AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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PRIVATEBANCORP INC | BHB ACQUISITION CORP | BLOOMFIELD HILLS BANCORP. INC

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Michigan Date: 4/15/2005
Industry: Regional Banks Law Firm: Vedder, Price, Kaufman & Kammholz, P.C; Dykema Gossett PLLC Sector: Financial

AGREEMENT AND PLAN OF MERGER
, Parties: privatebancorp inc , bhb acquisition corp , bloomfield hills bancorp. inc

EXHIBIT 2.1

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AGREEMENT AND PLAN OF MERGER

by and among

PRIVATEBANCORP, INC.,

BHB ACQUISITION CORP.

and

BLOOMFIELD HILLS BANCORP. INC.

Dated as of April 14, 2005

================================================================================

<PAGE>

TABLE OF CONTENTS

<TABLE>

PAGE

<C> <C>

ARTICLE I THE MERGER.................................................................................1

Section 1.1 The Merger........................................................................1

Section 1.2 Effective Time....................................................................2

Section 1.3 Effect of the Merger..............................................................2

Section 1.4 Effect on Capital Stock...........................................................2

Section 1.5 The Closing.......................................................................4

ARTICLE II EXCHANGE OF CERTIFICATES...................................................................4

Section 2.1 Buyer to Make Merger Consideration Available......................................4

Section 2.2 Exchange of Certificates..........................................................4

ARTICLE III REPRESENTATIONS AND WARRANTIES OF BHB......................................................5

Section 3.1 Corporate Organization............................................................5

Section 3.2 Capitalization....................................................................7

Section 3.3 Authority.........................................................................7

Section 3.4 Financial Statements..............................................................7

Section 3.5 Absence of Certain Changes or Events..............................................8

Section 3.6 Undisclosed Liabilities...........................................................8

Section 3.7 Consents and Approvals............................................................9

Section 3.8 Reports...........................................................................9

Section 3.9 Broker's Fees; Other Transaction Fees............................................10

Section 3.10 Legal Proceedings................................................................10

Section 3.11 Taxes and Tax Returns............................................................10

Section 3.12 Employee Benefit Plans...........................................................11

Section 3.13 Compliance with Applicable Law...................................................14

Section 3.14 Material Contracts...............................................................14

Section 3.15 Investment Securities............................................................16

Section 3.16 Insurance........................................................................16

Section 3.17 Allowance for Loan Losses........................................................17

Section 3.18 Title to Properties; Leases......................................................17

Section 3.19 Environmental Matters............................................................18

Section 3.20 Approval Delays..................................................................20

Section 3.21 Vote Required....................................................................20

Section 3.22 Participation Loans..............................................................20

Section 3.23 Fairness Opinion.................................................................20

Section 3.24 Dissenter's Rights...............................................................20

Section 3.25 Loan Portfolio...................................................................20

Section 3.26 Interest Rate Risk Management Arrangements.......................................21

Section 3.28 Insider Interests................................................................21

Section 3.29 Antitakeover Provisions Inapplicable.............................................21

Section 3.30 Internal Controls................................................................22

Section 3.31 Accuracy of All Representations..................................................22

<PAGE>

TABLE OF CONTENTS

(continued)

PAGE

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION CORP..............................22

Section 4.1 Corporate Organization...........................................................22

Section 4.2 Authority........................................................................23

Section 4.3 Consents and Approvals...........................................................23

Section 4.4 Financial Resources..............................................................23

Section 4.5 Approval Delays..................................................................23

Section 4.6 Fairness Opinion.................................................................23

ARTICLE V ADDITIONAL AGREEMENTS.....................................................................23

Section 5.1 Conduct of Business..............................................................23

Section 5.2 Negative Covenants...............................................................24

Section 5.3 Access to Information and Due Diligence..........................................26

Section 5.4 Regulatory Filings...............................................................26

Section 5.5 Reasonable Efforts...............................................................27

Section 5.6 No Conduct Inconsistent with this Agreement......................................27

Section 5.7 Board of Directors' Notices, Minutes, Etc........................................27

Section 5.8 Untrue Representations and Warranties............................................27

Section 5.9 Indemnification; Directors' and Officers' Insurance..............................27

Section 5.10 Resolution of BHB Plans..........................................................28

Section 5.11 Certain Consents.................................................................29

Section 5.12 Accounting and Other Adjustments.................................................29

Section 5.13 List of BHB Shareholders.........................................................30

Section 5.14 The Oxford Investment Group Inc. Office Usage....................................30

Section 5.15 Retention Bonuses................................................................30

Section 5.16 Financial Statements and Reports.................................................30

Section 5.17 Delivery of Supplements to Disclosure Schedules..................................30

ARTICLE VI CONDITIONS PRECEDENT......................................................................31

Section 6.1 Conditions Precedent to Obligations of Buyer and Acquisition Corp................31

Section 6.2 Conditions Precedent to Obligations of BHB.......................................32

ARTICLE VII TERMINATION, EXPENSES AND AMENDMENT.......................................................33

Section 7.1 Termination......................................................................33

Section 7.2 Effect of Termination............................................................34

Section 7.3 Amendment........................................................................34

Section 7.4 Extension; Waiver................................................................34

ARTICLE VIII GENERAL PROVISION.........................................................................34

Section 8.1 Non-Survival of Representations, Warranties and Agreements.......................34

Section 8.2 Notices..........................................................................35

<PAGE>

TABLE OF CONTENTS

(continued)

PAGE

Section 8.3 Interpretation...................................................................35

Section 8.4 Counterparts.....................................................................35

Section 8.5 Entire Agreement.................................................................36

Section 8.6 Governing Law....................................................................36

Section 8.7 Severability.....................................................................36

Section 8.8 Publicity........................................................................36

Section 8.9 Assignment; Third Party Beneficiaries............................................36

Section 8.10 Transaction Expenses.............................................................36

</TABLE>

iii

<PAGE>

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and

entered into as of the 14th day of April, 2005, by and among PRIVATEBANCORP,

INC., a Delaware corporation ("Buyer"), BHB ACQUISITION CORP., a Michigan

corporation and a wholly-owned subsidiary of Buyer ("Acquisition Corp."), and

BLOOMFIELD HILLS BANCORP. INC., a Michigan corporation ("BHB").

WHEREAS, the respective Boards of Directors of the parties hereto deem

it advisable and in the best interests of the parties hereto and their

respective shareholders to consummate the Merger (as defined in Section 1.1),

upon the terms and subject to the conditions of this Agreement and have duly and

validly approved this Agreement and the transactions contemplated hereby.

WHEREAS, the holders representing a majority of the outstanding shares

of Class A Common Stock of BHB and a majority of the outstanding shares of Class

B Common Stock of BHB, each voting as a separate class (collectively, the

"Requisite Majority of Shareholders"), have approved this Agreement and the

consummation of the transactions contemplated hereby.

WHEREAS, the parties hereto desire to make certain representations,

warranties, covenants and agreements in connection with this Agreement and the

Merger.

NOW THEREFORE, in consideration of the premises and the mutual

representations, warranties, covenants, agreements and conditions herein

contained, the parties hereto covenant and agree as follows:

ARTICLE I

THE MERGER

Section 1.1 The Merger. At the Effective Time (as hereinafter defined)

and subject to and upon the terms and conditions of this Agreement and the

Michigan Business Corporation Act (the "Michigan Act"), Acquisition Corp. shall

merge (the "Merger") with and into BHB, the separate corporate existence of

Acquisition Corp. shall cease, and BHB shall continue as the surviving

corporation (as such, the "Surviving Corporation"), which shall be a

wholly-owned subsidiary of Buyer. Pursuant to the Merger:

(a) the Articles of Incorporation of BHB, as in effect immediately

before the Effective Time, shall be amended and restated in their entirety, from

and after the Effective Time, to read as the Articles of Incorporation of

Acquisition Corp., as in effect immediately before the Effective Time, until

thereafter amended as provided therein and under the Michigan Act;

(b) the Bylaws of Acquisition Corp., as in effect immediately before

the Effective Time, shall be, from and after the Effective Time, the Bylaws of

the Surviving Corporation, until thereafter amended as provided therein and

under the Michigan Act;

<PAGE>

Time shall be, from and after the Effective Time, the directors of the Surviving

Corporation to serve until their death, resignation or removal or until their

successors are duly elected and qualified; and

(d) the officers of Acquisition Corp. immediately before the Effective

Time shall be, from and after the Effective Time, the officers of the Surviving

Corporation to serve until their death, resignation or removal or until their

successors are duly elected and qualified.

Section 1.2 Effective Time. As promptly as practicable on the Closing

Date (as hereinafter defined), the parties shall cause the Merger to be

consummated by filing a Certificate of Merger (the "Certificate of Merger") with

the Michigan Department of Labor & Economic Growth, Bureau of Commercial

Services (the "Michigan Department") with respect to the Merger, in such form as

required by, and executed in accordance with, the relevant provisions of the

Michigan Act, and substantially in the form attached hereto as Exhibit A. The

Merger shall become effective at such time as the Certificate of Merger is duly

filed with the Michigan Department (such time as the Merger becomes effective

being hereinafter referred to as the "Effective Time").

Section 1.3 Effect of the Merger. At the Effective Time, the effect of

the Merger shall be as provided in the applicable provisions of the Michigan

Act. At the Effective Time, the Surviving Corporation shall be a direct

wholly-owned subsidiary of Buyer.

Section 1.4 Effect on Capital Stock.

(a) At the Effective Time, subject to Section 2.2 hereof, by virtue of

the Merger and without any action on the part of BHB, or the holder of any

securities of BHB, each share of BHB Class A Common Stock (the "Class A Common

Stock"), and each share of BHB Class B Common Stock (the "Class B Common

Stock"), issued and outstanding immediately before the Effective Time (other

than shares cancelled pursuant to Section 1.4(c)), shall be converted into the

right to receive an amount equal to the Per Share Merger Consideration (as

defined below). All of the shares of Class A Common Stock and all of the shares

of Class B Common Stock (the Class A Common Stock and the Class B Common Stock

are collectively referred to hereinafter as the "BHB Common Stock") converted

into the right to receive the Per Share Merger Consideration pursuant to this

Article I shall no longer be outstanding, shall automatically be cancelled and

shall cease to exist as of the Effective Time, and each certificate (each an

"BHB Common Stock Certificate") previously representing any such shares of BHB

Common Stock shall thereafter represent only the right to receive the Per Share

Merger Consideration.

(b) As used herein, the following terms have the following meanings:

(i) "Per Share Merger Consideration" means a cash amount equal

to the quotient of (A) divided by (B), where (A) is the sum of (1) the

Merger Consideration (as defined below), plus (2) Per Diem Amount (as

defined below), if any, and (B) is the number of shares of BHB Common

Stock issued and outstanding at the Effective Time.

(ii) "Merger Consideration" means $64,000,000.

<PAGE>

(iii) "Per Diem Amount" means the product of (X) and (Y),

where (X) is the number of days elapsed in the period beginning and

including July 1, 2005 and ending on and including the day immediately

preceding the Effective Time, and (Y) is the quotient of the Closing

Adjusted Net Income (as defined below) divided by the number of days

elapsed in the period beginning January 1, 2005 and ending on the

Determination Date.

(iv) "Closing Adjusted Net Income" means the amount that is

equal to the net income of BHB for the period beginning January 1, 2005

and ending on the Determination Date, as reflected on an unaudited

income statement (the "Closing Income Statement") prepared by BHB in

conformity with GAAP (as defined below) applied on a basis consistent

with the preparation of the BHB Financial Statements (as defined

below), subject to normal audit and year-end adjustments and need not

include notes, provided further that such Closing Income Statement

shall reflect adjustments so as to exclude the effects of (i) any

accounting and other adjustments required under Section 5.12 hereof and

(ii) expenses attributable to this Agreement and the transactions

contemplated hereby. BHB shall deliver to Buyer not less than five (5)

business days prior to the Closing Date (i) the Closing Income

Statement and (ii) an unaudited balance sheet of BHB and the BHB

Subsidiaries (the "Closing Balance Sheet") prepared by BHB as of the

Determination Date in conformity with GAAP applied on a basis

consistent with the preparation of the BHB Financial Statements,

subject to normal audit and year-end adjustments and need not include

notes, provided further that such Closing Balance Sheet shall reflect

adjustments so as to exclude the effects of (i) any accounting and

other adjustments required under Section 5.12 hereof and (ii) expenses

attributable to this Agreement and the transactions contemplated

hereby.

(v) "Determination Date" means the last day of the month which

immediately precedes the month during with the Closing Date occurs.

BHB, if any, (ii) owned directly or indirectly (other than in a fiduciary

capacity), by The Private Bank, a Michigan state bank and a wholly-owned

subsidiary of BHB (the "Bank"), or any subsidiary of BHB or the Bank, or (iii)

owned by Buyer, Acquisition Corp. or any other subsidiary of Buyer (other than

in a fiduciary capacity), if any, immediately before the Effective Time, shall

be cancelled and retired and no Per Share Merger Consideration shall be paid

with respect thereto.

(d) At the Effective Time, the shares of common stock, without par

value, of Acquisition Corp. issued and outstanding immediately before the

Effective Time, and all rights in respect thereof, shall, without any action on

the part of Buyer, forthwith cease to exist and be converted into an aggregate

of 100 validly issued, fully paid and nonassessable shares of common stock of

the Surviving Corporation, without par value (the "Surviving Corporation Common

Stock"). Immediately after the Effective Time and upon surrender by Buyer of the

certificate representing the shares of the common stock of Acquisition Corp.,

the Surviving Corporation shall deliver to Buyer an appropriate certificate or

certificates representing the shares of Surviving Corporation Common Stock

created by conversion of the common stock of Acquisition Corp. owned by Buyer.

<PAGE>

Section 1.5 The Closing. Consummation of the transactions contemplated

by this Agreement shall take place at a closing (the "Closing") to be held upon

the satisfaction or waiver of all of the conditions to the Merger set forth

herein, which Closing shall take place at 10:00 a.m., local time, at the office

of Dykema Gossett PLLC in Bloomfield Hills, Michigan on a date mutually

agreeable to the parties hereto, but in no event later than the second business

day after all of the conditions to the Merger set forth herein have been

satisfied or waived, unless the parties mutually agree to another date

(hereinafter referred to as the "Closing Date").

ARTICLE II

EXCHANGE OF CERTIFICATES

Section 2.1 Buyer to Make Merger Consideration Available. At or before

the Effective Time, Buyer and BHB shall designate LaSalle Bank, National

Association or such other third party as Buyer shall reasonably determine in its

sole discretion, as paying agent (the "Paying Agent") and shall irrevocably

deposit into trust, or shall cause to be deposited, with the Paying Agent, for

the benefit of the holders of BHB Common Stock Certificates, for payment in

accordance with Article I hereof and this Article II, an amount of cash

sufficient for payment of the aggregate Per Share Merger Consideration payable

to the holders of BHB Common Stock under Section 1.4 of this Agreement (such

cash being hereinafter referred to as the "Conversion Fund").

Section 2.2 Exchange of Certificates.

(a) On the Effective Date, Buyer shall cause the Paying Agent to make

available for personal pick up and mail to each holder of record of one or more

BHB Common Stock Certificates a letter of transmittal and instructions (the

"Transmittal") for use in effecting the surrender of the BHB Common Stock

Certificates in exchange for the Per Share Merger Consideration into which the

shares of BHB Common Stock represented by such BHB Common Stock Certificate or

Certificates shall have been converted pursuant to this Agreement. The

Transmittal form is attached hereto as Exhibit B. Upon receipt of an BHB Common

Stock Certificate for payment and cancellation to the Paying Agent, together

with such properly completed Transmittal, duly executed, the holder of such BHB

Common Stock Certificate shall be entitled to receive in exchange therefore a

bank check of the Paying Agent representing the Per Share Merger Consideration

for such holder's shares pursuant to Section 1.4 of this Agreement, and the BHB

Common Stock Certificate so surrendered shall forthwith be cancelled. Such check

shall be mailed by express mail to the address designated on the Transmittal

within three (3) days of receipt of the Transmittal. All risk of loss for

non-delivery of such check shall remain with the Buyer and Paying Agent. No

interest will be paid or accrued on any Per Share Merger Consideration payable

to a holder of BHB Common Stock Certificates.

(b) If any check is to be issued in a name other than that in which the

BHB Common Stock Certificate surrendered in exchange therefore is registered, it

shall be a condition of the issuance thereof that the BHB Common Stock

Certificate so surrendered shall be properly endorsed or accompanied by an

appropriate instrument of transfer and otherwise in proper form for transfer.

<PAGE>

transfer books of BHB of the shares of BHB Common Stock that were issued and

outstanding immediately before the Effective Time. If, after the Effective Time,

BHB Common Stock Certificates are presented for transfer to the Paying Agent,

they shall be cancelled and exchanged for the Per Share Merger Consideration as

provided in Section 1.4 hereof and this Article II.

(d) Any portion of the Conversion Fund that remains unclaimed by

shareholders of BHB for one (1) year after the Effective Time shall be paid to

the Surviving Corporation. Any shareholders of BHB who have not theretofore

complied with this Article II shall thereafter look only to the Surviving

Corporation for the cash consideration payable in respect of each share of BHB

Common Stock such shareholder holds as determined pursuant to this Agreement, in

each case, without any interest thereon. Notwithstanding the foregoing, none of

Buyer, BHB, the Paying Agent or any other person shall be liable to any former

holder of shares of BHB Common Stock for any amount delivered in good faith to a

public official pursuant to applicable abandoned property, escheat or similar

laws.

(e) In the event any BHB Common Stock Certificate shall have been lost,

stolen or destroyed, upon the making of an affidavit of that fact by the person

claiming such BHB Common Stock Certificate to be lost, stolen or destroyed and

providing an indemnification agreement for the benefit of the Buyer and Paying

Agent in a form reasonably determined by the Paying Agent reasonably necessary

as indemnity against any claim that may be made against it with respect to such

BHB Common Stock Certificate, the Paying Agent shall issue in exchange for such

lost, stolen or destroyed BHB Common Stock Certificate the Per Share Merger

Consideration payable in respect thereof pursuant to this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BHB

Except as set forth in the "BHB Disclosure Schedules," which shall

consist of all of the agreements, lists, instruments and other documentation and

information described or referred to in this Agreement as being provided on a

specified schedule, BHB hereby represents and warrants to Buyer as follows:

Section 3.1 Corporate Organization.

(a) BHB is a corporation duly organized and validly existing under the

laws of the State of Michigan. BHB has the corporate power and authority to own

or lease all of its properties and assets and to carry on its business as it is

now being conducted, and is duly licensed or qualified to do business in each

jurisdiction in which the nature of the business conducted by it or the

character or location of the properties and assets owned or leased by it makes

such licensing or qualification necessary, except where the failure to be so

licensed or qualified would not have a Material Adverse Effect (as defined

below) on BHB. BHB is duly registered as a bank holding company under the Bank

Holding Company Act of 1956, as amended ("BHCA"). True and complete copies of

the Articles of Incorporation and Bylaws of BHB, as in effect as of the date of

this Agreement, are attached hereto as Schedule 3.1(a) of the BHB Disclosure

Schedules. As used in this Agreement, the term "Material Adverse Effect"

<PAGE>

means with respect to BHB, any effect that (1) is or is reasonably likely to be

material and adverse to the financial condition, business or results of

operations of BHB and its subsidiaries taken as a whole other than any change,

effect, event or occurrence arising out of the performance by the parties of

their obligations under this Agreement or (2) would prevent or materially impair

the ability of such person to perform its obligations under this Agreement or to

consummate the transactions contemplated hereby in accordance with the terms of

this Agreement; provided, however, that Material Adverse Effect shall not be

deemed to include the impact of (i) changes in banking and other laws of general

applicability or interpretations thereof by courts or governmental authorities,

(ii) changes in GAAP or regulatory accounting requirements applicable to banks

and their holding companies generally, (iii) this Agreement and the transactions

contemplated hereby and the announcement hereof, (iv) actions or omissions of a

party to this Agreement taken with the prior written consent of the other

parties to this Agreement, in contemplation of the transactions contemplated

hereby, (v) changes attributable or resulting from changes in general economic

conditions affecting similarly situated banks, saving institutions or their

holding companies generally and (vi) any modifications or changes to valuation

policies and practices of BHB or any of its subsidiaries in connection with the

Merger or restructuring charges, in each case taken with the prior approval of

Buyer, in connection with the Merger, in each case in accordance with GAAP.

(b) As of the date of this Agreement, the Bank is BHB's sole

wholly-owned, direct subsidiary. The Bank also conducts business under the names

"The Bank of Bloomfield Hills, The Private Bank," "The Bank of Rochester, The

Private Bank," and "The Bank of Gross Pointe, The Private Bank." The Bank has,

as its only direct or indirect subsidiaries, The Private Mortgage Company (the

"Mortgage Company") and BBH Financial Advisors, Inc. ("BBH Financial") (the

Bank, the Mortgage Company and BBH Financial are sometimes collectively referred

to herein as the "BHB Subsidiaries"). Except as set forth in Schedule 3.1(b) of

the BHB Disclosure Schedules, BHB does not own or hold any options, warrants,

calls or commitments of any character relating to, any voting or non-voting

stock or equity securities of any bank, corporation, partnership, limited

liability company, or other organization, whether incorporated or

unincorporated, other than the BHB Subsidiaries.

corporation under the laws of the State of Michigan. The Bank is an "insured

depository institution" as defined in the Federal Deposit Insurance Act (the

"FDI Act") and applicable regulations thereunder, the deposits of which are

insured by the Federal Deposit Insurance Corporation ("FDIC") through the Bank

Insurance Fund to the full extent permitted under applicable laws. Each of the

Mortgage Company and BBH Financial is a corporation duly organized and validly

existing under the laws of the State of Michigan. Each of the BHB Subsidiaries

(i) is duly qualified to do business and in good standing in all jurisdictions

(whether federal, state, local or foreign) where its ownership or leasing of

property or the conduct of its business requires it to be so qualified except

where the failure to be so qualified would not have a Material Adverse Effect on

BHB, and (ii) has all requisite corporate power and authority to own or lease

its properties and assets and to carry on its business as now conducted. Except

as set forth in Schedule 3.1(c) of the BHB Disclosure Schedules, the BHB

Subsidiaries do not own, or hold any options, warrants, calls or commitments of

any character relating to, any voting or non-voting stock or equity securities

of any bank, corporation, partnership, limited liability company, or other

organization, whether incorporated or unincorporated.

<PAGE>

Section 3.2 Capitalization.

(a) The authorized capital stock of BHB consists of (i) 10,000 shares

of Class A Common Stock, of which 310 shares are issued and outstanding; (ii)

10,000 shares of Class B Common Stock, of which 600 shares are issued and

outstanding; and (iii) 30,000 shares of preferred stock ("BHB Preferred Stock"),

of which no shares are issued and outstanding. No shares of BHB Common Stock and

no shares of BHB Preferred Stock are held in treasury. All of the issued and

outstanding shares of BHB Common Stock have been duly authorized and validly

issued and are fully paid, nonassessable and free of preemptive rights. Except

as set forth in Schedule 3.2(a) of the BHB Disclosure Schedules, BHB does not

have and is not subject to any outstanding subscriptions, options, warrants,

calls, commitments, agreements, preemptive or other rights of any character

calling for the purchase or issuance of any shares of BHB Common Stock or BHB

Preferred Stock or any other equity securities of BHB or any securities

representing the right to purchase or otherwise receive any shares of the

capital stock of BHB, nor are there any securities, debts, obligations or rights

outstanding which are convertible into or exchangeable for shares of the capital

stock of BHB. No shares of BHB Common Stock and no shares of BHB Preferred Stock

have been reserved for issuance. The holders of Class A Common Stock and the

holders of Class B Common Stock, each voting as a separate class, are entitled

to vote on this Agreement.

(b) BHB owns, directly or indirectly, all of the issued and outstanding

shares of capital stock of the BHB Subsidiaries, free and clear of any liens,

pledges, charges, encumbrances and security interests whatsoever ("Liens"). All

of the shares of capital stock of the BHB Subsidiaries are duly authorized and

validly issued and are fully paid, nonassessable and free of preemptive rights.

The BHB Subsidiaries are not bound by any outstanding subscriptions, options,

warrants, calls, commitments or agreements of any character calling for the

purchase or issuance of any shares of capital stock or any other equity security

of the BHB Subsidiaries or any securities representing the right to purchase or

otherwise receive any shares of capital stock or any other equity security of

the BHB Subsidiaries.

Section 3.3 Authority. BHB has full corporate power and authority to

execute and deliver this Agreement and, subject only to regulatory approvals as

described herein, to consummate the transactions contemplated hereby. The

execution and delivery of this Agreement and the consummation of the

transactions contemplated hereby have been duly and validly approved by each of

(a) the Board of Directors of BHB and (b) the Requisite Majority of

Shareholders. No other corporate proceedings on the part of BHB are necessary to

approve this Agreement and to consummate the transactions contemplated hereby.

This Agreement has been duly and validly executed and delivered by BHB and

(assuming due authorization, execution and delivery by Buyer) constitutes a

valid and binding obligation of BHB, enforceable against BHB in accordance with

its terms.

Section 3.4 Financial Statements. True, correct and complete copies of

the following financial statements (collectively referred to as the "BHB

Financial Statements") are included in Schedule 3.4 of the BHB Disclosure

Schedules:

<PAGE>

(a) the audited Consolidated Statement of Financial Condition of BHB

for the fiscal year ended December 31, 2004 and the related Statement of Income,

Statement of Changes in Shareholders Equity, and Statement of Cash Flows for the

fiscal year then ended;

(b) the Bank's Call Report for the twelve month period ended December

31, 2004;

hereafter defined); and

(d) unaudited consolidated income statement of BHB for the period

commencing January 1, 2005 and ending March 31, 2005 and an unaudited

consolidated balance sheet as of such period end.

The financial statements described in clause (a) have been prepared in

conformity with generally accepted accounting principles ("GAAP") consistently

applied and fairly present the consolidated financial condition and results of

operations at the date and for the period presented. The financial statements

described in clauses (b) and (c) above have been prepared on a basis consistent

with past accounting practices and as required by applicable rules and

regulations. The financial statements described in clause (d) have been prepared

in conformity with GAAP (as defined below) applied on a basis consistent with

the preparation of the BHB Financial Statements described in clauses (a) through

notes, provided further that such income statement shall reflect adjustments so

as to exclude the effects of (i) any accounting and other adjustments required

under Section 5.12 hereof and (ii) expenses attributable to this Agreement and

the transactions contemplated hereby.

Section 3.5 Absence of Certain Changes or Events.

(a) Since December 31, 2004, no event has occurred which has had a

Material Adverse Effect on BHB or, to BHB's "knowledge" (as defined below), no

event has occurred which is reasonably likely to have a Material Adverse Effect

on BHB.

(b) "BHB's knowledge", "knowledge of BHB" or words of similar effect

means the actual knowledge, after due inquiry, of any one of Selwyn Isakow, Rex

E. Schlaybaugh, Jr., David T. Provost, Patrick M. McQueen, Robert M. Burch or

Thomas W. Brown.

their respective businesses in all material respects in the ordinary and usual

course consistent with past practice and, since the date of this Agreement,

consistent with the restrictions set forth in Section 5.2.

Section 3.6 Undisclosed Liabilities. Except for those liabilities that

are fully reflected or reserved against on the audited Consolidated Statement of

Financial Condition of BHB for the fiscal year ended December 31, 2004,

liabilities disclosed in Schedule 3.6 of the BHB Disclosure Schedules,

liabilities less than $25,000 individually or in the aggregate, and liabilities

incurred in the ordinary course of business consistent with past practice, since

December 31, 2004, BHB and

<PAGE>

the BHB Subsidiaries to the knowledge of BHB, have not incurred any liability of

any nature whatsoever (whether absolute, accrued, contingent or otherwise and

whether due or to become due).

Section 3.7 Consents and Approvals. Except as set forth on Schedule 3.7

of the BHB Disclosure Schedules, no consents or approvals of or filings or

registrations with any court, administrative agency or commission or other

governmental authority or instrumentality (each a "Governmental Entity") are

necessary in connection with the execution and delivery by BHB of this Agreement

and the consummation by BHB of the Merger and the other transactions

contemplated hereby except for (a) the filing of applications with the Board of

Governors of the Federal Reserve System or the appropriate Federal Reserve Bank

(the "FRB") and the Michigan Office of Financial and Insurance Services ("OFIS")

and the approval of such applications by the FRB and OFIS (the "Regulatory

Applications"), and (b) the filing of the Certificate of Merger with the

Michigan Department under the Michigan Act.

Section 3.8 Reports. (a) BHB and each of the BHB Subsidiaries have

timely filed all reports, registrations and statements, together with any

amendments required to be made with respect thereto, that they were required to

file during the five (5) years preceding the date hereof with (i) the FRB, (ii)

the FDIC, (iii) OFIS, (iv) any state regulatory authority, and (v) any

self-regulatory organization with jurisdiction over any of the activities of BHB

or the BHB Subsidiaries (collectively "Regulatory Agencies"), and all other

reports and statements required to be filed by them, including, without

limitation, any report or statement required to be filed pursuant to the laws,

rules or regulations of the United States, any state, or any Regulatory Agency

(the "BHB Reports"), and have paid all fees and assessments due and payable in

connection therewith, except where the failure to file such report, registration

or statement or to pay such fees and assessments will not have a Material

Adverse Effect on BHB. As of their respective filing dates, each of the BHB

Reports (after giving effect to any amendments thereto), including the financial

statements, exhibits, and schedules thereto, complied in all material respects

with the applicable provisions of the statutes, rules, and regulations enforced

or promulgated by the authority with which they were filed. To the knowledge of

BHB, none of the BHB Reports contained 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 were made, not

misleading. None of BHB and the BHB Subsidiaries are subject to any

cease-and-desist or other similar order issued by, or is a party to any written

agreement, consent agreement or memorandum of understanding with, or is a party

to any commitment letter or similar undertaking to, or is subject to any order

or directive by any Regulatory Agency or other Governmental Entity that

currently restricts the conduct of its business or that relates to its capital

adequacy, compliance with laws, its credit policies, its management or its

business (each a "BHB Regulatory Agreement"), and none of BHB and the BHB

Subsidiaries have been advised during the five (5) years preceding the date

hereof by any Regulatory Agency or other Governmental Entity that it is

considering issuing or requesting any such BHB Regulatory Agreement.

(b) Except for examinations or reviews conducted by the Regulatory

Agencies in the ordinary course of the business of BHB or the BHB Subsidiaries,

no federal, state or local governmental agency, commission or other entity has

initiated any proceeding or, to the knowledge of BHB, investigation into the

business or operations of BHB or the BHB

<PAGE>

Subsidiaries within the past five (5) years nor, to the knowledge of BHB, has

any such proceedings or investigation been threatened or is currently pending.

Except as disclosed in Schedule 3.8(b) of the BHB Disclosure Schedules, there is

no unresolved violation, criticism or exception noted by any Regulatory Agency

with respect to any BHB Report other than those that have not had and are not

expected to have a Material Adverse Effect on the business of BHB or the BHB

Subsidiaries that is subject to the Regulatory Agency.

Section 3.9 Broker's Fees; Other Transaction Fees. (a) Other than the

financial advisory services performed for BHB by Oppenheimer & Co. Inc. in

connection with the preparation and delivery of the BHB Fairness Opinion (as

defined below), neither BHB nor any of the BHB Subsidiaries, nor any of their

respective shareholders, officers, directors, employees or agents, has employed

a broker or finder or incurred any liability for any financial advisory fees,

brokerage fees, commissions, or finder's fees, and no broker or finder has acted

directly or indirectly for BHB or any BHB Subsidiary in connection with this

Agreement or the transactions contemplated hereby. A copy of BHB's agreement

with Oppenheimer & Co. Inc. is included in Schedule 3.9 of the BHB Disclosure

Schedules. The fee payable under such agreement shall not exceed $60,000 in the

aggregate. No other action has been taken by BHB or any BHB Subsidiary that

would give rise to any claim by any party hereto for a brokerage commission,

finder's fee or other like payment with respect to the transactions contemplated

by this Agreement.

(b) There are no fees and expenses paid, incurred or expected to be

incurred by BHB and the BHB Subsidiaries for legal, investment banking,

accounting and other professional services received in connection with this

Agreement or any of the transactions contemplated hereby, except (i) the fees

set forth in Section 3.9(a) above, (ii) the reasonable accounting fees of Crowe,

Chizek and Company, LLC, and (iii) the reasonable legal fees of Dykema Gossett

PLLC billed at an hourly rate.

Section 3.10 Legal Proceedings. Except as set forth on Schedule 3.10 of

the BHB Disclosure Schedules:

(a) There is no pending or, to the knowledge of BHB, threatened

litigation or other legal, administrative, arbitration or other proceeding,

claim, action or investigation of any nature against BHB or any BHB Subsidiary

or which is seeking to enjoin consummation of the transactions provided for

herein or to obtain other relief in connection with this Agreement or the

transactions contemplated hereby, having, or which would have in the future, any

such effect; and,

(b) There is no injunction, order, judgment, decree, or regulatory

restriction (other than regulatory restrictions that apply to similarly situated

bank holding companies or banks) imposed upon BHB, the BHB Subsidiaries or the

assets of BHB or the BHB Subsidiaries.

Section 3.11 Taxes and Tax Returns.

(a) BHB, each BHB Subsidiary and each other company (including any

limited liability company) or joint venture where BHB or any BHB Subsidiary owns

more than 50% of the equity interest of such company or venture measured by vote

and value (a "Tax

<PAGE>

Subsidiary") have duly filed all federal, state, county, foreign and local Tax

Returns (as defined in Section 3.11(c)) required to be filed (all such Tax

Returns being accurate and complete in all material respects). All Taxes (as

defined in Section 3.11(c)) required to be shown on such Tax Returns have been

paid when due. Except as set forth on Schedule 3.11 of the BHB Disclosure

Schedules, no application for an extension of time for filing a Tax Return or

consent to any extension of the period of limitations applicable to the

assessment or collection of any Tax is in effect with respect to BHB, each BHB

Subsidiary or any Tax Subsidiary. None of BHB, each BHB Subsidiary or any Tax

Subsidiary is delinquent in the payment of any Taxes. Adequate reserves for

Taxes (including any penalties and interest) payable by BHB, each BHB Subsidiary

or any Tax Subsidiary have been made on the books of BHB and on the most recent

Financial Statements. No taxing authority has asserted any claims for, Taxes or

assessments which remain unpaid upon BHB, each BHB Subsidiary or any Tax

Subsidiary or notified BHB, BHB Subsidiaries or any Tax Subsidiary of any audit.

Neither BHB, nor any BHB Subsidiary or any Tax Subsidiary has received any

written notice of a proposed audit or proposed deficiency for any Tax which

remains unpaid. In addition, proper and accurate amounts have been withheld by

BHB, each BHB Subsidiary and each Tax Subsidiary from each of their employees,

partners, members, shareholders or holders of deposit accounts for all prior

periods in compliance in all material respects with the Tax withholding

provisions of applicable federal, state, foreign and local laws. There are no

Tax liens upon any property or assets of BHB, each BHB Subsidiary or any Tax

Subsidiary, except for liens for Taxes not yet past due.

(b) BHB has not filed any consolidated federal income tax return with

an "affiliated group" (within the meaning of Section 1504 of the Code) where BHB

was not the common parent of the group. Neither BHB, nor any BHB Subsidiary or

any Tax Subsidiary is, or has been, a party to a tax allocation agreement or

arrangement pursuant to which it has any contingent or outstanding Tax liability

to anyone other than BHB, any BHB Subsidiary or any Tax Subsidiary.

all taxes, charges, fees, levies or other assessments, including but not limited

to all federal, state, county, local, and foreign income, excise, gross

receipts, gross income, ad valorem, profits, gains, property, capital, sales,

transfer, use, payroll, employment, severance, withholding, duties, intangibles,

franchise, backup withholding, and other taxes, charges, levies or like

assessments together with all penalties and additions to tax and interest

thereon. "Tax Return" shall mean any report, return, document, declaration or

other information or filing required to be supplied to any taxing authority or

jurisdiction with respect to Taxes.

Section 3.12 Employee Benefit Plans.

(a) (i) BHB Plan. The term, "BHB Plan" includes each bonus, deferred

compensation, pension, retirement, profit sharing, thrift savings, employee

stock ownership, stock bonus, stock purchase, stock appreciation right,

restricted stock and stock option plan, each employment, consulting, severance

contract or recognition and retention, each other material employee benefit

plan, any applicable "change in control" or similar provisions in any plan,

program, policy, contract or arrangement, and each other benefit plan, contract,

program, policy or arrangement, oral or written, including but not limited to,

each employee benefit plan, as defined in Section 3(3) of ERISA (other than a

BHB Multiemployer Plan and including any

<PAGE>

terminated BHB Plans) that currently or since January 1, 1998: (1) is or has

been maintained for directors, former directors, employees and former employees

of BHB or of any BHB Control Group member or (2) to which BHB or any BHB Control

Group member made or was required to make contributions.

(ii) BHB Qualified Plan. The term "BHB Qualified Plan" means

any BHB Plan which is an employee pension benefit plan as defined in

Section 3(2) of ERISA and which is intended to meet the qualification

requirements of Section 401(a) of the Internal Revenue Code of 1986, as

amended (the "Code").

(iii) BHB Title IV Plan. The term "BHB Title IV Plan" means

any BHB Qualified Plan that is a defined benefit plan (as defined in

Section 3(35) of ERISA) and is subject to Title IV of ERISA.

(iv) BHB Multiemployer Plan. The term "BHB Multiemployer Plan"

means any employee benefit plan that is a "multiemployer plan" within

the meaning of Section 3(37) of ERISA and to which BHB or any BHB

Control Group member has or had any obligation to contribute.

(v) BHB Control Group. The term "BHB Control Group" means a

controlled group of corporations of which BHB or any of the BHB

Subsidiaries is a member within the meaning of Section 414(b) of the

Code, any group of corporations or entities under common control with

BHB or any of the BHB Subsidiaries within the meaning of Section 414(c)

of the Code, or any affiliated service group of which BHB or any of the

BHB Subsidiaries is a member within the meaning of Section 414(m) of

the Code.

(vi) ERISA. The term "ERISA" means the Employee Retirement

Income Security Act of 1974, as amended.

(b) All BHB Plans are listed in Schedule 3.12(b) of the BHB Disclosure

Schedules.

its terms and with all filing, reporting, disclosure and other requirements of

all applicable statutes (including but not limited to ERISA and the Code),

regulations or interpretations thereunder.

(ii) Neither BHB nor any BHB Control Group member currently or

at any time maintains or maintained, or contributes or contributed to,

or is required to contribute to, any BHB Title IV Plan or any BHB

Multiemployer Plan.

(iii) Neither BHB nor any BHB Control Group member, nor any of

their respective employees, directors, or any fiduciaries, nor any BHB

Plan has been a party to or has engaged in any transaction, including

the execution and delivery of this Agreement and other agreements,

instruments and documents for which execution and delivery by BHB is

contemplated herein, in violation of Section 406(a) or (b) of ERISA or

any "prohibited transaction" (as defined in Section 4975(c)(1) of the

Code) for which

<PAGE>

no exemption exists under Section 408(b) of ERISA or Section 4975(d) of

the Code or for which no administrative exemption has been granted

under Section 408(a) of ERISA.

(iv) Each BHB Qualified Plan is the subject of a favorable

Internal Revenue Service determination with respect to qualification (a

copy of the most recent favorable determination letter has been made

available to Buyer) and, except as disclosed on Schedule 3.12(c)(iv) of

the BHB Disclosure Schedules, no event has occurred which will or could

give rise to disqualification of such BHB Plan under Section 401(a) or

501(a) of the Code or to a material liability under Section 511 of the

Code.

(v) No matter is pending relating to any BHB Plan before any

court or governmental agency.

(vi) None of the payments contemplated by BHB, any BHB

Subsidiary or by or under any BHB Plan will constitute excess parachute

payments as defined in Section 280G of the Code.

(vii) All group health plans of BHB and any BHB Subsidiary

(including any plans of current and former affiliates of BHB and the

BHB Subsidiaries which must be taken into account under Section 4980B

of the Code or Sections 601-609, 701-702 and 711-713 of ERISA) have

been operated in material compliance with the group health plan

continuation coverage requirements of Section 4980B of the Code and

Section 601 of ERISA, to the extent such requirements are applicable.

(viii) There have been no acts or omissions by BHB or any BHB

Subsidiary which have given rise to or may give rise to any material

fines, penalties, taxes or related charges under Sections 502(c),

502(i), 502(l) or 4071 of ERISA or Chapter 43 of the Code, for which

BHB, the Surviving Corporat

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