UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                    WASHINGTON D.C.    20549


                          FORM 10-Q


  X       QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934.

          For the quarterly period ended September 30, 1995

                              OR

_____     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
          OF THE SECURITIES EXCHANGE ACT OF 1934.

          For the transition period from _______ to _______

          Commission file number 2-89283


                IOWA FIRST BANCSHARES CORP.
     (Exact name of registrant as specified in its charter)


STATE  OF  IOWA  42-1211285  (State  or  other  jurisdiction  (IRS  Employer  of
incorporation or organization) Identification No.)

300 East Second Street
Muscatine, Iowa  52761
(Address of principal executive offices)

319-263-4221
(Registrant's telephone number)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

YES  X     NO_____

At September 30, 1995 there were 571,921 shares of the registrant's common stock
outstanding.

<PAGE>
                  IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
                     CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (In Thousands)
                                  (Unaudited)

                                                          September     December
                                                            30,            31,
                                                            1995          1994
                                                          ---------     --------
               ASSETS

Cash and due from banks ..............................     $ 12,465     $ 11,720

Investment securities held to maturity (fair value
  September 30, 1995, $44,994; December 31,
  1994, $52,022)......................................       44,829       53,659

Investment securities available for sale (cost
  September 30, 1995, $19,121; December 31, 1994,
  $16,160)............................................      19,232       15,791

Federal funds sold and securities
   purchased under resale agreements .................        7,075        3,337

Loans, net of allowance for possible loan
   losses September 30, 1995, $2,576;
   December 31, 1994, $2,526 .........................      170,014      162,015

Bank premises and equipment, net .....................        4,430        4,545

Other assets .........................................        3,162        2,733
                                                           --------     --------

   TOTAL ASSETS ......................................     $261,207     $253,800
                                                           ========     ========

LIABILITIES AND STOCKHOLDERS' EQUITY
            LIABILITIES

Noninterest bearing deposits ........................     $ 32,413     $ 35,336
Interest bearing deposits ...........................      198,292      193,687
                                                          --------     --------
   TOTAL DEPOSITS ...................................      230,705      229,023
Other borrowings ....................................        2,600            0
                                                          --------     --------
Securities sold under agreements to repurchase ......        3,717        2,248
Other liabilities ...................................        1,815        1,857
                                                          --------     --------

   TOTAL LIABILITIES ................................      238,837      233,128
                                                          --------     --------

STOCKHOLDERS' EQUITY

Common Stock ........................................          200          200
Surplus .............................................        3,800        3,800
Retained earnings ...................................       18,822       17,193
                                                          --------     --------
                                                            22,822       21,193
Unrealized gains (losses) on securities
  available for sale, net ...........................           70         (233)
Less net cost of common shares acquired for
  the treasury ......................................          522          288
                                                          --------     --------
   TOTAL STOCKHOLDERS' EQUITY .......................       22,370       20,672
                                                          --------     --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..........     $261,207     $253,800
                                                          ========     ========


See notes to Consolidated Condensed Financial Statements.

<PAGE>

                         IOWA FIRST BANCSHARES CORP. AND
                                  SUBSIDIARIES
                             CONSOLIDATED CONDENSED
                            STATEMENTS OF OPERATIONS
                           (In Thousands, Except Per
                                  Share Data)
                                  (Unaudited)
<TABLE>
                                            
                                                                         Three Months Ended                   Nine Months Ended
                                                                            September 30,                        September 30,
                                                                     --------------------------           --------------------------
                                                                       1995              1994              1995                1994
                                                                     -------            -------           -------            -------
<S>                                                                  <C>                <C>               <C>                <C>

INTEREST INCOME:
   Interest and fees on loans ............................           $ 3,744            $ 3,306           $10,828            $ 9,498
   Interest on investment securities .....................               927              1,020             2,828              2,995
   Interest on federal funds sold and securities
     purchased under resale agreements ...................               109                 29               300                233
   Other interest ........................................                 0                  4                 0                 15
                                                                     -------            -------           -------            -------
   Total interest income .................................             4,780              4,359            13,956             12,741
                                                                     -------            -------           -------            -------

INTEREST EXPENSE:
   Interest on deposits, securities sold under repurchase
     agreements and other borrowings......................             2,307              1,869             6,604              5,447
   Interest on note payable ..............................                 0                  9                 0                 49
                                                                     -------            -------           -------            -------
   Total interest expense ................................             2,307              1,878             6,604              5,496
                                                                     -------            -------           -------            -------
   Net interest income ...................................             2,473              2,481             7,352              7,245

Provision for loan losses ................................                 0                 15                30                 45
                                                                     -------            -------           -------            -------
   Net interest income after provision for
      loan losses ........................................             2,473              2,466             7,322              7,200

Investment securities gains (losses) .....................                (9)                 5                (3)                55
Other income .............................................               405                462             1,135              1,275
Other expense ............................................             1,617              1,810             5,108              5,353
                                                                     -------            -------           -------            -------
   Income before income taxes ............................             1,252              1,123             3,346              3,177
Applicable income taxes ..................................               400                336             1,046                972
                                                                     -------            -------           -------            -------
Net income ...............................................           $   852            $   787           $ 2,300            $ 2,205
                                                                     =======            =======           =======            =======

Per share data:
  Net earnings per common share ..........................           $  1.42            $  1.34           $  3.87            $  3.78
                                                                     =======            =======           =======            =======
Dividends declared per common share (declared semi-
  annually until quarterly dividend declarations
  began first quarter of 1995)                                       $  0.41            $  0.00           $  1.17            $  0.65
                                                                     =======            =======           =======            =======
</TABLE>

See Notes to Consolidated Condensed Financial Statements.

<PAGE>

                  IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
                             CONSOLIDATED CONDENSED
                            STATEMENTS OF CASH FLOWS
                               For The Nine Months
                        Ended September 30, 1995 and 1994
                                 (In Thousands)

                                                            1995          1994
                                                           -------      -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ...........................................     $ 2,300      $ 2,205
Adjustments to  reconcile  net  income  to  net  
   cash  provided  by  operating activities:
   Proceeds from  FHLMC ..............................       1,405        2,916
   Loans underwritten for FHLMC ......................      (1,400)      (2,891)
   Gains on loans sold to FHLMC ......................          (5)         (25)
   Provision for loan losses .........................          30           45
   Investment securities (gains) losses, net .........           3          (55)
   Depreciation ......................................         324          348
   Deferred income taxes .............................        (150)
                                                           -------      -------
   Amortization of premiums and accretion of
     discounts on loans and investment securities, 
     net .............................................         138          247
   (Increase) decrease in other assets ...............        (429)        (543)
   Increase (decrease) in other liabilities ..........          50         (302)
                                                           -------      -------
Net cash provided by operating activities ............       2,416      $ 1,795
                                                           -------      -------

CASH FLOWS FROM INVESTING ACTIVITIES
   Net (increase) decrease in federal funds sold .....      (3,738)      10,530
   Proceeds from maturities of investment
     securities.......................................      11,430       11,921
   Proceeds from sales of investment securities ......       3,968        9,660
   Purchases of investment securities ................      (9,773)     (18,258)
   Net (increase) in loans ...........................      (8,029)      (7,493)
   Purchases of bank premises and equipment ..........        (209)        (242)
                                                          --------     --------
   Net cash (used in) investing activities ...........      (6,351)       6,118
                                                          ---------    ---------


CASH FLOWS FROM FINANCING ACTIVITIES
   Net (decrease) in noninterest bearing deposits ....      (2,923)      (1,949)
   Net increase (decrease) in interest bearing
     deposits ........................................       4,605       (1,085)
   Net increase in securities sold under
     agreements to repurchase ........................       1,469        1,457
   Net increase in other borrowings ..................       2,600
                                                          --------     --------
   Principal payments on notes payable ...............           0       (1,300)
                                                          --------     --------
   Cash dividends paid ...............................        (837)        (715)
   Purchases of common stock for the treasury,
     net of sales ....................................        (234)         104
                                                          --------     --------
   Net cash provided by financing activities .........       4,680       (3,488)
                                                           --------    ---------

   Net increase in cash and due from banks ...........         745        4,425

Cash and due from banks:
   Beginning .........................................      11,720        9,100
                                                          --------     --------
   Ending ............................................    $ 12,465     $ 13,525
                                                          ========     ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

   Cash payments for: 
     Interest                                             $  7,614     $  5,392
 
     Income taxes                                         $    757     $    446


See notes to Consolidated Condensed Financial Statements.


<PAGE>

                  IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1.  Nature of Business and Significant Accounting Policies

   Nature of business:
     
     Iowa First  Bancshares  Corp. is a bank holding company  providing bank and
     bank related services through it's subsidiaries.

   Significant accounting policies:

     Principles of consolidation:

          The  accompanying   consolidated   financial  statements  include  the
          accounts  of the  Company  and its  wholly-owned  subsidiaries,  First
          National  Bank of Muscatine  (Muscatine)  and First  National  Bank in
          Fairfield (Fairfield), collectively referred to herein as (Banks). All
          material  intercompany  accounts and transactions have been eliminated
          in consolidation. The unaudited interim financial statements presented
          reflect  all  adjustments  which are,  in the  opinion of  management,
          necessary to a fair statement of the results for the interim  periods.
          All such adjustments are of a normal recurring nature.

     Presentation of cash flows:

          For  purposes of  reporting  cash flows,  cash and due from banks
          include  cash  on-hand and  amounts  due from  banks.  Cash flows from
          demand deposits,  NOW accounts,  savings  accounts,  and federal funds
          sold are reported net, since their  original  maturities are less than
          three months.  Cash flows are also reported net for other  borrowings,
          securities  sold  under  agreements  to  repurchase,  certificates  of
          deposits, and loans.

      Investment securities:

          Investment  securities held to maturity are those debt securities
          that the Banks have the  ability  and  intent to hold  until  maturity
          regardless of changes in market conditions, liquidity needs or changes
          in general  economic  conditions.  Such securities are carried at cost
          adjusted for  amortization of premiums and accretion of discounts.  If
          the  ability or intent to hold to  maturity is not present for certain
          specified  securities,  such  securities are considered  available for
          sale as the Banks intend to hold them for an indefinite period of time
          but not  necessarily  to  maturity.  Any  decision  to sell a security
          classified  as available  for sale would be based on various  factors,
          including  significant  movements  in interest  rates,  changes in the
          maturity mix of the Banks' assets and  liabilities,  liquidity  needs,
          regulatory   capital   considerations,   and  other  similar  factors.
          Securities  available  for sale are carried at fair value.  Unrealized
          gains  or  losses  are   reported  as   increases   or   decreases  in
          stockholders'  equity,  net of the related deferred tax effect.  There
          are no securities held for trading purposes. Realized gains or losses,
          determined on the basis of the cost of specific  securities  sold, are
          included in earnings.

<PAGE>


     Loans and direct lease financing:

          Loans are  stated at the amount of unpaid  principal,  reduced by
          unearned discount and an allowance for loan losses.  The allowance for
          loan  losses  is  maintained  at  the  level  considered  adequate  by
          management  of the Banks to provide for losses that can be  reasonably
          anticipated.  The  allowance  is increased  by  provisions  charged to
          operating  expense and reduced by net charge-offs.  In determining the
          adequacy of the llowance  balance,  the Banks make  continuous  credit
          reviews  of  the  loan   portfolio  and  consider   current   economic
          conditions,  historical  loan  loss  experience,  review  of  specific
          problem loans and other factors.

          Unearned interest on discounted loans is amortized to income over
          the life of the loans using the interest method.  For all other loans,
          interest  is accrued  daily on the  outstanding  balances.  Accrual of
          interest is  discontinued on a loan when  management  believes,  after
          considering  collection efforts and other factors, that the borrower's
          financial  condition is such that  collection of interest is doubtful.
          Generally this occurs when the collection of interest or principal has
          become 90 days past due.

          Financial  Accounting  Standards Board (FASB)  Statement No. 114,
          Accounting by Creditors  for  Impairment of a Loan, as amended by FASB
          Statement  No.  118,  was  adopted as of January 1, 1995.  Under these
          standards,  loans considered to be impaired are reduced to the present
          value  of  expected  future  cash  flows  or  to  the  fair  value  of
          collateral,  by  allocating a portion of the allowance for loan losses
          to such  loans.  If these  allocations  cause the  allowance  for loan
          losses to require  increase,  such  increase  is  reported as bad debt
          expense.  Cash  interest  payments  collected  on  impaired  loans are
          recorded as interest  income.  The effect of adopting these  standards
          was not material.

          The  leasing  operations  consist  principally  of the leasing of
          various  types of medical  and  transportation  equipment.  All of the
          leases are  classified and accounted for as direct  financing  leases.
          Under the direct financing method of accounting for leases,  the total
          net rentals  receivable  under the lease  contracts  and the estimated
          unguaranteed  residual value of the leased equipment,  net of unearned
          income,  are recorded as a net investment in direct  financing  leases
          and the unearned income is recognized each month as it is earned so as
          to  provide a  constant  periodic  rate of  return on the  unrecovered
          investment.

          Direct loan and lease  origination  fees and costs are  generally
          being  deferred and the net amount  amortized as an  adjustment of the
          related loan's or lease's yield.  The Banks  generally  amortize these
          amounts  over the  contractual  life.  Commitment  fees  based  upon a
          percentage  of  customers'  unused lines of credit and fees related to
          standby letters of credit are not significant.

   Bank premises and equipment:

          Bank premises and  equipment are stated at cost less  accumulated
          depreciation.  Depreciation is computed primarily by the straight-line
          method based on estimated useful lives.

   Other assets:

          Other real  estate  (ORE),  which is  included  in other  assets,
          represents  properties  acquired  through  foreclosure,   in-substance
          foreclosure or other proceedings.  ORE is recorded at the lower of the
          amount  of the  loan or  fair  market  value  of the  properties.  Any
          write-down  to fair  market  value at the time of  transfer  to ORE is
          charged  to the  allowance  for loan  losses.  Property  is  evaluated
          regularly  to ensure  that the  recorded  amount is  supported  by the
          current fair market value.

<PAGE>

   Income taxes:

          The Company files its tax return on a consolidated basis with its
          subsidiary banks. The entities follow the direct  reimbursement method
          of  accounting  for income  taxes under which  income taxes or credits
          which result from the subsidiary  banks' inclusion in the consolidated
          tax return are paid to or received from the parent company.

          Statement of Financial  Accounting  Standard No. 109 ("FAS 109"),
          Accounting for Income Taxes,  was adopted in 1993. Under the asset and
          liability method of accounting for income taxes prescribed by FAS 109,
          deferred tax assets and  liabilities  are recognized for the estimated
          future  tax  consequences  attributable  to  differences  between  the
          financial   statement   carrying   amounts  of  existing   assets  and
          liabilities  and their  respective tax bases.  Deferred tax assets and
          liabilities  are  measured  using  enacted tax rates in effect for the
          year in which those temporary differences are expected to be recovered
          or  settled.  Under FAS 109,  the  effect on  deferred  tax assets and
          liabilities  of a change in tax rates is  recognized  in income in the
          period that includes the enactment date.

          Deferred  income  taxes have not been  provided  on the equity in
          undistributed  net income of the  subsidiaries  as the entities file a
          consolidated income tax return.

     Trust assets:

          Trust  assets  (other  than cash  deposits)  held by the Banks in
          fiduciary or agency  capacities  for its customers are not included in
          the accompanying  consolidated balance sheets since such items are not
          assets of the Banks.

     Fair value of financial instruments:

          FAS No. 107,  Disclosures  about Fair Market  Value of  Financial
          Instruments,  requires  disclosure  of fair  value  information  about
          financial instruments, whether or not recognized in the balance sheet,
          for which it is practicable to estimate that value.  Interim condensed
          financial  statements  are not  required  to include  the  disclosures
          outlined by FAS 107 and, accordingly, are not included herein.


Note 2.  Capital Stock and Earnings Per Share

Common shares and  preferred  stock  authorized  total  2,000,000  shares and
500,000  shares,  respectively.  Primary  earnings  per share are  arrived at by
dividing net income by the weighted average number of shares of common stock and
common stock  equivalents  outstanding for the respective  period.  The weighted
average  number  of  shares  of  common  stock  and  common  stock   equivalents
outstanding for the first nine months of 1995 was 594,368.

<PAGE>

               IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS





Discussion and Analysis of Financial Condition
----------------------------------------------


The Company's total assets at September 30, 1995, were $261,207,000. Muscatine's
total assets were $176,373,000  which reflects a $4,442,000 (2.6%) increase from
December 31, 1994,  total assets.  Fairfield's  total assets were $83,048,000 at
September 30, 1995,  which is an increase of $2,841,000  (3.5%) when compared to
December 31, 1994,  total assets.  Total  consolidated  assets increased by 2.9%
during the first nine months of 1995.

Net loans totaled  $170,014,000  at September  30, 1995.  Net loans at Muscatine
increased by $5,459,000 (4.9%) during the first nine months. Net loans increased
at Fairfield by $2,557,000 (5.0%) during the first nine months. Consolidated net
loans  increased  by  $7,999,000  (4.9%)  year-to-date  with  $3,053,000  of the
increase occurring during the third quarter of 1995.

Total held to maturity  and  available  for sale  securities  decreased  over $5
million  during  the  first  nine  months  of 1995 due to  maturities  and sales
utilized to generate  funds  primarily  for loan growth.  The Banks  continue to
emphasize  purchase of securities with maturities of five years and less as such
purchases  offer  reasonable  yields  with very  little  credit  risk as well as
limited  interest  rate risk.  Additionally,  selected  securities  with  longer
maturities  have been  purchased  in order to enhance  overall  portfolio  yield
without  significantly  increasing risk. At September 30, 1995, less than 10% of
investment  securities mature in more than five years and less than 2% mature in
more than ten years. Securities totaling approximately $4 million were sold from
the  available  for sale  securities  portfolio  during the year with net losses
before tax on these sales of approximately $3,000.

Total deposits at September 30, 1995, were  $230,705,000.  Deposits at Muscatine
decreased  less than .1% from the prior  year end.  Fairfield's  total  deposits
increased  approximately  $1.5  million  (2.1%)  during  the same  period.  This
represents a combined  deposit  increase of .7% for the Company during the first
nine  months  of  1995.  Additionally,   securities  sold  under  agreements  to
repurchase  increased $1.5 million and intermediate  term advances were borrowed
from the Federal Home Loan Bank totaling $2.6 million.

<PAGE>

     IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
     FINANCIAL CONDITION AND RESULTS OF OPERATIONS





Results of Operations
---------------------

Consolidated  net income from continuing  operations was $852,000,  or $1.42 per
share,  for the third  quarter of 1995, a $65,000  increase from the same period
last  year.  Consolidated  net  income  for the  first  nine  months of 1995 was
$2,300,000,  or $3.87 per share.  This is $95,000  (4.3%)  higher  than the same
period in 1994. This improvement  resulted primarily from increased net interest
margin  and  reduced  expenses.   A  major  positive  factor  in  the  financial
performance of the third quarter  occurred when the FDIC refunded to the banking
industry,  including our subsidiary banks,  overpayments of previously submitted
deposit insurance  premiums to the Bank Insurance Fund (BIF). The refunds to our
subsidiaries   totalled   over   $130,000   before   income  tax   consequences.
Additionally,  future BIF premium rates were reduced  approximately  80% for our
banks.

The Company has been able to expand the net interest margin,  as compared to the
prior year by actively managing asset quality, growth of the loan portfolio, and
rates  paid on assets and  liabilities.  Management  expressed  doubts as to the
sustainability  of these  levels of net interest  margin as the Federal  Reserve
Bank raised  short-term  interest  rates over the past  several  quarters,  and,
indeed,  the net  interest  margin  for the third  quarter  of 1995 was a modest
$8,000 less than the same period in 1994.

Provisions for loan losses were $30,000 for the nine months ended  September 30,
1995,  $15,000 less than 1994. Net loan recoveries  totaled $20,000  compared to
net loan  charge-offs  of $74,000 for the first three quarters of 1995 and 1994,
respectively.

Nonaccrual  loans were reduced  during the past twelve  months  totaling  $1.195
million at September  30, 1995,  $353,000 less than the end of the third quarter
in 1994. Other real estate owned totaled $107,000, and loans past due 90 days or
more and  still  accruing  totaled  $138,000.  The  reserve  for loan  losses of
$2,576,000  represents  1.5% of net  loans and 179% of total  nonaccrual  loans,
other real estate owned, and loans past due 90 days or more and still accruing.

The  efficiency  ratio,  defined  as  noninterest  expense  as a percent  of net
interest income plus noninterest  income, was 60.5% for the first nine months of
1995 compared to 63% for all of 1994.


Interest Rate Sensitivity
-------------------------

The Company  manages its balance  sheet to minimize the impact of interest  rate
movements on its earnings.  The term "rate sensitive" refers to those assets and
liabilities  which are  "sensitive" to  fluctuations  in rates and yields.  When
interest  rates move,  earnings may be affected in many ways.  Interest rates on
assets and liabilities  may change at different  times or by different  amounts.
Maintaining a proper  balance  between rate  sensitive  earning  assets and rate
sensitive   liabilities  is  the  principal  function  of  asset  and  liability
management of a banking organization.


<PAGE>


The  following  table shows the interest  rate  sensitivity  position at several
repricing intervals (dollar amounts in thousands):

              Repricing Maturities at September 30, 1995


                   Repricing Maturities at September 30, 1995
<TABLE>

                                                    Less Than    3-12        1-5     More Than  Noninterest
                                                    3 Months    Months      Years     5 Years     Bearing     Total
                                                    ---------  --------    --------  ---------  -----------  --------
<S>                                                 <C>        <C>         <C>       <C>        <C>          <C>
Assets:
  Loans .........................................   $ 55,426   $ 29,943    $ 70,625   $ 12,825   $  1,195    $170,014
                                                     
  Investment securities .........................     10,365     10,274      38,516      4,896         10      64,061
  Other earning assets ..........................          0          0           0          0      7,075       7,075
  Nonearning assets .............................          0          0           0          0     20,057      20,057
                                                    --------   --------    --------   --------   --------    --------
         Total assets ...........................   $ 72,866   $ 40,217    $109,141   $ 17,721   $ 21,262    $261,207
                                                    ========   ========    ========   ========   ========    ========

Liabilities and Equity:
  Deposits ......................................   $ 51,130   $ 86,455    $ 60,707   $      0   $ 32,413    $230,705
  Other purchased fund ..........................      3,000        717       2,200        400          0       6,317
  Other liabilities .............................          0          0           0          0      1,815       1,815
  Equity ........................................          0          0           0          0     22,370      22,370
                                                    --------   --------    --------   --------   --------    --------
    Total liabilities and equity ................   $ 54,130   $ 87,172    $ 62,907   $    400   $ 56,598    $261,207
                                                    ========   ========    ========   ========   ========    ========
      
Repricing gap ...................................   $ 18,736   $(46,955)   $ 46,235   $ 17,321   $(35,336)   $      0
Cumulative repricing gap ........................   $ 18,736   $(28,220)   $ 18,015   $ 35,336   $      0    $      0

</TABLE>

The data in this table  incorporates the contractual  characteristics as well as
an estimate of the actual repricing  characteristics of the Company's assets and
liabilities.  Based on the  estimate,  twenty  percent  of the  savings  and NOW
accounts are reflected in the less than three months category,  30% in the three
month to one year  category,  with the remaining 50% in the 1-5 year time frame.
Money  market  accounts  are  estimated  as 25% in the less  than  three  months
category and 75% in the three months to one year time frame.

A positive  repricing gap for a given period exists when total  interest-earning
assets exceed total interest-bearing  liabilities and a negative gap exists when
total  interest-bearing  liabilities are in excess of  interest-earning  assets.
Generally a positive  repricing gap will result in increased net interest income
in a rising rate environment and decreased net interest income in a falling rate
environment.  A negative  repricing gap tends to produce  increased net interest
income in a falling rate  environment  and  decreased  net interest  income in a
rising rate  environment.  At September  30, 1995,  rate  sensitive  liabilities
exceeded rate  sensitive  assets within a one year maturity range by $28 million
and, thus, the Company is positioned to benefit from a decline in interest rates
within the next year.

The Company's  repricing gap position is useful for measuring  general  relative
risk  levels.  However,  even with  perfectly  matched  repricing  of assets and
liabilities,  interest rate risk cannot be avoided entirely.  Interest rate risk
remains in the form of prepayment risk of assets and liabilities, timing lags in
adjusting  certain assets and  liabilities  that have varying  sensitivities  to
market interest rates, and basis risk. Basis risk refers to the possibility that
the repricing  behavior of variable-rate  assets could differ from the repricing
characteristics  of  liabilities  which  reprice in the same time  period.  Even
though  these  assets are  match-funded,  the spread  between  asset  yields and
funding costs could change.

Because the  repricing  gap position  does not capture  these risks,  Management
utilizes simulation modeling to measure and manage the rate sensitivity exposure
of earnings.  The Company's simulation model provides a projection of the effect
on net interest  income of various  interest  rate  scenarios  and balance sheet
strategies.


<PAGE>


Liquidity
---------

For  banks,  liquidity  represents  ability  to meet both loan  commitments  and
deposit withdrawals.  Factors which influence the need for liquidity are varied,
but include general economic  conditions,  asset/liability mix, bank reputation,
future  FDIC  funding  needs,  changes  in  regulatory  environment,  and credit
standing.  Assets which provide liquidity consist principally of loans, cash and
due from  banks,  investment  securities,  and  short-term  investments  such as
federal funds.  Maturities of securities  held for investment  purposes and loan
payments   provide  a  constant   flow  of  funds   available  for  cash  needs.
Additionally,  liquidity can be gained by the sale of loans or securities  prior
to maturity if such assets had previously been designated as available for sale.
Interest  rates,  relative to the rate paid by the security or loan sold,  along
with the maturity of the  security or loan,  are the major  determinates  of the
price which can be realized upon sale.

The subsidiary banks do not have brokered deposits.

At September  30, 1995,  the held to maturity  investment  portfolio  had a book
value of $44,829  compared to a fair value of $44,994 for a net unrealized  gain
of $165,000.  Such amounts are not expected to have a material  effect on future
earnings  beyond the usual  amortization  of  acquisition  premium or  discount,
because no  significant  sale of such  investments  is  anticipated.  Securities
available for sale with a cost totaling  $19,121,000 at quarter-end included net
unrealized  gains of $111,000.  These securities may be sold in whole or in part
to increase  liquid assets,  reposition the investment  portfolio,  or for other
purposes as defined by Management.

Capital
-------

Stockholders' equity increased $651,000 and $1,698,000 during the three and nine
months ended September 30, 1995, respectively.

Federal regulatory agencies have adopted various capital standards for financial
institutions,  including risk-based capital standards. The primary objectives of
the risk-based  capital  framework are to provide a more  consistent  system for
comparing capital  positions of financial  institutions and to take into account
the  different   inherent  risks  among  financial   institutions'   assets  and
off-balance-sheet items.

Risk-based  capital  standards have been  supplemented  with  requirements for a
minimum Tier 1 capital to assets ratio (leverage ratio). In addition, regulatory
agencies consider the published capital levels as minimum levels and may require
a Financial Institution to maintain capital at higher levels.

A comparison of the Company's  capital as of September 30, 1995 with the minimum
requirements is presented below.
                                                                      Minimum
                                                           Actual   Requirements
                                                           ------   ------------
                   
Tier 1 risk-based capital .....................            12.83%       4.00%
Total risk-based capital ......................            14.58%       8.00%
Tier 1 leverage ratio .........................             8.22%       3.00%

<PAGE>


Impact of Inflation and Changing Prices
---------------------------------------

The financial statements and related data presented herein have been prepared in
accordance  with generally  accepted  accounting  principles,  which require the
measurement of financial  position and operating  results in terms of historical
dollars without  considering  changes in the relative  purchasing power of money
over time due to inflation.

Unlike most industrial companies, virtually all of the assets and liabilities of
a financial institution are monetary in nature. As a result, interest rates have
a more  significant  impact on a financial  institution's  performance  than the
effects of general levels of inflation.  Interest rates do not necessarily  move
in the  same  direction  or in the same  magnitude  as the  price  of goods  and
services.  In the current interest rate environment,  liquidity and the maturity
structure  of  the  Company's   assets  and  liabilities  are  critical  to  the
maintenance of acceptable performance levels.

Trends, Events or Uncertainties
-------------------------------

Officers  and  Directors of the Company and its  subsidiaries  have had, and may
have in the future,  banking  transactions in the ordinary course of business of
the Company's subsidiaries.  All such transactions are on substantially the same
terms, including interest rates on loans and collateral,  as those prevailing at
the time for comparable  transactions  with others,  involve no more than normal
risk of collectibility, and present no other unfavorable features.

At its meeting on June 15, 1989, the Company's  Board of Directors  authorized a
stock repurchase program, to repurchase up to 10 percent of the Company's shares
or 60,000 shares.  Through  September 30, 1995,  approximately  28,000 shares of
common  stock  have  been  purchased  under  the  program,  net of  sales to the
Company's  Employee  Stock  Ownership  Plan.  The  Company  expects to  continue
repurchase of its common stock from time to time under the repurchase program.

In the normal  course of  business,  the Banks are  involved  in  various  legal
proceedings.  In the current opinion of management, any liability resulting from
such  proceedings  would not have a material  effect on the Company's  financial
statements.

The Company has incurred legal and engineering fees, and performed various tests
on a bank-owned vacant lot to determine if the lot contains environmental damage
or a potential for environmental  damage liability.  As a result of the testing,
the Company has  submitted a Site  Clean-Up  Report with the Iowa  Department of
Natural Resources  (IADNR).  The Company intends to work with the IADNR, as well
as its own  engineers and  attorneys,  to determine the nature and scope of this
environmental concern, to ascertain the need for a monitoring and/or remediation
program and to consider the costs and allocations of responsibility with respect
to any  expenses  incurred  under  such a program.  In the event  that  on-going
monitoring  or  remediation  is required,  investigation  into the potential for
reimbursement  by predecessor  owners or insurers is in process.  No conclusions
have  been  reached  at  this  time  about a final  plan  of  monitoring  and/or
remediation, if any, and the costs that may be associated with such a plan.

Besides  those  previously  discussed,  management  is not aware of any  trends,
events,  or uncertainties  that will have or that are reasonably  likely to have
material effect on the Company's liquidity, capital resources or operations.



<PAGE>


     IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
                  OTHER INFORMATION




ITEM 6.  Exhibits and reports on Form 8-K.


         Reports on Form 8-K.  

         No Form 8-K has been filed for the quarter ended September 30, 1995.

<PAGE>



            IOWA FIRST BANCSHARES CORP. AND SUBSIDIARIES
                             SIGNATURES




Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                                   IOWA FIRST BANCSHARES CORP.
                                                          (Registrant)


11/14/95                                          /s/ George A. Shepley
----------------                                  ------------------------------
Date                                              George A. Shepley, Chairman of
                                                    the Board, President & Chief
                                                               Executive Officer





11/14/95                                           /s/ Kim K. Bartling
----------------                                  ------------------------------
Date                                                Kim K. Bartling, Senior Vice
                                                      President, Chief Financial
                                                             Officer & Treasurer