AGREEMENT AND PLAN OF MERGER



     AGREEMENT AND PLAN OF MERGER, dated as of December 17, 2004

("Agreement"), among Peoples Community Bancorp, Inc. ("Bancorp"),

a Maryland corporation, Peoples Community Bank (the "Bank"), a

federally-chartered  savings bank and a wholly-owned subsidiary

of Bancorp, American State Corporation ("ASC"), an Indiana

corporation, and American State Bank ("American"), an Indiana-

chartered commercial bank and wholly-owned subsidiary of ASC.



                          WITNESSETH:



     WHEREAS, the Boards of Directors of Bancorp, the Bank, ASC

and American have determined that it is in the best interests of

their respective companies and their stockholders to consummate

the business combination transactions provided for herein; and



     WHEREAS, the parties desire to provide for certain

undertakings, conditions, representations, warranties and

covenants in connection with the transactions contemplated

hereby; and



     WHEREAS, as a condition and inducement to the willingness of

Bancorp to enter into this Agreement, the directors of ASC

Directors are concurrently entering into a Stockholder Agreement

with Bancorp (the "Stockholder Agreement"), in substantially the

form attached hereto as Exhibit A, pursuant to which, among other

things, such directors agree to vote their shares of ASC Capital

Stock (as defined below) in favor of this Agreement and the

transactions contemplated hereby.



     NOW, THEREFORE, in consideration of the premises and the

mutual covenants, representations, warranties and agreements

herein contained, the parties hereto agree as follows:



                            ARTICLE I



                           THE MERGER



     1.01 The Merger.  Subject to the terms and conditions of

this Agreement and subject to and in accordance with an Agreement

of Merger, a copy of which is attached hereto as Exhibit B (the

"Agreement of Merger"), between ASC and ASC Acquisition Corp.

("Interim"), an Indiana corporation to be formed as a wholly-

owned subsidiary of the Bank in connection with the transactions

contemplated hereby, at the Effective Time (as defined in Section

1.05 hereof), Interim shall be merged with and into ASC in

accordance with Chapter 40 of the Indiana Business Corporation

Law ("IBCL") (the "Merger"), with ASC as the surviving

corporation (hereinafter sometimes called the "Surviving

Corporation"). Simultaneously with or as soon as practicable

after the Merger, the Surviving Corporation shall be merged with

and liquidated into the Bank (the "Liquidation") in accordance

with a Plan of Complete Liquidation, the form of which is

attached hereto as Exhibit C.  Simultaneously with or immediately

following consummation of the Liquidation, American shall be

merged with and into the Bank, with the Bank as the resulting

institution (the "Bank Merger").





     1.02 Effect of the Merger.  As of the Effective Time (as

defined in Section 1.05 hereof), the Surviving Corporation shall

be considered the same business and corporate entity as each of

ASC and Interim and thereupon and thereafter, all the property,

rights, powers and franchises of each of ASC and Interim shall

vest in the Surviving Corporation and the Surviving Corporation

shall be subject to and be deemed to have assumed all of the

debts, liabilities, obligations and duties of each of ASC and

Interim and shall have succeeded to all of each of their

relationships, fiduciary or otherwise, as fully and to the same

extent as if such property rights, privileges, powers,

franchises, debts, obligations, duties and relationships had been

originally acquired, incurred or entered into by the Surviving

Corporation.  In addition, any reference to either of ASC and

Interim in any contract or document, whether executed or taking

effect before or after the Effective Time, shall be considered a

reference to the Surviving Corporation if not inconsistent with

the other provisions of the contract or document; and any pending

action or other judicial proceeding to which either of ASC and

Interim is a party, shall not be deemed to have abated or to have

discontinued by reason of the Merger, but may be prosecuted to

final judgment, order or decree in the same manner as if the

Merger had not been made; or the Surviving Corporation may be

substituted as a party to such action or proceeding, and any

judgment, order or decree may be rendered for or against it that

might have been rendered for or against either of ASC and Interim

if the Merger had not occurred.  At the Effective Time, the

directors and officers of the Surviving Corporation shall be the

persons designated in Section 1.04.



     1.03 Articles of Incorporation and Bylaws.  As of the

Effective Time, the Articles of Incorporation and Bylaws of ASC

shall be the Articles of Incorporation and Bylaws of the

Surviving Corporation until otherwise amended as provided by law.



     1.04 Directors and Officers.  As of the Effective Time, the

directors and officers of Interim shall become the directors and

officers of the Surviving Corporation.  If requested by Bancorp,

the directors of ASC and/or American shall resign as of the

Effective Time.



     1.05 Effective Time.  The Merger shall become effective upon

the occurrence of the filing of Articles of Merger with the

Secretary of State of the State of Indiana, unless a later date

and time is specified as the effective time in such Articles of

Merger ("Effective Time").  A closing (the "Closing") shall take

place immediately prior to the Effective Time at 10:00 a.m., on

the fifth business day following the receipt of all necessary

regulatory or governmental approvals and consents and the

expiration of all statutory waiting periods in respect thereof

and the satisfaction or waiver, to the extent permitted

hereunder, of the conditions to the consummation of the Merger

specified in Article V of this Agreement (other than the delivery

of certificates and other instruments and documents to be

delivered at the Closing), at the offices of Bancorp or at such

other place, at such other time, or on such other date as the

parties may mutually agree upon.  At the Closing, there shall be

delivered to Bancorp, the Bank, ASC and American the certificates

and other documents required to be delivered under Article V

hereof.



     1.06 Modification of Structure.  Notwithstanding any

provision of this Agreement to the contrary, Bancorp, with the

prior written consent of ASC, which consent shall not be

unreasonably withheld, may elect, subject to the filing of all

necessary applications and the receipt of all required regulatory

approvals, to modify the structure of the transactions

contemplated hereby so long as (i) there are no material adverse

federal income tax consequences to the stockholders of ASC as a

result





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of such modification, (ii) the consideration to be paid to

holders of ASC Common Stock (as defined below) under this

Agreement is not thereby changed in kind or reduced in amount

solely because of such modification and (iii) such modification

will not be likely to materially delay or jeopardize receipt of

any required regulatory approvals or impair or prevent the

satisfaction of any conditions to the Closing.



     1.07 Conversion of ASC Capital Stock.  As of the Effective

Time, each share of Class A and Class B common stock, no par

value, of ASC (the "ASC Common Stock"), issued and outstanding

immediately prior to the Effective Time (other than shares (i) as

to which dissenters' rights have been asserted and duly perfected

in accordance with the IBCL ("Dissenting Shares"), and (ii) held

by ASC (including treasury shares) or Bancorp or the Bank other

than in a fiduciary capacity, which shares shall be cancelled)

shall, by virtue of the Merger and without any action on the part

of the holder thereof, be cancelled and by operation of law be

converted into and represent the right to receive from Bancorp,

$4.79 in cash (the "Common Consideration").  In addition, as of

the Effective Time, each share of preferred stock, par value

$1,000 per share, of ASC ("ASC Preferred Stock"), issued and

outstanding immediately prior to the Effective Time shall, by

virtue of the Merger and without any action on the part of the

holder thereof, be cancelled and by operation of law be converted

into and represent the right to receive from the Bank, $1,000 in

cash (the "Preferred Consideration").  The aggregate

consideration to be paid for the conversion of all outstanding

shares of ASC Common Stock and ASC Preferred Stock is hereinafter

referred to as the "Aggregate Merger Consideration." ASC Common

Stock and ASC Preferred Stock are together referred to as "ASC

Capital Stock."



     In addition, holders of ASC Common Stock shall have a

proportionate interest in funds, if any, remaining in the escrow

account to be established at Closing in accordance with the

Holdback Escrow Agreement, attached hereto as Exhibit D.



     1.08 Exchange Procedures



     (a)  As of the Effective Time, Bancorp shall deposit in

trust with an exchange agent designated by Bancorp and reasonably

acceptable to ASC (the "Exchange Agent") cash in an amount equal

to the Aggregate Merger Consideration.  No later than ten

business days following the Effective Time, Bancorp shall cause

the Exchange Agent to mail or make available to each holder of

record of a certificate or certificates which immediately prior

to the Effective Time represented issued and outstanding shares

of ASC Capital Stock a notice and letter of transmittal (which

shall specify that delivery shall be effected and risk of loss

and title to the certificates theretofore representing shares of

ASC Capital Stock shall pass only upon proper delivery of such

certificates to the Exchange Agent) advising such holder of the

effectiveness of the Merger and the procedure for surrendering to

the Exchange Agent such certificate or certificates which

immediately prior to the Effective Time represented issued and

outstanding shares of ASC Capital Stock in exchange for the

consideration set forth in Section 1.07 hereof deliverable in

respect thereof pursuant to this Agreement.  Within five business

days following receipt of surrendered certificates and a properly

completed letter of transmittal, the Exchange Agent shall deliver

the Common Consideration and/or the Preferred Consideration to

each former ASC stockholder.  The Exchange Agent shall accept

such





                               3





certificates upon compliance with such reasonable terms and

conditions as the Exchange Agent may impose to effect an orderly

exchange thereof in accordance with normal exchange practices.



     (b)  Each outstanding certificate which prior to the

Effective Time represented ASC Common Stock (other than

Dissenting Shares) or ASC Preferred Stock and which is not

surrendered to the Exchange Agent in accordance with the

procedures provided for herein shall, except as otherwise herein

provided, until duly surrendered to the Exchange Agent, be deemed

to evidence the right to receive the Common Consideration or the

Preferred Consideration as the case may be.  After the Effective

Time, there shall be no further transfer on the records of ASC of

certificates representing shares of ASC Capital Stock and if such

certificates are presented to ASC for transfer, they shall be

cancelled against delivery of the Common Consideration or the

Preferred Consideration as hereinabove provided.



     (c)  Bancorp shall not be obligated to deliver the Common

Consideration or the Preferred Consideration to which a holder of

ASC Common Stock or ASC Preferred Stock would otherwise be

entitled as a result of the Merger until such holder surrenders

the certificate or certificates representing the shares of ASC

Common Stock or ASC Preferred Stock for exchange as provided in

this Section 1.08, or, in lieu thereof, an appropriate affidavit

of loss and indemnity agreement as may be required in each case

by Bancorp.  If payment of the Common Consideration or the

Preferred Consideration is to be made in a name other than that

in which the certificate evidencing ASC Common Stock or ASC

Preferred Stock surrendered in exchange therefor is registered,

it shall be a condition of the issuance thereof that the

certificate so surrendered shall be properly endorsed or

accompanied by an executed form of assignment separate from the

certificate and otherwise in proper form for transfer and that

the person requesting such payment pay to the Exchange Agent in

advance, any transfer or other tax required by reason of the

payment in any name other than that of the registered holder of

the certificate surrendered or otherwise establish to the

satisfaction of the Exchange Agent that such tax has been paid or

is not payable.



     (d)  Any portion of either the Common Consideration or the

Preferred Consideration delivered to the Exchange Agent by

Bancorp pursuant to Section 1.07 that remains unclaimed by the

stockholders of ASC for six months after the Effective Time (as

well as any proceeds from any investment thereof) shall be

delivered by the Exchange Agent to Bancorp.  Any stockholders of

ASC who have not exchanged their shares of ASC Common Stock for

the Common Consideration or their shares of ASC Preferred Stock

for Preferred Consideration in accordance with this Agreement

shall thereafter look only to Bancorp for the consideration

deliverable in respect of each share of ASC Common Stock or ASC

Preferred Stock such stockholder holds as determined pursuant to

this Agreement without any interest thereon.  If outstanding

certificates for shares of ASC Common Stock or ASC Preferred

Stock are not surrendered or the payment for them is not claimed

prior to the date on which payment of the Common Consideration or

Preferred Consideration would otherwise escheat to or become the

property of any governmental unit or agency, the unclaimed items

shall, to the extent permitted by abandoned property and any

other applicable law, become the property of Bancorp (and to the

extent not in its possession shall be delivered to it), free and

clear of all claims or interest of any person previously entitled

to such property.  Neither the Exchange Agent nor any party to

this Agreement shall be liable to any holder of stock represented

by any certificate for any consideration paid to a public

official pursuant to applicable abandoned property, escheat or

similar





                               4



laws.  Bancorp and the Exchange Agent shall be entitled

to rely upon the stock transfer books of ASC to establish the

identity of those persons entitled to receive the Common

Consideration or Preferred Consideration specified in this

Agreement, which books shall be conclusive with respect thereto.

In the event of a dispute with respect to ownership of stock

represented by any certificate, Bancorp and the Exchange Agent

shall be entitled to deposit any consideration represented

thereby in escrow with an independent third party and thereafter

be relieved with respect to any claims thereto.



     1.09 Withholding Rights.  Bancorp (through the Exchange

Agent, if applicable) shall be entitled to deduct and withhold

from any amounts otherwise payable pursuant to this Agreement to

any holder of shares of ASC Capital Stock such amounts as Bancorp

is required under the Internal Revenue Code of 1986, as amended

("Code") or any provision of state, local or foreign tax law to

deduct and withhold with respect to the making of such payment.

Any amounts so withheld shall be treated for all purposes of this

Agreement as having been paid to the holder of ASC Common Stock

or ASC Preferred Stock in respect of which such deduction and

withholding was made by Bancorp.



     1.10 Dissenting Shares.  Each outstanding share of ASC

Capital Stock the holder of which has perfected his right to

dissent under the IBCL and has not effectively withdrawn or lost

such rights as of the Effective Time shall not be converted into

or represent a right to receive the Common Consideration or

Preferred Consideration, as applicable, and the holder thereof

shall be entitled only to such rights as are granted by the IBCL.

ASC shall give Bancorp prompt notice upon receipt by ASC of any

such written demands for payment of their fair value of such

shares of ASC Capital Stock and of withdrawals of such demands

and any other instruments provided pursuant to the IBCL (any

stockholder duly making such demand being hereinafter called a

"Dissenting Stockholder").  Any payments made in respect of

Dissenting Shares shall be made by Bancorp.  If any Dissenting

Stockholder shall effectively withdraw or lose (through failure

to perfect or otherwise) his right to such payment at or prior to

the Effective Time, such holder's shares of ASC Capital Stock

shall be converted into a right to receive the Common

Consideration or Preferred Consideration, as applicable, in

accordance with the applicable provisions of this Agreement.



     1.11 Additional Actions.  If at any time after the Effective

Time the Surviving Corporation shall consider that any further

assignments or assurances in law or any other acts are necessary

or desirable to (i) vest, perfect or confirm, of record or

otherwise, in the Surviving Corporation its rights, title or

interest in, to or under any of the rights, properties or assets

of ASC acquired or to be acquired by the Surviving Corporation as

a result of, or in connection with, the Merger, or (ii) otherwise

carry out the purposes of this Agreement, ASC and its proper

officers and directors shall be deemed to have granted to the

Surviving Corporation an irrevocable power of attorney to execute

and deliver all such proper deeds, assignments and assurances in

law and to do all acts necessary or proper to vest, perfect or

confirm title to and possession of such rights, properties or

assets in the Surviving Corporation and otherwise to carry out

the purposes of this Agreement; and the proper officers and

directors of the Surviving Corporation are fully authorized in

the name of ASC or otherwise to take any and all such action.



     1.12 Interim Shares.  Each outstanding share of common stock

of Interim, $.01 par value per share ("Interim Common Stock"), on

the Effective Time shall be converted automatically and without

any action on the part of the holder thereof into an equal number

of shares of the Surviving







                               5



Corporation, which shall constitute all of the outstanding common

stock of the Surviving Corporation.





                           ARTICLE II



             REPRESENTATIONS AND WARRANTIES OF ASC

                          AND AMERICAN



     References to "ASC Disclosure Schedules" shall mean all of

the disclosure schedules required by this Article II and Article

IV hereof, dated as of the date hereof and referenced to the

specific sections and subsections of this Agreement, which have

been delivered by ASC to Bancorp. ASC and American hereby

represent and warrant to Bancorp and the Bank as follows as of

the date hereof:



     2.01 Corporate Organization.



     (a)  ASC is a corporation duly organized and validly

existing under the laws of the State of Indiana.  ASC 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

and is in good standing (if and to the extent the concept of good

standing is recognized in such jurisdiction) 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, qualified or in good

standing would not have a Material Adverse Effect (as defined

below).  ASC is registered as a bank holding company under the

Bank Holding Company Act of 1956 ("BHCA").  ASC Disclosure

Schedule 2.01(a) sets forth true and complete copies of the

Articles of Incorporation and Bylaws of ASC as in effect on the

date hereof.



     For the purposes of this Agreement, the term "Material

Adverse Effect" shall mean any effect that (i) is material and

adverse to the financial condition, results of operations or

business of ASC and American, either individually or considered

as one enterprise and results in a substantial diminution of

value of ASC and American, either individually or considered as

one enterprise or (ii) materially impairs the ability of ASC

and/or American to consummate the transactions contemplated by

this Agreement and the Agreement of Merger, provided, however,

that the term "Material Adverse Effect" shall not be deemed to

include (i) the impact of changes in (a) laws, regulations, or

policies of any Federal or state court, administrative agency,

commission or other governmental authority or interpretations

thereof; (b) generally accepted accounting principles; or (c)

interest rates, that in each case are generally applicable to the

banking industry,  (ii) actions taken or to be taken by ASC or

American upon the written request of Bancorp pursuant to this

Agreement or the Agreement of Merger, (iii) any adverse effect

resulting from or relating to the announcement or pendency of the

Merger, pursuant to Section 4.10 below or (iv) any losses related

to the assets listed in Appendix A to the Holdback Escrow

Agreement.





                               6



     (b)  The only direct or indirect subsidiaries of ASC are

American and American State Advisory Group Corp. ("Advisory").

Advisory is an Indiana corporation and a wholly-owned subsidiary

of American.  Disclosure Schedule 2.01(b)(i) sets forth true and

complete copies of the Articles of Incorporation and Bylaws of

American and Advisory as in effect on the date hereof.  American

and Advisory (i) are duly organized and validly existing under

the laws of the State of Indiana, (ii) have the corporate power

and authority to own or lease all of their respective properties

and assets, and (iii) are duly licensed or qualified to do

business and are in good standing (if and to the extent the

concept of good standing is recognized in such jurisdiction) in

each jurisdiction in which the nature of the business

respectively conducted by them or the character or location of

the respective properties and assets owned or leased by them

makes such licensing or qualification necessary, except where the

failure to be so licensed, qualified or in good standing would

not have a Material Adverse Effect.  ASC and American have

satisfied in all material respects all commitments, financial or

otherwise, as may have been agreed upon with their state and/or

federal regulatory agencies.  Other than American and Advisory,

and except as set forth in ASC Disclosure Schedule 2.01(b)(ii),

ASC does not own or control, directly or indirectly, greater than

a 5% equity interest in any corporation, company, association,

partnership, joint venture or other entity.



     2.02 Capitalization.  The authorized capital stock of ASC

consists of  10,000,000 shares of ASC Common Stock, of which

1,469,062 are issued and outstanding as of the date hereof, and

100,000 shares of ASC Preferred Stock, of which 700 shares are

issued and outstanding as of date hereof.  All issued and

outstanding shares of ASC Capital Stock have been duly authorized

and validly issued and are fully paid, nonassessable and free of

preemptive rights.  ASC does not have and is not bound by any

outstanding subscriptions, options, warrants, calls, commitments

or agreements of any character calling for the transfer, purchase

or issuance of any shares of capital stock of ASC or any

securities representing the right to purchase or otherwise

receive any shares of such capital stock or any securities

convertible into or representing the right to purchase or

subscribe for any such stock.



     2.03 Authority; No Violation.



     (a)  Subject to the approval of this Agreement by the

stockholders of ASC Capital Stock, ASC and American have full

corporate power and authority to execute and deliver this

Agreement and to consummate the transactions contemplated hereby

in accordance with the terms hereof.  The execution and delivery

of this Agreement and the consummation of the transactions

contemplated hereby have been duly and validly approved by the

boards of directors of ASC and American.  Except for the adoption

of this Agreement by the holders of ASC Capital Stock, no other

corporate proceedings on the part of ASC or American are

necessary to consummate the Merger.  This Agreement has been duly

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