MERCANTILE BECOMES MEGA-BANK

ST. LOUIS -- Mercantile Bancorporation Inc. and Roosevelt Financial Group, Inc. announced Monday that the organizations have signed a definitive merger agreement which will create the largest locally managed and independently-owned financial services organization headquartered in the lower Midwest.

Mercantile Bancorporation Inc., an $18.2 billion multi-bank holding company headquartered in St. Louis, operates banks in Missouri, Iowa, Kansas, Illinois and Arkansas.

Roosevelt, a $9 billion thrift holding company, is headquartered in St. Louis with 81 locations in Missouri, Kansas and Illinois.

Mercantile currently has mergers pending with the $3.1 billion-asset Mark Twain Bancshares, Inc., with offices in St. Louis, Springfield and Kansas City, and with Regional Bancshares Inc., in Madison County, Ill. Mercantile's non-banking subsidiaries include companies providing brokerage services, asset-based lending, investment advisory services, leasing services and credit life insurance.

"Our shareholders will benefit from the powerful market position and complementary products of the Mercantile which emerges from these combinations. In addition, customers will benefit from a highly competitive, convenient, and exciting alternative for banking services," said Thomas H. Jacobsen, Mercantile's chairman, president and CEO.

"Our combination with Roosevelt will materially enhance our mix of strong retail, middle market lending and other specialty businesses. As the leading mortgage originator and servicer in Missouri, Mercantile will enter the top tier of mortgage providers nationwide," Jacobsen added.

From its 81 locations, Roosevelt serves 28 local markets. Currently, there are 42 offices in the St. Louis metro area, 10 in Kansas City, one in Pittsburg, Kansas and the remaining in outstate Missouri, including Cape Girardeau.

"This merger represents the culminating step in Roosevelt's growth and transformation since the early 1980s," said Stanley J. Bradshaw, chairman, president and CEO, Roosevelt Financial Group, Inc. "We have consistently focused on providing quality service to our customers, and the combination with Mercantile will further enhance our product capabilities and growth prospects for our employees and shareholders, not only in St. Louis, but throughout the Midwest."

Based upon Mercantile's closing stock price on December 20, 1996, of $50.75, the transaction is valued at approximately $1.072 billion. Mercantile will deliver up to 13 million shares of common stock at an exchange ratio of .4211 shares of Mercantile common stock, or $22 in cash for each remaining share of Roosevelt common stock. The transaction is structured as a tax-free exchange for shareholders receiving stock, and will be accounted for as a purchase transaction. In connection with the purchase, Mercantile plans to repurchase up to 7 million shares in open market transactions.

Roosevelt stock jumped 13 percent Monday following the news, with its shares up $2.27 to $20.50 a share in afternoon trading on the Nasdaq Stock Market. Mercantile shares were down $1.12 1/2 at $59.62 1/2 on the New York Stock Exchange.

The acquisition positions Mercantile as the largest financial institution in Missouri with more than 23 percent of the state's deposits. Mercantile will become the largest bank in the St. Louis and Springfield markets, the second largest institution in Kansas City and will significantly strengthen its presence in a number of other major Missouri markets.