U.S.
Securities and Exchange CommissionWashington, D.C. 
20549  FORM
10-QSB   x
  QUARTERLY
  REPORT UNDER SECTION 13 OR 15(d) OF THESECURITIES
  EXCHANGE ACT OF 1934For quarterly
  period ended  March 31, 2001o
  TRANSITION
  REPORT UNDER SECTION 13 OR 15(d) OFTHE
  EXCHANGE ACT
  Commission
file number           0-13343 Illini Corporation(Exact name of small
business issuer as specified in its charter) Illinois
  37-1135429(State or other jurisdiction of
  (I.R.S. Employerincorporation or organization)
  Identification No.)3200 West Iles
  Avenue, Springfield,  Illinois   62707(Address of principal executive offices)(217) 787-5111(Issuers telephone number)
 Check whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act during the past 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. YesTNo£  State the number of shares outstanding of
each of the issuer's classes of common equity, as of the latest practicable
date: 571,789 shares of $10 par value common stock as of  April 30, 2001. Transitional
  Small Business Disclosure Format:
  Yes£NoT    ILLINI
CORPORATIONINDEX TO FORM 10-QSB
March 31, 2001

PART I.    FINANCIAL INFORMATIONItem 1.
  Financial Statements
  (Unaudited)Condensed Balance
  Sheets March 31, 2001 and December 31, 2000Condensed
  Statements of Income - Three Months Ended March 31, 2001 and 2000Condensed
  Statements of Cash Flows Three Months Ended March 31, 2001 and 2000Notes
  to Interim Condensed Financial StatementsItem
  2.
  Management's
  Discussion and Analysis of OperationsItem
  3.
  Quantitative
  and Qualitative Disclosures About Market RiskPART II.   OTHER INFORMATIONSIGNATURESEXHIBIT INDEX


Information Concerning Forward-Looking
  StatementsStatements contained in this Form
  10-QSB which are not historical facts are forward-looking statements within
  the meaning of Section 27A of the Securities Act of 1933 and Section 21E of
  the Securities Exchange Act of 1934. These statements involve important known
  and unknown risks, uncertainties and other factors and can be identified by
  phrases using estimate, anticipate, believe, project, expect,
  intend, predict, potential, future, may, should and similar
  expressions or words.  Such
  forward-looking statements are subject to risk and uncertainties which could
  cause actual results to differ materially from those projected.  Such risks and uncertainties include
  potential change in interest rates, competitive factors in the financial
  services industry, general economic conditions, the effect of new legislation
  and other risks detailed in documents filed by Illini Corporation with the
  Securities and Exchange Commission from time to time.PART I.  FINANCIAL
INFORMATIONItem 1. 
Financial Statements

ILLINI CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS
March 31, 2001 and December 31, 2000
(Unaudited)

March 31,2001
  December 31,2000(dollars in thousands)ASSETSCash and due from
  banks
  $5,310
  $6,993Interest-bearing
  deposits in other banks
  31
  30Federal funds sold
  7,860
  0Cash and cash
  equivalents
  13,201
  7,023Investment securities
  available for sale, at fair value
  51,913
  54,602Loans, net of the
  allowance for loan losses
  173,951
  166,781Premises and equipment
  6,610
  6,555Accrued interest
  receivable
  2,495
  2,395Other real estate
  owned
  459
  359Other assets
  2,686
  2,316$251,315
  $240,031LIABILITIES AND SHAREHOLDERS' EQUITYNoninterest-bearing
  demand deposits
  26,002
  32,725Interest-bearing
  deposits:NOW and money
  market accounts
  56,617
  52,571Savings deposits
  16,950
  16,651Time deposits,
  $100,000 and over
  30,813
  26,143Other time
  deposits
  82,207
  75,202Total
  deposits
  212,589
  203,292Short-term debt
  375
  8,481Long-term debt
  6,000
  6,000Accrued interest
  payable
  1,388
  1,181Other liabilities
  1,882
  1,719Total
  liabilities
  222,234
  220,673COMMITMENTS AND CONTINGENT LIABILITIESPreferred
  Securities of subsidiary trust
  9,000
  ----Shareholders' equity:Common stock-$10
  par value, authorized 800,000 shares; 571,789 shares issued and outstanding
  5,718
  5,718Capital surplus
  3,358
  3,358Retained earnings
  10,114
  9,948Accumulated other
  comprehensive income
  891
  334Total
  shareholders' equity
  20,081
  19,358$251,315
  $240,031See accompanying notes to interim
consolidated financial statements.ILLINI CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED
STATEMENTS OF INCOMEThree Months Ended March 31, 2001 and 2000
(Unaudited)

2001
  2000(dollars in thousands)Interest income:Interest and fees on
  loans
  $3,701
  $2,976Interest on
  investments securities:Taxable
  635
  758Exempt from federal
  income taxes
  181
  107Interest on short term
  investments
  71
  40Total
  interest income
  4,588
  3,881Interest expense:Interest on deposits:NOW and money
  market accounts
  543
  461Savings deposits
  82
  92Time deposits,
  $100,000 and over
  401
  272Other time deposits
  1,187
  989Interest on short-term
  debt
  58
  30Interest on long-term
  debt
  194
  ----Total
  interest expense
  2,465
  1,844Net interest income
  2,123
  2,037Provision for loan losses
  100
  135Net interest
  income after  provision for loan
  losses
  2,023
  1,902Noninterest income:Service charges on
  deposit accounts
  333
  320Other fee income
  68
  72Mortgage loan
  servicing fees
  59
  58Gains on sales of
  mortgage loans
  43
  1Gains on sales of
  other real estate owned
  6
  14Other
  30
  35Total
  noninterest income
  539
  500Noninterest expense:Salaries and employee
  benefits
  1,010
  903Net occupancy expense
  199
  211Equipment expense
  104
  105Data processing
  183
  184Supplies
  43
  37Communication and
  transportation
  104
  115Marketing and
  advertising
  57
  50Correspondent and
  processing fees
  71
  62Loan and other real
  estate owned expenses
  14
  17Professional fees
  186
  194Directors' and
  regulatory fees
  75
  54Other
  97
  92Total
  noninterest expense
  2,143
  2,024Income before
  income tax expense
  419
  378Income tax expense
  110
  114Net income
  $309
  $264Basic earnings per share(based on weighted average common shares outstandingof 571,789 in 2001 and 2000)
  $0.54
  $0.46See accompanying notes to interim
consolidated financial statements.

ILLINI CORPORATION AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWSThree Months Ended March 31, 2001 and 2000
(Unaudited)

2001
  2000Cash flows from operating activities:
  (dollars in thousands)Net income
  $309
  $264Adjustments to
  reconcile net income to net cash 
  provided by operating activities:Depreciation and
  amortization
  186
  303Amortization of
  goodwill
  41
  41Provision for
  loan losses
  100
  135Gains on sale of
  premises and equipment
  ----
  (2)Gains on sale of
  other real estate owned
  ----
  (9)Increase in
  accrued interest receivable
  (100)
  (44)Increase
  (decrease) in accrued interest payable
  207
  (84)Origination of
  secondary market mortgage loans
  (4,171)
  (1,802)Proceeds from
  the sales of secondary market mortgage loans
  3,949
  1,575Other, net
  (567)
  (99)Net cash
  provided by (used in) operating activities
  (46)
  278Cash flows from investing activities:Proceeds from
  maturities and paydowns of investmentsecurities available for sale
  6,058
  1,498Purchases of
  investment securities available for sale
  (2,468)
  ----Net increase in loans,
  net
  (7,148)
  (3,324)Purchases of premises
  and equipment
  (266)
  (46)Proceeds from sale of
  premises and equipment
  ----
  2Proceeds from sales of
  other real estate owned
  ----
  14Net cash used
  in investing activities
  (3,824)
  (1,856)Cash flows from financing activities:Net increase (decrease) in non-interest
  bearing deposit accounts
  (6,723)
  999Net increase in NOW,
  money market accounts and savings
  4,345
  1,529Net increase
  (decrease) in time deposits $100,000 and over
  4,670
  (4,781)Net increase in other
  time deposits
  7,005
  5,633Net increase
  (decrease) in short-term debt
  (8,106)
  4Proceeds from issuance
  of Trust Preferred Securities
  9,000
  ----Cash dividends paid
  (143)
  (143)Net cash
  provided by financing activities
  10,048
  3,241Net increase in cash and cash equivalents
  6,178
  1,663Cash and cash equivalents at beginning of period
  7,023
  13,006Cash and cash equivalents at end of period
  $13,201
  $14,669Supplemental Information:Income taxes paid
  $613
  $125Interest paid
  $2,258
  $1,928Other non-cash investing activities:Transfer of loans to
  other real estate owned
  $100
  $----See accompanying notes to interim consolidated financial
statements.

ILLINI CORPORATION AND SUBSIDIARIESNotes to Interim Condensed
Consolidated Financial Statements (Unaudited)
March 31, 2001

(1)         Basis
of Presentation

The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with the instructions to
Form 10-QSB and, therefore, do not include all of the information and notes
required by generally accepted accounting principles for complete consolidated
financial statements.  In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.  For further information, refer to the
consolidated financial statements and footnotes included in the Illini
Corporation Annual Report on Form 10-KSB for the year ended December 31, 2000.Basic earnings per share is computed by dividing income
available to common shareholders by the weighted-average number of common
shares outstanding for the period. 
Illini Corporation has no potential common shares which are dilutive.Results for the three months ended March 31, 2001 may
not be indicative of the annual performance of Illini Corporation (or the
Banks).  Management of the Corporation
has made estimates and assumptions relating to the reporting of assets and
liabilities and the disclosure of contingent assets and liabilities to prepare
the interim consolidated financial statements (unaudited) in conformity with
generally accepted accounting principals. 
Actual results could differ from those estimates.(2)         Recent
Developments

Illini
Statutory Trust I is a wholly-owned subsidiary of the Company which was formed
on January 31, 2001, solely for the purpose of issuing capital and common
securities.  Illini Statutory Trust I
issued 9,279 shares of preferred securities bearing an interest rate of 10.20%
for net proceeds of $9.0 million, after deducting underwriting commissions,
capital, and other costs.  Illini
Statutory Trust I invested the proceeds in junior subordinated debentures of
the Company, which also had an interest rate of 10.20%.  The Company used $3.0 million of the
proceeds from the junior subordinated debentures to increase the equity capital
of Illini Bank.  Interest on the junior
subordinated debentures and distributions on the preferred securities are
payable semi-annually in arrears, with the first payment to be paid on August
22, 2001.  Distribution on the
securities is cumulative and based upon the liquidation value of $1,000 per
capital security.  The Company has the
right, at any time, so long as no event of default has occurred and is
continuing, to defer payments of interest on the junior subordinated debentures
for a period not exceeding 10 consecutive semi-annual periods; provided, that
such deferral may not extend beyond the stated maturity of the junior
subordinated debentures.  The securities
are subject to mandatory redemption, in whole or in part, upon repayment of the
junior subordinated debentures at maturity or their earlier redemption(3)         Allowance
for Loan Losses and Impaired Loans

The
allowance for loan losses is increased by provisions charged to operations and
is available to absorb loan losses. 
Illini Corporation utilizes a systematic, documented approach in
determining the appropriate level of the allowance for loan losses of its
subsidiary banks. Managements approach, which provides for general and
specific allowances, is based on current economic conditions, past loan losses,
collection experience, risk characteristics of the portfolio, assessing
collateral values by obtaining independent appraisals for significant
properties, and such other factors which, in managements judgment, deserve
current recognition in estimating potential loan losses.  The determination of the allowance for loan
losses is one of the significant estimates made by management in the
preparation of the consolidated financial statements.March
  31,2001
  2000(dollars
  in thousands)Balance at beginning
  of period
  $2,188
  $1,696Provision charged to
  expense
  100
  135Charge-offs
  65
  27Less:  recoveries
  11
  20Net charge-offs
  54
  7Balance at end of period
  $2,234
  $1,824Loans,
except large groups of smaller-balance homogeneous loans, for which the full
collection of principal and interest according to the contractual terms of the
loan agreement is not probable, are evaluated for impairment.  Information regarding impaired loans at
March 31, 2001 and December 31, 2000 is as follows:March
  31,
  December
  31,2001
  2000(dollars
  in thousands)Nonaccrual loans
  $1,922
  $772Impaired loans
  continuing to accrue interest
  ----
  ---Total impaired loans
  $1,922
  $772Allowance for losses
  on specific impaired loans
  $115
  $115Impaired loans with no
  specific related allowance for loan losses
  1,764
  614Average balance of
  impaired loans during the period
  1,078
  714(4)         New
Accounting Pronouncements

In
June 1998, the FASB issued SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities(SFAS 133), which
establishes standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging activities.  SFAS 133 requires an entity to recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value.  In
June 1999, the FASB issued SFAS No. 137, Accounting
for Derivative Instruments and Hedging Activities  Deferral of the Effective
Date of FASB Statement No. 133, which states SFAS 133 shall be
effective for all fiscal quarters of all fiscal years beginning after June 15,
2000. The adoption of the Statement did not have a material impact on the
Company's financial condition or results of operation.In
2000, the FASB issued Statement of Financial Accounting Standards No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities.  This Statement replaces Statement of Financial Accounting
Standards No. 125.  This Statement is
also effective for the recognition and reclassification of collateral and for
disclosures relating to securitization transactions.  This Statement is effective for fiscal years ending after
December 15, 2000.  The adoption of this
Statement did not have any impact on the Company's financial condition or
results of operations.(5)         Other
Comprehensive Income

For the three month period ended March 31, 2001 and
2000, unrealized gains (losses) on debt and marketable equity securities
available for sale, net of tax, is the Corporation's only other comprehensive
income component.  Other comprehensive
income for the three month period ended March 31, 2001 and 2000 is summarized
as follows:

Three
  Months Ended March 31, 2001TaxBefore-Tax
  (Expense)
  Net-of-TaxAmount
  Benefit
  AmountNet realized and
  unrealized gains (losses)on securities
  available for sale
  $876
  $(319)
  $557Less adjustment for
  net securities gains(losses) realized in
  net income
  ----
  ----
  ----Other comprehensive income (loss)
  $876
  $(319)
  $557

Three
  Months Ended March 31, 2000TaxBefore-Tax
  (Expense)
  Net-of-TaxAmount
  Benefit
  AmountNet realized and
  unrealized gains (losses)on securities
  available for sale
  $(121)
  $44
  $(77)Less adjustment for
  net securities gains(losses) realized in
  net income
  ----
  ----
  ----Other comprehensive income (loss)
  $(121)
  $44
  $(77)(6)           Sale
of Menard County Branches

On May 24, 2000, Illini Corporation signed a Branch
Purchase and Assumption Agreement with Petefish Skiles & Company of
Virginia, Illinois, to sell Illini Corporation branches located in Tallula,
Greenview and Petersburg, Illinois.  The
sale includes real property, personal property, loans and deposit
liabilities.  Total average loan and
total average deposit liabilities for these branches at September 30, 2000 were
$6.1 million and $14.1 million, respectively. 
The transaction was completed in the fourth quarter of 2000 with a
before tax gain of $1,071,000 recorded.Item 2.  Management's
Discussion and Analysis of Operations

This discussion should be read in conjunction with the
consolidated financial statements, notes, and tables included elsewhere in this
report and in the 2000 Illini Corporation Annual Report on Form 10-KSB (2000
Form 10-KSB).



SUMMARY



Quarter endedMarch 31,
  PercentEarnings
  2001
  2000
  Change(dollars in thousands, except per
  share data)Total revenue
  $5,127
  $4,381
  17.02%Net income
  309
  264
  17.07%Basic earnings per share
  $0.54
  $0.46
  17.07%









Quarter endedMarch 31
  Basis PointKey Ratios
  2001
  2000
  ChangeReturn on average assets (1)
  0.51%
  0.49%
  0.02%Return on average equity (1)
  6.65%
  6.12%
  0.53%Average equity to assets
  7.69%
  8.06%
  (0.37%)Tier 1 leverage ratio
  9.30%
  7.40%
  1.90%Tier 1 risk-based capital ratio
  11.73%
  10.63%
  1.10%Total risk-based capital ratio
  14.64%
  11.85%
  2.79%Dividend payout ratio
  46.28%
  54.18%
  (7.90%)Net interest margin
  3.96%
  4.27%
  (0.31%)Efficiency ratio
  77.87%
  78.08%
  (0.20%)





(1)  Reported on
an annualized basis.











RESULTS OF OPERATION

Earning Assets

Management
is pleased with the results of our efforts to grow earning assets.  Average earning assets of the Corporation
for the first three months of 2001 increased 15.32% or $30.1 million to $226.5
million from $196.4 million for the first three months of 2000.  Earning assets increased primarily due to
planned loan growth.  On February 22,
2001, the Company issued $9.3 million of junior subordinated debentures to it's
subsidiary, Illini Statutory Trust I which completed a $9.0 million sale of
trust preferred stock.

As
discussed in the asset quality section of this Form 10-QSB, management has
actively pursued the improvement of the asset quality of all earning assets,
including loans and investment securities.

Average net loans increased to $170.1 million for the
three months ended March 31, 2001 compared to $136.5 million for the same
period in 2000.  The increase of $33.6
million for the three months ended March 31, 2001 as compared to the same
period for 2000 was primarily due to an increase of $27.4 million in commercial
loans, including commercial real estate loans, $2.9 million in residential
loans, $2.3 million in agriculture loans, including agriculture real estate,
and $1.4 million in consumer loans. The average yield on the loan portfolio,
net of the allowance for loan losses, increased 7 basis points to 8.84% for the
three months ended March 31, 2001, due to the pricing strategies for certain
commercial loans, and a change in loan mix for the three months ended March 31,
2001 compared to the three months ended March 31, 2000.

Average investment securities decreased $4.8 million for
the three months ended March 31, 2001 as compared to the same period in
2000.  The average yield of the
investment securities portfolio was 6.86% for the three months ended March 31,
2001, an increase of 47 basis points as compared to the same period in 2000.  The decrease in investments from December
31, 2000 to March 31, 2001 is a result of the increase in loan growth, and is
consistent with management's intent to maintain a balance in the investment
portfolio to support basic surplus, which is used as a measurement of liquidity

Funding

The most important and stable source of
funding is core deposits, considered by management to include non-interest
bearing demand deposits, NOW and money market accounts, savings deposits and
time deposits under $100,000.  Average
core deposits for the three months ended March 31, 2001 increased 3.6% or $6.3
million to $179.3 million from $173.0 million for the three months ended March
31, 2000.  The average rate paid on
total interest bearing liabilities for the three months ended March 31, 2001
increased 62 basis points when compared to the three months ended March 31,
2000.  The average rate paid on trust
preferred securiites for the three months ended March 31, 2001 was 6.38%.

The increase in average core deposits for
the three months ended March 31, 2001 as compared to the same period in 2000
has provided a low cost funding source for the growth in the loan portfolio. In
addition to federal funds purchased, Illini Bank and Camp Point maintain an
overnight federal funds line of credit with an unaffiliated financial institution
and a line of credit with the Federal Home Loan Bank of Chicago.



Net Interest Income/Net
Interest Margin

The operating results of the Corporation
are highly dependent on net interest income, which is the difference between
interest income on interest-earning assets and interest expense on
interest-bearing liabilities, consisting primarily of deposits.  Net interest income is determined by the
difference between yields earned on assets and rates paid on liabilities and
the relative amounts of interest-earning assets and interest-bearing
liabilities.

Interest income, on a fully taxable
equivalent basis, was $4.7 million for the three months ended March 31, 2001
compared to $3.9 million for the same period in 2000.  Interest expense was $2.5 million for the three months ended
March 31, 2001 compared to $1.8 million for the same periods in 2000.  An increase in interest income and interest
expense resulted in a $0.1 million increase in net interest income for the
three months ended March 31, 2001.

Net interest margin for the three months
ended March 31, 2001 of 3.96% was down from 4.27% reported for the same period
in 2000.  The decrease in the net
interest margin is primarily due to increases in rates of core time
deposits.  Management will continue to
closely monitor its funding costs to maintain an acceptable spread given the
increased demand in commercial lending. 
Management will continue to structure the balance sheet to provide
insulation for extreme interest rate changes. 
Management continues to focus on increasing the loan portfolio without
jeopardizing the enhanced liquidity that has been gained in prior periods.

Net interest income is affected by the
growth, pricing, mix, and maturity of interest earning-assets and interest-
bearing liabilities, as well as other factors, including loan quality.  Also, the Corporations interest-rate spread
is affected by regulatory, economic, and competitive factors that influence
interest rates, loan demand, and deposit flow. 
Individual components of net interest income and net interest margin are
presented in the consolidated average balances, interest income/expense and
yield/rates table located elsewhere in this report under the headings;
Consolidated Average Balances, Interest Income/Expense and Yield/Rates, and Net
Interest Income-Rate/Volume Variance Analysis.

Consolidated Average Balances, Interest Income/Expense and
Yield/Rates

Three
  months ended March 31,2001
  2000Percent
  Interest
  Average
  
  Percent
  Interest
  AverageAverage
  of
  Total
  Income/
  Yield/
  Average
  of
  Total
  Income/
  Yield/Balance
  Assets
  Expense
  Rate
  Balance
  Assets
  Expense
  Rate(dollars
  in thousands)ASSETSInterest-earning assets:Short-term investments
  $4,158
  1.7%
  $71
  6.88%
  $2,872
  1.3%
  $40
  5.63%Investment securities (3)Taxable
  39,470
  16.1
  635
  6.44
  48,458
  22.6
  758
  6.26Tax-exempt (1)
  12,794
  5.2
  262
  8.18
  8,655
  4.0
  155
  7.14Total securities
  52,264
  21.3
  897
  6.86
  57,113
  26.6
  913
  6.39LoansCommercial (1)
  28,776
  11.8
  651
  9.18
  20,592
  9.6
  471
  9.18Agriculture
  13,772
  5.6
  283
  8.32
  11,933
  5.6
  253
  8.51Real estate:Commercial
  74,921
  30.6
  1,608
  8.70
  55,707
  25.9
  1,187
  8.54Agriculture
  7,209
  3.0
  159
  8.95
  6,780
  3.2
  148
  8.77Residential
  34,773
  14.2
  711
  8.29
  31,845
  14.8
  653
  8.22Consumer, net
  12,073
  4.9
  264
  8.89
  10,687
  5.0
  243
  9.12Credit card
  783
  0.3
  33
  17.18
  669
  0.3
  28
  16.97Total loans
  172,307
  70.4
  3,709
  8.73
  138,213
  64.4
  2,983
  8.66Allowance for loan losses
  (2,214)
  (0.9)
  
  
  (1,765)
  (0.8)Net loans (1) (2)
  170,093
  69.5
  3,709
  8.84
  136,448
  63.6
  2,983
  8.77Total interest-earning assets
  226,515
  92.5
  $4,677
  8.37%
  196,433
  91.5
  $3,936
  8.04%Cash and due from
  banks
  5,653
  2.3
  
  
  6,389
  3.0Premises and equipment
  6,682
  2.7
  
  
  7,465
  3.5Other real estate
  owned
  427
  0.2
  
  
  613
  0.3Other assets (3)
  5,731
  2.3
  
  
  3,680
  1.7Total
  assets
  $245,008
  100.0%
  
  
  $214,580
  100.0%LIABILITIES AND SHAREHOLDERS
  EQUITYDeposits:Noninterest-bearing demand
  $28,100
  11.5%
  
  
  $29,131
  13.6%Interest-bearing demand
  54,297
  22.2
  $543
  4.06%
  51,679
  24.1
  $461
  3.58
  %Savings
  16,658
  6.8
  82
  2.00
  18,704
  8.7
  92
  1.98Time deposits, less than $100,000
  80,217
  32.7
  1,187
  6.00
  73,449
  34.2
  989
  5.40Total core deposits
  179,272
  73.2
  1,812
  4.10
  172,963
  80.6
  1,542
  3.58Time deposits, $100,000 and over
  28,439
  11.6
  401
  5.71
  20,180
  9.4
  272
  5.41Total deposits
  207,711
  84.8
  2,213
  4.32
  193,143
  90.0
  1,814
  3.77Short-term debt
  3,229
  1.3
  58
  7.22
  1,602
  0.7
  30
  7.51Long-term debt
  6,000
  2.4
  100
  6.74
  ----
  ----
  ----
  ----Total interest-bearing liabilities
  188,840
  77.0
  2,371
  5.09
  165,614
  77.1
  1,844
  4.47Other liabilities
  3,219
  1.3
  
  
  2,538
  1.2Total liabilities
  220,159
  89.8
  
  
  197,283
  91.9Trust preferred
  securities
  6,000
  2.5
  94
  6.38
  ----
  ----Shareholders equity
  18,849
  7.7
  
  
  17,297
  8.1Total liabilities andshareholders equity
  $245,008
  100.0%
  
  
  $214,580
  100.0%Net interest margin
  
  
  $2,212
  3.96%
  
  
  $2,092
  4.27%

(1)         Income amounts are presented on a fully
taxable equivalent basis (FTE), which is defined as income on earning assets
that is subject to either a reduced rate or zero rate of income tax, adjusted
to give effect to the appropriate incremental federal income tax rate and
adjusted for non-deductible carrying costs, where applicable.  Where appropriate, yield calculations
include these adjustments.  The federal
statutory rate was 34% for all periods presented.

(2)         Nonaccrual loans are included in the
loan balances.  Interest income includes
related fee income of $75,000 in 2001 and $79,000 in 2000.

(3)         Average securities balances are based
on amortized historical cost, excluding SFAS 115 adjustments to fair value,
which are included in other assets.



Net Interest Income  Rate/Volume Variance Analysis(*)

Quarter ended March 31, 2001as compared toquarter ended March 31, 2000Changes inIncome/Expense
  VolumeEffect
  RateEffect(dollars in thousands)Short-term investments
  $31
  $18
  $13Investment securities:Taxable
  (123)
  (139)
  16Tax-exempt
  107
  73
  34Total securities
  (16)
  (66)
  50Loans:Commercial
  180
  185
  (5)Agriculture
  30
  39
  (9)Real Estate:Commercial
  421
  405
  16Agriculture
  11
  9
  2Residential
  58
  59
  (1)Consumer, net
  21
  31
  (10)Credit card
  5
  5
  ---Total loans
  726
  733
  (7)Total interest income
  741
  685
  56Interest bearing demand
  82
  23
  59Savings
  (10)
  (10)
  ---Time deposits, less than $100,000
  198
  91
  107Total core
  deposits
  270
  104
  166Time deposits, $100,000 and over
  129
  110
  19Total deposits
  399
  214
  185Short-term debt
  28
  30
  (2)Long-term debt
  194
  ---
  194Total debt
  222
  30
  192Total interest expense
  621
  244
  377Net interest income
  $120
  $441
  $(321)




(*) 
Fully taxable equivalent basis
NOTE:  The change in interest which can
not be attributed to only a change in volume or a change in
  rate, but instead represents a
combination of the two factors, has been allocated to the rate effect.

Noninterest Income






Three months endedMarch 31,
  Percent Change2001
  2000
  2001/2000Service charges on deposit accounts
  $333
  $320
  4.1%Other fee income
  68
  72
  (5.6)Mortgage loan servicing fees
  59
  58
  1.7Gains on sales of mortgage loans
  43
  1
  4,200.0Gains on sales of other real estate owned
  6
  14
  (57.1)Other
  30
  35
  (14.3)$539
  $500
  7.8%The 4.1% increase in service charge income is a direct
result of increased numbers of fee based transaction accounts opened in
2000.  Mortgage loan servicing fees
increased 1.7% for the three months ending March 31, 2001.  The increase is due to increased activity of
mortgage loans being refinanced due to the decline in mortgage rates for single
family housing.  Gains on sales of
mortgage loans are a result of increased sales volumes of these refinancings.

Noninterest ExpenseThree months endedMarch 31,
  Percent Change2001
  2000
  2001/2000Salaries and employee benefits
  $1,010
  $903
  11.8%Net occupancy expense
  199
  211
  (5.7)Equipment expense
  104
  105
  (1.0)Data processing
  183
  184
  (0.5)Supplies
  43
  37
  16.2Communication and transportation
  104
  115
  (9.6)Marketing and advertising
  57
  50
  14.0Correspondent and processing fees
  71
  62
  14.5Loan and other real estate owned expenses
  14
  17
  (17.6)Professional fees
  186
  194
  (4.1)Directors and regulatory fees
  75
  54
  38.9Other
  97
  92
  5.4$2,143
  $2,024
  5.9%Total non-interest expense increased $119,000 to $2,143
million for the three months ended March 31, 2001.  The net increases in these expenses are influenced by several
factors.  Salaries and employee benefits
increased $107,000 and was a direct result of incentive pay programs, increased
costs of employee benefit plans, and cost of living increases to base
salaries.  Communication and
Transportation expenses decreased $11,000 as a result of cost reductions from
the sale of three branches in 2000. 
Marketing and advertising increased $7,000 to support bank strategies
for growth.  Correspondent and
processing fees increased $9,000, Regulatory fees increased $21,000, and other
expenses increased $5,000.  These
increases were a result of growth related costs.  Management continues to explore opportunities to reduce
non-interest expenses.



CREDIT QUALITY

Gross loans totaled $176.2 million at March 31, 2001, an
increase of $7.2 million, or 4.26%, from $169.0 million at December 31,
2000.  The provision for loan losses has
decreased to $100,000 for the three months ended March 31, 2001 as compared to
$135,000 for the same period in 2000. 
At March 31, 2001 the allowance as a percent of total loans decreased to
1.27% as compared to 1.30% at December 31, 2000.  The decrease is a result of the first quarter growth in the loan
portfolio.  Management believes this
percentage is adequate to support any unexpected losses, and is consistent with
peer group ratios.

Three Months EndedMarch 31,2001
  2000Allowance for Loan Losses:
  (dollars in thousands)Balance at beginning
  of period
  $2,188
  $1,696Provision charged to
  expense
  100
  135Charge-offs
  65
  27Less:  recoveries
  11
  20Net charge-offs
  54
  7Balance at end of
  period
  $2,234
  $1,824Net Charge-Off Ratios(1):Commercial
  0.09%
  (0.09)%Real Estate
  0.13
  0.00Installment
  0.20
  0.19Credit Cards
  0.42
  4.16Totals
  0.13%
  0.02%





(1) Ratios to average loans are
presented on  an annualized basis




Illini Corporations primary business of making
commercial, real estate, and consumer loans entails potential losses, the
magnitude of which depends on a variety of economic factors affecting borrowers
which are beyond the control of the Corporation.  Accordingly, a significant factor in the Corporations past and
future operating results is the level of the provision for loan losses. The
provision for loan losses is down 26% for the three months ended March 31, 2001
as compared to the comparable period in the prior year.  Net charge-offs increased to $54,000 for the
three months ended March 31, 2001 as compared to $7,000 for the comparable
period in the prior year.  The increase
in net charge offs is a direct result of the repurchase of four FNMA real
estate loans totaling $33,480 that were foreclosed upon, and two commercial loans
that went into non-accrual.

Management feels that credit quality systems and
controls, along with the creation of a formalized credit administration
function, have continued to improve credit quality.  Illini Corporation has a 1.27% allowance to gross loans ratio as
of March 31, 2001 compared to 1.30% and 1.31% as of December 31, 2000 and March
31, 2000, respectively.  The net
charge-off ratio for the three months ended March 31, 2001 was 0.13% compared
to 0.03% and 0.09% for years ended December 31, 2000 and 1999, respectively.

At March 31, 2001, impaired loans totaled $1,922,000
compared to $772,000 at December 31, 2000. 
The increase is due to one commercial real estate loan totaling
$915,000, and one commercial loan totaling $427,000.  The commercial real estate loan is secured by real estate with a
loan to value of less than 70%. 
Management is in the process of working out a recapitalization with the
borrower that will bring this non-performing loan into compliance with the
terms of debt instruments.  The
collateral on the commercial loan is being liquidated and should be complete by
June 30, 2001.  Management estimates no
loss in this loan as the loan is fully collateralized and personally guaranteed
by the borrowers.  At March 31, 2001 and
December 31, 2000 allowance for loan losses on impaired loans totaled
$115,000.  Of the total impaired loans
at March 31, 2001 and December 31, 2000, there were no loans still accruing
interest.



Credit Quality
  March 31,2001
  December 31,
  2000
  March 31,
  2000(dollars in thousands)Nonperforming assets:Loans delinquent over
  90 days, still accruing interest
  $---
  $---
  $---Nonaccrual
  1,922
  772
  558Renegotiated
  ---
  ---
  32Other real estate
  owned
  459
  359
  613Total nonperforming
  assets
  $2,381
  $1,131
  $1,203Key ratios:Nonperforming loans
  to ending loans
  1.09%
  0.46%
  0.40%90 days delinquent to
  ending loans
  0.00
  0.00
  0.00Allowance to total
  loans
  1.27
  1.30
  1.31Allowance to
  nonperforming loans
  116.23
  283.49
  309.15Illini Corporations loan underwriting guidelines and
credit review procedures and policies are designed to protect the Corporation
from credit losses.  Illini
Corporations process for monitoring loan quality includes detailed monthly
trend analysis of delinquencies and nonperforming assets.  Management and the board of directors
monitor potential problem loans, changes to the watchlist, and extensions of
credit outside of the loan policy. 
Management extensively monitors significant credit relationships through
appraisals, assessment of the financial condition of borrowers, restrictions on
out-of-area lending, and avoidance of loan concentrations.

As discussed in the Corporations 2000 Form 10-KSB and
previous Form 10-QSB reports, management has implemented several initiatives to
improve credit quality.  These steps
included a new officer driven problem loan identification system, a revamped
allowance for loan losses adequacy determination process, a new loan policy,
and improved reporting systems (credit quality and production).  Management is committed to continuing these
initiatives and has supplemented these efforts in 2000 by engaging an outside
firm to perform a comprehensive review of each banks loan portfolio to assess
its credit quality and the effectiveness of managements loan quality systems
and controls.

CAPITAL
RESOURCES

The current economic and regulatory
environment places increased emphasis on capital strength.  A strong capital position, which is vital to
the continued profitability of Illini Corporation, also promotes depositor and
investor confidence and provides a solid foundation for the future growth of
the organization.  Illini Corporation
has satisfied its capital requirements principally through the retention of
earnings.  At March 31, 2001, Tier 1
risk-based capital, total risk-based capital and leverage capital ratios were
11.73%, 14.64% and 9.30%, respectively, as compared to 9.63%, 10.87% and 7.27%
for the period ending December 31, 2000. 
The increase is due to a preferred security issue by the trust
subsidiary, Illini Statutory Trust I, which was completed February 22,
2001.  Per regulation 25% of the trust
preferred issue is calculated in the Tier 1 capital ratio.  For a further explanation please refer to Section
2 under the heading Recent Development. 
As of March 31, 2001, the Corporations subsidiary banks met the
criteria to be classified as well capitalized.

Earnings retention is affected by the
board of directors declaration of cash dividends.  The dividend payout ratio is an indicator of the level of
earnings retained.  The Board of
Directors of the Corporation considers the capital strength of the Corporation
and the banks in determining the appropriate level of cash dividends to be paid
to shareholders.  The dividend payout
ratio for the three months ended March 31, 2001 was 46.28% as compared to
54.18% for the three months ended March 31, 2000.  The dividend per share for the three months ended March 31, 2001
is unchanged from the same period in 2000.

LIQUIDITY

Illini Corporations policy is to manage
interest rate risk to a level which places limits on the sensitivity of its
earnings to changes in market interest rates. 
An explanation of the asset/liability management process is found in the
Corporations 2000 Form 10-KSB, beginning on
page 15.  Interest rate risk
management at Illini Corporation is executed through the use of on-balance
sheet investment products.

The assets portion of the balance sheet
provides liquidity primarily through loan principal repayments, maturities of
investment securities, and sales of investment securities available for
sale.  The liability side of the balance
sheet provides liquidity through various customers interest-bearing and
noninterest-bearing deposit accounts. 
Short-term borrowings are an additional source of liquidity and
represent Illini Corporations incremental borrowing capacity.

Illini Corporation uses a comprehensive
analysis of its asset/liability function, including a review of its funds
management policy and its principal measure of liquidity.  The Corporation implemented a new measure of
liquidity measurement, called Basic Surplus, which redefines liquid assets as
the total assets held by the Corporation which can be converted to cash in
thirty days or less, reduced by short term liabilities.  As of March 31, 2001, the most recent
calculation, Illini Corporations core liquidity was $19.0 million, or 7.55% of
total average assets.

Management believes the formula provides
an accurate measurement of liquidity and provides management with a
comprehensible and consistent tool to develop pricing and profitability
strategies.  Based on the new
measurement and as compared to peer banks, management believes the liquidity
position of the banks is strong.





Item
3.  Quantitative and Qualitative
Disclosures About Market Risk

Derivative financial instruments include
futures, forwards, interest rate swaps, option contracts, and other financial
instruments with similar characteristics. 
The bank subsidiaries currently do not enter into futures, forwards,
swaps, or options.  However, they are a
party to financial instruments with off-balance sheet risk in the normal course
of business to meet the financing needs of its customers.  These financial instruments include
commitments to extend credit and standby letters of credit.  These instruments involve to varying
degrees, elements of credit and interest rate risk in excess of the amount
recognized in the consolidated balance sheets. 
Commitments generally have fixed expiration dates and require collateral
from the borrower if deemed necessary by the banks.  Standby letters of credit are conditional commitments issued by
the banks to guarantee the performance of a customer to a third party up to a
stipulated amount and within specified terms and conditions.  Commitments to extend credit and standby
letters of credit are not recorded as an asset or liability by the banks until
and unless the instrument is exercised.

The bank subsidiaries exposure to market risk and interest
rate risk is reviewed by their individual Asset/Liability Committees.  Management realizes certain risks are
inherent, such as the uncertainty of market interest rates, and that its goal
is to identify and manage such risks. 
The primary tool management uses to monitor and manage interest rate
risk is a static gap report.  The bank
subsidiaries have no market risk sensitive instruments held for trading
purposes.

The Corporations interest rate and market risk profile
has not materially changed from the year ended December 31, 2000.  Please refer to the Corporations 2000 Form
10-KSB for further discussion of the Corporations market and interest rate
risk.



PART II.  OTHER INFORMATION

Item 1    Legal
Proceedings

Mary Quinn v. Illini
Corporation and Illinois Stock Transfer Co.,Sangamon County Case No. 98 CH 240

Illini
Corporation adopted a Shareholder Rights Agreement on June 20, 1997, and named
Illinois Stock Transfer Company (ISTC) as its rights agent thereunder.  Illini Corporation was notified in May 1998
of a threatened complaint against ISTC by an Illini Corporation
shareholder.  The shareholder, Mary K.
Quinn (Quinn), who owns 21 shares of stock in Illini Corporation, filed suit
against ISTC on June 9, 1998 in the Seventh Judicial Circuit Court, Sangamon
County, Illinois.  Quinn sought to
compel ISTC to distribute rights certificates to Illini Corporations
shareholders and further sought to certify all Illini Corporation shareholders
as a class.  Quinn asserted that Ida R.
Noll became an acquiring person under the Rights Agreement on April 16, 1998,
and that the Rights Agreement was triggered. 
IST has vigorously contested Quinns assertions that Ida R. Noll was an
acquiring person, that the Rights Agreement had been triggered, and that ISTC
had a duty to distribute rights certificates.

On
June 9, 1998, Quinn filed a Motion to Certify the Class, which was granted on
December 29, 1998.  On January 13, 1999,
Quinn filed an Amended Complaint adding Illini Corporation as a defendant to
her action.  Both Illini Corporation and
ISTC answered the Amended Complaint and denied that Ida R. Noll was an
acquiring person.  Quinn asserted that
she was entitled to recover her attorneys fees from Illini Corporation and ISTC.

Quinn
filed a Motion for Summary Judgment that asked the Court to determine as a
matter of law that Ida R. Noll became an acquiring person on April 16, 1998,
that the Rights Agreement was triggered as a result and that Illini Corporation
and ISTC had a duty to distribute rights certificates to all shareholders as of
April 16, 1998, except for Ida R. Noll. 
Illini Corporation opposed Quinns Motion for Summary Judgment, which
was heard by the Court on June 18, 1999. 
On June 29, 1999, the Court entered an Opinion and Order denying Quinns
Motion for Summary Judgment.

On
or about May 6, 1999, counsel for Quinn advised Illini Corporations counsel of
her intent to seek an injunction that would preclude Illini Corporation from
completing its acquisition of the Farmers State Bank of Camp Point (Camp
Point), pending further order of the Court. 
Quinn subsequently filed a Motion for Preliminary Injunction and a
Memorandum of Law in Support of her Motion. 
Quinn argued that the class (consisting of all Illini Corporations
shareholders as of April 16, 1998, except for Ida R. Noll) would be irreparably
harmed if the Camp Point merger closed prior to a determination on the merits
of her suit.  Illini Corporation filed
extensive briefs in opposition to the Motion for Preliminary Injunction, and
the Court heard the Motion on July 1, 1999. 
The Court entered a written Order on July 13, 1999, denying the Motion
for Preliminary Injunction.

Quinns
counsel filed a Motion for Reconsideration of the Orders denying Quinns Motion
for Summary Judgment and Motion for Preliminary Injunction.  Illini Corporation and ISTC filed a Motion
for Summary Judgment on August 25, 1999. 
At a hearing held on October 18, 1999, the Court granted Illini
Corporation and ISTCs Motion for Summary Judgment and denied Quinns Motion for
Reconsideration.  An Order was
subsequently entered on January 12, 2000.

Quinns
counsel announced on October 18, 1999, the intention to petition the Court for
an order directing Illini Corporation and ISTC to pay Quinns attorneys fees
pursuant to the attorney fee provision of the Rights Agreement.  Quinns fee petition was heard and
denied.  Quinn has filed a pending
appeal as to all adverse orders.  The
Corporation is vigorously contesting the appeal.  Oral argument was held before the Illinois Appellate Court for
the Fourth District on July 18, 2000.

On
July 31, 2000, the Appellate Court issued an order reversing the trial courts
order granting summary judgment to Illini Corporation and remanding the case
for trial.  The Appellate Court found
that genuine issue of material fact remained concerning whether the Illini
Corporation board of directors acted in good faith (1) in determining on
April 30, 1998 that Ida Nolls acquisition of shares was inadvertent and
(2) in amending the agreement on June 30, 1998.  The Appellate Court also reversed the trial courts order denying
Quinns request for costs, expenses and attorneys fees, finding that the fee
provision of the Rights Agreement did not require one who brought an action to
enforce the agreement to prevail in that action in order to recover fees.  As of December 31, 2000, Illini Corporation
has accrued its best estimate as a contingency reserve for this litigation to
cover expenses and attorneys fees, although such amounts shall be subject to
further discovery.

The
case has been remanded to the trial court. 
The trial court has permitted Quinn to add Mrs. Noll as a party to the
action.

Ida R Noll v. Illini
Corporation, et al.,Sangamon County Case No. 98 MR 226

On
or about July 17, 1998, Ida R. Noll (Noll) filed a 14 count complaint against
Illini Corporation and all members of Illini Corporations Board of Directors
serving at that time, except William Walschleger, Jr., in the Seventh Judicial
Circuit, Sangamon County, Illinois.  On
September 28, 1998, Judge Carmody dismissed the complaint and granted Noll 21
days to file an Amended Complaint.  Noll
filed an Amended Complaint on October 19, 1998.  The Amended Complaint was also dismissed, but Noll was granted
leave to file a Second Amended Complaint. 
Illini Corporation and the directors answered the Second Amended
Complaint.

The
Second Amended Complaint arose out of Illini Corporations adoption of a
Shareholder Rights Agreement on June 20, 1997, Illini Corporations subsequent
adoption of a First Amendment to the Rights Agreement on July 1, 1998, and the
Nolls assertion that she became an acquiring person under the Rights
Agreement on April 16, 1998.  Noll
sought declaratory and injunctive relief from Illini Corporation and the
directors regarding the alleged triggering of the Rights Agreement.  Noll also challenged the enforceability and
validity of the First Amendment to the Rights Agreement.  Noll sought compensatory and punitive
damages against the directors arising out of the directors alleged breaches of
fiduciary duty committed in connection with the Rights Agreement and the First
Amendment to the Rights Agreement.  Noll
sought recovery of her attorneys fees and costs in connection with her action,
alleging attorneys fees through October 23, 1998 of approximately $50,000 and
expenses of approximately $5,000. 
Illini Corporation and the directors vigorously contested and opposed
the allegations.

On
July 6, 1999, Illini Corporation adopted a Second Amendment to its Shareholder
Rights Agreement.  Illini Corporation
moved on August 31, 1999, for summary judgment as to the counts of the Second
Amended Complaint directed against it. 
Illini Corporations motion argued that the adoption of the Second
Amendment rendered the case against it moot. 
The Defendant directors also filed on or about September 15, 1999, a
Joint Motion for Summary Judgment as to the counts directed against them.  On October 18, 1999, after denying Nolls
motion to continue the hearing, the Court granted both motions.  Counsel for the Defendants submitted written
orders granting the Defendants summary judgment motions, which were entered by
the Court on January 12, 2000.

Nolls
counsel filed a petition for payment of her attorneys fees by Illini
Corporation, which was heard on December 9, 1999.  The Court denied Nolls fee petition.  Noll filed a Motion for Reconsideration of the Orders granting
the Defendants Motions for Summary Judgment and denying attorneys fees.  Hearing on that Motion was held on April 11,
2000, and the Court denied the Motion. 
Noll has appealed to the Illinois Appellate Court where the appeal is
now pending.

Illini
Corporation has executed a definitive stock purchase agreement to redeem
160,088 of its shares (27.99% of total shares outstanding) from the Noll family
and related interests. The agreement was executed on April 12, 2001. The
agreement is subject to the approval of federal and state banking regulators
and, if approved, is expected to close on or before the end of the third
quarter 2001.  Part of the agreement
requires the Noll family to terminate this litigation.

Ida R. Noll v. Ernest H.
Huls, Illini Corporation, et al,Sangamon County Case No. 99 CH 196

On
or about April 22, 1999, Ida R. Noll (Noll) filed a new lawsuit against Illini
Corporation, Illinois Stock Transfer Company, Ernest H. Huls and Farmers State
Bank of Camp Point in the Seventh Judicial Circuit Court, Sangamon County,
Illinois.  The Complaint sought specific
performance of the Rights Agreement alleging that Ernest Huls became an
acquiring person under the Rights Agreement by reason of his right to receive
shares of Illini Corporation common stock pursuant to an Agreement and Plan of
Reorganization between Illini Corporation and the Farmers State Bank of Camp
Point.  Noll sought to compel Illini
Corporation and ISTC to distribute rights certificates to all shareholders of
Illini Corporation, except for Mr. Huls. 
Illini Corporation strongly disputes Nolls assertion that Ernest Huls
has become an acquiring person under the Rights Agreement.

In
June 1999, Illini Corporation and ISTC filed a joint Motion to Dismiss Nolls
Complaint on the grounds that the alleged acquiring person, Ernest Huls, was
not a beneficial owner of a substantial block of Illini Corporation common
stock.  The Motion to Dismiss was
scheduled for hearing on July 20, 1999, but on July 16, 1999, Nolls counsel
moved for a substitution of judges. 
Illini Corporation and ISTC opposed substitution, but the court granted
the motion.

The
case has been reassigned to Judge Tim Olson. 
Briefing of the Motion to Dismiss was completed, but the Court continued
the hearing on the Motion to Dismiss. Judge Olson recused himself just prior to
a scheduled case management conference on March 9, 2000.  The case has been reassigned to Chief Judge
Thomas Russell.  On June 1, 2000 Judge
Russell reconsidered Judge Olsons ruling granting the Plaintiffs Motion to
Continue.  Judge Russell set Illinis
Motion to Dismiss for hearing on July 21, 2000.  On that date Judge Russell heard argument on Illinis Motion to
Dismiss as well as on Plaintiffs Petition for Discovery, which had been filed
on July 18, 2000.  On October 6, 2000,
the Court granted Illinis Motion to Dismiss all pending counts with prejudice,
but reserving the issue of Plaintiffs attorneys fees.  On October 10, 2000, the Court entered a
docket order denying Plaintiffs Petition for Discovery.  Plaintiff has moved for reconsideration of
the dismissal and that motion is now pending.

Illini
Corporation has executed a definitive stock purchase agreement to redeem
160,088 of its shares (27.99% of total shares outstanding) from the Noll family
and related interests. The agreement was executed on April 12, 2001. The
agreement is subject to the approval of federal and state banking regulators
and, if approved, is expected to close on or before the end of the third
quarter 2001.  Part of the agreement
requires the Noll family to terminate this litigation.

Item 2    Changes
in Securities - none

Item 3    Defaults
Upon Senior Securities - none

Item 4    Submission
of Matters to a Vote of Security Holders- none

Item 5    Other
Information - none

Item 6    Exhibits
and Reports on Form 8-K

(a)  Exhibits:

The
Exhibits filed herewith are set forth in the Exhibit Index filed as a part of these
Form 10-QSB.

(b)  Reports on Form 8-K:

There
were no reports on Form 8-K file for the quarter ended March 31, 2001.

SIGNATURES

In accordance with the requirements of the Exchange Act,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



Illini Corporation(Registrant)By:  /s/ Burnard K. McHone
  May  14, 2001Burnard K. McHone
  Date signedPresidentBy:  /s/ Deann Hager
  May 14, 2001Deann Hager
  Date signedFinance ManagerEXHIBIT INDEX

Number                          Description

(none)                          
  (none)