requested by IBC, at or prior to the
Effective Time, LFC shall, consistent with GAAP, establish such
additional accruals and reserves as may be necessary to conform
its accounting and credit loss reserve practices and methods to
those of IBC and its Subsidiaries (as such practices and methods
are to be applied to LFC from and after the Effective Time) and
reflect IBC&#146;s plans with respect to the conduct of
LFC&#146;s business following the Merger and to provide for the
costs and expenses relating to the consummation by LFC of the
transactions contemplated by this Agreement, provided, however,
that no such accruals or reserves need to be established prior
to the satisfaction of the conditions set forth in
Section&nbsp;7.1 and 7.3. The establishment of such accrual and
reserves shall not, in and of itself, constitute a breach of any
representation, warranty, covenant, agreement or condition of
LFC contained in the Agreement or otherwise be considered in
determining whether any such breach shall have occurred.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Control of
LFC&#146;s Business.</I> Nothing contained in this Agreement
shall be deemed to give IBC, directly or indirectly, the right
to control or direct LFC&#146;s operations prior to the
Effective Time. Prior to the Effective Time, LFC shall exercise,
consistent with the terms and conditions of this Agreement,
complete control and supervision over its operations.
</FONT>

<P align="center">
<FONT size="2">ARTICLE&nbsp;VI
</FONT>

<P align="center">
<FONT size="2">ADDITIONAL AGREEMENTS
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>LFC
Stockholders Meeting; Preparation of Proxy Statement.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;LFC shall, as promptly as practicable
following the execution of this Agreement, duly call, give
notice of, convene and hold a meeting of its stockholders (the
<I>&#147;LFC Stockholders Meeting&#148;</I>) for the purpose of
obtaining the Required LFC Vote with respect to the transactions
contemplated by this Agreement, shall take all lawful action to
solicit the approval of this Agreement by the Required LFC Vote
and the Board of Directors of LFC shall recommend approval of
this Agreement by the stockholders of LFC, provided that nothing
in this Agreement shall prevent the Board of Directors of LFC
from withholding, withdrawing, amending or modifying its
recommendation if the Board of Directors of LFC determines,
after consultation with its outside counsel, that such action is
legally required in order for the directors to comply with their
fiduciary duties under applicable law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;IBC and LFC shall cooperate in
preparing, and LFC shall cause to be filed with the SEC, as
promptly as reasonably practicable following the date hereof,
mutually acceptable proxy materials which shall constitute the
proxy statement-prospectus relating to the matters to be
submitted to the LFC stockholders at the LFC Stockholders
Meeting (such proxy statement-prospectus, and any amendments or
supplements thereto, the <I>&#147;Proxy
Statement-Prospectus&#148;</I>), and IBC shall prepare and file
with the SEC a registration statement on Form&nbsp;S-4 with
respect to the issuance of IBC Common Stock in the Merger (such
Form&nbsp;S-4,
</FONT>

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<DIV align="left">
<FONT size="2">and any amendments or supplements thereto, the
<I>&#147;Registration Statement&#148;</I>). The Proxy
Statement-Prospectus will be included as a prospectus in and
will constitute a part of the Registration Statement as
IBC&#146;s prospectus. Each of IBC and LFC shall use its
reasonable best efforts to have the Proxy Statement-Prospectus
cleared by the SEC and the Registration Statement declared
effective by the SEC and to keep the Registration Statement
effective as long as is necessary to consummate the Merger and
the transactions contemplated hereby. IBC and LFC shall, as
promptly as practicable after receipt thereof, provide the other
party copies of any written comments and advise the other party
of any oral comments, received from the SEC with respect to the
Proxy Statement-Prospectus or Registration Statement. The
parties shall cooperate and provide the other with a reasonable
opportunity to review and comment on any amendment or supplement
to the Proxy Statement-Prospectus and the Registration Statement
prior to filing such with the SEC, and will provide each other
with a copy of all such filings made with the SEC.
Notwithstanding any other provision herein to the contrary, no
amendment or supplement (including by incorporation by
reference) to the Proxy Statement-Prospectus or the Registration
Statement shall be made without the approval of both parties,
which approval shall not be unreasonably withheld or delayed;
provided that with respect to documents filed by a party which
are incorporated by reference in the Registration Statement or
Proxy Statement-Prospectus, this right of approval shall apply
only with respect to information relating to the other party or
its business, financial condition or results of operations. LFC
will use reasonable best efforts to cause the Proxy
Statement-Prospectus to be mailed to LFC&#146;s stockholders as
promptly as practicable after the Registration Statement is
declared effective under the 1933&nbsp;Act. Each party will
advise the other party, promptly after it receives notice
thereof, of the time when the Registration Statement has become
effective, the issuance of any stop order, the suspension of the
qualification of the IBC Common Stock issuable in connection
with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy
Statement-Prospectus or the Registration Statement. If at any
time prior to the Effective Time any information relating to IBC
or LFC, or any of their respective affiliates, officers or
directors, should be discovered by IBC or LFC which should be
set forth in an amendment or supplement to any of the
Registration Statement or the Proxy Statement-Prospectus so that
any of such documents would not include any misstatement of a
material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, the party which discovers
such information shall promptly notify the other party hereto
and, to the extent required by law, rules or regulations, an
appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and disseminated to the
stockholders of LFC.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;IBC shall also take any action required
to be taken under any applicable state securities laws in
connection with the Merger and each of LFC and IBC shall furnish
all information concerning it and the holders of LFC Common
Stock as may be reasonably requested in connection with any such
action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;IBC shall use its reasonable best
efforts to cause the shares of IBC Common Stock to be issued in
the Merger to be approved for listing on the NASDAQ Stock
Market,&nbsp;Inc. National Market System, subject to official
notice of issuance, prior to the Closing Date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Access to
Information and Confidentiality.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Upon reasonable notice, LFC and IBC
shall each (and shall each cause its Subsidiaries to) use its
commercially reasonable efforts to afford to the officers,
employees, accountants, counsel, financial advisors and other
representatives of the other party reasonable access during
normal business hours, during the period prior to the Effective
Time, to all its properties, books, contracts, commitments,
records, documents, employees, vendors, suppliers and service
providers, and all other information with respect to their
business affairs, financial condition, assets and liabilities,
and, during such period, LFC and IBC shall each (and shall each
cause its Subsidiaries to) furnish promptly to the other party
(a)&nbsp;a copy of each report, schedule, registration statement
and other document filed, published, announced or received by it
during such period pursuant to the requirements of Federal or
state securities laws, as applicable (other than documents which
such party is not permitted to disclose under applicable law),
and (b)&nbsp;consistent with its legal obligations, all other
information concerning its business, properties and personnel as
the other party may reasonably request. LFC and IBC shall each
permit the other party, its officers, employees, accountants,
counsel, financial advisors and other representatives to make
copies of such books, records and other documents and to discuss
</FONT>

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<DIV align="left">
<FONT size="2">its business affairs, condition (financial and
otherwise), operations, assets and liabilities with such third
Persons, including, without limitation, its directors, officers,
employees, accountants, counsel, creditors, vendors, suppliers
and service providers, as the other party considers necessary or
appropriate for any purpose, including, without limitation,
familiarizing itself with its businesses and operations,
obtaining any necessary orders, consents or approvals of the
transactions contemplated by this Agreement, conducting an
evaluation of its assets and liabilities and facilitating the
integration of the business and operations of LFC and its
Subsidiaries after the Effective Time. LFC and IBC will each
cause its outside accountants to make available to the other
party, its officers, employees, accountants, counsel, financial
advisor and other representatives, such personnel, work papers
and other documentation of such firm relating to its work papers
and its audits of the books and records of such party as may be
requested by the other party in connection with its review of
the foregoing matters. Without limiting the generality of the
foregoing, during the period of time beginning on the date of
this Agreement and continuing to the Effective Time, LFC shall
promptly provide (and in any case within one week after the
relevant meeting) complete and accurate minutes of all meetings
of the Board of Directors (or any committee of the Board of
Directors) of LFC and/or any LFC Subsidiary.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;IBC and LFC shall each, and shall each
cause its affiliates (as defined in Rule&nbsp;12b-2 of the
1934&nbsp;Act) and its and their employees, agents, accountants,
legal counsel and other representatives and advisers to, hold in
strict confidence all, and not divulge or disclose any
information of any kind concerning the other party and its
business; <I>provided, however,</I> that the foregoing
obligation of confidence shall not apply to (i)&nbsp;information
that is or becomes generally available to the public other than
as a result of a disclosure by such party, any of its affiliates
or any of its employees, agents, accountants, legal counsel or
other representatives or advisers, (ii)&nbsp;information that is
or becomes available to such party, any of its affiliates or any
of its employees, agents, accountants, legal counsel or other
representatives or advisers on a nonconfidential basis, and
(iii)&nbsp;information that is required to be disclosed by such
party, any of its affiliates or any of its employees, agents,
accountants, legal counsel or other representatives or advisers
as a result of any applicable law, rule or regulation of any
Governmental Entity; and <I>provided further, however,</I> that
each party shall promptly notify the other party of any
disclosure by it pursuant to clause&nbsp;(iii) of this
<I>Section&nbsp;6.2(b).</I> Promptly after any termination of
this Agreement, each party and its representatives shall return
to the other party or destroy all copies of documentation with
respect to the other party that were supplied by or on behalf of
such party pursuant to this Agreement, without retaining any
copy thereof, and destroy any notes or analyses such party
and/or its representatives may have prepared containing
information derived from such materials
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Commercially
Reasonable Efforts.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Subject to the terms and conditions of
this Agreements each party will use all commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate the Merger
and the other transactions contemplated by this Agreement as
soon as practicable after the date hereof, including, without
limitation, obtaining the LFC Required Consents and the IBC
Required Consents in a timely manner. In furtherance and not in
limitation of the foregoing, each party hereto agrees to make
any appropriate filings pursuant to the BHC Act with respect to
the transactions contemplated hereby as promptly as practicable
after the date hereof and to supply as promptly as practicable
any additional information and documentary material that may be
requested pursuant to the BHC Act and to take all other actions
reasonably necessary to cause the approval of the transactions
contemplated hereby under the BHC Act and the expiration or
termination of the applicable waiting periods under the BHC Act
as soon as practicable. Nothing in this <I>Section&nbsp;6.3(a)
</I>shall require any of IBC and its Subsidiaries to sell or
otherwise dispose of, or permit the sale or other disposition
of, any assets of IBC, LFC or their respective Subsidiaries,
whether as a condition to obtaining any approval from a
Governmental Entity or any other Person or for any other reason.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Each of IBC and LFC shall, in connection
with the efforts referenced in <I>Section&nbsp;6.3(a) </I>to
obtain all requisite approvals and authorizations for the
transactions contemplated by this Merger Agreement (including,
without limitation, the Merger and the Subsidiary Mergers) under
the BHC Act or any other applicable law or regulation, use all
commercially reasonable efforts to (i)&nbsp;make all appropriate
filings and submissions with any Governmental Entity that may be
necessary, proper or advisable under applicable laws or
regulations
</FONT>

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<DIV align="left">
<FONT size="2">in respect of any of the transactions
contemplated by this Agreement, (ii)&nbsp;cooperate in all
respects with each other in connection with any such filing or
submission and in connection with any investigation or other
inquiry, including any proceeding initiated by a private party,
(iii)&nbsp;promptly inform the other party of any communication
received by such party from, or given by such party to the
Federal Reserve Board or any other Governmental Entity and of
any material communication received or given in connection with
any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby and (iv)&nbsp;permit the
other party to review any communication given by it to, and
consult with each other in advance of any meeting or conference
with, the Federal Reserve Board or any such other Governmental
Entity or, in connection with any proceeding by a private party,
with any other Person, and to the extent permitted by the
Federal Reserve Board or such other applicable Governmental
Entity or other Person, give the other party the opportunity to
attend and participate in such meetings and conferences.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;In furtherance and not in limitation of
the covenants of the parties contained in
<I>Sections&nbsp;6.3(a) </I>and <I>6.3(b)</I>, if any
administrative or judicial action or proceeding, including any
proceeding by a private party, is instituted (or threatened to
be instituted) challenging any transaction contemplated by this
Agreement as violative of any applicable law or regulation, each
of IBC and LFC shall cooperate in all respects with each other
and use all commercially reasonable efforts to contest and
resist any such action or proceeding and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction
or other order, whether temporary, preliminary or permanent that
is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this <I>Section&nbsp;6.3</I> shall limit a
party&#146;s right to terminate this Agreement pursuant to
<I>Section&nbsp;8.1</I> so long as such party has up to then
complied in all respects with its obligations under this
<I>Section&nbsp;6.3.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;If any objections are asserted with
respect to the transactions contemplated hereby under any
applicable law or regulation or if any suit is instituted by any
Governmental Entity or any private party challenging any of the
transactions contemplated hereby as violative of any applicable
law or regulation, each of IBC and LFC shall use all
commercially reasonable efforts to resolve any such objections
or challenge as such Governmental Entity or private party may
have to such transactions under such law or regulation so as to
permit consummation of the transactions contemplated by this
Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Acquisition
Proposals.</I> LFC shall not directly or indirectly, and it
shall use all commercially reasonable efforts to cause its
officers, directors, employees, representatives, agents or
affiliates, including any investment bankers, attorneys or
accountants retained by LFC or any of its Subsidiaries or
affiliates, not to, (i)&nbsp;solicit, initiate, encourage or
otherwise facilitate (including by way of furnishing
information) any inquiries or proposals that constitute, or
could reasonably be expected to lead to, a proposal or offer for
a merger, recapitalization, consolidation, business combination,
sale of a substantial portion of the assets of LFC and its
Subsidiaries, taken as a whole, sale of 15% or more of the
shares of capital stock (including by way of a tender offer,
share exchange or exchange offer) or similar or comparable
transactions involving LFC or any of its Subsidiaries, other
than the transactions contemplated by this Agreement (any such
proposal or offer (other than a proposal or offer made by IBC or
an affiliate thereof) being herein referred to as an
<I>&#147;Acquisition Proposal&#148;</I>), or (ii)&nbsp;engage in
negotiations or discussions concerning, or provide any
non-public information to any Person relating to, any
Acquisition Proposal. Notwithstanding any other provision of
this Agreement, the Board of Directors of LFC may, at any time
prior to approval of this Agreement by the stockholders of LFC,
furnish information pursuant to a confidentiality agreement to,
or engage in discussions or negotiations with, any Person in
response to an unsolicited bona fide written Acquisition
Proposal of such Person if, (a)&nbsp;LFC has not violated any of
the restrictions set forth in this Section&nbsp;6.4,
(b)&nbsp;the Board of Directors of LFC or any committee thereof
concludes in good faith after consultation with its outside
legal counsel, that such action is reasonably necessary in order
for the Board of Directors of LFC to comply with its fiduciary
obligation to the stockholders of LFC under applicable law and
(c)&nbsp;only to the extent that, the Board of Directors of LFC
determines in good faith by a majority vote, after consultation
with its financial advisors, that such Acquisition Proposal
constitutes a Superior Proposal. From and after the execution of
this Agreement, LFC shall immediately advise IBC in writing of
the receipt, directly or indirectly, of any inquiries,
discussions, negotiations or proposals relating to an
Acquisition Proposal (including the specific terms thereof and
the
</FONT>

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<DIV align="left">
<FONT size="2">identity of the other party or parties involved)
and furnish to IBC within 24&nbsp;hours of such receipt an
accurate description of all material terms (including any
changes or adjustments to such terms as a result of negotiations
or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto. Upon
execution of this Agreement, LFC and the LFC Subsidiaries shall
immediately cease any and all existing activities, discussions
or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal. Notwithstanding any other
provision of this Agreement, in response to an unsolicited
Acquisition Proposal, LFC&#146;s Board of Directors shall be
permitted, at any time prior to the approval of this Agreement
by the stockholders of LFC, (i)&nbsp;to withdraw, modify or
change, or propose to withdraw, modify or change, the approval
or recommendation by the Board of Directors of this Agreement,
the Merger or the other transactions contemplated by this
Agreement or (ii)&nbsp;to approve or recommend, or propose to
approve or recommend, any Acquisition Proposal, but only if, in
each case referred to in clauses&nbsp;(i) and (ii), the Board of
Directors of LFC concludes in good faith that (a)&nbsp;such
Acquisition Proposal would, if consummated, constitute a
Superior Proposal and such proposal has not been withdrawn and
(b)&nbsp;in light of such Superior Proposal, the failure to
withdraw, withhold, amend, modify or change such recommendation
would constitute a breach of the fiduciary duties of the Board
of Directors of LFC to the stockholders of LFC under applicable
law. LFC shall immediately advise IBC in writing, if the Board
of Directors shall make any determination as to any Acquisition
Proposal as contemplated by the preceding sentence. Nothing
contained in this <I>Section&nbsp;6.4 </I>shall prohibit LFC or
its Board of Directors (i)&nbsp;from taking and disclosing to
its stockholders a position contemplated by Rule&nbsp;14d-9 and
Rule&nbsp;14e-2(a) promulgated under the 1934&nbsp;Act or from
making any legally required disclosure to the stockholders of
LFC with regard to an Acquisition Proposal or (ii)&nbsp;prior to
the approval of this Agreement by the stockholders of LFC, from
taking any action as contemplated by <I>Section&nbsp;8.1(f).</I>
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Treatment of
LFC Stock Options; Other Stock Plans; Employee Benefits
Matters.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;<I>Stock Options.</I> The treatment of
the LFC Stock Options in the Merger shall be as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;As to all LFC Stock Options represented
    by agreements not expressly requiring the Surviving
    Corporation,&nbsp;IBC or any of the IBC Subsidiaries to assume
    such LFC Stock Options or to substitute equivalent options
    <I>(&#147;Terminating Options&#148;)</I>, such Terminating
    Options shall terminate and be canceled immediately prior to the
    Effective Time (subject to the actual occurrence of the
    Effective Time), and the holder thereof shall have no further
    rights thereunder except as expressly provided herein.
    Notwithstanding such termination of the Terminating Options,
    promptly after the Effective Time, the Surviving Corporation
    shall pay to each holder of a Terminating Option an amount in
    cash equal to the product of (x)&nbsp;the excess, if any, of the
    Per Share Cash Consideration over the exercise price of each
    such Terminating Option, and (y)&nbsp;the number of Shares
    subject to such Terminating Option immediately prior to the
    Effective Time (such payment to be net of applicable withholding
    taxes).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;As to all LFC Stock Options other than
    Terminating Options, LFC shall, effective as of the Effective
    Time, (A)&nbsp;cause each such outstanding LFC Stock Option,
    whether or not exercisable or vested, to become fully
    exercisable and vested, (B)&nbsp;cause each such outstanding LFC
    Stock Option to be canceled and (C)&nbsp;in consideration of
    such cancellation, and, except to the extent IBC and the holder
    of any such LFC Stock Option otherwise agree, cause LFC to pay
    the holders of such LFC Stock Options an amount in respect
    thereof equal to the product of (x)&nbsp;the excess, if any, of
    the Per Share Cash Consideration over the exercise price of each
    such LFC Stock Option, and (y)&nbsp;the number of Shares subject
    to such LFC Stock Option immediately prior to its cancellation
    (such payment to be net of applicable withholding taxes).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;<I>Section&nbsp;16(b) of the
1934&nbsp;Act.</I> The Board of Directors of each of LFC and IBC
shall each grant all approvals and take all other actions
required pursuant to Rules&nbsp;16b-3(d) and 16(b)-3(e) under
the 1934&nbsp;Act to cause the disposition in the Merger of the
Shares and the LFC Stock Options and the acquisition in the
Merger of shares of IBC Common Stock or options to purchase the
common stock of the Surviving Corporation awards pertaining to
and applying to the common stock of the Surviving Corporation to
be exempt from the provisions of Section&nbsp;16(b) of the
1934&nbsp;Act.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;<I>Employee Issues.</I> Between the date
hereof and the Closing,&nbsp;IBC shall be afforded the
reasonable opportunity to interview and meet with the employees
of LFC and the LFC Subsidiaries and to provide training to, and
such information as is reasonably necessary with respect to
terms of continued employment for, such employees of LFC and the
LFC Subsidiaries who will remain or are expected to remain
employees immediately after the Effective Time, which terms of
employment may be amended thereafter by IBC in its sole
discretion. LFC shall terminate the 401(k) Plan maintained by
LFC effective as of the day prior to the Effective Time. All of
the other employee benefit plans and programs maintained by LFC
and any of its Subsidiaries shall be terminated effective as of
the Effective Time. Prior to the Effective Time, LFC shall amend
the ESOP to provide that distributions to participants from such
plan may be made in lump sum payments in the form of cash and/or
employer stock as defined in such plan. IBC presently intends
that, except to the extent that may be required by law, after
the Merger, neither IBC or its Subsidiaries, LFC, the LFC
Subsidiaries nor the Surviving Corporation will make additional
contributions to the employee benefit plans or other programs
that were sponsored by LFC or any of the LFC Subsidiaries at any
time prior to the Merger. At and following the Effective
Time,&nbsp;IBC shall take all actions necessary to complete the
dissolution and winding up of the employee benefit plans
maintained by LFC and the LFC Subsidiaries which are terminated
at or before the Effective Time; provided, however, that with
respect to terminated deferred compensation plans,&nbsp;IBC
shall distribute accrued vested benefits according to the terms
of such plans; provided further; that with respect to the
Section&nbsp;125 Plan maintained by LFC or the LFC
Subsidiaries,&nbsp;IBC agrees to maintain such plan from the
Effective Time through December&nbsp;31, 2004, for the benefit
of the employees of LFC and the LFC Subsidiaries who are
employed by IBC or any of its Subsidiaries after the Effective
Time. IBC agrees that the employees of LFC and the LFC
Subsidiaries who are retained as employees of IBC will be
entitled effective as of the Effective Time to participate as
newly hired employees in the employee benefit plans and programs
maintained for employees of IBC and its affiliates, in
accordance with the respective terms of such plans and programs;
provided, however, that within thirty days following the
Effective Time, such employees will be entitled to participate
in the profit sharing plan sponsored by IBC and shall receive
credit for service with LFC or LFC Subsidiaries for vesting and
eligibility purposes with respect to the profit sharing plan
sponsored by IBC; provided further, however, that with respect
to the welfare benefit plans of IBC such employees shall receive
credit for service with LFC or LFC Subsidiaries solely for
purposes of eligibility, and IBC shall take all actions
necessary or appropriate (including amending plans, if
necessary) to facilitate such participation; provided further
that any preexisting condition exclusion or waiting period
applicable to any health care plan sponsored by IBC shall be
waived with respect to any LFC or LFC Subsidiary employee. IBC
agrees that the employees and former employees of LFC and the
LFC Subsidiaries who are entitled to elect, or who have already
elected, continuation of health insurance coverage pursuant to
Code Section&nbsp;4980B shall be entitled to elect continuation
of health insurance coverage pursuant to Code Section&nbsp;4980B
under the IBC health plan. For purposes of determining each LFC
or LFC Subsidiary&#146;s employee&#146;s benefit for the year in
which the Merger occurs under IBC&#146;s vacation or sick leave
program, any vacation or sick leave taken by a LFC or LFC
Subsidiary employee preceding the Effective Time for the year in
which the Merger occurs will be deducted from the total IBC
vacation or sick leave benefits available to such employee for
such year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;<I>Employment Agreements and Severance
Policy.</I> At and following the Effective Time,&nbsp;IBC and
the IBC Subsidiaries shall honor, and IBC and the IBC
Subsidiaries shall continue to be obligated to perform, in
accordance with their terms, all contractual obligations under
the employment agreements and/or severance agreements set forth
in Section&nbsp;6.5(e)(i) of the LFC Disclosure Schedules. An
employee of LFC or an LFC Subsidiary (other than an employee who
is a party to an employment agreement or a severance agreement)
whose employment is involuntarily terminated within six months
following the Effective Time, shall be entitled to receive
severance payments which shall be no less favorable that
LFC&#146;s existing severance/separation policy which is set
forth as Section&nbsp;6.5(e)(ii) of the LFC Disclosure Schedule.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fees and
Expenses.</I> Whether or not the Merger is consummated, all
Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such Expenses, except (a)&nbsp;if the Merger is
consummated, the Surviving Corporation shall pay, or cause to be
paid, any and all property or transfer taxes imposed on LFC or
its Subsidiaries resulting from the Merger, (b)&nbsp;as provided
in <I>Section&nbsp;8.2 </I>and (c)&nbsp;the expenses of printing
the Proxy Statement-Prospectus shall be
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">shared equally between Local and IBC. As used in
this Agreement, <I>&#147;Expenses&#148;</I> includes all
out-of-pocket expenses (including all fees and expenses of
counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a
party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated
hereby, including the preparation, printing, filing and mailing
of the Proxy Statement and the solicitation of stockholder
approvals and all other matters related to the transactions
contemplated hereby.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Directors&#146;
and Officers&#146; Indemnification and Insurance.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;After the Effective Time IBC and the
Surviving Corporation shall, jointly and severally, indemnify
and hold harmless each present (as of the Effective Time) or
former officer, director or employee of LFC and the LFC
Subsidiaries (the <I>&#147;Indemnified Parties&#148;</I>),
against all claims, losses, liabilities, damages, judgments,
fines and reasonable fees, costs and expenses (including
attorneys&#146; fees and expenses) incurred in connection with
any claim, action, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or
pertaining to (i)&nbsp;the fact that the Indemnified Party is or
was an officer, director or employee of LFC or any of the LFC
Subsidiaries or (ii)&nbsp;matters existing or occurring at or
prior to the Effective Time (including this Agreement and the
transactions and actions contemplated hereby), whether asserted
or claimed prior to, at or after the Effective Time, solely to
the same extent required under any indemnification provisions
included in LFC&#146;s or LFC Subsidiary&#146;s, as the case may
be, constituent or organizational documents as in effect on the
date of this Agreement; <I>provided </I>that no Indemnified
Party may settle any such claim without the prior approval of
IBC (which approval shall not be unreasonably withheld or
delayed).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The Surviving Corporation shall
(i)&nbsp;cause to be maintained in effect in its articles of
incorporation and by-laws for a period of six years after the
Effective Time, provisions regarding elimination of liability of
directors and indemnification of, and advancement of expenses
to, officers, directors and employees that are at least as
favorable to the Indemnified Parties as those contained in the
articles of incorporation and by-laws of LFC as in effect on the
date hereof and (ii)&nbsp;for a period of six years after the
Effective Time, shall use its reasonable best efforts to
maintain the current policies of directors&#146; and
officers&#146; liability insurance and fiduciary liability
insurance maintained by LFC (<I>provided </I>that the Surviving
Corporation may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which
are, in the aggregate, no less advantageous to the insured) with
respect to claims arising from facts or events that occurred on
or before the Effective Time; <I>provided, however,</I> that in
no event shall the Surviving Corporation be required to expend
in any one year an amount in excess of 150% of the annual
premiums currently paid by LFC for such insurance (which
premiums LFC represents to be $185,000&nbsp;per year in the
aggregate); and, <I>provided, further,</I> that if the Surviving
Corporation is unable to obtain the insurance required by this
Section&nbsp;6.7 or the annual premiums of such insurance
coverage exceed such amount, the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Notwithstanding anything herein to the
contrary, if any claim, action, proceeding or investigation
(whether arising before, at or after the Effective Time) is made
against any Indemnified Party on or prior to the sixth
anniversary of the Effective Time, the provisions of this
<I>Section&nbsp;6.7 </I>shall continue in effect until the final
disposition of such claim, action, proceeding or investigation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;In the event that the Surviving
Corporation or any of its successors or assigns
(i)&nbsp;consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii)&nbsp;transfers or
conveys all or substantially all of its properties and assets to
any Person, then, and in each such case, proper provision shall
be made so that the successors or assigns of the Surviving
Corporation shall succeed to the obligations set forth in
<I>Section&nbsp;6.5 </I>and this <I>Section&nbsp;6.7.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Public
Announcements.</I> LFC and IBC shall use all commercially
reasonable efforts to develop a joint communications plan and
each party shall use all commercially reasonable efforts
(i)&nbsp;to ensure that all press releases and other public
statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and
(ii)&nbsp;unless otherwise required by applicable law or by
obligations pursuant to any listing agreement with or rules of
any securities exchange, to consult with each
</FONT>

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<DIV align="left">
<FONT size="2">other before issuing any press release or
otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Affiliate
Letters.</I> LFC shall use its reasonable best efforts to cause
each director, executive officer and other Person, if any, who
is an &#147;affiliate&#148; of LFC under Rule&nbsp;145 of the
1933&nbsp;Act to deliver to IBC as soon as practicable and prior
to the mailing of the Proxy Statement-Prospectus executed letter
agreements, each in the form designated by IBC, providing that
such Person will comply with Rule&nbsp;145.
</FONT>

<P align="center">
<FONT size="2">ARTICLE&nbsp;VII
</FONT>

<P align="center">
<FONT size="2">CONDITIONS PRECEDENT
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Conditions to
Each Party&#146;s Obligation to Effect the Merger.</I> The
obligations of LFC,&nbsp;IBC and Acquisition Sub to effect the
Merger are subject to the satisfaction or waiver on or prior to
the Closing of the following conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Stockholder Approval.</I> LFC shall
    have obtained the Required LFC Vote for the approval of this
    Agreement by the stockholders of LFC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>No Injunctions or Restraints;
    Illegality.</I> No federal, state, local or foreign, if any,
    law, statute, regulation, code, ordinance or decree shall have
    been adopted or promulgated, and no temporary restraining order,
    preliminary or permanent injunction or other order issued by a
    court or other Governmental Entity of competent jurisdiction
    shall be in effect, having the effect of making the Merger
    illegal or otherwise prohibiting consummation of the Merger;
    <I>provided, however,</I> that the provisions of this
    <I>Section&nbsp;7.1(b) </I>shall not be available to any party
    whose failure to fulfill its obligations pursuant to
    <I>Section&nbsp;6.3 </I>shall have been the cause of, or shall
    have resulted in, such order or injunction.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Governmental Approvals.</I> All
    approvals required for the Merger and the Subsidiary Mergers
    from Governmental Entities shall have been obtained (and any
    applicable waiting periods with respect thereto shall have
    expired) other than those the failure of which to be obtained
    would not reasonably be expected to result in a Material Adverse
    Effect on IBC and its Subsidiaries (including the Surviving
    Corporation and its Subsidiaries), taken together, and such
    approvals shall not have imposed any condition or requirement
    which in the reasonable judgment of the party or parties
    affected by such condition or requirement would adversely impact
    in a material respect the intended economic benefits to such
    party of the transactions contemplated by this Agreement or
    otherwise would in the reasonable judgment of such party be so
    burdensome as to render reasonably inadvisable the consummation
    of the Merger.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;<I>Registration Statement; Blue Sky
    Laws.</I> The Registration Statement shall have been declared
    effective by the SEC and shall be effective and not subject to
    any stop order, and no proceedings shall be pending or
    threatened by the SEC to suspend the effectiveness of the
    Registration Statement, and IBC shall have received all required
    approvals by state securities or &#147;blue sky&#148;
    authorities with respect to the transactions contemplated by
    this Agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;<I>Listing.</I> The shares of IBC Common
    Stock to be issued in the Merger shall have been approved for
    listing on Nasdaq, subject to official notice of issuance.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Additional
Conditions to Obligations of IBC and Acquisition Sub.</I> The
obligations of IBC and Acquisition Sub to effect the Merger are
subject to the satisfaction of, or waiver by IBC, on or prior to
the Closing of the following additional conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Representations and Warranties.</I>
    Each of the representations and warranties of LFC set forth in
    this Agreement shall have been true and correct in all material
    respects (except for representations and warranties qualified by
    materiality or &#147;Material Adverse Effect&#148;, which shall
    be true and correct in all respects) both on the date of this
    Agreement and at and as of the Closing Date, with the same force
    and effect as though made on and as of the Closing Date (except
    to the extent that any such representation and warranty speaks
    as of another date, in which case such representation and
    warranty shall be true and
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">correct as of such other date), and IBC shall
    have received a certificate of the chief executive officer and
    the chief financial officer of LFC to such effect.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Performance of Obligations of
    LFC.</I> LFC shall have performed or complied in all material
    respects with all agreements and covenants required to be
    performed by it under this Agreement at or prior to the Closing,
    and IBC shall have received a certificate of the chief executive
    officer and the chief financial officer of LFC to such effect.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Officers Certificate.</I> IBC shall
    have received such certificates of LFC, dated the Closing Date,
    signed by an executive officer of LFC to evidence satisfaction
    of the conditions set forth in this Article&nbsp;VII (insofar as
    each relates to LFC) and as may be reasonably requested by IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;<I>No Material Adverse Effect.</I> There
    shall not have occurred after the date hereof any Material
    Adverse Effect on LFC or any event that is likely to result in
    or cause any Material Adverse Effect on LFC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;<I>Resignations.</I> Each of the
    individuals named in Section&nbsp;7.2(e) of the LFC Disclosure
    Schedule shall have resigned from all officer positions (but not
    as employees) held by such individual with LFC and any of the
    LFC Subsidiaries, effective as of a date certain that is on or
    prior to the date that is fourteen (14)&nbsp;days prior to the
    Closing Date.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Additional
Conditions to Obligations of LFC.</I> The obligations of LFC to
effect the Merger are subject to the satisfaction of, or waiver
by LFC, on or prior to the Closing of the following additional
conditions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>Representations and Warranties.</I>
    Each of the representations and warranties of IBC and
    Acquisition Sub set forth in this Agreement shall have been true
    and correct in all material respects (except for representations
    and warranties qualified by materiality or &#147;Material
    Adverse Effect,&#148; which shall be true and correct in all
    respects) both on the date of this Agreement and at and as of
    the Closing Date, with the same force and effect as though made
    on and as of the Closing Date (except to the extent that any
    such representation and warranty speaks as of another date, in
    which case such representation and warranty shall be true and
    correct as of such other date), and LFC shall have received a
    certificate of the chief executive officer and the chief
    financial officer of IBC to such effect.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>Performance of Obligations of
    IBC.</I> IBC shall have performed or complied in all material
    respects with all agreements and covenants required to be
    performed by it under this Agreement at or prior to the Closing,
    and LFC shall have received a certificate of the chief executive
    officer and the chief financial officer of IBC to such effect.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>Officers Certificate.</I> LFC shall
    have received such certificates of IBC, dated the Closing Date,
    signed by an executive officer of IBC to evidence satisfaction
    of the conditions set forth in this Article&nbsp;VII (insofar as
    each relates to IBC) and as may be reasonably requested by LFC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;<I>No Material Adverse Effect.</I> There
    shall not have occurred after the date hereof any Material
    Adverse Effect on IBC or any event that is likely to result in
    or cause any Material Adverse Effect on IBC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;<I>Assumption of Indenture
    Obligation.</I> IBC shall have taken all necessary and required
    actions to assume LFC&#146;s obligations pursuant to
    Section&nbsp;8.1 of the Indenture dated September&nbsp;8, 1997,
    between LFC and the Bank of New&nbsp;York, as trustee, with
    respect to LFC&#146;s 11%&nbsp;Senior Notes due 2004.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<FONT size="2">ARTICLE&nbsp;VIII
</FONT>

<P align="center">
<FONT size="2">TERMINATION AND AMENDMENT
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination.</I>
This Agreement may be terminated at any time prior to the
Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as
provided
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">below, whether before or after approval of the
matters presented in connection with the Merger by the
stockholders of LFC or Acquisition Sub:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;By the mutual written consent of IBC and
    LFC, by action of their respective Boards of Directors;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;By either LFC or IBC if the Effective
    Time shall not have occurred on or before October&nbsp;31, 2004
    (the <I>&#147;Termination Date&#148;</I>); <I>provided,
    however,</I> that the right to terminate this Agreement under
    this <I>Section&nbsp;8.1(b) </I>shall not be available to any
    party whose failure to fulfill any obligation under this
    Agreement (including without limitation <I>Section&nbsp;6.3</I>)
    has to any extent been the cause of, or resulted in, the failure
    of the Effective Time to occur on or before the Termination Date;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;By either LFC or IBC if any Governmental
    Entity (i)&nbsp;shall have issued an order, decree or ruling or
    taken any other action (which the parties shall have used all
    commercially reasonable efforts to resist, resolve or lift, as
    applicable, in accordance with <I>Section&nbsp;6.3</I>)
    permanently restraining, enjoining or otherwise prohibiting the
    Merger, and such order, decree, ruling or other action shall
    have become final and nonappealable or (ii)&nbsp;shall have
    failed to issue an order, decree or ruling or to take any other
    action (which order, decree, ruling or other action the parties
    shall have used all commercially reasonable efforts to obtain,
    in accordance with <I>Section&nbsp;6.3</I>), that is necessary
    to fulfill the conditions set forth in subsections 7.1(c) and
    (d), as applicable, and such failure to issue such order,
    decree, ruling or take such other action shall have become final
    and nonappealable; <I>provided, however,</I> that the right to
    terminate this Agreement under this <I>Section&nbsp;8.1(c)
    </I>shall not be available to any party whose failure to comply
    with <I>Section&nbsp;6.3 </I>has to any extent been the cause of
    such action or inaction;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;By either LFC or IBC if the approval by
    the stockholders of LFC required for the consummation of the
    Merger shall not have been obtained by reason of the failure to
    obtain the Required LFC Vote upon the taking of such vote at a
    duly held meeting of stockholders of LFC, or at any adjournment
    thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;By IBC if the Board of Directors of LFC,
    or any committee thereof, prior to approval of this Agreement by
    the stockholders of LFC, (i)&nbsp;shall withhold, withdraw,
    change, modify or amend in any manner adverse to the LFC Board
    Approval, (ii)&nbsp;shall approve or recommend a Superior
    Proposal pursuant to <I>Section&nbsp;6.4, </I>(iii)&nbsp;shall
    resolve to take any of the actions specified in clauses&nbsp;(i)
    or (ii)&nbsp;above, (iv)&nbsp;LFC shall fail to include in the
    Proxy Statement-Prospectus the recommendation of the Board of
    Directors of LFC in favor of the approval this Agreement and the
    Merger and the transactions contemplated hereby, or shall have
    taken any action inconsistent with such recommendation, or
    (v)&nbsp;a tender or exchange offer relating to 15% or more of
    the capital stock of LFC shall have been commenced by a Person
    unaffiliated with IBC, and LFC shall not have sent to its
    stockholders pursuant to Rule&nbsp;14e-2 promulgated under the
    1933&nbsp;Act, within ten (10)&nbsp;Business Days after such
    tender or exchange offer is first published, sent or given, a
    statement disclosing that LFC recommends rejection of such
    tender or exchange offer;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;By LFC at any time prior to approval of
    this Agreement by the Required LFC Vote of stockholders of LFC
    at a duly held meeting of the stockholders of LFC if the Board
    of Directors of LFC shall approve a Superior Proposal;
    <I>provided, however,</I> that prior to any such termination,
    LFC shall, and shall cause its financial and legal advisors to,
    provide IBC with a reasonable opportunity (not to exceed a
    period of three Business Days unless otherwise agreed in
    writing) to make adjustments in the terms and conditions of this
    Agreement sufficient to cause the Board of Directors of LFC to
    determine that such Superior Proposal no longer constitutes a
    Superior Proposal;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(g)&nbsp;By IBC, if LFC shall have breached any
    representation, warranty, covenant or agreement contained in
    this Agreement, or if any representation or warranty of LFC
    shall have become untrue, in either case such that the
    conditions set forth in Section&nbsp;7.2(a) or (b)&nbsp;hereof
    would not be satisfied as of the time of such breach or as of
    the time such representation or warranty shall have become
    untrue.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(h)&nbsp;By LFC, if IBC shall have breached any
    representation, warranty, covenant or agreement contained in
    this Agreement, or if any representation or warranty of IBC
    shall have become untrue, in
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">either case such that the conditions set forth in
    Section&nbsp;7.3(a) or (b)&nbsp;hereof would not be satisfied as
    of the time of such breach or as of the time such representation
    or warranty shall have become untrue.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Effect of
Termination.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;In the event of termination of this
Agreement by either LFC or IBC as provided in
<I>Section&nbsp;8.1</I>, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part
of IBC or LFC or their respective officers or directors except
with respect to the second sentence of <I>Section&nbsp;6.2</I>,
<I>Section&nbsp;6.6</I>, this <I>Section&nbsp;8.2 </I>and
Article&nbsp;IX.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;IBC and LFC agree that, (i)&nbsp;if IBC
shall terminate this Agreement pursuant to
<I>Section&nbsp;8.1(e), </I>(ii)&nbsp;if either IBC or LFC shall
terminate this Agreement pursuant to Section&nbsp;8.1(d) or
pursuant to Section&nbsp;8.1(b) without the meeting of
LFC&#146;s stockholders to consider the transactions
contemplated by this Agreement having occurred, and at the time
of such termination an Acquisition Proposal shall exist and
within 12&nbsp;months of such termination LFC enters into a
definitive agreement with respect to, or consummates, any
Acquisition Proposal (for purposes of this clause&nbsp;(ii)
&#147;Acquisition Proposal&#148; shall have the meaning assigned
to such term in <I>Section&nbsp;6.4 </I>except that (x)&nbsp;the
references to &#147;15%&#148; in the definition of
&#147;Acquisition Proposal&#148; shall each be deemed to be a
reference to &#147;50%&#148; and (y) &#147;Acquisition
Proposal&#148; shall only be deemed to refer to a transaction
involving LFC, or with respect to assets (including the shares
of any Subsidiary of LFC) of LFC and its Subsidiaries, taken as
a whole, and not any of its Subsidiaries alone, or (iii)&nbsp;if
LFC shall terminate this Agreement pursuant to
<I>Section&nbsp;8.1(f)</I>, then, in any such case, LFC shall
pay to IBC cash in the amount of $12,000,000 (the
<I>&#147;Termination Fee&#148;</I>). The Termination Fee
required to be paid to IBC pursuant to this
<I>Section&nbsp;8.2(b)</I>shall be paid prior to, and shall be a
condition precedent to the effectiveness of the termination of,
this Agreement by LFC pursuant to <I>Section&nbsp;8.1(f).</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;All payments under this
<I>Section&nbsp;8.2 </I>shall be made by wire transfer of
immediately available funds to an account designated by the
party entitled to receive payment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Amendment.</I>
This Agreement may be amended by the parties hereto, by action
taken or authorized by their respective Boards of Directors, at
any time before or after approval of the matters presented in
connection with the Merger by the stockholders of LFC and
Acquisition Sub, but, after any such approval, no amendment
shall be made which by law or in accordance with the rules of
any relevant stock exchange requires further approval by such
stockholders without such further approval. This Agreement may
not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Extension;
Waiver.</I> At any time prior to the Effective Time, the parties
hereto, by action taken or authorized by their respective Boards
of Directors, may, to the extent legally allowed,
(i)&nbsp;extend the time for the performance of any of the
obligations or other acts of the other parties hereto,
(ii)&nbsp;waive any inaccuracies in the representations and
warranties contained herein or in any document delivered
pursuant hereto and (iii)&nbsp;waive compliance with any of the
agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf
of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
</FONT>

<P align="center">
<FONT size="2">ARTICLE&nbsp;IX
</FONT>

<P align="center">
<FONT size="2">GENERAL PROVISIONS
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Non-Survival
of Representations, Warranties and Agreements.</I> None of the
representations, warranties, covenants and other agreements in
this Agreement or in any instrument delivered pursuant to this
Agreement, including any rights arising out of any breach of
such representations, warranties, covenants and other
agreements, shall survive the Effective Time, except for those
covenants and agreements contained herein and therein that by
their terms apply or are to be performed in whole or in part
after the Effective Time (including, without limitation,
Sections&nbsp;6.2, 6.5, 6.7 and 8.2) and this Article&nbsp;IX.
Nothing in this <I>Section&nbsp;9.1 </I>shall relieve any party
for any breach of any representation, warranty, covenant or
other agreement in this Agreement occurring prior to termination.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Notices.</I>
All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a)&nbsp;on the date of
delivery if delivered personally, or by telecopy or
telefacsimile, upon confirmation of receipt, (b)&nbsp;on the
first Business Day following the date of dispatch if delivered
by a recognized next-day courier service, or (c)&nbsp;on the
tenth Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage
prepaid. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;if to IBC or Acquisition Sub, to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">International Bancshares Corporation
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">1200 San&nbsp;Bernardo Ave.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Laredo, Texas 78040
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Fax: (956)&nbsp;726-6616
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Attention: Dennis E. Nixon, President
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">with a copy to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Cox&nbsp;&#38; Smith Incorporated
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">112&nbsp;E.&nbsp;Pecan, Suite&nbsp;1800
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">San&nbsp;Antonio, Texas 78205
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Fax: (210)&nbsp;226-8395
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Attention: Cary Plotkin Kavy
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;if to LFC or the LFC Subsidiaries, to
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Local Financial Corporation
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">3601 N.W. 63RD
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Oklahoma City, Oklahoma 73116
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Fax: (405)&nbsp;841-2289
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Attention: Edward A. Townsend
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">with a copy to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Patton Boggs LLP
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">2550 M Street, NW
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Washington, DC 20037
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Fax: (202)&nbsp;457-6315
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Attn:</FONT></TD>
    <TD align="left">
    <FONT size="2">Norman B. Antin
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Jeffrey D. Haas
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interpretation.</I>
When a reference is made in this Agreement to Sections, Exhibits
or Schedules, such reference shall be to a Section of or Exhibit
or Schedule to this Agreement unless otherwise indicated. The
table of contents, glossary of defined terms 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 &#147;include&#148;,
&#147;includes&#148; or &#147;including&#148; are used in this
Agreement, they shall be deemed to be followed by the words
&#147;without limitation&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Counterparts.</I>
This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other
parties, it being understood that the parties need not sign the
same counterpart.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Entire
Agreement; Third Party Beneficiaries.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;This Agreement constitutes the entire
agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter hereof.
</FONT>

<P align="center"><FONT size="2">A-39
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied, is intended to or shall
confer upon any other Person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement, other
than <I>Section&nbsp;6.5 </I>and <I>Section&nbsp;6.7 </I>(which
is intended to be for the benefit of the Persons covered thereby
and may be enforced by such Persons).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Governing
Law.</I> All aspects of the relationship between the parties
hereto, including, without limitation, the construction and
interpretation of this Agreement and all claims arising out of
the relationship between the parties, shall be governed and
construed in accordance with the laws of the State of Texas,
without regard to the conflicts of laws principles thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Severability.</I>
If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any law or public
policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated
to the greatest extent possible.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Assignment.</I>
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or
otherwise), without the prior written consent of the other
parties, and any attempt to make any such assignment without
such consent shall be null and void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their
respective successors and assigns.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Enforcement.</I>
The parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is
accordingly agreed that the parties shall be entitled to
specific performance of the terms hereof, this being in addition
to any other remedy to which they are entitled at law or in
equity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Definitions.</I>
As used in this Agreement:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;<I>&#147;Board of Directors&#148;</I>
    means the Board of Directors of any specified Person and any
    committees thereof.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;<I>&#147;Business Day&#148;</I> means
    any day on which banks are not required or authorized to close
    in the states of Oklahoma and Texas.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;<I>&#147;knowledge&#148;</I> when used
    with respect to any party means the knowledge of any senior
    executive officer of such party.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;<I>&#147;Material Adverse
    Effect&#148;</I> means, with respect to any entity, any adverse
    change, circumstance or effect that is materially adverse to the
    business, financial condition or results of operations of such
    entity and its Subsidiaries taken as a whole, other than any
    change, circumstance or effect relating to (i)&nbsp;the economy
    or securities markets in general, (ii)&nbsp;regional economic
    conditions that have a similar effect on other participants in
    such region in the industries which IBC or LFC, as the case may
    be, operates, (iii)&nbsp;the industries in which IBC or LFC, as
    the case may be, operates and not specifically relating to (or
    having the effect of specifically relating to or having a
    materially disproportionate effect (relative to most other
    industry participants) on ) IBC or LFC, as the case may be,
    (iv)&nbsp;changes in any tax laws or regulations or applicable
    accounting regulations or principles in each case not
    specifically relating to IBC or LFC, as the case may be,
    (v)&nbsp;actions or omissions by either IBC or LFC, or any of
    their Subsidiaries, as the case may be, taken with the written
    permission of the other party in connection with the
    transactions contemplated hereby or as otherwise contemplated by
    this Agreement or (vi)&nbsp;any modification or changes to
    valuation policies and practices, or expenses incurred, in
    connection with the Merger or restructuring charges taken in
    connection with the Merger, in each case in accordance with GAAP.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-40
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;<I>&#147;the other party&#148;</I>
    means, with respect to LFC,&nbsp;IBC and means, with respect to
    IBC, LFC.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;<I>&#147;Person&#148;</I> means an
    individual, corporation, limited liability company, partnership,
    association, trust, unincorporated organization, other entity or
    group (as defined in the 1934&nbsp;Act).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(g)&nbsp;<I>&#147;Subsidiary&#148;</I> when used
    with respect to any party means any corporation or other
    organization, whether incorporated or unincorporated,
    (i)&nbsp;of which such party or any other Subsidiary of such
    party is a general partner (excluding partnerships, the general
    partnership interests of which held by such party or any
    Subsidiary of such party do not have a majority of the voting
    interests in such partnership) or (ii)&nbsp;at least a majority
    of the securities or other interests of which having by their
    terms ordinary voting power to elect a majority of the Board of
    Directors or others performing similar functions with respect to
    such corporation or other organization is directly or indirectly
    owned or controlled by such party or by any one or more of its
    Subsidiaries, or by such party and one or more of its
    Subsidiaries.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(h)&nbsp;<I>&#147;Superior Proposal&#148;</I>
    means a bona fide Acquisition Proposal the terms of which the
    Board of Directors of LFC concludes in good faith (after
    consultation with its financial advisors and legal counsel),
    taking into account all legal, financial, regulatory and other
    aspects of such proposal, including any condition to the
    consummation of such proposal, and the Person making the
    proposal, (i)&nbsp;would, if consummated, result in a
    transaction that is more favorable to holders of the Shares (in
    their capacity as stockholders) from a financial point of view
    than the transactions contemplated by this Agreement and
    (ii)&nbsp;is reasonably capable of being completed (provided
    that for purposes of this definition the term Acquisition
    Proposal shall have the meaning assigned to such term in
    <I>Section&nbsp;6.4 </I>except that (x)&nbsp;the references to
    &#147;15%&#148; in the definition of &#147;Acquisition
    Proposal&#148; shall each be deemed to be a reference to
    &#147;50%&#148; and (y)&nbsp;&#147;Acquisition Proposal&#148;
    shall only be deemed to refer to a transaction involving LFC, or
    with respect to assets (including the shares of any Subsidiary
    of LFC) of LFC and its Subsidiaries, taken as a whole, and not
    any of its Subsidiaries alone.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;<I>&#147;Tax&#148; </I>(and with
    correlative meaning, <I>&#147;Taxes&#148;</I>) means any
    U.S.&nbsp;federal, state, local or foreign income, gross
    receipts, license, payroll, employment, excise, severance,
    stamp, occupation, premium, windfall profits, environmental
    (including taxes under Code Section&nbsp;59A), customs duties,
    capital stock, franchise, profits, withholding, social security
    (or similar), unemployment, disability, real property, personal
    property, sales, use, transfer, registration, value added,
    alternative or add-on minimum, estimated or other tax of any
    kind whatsoever, including any interest, penalty or addition
    thereto, whether disputed or not.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(j)&nbsp;<I>&#147;Tax Return&#148;</I> means any
    return, declaration, report, claim for refund or information
    return or statement relating to Taxes, including any schedule or
    attachment thereto, and any amendment thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other
Agreements.</I> The parties hereto acknowledge and agree that,
except as otherwise expressly set forth in this Agreement, the
rights and obligations of LFC and IBC under any other agreement
between the parties shall not be affected by any provision of
this Agreement.
</FONT>

<P align="center">
<FONT size="2">[Intentionally Left Blank]
</FONT>

<P align="center"><FONT size="2">A-41
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IN WITNESS WHEREOF,&nbsp;IBC, LFC and Acquisition
Sub have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the day and year
first above written.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">INTERNATIONAL BANCSHARES CORPORATION
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ DENNIS E. NIXON
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Name:&nbsp;&nbsp;&nbsp;&nbsp;Dennis E. Nixon
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="6%"></TD>
    <TD width="54%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:</FONT></TD>
    <TD align="left">
    <FONT size="2">Chairman, Chief Executive Officer and President
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">LFC ACQUISITION CORP.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ DENNIS E. NIXON
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Name:&nbsp;&nbsp;&nbsp;&nbsp;Dennis E. Nixon
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="6%"></TD>
    <TD width="54%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:</FONT></TD>
    <TD align="left">
    <FONT size="2">President
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">LOCAL FINANCIAL CORPORATION
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ EDWARD A. TOWNSEND
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Name:&nbsp;&nbsp;&nbsp;&nbsp;Edward A. Townsend
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="6%"></TD>
    <TD width="54%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:</FONT></TD>
    <TD align="left">
    <FONT size="2">Chairman and Chief Executive Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-42
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">APPENDIX&nbsp;A</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">DEFINED TERMS IN THE AGREEMENT</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Definition</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Section</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1933&nbsp;Act
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1934&nbsp;Act
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(e)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition Proposal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;6.4
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition Sub
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Preamble
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Aggregate Adjustment Amount
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Preamble
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Audited Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(d)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bank Merger
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.7
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BHC Act
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Board of Directors
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Business Day
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(b)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash Election
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash Election Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Certificates
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(c)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Closing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;1.3
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Closing Date
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;1.3
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Code
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.6
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common Control Entity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(o)(vii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Contracts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(x)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Converted Cash Election Share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(b)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Converted Stock Election Share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(b)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Derivative Transactions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(dd)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Determination Period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DGCL
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;1.2
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dissenters&#146; Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.4
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effective Time
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;1.2
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Election
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Election Deadline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(e)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Election Form
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(c)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Election Form&nbsp;Record Date
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(c)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental Law(s)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(g)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Environmental Permit(s)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(g)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ERISA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(o)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ESOP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(ee)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Exchange Agent
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(c)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Exchange Ratio
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;6.6
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GAAP
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(d)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Governmental Entity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(h)(iii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">HIPAA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(o)(v)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Holding Company Merger
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.7
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Preamble
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">A-43
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Definition</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Section</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC Audited Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.2(d)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC Common Stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC Common Stock Value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC Disclosure Schedule
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.2
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC Required Consents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.2(c)(iii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC SEC Reports
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.2(e)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC Stock Options
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.2(b)(iii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IBC Unaudited Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.2(d)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Indemnified Parties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;6.7(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">knowledge
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(c)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Letter of Transmittal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.3(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Preamble
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC Bank
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.7
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC Board Approval
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(j)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC Disclosure Schedule
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC Required Consents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(h)(iii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC SEC Reports
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC Stock Options
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(c)(iii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC Stockholders Meeting
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;6.1(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LFC Subsidiaries
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(e)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mailing Date
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(c)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Material Adverse Effect
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(d)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Materials of Environmental Concern
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(g)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Merger
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Recitals
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Merger Consideration
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mixed Election
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nasdaq
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(z)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">No-Election Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-Election
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other Programs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(o)(iii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pension Benefit Plans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(o)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per Share Cash Consideration
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per Share Stock Consideration
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(c)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Person
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(f)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proxy Statement-Prospectus
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;6.1(b)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Real Property
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(g)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Registration Statement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;6.1(b)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Regulatory Authorities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(s)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Required LFC Vote
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(k)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Representative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(d)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SEC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(f)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.1(b)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stock Election
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">A-44
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Definition</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Section</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stock Election Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stock Number
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stock-Selected No-Election Share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.2(b)(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Subsidiary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(g)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Subsidiary Mergers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;3.7
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Superior Proposal
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(h)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Surviving Corporation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Recitals
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(i)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tax Return
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(j)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Terminating Options
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;6.5(a)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Termination Date
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;8.1(b)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Termination Fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;8.2(b)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">the other party
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;9.11(e)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Unaudited Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(d)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Violation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.l(h)(ii)
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Welfare Benefit Plans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Section&nbsp;4.1(o)(i)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">A-45
</FONT>

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<DIV align="left">
<A name='212'></A>
</DIV>

<!-- link1 "APPENDIX B" -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="right">
<B><FONT size="2">APPENDIX&nbsp;B</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<IMG src="d13787a1d1378702.gif" alt="(SANDLER ONEILL &#38; PARTNERS LP LETTERHEAD)">
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">April&nbsp;13, 2004
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">Board of Directors
</FONT>

<DIV align="left">
<FONT size="2">Local Financial Corporation
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">3601 N.W. 63RD
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">Oklahoma City, Oklahoma 73116
</FONT>
</DIV>

<P align="left">
<FONT size="2">Gentlemen:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local Financial Corporation
(&#147;Local&#148;),&nbsp;International Bancshares Corporation
(&#147;IBC&#148;) and LFC Acquisition Corp. (&#147;Acquisition
Sub&#148;), a wholly-owned subsidiary of IBC, have entered into
an Agreement and Plan of Merger, dated as of January&nbsp;22,
2004 (the &#147;Agreement&#148;), pursuant to which Local will
be acquired by IBC through the merger of Acquisition Sub with
and into Local (the &#147;Merger&#148;). Under the terms of the
Agreement, upon consummation of the Merger, each share of Local
common stock, par value $.01&nbsp;per share, issued and
outstanding immediately prior to the Merger (the &#147;Local
Shares&#148;), other than certain shares specified in the
Agreement, will be converted into the right to receive, at the
election of the holder thereof, either (a)&nbsp;$22.00 in cash
without interest (the &#147;Per Share Consideration&#148;), or
(b)&nbsp;a number of shares of IBC common stock, par value
$1.00&nbsp;per share, equal to the Exchange Ratio, subject to
the election and proration procedures set forth in the Agreement
which provide generally, among other things, that 75% of the
Shares shall be converted into cash and 25% shall be converted
into IBC common stock (the &#147;Merger Consideration&#148;).
The Exchange Ratio shall be determined by dividing the Per Share
Consideration by the average of the closing prices of IBC common
stock for the ten business days commencing fifteen business days
prior to the closing of the Merger (the &#147;IBC Stock
Value&#148;); <I>provided, however, </I>that if the actual IBC
Stock Value is (a)&nbsp;less than $36.80, then the IBC Stock
Value shall be deemed to be $36.80, or (b)&nbsp;greater than
$44.80, then the IBC Stock Value shall be deemed to be $44.80.
The Per Share Consideration is subject to increase in the event
the Merger is consummated after August&nbsp;15, 2004. The
foregoing IBC Stock Values have been adjusted to reflect a 25%
stock dividend that IBC declared on April&nbsp;1, 2004 that is
payable on May&nbsp;28, 2004 to stockholders of record on
May&nbsp;3, 2004. The terms and conditions of the Merger are
more fully set forth in the Agreement. You have requested our
opinion as to the fairness, from a financial point of view, of
the Merger Consideration to the holders of Local Shares.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sandler O&#146;Neill&nbsp;&#38; Partners, L.P.,
as part of its investment banking business, is regularly engaged
in the valuation of financial institutions and their securities
in connection with mergers and acquisitions and other corporate
transactions. In connection with this opinion, we have reviewed,
among other things: (i)&nbsp;the Agreement; (ii)&nbsp;certain
publicly available financial statements and other historical
financial information of Local that we deemed relevant;
(iii)&nbsp;certain publicly available financial statements and
other historical financial information of IBC that we deemed
relevant; (iv)&nbsp;internal financial projections for Local for
the years ending December&nbsp;31, 2004 and 2005 reviewed with
management of Local; (v)&nbsp;internal financial projections for
IBC for the year ending December&nbsp;31, 2004 reviewed with
management of IBC; (vi)&nbsp;earnings per share estimates for
Local and IBC for the year ending December&nbsp;31, 2004
published by I/B/E/S; (vii)&nbsp;the pro forma financial impact
of the Merger on IBC, based on assumptions relating to
transaction expenses, purchase accounting adjustments and cost
savings determined by senior managements of Local and IBC;
(viii)&nbsp;the publicly reported historical price and trading
activity for Local&#146;s and IBC&#146;s common stock, including
a comparison of certain financial and stock market information
for Local and IBC with similar publicly available information
for certain other companies the securities of which are publicly
traded; (ix)&nbsp;the financial terms of certain recent business
combinations in the commercial banking industry, to the extent
publicly available; (x)&nbsp;the current market environment
generally and the banking environment in particular; and
(xi)&nbsp;such other information, financial studies, analyses
and investigations and financial, economic and market criteria
as we considered relevant. We also discussed with certain
members of senior management of
</FONT>

<P align="center"><FONT size="2">B-1
</FONT>
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<DIV align="right">
<IMG src="d13787a1d1378703.gif" alt="(SANDLER ONEILL &#38; PARTNERS LP LETTERHEAD)">
</DIV>

<P align="left">
<FONT size="2">Local the business, financial condition, results
of operations and prospects of Local and held similar
discussions with certain members of senior management of IBC
regarding the business, financial condition, results of
operations and prospects of IBC.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In performing our review, we have relied upon the
accuracy and completeness of all of the financial and other
information that was available to us from public sources, that
was provided to us by Local or IBC or their respective
representatives or that was otherwise reviewed by us and have
assumed such accuracy and completeness for purposes of rendering
this opinion. We have further relied on the assurances of
management of Local and IBC that they are not aware of any facts
or circumstances that would make any of such information
inaccurate or misleading. We have not been asked to and have not
undertaken an independent verification of any of such
information and we do not assume any responsibility or liability
for the accuracy or completeness thereof. We did not make an
independent evaluation or appraisal of the specific assets, the
collateral securing assets or the liabilities (contingent or
otherwise) of Local or IBC or any of their subsidiaries, or the
collectibility of any such assets, nor have we been furnished
with any such evaluations or appraisals. We did not make an
independent evaluation of the adequacy of the allowance for loan
losses of Local or IBC nor have we reviewed any individual
credit files relating to Local or IBC. We have assumed, with
your consent, that the respective allowances for loan losses for
both Local and IBC are adequate to cover such losses and will be
adequate on a combined basis for the combined entity. With
respect to the financial projections for Local and IBC and all
projections of transaction costs, purchase accounting
adjustments and expected cost savings used by Sandler
O&#146;Neill in its analyses, the managements of Local and IBC
confirmed to us that they reflected the best currently available
estimates and judgments of the respective managements of the
respective future financial performances of Local and IBC and we
assumed that such performances would be achieved. We express no
opinion as to such financial projections or the assumptions on
which they are based. We have also assumed that there has been
no material change in Local&#146;s or IBC&#146;s assets,
financial condition, results of operations, business or
prospects since the date of the most recent financial statements
made available to us. We have assumed in all respects material
to our analysis that Local and IBC will remain as going concerns
for all periods relevant to our analyses, that all of the
representations and warranties contained in the Agreement and
all related agreements are true and correct, that each party to
such agreements will perform all of the covenants required to be
performed by such party under such agreements and that the
conditions precedent in the Agreement are not waived. Finally,
with your consent, we have relied upon the advice Local has
received from its legal, accounting and tax advisors as to all
legal, accounting and tax matters relating to the Merger and the
other transactions contemplated by the Agreement.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our opinion is necessarily based on financial,
economic, market and other conditions as in effect on, and the
information made available to us as of, the date hereof. Events
occurring after the date hereof could materially affect this
opinion. We have not undertaken to update, revise, reaffirm or
withdraw this opinion or otherwise comment upon events occurring
after the date hereof. We are expressing no opinion herein as to
what the value of IBC&#146;s common stock will be when issued to
Local&#146;s shareholders pursuant to the Agreement or the
prices at which Local&#146;s or IBC&#146;s common stock may
trade at any time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have acted as Local&#146;s financial advisor
in connection with the Merger and will receive a fee for our
services, a substantial portion of which is contingent upon
consummation of the Merger. We have also received a fee for
rendering this opinion. Local has also agreed to indemnify us
against certain liabilities arising out of our engagement. In
the past, we have provided certain other investment banking
services for Local and have received compensation for such
services. As you are aware, a director of Local, Robert Kotecki,
is a managing director of Sandler O&#146;Neill. Mr.&nbsp;Kotecki
will receive a portion of the fee paid to Sandler O&#146;Neill
in connection with the Merger.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As we have previously advised you,&nbsp;IBC is a
limited partner of Sandler O&#146;Neill. In the past, we have
provided certain investment banking services to IBC and have
received compensation for such services and we may provide, and
receive compensation for, such services in the future, including
during the period prior to the closing of the Merger.
</FONT>

<P align="center"><FONT size="2">B-2
</FONT>
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<DIV align="right">
<IMG src="d13787a1d1378703.gif" alt="(SANDLER ONEILL &#38; PARTNERS LP LETTERHEAD)">
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the ordinary course of our business as a
broker-dealer, we may purchase securities from and sell
securities to Local and IBC and their affiliates. We may also
actively trade the debt and/or equity securities of Local and
IBC and their affiliates for our own account and for the
accounts of our customers and, accordingly, may at any time hold
a long or short position in such securities.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our opinion is directed to the Board of Directors
of Local in connection with its consideration of the Merger and
does not constitute a recommendation to any shareholder of Local
as to how such shareholder should vote at any meeting of
shareholders called to consider and vote upon the Merger or the
form of consideration such shareholder should elect in the
Merger. Our opinion is directed only to the fairness of the
Merger Consideration to Local shareholders from a financial
point of view and does not address the underlying business
decision of Local to engage in the Merger, the relative merits
of the Merger as compared to any other alternative business
strategies that might exist for Local or the effect of any other
transaction in which Local might engage. Our opinion is not to
be quoted or referred to, in whole or in part, in a registration
statement, prospectus, proxy statement or in any other document,
nor shall this opinion be used for any other purposes, without
Sandler O&#146;Neill&#146;s prior written consent; <I>provided,
however,</I> that we hereby consent to the inclusion of this
opinion as an appendix to the proxy statement-prospectus of
Local and IBC dated the date hereof and to the references to
this opinion therein.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based upon and subject to the foregoing, it is
our opinion, as of the date hereof, that the Merger
Consideration to be received by the holders of Local Shares is
fair to such shareholders from a financial point of view.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Very truly yours,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ SANDLER O&#146;NEILL &#38; PARTNERS, L.P.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="center"><FONT size="2">B-3
</FONT>

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<DIV align="left">
<A name='213'></A>
</DIV>

<!-- link1 "APPENDIX C" -->

<DIV align="right">
<B><FONT size="2">APPENDIX&nbsp;C</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">TITLE&nbsp;8 CORPORATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">CHAPTER 1. GENERAL CORPORATION LAW</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">SUBCHAPTER IX. MERGER, CONSOLIDATION OR
CONVERSION</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">&#167;262.&nbsp;Appraisal rights.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;Any stockholder of a corporation of this
State who holds shares of stock on the date of the making of a
demand pursuant to subsection&nbsp;(d) of this section with
respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who
has otherwise complied with subsection&nbsp;(d)&nbsp;of this
section and who has neither voted in favor of the merger or
consolidation nor consented thereto in writing pursuant to
&#167;228 of this title shall be entitled to an appraisal by the
Court of Chancery of the fair value of the stockholder&#146;s
shares of stock under the circumstances described in subsections
(b)&nbsp;and (c)&nbsp;of this section. As used in this section,
the word &#147;stockholder&#148; means a holder of record of
stock in a stock corporation and also a member of record of a
nonstock corporation; the words &#147;stock&#148; and
&#147;share&#148; mean and include what is ordinarily meant by
those words and also membership or membership interest of a
member of a nonstock corporation; and the words &#147;depository
receipt&#148; mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or
fractions thereof, solely of stock of a corporation, which stock
is deposited with the depository.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Appraisal rights shall be available for
the shares of any class or series of stock of a constituent
corporation in a merger or consolidation to be effected pursuant
to &#167;251 (other than a merger effected pursuant to
&#167;251(g) of this title), &#167;252, &#167;254, &#167;257,
&#167;258, &#167;263 or &#167;264 of this title:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;Provided, however, that no appraisal
    rights under this section shall be available for the shares of
    any class or series of stock, which stock, or depository
    receipts in respect thereof, at the record date fixed to
    determine the stockholders entitled to receive notice of and to
    vote at the meeting of stockholders to act upon the agreement of
    merger or consolidation, were either (i)&nbsp;listed on a
    national securities exchange or designated as a national market
    system security on an interdealer quotation system by the
    National Association of Securities Dealers,&nbsp;Inc. or
    (ii)&nbsp;held of record by more than 2,000 holders; and further
    provided that no appraisal rights shall be available for any
    shares of stock of the constituent corporation surviving a
    merger if the merger did not require for its approval the vote
    of the stockholders of the surviving corporation as provided in
    subsection&nbsp;(f)&nbsp;of &#167;251 of this title.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Notwithstanding paragraph (1)&nbsp;of
    this subsection, appraisal rights under this section shall be
    available for the shares of any class or series of stock of a
    constituent corporation if the holders thereof are required by
    the terms of an agreement of merger or consolidation pursuant to
    &#167;&#167;251, 252, 254, 257, 258, 263 and 264 of this title
    to accept for such stock anything except:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">a.&nbsp;Shares of stock of the corporation
    surviving or resulting from such merger or consolidation, or
    depository receipts in respect thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">b.&nbsp;Shares of stock of any other corporation,
    or depository receipts in respect thereof, which shares of stock
    (or depository receipts in respect thereof) or depository
    receipts at the effective date of the merger or consolidation
    will be either listed on a national securities exchange or
    designated as a national market system security on an
    interdealer quotation system by the National Association of
    Securities Dealers,&nbsp;Inc. or held of record by more than
    2,000 holders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">c.&nbsp;Cash in lieu of fractional shares or
    fractional depository receipts described in the foregoing
    subparagraphs a. and b. of this paragraph;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">d.&nbsp;Any combination of the shares of stock,
    depository receipts and cash in lieu of fractional shares or
    fractional depository receipts described in the foregoing
    subparagraphs a., b. and c. of this paragraph.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">C-1
</FONT>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;In the event all of the stock of a
    subsidiary Delaware corporation party to a merger effected under
    &#167;253 of this title is not owned by the parent corporation
    immediately prior to the merger, appraisal rights shall be
    available for the shares of the subsidiary Delaware corporation.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Any corporation may provide in its
certificate of incorporation that appraisal rights under this
section shall be available for the shares of any class or series
of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the
certificate of incorporation contains such a provision, the
procedures of this section, including those set forth in
subsections (d)&nbsp;and (e)&nbsp;of this section, shall apply
as nearly as is practicable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;Appraisal rights shall be perfected as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;If a proposed merger or consolidation
    for which appraisal rights are provided under this section is to
    be submitted for approval at a meeting of stockholders, the
    corporation, not less than 20&nbsp;days prior to the meeting,
    shall notify each of its stockholders who was such on the record
    date for such meeting with respect to shares for which appraisal
    rights are available pursuant to subsection&nbsp;(b)&nbsp;or
    (c)&nbsp;hereof that appraisal rights are available for any or
    all of the shares of the constituent corporations, and shall
    include in such notice a copy of this section. Each stockholder
    electing to demand the appraisal of such stockholder&#146;s
    shares shall deliver to the corporation, before the taking of
    the vote on the merger or consolidation, a written demand for
    appraisal of such stockholder&#146;s shares. Such demand will be
    sufficient if it reasonably informs the corporation of the
    identity of the stockholder and that the stockholder intends
    thereby to demand the appraisal of such stockholder&#146;s
    shares. A proxy or vote against the merger or consolidation
    shall not constitute such a demand. A stockholder electing to
    take such action must do so by a separate written demand as
    herein provided. Within 10&nbsp;days after the effective date of
    such merger or consolidation, the surviving or resulting
    corporation shall notify each stockholder of each constituent
    corporation who has complied with this subsection and has not
    voted in favor of or consented to the merger or consolidation of
    the date that the merger or consolidation has become
    effective;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;If the merger or consolidation was
    approved pursuant to &#167;228 or &#167;253 of this title, then
    either a constituent corporation before the effective date of
    the merger or consolidation or the surviving or resulting
    corporation within 10&nbsp;days thereafter shall notify each of
    the holders of any class or series of stock of such constituent
    corporation who are entitled to appraisal rights of the approval
    of the merger or consolidation and that appraisal rights are
    available for any or all shares of such class or series of stock
    of such constituent corporation, and shall include in such
    notice a copy of this section. Such notice may, and, if given on
    or after the effective date of the merger or consolidation,
    shall, also notify such stockholders of the effective date of
    the merger or consolidation. Any stockholder entitled to
    appraisal rights may, within 20&nbsp;days after the date of
    mailing of such notice, demand in writing from the surviving or
    resulting corporation the appraisal of such holder&#146;s
    shares. Such demand will be sufficient if it reasonably informs
    the corporation of the identity of the stockholder and that the
    stockholder intends thereby to demand the appraisal of such
    holder&#146;s shares. If such notice did not notify stockholders
    of the effective date of the merger or consolidation, either
    (i)&nbsp;each such constituent corporation shall send a second
    notice before the effective date of the merger or consolidation
    notifying each of the holders of any class or series of stock of
    such constituent corporation that are entitled to appraisal
    rights of the effective date of the merger or consolidation or
    (ii)&nbsp;the surviving or resulting corporation shall send such
    a second notice to all such holders on or within 10&nbsp;days
    after such effective date; provided, however, that if such
    second notice is sent more than 20&nbsp;days following the
    sending of the first notice, such second notice need only be
    sent to each stockholder who is entitled to appraisal rights and
    who has demanded appraisal of such holder&#146;s shares in
    accordance with this subsection. An affidavit of the secretary
    or assistant secretary or of the transfer agent of the
    corporation that is required to give either notice that such
    notice has been given shall, in the absence of fraud, be prima
    facie evidence of the facts stated therein. For purposes of
    determining the stockholders entitled to receive either notice,
    each constituent corporation may fix, in advance, a record date
    that shall be not more than 10&nbsp;days prior to the date the
    notice is given, provided, that if the notice is given on or
    after the effective date of the merger or consolidation, the
    record date shall
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">C-2
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">be such effective date. If no record date is
    fixed and the notice is given prior to the effective date, the
    record date shall be the close of business on the day next
    preceding the day on which the notice is given.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;Within 120&nbsp;days after the effective
date of the merger or consolidation, the surviving or resulting
corporation or any stockholder who has complied with subsections
(a)&nbsp;and (d)&nbsp;hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within
60&nbsp;days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw
such stockholder&#146;s demand for appraisal and to accept the
terms offered upon the merger or consolidation. Within
120&nbsp;days after the effective date of the merger or
consolidation, any stockholder who has complied with the
requirements of subsections (a)&nbsp;and (d)&nbsp;hereof, upon
written request, shall be entitled to receive from the
corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and
with respect to which demands for appraisal have been received
and the aggregate number of holders of such shares. Such written
statement shall be mailed to the stockholder within 10&nbsp;days
after such stockholder&#146;s written request for such a
statement is received by the surviving or resulting corporation
or within 10&nbsp;days after expiration of the period for
delivery of demands for appraisal under
subsection&nbsp;(d)&nbsp;hereof, whichever is later.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(f)&nbsp;Upon the filing of any such petition by
a stockholder, service of a copy thereof shall be made upon the
surviving or resulting corporation, which shall within
20&nbsp;days after such service file in the office of the
Register in Chancery in which the petition was filed a duly
verified list containing the names and addresses of all
stockholders who have demanded payment for their shares and with
whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the
petition shall be filed by the surviving or resulting
corporation, the petition shall be accompanied by such a duly
verified list. The Register in Chancery, if so ordered by the
Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the
surviving or resulting corporation and to the stockholders shown
on the list at the addresses therein stated. Such notice shall
also be given by 1 or more publications at least 1&nbsp;week
before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or
such publication as the Court deems advisable. The forms of the
notices by mail and by publication shall be approved by the
Court, and the costs thereof shall be borne by the surviving or
resulting corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(g)&nbsp;At the hearing on such petition, the
Court shall determine the stockholders who have complied with
this section and who have become entitled to appraisal rights.
The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by
certificates to submit their certificates of stock to the
Register in Chancery for notation thereon of the pendency of the
appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to
such stockholder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(h)&nbsp;After determining the stockholders
entitled to an appraisal, the Court shall appraise the shares,
determining their fair value exclusive of any element of value
arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to
be paid upon the amount determined to be the fair value. In
determining such fair value, the Court shall take into account
all relevant factors. In determining the fair rate of interest,
the Court may consider all relevant factors, including the rate
of interest which the surviving or resulting corporation would
have had to pay to borrow money during the pendency of the
proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the
appraisal proceeding, the Court may, in its discretion, permit
discovery or other pretrial proceedings and may proceed to trial
upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name
appears on the list filed by the surviving or resulting
corporation pursuant to subsection&nbsp;(f) of this section and
who has submitted such stockholder&#146;s certificates of stock
to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal
rights under this section.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(i)&nbsp;The Court shall direct the payment of
the fair value of the shares, together with interest, if any, by
the surviving or resulting corporation to the stockholders
entitled thereto. Interest may be simple or
</FONT>

<P align="center"><FONT size="2">C-3
</FONT>

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<DIV align="left">
<FONT size="2">compound, as the Court may direct. Payment shall
be so made to each such stockholder, in the case of holders of
uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The
Court&#146;s decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(j)&nbsp;The costs of the proceeding may be
determined by the Court and taxed upon the parties as the Court
deems equitable in the circumstances. Upon application of a
stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable
attorney&#146;s fees and the fees and expenses of experts, to be
charged pro rata against the value of all the shares entitled to
an appraisal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(k)&nbsp;From and after the effective date of the
merger or consolidation, no stockholder who has demanded
appraisal rights as provided in subsection&nbsp;(d)&nbsp;of this
section shall be entitled to vote such stock for any purpose or
to receive payment of dividends or other distributions on the
stock (except dividends or other distributions payable to
stockholders of record at a date which is prior to the effective
date of the merger or consolidation); provided, however, that if
no petition for an appraisal shall be filed within the time
provided in subsection&nbsp;(e)&nbsp;of this section, or if such
stockholder shall deliver to the surviving or resulting
corporation a written withdrawal of such stockholder&#146;s
demand for an appraisal and an acceptance of the merger or
consolidation, either within 60&nbsp;days after the effective
date of the merger or consolidation as provided in
subsection&nbsp;(e)&nbsp;of this section or thereafter with the
written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the
foregoing, no appraisal proceeding in the Court of Chancery
shall be dismissed as to any stockholder without the approval of
the Court, and such approval may be conditioned upon such terms
as the Court deems just.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(l)&nbsp;The shares of the surviving or resulting
corporation to which the shares of such objecting stockholders
would have been converted had they assented to the merger or
consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
</FONT>

<P align="center"><FONT size="2">C-4
</FONT>

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<P align="center">
<B><FONT size="2">PART&nbsp;II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;20.</FONT></B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Indemnification
of Directors and Officers of International Bancshares
Corporation.</B></FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Texas law,&nbsp;IBC&#146;s articles of
incorporation, as amended and restated, and by-laws, as amended
and restated, contain provisions for indemnification of its
directors and officers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Article&nbsp;2.02-1 of the Texas Business
Corporation Act, or TBCA, provides generally that a person sued
as a director, officer, employee or agent of a corporation, or
while serving at the request of the corporation as a director,
officer, partner, employee, agent, or similar functionary of
another enterprise, may be indemnified by the corporation
against judgments, penalties, fines, settlements and reasonable
expenses if it is determined that such person has conducted
himself in good faith and it is reasonably believed, in the case
of conduct in his official capacity with the corporation, that
his conduct was in the corporation&#146;s best interests, and in
all other cases, that his conduct was at least not opposed to
the corporation&#146;s best interests (and, in the case of any
criminal proceeding, had no reasonable cause to believe his
conduct was unlawful). The TBCA provides that a corporation may
advance expenses incurred by a director in defending a suit or
similar proceeding. A Texas corporation is also permitted to
indemnify and advance expenses to officers, employees and agents
who are not directors to such extent as may be provided by its
articles of incorporation, by-laws, action of board of
directors, a contract or required by common law. Indemnification
of a person found liable to the corporation or found liable on
the basis that personal benefit was improperly received by him
is limited to reasonable expenses actually incurred by the
person in connection with the proceeding, and shall not be made
if the person is found liable for willful or intentional
misconduct in the performance of his duty to the corporation.
Indemnification is mandatory, however, in the case of such
person being wholly successful, on the merits or otherwise, in
the defense of the proceeding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Article&nbsp;2.02-1 also authorizes a corporation
to purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the
corporation or who is or was serving at the request of the
corporation as a director, officer, employee, agent or similar
functionary of another entity or enterprise against any
liability asserted against him and incurred by him in such a
capacity or arising out of his status as such, whether or not
the corporation would have the power to indemnify him against
that liability under Article&nbsp;2.02-1.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Article&nbsp;1302-7.06 of the Texas Miscellaneous
Corporation Laws Act, or TMCLA, provides that a
corporation&#146;s articles of incorporation may limit or
eliminate the directors&#146; liability for monetary damages to
the corporation or its shareholders for an act or omission in
the director&#146;s capacity as a director, except that no
limitation or elimination of liability is permitted to the
extent the director is found liable for a breach of the duty of
loyalty, an act or omission not in good faith or that involves
intentional misconduct or a knowing violation of the law, a
transaction involving an improper personal benefit to the
director, or an act or omission for which liability is expressly
provided by an applicable statute.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Similarly, Article&nbsp;XI of the
Registrant&#146;s articles of incorporation states that a
director of the Registrant shall not be personally liable to the
Registrant or its shareholders for monetary damages for an act
or omission in the director&#146;s capacity as a director,
except for liability for (a)&nbsp;a breach of the
director&#146;s duty of loyalty to the Registrant or its
shareholders, (b)&nbsp;an act or omission not in good faith or
that involves intentional misconduct or a knowing violation of
the law, (c)&nbsp;a transaction from which the director received
an improper benefit, whether or not the benefit resulted from an
action taken within the scope of the director&#146;s office, or
(d)&nbsp;an act or omission for which the liability for the
director is expressly provided for by statute. Article&nbsp;XI
also provides that if the TBCA and/or the TMCLA is amended to
authorize further elimination or limitation of the liability of
directors, then the liability of the directors to the Registrant
shall be limited to the fullest extent permitted by the TBCA, as
amended, and the TMCLA, as amended.
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Article&nbsp;IX of the Registrant&#146;s articles
of incorporation states that the Registrant shall indemnify to
the fullest extent provided by the TBCA, as presently in effect
or hereafter amended, any person who was, is or is threatened to
be made a named defendant or respondent to an action, suit or
proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that the person (i)&nbsp;is
or was a director or officer of the Registrant, or
(ii)&nbsp;while a director or officer of the Registrant, is or
was serving at the request of the Registrant as a director,
officer, partner, venturer, proprietor, trustee, employee, agent
or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise, against
expenses (including attorneys&#146; fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding.
In addition, Article&nbsp;IX of the Registrant&#146;s articles
of incorporation provides that such right of indemnification
shall be a contract right which may be enforced in any manner
desired by such person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Further, Article&nbsp;IX of the Registrant&#146;s
by-laws provides that the Registrant shall indemnify to the
fullest extent permitted by the TBCA any person who was, is or
is threatened to be made a named defendant or respondent to any
action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that the
person is or was a director, officer, employee or agent of the
Registrant, or is or was serving at the request of the
Registrant as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys&#146; fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he
reasonably believed to be, in the case of conduct in his
official capacity as a director, officer, employee or agent of
the Registrant, that his conduct was in the Registrant&#146;s
best interests, and in all other cases, that his conduct was at
least not opposed to the best interests of the Registrant, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Article&nbsp;IX of the Registrant&#146;s by-laws further
provides that the termination of any proceeding by judgment,
order, settlement, or conviction, or upon a plea of <I>nolo
contendere </I>or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be, in the case of
conduct in his official capacity as a director, officer,
employee or agent of the Registrant, in the Registrant&#146;s
best interests, and in all other cases, at least not opposed to
the best interests of the Registrant, and with respect to any
criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Article&nbsp;IX of the Registrant&#146;s articles
of incorporation provides that the Registrant shall have the
power to purchase and maintain liability insurance for those
persons or make other arrangements on such persons&#146; behalf
as and to the fullest extent permitted by the TBCA, as presently
in effect and as hereinafter amended. In addition,
Article&nbsp;IX, Section&nbsp;3 of the Registrant&#146;s by-laws
provides that the Registrant has the power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent (including any such person
who is or was serving, at the request of the Registrant, in a
similar or related capacity for another entity), insuring
against any liability asserted against such person and incurred
in the capacity, or arising out of such status as such, whether
or not the Registrant would have the power to indemnify such
person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers or persons controlling us pursuant to the foregoing
provisions, the Registrant has been informed that in the opinion
of the SEC, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
</FONT>

<P align="center"><FONT size="2">II-2
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;21.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Exhibits and Financial Statement
    Schedules.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;<I>Exhibit&nbsp;List</I>
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement and Plan of Merger dated as of
    January&nbsp;22, 2004, among International Bancshares
    Corporation, LFC Acquisition Corp. and Local Financial
    Corporation included as <B>APPENDIX&nbsp;A </B>to the proxy
    statement-prospectus.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of International
    Bancshares Corporation incorporated herein as an exhibit by
    reference to the Current Report, Exhibit&nbsp;3.1 therein, under
    the Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;8-K with the Securities and Exchange Commission on
    June&nbsp;20, 1995, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Restated By-Laws of International Bancshares
    Corporation incorporated herein as an exhibit by reference to
    the Annual Report, Exhibit&nbsp;3(b) therein, under the
    Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K with the Securities and Exchange Commission on
    March&nbsp;12, 2004, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Amendment to the Articles of
    Incorporation of International Bancshares Corporation dated
    May&nbsp;22, 1998 incorporated herein as an exhibit by reference
    to the Annual Report, Exhibit&nbsp;3(c) therein, under the
    Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K405 with the Securities and Exchange Commission on
    March&nbsp;31, 1999, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Amendment to the Articles of
    Incorporation of International Bancshares Corporation dated
    May&nbsp;20, 2002 incorporated herein as an exhibit by reference
    to the Annual Report, Exhibit&nbsp;3(d) therein, under the
    Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K with the Securities and Exchange Commission on
    March&nbsp;12, 2004, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Cox&nbsp;&#38; Smith Incorporated
    regarding legality.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The 1987 International Bancshares Corporation Key
    Contributor Stock Option Plan as amended and restated (formerly
    the International Bancshares Corporation 1981 Incentive Stock
    Option Plan) incorporated herein as an exhibit by reference to
    Exhibit&nbsp;28 to the Registration Statement on Form&nbsp;S-8
    filed with the Securities and Exchange Commission on
    July&nbsp;13, 1987, SEC File No.&nbsp;33-15655.&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The 1996 International Bancshares Corporation
    Stock Option Plan incorporated herein by reference to
    Exhibit&nbsp;99.1 to the Post Effective Amendment No.&nbsp;1 to
    Form&nbsp;S-8 filed with the Securities and Exchange Commission
    on March&nbsp;21, 1997, SEC File No.&nbsp;33-15655.&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Incentive Compensation Plan of the
    Registrant incorporated herein by reference to exhibit
    &#147;A&#148; of the Registrant&#146;s Proxy Statement filed
    with the Securities Exchange Commission on April&nbsp;15, 1997,
    SEC File No.&nbsp;09439.&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Registrants 2003 Annual Report, incorporated
    herein as an exhibit by reference to the Annual Report,
    Exhibit&nbsp;13 therein, under the Securities Exchange Act of
    1934, filed by Registrant on Form&nbsp;10-K with the Securities
    and Exchange Commission on March&nbsp;12, 2004, SEC File
    No.&nbsp;09439.&#134;&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">List of Subsidiaries of the Registrant as of
    March&nbsp;5, 2004 incorporated herein as an exhibit by
    reference to the Annual Report, Exhibit&nbsp;21 therein, under
    the Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K with the Securities and Exchange Commission on
    March&nbsp;12, 2004, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of KPMG LLP*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of KPMG LLP*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Cox&nbsp;&#38; Smith Incorporated
    (included in Exhibit&nbsp;5.1)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney of Directors and Officers of
    IBC.**
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Proxy Card for Local Financial
    Corporation.*
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Cover Letter for Election Form.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Election Form and Letter of Transmittal.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Notice of Guaranteed Delivery.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Election Information for Brokers and
    Dealers.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Election Information for Clients.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Sandler O&#146;Neill&nbsp;&#38;
    Partners L.P.*
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Filed herewith.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Previously filed.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">***&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be filed by amendment.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#134;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Compensation Plans and Arrangements.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#134;&#134;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Deemed filed only with respect to those portions
    thereof incorporated by reference therein.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;22.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Undertakings.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;To file, during any period in which
    offers or sales are being made, a post-effective amendment to
    this registration statement:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;to include any prospectus required by
    Section&nbsp;10(a)(3) of the Securities Act of 1933;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;to reflect in the prospectus any facts
    or events arising after the effective date of the registration
    statement (or the most recent post-effective amendment thereof)
    which, individually or in the aggregate, represent a fundamental
    change in the information set forth in the registration
    statement. Notwithstanding the foregoing, any increase or
    decrease in volume of securities offered (if the total dollar
    value of securities offered would not exceed that which was
    registered) and any deviation from the low or high end of the
    estimated maximum offering range may be reflected in the form of
    prospectus filed with the Commission pursuant to
    Rule&nbsp;424(b) if, in the aggregate, the changes in volume and
    price represent no more than a twenty percent (20%) change in
    the maximum aggregate offering price set forth in the
    &#147;Calculation of Registration Fee&#148; table in the
    effective registration statement;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;to include any material information
    with respect to the plan of distribution not previously
    disclosed in the registration statement or any material change
    to such information in the registration statement.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;That, for the purpose of determining any
    liability under the Securities Act of 1933, each such
    post-effective amendment shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at the time shall
    be deemed to be the initial bona fide offering thereof.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;To remove from registration by means of
    a post-effective amendment any of the securities being
    registered which remain unsold at the termination of the
    offering.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;That, for purposes of determining any
    liability under the Securities Act of 1933, each filing of
    IBC&#146;s annual report pursuant to Section&nbsp;13(a) or 15(d)
    of the Securities Exchange Act of 1934 that is incorporated by
    reference in the registration statement shall be deemed to be a
    new registration statement relating to the securities offered
    herein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;(a)&nbsp;that prior to any public
    reoffering of the securities registered hereunder through use of
    a prospectus which is a part of this registration statement, by
    any person or party who is deemed to be an underwriter within
    the meaning of Rule&nbsp;145(c) of the Securities Act, the
    issuer undertakes that
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-4
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">such reoffering prospectus will contain the
    information called for by the applicable registration form with
    respect to reofferings by persons who may be deemed
    underwriters, in addition to the information called for by the
    other items of the applicable form.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;that every prospectus (i)&nbsp;that is
    filed pursuant to paragraph 5(a) immediately preceding, or
    (ii)&nbsp;that purports to meet the requirements of
    Section&nbsp;10(a)(3) of the Securities Act and is used in
    connection with an offering of securities subject to
    Rule&nbsp;415, will be filed as part of an amendment to the
    registration statement and will not be used until such amendment
    is effective, and that, for purposes of determining any
    liability under the Securities Act of 1933, each such
    post-effective amendment shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering hereof.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;To respond to requests for information
    that is incorporated by reference into the prospectus pursuant
    to Items&nbsp;4, 10(b), 11 or 13 of this Form&nbsp;S-4, within
    one business day of receipt of such request, and to send the
    incorporated documents by first class mail or other equally
    prompt means. This includes information contained in documents
    filed subsequent to the effective date of the registration
    statement through the date of responding to the request.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;To supply by means of a post-effective
    amendment all information concerning a company being acquired
    involved therein, that was not the subject of and included in
    the registration statement when it became effective.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;Insofar as indemnification for
    liabilities arising under the Securities Act of 1933 may be
    permitted to directors, officers and controlling persons of the
    registrant pursuant to the provisions of Item&nbsp;20 of this
    Registration Statement, or otherwise, the registrant has been
    advised that in the opinion of the Securities and Exchange
    Commission such indemnification is against public policy as
    expressed in the Securities Act of 1933 and is, therefore,
    unenforceable. In the event that a claim for indemnification
    against such liabilities (other than the payment by IBC of
    expenses incurred or paid by a director, officer or controlling
    person of the registrant in the successful defense of any
    action, suit or proceeding) is asserted by such director,
    officer or controlling person in connection with the securities
    being registered, the registrant will, unless in the opinion of
    its counsel the matter has been settled by controlling
    precedent, submit to a court of appropriate jurisdiction the
    question whether such indemnification by it is against public
    policy, as expressed in the Securities Act of 1933 and will be
    governed by the final adjudication of such issue.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-5
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Laredo, State of
Texas, on April&nbsp;13, 2004.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">INTERNATIONAL BANCSHARES CORPORATION
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ DENNIS E. NIXON
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Dennis E. Nixon
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chairman of the Board, President</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">and Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signatures</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ DENNIS E. NIXON<BR>
    <HR size="1" noshade>Dennis E. Nixon
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board, President and Chief
    Executive Officer (Principal Executive Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ IMELDA NAVARRO*<BR>
    <HR size="1" noshade>Imelda Navarro
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Senior Executive Vice President, Chief Financial
    Officer and Director (Principal Financial Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ LEONARDO SALINAS*<BR>
    <HR size="1" noshade>Leonardo Salinas
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ LESTER AVIGAEL*<BR>
    <HR size="1" noshade>Lester Avigael
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ IRVING GREENBLUM*<BR>
    <HR size="1" noshade>Irving Greenblum
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ ANTONIO R. SANCHEZ, JR.*<BR>
    <HR size="1" noshade>Antonio R. Sanchez,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ R. DAVID GUERRA*<BR>
    <HR size="1" noshade>R. David Guerra
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ RICHARD E. HAYNES*<BR>
    <HR size="1" noshade>Richard E. Haynes
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ SIOMA NEIMAN*<BR>
    <HR size="1" noshade>Sioma Neiman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signatures</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ PEGGY J. NEWMAN*<BR>
    <HR size="1" noshade>Peggy J. Newman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ DANIEL B. HASTINGS, JR.*<BR>
    <HR size="1" noshade>Daniel B. Hastings,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;13, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">*By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ DENNIS E. NIXON<BR>
    <HR size="1" noshade>Dennis E. Nixon<BR>
    <BR>
     <I>Pursuant to Power of Attorney</I>
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Exhibit Index</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement and Plan of Merger dated as of
    January&nbsp;22, 2004, among International Bancshares
    Corporation, LFC Acquisition Corp. and Local Financial
    Corporation included as <B>APPENDIX&nbsp;A </B>to the proxy
    statement-prospectus.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of International
    Bancshares Corporation incorporated herein as an exhibit by
    reference to the Current Report, Exhibit&nbsp;3.1 therein, under
    the Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;8-K with the Securities and Exchange Commission on
    June&nbsp;20, 1995, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Restated By-Laws of International Bancshares
    Corporation incorporated herein as an exhibit by reference to
    the Annual Report, Exhibit&nbsp;3(b) therein, under the
    Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K with the Securities and Exchange Commission on
    March&nbsp;12, 2004, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Amendment to the Articles of
    Incorporation of International Bancshares Corporation dated
    May&nbsp;22, 1998 incorporated herein as an exhibit by reference
    to the Annual Report, Exhibit&nbsp;3(c) therein, under the
    Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K405 with the Securities and Exchange Commission on
    March&nbsp;31, 1999, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Amendment to the Articles of
    Incorporation of International Bancshares Corporation dated
    May&nbsp;20, 2002 incorporated herein as an exhibit by reference
    to the Annual Report, Exhibit&nbsp;3(d) therein, under the
    Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K with the Securities and Exchange Commission on
    March&nbsp;12, 2004, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Cox&nbsp;&#38; Smith Incorporated
    regarding legality.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The 1987 International Bancshares Corporation Key
    Contributor Stock Option Plan as amended and restated (formerly
    the International Bancshares Corporation 1981 Incentive Stock
    Option Plan) incorporated herein as an exhibit by reference to
    Exhibit&nbsp;28 to the Registration Statement on Form&nbsp;S-8
    filed with the Securities and Exchange Commission on
    July&nbsp;13, 1987, SEC File No.&nbsp;33-15655.&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">The 1996 International Bancshares Corporation
    Stock Option Plan incorporated herein by reference to
    Exhibit&nbsp;99.1 to the Post Effective Amendment No.&nbsp;1 to
    Form&nbsp;S-8 filed with the Securities and Exchange Commission
    on March&nbsp;21, 1997, SEC File No.&nbsp;33-15655.&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Incentive Compensation Plan of the
    Registrant incorporated herein by reference to exhibit
    &#147;A&#148; of the Registrant&#146;s Proxy Statement filed
    with the Securities Exchange Commission on April&nbsp;15, 1997,
    SEC File No.&nbsp;09439.&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Registrants 2003 Annual Report, incorporated
    herein as an exhibit by reference to the Annual Report,
    Exhibit&nbsp;13 therein, under the Securities Exchange Act of
    1934, filed by Registrant on Form&nbsp;10-K with the Securities
    and Exchange Commission on March&nbsp;12, 2004, SEC File
    No.&nbsp;09439.&#134;&#134;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">List of Subsidiaries of the Registrant as of
    March&nbsp;5, 2004 incorporated herein as an exhibit by
    reference to the Annual Report, Exhibit&nbsp;21 therein, under
    the Securities Exchange Act of 1934, filed by Registrant on
    Form&nbsp;10-K with the Securities and Exchange Commission on
    March&nbsp;12, 2004, SEC File No.&nbsp;09439.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of KPMG LLP*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of KPMG LLP*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Cox&nbsp;&#38; Smith Incorporated
    (included in Exhibit&nbsp;5.1)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney of Directors and Officers of
    IBC.**
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Proxy Card for Local Financial
    Corporation.*
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Cover Letter for Election Form.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Election Form and Letter of Transmittal.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Notice of Guaranteed Delivery.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Election Information for Brokers and
    Dealers.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Election Information for Clients.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Sandler O&#146;Neill&nbsp;&#38;
    Partners L.P.*
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Filed herewith.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Previously filed.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">***&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be filed by amendment.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#134;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Compensation Plans and Arrangements.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#134;&#134;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Deemed filed only with respect to those portions
    thereof incorporated by reference therein.
    </FONT></TD>
</TR>

</TABLE>

</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>d13787a1exv5w1.htm
<DESCRIPTION>OPINION/CONSENT OF COX & SMITH INCORPORATED
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;5.1</B>
<p>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%"></TD>
    <TD width="5%"></TD>
    <TD width="47%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">(210) 554-5298
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">teolson@coxsmith.com</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">April&nbsp;13, 2004


<P align="left" style="font-size: 10pt">International Bancshares Corporation<BR>
1200 San Bernardo Avenue<BR>
Laredo, Texas 78040


<P align="center" style="font-size: 10pt">Re: Registration Statement on Form&nbsp;S-4



<P align="left" style="font-size: 10pt">Ladies and Gentlemen:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acted as special counsel to International Bancshares Corporation
(&#147;IBC&#148;) in connection with the preparation and filing with the Securities and
Exchange Commission (&#147;Commission&#148;) pursuant to the Securities Act of 1933, as
amended (the &#147;Act&#148;), and the regulations promulgated thereunder, of the
registration statement on Form S-4 filed with the Commission on March&nbsp;19, 2004
and as amended by an amendment thereto filed on April&nbsp;13, 2004 (the
&#147;Registration Statement&#148;) relating to the issuance of shares of IBC&#146;s common
stock, $1.00 par value per share (the &#147;Shares&#148;), in connection with the merger
(&#147;Merger&#148;) of Local Financial Corporation (&#147;Local&#148;) with and into LFC
Acquisition Corp., a Delaware corporation and wholly-owned indirect subsidiary
of IBC (&#147;Acquisition Sub&#148;), pursuant to which, among other things, Local would
be the surviving corporation in the Merger, as provided in that certain
Agreement and Plan of Merger dated January&nbsp;22, 2004 (the &#147;Agreement&#148;), among
IBC, Acquisition Sub and Local, all as more specifically described in the
Registration Statement. As such counsel, we have made such legal and factual
examinations and inquiries as we deemed advisable for the purpose of rendering
this opinion.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This opinion is being delivered in accordance with the requirements of
Item&nbsp;601(b)(5) of Regulation&nbsp;S-K under the Act.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Agreement;</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Registration Statement;</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Articles of Incorporation of IBC, as amended (the
&#147;Articles of Incorporation&#148;);</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(iv)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Restated By-laws of IBC, as currently in effect (the
&#147;Bylaws&#148;); and</TD>
</TR>

</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">(v)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>certain resolutions of the Board of Directors of IBC relating
to the Agreement and the issuance and registration of the Shares
pursuant thereto.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also examined and are familiar with originals or copies, the
authenticity of which have been established to our satisfaction, of all such
other documents, corporate records, certificates of officers of IBC and public
officials, and other instruments as we have deemed necessary to express the
opinions hereinafter set forth. As to any facts material to the opinions
expressed herein that we did not independently establish or verify, we have
relied upon statements and representations of officers and other
representatives of IBC and others and of public officials.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as facsimile, electronic, certified or photostatic
copies, and the authenticity of the originals of such copies. In making our
examination of documents executed or to be executed, we have assumed that the
parties thereto other than IBC and Acquisition Sub had the power, corporate or
otherwise, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action, corporate or otherwise
by such parties, and the execution and delivery by such parties of such
documents.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In expressing our opinions herein, we express no opinion as to compliance
with federal and state securities laws.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The opinions expressed herein are limited to the corporate laws of the
State of Texas and the federal laws of the United States (the &#147;Applicable
Law&#148;). Members of our firm are admitted to the practice of law in the State of
Texas, and we do not express any opinion as to the laws of any other
jurisdiction other than the Applicable Law to the extent referred to
specifically herein. Insofar as the opinions expressed herein relate to
matters governed by laws other than the Applicable Law, we have assumed,
without having made any independent investigation, that such laws do not affect
any of the opinions set forth herein. The opinions expressed herein are based
on laws in effect on the date hereof, which laws are subject to change with
possible retroactive effect.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this opinion, we have assumed that, prior to the issuance
of the Shares, (i)&nbsp;the Registration Statement, as finally amended, becomes and
remains effective during the period when the Shares are offered and issued,
(ii)&nbsp;Local&#146;s stockholders have approved the Merger, (iii)&nbsp;the Merger becomes
effective, (iv)&nbsp;the Shares are issued in accordance with the Agreement,
(v)&nbsp;appropriate certificates evidencing the Shares are executed and delivered
by IBC and (vi)&nbsp;the value of Local common stock being cancelled in connection
with the transactions contemplated by the Agreement equals or exceeds
the par value of the Shares.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, it is our opinion that, the Shares
of IBC to be issued in connection with the Merger described in the Registration
Statement will, upon consummation of the Merger and the issuance and delivery
of such shares to the Local stockholders pursuant to the Agreement, be validly
issued, fully paid and nonassessable.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
&#147;Legal Matters&#148; in the proxy statement-prospectus forming a part of the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section&nbsp;7 of the
Act or the general rules and regulations of the Commission promulgated
thereunder.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Very Truly Yours,</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">COX &#038; SMITH INCORPORATED</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ TOBIN E. OLSON<BR>
<HR size="1" noshade>
For the Firm</TD>
</TR>

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</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>d13787a1exv23w1.htm
<DESCRIPTION>CONSENT OF KPMG LLP
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt">EXHIBIT 23.1

<P align="left" style="font-size: 10pt"><IMG src="d13787a1d1378705.gif" alt="(KPMG LETTERHEAD)">

<P align="center" style="font-size: 10pt"><B>Independent Auditors&#146; Consent</B>

<P align="left" style="font-size: 10pt">The Board of Directors<BR>
Local Financial Corporation:

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">We consent to the incorporation by reference in the Pre-Effective Amendment No.&nbsp;1 to the Form S-4 registration
statement (No.&nbsp;333-113767) of International Bancshares Corporation of our report dated January&nbsp;30, 2004, with
respect to the consolidated statements of financial condition of Local Financial Corporation and subsidiaries as
of December&nbsp;31, 2003 and 2002, and the related consolidated statements of operations, stockholders&#146; equity, and
cash flows for each of the years in the three-year period ended December&nbsp;31, 2003, which report appears in the
December&nbsp;31, 2003, annual report on Form 10-K of Local Financial Corporation and to the reference to our firm
under the heading &#147;Experts&#148; in the proxy statement &#151;  prospectus included in the registration statement. Our
report refers to the Local Financial Corporation and subsidiaries&#146; adoption of Financial Accounting Standards
Board Interpretation No.&nbsp;46R, <I>Consolidation of Variable Interest Entities, an Interpretation of ARB No.&nbsp;51,</I>
effective December&nbsp;31, 2003 and the adoption of Statement of Financial Accounting Standards No.&nbsp;142, <I>Goodwill and
Other Intangible Assets,</I> effective January&nbsp;1, 2002.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt; margin-left: 50%">/s/ KPMG LLP

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">April&nbsp;13, 2004
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt"><IMG src="d13787a1d1378704.gif" alt="(KPMG MEMBER INFORMATION)">


<P align="center" style="font-size: 10pt">
</DIV>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>5
<FILENAME>d13787a1exv23w2.htm
<DESCRIPTION>CONSENT OF KPMG LLP
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right">
<B><FONT size="2">Exhibit 23.2</FONT></B>

<P align="left">
<IMG src="d13787a1d1378711.gif">

<P align="center">
<B><FONT size="2">Independent Auditor&#146;s Consent</FONT></B>

<P align="left">
<FONT size="2">The Board of Directors
</FONT>

<DIV align="left">
<FONT size="2">International Bancshares Corporation:
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<DIV align="left"><FONT size="1">

</FONT></DIV>
<FONT size="2">We consent to the incorporation by reference in
the Pre-Effective Amendment No.&nbsp;1 to the Form&nbsp;S-4
registration statement (No.&nbsp;333-113767) of International
Bancshares Corporation of our report dated March&nbsp;5, 2004,
with respect to the consolidated statements of condition of
International Bancshares Corporation and subsidiaries as of
December&nbsp;31, 2003 and 2002, and the related consolidated
statements of income, comprehensive income, shareholders&#146;
equity, and cash flows for each of the years in the three-year
period ended December&nbsp;31, 2003, which report appears in the
December&nbsp;31, 2003, annual report on Form&nbsp;10-K of
International Bancshares Corporation and to the reference to our
firm under the heading &#147;Experts&#148; in the proxy
statement-prospectus included in the registration statement. Our
report refers to International Bancshares Corporation&#146;s
change in method of accounting for its investment in its
statutory business trusts, effective December&nbsp;31, 2003 and
the change in method of accounting for goodwill and other
intangible assets, effective January&nbsp;1, 2002.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
/s/&nbsp;KPMG LLP

<P align="left">
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left">
<FONT size="2">April&nbsp;13, 2004
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>
</DIV>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>d13787a1exv99w1.htm
<DESCRIPTION>FORM OF PROXY CARD
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>Exhibit&nbsp;99.1</B>

<P align="center" style="font-size: 10pt"><B>ANNUAL MEETING OF STOCKHOLDERS OF</B>

<P align="center" style="font-size: 10pt"><B>LOCAL FINANCIAL CORPORATION<BR>
May&nbsp;19, 2004</B>

<P align="center" style="font-size: 10pt">Please date, sign and mail<BR>
your proxy card in the<BR>
envelope provided as soon<BR>
as possible.

<P align="center" style="font-size: 10pt"><FONT face="wingdings">&#226;</FONT> Please detach along perforated line and mail in the envelope provided.<FONT face="wingdings">&#226;</FONT>

<P align="center" style="font-size: 8pt"><hr noshade size="1">

<P align="center" style="font-size: 8pt"><b>THE BOARD OF DIRECTORS
RECOMMENDS A VOTE &#147;FOR&#148;
THE ELECTION OF DIRECTORS AND &#147;FOR&#148; PROPOSALS 1, 3 AND 4.<BR>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.<BR>
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE</b> <FONT face="Wingdings">&#120;</FONT>

<P align="center" style="font-size: 8pt"><hr noshade size="1">

<P><DIV style="position: relative; float: left; margin-right: 1%; width: 48%">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<P align="left" style="font-size: 8pt"><B>This signed proxy will be voted as directed, but if no instructions are
specified, this signed proxy will be voted &#147;FOR&#148; each of
the proposals stated. However, no proxy that is voted against the
merger will be voted in favor of adjournment to solicit further
proxies in favor of the merger. Additionally, if any other business
is presented at such meeting, this signed proxy will be voted by
those named in this proxy in their best judgment. At the present
time, the Board of Directors knows of no other business to be
presented at the meeting.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>

<P align="center" style="font-size: 8pt"><hr noshade size="1">

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To change the address on your account, please check the box
at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on
the account may not be submitted via this method.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="right" valign="middle"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

</DIV>
<DIV style="position: relative; float: right; margin-left: 1%; width: 48%">
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">FOR</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">AGAINST</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">ABSTAIN</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Adoption of the Agreement and Plan of Merger, dated as
of January&nbsp;22, 2004, among International Bancshares Corporation,
LFC Acquisition Corp. and Local
Financial Corporation.</TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Election of Directors:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" valign="top">NOMINEES</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
<B>FOR ALL NOMINEES</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#161;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Edward A. Townsend</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#161;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Robert A. Kotecki</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
<B>WITHHOLD AUTHORITY</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#161;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. David Rosenberg</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>FOR ALL NOMINEES</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
<B>FOR ALL EXCEPT</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(See instructions below)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>INSTRUCTION:</B> To withhold authority to vote
for any individual nominee(s), mark <B>&#147;FOR ALL EXCEPT&#148;</B> and
fill in the circle next to each nominee you wish to withhold, as
shown here: <FONT face="Wingdings">&#108;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">FOR</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">AGAINST</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">ABSTAIN</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ratification of the appointment of KPMG LLP as independent auditors for
the year ending December&nbsp;31, 2004.</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Proposal to adjourn the Annual Meeting to a later date
or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the
time of the Annual Meeting to constitute a quorum and/or approve the proposals to be presented at the
Annual Meeting.</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


</DIV>
<BR clear="all"><BR>
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature of Stockholder</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of Stockholder</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD align="left" valign="top" colspan="2"><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="left" valign="top" colspan="2"><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
   <TD align="left" valign="top" colspan="2"><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
   <TD align="left" valign="top" colspan="2"><HR size="1" noshade>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><b>Note:</b></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">This proxy must be signed exactly as the name appears hereon. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as
such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>LOCAL FINANCIAL CORPORATION</B>



<P align="center" style="font-size: 10pt"><b>3601 N.W. 63rd Street<BR>
Oklahoma City, Oklahoma 73116



<P align="center" style="font-size: 10pt">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</b>


<P align="left" style="font-size: 10pt">The undersigned hereby appoints Edward A. Townsend and Richard L. Park as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse side, all the shares
of common stock of Local Financial Corporation held of record by the undersigned
on April&nbsp;5, 2004, at the Annual Meeting of Stockholders to be held
on May&nbsp;19, 2004, or any adjournment thereof.



<P align="center" style="font-size: 10pt"><B>(Continued and to be signed on the reverse side)</B>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>ANNUAL MEETING OF STOCKHOLDERS OF</B>

<P align="center" style="font-size: 10pt"><B>LOCAL FINANCIAL CORPORATION</B>

<P align="center" style="font-size: 10pt"><B>
May&nbsp;19, 2004</B>

<P align="center" style="font-size: 10pt"><B>PROXY VOTING INSTRUCTIONS</B>

<P align="right" style="font-size: 10pt"><B>COMPANY NUMBER </B><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U>

<P align="right" style="font-size: 10pt"><B>ACCOUNT NUMBER </B><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U><U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U>

<P align="left" style="font-size: 10pt"><B>MAIL -</B> Date, sign and mail your proxy card
in the envelope provided as soon as possible.

<P align="center" style="font-size: 10pt"><B>- OR -</B>

<P align="left" style="font-size: 10pt"><B>TELEPHONE - </B>Call toll-free <B>1-800-PROXIES</B>
(1-800-776-9437) from any touch-tone telephone and follow the instructions. Have
your proxy card available when you call.

<P align="center" style="font-size: 10pt"><B>- OR -</B>

<P align="left" style="font-size: 10pt"><B>INTERNET - </B>Access &#147;<B>www.voteproxy.com</B>&#148; and
follow the on-screen instructions. Have your
proxy card available when you access the web page.

<P align="center" style="font-size: 10pt"><FONT face="wingdings">&#226;</FONT>
Please detach along perforated line and mail in the envelope provided
<u>IF</u> you are not voting via telephone or the Internet.<FONT face="wingdings">&#226;</FONT>

<P align="center" style="font-size: 8pt"><hr noshade size="1">

<P align="center" style="font-size: 8pt"><b>THE BOARD OF DIRECTORS
RECOMMENDS A VOTE &#147;FOR&#148; THE ELECTION OF DIRECTORS AND &#147;FOR&#148; PROPOSALS 1, 3 AND 4.<BR>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.<BR>
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE</b> <FONT face="Wingdings">&#120;</FONT>

<P align="center" style="font-size: 8pt"><hr noshade size="1">

<P><DIV style="position: relative; float: left; margin-right: 1%; width: 48%">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<P align="left" style="font-size: 10pt"><B>This signed proxy will be voted as directed, but if no instructions are
specified, this signed proxy will be voted &#147;FOR&#148; each of
the proposals stated. However, no proxy that is voted against the
merger will be voted in favor of adjournment to solicit further
proxies in favor of the merger. Additionally, if any other business
is presented at such meeting, this signed proxy will be voted by
those named in this proxy in their best judgment. At the present
time, the Board of Directors knows of no other business to be
presented at the meeting.</B>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>

<P align="center" style="font-size: 8pt"><hr noshade size="1">

<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">To change the address on your account, please check the box
at right and indicate your new address in the address space
above. Please note that changes to the registered name(s) on
the account may not be submitted via this method.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="right" valign="middle"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


</DIV>
<DIV style="position: relative; float: right; margin-left: 1%; width: 48%">
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">FOR
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">AGAINST
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">ABSTAIN</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Adoption of the Agreement and Plan of Merger, dated as
of January&nbsp;22, 2004, among International Bancshares
Corporation, LFC Acquisition Corp. and Local
Financial Corporation.
</TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD style="font-size: 10pt" align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Election of Directors:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" valign="top">NOMINEES</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
<B>FOR ALL NOMINEES</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#161;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Edward A. Townsend</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#161;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Robert A. Kotecki</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
<B>WITHHOLD AUTHORITY</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#161;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. David Rosenberg</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>FOR ALL NOMINEES</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
<B>FOR ALL EXCEPT</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(See instructions below)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>INSTRUCTION:</B> To withhold
authority to vote
for any individual nominee(s),
mark <B>&#147;FOR
ALL EXCEPT&#148;</B> and fill in the
circle next to
each nominee you wish to
withhold, as
shown here: <FONT face="Wingdings">&#108;</FONT></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">FOR
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AGAINST
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">ABSTAIN</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ratification of the appointment of KPMG LLP as independent auditors for
the year ending December&nbsp;31, 2004.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Proposal to adjourn the Annual Meeting to a later date
or dates, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the
time of the Annual Meeting to constitute a quorum and/or approve the proposals to be presented at the
Annual Meeting.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>


</DIV>
<BR clear="all"><BR>
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature of Stockholder
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of Stockholder
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD align="left" valign="top" colspan="2"><HR size="1" noshade>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD align="left" valign="top" colspan="2"><HR size="1" noshade>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
   <TD align="left" valign="top" colspan="2"><HR size="1" noshade>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
   <TD align="left" valign="top" colspan="2"><HR size="1" noshade>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><b>Note:</b>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">This proxy must be signed exactly as the name appears hereon. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as
such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">
</DIV>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>7
<FILENAME>d13787a1exv99w2.htm
<DESCRIPTION>FORM OF COVER LETTER FOR ELECTION FORM
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right">
<B><FONT size="2">EXHIBIT 99.2</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2">[IBC LETTERHEAD]</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2"> ______________________________,
2004</FONT></B>

<P align="left">
<FONT size="2">Dear Local Financial Corporation Stockholder:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the merger of Local Financial
Corporation (&#147;Local&#148;) with and into LFC Acquisition
Corp., a wholly owned indirect subsidiary of International
Bancshares Corporation (&#147;IBC&#148;), we are pleased to
offer you the opportunity to indicate whether you prefer to
receive shares of IBC common stock, cash or a combination of IBC
common stock and cash in exchange for your shares of Local
common stock. This election will be effective only upon the
consummation of the merger, which is subject to the satisfaction
of several conditions, including the approval of Local&#146;s
stockholders. A complete description of the merger and of the
election and allocation procedures is included in the proxy
statement-prospectus dated April&nbsp;13, 2004 of Local and IBC
previously provided to you.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Enclosed is an Election Form and Letter of
Transmittal which you must complete, sign and return with all of
your Local stock certificates to our exchange
agent, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
in order to make an election. Please use the return envelope
enclosed herewith to return your Election Form and Letter of
Transmittal and your stock certificates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">For your election to be effective, the
Exchange Agent must receive your Election Form and Letter of
Transmittal, together with your Local stock certificates, no
later than 5:00 p.m., New York City time,
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004. </FONT></B><FONT size="2">Please follow the instructions
on the Election Form and Letter of Transmittal carefully. If
your Local stock certificates are not immediately available or
time will not permit the Election Form and Letter of Transmittal
to be delivered to the exchange agent prior to the election
deadline, you may make an election if you submit the Notice of
Guaranteed Delivery included in this package and follow the
instructions in that document. If you need assistance, please
call the exchange agent toll free at
(800)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you do not make an election, the exchange
agent will send you additional forms for the surrender of your
Local stock certificates after consummation of the merger, and
you will receive IBC common stock and/or cash in exchange for
your shares pursuant to the agreed-upon allocation procedures
described in the proxy statement-prospectus of Local and IBC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the terms of the merger agreement,
25% of the outstanding shares of Local will be exchanged for IBC
common stock and 75% of the outstanding shares of Local will be
exchanged for cash. Since it is unlikely that elections will be
made exactly in these proportions, the merger agreement
describes allocation procedures to be followed if Local
stockholders elect to receive more or less of the IBC common
stock than IBC has agreed to issue.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your submission of an Election Form and Letter of
Transmittal does <B><I>not</I></B> constitute a vote on the
merger. In order to vote your Local shares, you must sign, date
and return the proxy card included with the proxy
statement-prospectus of Local and IBC or attend Local&#146;s
Annual Meeting and vote in person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For those of you who elect to receive IBC common
stock in the merger, we look forward to having you as
shareholders of IBC.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Very truly yours,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Dennis E. Nixon,
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Chairman of the Board, President and</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Chief Executive Officer</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">International Bancshares Corporation</FONT></I></TD>
</TR>

</TABLE>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>8
<FILENAME>d13787a1exv99w3.htm
<DESCRIPTION>FORM OF ELECTION FORM AND LETTER OF TRANSMITTAL
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right">
<B><FONT size="2">EXHIBIT 99.3</FONT></B>

<P align="center">
<B><FONT size="2">ELECTION FORM AND LETTER OF
TRANSMITTAL</FONT></B>

<P align="center">
<B><FONT size="2">To accompany certificates of common stock, par
value $0.01 per share, of Local Financial Corporation.</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap>&nbsp;<B><FONT size="1">DESCRIPTION OF SHARES SURRENDERED <I>(Please fill in. Attach separate schedule if needed.)</I></FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><FONT size="1">Name(s) and Address of Registered Holder(s)</FONT></TD>
    <TD></TD>
    <TD align="center" nowrap><FONT size="1">Number of Shares</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><FONT size="1">If there is any error in the name or address shown below, please make the</FONT></TD>
    <TD></TD>
    <TD align="center" nowrap><FONT size="1">Represented</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><FONT size="1">necessary corrections.</FONT></TD>
    <TD></TD>
    <TD align="center" nowrap><FONT size="1">Certificate Number(s)</FONT></TD>
    <TD></TD>
    <TD align="center" nowrap><FONT size="1">By Certificate</FONT></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="1">&nbsp;Total Number of<BR>&nbsp;Shares
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mail or deliver this Election Form and Letter of
Transmittal, or a facsimile, together with the certificates
representing your shares of Local Financial Corporation common
stock, to the Exchange Agent:
</FONT>

<P align="center">
<FONT size="2">[Name of Exchange Agent]
</FONT>

<P align="center">
<I><FONT size="2">For information
call&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></I><FONT size="2">:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">&nbsp;By Mail or Overnight Delivery:</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <I><FONT size="2">By Hand:</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <I><FONT size="2">By Facsimile:</FONT></I></TD>
</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Method of delivery of the certificates is at the
option and risk of the owner thereof. <I>See Instruction 6</I>.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Election Deadline is 5:00 p.m., New York City
time,
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004. The Exchange Agent must receive your election materials no
later than this time.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">If </FONT></I><FONT size="2">your
certificates have been lost, stolen, misplaced or mutilated,
contact the Exchange Agent at the number above. See Instruction
4.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the terms of the Agreement and Plan
of Merger, dated as of January&nbsp;22, 2004 (Merger Agreement),
by and among International Bancshares Corporation (IBC), LFC
Acquisition Corp. (Acquisition Sub) and Local Financial
Corporation (Local), upon the consummation of the merger of
Acquisition Sub and Local, each share of Local common stock
(other than dissenting shares) will be converted into the right
to receive either:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a number of shares of IBC common stock equal to
    $22.00 (subject to upward adjustment as provided in the Merger
    Agreement) divided by the IBC common stock value (determined as
    provided in the Merger Agreement); or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$22.00 (subject to upward adjustment as provided
    in the Merger Agreement) in cash.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Local stockholders are being given the
opportunity to elect the form of consideration to be received by
them in the merger. For a full discussion of the merger and
effect of this election, see the proxy statement-prospectus
dated April&nbsp;13, 2004 of Local and IBC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">This election governs that consideration that
you, as a stockholder of Local Financial Corporation, will
receive if the merger is approved and consummated.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Complete the box on page 2 to make an election
(1)&nbsp;to have all of your shares of Local common stock
converted into the right to receive shares of IBC common stock
(a Stock Election), OR (2)&nbsp;to have all of your
</FONT>

<P align="center">
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">shares of Local common stock converted into the
right to receive cash (a Cash Election), OR (3) to have the
indicated number of your shares of Local common stock converted
into the right to receive shares of IBC common stock and the
remainder of your shares converted into the right to receive
cash (a Mixed Election) OR (4)&nbsp;to indicate that you make no
election. If the NON-ELECTION box is checked, you will receive
either stock or cash or a combination of stock and cash pursuant
to the allocation procedures set forth in the Merger Agreement.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Merger Agreement generally provides that 25%
of the outstanding shares of Local common stock will be
converted into IBC common stock and 75% of the outstanding
shares of Local common stock will be converted into cash. The
Merger Agreement contains allocation procedures to achieve this
result. Accordingly, depending on the elections of other Local
stockholders, the amount of cash and/or stock that you receive
may differ from the amounts you elect to receive.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">To be effective, this Election Form and Letter
of Transmittal must be properly completed, signed and delivered
to the Exchange Agent, together with the certificates
representing your shares of Local common stock, at the address
above prior to the Election Deadline.</FONT></B>

<P align="center">
<B><FONT size="2">ELECTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">I hereby elect to receive the following as
consideration for my shares of Local common stock: (check only
one box)
</FONT>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;STOCK
ELECTION&#151;Each share of Local common stock converted into a
number of shares of IBC common stock determined pursuant to the
Merger Agreement (plus cash instead of any fractional shares).
</FONT>
</DIV>

<P align="left">
<FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;CASH
ELECTION&#151;Each share of Local common stock converted into an
amount in cash (without interest) determined pursuant to the
Merger Agreement.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;MIXED
    ELECTION&#151;-------<BR>
     <I>(insert<BR>
    number)</I>
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">shares of Local common stock converted into
    shares of IBC common stock.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">My remaining shares of Local common stock
    converted into an amount in cash (without interest) determined
    pursuant to the Merger Agreement.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">
<FONT face="wingdings">&#111;</FONT>&nbsp;NON-ELECTION&#151;I
will be deemed to have made a NON-ELECTION if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="2%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">A.&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">no choice is indicated above;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="2%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">B.&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">I fail to follow the instructions on this
    Election Form and Letter of Transmittal (including submission of
    my Local common stock certificates and related transmittal
    materials) or otherwise fail properly to make an election;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="2%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">C.&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a completed Election Form and Letter of
    Transmittal (including submission of my Local common
    certificates) is not actually received by the Exchange Agent by
    the Election Deadline; of
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">D.&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">I revoke my Election Form and Letter of
    Transmittal prior to the Election Deadline and do not submit a
    new properly executed Election Form and Letter of Transmittal
    prior to the Election Deadline.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">

</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="center"><FONT size="2">2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;
<FONT size="2">The undersigned represents that I (we)&nbsp;have
full authority to surrender without restriction the certificates
for exchange. Please issue the new certificate and/or check in
the name shown above to the above address unless instructions
are given in the boxes below.
</FONT>

<P align="center">
<B><FONT size="2">SPECIAL ISSUANCE/PAYMENT
INSTRUCTIONS</FONT></B>

<P align="left">&nbsp;&nbsp;
<FONT size="2">Complete ONLY if the new certificate and/or check
is to be issued in a name that differs from the name on the
surrendered certificates. Issue to:
</FONT>

<P align="left">
<FONT size="2">Name:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<DIV align="center">
<B><FONT size="2">(Please Print)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Address:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<DIV align="center">
<B><FONT size="2">(Include Zip Code)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;
<FONT size="2">(Please also complete Substitute Form W-9 on page
3 AND see instructions regarding signature guarantee.) <I>See
Instructions 8 and 9.</I>
</FONT>

<P align="center">
<B><FONT size="2">SPECIAL DELIVERY INSTRUCTIONS</FONT></B>

<P align="left">&nbsp;&nbsp;
<FONT size="2">Complete ONLY if new certificate and/or check is
to be mailed to an address other than the address reflected
above. Mail to:
</FONT>

<P align="left">
<FONT size="2">Name:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<DIV align="center">
<B><FONT size="2">(Please Print)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Address:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<DIV align="center">
<B><FONT size="2">(Include Zip Code)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;
<I><FONT size="2">See Instruction 9.</FONT></I>

<P align="center"><FONT size="2">3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">YOU MUST SIGN IN THE BOX BELOW:</FONT></B>

<P align="center">
<B><FONT size="2">*SIGNATURE(S) REQUIRED*</FONT></B>

<DIV align="center">
<FONT size="2">Signature(s) of Registered Holder(s) or Agent
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;
<FONT size="2">Must be signed by the registered holder(s)
EXACTLY as names(s) appear(s) on stock certificates. If
signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer for a corporation acting in a
fiduciary or representative capacity, or other person, please
set forth full title. <I>See Instructions 7, 8 and 9.</I>
</FONT>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<DIV align="left">
<FONT size="2">Registered Holder
</FONT>
</DIV>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<DIV align="left">
<FONT size="2">Registered Holder
</FONT>
</DIV>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<DIV align="left">
<FONT size="2">Title, if any
</FONT>
</DIV>

<P align="left">
<FONT size="2">Date:
<HR size="1" width="100%" align="left" noshade>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Phone
No.: <HR size="1" width="100%" align="left" noshade>
</FONT>

<P align="center">
<B><FONT size="2">SIGNATURE(S) GUARANTEED (IF
REQUIRED)</FONT></B>

<P align="left">&nbsp;&nbsp;
<FONT size="2">Unless the shares are tendered by the registered
holder(s) of the common stock, or for the account of a member of
a Signature Guarantee Program, Stock Exchange Medallion Program
or New York Stock Exchange Medallion Signature Program, your
signature(s) must be guaranteed by an Eligible Institution.
<I>See Instruction 8.</I>
</FONT>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<FONT size="2">Authorized signature
</FONT>
</DIV>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<FONT size="2">Name of Firm
</FONT>
</DIV>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<FONT size="2">Address of Firm - Please Print
</FONT>
</DIV>

<P align="center">
<B><I><FONT size="2">Also: Sign and provide your tax ID number
on page 3 of this form.</FONT></I></B>

<P align="center"><FONT size="2">4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">IMPORTANT TAX INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under federal income tax law, a non-exempt
stockholder is required to provide the Exchange Agent with such
stockholder&#146;s correct Taxpayer Identification Number
(TIN)&nbsp;on the Substitute Form&nbsp;W-9 below. If the
certificates are in more than one name or are not in the name of
the actual owner, consult the enclosed Substitute Form&nbsp;W-9
guidelines for additional guidance on which number to report.
<I>Failure to provide the information on the form may subject
the surrendering stockholder to 28% federal income tax
withholding on the payment of any cash. </I>If the Exchange
Agent is not provided with a TIN before payment is made, the
Exchange Agent will withhold 28% on all payments to such
surrendering stockholders of any cash consideration due for
their former shares. Please review the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute
Form&nbsp;W-9 for additional details on which TIN to give the
Exchange Agent.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><B><FONT size="1">PAYER&#146;S NAME:</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    &nbsp;&nbsp;&nbsp;&nbsp;<B><FONT size="2">SUBSTITUTE<BR>
    <BR>
    FORM W-9<BR>
    <BR>
    <BR>
     Department of the Treasury<BR>
    Internal Revenue Service</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <B><FONT size="2">Part I&nbsp;&#151;
    </FONT></B><FONT size="2">Taxpayer Identification
    Number&nbsp;&#151; For all accounts, enter taxpayer
    identification number in box at right. (For most individuals,
    this is your social security number. If you do not have a
    number, see Obtaining a Number in the enclosed
    <I>Guidelines</I>.) Certify by signing and dating below. Note:
    If the account is in more than one name, see the chart in the
    enclosed <I>Guidelines </I>to determine which social security or
    employer identification number to give the payer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <BR>
    <HR size="1" noshade>&nbsp;&nbsp;&nbsp;<FONT size="2">Social
    Security Number<BR>
    <BR>
    <BR>
    <BR>
    OR&nbsp;<HR size="1" noshade>Employer
    Identification<BR>&nbsp;Number<BR>
    <BR>&nbsp;&nbsp;&nbsp;(If awaiting TIN write<BR>
    <BR>&nbsp;&nbsp;&nbsp;&#147;Applied For&#148;)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="18%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="29%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <B><FONT size="1">Part
    II</FONT></B><FONT size="1">&nbsp;&#151;&nbsp;For Payees Exempt
    From Backup Withholding, see the enclosed <I>Guidelines </I>and
    complete as instructed therein.
    </FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="1">Payer&#146;s Request for Taxpayer
    Identification Number (&#147;TIN&#148;)</FONT></B></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <B><I><FONT size="1">Certification&nbsp;&#151;
    </FONT></I></B><FONT size="1">Under penalties of perjury, I
    certify that:
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <FONT size="1">(1)&nbsp;The number shown on this form is my
    correct Taxpayer Identification Number (or I am awaiting for a
    number to be issued to me), and
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <FONT size="1">(2)&nbsp;I am not subject to backup withholding
    either because: (a)&nbsp;I am exempt from backup withholding, or
    (b)&nbsp;I have not been notified by the Internal Revenue
    Service (the &#147;IRS&#148;) that I am subject to backup
    withholding as a result of a failure to report all interest or
    dividends, or (c)&nbsp;the IRS has notified me that I am no
    longer subject to backup withholding, and
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <FONT size="1">(3)&nbsp;I am a U.S. person (including a U.S.
    resident alien).
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <B><I><FONT size="1">Certificate
    Instructions&nbsp;&#151;&nbsp;</FONT></I></B><FONT size="1">You
    must cross out item (2)&nbsp;above if you have been notified by
    the IRS that you are subject to backup withholding because of
    underreporting interest or dividends on your tax return.
    However, if after being notified by the IRS that you were
    subject to backup withholding you received another notification
    from the IRS that you are no longer subject to backup
    withholding, do not cross out item&nbsp;(2). (Also see
    instructions in the enclosed <I>Guidelines</I>.)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <FONT size="1">Signature&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,&nbsp;2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">5
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">INSTRUCTIONS</FONT></B>

<DIV align="center">
<FONT size="2">(Please read carefully the instructions below)
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">1.&nbsp;<B><I>Election Deadline:</I></B> For any
election contained herein to be considered, this Election Form
and Letter of Transmittal, or a facsimile thereof, properly
completed and signed, together with the related Local common
stock certificates, <B>must be received by the Exchange Agent at
the address on the front of this Election Form and Letter of
Transmittal no later than 5:00 p.m., New York City time,
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004. </B>The Exchange Agent shall have reasonable discretion to
determine whether any Election Form and Letter of Transmittal
has been properly or timely received and to disregard immaterial
defects in any Election Form, and any good faith decisions of
the Exchange Agent regarding such matters shall be binding and
conclusive.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">2.&nbsp;<B><I>Revocation or Change of
Election:</I></B> Any Local stockholder may, at any time prior
to the Election Deadline, revoke his or her election by written
notice received by the Exchange Agent prior to the Election
Deadline or by withdrawal prior to the Election Deadline of his
or her certificates, or of the guarantee of delivery of such
certificates, previously deposited with the Exchange Agent. The
Exchange Agent will have reasonable discretion to determine
whether any revocation or change is timely received and whether
any such revocation or change has been properly made, and any
good faith decisions of the Exchange Agent regarding such
matters shall be binding and conclusive.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">3.&nbsp;<B><I>Surrender of Certificates:</I></B>
For any election contained herein to be effective, this Election
Form and Letter of Transmittal must be accompanied by the
certificates evidencing your shares and any required
accompanying evidences of authority.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.&nbsp;<B><I>Lost Certificates:</I></B> If any
certificates that a registered holder (or transferee) wants to
surrender have been lost or destroyed, that fact should be
indicated on the face of this Election Form and Letter of
Transmittal, which should then be delivered to the Exchange
Agent after being otherwise properly completed and duly
executed. In such event, the Exchange Agent will forward
additional documentation necessary to be completed in order to
effectively replace such lost or destroyed certificates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">5.&nbsp;<B><I>Termination of Merger:</I></B> In
the event of termination of the Merger Agreement, the Exchange
Agent will promptly return stock certificates representing
shares of Local common stock. In such event, shares of Local
common stock held through nominees are expected to be available
for sale or transfer promptly following the termination of the
Merger Agreement. Certificates representing shares of Local
common stock held directly by Local stockholders will be
returned by registered mail (with attendant delay). The Exchange
Agent and IBC will use their commercially reasonable efforts to
cooperate with Local and Local stockholders to facilitate return
of Local stock certificates in the event of termination of the
Merger Agreement, but return of certificates other than by
registered mail will only be made at the expense, written
direction and risk of Local stockholders, accompanied by a
pre-paid, pre-addressed return courier envelope sent to the
Exchange Agent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">6.&nbsp;<B><I>Method of Delivery:</I></B> Your
old certificates and the Election Form and Letter of Transmittal
must be sent or delivered to the Exchange Agent. Do not send
them to IBC or Local. The method of delivery of certificates to
be surrendered to the Exchange Agent at the address set forth on
the front of the Election Form and Letter of Transmittal is at
the option and risk of the surrendering stockholder. Delivery
will be deemed effective, and risk of loss and title to the
shares represented by the certificates to be surrendered shall
pass, only upon receipt. If the certificates are sent by mail,
registered mail with return receipt requested and properly
insured is suggested. A return envelope is enclosed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">7.&nbsp;<B><I>New Certificate/ Check Issued in
the Same Name:</I></B> If the new certificate and/or check are
to be issued in the same name as the surrendered certificates
are registered, the Election Form and Letter of Transmittal
should be completed and signed exactly as the surrendered
certificates are registered. <I>Do not sign the certificates.
</I>Signature guarantees are not required if the certificates
surrendered herewith (a)&nbsp;are submitted by the registered
owner of such shares if such owner has not completed the section
entitled &#147;Special Issuance/ Payment Instructions&#148; or
(b)&nbsp;are for the account of an Eligible Institution, as
defined below. If any of the shares surrendered hereby are owned
by two or more joint owners, all such owners must sign this
Election Form and Letter of Transmittal exactly as written on
the face of the certificates. If any shares are registered in
different names on several certificates, it will be necessary to
complete, sign and submit as many separate Election Forms and
Letters of Transmittal as there are different registrations.
Election Forms and Letters of Transmittal executed by trustees,
executors, administrators, guardians,
</FONT>

<P align="center"><FONT size="2">6
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">officers of corporations, or others acting in a
fiduciary capacity who are not identified as such in the
registration must be accompanied by proper evidence of the
signer&#146;s authority to act.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">8.&nbsp;<B><I>New Certificate/ Check Issued in
Different Name:</I></B> If the section entitled &#147;Special
Issuance/ Payment Instructions&#148; is completed, then
signatures on this Election Form and Letter of Transmittal must
be guaranteed by a firm that is a bank, broker, dealer, credit
union, savings association or other entity which is a member in
good standing of the Securities Transfer Agents&#146; Medallion
Program (each an &#147;Eligible Institution&#148;). If the
surrendered certificates are registered in the name of a person
other than the signer of this Election Form and Letter of
Transmittal, or if issuance is to be made to a person other than
the signer of this Election Form and Letter of Transmittal, or
if the issuance is to be made to a person other than the
registered owner(s), then the surrendered certificates must be
endorsed or accompanied by duly executed stock power(s), in
either case signed exactly as the name(s) of the registered
owners appear on such certificates or stock power(s), with the
signatures on the certificates or stock power(s) guaranteed by
an Eligible Institution as provided herein.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">9.&nbsp;<B><I>Special Issuance/ Payment and
Delivery Instructions:</I></B> Indicate the name and address in
which the new certificate and/or check is to be sent if
different from the name and/or address of the person(s) signing
this Election Form and Letter of Transmittal. The stockholder is
required to give the social security number or employer
identification number of the record owner(s) of the shares. If
Special Issuance/ Payment Instructions have been completed, the
stockholder(s) named therein will be considered the record
owner(s) for this purpose.
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>9
<FILENAME>d13787a1exv99w4.htm
<DESCRIPTION>FORM OF NOTICE OF GUARANTEED DELIVERY
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w4</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right">
<B><FONT size="2">EXHIBIT 99.4</FONT></B>

<P align="center">
<B><FONT size="2">NOTICE OF GUARANTEED DELIVERY</FONT></B>

<DIV align="center">
<B><FONT size="2">OF</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">SHARES OF COMMON STOCK</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">OF</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LOCAL FINANCIAL CORPORATION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This form, or a facsimile hereof, must be used in
connection with your election to receive shares of International
Bancshares Corporation (&#147;IBC&#148;) common stock, cash or a
combination thereof for your shares of Local Financial
Corporation (&#147;Local&#148;) common stock if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;the certificates for your shares of
    common stock of Local are not immediately available;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;time will not permit the Election Form
    and Letter of Transmittal (&#147;Election Form&#148;) and other
    required documents to be delivered to the Exchange Agent on or
    before 5:00 p.m., New York City time,
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004 (the &#147;Election Deadline&#148;); or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;the procedures for book-entry transfer
    cannot be completed on a timely basis.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This form may be delivered by hand, mail or
facsimile transmission to the Exchange Agent, and must be
received by the Exchange Agent on or before the Election
Deadline.
</FONT>

<P align="center">
<I><FONT size="2">The Exchange Agent Is:</FONT></I>

<P align="center">
<HR size="1" width="75%" align="center" noshade>

<P align="center">
<FONT size="2">Facsimile
Number: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>

<P align="center">
<FONT size="2">For Account Information or to Confirm by
Telephone
Call: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <I><FONT size="2">&nbsp;By Mail or Overnight Delivery:</FONT></I></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <I><FONT size="2">By Hand:</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <I><FONT size="2">By Facsimile:</FONT></I></TD>
</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Delivery of this form to an address other than
as set forth above or transmission via</FONT></B>

<DIV align="center">
<B><FONT size="2">facsimile to a number other than one listed
above does not constitute a valid delivery.</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Ladies and Gentlemen:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned hereby surrenders
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
the Exchange Agent, upon the terms and subject to the conditions
set forth in the proxy statement-prospectus, dated
April&nbsp;13, 2004, of IBC and Local, and the related Election
Form and Letter of Transmittal, receipt of which are hereby
acknowledged, the number of shares of common stock of Local set
forth below pursuant to the guaranteed delivery procedures
outlined in the section of the proxy statement-prospectus
entitled &#147;The Merger Agreement&#151;Election
Procedures.&#148;
</FONT>

<P align="center">

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="left">
<FONT size="2">Number of Shares Surrendered:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="left">
<FONT size="2">Certificate No(s). (If available):
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp; Check box if shares will be surrendered by book-entry transfer.</FONT></TD>
    <TD align="right"><FONT size="2">DTC Account Number: <HR size="1" align="left" noshade></FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Name(s) of Record Holder(s):
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="left">
<FONT size="2">Address:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<P align="left">
<FONT size="2">Area Code and Telephone Number
(&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)&nbsp;<HR size="1" width="45%" align="left" noshade>
</FONT>

<P align="left">
<FONT size="2">**Social Security Number &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; or **Employee Identification Number&nbsp;
</FONT>
<HR size="1" width="100%" align="left" noshade>

<P align="left">
<FONT size="2">Dated:&nbsp;____________________________________
, 2004
</FONT>

<P align="right">
<HR size="1" width="75%" align="right" noshade>

<DIV align="right">
<HR size="1" width="75%" align="right" noshade>
</DIV>

<DIV align="right">
<FONT size="2">Signature(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
</DIV>

<P align="left">
<FONT size="2">**Provide for each Record Holder
</FONT>
</DIV>

<P align="center"><FONT size="2">2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">GUARANTEE</FONT></B>

<DIV align="left">
<FONT size="2">The undersigned, a member firm of a registered
national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office, branch, or agency in the United
States, hereby guarantees to deliver to the Exchange Agent
certificates representing the shares tendered hereby, in proper
form for transfer (or surrender shares pursuant to the procedure
for book-entry transfer into the Exchange Agent account at the
Depository Trust Company), together with (i)&nbsp;a properly
completed and duly executed Election Form (or facsimile thereof)
with any required signature guarantees and (ii)&nbsp;any other
required document, within <U>three business days after the
Election Deadline.</U>
</FONT>
</DIV>

<P align="left">
<FONT size="2">Name of Firm:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="left">
<FONT size="2">Authorized Signature:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">Name:&nbsp;</FONT></TD>
    <TD align="left">
</TD>
</TR>

</TABLE>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<DIV align="center">
<B><FONT size="2">(Please Print or Type)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Address:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<P align="right">
<HR size="1" width="100%" align="right" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="16%"></TD>
    <TD width="16%"></TD>
    <TD width="16%"></TD>
    <TD width="16%"></TD>
    <TD width="16%"></TD>
    <TD width="16%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;City</FONT></B></TD>
    <TD align="center"></TD>
    <TD align="center"></TD>
    <TD align="center"><B><FONT size="2">State</FONT></B></TD>
    <TD align="center"></TD>
    <TD align="right"><B><FONT size="2">Zip Code&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Title:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="left">
<FONT size="2">Area Code and Telephone Number:
</FONT>

<DIV align="right">
<HR size="1" width="100%" align="right" noshade>
</DIV>

<P align="left">
<FONT size="2">Dated:
_____________________________________________ , 2004
</FONT>

<P align="center">
<B><FONT size="2">DO NOT SEND STOCK CERTIFICATES WITH THIS
FORM.</FONT></B>

<DIV align="center">
<B><FONT size="2">YOUR STOCK CERTIFICATES MUST BE SENT WITH THE
ELECTION FORM</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">AND LETTER OF TRANSMITTAL.</FONT></B>
</DIV>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This form is not to be used to guarantee
signatures. If a signature on a Form of Election requires a
Medallion Signature Guarantee, such guarantee must appear in the
applicable space provided on the Form of Election.
</FONT>

<P align="center"><FONT size="2">3
</FONT>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>10
<FILENAME>d13787a1exv99w5.htm
<DESCRIPTION>FORM OF ELECTION INFORMATION FOR BROKERS & DEALERS
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w5</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right">
<B><FONT size="2">EXHIBIT 99.6</FONT></B>

<P align="center">
<B><FONT size="2">Local Financial Corporation</FONT></B>

<P align="center">
<B><FONT size="2">Election Information</FONT></B>

<P align="left">
<FONT size="2">The right to make an election will expire at
5:00&nbsp;p.m. New&nbsp;York City time,
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, unless extended. The time and date of the expiration of
the election period is herein referred to as the &#147;Election
Deadline.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">To:</FONT></TD>
    <TD>
    <FONT size="2">Brokers, Dealers, Commercial Banks,
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">Trust Companies and other Nominees:
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local Financial Corporation.(Local) has agreed to
merge with LFC Acquisition Corp., a wholly owned indirect
subsidiary of International Bancshares Corporation (IBC). The
merger is subject to approval by the stockholders of Local and
to the receipt of all required regulatory approvals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the merger agreement, which
are more fully explained in the proxy statement-prospectus
dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004 of Local and IBC, stockholders of Local have the following
options subject to certain limitations:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.<B>&nbsp;Exchange all shares for stock.</B>
    Each share of Local common stock converted into a number of
    shares of IBC common stock determined pursuant to the merger
    agreement (plus cash instead of any fractional shares).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.<B>&nbsp;Exchange all shares for cash.</B> Each
    share of Local common stock converted into an amount in cash
    (without interest) determined pursuant to the merger agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.<B>&nbsp;Exchange some shares for cash and some
    shares for stock.</B> Stockholders may choose to have some of
    their shares of Local common stock converted into shares of IBC
    common stock, with any remaining shares of Local common stock
    converted into an amount in cash (without interest) determined
    pursuant to the merger agreement.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">4.<B>&nbsp;No preference.</B> Stockholders may
indicate that they have no preference between receiving stock
and cash.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Please note that elections will be limited by
the requirement that 25% of the shares of Local common stock be
exchanged for IBC common stock and 75% be exchanged for cash.
Therefore, the allocation of cash and IBC common stock that a
Local stockholder receives will depend on the elections of other
Local stockholders.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">If no option is chosen IBC will assume the
stockholder has no preference and the type of consideration to
be given will be determined under the terms of the merger
agreement.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For your information and for forwarding to those
of your clients for whom you hold shares registered in your name
or in the name of your nominee, we are enclosing the following
documents:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.&nbsp;Election Form and Letter of Transmittal
    (facsimile copies of the Election Form and Letter of Transmittal
    may be used to surrender shares);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.&nbsp;A Notice of Guaranteed Delivery to be
    used to make an election if none of the procedures for
    delivering the necessary certificates representing Local shares
    can be completed on a timely basis;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.&nbsp;A proposed client letter which you may
    wish to use to obtain instructions from your clients.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">YOUR PROMPT ACTION IS REQUIRED. PLEASE CONTACT
YOUR CLIENTS AS SOON AS POSSIBLE. PLEASE NOTE&nbsp;THAT THE
RIGHT TO MAKE AN ELECTION WILL EXPIRE AT 5:00&nbsp;P.M., NEW
YORK CITY TIME,
ON &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, UNLESS THE DEADLINE IS EXTENDED.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For an election to be valid, a duly executed and
properly completed Election Form and Letter of Transmittal (or
facsimile thereof) including any required signature guarantees
and any other documents should be sent to the Exchange Agent,
together with either certificate(s) representing surrendered
Local shares or timely confirmation of their book-entry
transfer, in accordance with the instructions contained in the
Notice of Guaranteed Delivery.
</FONT>

<P align="center">

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stockholders whose certificate(s) are not
immediately available or who cannot deliver such certificate(s)
and all other documents to the Exchange Agent, or cannot
complete the procedures for book-entry transfer, prior to the
Election Deadline must surrender their shares according to the
procedure for guaranteed delivery set forth in the enclosed
Notice of Guaranteed Delivery.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No fees or commissions will be payable by IBC,
Local or any officer, director, stockholder, agent, or other
representative of either of them to any broker, dealer or other
person for soliciting surrender of shares pursuant to the
election (other than fees paid to the Exchange Agent for its
services in connection with the election and exchange process).
IBC will, however, upon request, reimburse you for customary
mailing and handling expenses incurred by you in forwarding any
of the enclosed materials to your clients whose shares are held
by you as a nominee or in a fiduciary capacity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any inquiries you may have with respect to the
election should be addressed
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
the Exchange Agent for the election,
at &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
or phone toll free at
(800)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
Additional copies of the enclosed materials may be obtained
from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;at
the same address and telephone number.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Very truly yours,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Dennis E. Nixon,
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Chairman of the Board, President and
    Chief</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Executive Officer</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">International Bancshares Corporation</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Nothing contained herein or in the enclosed
documents shall constitute you or any person as an agent of
International Bancshares Corporation, Local Financial
Corporation, the Exchange Agent or any affiliate of any of the
foregoing, or authorize you or any other person to use any
document or make any statement on behalf of any of them in
connection with the election other than the documents enclosed
herewith and the statements contained therein.</FONT></B>

<P align="center"><FONT size="2">2
</FONT>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.6
<SEQUENCE>11
<FILENAME>d13787a1exv99w6.htm
<DESCRIPTION>FORM OF ELECTION INFORMATION FOR CLIENTS
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w6</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right">
<B><FONT size="2">EXHIBIT 99.6</FONT></B>

<DIV align="center">
<B><FONT size="2">Local Financial Corporation</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Election Information</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The right to make an election will expire at
5:00&nbsp;p.m. New&nbsp;York City time,
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, unless extended. The time and date of the expiration of
the election period is herein referred to as the &#147;Election
Deadline.&#148; Unless we have otherwise advised you, <B>it is
imperative that we receive your instruction no later than five
business days prior to the Election Deadline, i.e.,
by &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, </B>in order to properly fulfill your instructions. Any
instructions received after that time will be processed on a
&#147;best efforts&#148; basis only.
</FONT>

<P align="left">
<FONT size="2">To Our Clients:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Local Financial Corporation (&#147;Local&#148;)
has agreed to merge with LFC Acquisition Corp., a wholly owned
indirect subsidiary of International Bancshares Corporation
(&#147;IBC&#148;). The merger is subject to approval by the
stockholders of Local and to the receipt of all required
regulatory approvals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the merger agreement, which
are more fully explained in proxy statement-prospectus
dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004 of Local and IBC, stockholders of Local have the following
options subject to certain limitations:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">1.<B>&nbsp;Exchange all shares for stock.</B>
    Each share of Local common stock converted into a number of
    shares of IBC common stock determined pursuant to the merger
    agreement (plus cash instead of any fractional shares).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">2.<B>&nbsp;Exchange all shares for cash.</B> Each
    share of Local common stock converted into an amount in cash
    (without interest) determined pursuant to the merger agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">3.<B>&nbsp;Exchange some shares for cash and some
    shares for stock.</B> Stockholders may choose to have some of
    their shares of Local common stock converted into shares of IBC
    common stock, with any remaining shares of Local common stock
    converted into an amount in cash (without interest) determined
    pursuant to the merger agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">4.<B>&nbsp;No preference.</B> Stockholders may
    indicate that they have no preference between receiving stock
    and cash.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Please note that elections will be limited by the
requirement that 25% of the shares of Local common stock be
exchanged for IBC common stock and 75% be exchanged for cash.
Therefore, the allocation of cash and IBC common stock that a
Local stockholder receives will depend on the elections of other
Local stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">Because we are the holder of record for
your Local shares, only we can make an election for your shares
in accordance with your instructions. Please instruct us on how
to exchange your shares (for cash, stock or a combination of
cash and stock) by completing this form and returning it to us.
If you do not make an election, we will not make an election for
you and the form of merger consideration you will receive will
be determined pursuant to the merger agreement without regard to
your preferences.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you have any questions, please contact your
broker or financial advisor directly, or alternatively
contact &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;toll
free at
(800)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="center">

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<B><FONT size="2">Please note the following:</FONT></B>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The election period expires at 5:00&nbsp;p.m.
    New&nbsp;York City time
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004, unless extended. Unless we have otherwise advised you,
    <B>it is imperative that we receive your instructions as soon as
    possible and in any event at least five business days prior to
    the Election Deadline (i.e.
    by &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004,) </B>to order to properly fulfill your instructions.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">If you miss our processing deadline and we are
    unable to comply with the election deadline
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004, you may be treated as not responding, in which case the
    terms of the merger agreement will determine whether cash, stock
    or a combination of cash and stock will be distributed to you,
    without regard to your preferences.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">There is no guarantee that you will receive your
    election choice. If the combined elections received exceed the
    cash or stock amounts required by the merger agreement it may be
    necessary to allocate the cash or stock consideration. In this
    case, you may not receive the cash or shares that you elected.
    Refer to the proxy statement-prospectus
    dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004 of Local and IBC, for more information.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Because individual circumstances may differ,
    stockholders should consult their tax advisors to determine the
    tax effect to them of the merger, including the application and
    effect of foreign, state, local or other tax laws.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Please provide your signed instructions below:
</FONT>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">ELECTION OPTIONS</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">I hereby elect to receive the following as
    consideration for my shares of Local common stock:
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">(check only one box)
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">STOCK ELECTION&nbsp;&#151; Each share of Local
    common stock converted into a number of shares of IBC common
    stock determined pursuant to the merger agreement (plus cash
    instead of any fractional shares).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">CASH ELECTION&nbsp;&#151; Each share of Local
    common stock converted into an amount in cash (without interest)
    determined pursuant to the merger agreement.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">MIXED ELECTION OF STOCK AND CASH
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<U><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></U><FONT size="2">&nbsp;shares
of Local common stock converted into shares of IBC common stock
and <BR>

<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;shares
of Local common stock converted into cash.
</FONT>

<DIV align="left">
<I><FONT size="2">(insert numbers)</FONT></I>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"><FONT face="wingdings">&#111;</FONT>&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">NON-ELECTION
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">If you do not elect one of the first three
options listed above, the merging companies will assume you have
no preference and the terms of the merger agreement will
determine the type of consideration you will receive without
regard to your preferences.</FONT></B>

<P align="left">
<FONT size="2">Account Number:&nbsp;</FONT>

<DIV align="right">
<HR size="1" width="77%" align="right" noshade>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="25%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Signature of Accountholder</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <B><FONT size="2">Signature of Accountholder</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <B><FONT size="2">Area Code and Daytime Phone (if joint
    account)</FONT></B></TD>
</TR>

</TABLE>
</CENTER>
</DIV>

<P align="left">
<FONT size="2">THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE
OPTION AND RISK OF THE ELECTING ACCOUNTHOLDER. IF DELIVERED BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE DELIVERY.
</FONT>

<P align="center"><FONT size="2">2
</FONT>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.7
<SEQUENCE>12
<FILENAME>d13787a1exv99w7.htm
<DESCRIPTION>CONSENT OF SANDLER O'NEILL & PARTNERS, L.P.
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w7</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="right" style="font-size: 10pt"><B>EXHIBIT 99.7</B>

<P align="center" style="font-size: 10pt"><B>Consent of
Sandler O&#146;Neill&nbsp;&#38; Partners, L.P.</B>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">We hereby consent to the inclusion of our opinion letter, dated April&nbsp;13, 2004 to the Board of
Directors of Local Financial Corporation (the &#147;Company&#148;), as an Appendix to the
proxy statement-prospectus relating to the proposed merger of the Company with
LFC Acquisition Corp, a wholly owned subsidiary of International Bancshares Corporation (&#147;IBC&#148;), contained in Pre-effective Amendment No. 1 to IBC&#146;s Registration Statement on
Form S-4 as filed with the Securities and Exchange Commission on the date
hereof, and to the references to our firm and such opinion in such proxy
statement-prospectus. In giving such consent, we do not admit that we come within the category of persons whose consent is required under Section
7 of the Securities Act of 1933, as amended (the &#147;Act&#148;), or the rules and regulations of the Securities
and Exchange Commission thereunder (the &#147;Regulations&#148;), nor do we admit that we are
experts with respect to any part of such Registration Statement within the meaning of the term &#147;experts&#148; as
used in the Act or the Regulations.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left" style="font-size: 10pt">/s/&nbsp;SANDLER O&#146;NEILL&nbsp;&#38; PARTNERS, L.P.<BR>
April&nbsp;13, 2004
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt">
</DIV>


</BODY>
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