CAPITAL, BANK OF SOUTH COUNTY ENTER INTO A MERGER AGREEMENT

Capital Bancorporation Inc., headquartered at Cape Girardeau, and Bank of South County in St. Louis have announced the two organizations will merge into a subsidiary of Capital Bancorporation.

Bank of South County has total assets of about $65 million and operates out of its main office at 9100 Gravois in St. Louis. As of Dec. 31, the bank had deposits of $58,736,000; total loans, net of unearned interest, $45,676,000; and equity capital of $5,030,000.

Under the terms of the agreement, stockholders of the Bank of South County will receive 4.1454 shares of Capital Bancorporation common stock for each share of Bank of South County common stock.

Total consideration for the 110,000 shares of Bank of South County outstanding will be approximately 456,000 shares of Capital Bancorporation common stock.

The agreement contains customary conditions of closing for this type of transaction, including approval of the shareholders of the Bank of South County and receipt of regulatory approvals. The acquisition is expected to be completed during the fourth quarter of 1994.

The merger will increase the presence of Capital Bancorporation in the St. Louis market when combined with Capital Bancorporation's affiliate, Capital Bank & Trust of Clayton, with resulting total assets of about $145 million. With this acquisition, Capital Bancorporation will have consolidated total assets of approximately $900 million.

Bank of South County President and Chief Executive Officer David T. Stoecker said he looks forward to the bank's association with Capital.

"A major factor in the decision of Bank of South County was the commitment of Capital Bancorporation to community banking," Stoecker said. "Capital Bancorporation presently owns six community banks throughout the state of Missouri.

"Decisions affecting customers are made on the local level while additional products, services, and resources are made available through the parent company.

"The uniqueness of a community bank combined with access to the resources of a larger organization affords our customers the best of all worlds," Stoecker said. "The added resources of this merger will enable us to achieve economies of scale we are unable to obtain as a stand-alone entity. In addition the combined organizations will be able to offer a broader array of services to corporate and individual customers throughout the St. Louis area."

David G. Collier, senior vice president and chief financial officer of Capital Bancorporation, stated, "This transaction contains all the factors we consider important in our search for affiliates: adequate equity capital, a clean balance sheet, reasonable earnings, an excellent market fit and strong management.

"It will be an outstanding addition to our St. Louis area banking operation. An intra-market merger such as this provides opportunities for significant economies of scale, which enhance profit potential."

Capital Bancorporation is a multi-bank holding company. The Company operates 27 banking locations through six subsidiary banks in southeastern, southwestern, central, and eastern Missouri. The Company's common stock and preferred stock are traded on the NASDAQ National Market System.