<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  20549


                                    FORM 10-Q


                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended   September 30, 1995
                   --------------------

Commission file number           0-13343
                        -----------------

                               Illini Corporation
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Illinois                                    37-1135429
--------------------------------------------------------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         identification No.)


            120 Chatham South Road     Springfield,  Illinois   62704
--------------------------------------------------------------------------------
(Address of principal executive offices)                        (Zip Code)

                                 (217) 787-1651
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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
                                                                  -----    -----



                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

       448,456 shares of $10 par value common stock as of October 31, 1995

<PAGE>

                               ILLINI CORPORATION
                               INDEX TO FORM 10-Q
                               September 30, 1995

                                                                            Page
PART I.    FINANCIAL INFORMATION

     Item 1.   Consolidated Financial Statements

               Consolidated Balance Sheets                                   3
                  September 30, 1995 and December 31, 1994

               Consolidated Statements of Income                             4
                  Nine and Three Months Ended September 30, 1995 and 1994

               Consolidated Statements of Cash Flows                         5
                  Nine Months Ended September 30, 1995 and 1994

               Notes to Consolidated Financial Statements                    6

     Item 2.   Management's Discussion and Analysis                          8
                  of Financial Condition and Results
                  of Operations

PART II.   OTHER INFORMATION                                                15

SIGNATURE PAGE                                                              16

<PAGE>


                        ILLINI CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                          SEPTEMBER 30              December 31,
                                                                              1995                      1994
                                                                         -------------             -------------
<S>                                                                      <C>                       <C>
ASSETS:
  Cash and due from banks                                                $   6,786,709             $   7,637,207
  Federal funds sold                                                         1,710,000                   125,000
                                                                         -------------             -------------
    Cash and cash equivalents                                                8,496,709                 7,762,207
  Investment in debt and marketable equity securities:
    Available for sale, at market value                                     18,782,334                33,043,332
    Held to maturity, at amortized cost, estimated market value
      of $10,587,753 and $9,219,143 at September 30, 1995 and
      December 31, 1994, respectively                                       10,458,862                10,752,195
                                                                         -------------             -------------
                                                                            29,241,196                43,795,527
                                                                         -------------             -------------
  Loans                                                                    110,398,259                99,068,300
    Less:
      Unearned discount and loan fees                                          334,813                   323,544
      Reserve for possible loan losses                                       1,439,664                 1,546,834
                                                                         -------------             -------------
        Loans, net                                                         108,623,782                97,197,922
                                                                         -------------             -------------
  Premises and equipment                                                     4,289,555                 4,163,748
  Accrued interest receivable                                                1,905,465                 1,519,771
  Other assets                                                               1,610,122                 2,072,348
                                                                         -------------             -------------
                                                                         $ 154,166,829             $ 156,511,523
                                                                         -------------             -------------
                                                                         -------------             -------------
LIABILITIES AND SHAREHOLDERS' EQUITY:
  Noninterest-bearing demand deposits                                       20,369,890                21,668,476
  Interest-bearing deposits:
    NOW and money market accounts                                           27,353,178                30,417,135
    Savings deposits                                                        21,667,898                23,097,415
    Time deposits, $100,000 and over                                        13,698,586                16,081,765
    Other time deposits                                                     55,226,202                45,938,684
                                                                         -------------             -------------
        Total deposits                                                     138,315,754               137,203,475

  Federal funds purchased                                                            0                 4,165,000
  Securities sold under agreements to repurchase                               250,000                   641,419
  Accrued interest payable                                                     865,934                   715,899
  Note payable                                                                       0                   500,000
  Other liabilities                                                            775,141                   752,863
                                                                         -------------             -------------
        Total liabilities                                                  140,206,829               143,978,656
                                                                         -------------             -------------
  Shareholders' equity:
    Common stock-authorized 800,000 shares of $10
      par value; 448,456 shares issued and outstanding                       4,484,560                 4,484,560
    Capital surplus                                                          1,885,913                 1,885,913
    Retained earnings                                                        7,708,369                 7,235,535
    Net fair value adjustment for investments in debt and
      marketable equity securities available for sale, net of tax             (118,842)               (1,073,141)
                                                                         -------------             -------------
        Total shareholders' equity                                          13,960,000                12,532,867
                                                                         -------------             -------------
                                                                         $ 154,166,829             $ 156,511,523
                                                                         -------------             -------------
                                                                         -------------             -------------
</TABLE>


      See accompanying notes to interim consolidated financial statements.

                                        3
<PAGE>

                        ILLINI CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
         FOR THE NINE AND THREE MONTHS ENDED SEPTEMBEr 30, 1995 and 1994
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                       1995                        1994
                                             -------------------------   -------------------------
                                               9 MONTHS      3 MONTHS      9 Months      3 Months
                                             -----------   -----------   -----------   -----------
<S>                                          <C>           <C>           <C>           <C>
Interest income:
  Interest and fees on loans                 $ 7,059,603   $ 2,529,696   $ 6,750,654   $ 2,256,035
  Interest on investment securities:
    Taxable                                    1,139,467       269,597     1,372,303       471,587
    Exempt from Federal income taxes             375,257       123,972       334,841       118,518
  Interest on short term investments             105,997        69,171        64,181         6,327
                                             -----------   -----------   -----------   -----------

        Total interest income                  8,680,324     2,992,436     8,521,979     2,852,467
                                             -----------   -----------   -----------   -----------

Interest expense:
  Interest on deposits                         3,727,179     1,319,827     3,159,053     1,069,434
  Interest on Federal funds purchased             33,108             0        38,295        26,379
  Interest on securities sold under
    agreements to repurchase                      29,053         6,610        37,262        11,942
  Interest on note payable                         9,035             0        62,848        19,899
                                             -----------   -----------   -----------   -----------

        Total interest expense                 3,798,375     1,326,437     3,297,458     1,127,654
                                             -----------   -----------   -----------   -----------

        Net interest income                    4,881,949     1,665,999     5,224,521     1,724,813

Provision for possible loan losses                90,000        30,000       180,000        60,000
                                             -----------   -----------   -----------   -----------

        Net interest income after provision
             for possible loan losses          4,791,949     1,635,999     5,044,521     1,664,813

Noninterest income                             1,230,496       449,320     1,095,408       390,502

Noninterest expense                            4,940,004     1,640,926     4,902,936     1,695,558
                                             -----------   -----------   -----------   -----------

        Income before income taxes             1,082,441       444,393     1,236,993       359,757

Income tax expense                               306,900       156,300       324,700        81,700
                                             -----------   -----------   -----------   -----------

        Net income                           $   775,541   $   288,093   $   912,293   $   278,057
                                             -----------   -----------   -----------   -----------
                                             -----------   -----------   -----------   -----------
Income per common share (based on
  weighted average common shares
  outstanding of 448,456 for 1995 and
  1994):                                     $      1.73   $      0.64   $      2.03   $      0.62
                                             -----------   -----------   -----------   -----------
                                             -----------   -----------   -----------   -----------
</TABLE>


      See accompanying notes to interim consolidated financial statements.


                                        4
<PAGE>

                        ILLINI CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                             1995                       1994
                                                                          ------------              ------------
<S>                                                                       <C>                       <C>
Cash flows from operating activities:
  Net income                                                              $    775,541              $    912,293
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization                                            363,474                   348,197
      Provision for possible loan losses                                        90,000                   180,000
      Securities losses, net                                                     4,036                    30,829
      Increase in accrued interest receivable                                 (385,694)                 (308,833)
      Increase in accrued interest payable                                     150,035                     6,583
      Other, net                                                              (273,424)                 (393,670)
  Origination of secondary market mortgage loans                            (7,188,143)              (10,731,854)
  Proceeds from the sale of secondary market mortgage loans                  7,188,143                11,735,614
                                                                          ------------              ------------
        Net cash provided by operating activities                              723,968                 1,779,159
                                                                          ------------              ------------
Cash flows from investing activities:
  Proceeds from sales of debt and marketable equity securities
    available for sale                                                      13,409,069                12,079,367
  Proceeds from maturities and paydowns of debt securities
    available for sale                                                       2,478,079                 4,974,842
  Proceeds from maturities and paydowns of debt securitie
    held to maturity                                                           235,000                    30,000
  Purchases of debt and marketable equity securities
    available for sale                                                        (287,573)              (18,702,355)
  Purchases of debt and marketable equity securities
    held to maturity                                                                 0                (2,731,866)
  Net (increase) decrease in loans                                         (11,515,860)                2,835,843
  Purchases of premises and equipment                                         (420,851)                 (745,491)
  Proceeds from sale of premises and equipment                                       0                     3,750
  Proceeds from sales of other real estate                                     359,517                    62,263
                                                                          ------------              ------------
        Net cash  provided by (used in) investing activities                 4,257,381                (2,193,647)
                                                                          ------------              ------------
Cash flows from financing activities:
  Net decrease in noninterest-bearing deposit accounts                      (1,298,586)               (1,790,309)
  Net increase (decrease) in savings, NOW and money market accounts         (4,493,474)                1,267,573
  Net decrease in time deposits $100,000 and over                           (2,383,179)                 (533,976)
  Net increase (decrease) in other time deposits                             9,287,518                (3,707,906)
  Net increase (decrease) in Federal funds purchased                        (4,165,000)                  500,000
  Net decrease in securities sold under agreements
    to repurchase                                                             (391,419)                 (343,758)
  Principal payments on note payable                                          (500,000)                 (575,000)
  Dividends paid                                                              (302,707)                 (168,171)
                                                                          ------------              ------------
        Net cash used in financing activities                               (4,246,847)               (5,351,547)
                                                                          ------------              ------------

Net increase (decrease) in cash and cash equivalents                           734,502                (5,766,035)

Cash and cash equivalents at beginning of period                             7,762,207                12,205,523
                                                                          ------------              ------------
Cash and cash equivalents at end of period                                $  8,496,709              $  6,439,488
                                                                          ------------              ------------
                                                                          ------------              ------------
Supplemental Information:
  Income taxes paid                                                       $    123,000              $    565,000
  Interest paid                                                           $  3,648,340              $  3,290,875
                                                                          ------------              ------------
                                                                          ------------              ------------
Other non-cash investing activities:
  Transfer of loans to other real estate                                  $    191,495              $    124,534
                                                                          ------------              ------------
                                                                          ------------              ------------
</TABLE>


      See accompanying notes to interim consolidated financial statements.

                                        5

<PAGE>

                               ILLINI CORPORATION
         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                SEPTEMBER 30, 1995


(1)  BASIS OF PRESENTATION

     The accompanying unaudited interim consolidated financial statements have
     been prepared in accordance with the instructions to Form 10-Q 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 Company's
     Annual Report on Form 10-K for the year ended December 31, 1994.

     Results for the three and nine months ended September 30, 1995 are not
     indicative of the companies annual performance.

(2)  NONINTEREST INCOME AND EXPENSE
     Details of noninterest income and expense for the nine and three months
     ended September 30, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
                                                     1995                          1994
                                           ------------------------      ------------------------

                                           9 MONTHS        3 MONTHS      9 Months        3 Months
                                           --------        --------      --------        --------
     <S>                                   <C>             <C>           <C>             <C>
     Noninterest income:
       Service charges on deposits         $    795,648    $   263,825   $    789,196    $   280,191
       Securities losses, net                    (4,036)             0        (30,829)        (1,365)
       Mortgage loan servicing fees             118,743         41,203        112,891         39,846
       Gain on sale of mortgage loans            66,972         40,168         86,802         10,157
       Other income                             253,169        104,124        137,348         61,673
                                           ------------    -----------   ------------    -----------
           Total noninterest income        $  1,230,496    $   449,320   $  1,095,408    $   390,502
                                           ------------    -----------   ------------    -----------
                                           ------------    -----------   ------------    -----------
     Noninterest expense:
       Salaries and employee benefits      $  2,373,724    $   807,342   $  2,332,356    $   799,384
       Occupancy and equipment
           expense                              765,569        265,775        760,102        259,402
       Data processing                          280,161         96,071        260,245         86,401
       Insurance                                 27,327          6,891         29,332          9,506
       Directors' fees                          119,553         43,353        107,310         43,500
       Professional fees                        207,309         92,257        247,885         87,005
       Regulatory fees                          161,772         (3,769)       255,303         85,389
       Supplies                                 112,232         37,066        119,799         44,440
       Other expense                            892,357        295,940        790,604        280,531
                                           ------------    -----------   ------------    -----------
           Total noninterest expense       $  4,940,004    $ 1,640,926   $  4,902,936    $ 1,695,558
                                           ------------    -----------   ------------    -----------
                                           ------------    -----------   ------------    -----------
</TABLE>


                                        6
<PAGE>

(3)       NEW ACCOUNTING STANDARDS

Effective January 1, 1995 the Company adopted the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan:  (SFAS 114) and Statement of Financial
Accounting Standards No. 118, "Accounting by Creditors for Impairment of a Loan
-Income Recognition and Disclosures" (SFAS 118) which amends SFAS 114.

SFAS 114 (as amended by SFAS 118) defines the recognition criterion for loan
impairment and the measurement methods for certain impaired loans and loans
whose terms have been modified in troubled debt restructurings ("a restructured
loan").  Specifically, a loan is considered impaired when it is probable a
creditor will be unable to collect all amounts due - both principal and interest
- according to the contractual terms of the loan agreement.  When measuring
impairment, the expected future cash flows of an impaired loan are required to
be discounted at the loan's effective interest rate. Alternatively, impairment
can be measured by reference to an observable market price, if one exists, or
the fair value of the collateral for a collateral-dependent loan.  Regardless of
the measurement method used historically, SFAS No. 114 requires a creditor to
measure impairment based on the fair value of the collateral when the creditor
determines foreclosure is probable.  Additionally, impairment of a restructured
loan is measured by discounting the total expected future cash flow at the
loan's effective rate of interest as stated in the original loan agreement.

SFAS 118 amended SFAS 114 to allow a creditor to use existing methods for
recognizing interest income on an impaired loan.  The Company has elected to
continue to use its existing nonaccrual methods for recognizing interest on
impaired loans.  Illini continues to apply all payments received on impaired
loans to the outstanding balance of the loan until such time as the loan balance
is reduced to zero, after which payments are applied to interest income until
such time as the forgone interest is recovered.

The impact of initially applying SFAS 114 and SFAS 118 had no significant impact
on the Company's consolidated financial position or results of operations.


                                        7
<PAGE>

                        ILLINI CORPORATION AND SUBSIDIARY
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
               FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

GENERAL

Headquartered in Springfield, Illinois, Illini Corporation (Illini) is a bank
holding company which was organized under the laws of the State of Illinois in
1983.  Illini owns and operates one wholly owned subsidiary bank, Illini Bank
(the Bank).  The Bank maintains 18 offices serving the central Illinois area.
The following discussion and related financial information is intended to aid in
understanding the financial position and results of operations of Illini and the
Bank as of and for the periods presented.

On July 13, 1995,  the Bank entered into an agreement with the Security National
Bank of Witt whereby the Security National Bank of Witt agrees to purchase the
assets and assume the deposit liabilities of Illini Bank's Coffeen branch.  As
of June 30, 1995, the Coffeen, Illinois branch had approximately $7,522,000 in
assets and approximately $12,493,000 in liabilities.  The Security National Bank
of Witt is in the process of filing the appropriate applications with the proper
regulatory authorities.  Given regulatory approval, Illini's management expects
the transaction to be consummated in late 1995 or early 1996 resulting in a gain
of approximately $600,000.

FINANCIAL CONDITION

Total assets decreased from $156,511,523 at December 31, 1994, to $154,166,829
at September 30, 1995.  This represents a decrease of $2,344,694 or 1.50% for
the nine month period.  The decrease in total assets is attributable to a
decrease in both investment in debt and marketable equity securities and federal
funds purchased, substantially offset by an increase in loans.

Investment in debt and marketable equity securities decreased $14,554,331 or
33.23% from December 31, 1994 to September 30, 1995.  In 1994, Illini
restructured its investment portfolio by selling several investments in debt
securities in the available for sale category and reinvested the proceeds into
marketable equity securities held in a professionally managed collective
investment fund.  In early 1995, the funds changed its portfolio managers and
hence changed the investment strategy with which the management of Illini did
not agree.  As a result, Illini decided to liquidate the funds in the second
quarter of 1995. Proceeds received from the sale totaled $10,176,737 resulting
in a net loss of $39,625. Also, Illini decided to sell longer term available for
sale mortgage backed securities in an effort to reduce the short term borrowing
position of the Bank.

Net loans increased $11,425,860 or 11.76% from December 31, 1994.  This increase
is primarily a result of  an increase in the indirect loan portfolio as well as
the funding of several large commercial and commercial real estate loans.  These
loans were funded from the liquidity generated from the investment portfolio,
net of the repayment of $4,165,000 in federal funds purchased.

Additionally,  Federal funds sold  increased as a result of the liquidation of
the investment portfolio. As short term rates remain artificially high,  Illini
intends to use these short term investments to maximize interest income as well
as provide viable source of liquidity.


                                        8
<PAGE>

Total deposits increased slightly during the first nine months of 1995.  Total
deposits increased $1,112,279 or .81% from December 31, 1994 to September 30,
1995.  Significant decreases however, occurred in non-interest bearing demand
deposits, NOW and money market accounts, and savings deposits as well as time
deposits $100,000 and over.  A notable increase however, was recognized in the
other time deposits.   As interest rates increased during the first nine months
of the year, Illini's deposit structure shifted from lower cost deposits
including, NOW, money market and savings to time certificates as a result of a
widening interest rate gap between these deposit products.  The decrease in the
noninterest-bearing deposits was a direct result of a decrease in public fund
deposits and retail deposits from their generally higher year end totals.
Volatile liabilities in the form of time deposits $100,000 and over decreased
$2,383,179 or 14.82%, as Illini chose not to aggressively bid for such funds.

Also during 1995, Illini continued its plan to reduce the Company's debt. On
April 20, 1995, Illini retired its note payable, leaving the parent company debt
fee.

RESULTS OF OPERATIONS

Illini recorded earnings of $775,541 and $288,093 for the nine month and three
month periods ended September 30, 1995, respectively compared to $912,293 and
$278,057 for the same periods in 1994.  On a per share basis income was $1.73
for the nine months ended September 30, 1995 as compared to $2.03 for the nine
months ended September 30, 1994, a decrease of $0.30.  Income on a per share
basis increased $0.02 for the three months ended September 30, 1995 as compared
to the three month period ended September 30, 1994. The annualized return on
assets and return on shareholders' equity for the nine months ended September
30, 1995 was .67% and 7.83% respectively.  This compares to an annualized
return on assets and return on shareholders' equity for the same period in 1994
of  .77% and 9.71% respectively.

The decrease in net income is attributable to the decrease in net interest
income, Illini's primary source of earnings. Illini's net interest income, the
difference between interest income and interest expense continues to decrease.
Net interest income decreased by $342,572 to $4,881,949 for the first nine
months of 1995 compared to the first nine months of 1994 and decreased $58,814
for the three months ending September 30, 1995 compared to the same period in
1994.  Illini's net interest margin decreased .11 basis points from 4.71% for
the nine months ended September 30, 1994 to 4.60% for the nine months ended
September 30, 1995.  During 1994 and early 1995, the Federal Open Market
Committee increased interest rates in an effort to control inflation and slow
down the economy.  The impact of the increase in rates not only produced an
increase in rates associated with investment securities, but also caused
financial institutions to raise the prime lending rate from 6% to 9%.  As
interest rates increased, so also did deposit rates.  During the first quarter
several new financial institutions began offering above market rate deposit
products in an effort to increase and maintain marketshare within the
Springfield area.  This caused Illini to react in a similar fashion by also
increasing deposit rates to diminish the erosion of Illini's deposit base.
Illini had a large portion of its commercial loan portfolio in adjustable rate
and short term operating loans tied to the Bank's prime lending rate.
Competition forced Illini to renegotiate lower interest rate terms with its
borrowers.  Illini was faced with either renegotiating the interest rate terms
or having the borrowers refinance with other institutions leaving Illini to
reinvest the payoff proceeds into even lower yielding investment securities.  As
these interest rate increases have stabilized, Illini's net interest margin has
begun to increase.  As opportunity allows, Illini will continue to restructure
both the


                                        9
<PAGE>


loan and investment portfolio in an effort to maximize the net interest margin.
While Illini does not expect the net interest margin to increase to levels
achieved during the declining interest rate environment experienced in 1992 and
1993, management anticipates a gradual increase in the net interest margin
throughout the remainder of 1995.

Interest income increased $158,345 and $139,969 for the nine and three month
periods ended September 30, 1995 compared to the same periods in 1994.   During
1995, interest earning assets shifted to higher yielding loans.  This shift
coupled with higher interest rates produced an increase in interest income for
the nine month period ending September 30, 1995 as compared to the same period
in 1994.

Interest expense has increased  $500,917 and $198,783 for the nine and three
month periods ended September 30, 1995 compared to the same periods in 1994.  As
previously mentioned, in the first quarter of 1995, Illini realized a shift from
lower cost interest bearing transaction accounts, money market accounts, and
savings deposits into higher cost time deposits resulting in the significant
increase in interest expense.  While Illini experienced a reduction in both
interest earning assets and interest bearing liabilities, interest bearing
liabilities continue to reprice at higher interest rate levels as compared to
the corresponding interest earning assets.  The effect of which is a  reduction
in net interest income.

Other real estate included in other assets decreased from $623,916 at December
31, 1994 to $507,279 at September 30, 1995.  This decrease is largely due to the
sale of other real estate in the first nine months of 1995. Proceeds received
from this sale totaled $359,517, resulting in a net gain of $82,074, which is
included in other noninterest income on the consolidated statements of income.

Net charge offs for the first nine months of 1995 were $197,171 compared to
$160,322 for the same period in 1994, an increase of $36,849.  Nonperforming
loans increased, $186,000 or 18.11% from $1,027,000 at December 31, 1994 to
$1,213,000 at September 30, 1995.  The reserve for possible loan losses as a
percentage of nonperforming loans was 118.68% at September 30, 1995, as compared
to 150.62% at December 31, 1994.  The provision for possible loan losses was
$90,000 for the nine month period ended September 30, 1995, compared to $180,000
for the same period in 1994.  The provisions for 1995 and 1994 are results of
management's efforts to maintain the reserve for possible loan losses at
targeted levels, adequate for the risks associated with the loan portfolio, and
to do so in a regular fashion throughout the year.  Management will continue to
analyze the adequacy of the reserve for possible loan losses on a quarterly
basis and will continue to make provisions to the reserve for possible loan
losses as deemed necessary.

Noninterest income increased $135,088 and $58,818 for the nine and three month
periods ended September 30, 1995, as compared to the same periods in 1994.
Service charges on deposits continue to increase and servicing fees associated
with the FNMA fixed rate loan program remain strong through the first nine
months of 1995.  Other income increased $115,821 from the nine month period
ended September 30, 1995 as compared to the nine month period ended September
30, 1994.  During 1995, Illini instituted a new credit card program which
generated merchants fees totaling $28,586.  Illini also recognized a net gain of
$82,074  from the sale of other real estate during the first nine months of
1995. In addition, Illini recognized increases in safe deposit rental income,
line of credit fees, and a one time recovery of  loan fees previously deemed
uncollectable.


                                       10
<PAGE>


Illini also recognized net securities losses of $4,036 in conjunction with the
liquidation and restructuring of the investment portfolio.

Noninterest expense increased $37,068 for the nine month period while decreasing
$54,632 for the three month period ended September 30, 1995, compared to the
same periods in 1994.  Increases in expenses have been recognized in salaries
and employee benefits, occupancy and equipment, data processing, and directors
fees.  Other expenses which includes marketing and promotions also increased in
the first nine months of 1995 as a result of management's continuing effort to
increase the market share of Illini Bank. Offsetting these increases, Illini
experienced a decrease in insurance, professional fees, regulatory fees, and
supplies in the first nine of 1995 as compared to the same period in 1994.  The
decrease in professional fees is a direct result of a decrease in legal fees.
As a result of an improvement in the quality of the loan portfolio and a
reduction in delinquent loans, legal fees have diminished.  In addition,
regulatory fee decreased in the third quarter and year to date due to a refund
of $86,207 in Federal Deposit Insurance Corporation insurance premiums as well
as a reduction in future premiums as a result of the Federal Deposit Insurance
Corporation insurance funding requirements.

Lower income taxes for 1995 are the result of a decrease in Federal and state
taxable income recorded in 1995.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of an enterprise to generate adequate amounts of cash
to meet the enterprise's needs for cash.  Liquidity has both short term and long
term aspects, and involves both internal and external sources of cash.

Internal sources of cash for Illini include cash and cash equivalents, which
also include Federal funds sold.  External sources of cash include principal
collected on loans and new customer deposits, as well as investment maturities
and sales.

During the first quarter of 1994, the Board of Directors of Illini approved a
resolution to adopt the payment of quarterly dividends.  Prior to 1994,
Illini's policy was to pay a dividend once annually.  In keeping with this
policy, the Board of  Directors declared and paid a regular quarterly dividend
of 22.5 cents per share in the first, second, and third quarter of 1995.  On
October 25, 1995 the Board of Directors also declared a fourth quarter dividend
payable to shareholders of record November 30, 1995 payable on December 15, 1995
in the amount of 22.5 cents per share.

The consolidated statements of cash flows shows cash provided by and used in
Illini's operating, investing and financing activities.  As the statements
reflect, Illini had a net increase in cash and cash equivalents of $734,502 for
the nine months ended  September 30, 1995 as compared to net decrease in cash
and cash equivalents of $5,766,035 for the nine months ended September 30, 1994.
Net cash provided by operating activities was $723,968 in 1995 compared to
$1,779,159 in 1994.  Net cash provided by investing activities was $4,257,381 in
1995 as compared with net cash used in investing activities of $2,193,647 in
1994.  This reflects the substantial decrease in net investments as a result of
the liquidation of the marketable equity securities as well as the proceeds
received from the sale of available for sale mortgage back securities and
maturities within the portfolio.  Net cash provided by the proceeds from the
investment portfolio was offset by the net


                                       11
<PAGE>


increase in loans of $11,515,860.  Net cash used in financing activities was
$4,246,847 for the nine month period ending September 30, 1995 compared to net
cash used in financing activities of $5,351,547 for the same period in 1994.
The negative cash flow from financing activities for 1995 is the result of a
decrease in federal funds purchased, time deposits, $100,000 and over, and the
retirement of the note payable. In addition, Illini recognized a shift from
noninterest-bearing deposits and lower cost deposits including NOW, money market
and savings accounts to other time deposits.

The cash flow statement is a valuable management tool for determining cash
needs.  Management believes that the numbers reflected therein indicate that
Illini is currently able to meet its cash needs. Management also anticipates
that Illini will be able to meet future cash needs through careful planning and
monitoring using the cash flow statement and other management tools.

Capital levels and ratios are tracked by bank regulators and analysts as
indicators of capital adequacy. Illini's capital to asset ratio which excludes
the net fair value adjustment for investments in debt and marketable equity
securities available for sale, net of tax was 9.13% at September 30, 1995 and
8.70% at December 31, 1994.  Illini has looked primarily to retained earnings to
build its capital.  Management anticipates that any future cash dividends will
be modest, to the extent that they will allow Illini to maintain adequate
capital levels.

The Federal Reserve Board established risk-based capital guidelines for bank
holding companies effective March 15, 1989.  The guidelines define Tier 1
Capital and Total Capital.  Tier 1 Capital consists of common and qualifying
preferred stockholder's equity and minority interests in equity accounts of
consolidated subsidiaries, less goodwill and 50% of investments in
unconsolidated subsidiaries.  Total Capital consists of, in addition to Tier 1
Capital, mandatory convertible debt, preferred stock not qualifying as Tier 1
Capital, subordinated and other qualifying term debt and a portion of the
reserve for possible loan losses less the remaining 50% of investments in
unconsolidated subsidiaries.  The Tier 1 component must comprise at least 50% of
qualifying Total Capital.  Risk-based capital ratios are calculated with
reference to risk-weighted assets, which include both on-and-off balance sheet
exposures.  As of December 31, 1992, the minimum required qualifying total
capital ratio is 8%, of which at least 4% must consist of Tier 1 Capital.

As of September 30, 1995, Illini and the Bank are in compliance with the Tier 1
Capital ratio requirement and all other applicable regulatory capital
requirements, as calculated in accordance with the risk-based capital
guidelines.

Effective December 19, 1992, as mandated by the Federal Deposit Insurance
Corporation Improvement Act, insured depository institutions such as the Bank
are classified into one of five capital zones based on the institution's capital
levels.


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                          Minimum Capital Ratios
                                     ---------------------------------
                                       Total       Tier 1      Tier 1
                                     risk-based  risk-based  leveraged
                                       ratio       ratio       ratio
                                     ----------  ----------  ---------
     <S>                             <C>         <C>         <C>
     Well capitalized                    10%         6%          5%
     Adequately capitalized               8          4           4
     Undercapitalized                   < 8        < 4         < 4
     Significantly undercapitalized     < 6        < 3         < 3
     Critically undercapitalized          *          *           *
</TABLE>

     * A critically undercapitalized institution is defined as having a
     tangible equity to total assets ratio of 2% or less.  The capital
     levels maintained by an insured depository institution are/will be
     used in determining the institutions ability to act without prior
     consent of the FDIC in areas such as dividend payments, compensation,
     and material transactions, etc.  The capital zone of an institution
     also determines the insurance premium which is assessed thereon.  At
     September 30, 1995, the Bank's total risk-based capital ratio was
     13.42%.  The Bank's tier 1 risk-based capital ratio and  tier 1
     leveraged ratio was 13.40%. Based upon these capital ratios, the Bank
     is considered "well capitalized."

INTEREST RATE SENSITIVITY

Interest rate sensitivity is a function of the repricing characteristics of a
bank holding company's portfolio of interest-earning assets and interest-bearing
liabilities.  A bank holding company such as Illini is sensitive to changes in
interest rates when interest-earning assets and interest-bearing liabilities,
which are due to reprice within a given time period, are not equal.  Various
interest sensitive assets and liabilities are responsive to market interest rate
fluctuations to varying degrees, and this must be considered along with the
quantity of assets and liabilities which will reprice within a given time
period.

Illini's management regularly reviews its asset/liability strategy.  At times,
Illini will selectively mismatch the repricing of certain asset and liability
time frames to take advantage of short-term interest rate swings.

The Bank controls its own asset/liability mix within the constraints of its
individual loan and deposit structure.  The Bank uses its investment portfolio
in conjunction with its loan and deposit needs in an effort to maximize the
benefits of investment decisions based upon consolidated tax, liquidity, and
market concentration positions.

The asset/liability management process, which involves structuring the
consolidated balance sheet to allow approximately equal amounts of assets and
liabilities to reprice at the same time, is a dynamic process essential to
minimize the effect of fluctuating interest rates on net interest income.

The following table reflects Illini's interest rate gap (rate-sensitive assets
minus rate-sensitive liabilities) analysis as of September 30, 1995,
individually and cumulatively, through various time horizons (in thousands of
dollars):


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                 Contractual Repayment Schedule if Fixed Rate;
                                             Earliest Possible Repricing Interval if Floating Rate
                                             -----------------------------------------------------
                                                         Over 3    Over 6     Over 1
                                                 3       months    months      year
                                               months    through   through    through    Over 5
                                               or less   6 months  12 months  5 years     years
                                               -------   --------  ---------  -------     -----
<S>                                            <C>       <C>       <C>       <C>       <C>
Interest-earning Assets
     Loans                                     $ 22,138  $ 11,608  $ 16,776  $ 57,171  $  2,705
     Investments in debt and
        marketable equity securities              7,288     3,500     3,154    13,933     1,366
     Other interest-earning assets                1,710        --        --        --        --
                                               --------  --------  --------  --------  --------
Total Interest-earning Assets                  $ 31,136  $ 15,108  $ 19,930  $ 71,104  $  4,071
                                               --------  --------  --------  --------  --------
                                               --------  --------  --------  --------  --------
Interest-bearing Liabilities
     Savings, NOW, and money
        market accounts                        $ 49,021        --        --        --        --
     Time deposits                               15,523    11,625    26,307    15,242       228
     Federal funds purchased                         --        --        --        --        --
        Securities sold under
        agreements to repurchase                     --        --       150       100        --
                                               --------  --------  --------  --------  --------
Total Interest-bearing Liabilities             $ 64,544  $ 11,625  $ 26,457  $ 15,342  $    228
                                               --------  --------  --------  --------  --------
                                               --------  --------  --------  --------  --------
Gap by Period                                  $(33,408) $  3,483  $ (6,527) $ 55,762  $  3,843
                                               --------  --------  --------  --------  --------
                                               --------  --------  --------  --------  --------
Cumulative Gap                                 $(33,408) $(29,925) $(36,452) $ 19,310  $ 23,153
                                               --------  --------  --------  --------  --------
                                               --------  --------  --------  --------  --------
</TABLE>

As indicated in this table, Illini operates on a short-term basis similar to
most other financial institutions, as its liabilities, with savings, NOW, and
money market accounts included, typically reprice more quickly than its assets.
However, the process of asset/liability management in a financial institution is
dynamic and subject to economic events not easily predicted.  During moderate
interest rate movements, Illini believes its current asset/liability management
program will allow adequate reaction time for trends in the market place as they
occur, minimizing the negative impact of such trends on net interest margins.
However, should significant interest rate changes occur over a short period of
time, such as happened in 1994 and 1995, Illini's net interest margin will be
subject to increased volatility.


EFFECTS OF INFLATION

The effects of inflation on financial institutions are different from the
effects on other commercial enterprises since financial institutions make few
significant capital or inventory expenditures which are directly affected by
changing prices.  Because bank assets and liabilities are virtually all monetary
in nature, inflation does not affect a financial institution as much as changes
in interest rates.  The general level of inflation does, in fact, underlie the
general level of most interest rates, however, interest rates do not increase at
the rate of inflation as do the prices of goods and services. Rather, interest
rates react more to changes in the expected rate of inflation and to changes in
monetary and fiscal policy.


                                       14
<PAGE>


Inflation, however, does have an impact on the growth of total assets in the
banking industry, often resulting in a need to increase capital at higher than
normal rates to maintain an appropriate capital to asset ratio.


                                       15
<PAGE>


PART II.  OTHER INFORMATION


                        ILLINI CORPORATION AND SUBSIDIARY
                               September 30, 1995

Item 1    LEGAL PROCEEDINGS

          Various legal claims have arisen in the normal course of business,
          which, in the opinion of Illini management and legal counsel, will not
          result in any material liability to Illini.

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)  Reports on Form 8-K

          There were no reports on Form 8-K filed for the quarter ended
          September 30, 1995.


                                       16
<PAGE>


                        ILLINI CORPORATION AND SUBSIDIARY
                               September 30, 1995

                                   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.



Illini Corporation by





/s/ Burnard K. McHone                               11-9-95
---------------------                             -----------
Burnard K. McHone                                 Date signed
President and Acting Chief Financial Officer


                                       17