<PAGE>   1

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

For the quarterly period ended               June 30, 1999
                               ---------------------------------------------

                                       OR

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

For the transition period from                       to
                              -----------------------  ----------------------

Commission file number                       0-14553
                      -------------------------------------------------------

                           F & M Bancorporation, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Wisconsin                                         39-1365327
--------------------------------------------------------------------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

   One Bank Avenue,     Kaukauna, Wisconsin                     54130
--------------------------------------------------------------------------------
             (Address of principal executive offices)        (Zip Code)

                                 (920) 766-1717
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes   X      No
    -----        -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of August 10, 1999.

        $1.00 par value common
        16,103,134 shares


<PAGE>   2






                           F & M BANCORPORATION, INC.
                                AND SUBSIDIARIES
                           --------------------------

                                      INDEX
                                      -----



                                                                           Page
                                                                          Number
                                                                          ------
PART I.  FINANCIAL INFORMATION:

Item l.  Financial Statements                                               3

                  Condensed Consolidated Balance Sheets
                    as of June 30, 1999 and December 31,
                    1998 (Unaudited)                                        4

                  Condensed Consolidated Statements of Earnings
                    for the three and six months ended June 30, 1999
                    and 1998 (Unaudited)                                    5

                  Condensed Consolidated Statements of Changes in
                    Stockholders' Equity for the six months ended
                    June 30, 1999 and 1998 (Unaudited)                      6

                  Condensed Consolidated Statements of Cash Flows
                    for the six months ended June 30, 1999
                    and 1998 (Unaudited)                                    7

                  Notes to Condensed Consolidated Financial
                    Statements (Unaudited)                                  8

Item 2.  Managements Discussion and Analysis of Financial
                  Condition and Results of Operations                      11

Item 3.  Quantitative and
                  Qualitative Disclosure about Market Risk                 19

PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                  20



                                       -2-


<PAGE>   3




                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

The condensed consolidated financial statements included herein have been
included by F & M Bancorporation, Inc. (the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. This information is unaudited but includes all adjustments
(consisting only of normal recurring accruals) which, in the opinion of Company
management, are necessary for a fair presentation of the results for such
periods.

The results of operations for interim periods are not necessarily indicative of
the results of operations for the entire year. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's 1998 Annual Report.
























                                       -3-


<PAGE>   4



                   F & M BANCORPORATION, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                            June 30,               December 31,
                                                              1999                    1998
                                                          -----------              ------------
<S>                                                       <C>                      <C>
ASSETS
Cash and cash equivalents                                 $    69,645              $    82,061
Investment securities (Note B)
  Held to maturity                                            178,984                  160,132
  Available for sale - stated at fair value                   376,017                  354,436
Federal funds sold                                             23,548                   77,548
Loans (Note C)                                              1,862,809                1,680,195
  Less:  Allowance for loan losses                            (24,518)                 (23,291)
                                                          -----------              -----------
                  Net loans                                 1,838,291                1,656,904

Bank premises and equipment, net                               53,469                   49,732
Other real estate                                               3,133                    3,243
Other assets                                                   49,752                   45,595
                                                          -----------              -----------
         TOTAL ASSETS                                     $ 2,592,839              $ 2,429,651
                                                          ===========              ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
  Deposits
    Non-interest bearing                                  $   275,665              $   278,314
    Interest bearing                                        1,803,853                1,730,649
                                                          -----------              -----------
                  Total deposits                            2,079,518                2,008,963

  Short-term borrowing                                        123,077                   60,847
  Other borrowings                                            113,537                   95,234
  Accrued expenses and other liabilities                       21,772                   25,188
                                                          -----------              -----------

                  Total liabilities                         2,337,904                2,190,232



Shareholders' Equity
  Common stock - $1 par value:
    Authorized - 50,000,000 shares
    Issued - 16,133,845 and
             15,608,657 shares, respectively                   16,134                   15,609
  Capital surplus                                             145,179                  144,922
  Retained earnings                                            95,013                   77,016
  Net unrealized gain on securities available for sale           (366)                   3,489
  Less-Common stock held in treasury at cost-
    30,711 shares and 49,415 shares, respectively              (1,025)                  (1,617)
                                                          -----------              -----------
                  Total shareholders' equity                  254,935                  239,419
                                                          -----------              -----------
         Total liabilities and shareholders' equity       $ 2,592,839              $ 2,429,651
                                                          ===========              ===========

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.




                                       -4-


<PAGE>   5


                   F & M BANCORPORATION, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                          Three months ended   Six months ended
                                               June 30,            June 30,
                                            1999      1998      1999      1998
                                           -------   -------   -------   -------
<S>                                        <C>       <C>       <C>       <C>
Interest income
  Interest and fees on loans               $39,482   $37,370   $77,584   $74,006
  Interest on investment securities
    Taxable                                  5,693     5,364    11,346    10,753
    Exempt from federal tax                  2,310     2,378     4,581     4,818
  Other interest income                        374       523     1,103     1,180
                                           -------   -------   -------   -------


     Total interest income                  47,859    45,635    94,614    90,757
                                           -------   -------   -------   -------

Interest expense
  Interest on deposits                      18,951    19,829    38,019    39,706
  Interest on short-term borrowing           1,416     1,107     2,319     2,158
  Interest on other borrowing                1,425     1,104     2,743     2,228
                                           -------   -------   -------   -------
        Total interest expense              21,792    22,040    43,081    44,092
                                           -------   -------   -------   -------

        Net interest income                 26,067    23,595    51,533    46,665

Provision for loan losses                      712       763     1,183     1,456
                                           -------   -------   -------   -------

        Net interest income after
          provision for loan losses         25,355    22,832    50,350    45,209
                                           -------   -------   -------   -------

Other income
  Service charges on deposit accounts        1,822     1,494     3,457     3,052
  Other operating income                     2,469     2,797     5,347     4,738
  Net securities gain                          213         3       329         3
                                           -------   -------   -------   -------
                                             4,504     4,294     9,133     7,793
                                           -------   -------   -------   -------


Other expenses
  Salaries and employee benefits             9,098     8,468    18,211    16,817
  Other operating expense                    7,044     6,606    14,171    13,127
                                           -------   -------   -------   -------
                                            16,142    15,074    32,382    29,944
                                           -------   -------   -------   -------

Income before income taxes                  13,717    12,052    27,101    23,058

Income taxes                                 4,428     3,706     8,792     7,015
                                           -------   -------   -------   -------

   NET INCOME                              $ 9,289   $ 8,346   $18,309   $16,043
                                           =======   =======   =======   =======


EARNINGS PER SHARE - BASIC                 $  0.58   $  0.54   $  1.14   $  1.03
EARNINGS PER SHARE - DILUTED               $  0.58   $  0.53   $  1.14   $  1.03

</TABLE>


     See accompanying notes to unaudited consolidated financial statements.



                                       -5-


<PAGE>   6






                    F&M BANCORPORATION, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                         Six Months                    Six Months
                                                           Ended                         Ended
                                                       June 30, 1999                 June 30, 1998
                                                       -------------                 -------------
                                                  Shares           Equity Total    Shares     Equity Total
                                                  ------           ------------    ------     ------------
<S>                                             <C>                  <C>         <C>            <C>
Balance-beginning of
period                                          15,608,657           $239,419    13,404,043     $200,933
Acquisition of Financial Management
                  Services of Jefferson, Inc                                        641,854       12,784
Acquisition of Bank of South Wayne                                                  143,792        4,443
Acquisition of Community Bank
            of Elkhorn                             525,188              8,482
Comprehensive income:
  Net Income                                                           18,309                     16,043
  Other comprehensive
         income - Change in net
         unrealized gain (loss) on
         securities available for
         sale                                                          (3,855)                     1,507
                                                --------------------------------------------------------
Total comprehensive
         income                                                        14,454                     17,550
                                                --------------------------------------------------------
Cash dividends                                                         (7,744)                    (5,759)
Purchase Treasury shares                                                                            (448)
Exercise of stock options                                                 324                        408
                                                --------------------------------------------------------

Totals                                          16,133,845           $254,935    14,189,689     $229,911
                                                --------------------------------------------------------

</TABLE>



     See accompanying notes to unaudited consolidated financial statements.

















                                       -6-


<PAGE>   7


                   F & M BANCORPORATION, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                                           Six months ended
                                                                                               June 30,
                                                                                        1999               1998
                                                                                     ---------          ---------
<S>                                                                                  <C>                <C>
Increase (decrease) in cash and cash equivalents:
        Cash flows from operating activities:
        Net income                                                                   $  18,309          $  16,043
        Adjustments to reconcile net income to net cash provided by operating
          activities:
              Provision for depreciation and net amortization                            2,932              2,314
              Provision for loan losses                                                  1,183              1,456
              Gain on sale of investment securities                                       (329)                (3)
              Increase in other assets                                                  (2,533)            (1,212)
              Gain on sale of equipment                                                    (85)              (179)
              Increase in other liabilities                                             (1,698)            (1,215)
              Provision for other real estate losses                                         6                  2
              Gain on sale of other real estate                                           (112)               (10)
                                                                                     ---------          ---------
      Net cash provided by operating activities                                         17,673             17,196
                                                                                     ---------          ---------

      Cash flows from investing activities:
              Proceeds from sale of investment securities
                available for sale                                                       1,244                  0
              Proceeds from maturities of investment
                securities available for sale                                           84,002             77,481
              Purchase of investment securities
                available for sale                                                     (83,707)           (65,501)
              Proceeds from maturities of investment
                securities held to maturity                                             13,309             15,361
              Purchase of investment securities
                held to maturity                                                       (33,220)            (6,001)
              Net increase in loans                                                   (120,557)           (33,353)
              Capital expenditures                                                      (4,125)            (3,658)
              Proceeds from sale of equipment                                              222                476
              Proceeds from sale of other real estate                                      849                  0
              Payment for purchase of stock of
                subsidiary banks, net of cash received                                  14,447              6,303
                                                                                     ---------          ---------
    Net cash used in investing activities                                             (127,536)            (8,892)
                                                                                     ---------          ---------

      Cash flows from financing activities:
              Net decrease in deposits                                                 (29,429)            (7,568)
              Net increase (decrease) in short-term borrowings                          61,992             (4,048)
              Dividends paid                                                            (7,744)            (5,759)
              Purchase of common stock                                                       0               (448)
              Net increase in other borrowings                                          18,304             16,907
              Net proceeds options exercised                                               324                408
                                                                                     ---------          ---------
    Net cash provided by (used in) financing activities                                 43,447               (508)
                                                                                     ---------          ---------

Net increase (decrease) in cash and cash equivalents                                   (66,416)             7,796
Cash and cash equivalents at beginning of period                                       159,609            109,228
                                                                                     ---------          ---------
Cash and cash equivalents at end of period                                           $  93,193          $ 117,024
                                                                                     =========          =========

</TABLE>

     See accompanying notes to unaudited consolidated financial statements.








                                       -7-


<PAGE>   8


                   F & M BANCORPORATION, INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 1999
                                   (Unaudited)

NOTE A - BASIS OF PRESENTATION
     The accompanying unaudited condensed consolidated financial statements,
which include the accounts of F&M Bancorporation, Inc. and its subsidiaries,
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. These statements have been restated to
reflect the acquisition of BancSecurity Corporation, acquired on July 1, 1998,
Bank of South Wayne, acquired February 9, 1998, and Financial Management
Services of Jefferson, acquired on May 28, 1998, all accounted for using the
pooling of interest method of accounting. The May 14, 1999 acquisition of the
Community Bank of Elkhorn accounted for as pooling of interests, was not
material to prior years' reported operating results and accordingly, years
previous to 1999 have not been restated. The acquisition of Sentry Bancorp,
acquired on January 27, 1998, was accounted for using the purchase method of
accounting; accordingly, the financial data includes results of operations only
since the date of acquisition. All per share information has been adjusted to
reflect the 10% stock dividend, paid to shareholders on September 1, 1998. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation have been included.

NOTE B - INVESTMENT SECURITIES
     Carrying amounts and market values of investment securities held to
maturity at June 30, 1999 are as follows:

<TABLE>
<CAPTION>

                                                        Carrying      Market
                                                         Amount       Value
                                                        --------     --------
                                                           (in thousands)
<S>                                                     <C>          <C>
Exempt obligations of states and political subdivisions $178,984     $181,516
                                                        ========     ========

</TABLE>

NOTE C - LOANS

     At June 30, 1999, loans are as follows:
                                 (in thousands)

<TABLE>
<S>                                                                <C>
Commercial and industrial                                          $  460,841
Agricultural                                                          147,163
Real estate construction                                               65,293
Real estate mortgage                                                1,043,370
Installment and other consumer                                        146,142
                                                                   ----------
                                                                    1,862,809
Less allowance for loan losses                                        (24,518)
                                                                   ----------
       Net loans                                                   $1,838,291
                                                                   ==========

</TABLE>

NOTE D - EARNINGS PER SHARE OF COMMON STOCK
     Earnings per share are based on weighted average number of common shares
outstanding restated to reflect the 10% stock dividend paid to stockholders on
September 1, 1998. The following shows the computation of the basic and diluted
earnings per share for the six months ended June 30, 1999 and 1998.

<TABLE>
<CAPTION>

                                              Weighted
                                               Average
                                              Number of        Earnings Per
                                 Net Income    Shares          Share
--------------------------------------------------------------------------------
                               (in Thousands)
1999
--------------------------------------------------------------------------------
<S>                               <C>        <C>               <C>
Earnings per share-Basic          $18,309    16,091,315        $1.14
Effect of stock options                          32,565
--------------------------------------------------------------------------------
Earnings per share-Diluted        $18,309    16,123,880        $1.14
================================================================================
1998
--------------------------------------------------------------------------------
Earnings per share-Basic          $16,043    15,591,270        $1.03
Effect of stock options                          41,601
--------------------------------------------------------------------------------
Earnings per share-Diluted        $16,043    15,632,871        $1.03
================================================================================

</TABLE>


                                       -8-


<PAGE>   9


NOTE E - NON-PERFORMING ASSETS

     The following table sets forth the amount of non-performing loans, other
real estate owned and non-performing assets, and each of their percentages to
total loans at June 30, 1999:

<TABLE>
<S>                               <C>       <C>
(in thousands)
Non-accrual loans                 $16,324   0.88%
Loans past due 90 days or more      2,263   0.12
Restructured loans                      0   0.00
                                   ------   ----

Total non-performing loans         18,587   1.00

Other real estate owned             3,133   0.17
                                   ------   ----

Total non-performing assets       $21,720   1.17%
                                  =======   ====

</TABLE>

NOTE F - SUMMARY OF LOAN LOSS EXPERIENCE

     The following table summarizes loan balances at June 30, 1999; changes in
the allowance for loan losses arising from loans charged-off and recoveries on
loans previously charged-off, by loan category; and provisions for loan losses
which have been charged to expense:

<TABLE>
<S>                                      <C>
(in thousands)
Average balance of loans year to date    $1,800,458
                                         ==========
Allowance for loan losses at
  beginning of period                    $   23,291

Loans charged off
  Commercial and Industrial                     847
  Real Estate - Mortgage                         78
  Installments and Other Consumer Loans         445
                                         ----------

  Total charge offs                           1,370

Recoveries on loans previously
  charged off
  Commercial and Industrial                     113
  Real Estate - Mortgage                         77
  Installment and Other Consumer Loans          139
                                         ----------

  Total recoveries                              329

Net loans charged off                         1,041

Provisions for loan losses of bank
     acquired at date of acquisition          1,085

Provisions for loan
  losses                                      1,183
                                         ----------
Allowance for loan losses
  at end of period                       $   24,518
                                         ==========
Ratio of net charge offs
  during period to average
  loans outstanding (annualized)               0.12%
Allowance for loan
  losses to total loans                        1.32%

</TABLE>


                                       -9-


<PAGE>   10


NOTE G - ALLOCATION OF ALLOWANCE FOR LOAN LOSSES

     The following table summarizes the allocation of allowances for loan losses
and gives a breakdown of the percentage of loans in each category at June 30,
1999:

<TABLE>
<CAPTION>

                                                   Percent
                                                  of loans
                            Amount of             in each
                             reserve              category
                             for loan             to total
(in thousands)                losses               loans
----------------------------------------------------------
<S>                           <C>                   <C>
Commercial,
     industrial, and
     agricultural             $11,744               32.6%
Real estate -
     construction                 441                3.5
Real estate - mortgage          8,066               56.0
Installment and other
     consumer loans             4,267                7.9
                              -------              -----
                              $24,518              100.0%
                              =======              =====

</TABLE>
































                                      -10-


<PAGE>   11


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

GENERAL

      The following discussion and analysis provides information regarding the
Company's results of operations for the three and six months ended June 30, 1999
and 1998 and financial condition at June 30, 1999. These statements have been
restated to reflect the acquisition of BancSecurity Corporation, acquired on
July 1, 1998, Bank of South Wayne, acquired on February 9, 1998, and Financial
Management Services of Jefferson, acquired on May 28, 1998, accounted for using
the pooling of interests method of accounting. Community Bank of Elkhorn,
acquired on May 14, 1999, accounted for as pooling of interests, was not
material to prior years' reported operating results; accordingly, years previous
to 1999 have not been restated. The acquisition of the Sentry Bancorp, acquired
on January 27, 1998, was accounted for using the purchase method of accounting;
accordingly, the Company's financial data includes results of operations of this
entity only since the dates of acquisition. All per share information has been
adjusted to reflect the 10% stock dividend paid to shareholders on September 1,
1998.

      On April 18, 1999, the Company signed a definitive Agreement and Plan of
Merger that provides for the acquisition of the Company by Citizens Banking
Corp. of Flint, Michigan ("Citizens"). The Agreement was amended and restated on
July 30, 1999 to adjust the legal structure of the transaction. The amendment
and restatement did not affect the economic or other terms of the transaction.
Under the terms of the Agreement, Citizens will acquire all of the outstanding
shares of the company through a merger transaction pursuant to which the
Company's shareholders will receive 1.303 shares of Citizens in exchange for
each share of F&M common stock. Consummation of the transaction is subject to
regulatory approval, approval of both companies' shareholders and the
satisfaction of certain other conditions, and therefore there can be no
assurance of completion.

      Discussions in this Management's Discussion, and elsewhere in the
Quarterly Report, that are not statements of historical fact (including
statements in the future tense or which include terms such as "believe",
"expect", "anticipate" or "may") are forward-looking statements that involve
risks and uncertainties, and Company's actual future results could materially
differ from those discussed. Factors that could cause or contribute to such
differences include, but are not limited to, the Company's future lending and
collections experiences, the effects of acquisitions, competition from other
institutions, changes in the banking industry and its regulation, needs for
technological change, and other factors, including those described in this
Management's Discussion and Analysis and elsewhere in this report.

RESULTS OF OPERATIONS

   For the three months ended June 30, 1999, net income increased $944,000, or
11.3%, to $9.3 million from $8.3 million in the second quarter of 1998. The
annualized return on average assets was 1.45% for the second quarter of 1999
compared with 1.44% for the second quarter of 1998. Return on average
stockholders' equity on an annualized basis for the second quarter of 1999 and
1998 were 14.70% and 14.99%, respectively.

      For the six months ended June 30, 1999, net income increased $2.3 million,
or 14.1%, to $18.3 million from $16.0 million in the first half of 1998. The
annualized return on average assets was 1.45% for the six months ended June 30,
1999 compared with 1.39% for the first half of 1998. Return on average
stockholders' equity on an annualized basis for the six months ended June 30,
1999 and 1998 were 14.70% and 14.44%, respectively.

                                      -11-


<PAGE>   12



Net Interest Income

   Net interest income for the three months ended June 30, 1999 increased $2.5
million, or 10.5%, to $26.1 million from $23.6 million in the second quarter of
1998. Total interest income for the second quarter of 1999 increased $2.2
million, or 4.9%, to $47.9 million from $45.6 million in the second quarter of
1998. Interest expense decreased $249,000, or 1.1%, to $21.8 million in the
second quarter of 1999 from $22.0 million in the second quarter of 1998.

      Net interest income for the six months ended June 30, 1999 increased $4.9
million, or 10.4%, to $51.5 million from $46.7 million in the first half of
1998. Total interest income for the six months ended June 30, 1999 increased
$3.9 million, or 4.2%, to $94.6 million from $90.8 million in the first half of
1998, while interest expense decreased $1.0 million, or 2.3%, to $43.1 million
in the six months ended June 30, 1999 from $44.1 million in 1998.

   Increased net interest income for the three and six month periods is
attributable to the increase in asset volume due to the Company's internal
growth and acquisitions, and the relative stability of the Company's net
interest margin. Total interest income increased for the three and six month
period in 1999 compared to the same periods last year as a result of an increase
in interest and fees on loans due to acquisitions, internal growth, increased
loan activity, and generally stable interest rates, while total interest expense
decreased for the three and six month periods in 1999 compared to 1998 as a
result of decreasing interest rates paid on deposits and borrowings offset by
increases in the amount of deposits.

Provision for Loan Losses

      The amount charged to provision for loan losses is based on Management's
evaluation of the loan portfolio. Management determines the adequacy of the
allowance for loan losses, both on a bank by bank basis and on an overall basis
for the Company, based on past loan loss experience, current economic
conditions, composition of the loan portfolio (including the historical
performance of, and the F&M subsidiary banks' evaluation of the prospects for,
each of the component loans, and the collateral value therefor) and the
anticipated potential for future loss. Management is also mindful of the
expectations of banking industry regulators for certain levels of allowances,
although no particular regulatory obligations have been imposed on the Company
in this regard.

      The provision for loan losses for the three months ended June 30, 1999
decreased $51,000, or 6.7%, to $712,000 from $763,000 in the second quarter of
1998. The provision for loan losses for the six months ended June 30, 1999 was
$1.2 million, an 18.8% decrease from $1.5 million for the six months ended June
30, 1998. The decrease in the provision resulted from management's review of the
allowance and a determination of an appropriate allowance level for the period.
See "Allowance for Loan Losses" for further discussion.

Non-Interest Income

      The Company stresses the importance of growth in non-interest income as
one of its key long-term strategies. Non-interest income for the three months
ended June 30, 1999 increased $209,000, or 4.9%, to $4.5 million from $4.3
million in the second quarter of 1998. Non-interest income for the six months
ended June 30, 1999 increased $1.3 million, or 17.2%, to $9.1 million. The
increase was due principally to increases in secondary market commissions,
security gains, service charges and other fee income. Acquisition of a bank for
which prior period information was not restated also contributed to the increase
of non-interest income.






                                      -12-


<PAGE>   13






Non-Interest Expense

      Non-interest expense for the three months ended June 30, 1999 increased
$1.1 million, or 7.1%, to $16.1 million from $15.1 million in the second quarter
of 1998. Non-interest expense for the six months ended June 30, 1999 increased
$2.4 million, or 8.1% to $32.4 million from $30.0 million in the first half of
the year. The increase was primarily due to the acquisition in 1999, resulting
from both the cost of the acquisition and the increase from the acquisition with
respect for which prior periods were not restated (additional staffing, data
processing fees, occupancy expense, etc.), and the normal increases in salaries
and employee benefits.

      The overhead ratio, which is computed by subtracting non-interest income
from non-interest expense (excluding net securities transactions) and dividing
by average total assets, was 1.87% in the first half of 1999 compared with 1.92%
in the first half of 1998.

      Due to the sensitivity of the overhead ratio to changes in the balance
sheet, management also looks at trends in the efficiency ratio to assess the
changing relationship between operating expenses and income. The efficiency
ratio measures the amount of cost expended by the Company to generate a given
level of revenues in the normal course of business. It is computed by dividing
total operating expense by net interest income on a fully-taxable equivalent
basis and non-interest income from ongoing operations, excluding nonrecurring
items. The efficiency ratio was 51.4% in the first six months of 1999 compared
with 52.6% in the first six months of 1998. The decreases in this ratio and the
overhead ratio resulted from the various factors set forth above.

Provision for Income Taxes

      The Company's provision for income taxes for the three months ended June
30, 1999 increased $722,000, or 19.5%, to $4.4 million from $3.7 million in the
second quarter of 1998. The increase in income tax provision was principally due
to increased taxable income.

      The provision for income taxes for the six months ended June 30, 1999
increased $1.8 million, or 25.3% to $8.8 million from $7.0 million in 1998. The
increase in income tax provision was principally due to increased taxable
income.

Net Income

      As a result of the preceding factors, net income for the second quarter of
1999 increased by $944,000, or 11.3% to $9.3 million from $8.3 million in the
same period for 1998. Net income for the first half of 1999 increased by $2.3
million, or 14.1%, to $18.3 million from $16.0 million in the first half of
1998.

      Basic net income per common share was $0.58 for the second quarter of 1999
compared with $0.54 in the second quarter of 1998 an increase of 7.4%. The
Company maintains stock option plans for officers and directors. Fully diluted
net income per share was $.58 for the second quarter of 1999 compared with $.53
for the second quarter of 1998.

      Basic and fully diluted net income per share was $1.14 for the first half
of 1999, compared with $1.03 in the same period for 1998, an increase of 10.7%.








                                      -13-


<PAGE>   14







FINANCIAL CONDITION

Loan Portfolio

      At June 30, 1999, total loans increased $182.6 million, or 10.9%, to $1.86
billion from $1.68 billion at December 31, 1998. The loan mix in the Company's
portfolio at June 30, 1999 did not change in any material respect compared with
December 31, 1998. The year to date growth resulted primarily from loan demand
spread throughout the Company's subsidiary banks, along with an acquisition for
which prior years have not been restated.


Non-Performing Assets

      Maintaining excellent credit quality continues to be a priority for the
Company. At June 30, 1999, non-performing assets amounted to $21.7 million,
compared to $18.3 million at December 31, 1998. Non-performing loans at June 30,
1999 were $18.6 million, or 1.0% of total loans, compared to $15.0 million at
December 31, 1998. Other real estate owned ("OREO") at June 30, 1999 was $3.1
million as compared to $3.2 million at December 31, 1998. The ratio of
non-performing assets to total loans at June 30, 1999 was 1.17%. Management
continues to work at reducing the level of non-performing assets. Non-performing
assets increased the first six months of 1999 because of acquisitions and
developments with respect to a number of separate loans, in different locations
and industries. Management does not believe that there is any common reason or
general trend which accounts for the increase (or that it necessarily is an
indication of expected future developments). However, management continues to
take an aggressive collection effort on these assets, carefully monitors these
(and other) loans, and regularly reviews and evaluates the non-performing
credits to determine appropriate handling and action.

Summary of Loan Loss Experience

      For the first half of 1999, total charge-offs were $1.4 million and total
recoveries were $329,000. The annualized ratio of net charge-offs to average
loans outstanding for the six months ended June 30, 1999 was 0.12%. The
charge-offs were not concentrated in any particular industry.

Allowance for Loan Losses

      The allowance for loan losses as a percentage of total loans was 1.32% and
1.39% at June 30, 1999 and December 31, 1998, respectively. Management
continually reviews the loan portfolio, and other factors, to determine the
appropriate allowance. The allowance for loan losses is an amount that
management believes will be adequate to absorb possible losses on existing loans
that may become uncollectible based on evaluations of the collectibility of
loans and prior loan loss experience. In determining the additions to the
allowance charged to operating expenses, management considered historical loss
experience, changes in the nature and volume of the loan portfolio, overall
portfolio quality, the reserve levels at acquired banks, and current economic
conditions that may affect the borrower's ability to pay. The ultimate recovery
of all loans is susceptible to future market and economic factors beyond the
Company's control as well as factors affecting particular borrowers. Also, the
process of setting loss reserves involves an estimation of future occurrences,
and is inherently uncertain. These factors may result in future losses or
recoveries differing significantly from the allowances and reserves provided in
the financial statements.

Investment Portfolio

      At June 30, 1999, the investment portfolio increased $40.4 million, or
7.9%, to $555.0 million from $514.6 million at December 31, 1998. At June 30,
1999 and December 31, 1998, the investment portfolio represented 21.4% and 21.2%
of total assets, respectively. Increases in the investment portfolio are
primarily attributed to an acquisition for which prior years' financials have
not been restated and due to the Company's decision to increase the investment
portfolio.


                                      -14-


<PAGE>   15


Deposits

      Total deposits at June 30, 1999 increased $70.6 million, or 3.5%, to $2.08
billion from $2.01 billion at December 31, 1998. Interest-bearing deposits at
June 30, 1999 increased $73.2 million, or 4.2%, to $1.80 billion from $1.73
billion at December 31, 1998. The increase in deposits is primarily attributable
to the acquisition of Community Bank of Elkhorn in the second quarter of 1999,
representing approximately $90 million in deposits, offset by an internal
decrease in deposits of approximately $20 million. Historically, deposits have
typically increased at year end and then gradually returned to prior levels.

Borrowings

      Short-term borrowings at June 30, 1999 were $123.1 million, as compared to
$60.8 million at December 31, 1998. Short-term borrowings consist primarily of
federal funds purchased and repurchase agreements. The Company has used
short-term borrowings to assist in funding its increasing loan demand.
Management has taken steps to monitor short-term borrowings and is comfortable
with the current level. Going forward, continued reliance on short-term funds
may be required if loan demand continues to outpace deposit growth, and,
therefore, short-term borrowings are expected to vary from time to time.

      Several of the Company's subsidiary banks, as members of the Federal Home
Loan Bank (FHLB), had borrowings from the FHLB as of June 30, 1999. These
borrowings are secured by pledges of mortgage loans, and totaled $113.5 million
at June 30, 1999, compared to $95.2 million at December 31, 1998. These FHLB
borrowings had original maturities of one month to fifteen years at June 30,
1999. The increase in other borrowings in 1998 and early 1999 was due to
attractiveness in longer term rates and the Company's implementation of a
leverage program in which FHLB borrowings are matched to securities purchased.

CAPITAL ADEQUACY

      During the first half of 1999, shareholders' equity increased $15.5
million due to net income of $18.3 million in the first half of 1999 and the
acquisition of Community Bank of Elkhorn, offset by dividends paid to
shareholders and a decrease in net unrealized gains on securities. At June 30,
1999, the Company's risk-based Tier 1 capital ratio was 11.94%. The total
risk-based capital ratio was 13.14% and the leverage ratio was 9.53%. All such
ratios exceed regulatory minimums of 4.0%, 8.0% and 3.0%, respectively. The
average equity to average assets ratio was 9.87% at June 30, 1999, compared with
9.66% at June 30, 1998.

      F & M's common stock dividend payout ratio was 41.5% in the first half of
1999 as compared to 27.2% in the comparable 1998 period. These numbers do not
include the dividends historically paid by acquisitions prior to their
acquisitions by the Company.

   At June 30, 1999, each of the Company's subsidiary banks was in compliance
with all applicable capital requirements, and management believes that the
capitalization of those banks is adequate.

      During the first half of the year the Company incurred approximatley $2.5
million dollars in capital expenditures for replacement and renovation of
facilities. The Company to date has not committed to any additional major
commitments to build or purchase in 1999, but also expects to finance any such
expenditures through earnings and existing capital resources.

      At June 30, 1999, the Company had loaned its officers an aggregate of $1.9
million to fund their purchase of company owned stock pursuant to a stock
ownership plan approved by the Company shareholders in 1996.

LIQUIDITY

      As shown in the Company's Consolidated Statements of Cash Flows for the
six months ended June 30, 1999, cash and cash equivalents decreased by $66.4
million during the period to $93.2 million at June 30, 1999. The decrease
primarily reflected $17.7 million in net cash provided by operating activities
and $43.4 million in net cash provided by financing activities, offset by $127.5
million in net cash used in investing activities. Net cash provided by operating
activities primarily consisted of the Company's net income in the period
decreased by adjustments for non-cash credits. Net cash provided by financing
activities principally reflected an increase in short-term borrowings offset by
a decrease in deposits. Net cash used in investing activities consisted
primarily of a net increase in loans and investment securities plus necessary
capital expenditures offset by net cash received in acquisitions for which prior
periods were not restated.


                                      -15-


<PAGE>   16



      The Company manages its liquidity to provide adequate funds to support the
borrowing requirements and deposit flow of its customers. Management views
liquidity as the ability to raise cash at a reasonable cost or with a minimum of
loss and as a measure of balance sheet flexibility to react to marketplace,
regulatory and competitive changes. The primary sources of the Company's
liquidity are investment securities available for sale and other marketable
assets maturing within one year. The Company attempts, when possible, to match
relative maturities of assets and liabilities, while maintaining the desired net
interest margin. The Company can also utilize borrowing capacities if
appropriate. Although the percentage of earning assets represented by loans is
increasing, management believes that its sources of liquidity are adequate.

YEAR 2000

      Like other financial institutions, F&M must assure that its computer and
other systems are "year 2000 compliant." "Year 2000 compliant" means being
capable of operating, and accurately recognizing dates and processing
information, in and after the year 2000. To help assure that F&M's systems are
year 2000 compliant on a timely basis, F&M began a focused compliance program
primarily using F&M personnel. As the program has continued, F&M has identified
certain functions and roles in which the use of outside consultants or experts
would help F&M address year 2000 issues on a more expedited basis or in more
depth. Therefore, in addition to the designation of particular F&M employees to
coordinate F&M's year 2000 compliance efforts, F&M has retained outside
assistance.

      Federal financial institution regulators, which are coordinating efforts
to assure year 2000 compliance, have identified five major phases to the Year
2000 compliance efforts. The phases are generally summarized as: Awareness,
Assessment, Renovation, Validation (testing), and Implementation. F&M is keying
its compliance efforts to those phases. Currently, F&M has completed its review
process, and has begun testing and implementing solutions where necessary.
Further information as to F&M's Year 2000 expeceted schedule for efforts by
phase, and its estimates of the percentage of completion of those phases at June
30, 1999, is set forth in the following chart:

<TABLE>
<CAPTION>

                                   Estimated                 Estimated
                                   Completion                Completion
Phase                               Schedule                 Percentage
--------------------------------------------------------------------------------
<S>                                 <C>                        <C>
Awareness                           09/30/97                   100%
Assessment                          09/30/97                   100%
Renovation                          12/31/98                   100%
Validation                          09/30/99                    95%
Implementation                      10/30/99                    75%

</TABLE>

      F&M has to date budgeted $1.5 million for its compliance efforts, and has
expended approximately $1.2 million dollars through June 30, 1999.

    As part of that effort, F&M is monitoring year 2000 compliance efforts by
its suppliers, because many of F&M's affected systems (such as data processing)
are contracted from third parties. Therefore, a significant part of F&M being
year 2000 compliant requires such compliance by the third parties, and F&M is
subject to their achievement of appropriate year 2000 compliance on a timely
basis. F&M regularly receives updates from its "mission-critical" suppliers
(such as data processors) as to their Year 2000 compliance efforts. F&M has
identified its data processing function as one particularly critical function.
Based upon information obtained from its two primary data processing suppliers,
F&M believes that these systems are year 2000 compliant. In the event that one
or both of these processors would not achieve year 2000 compliance on a timely
basis (which F&M believes unlikely), F&M has written business resumption plans
to address possible problems in the future and expects to monitor developments
carefully and adjust and reform its plans accordingly. F&M's plans also include
contingency plans, developed by F&M's outside processors, which provides
alternative operating procedures in the event unforseen problems arise.

      In addition, F&M has completed its review of internal computers and data
processing equipment and systems and is in the process of implementing necessary
upgrades. As a result of the pending affiliation with Citizens Banking
Corporation, F&M has altered its plans for certain third party data processing
conversions to facilitate the ultimate conversion to Citizen's processor;
however, the Company does not expect these changes to impact its Y2K compliance.



                                      -16-

<PAGE>   17


      F&M's internal and third party reviews also include areas which are not
specifically "technology-related" but are also affected by year 2000 compliance
issues. For example, much of F&M's equipment (including building equipment and
systems such as security systems, HVAC, elevators, vaults and the like) includes
imbedded microchips which could be affected by year 2000 related problems. As to
equipment owned by F&M, F&M has assessed and identified non-compliant equipment
and is in the process of implementing solutions to correct them. As to services
supplied to F&M, F&M has contacted service providers and suppliers and obtained
assurance from them. Further testing with suppliers and providers will be
completed in 1999. In particular, F&M has monitored compliance efforts by
utilities and others who provide services to large areas or customer groups
including F&M. In many of these cases, F&M is not sufficiently large a customer
or user that it can demand special treatment, assurances or information from the
providers. In those cases, F&M employees have monitored public statements by
those providers for their state of readiness, attempted to identify any clear
issues, and attempted to make appropriate arrangements to the extent any
reasonable concerns have been identified.

      The credit-worthiness of F&M's customers could also be affected by the
year 2000 compliance efforts and failures. F&M loan officers and others are
continuing to review year 2000 efforts and compliance levels of F&M's commercial
credit customers. The failure of these customers to be year 2000 compliant could
adversely affect those businesses, which would, in turn, pose credit risks which
could have a material effect on F&M. F&M has reviewed information obtained from
approximately 50% of its commercial credit customers, which is a level of
inquiry F&M believes is appropriate. Specific guidelines were used to identify
which customers were selected for the review. Based upon that review, F&M
believes that further review and careful monitoring of customers will continue
to be required. While F&M also recognizes that loans to individuals could be
affected by year 2000 issues (for example, loss of employment due to an
employer's year 2000 related failure), F&M does not believe there is any
practical means to gather such information, which would provide little practical
benefit even if it could be obtained. F&M is also attempting to meet customer
needs stemming from possible year 2000 related disruptions by creating awareness
now to help resolve their potential future problems.

      Because of their concern for the integrity of the financial institutions
systems, federal regulators such as the Federal Reserve Board (which regulates
F&M and most of its subsidiary banks) and the FDIC (which insures deposits at
all F&M banks) have paid close attention to institutions' year 2000 compliance
efforts. F&M and its subsidiaries have had such examinations, and have had to
address the personnel and other needs to facilitate the examinations. Because of
the regulators' stated desire that acquisition activity not interfere with year
2000 readiness, F&M believes that it is possible that regulators may become more
reticent to approve acquisitions prior to 2000. Other than those possible
effects, F&M does not believe that it has had, or is likely to have, other
material projects or initiatives delayed or affected because of the need to
focus on year 2000 compliance.

      Like many businesses, F&M is making contingency plans for year 2000
related disruptions. The precise plans utilized would, of course, depend upon
the exact problems which develop. Disruptions could range from discreet
application-specific problems, which can be easily resolved, to systematic
failures affecting the banking industry (or other industries) as a whole, or all
persons in large geographical areas. F&M cannot identify every disruption that
may affect it, but it has identified critical problems that may arise. Loss of
electricity or disruption of computer systems if F&M is not able to successfully
complete its year 2000 remediation plans are the most likely "worst case"
scenarios identified by F&M. F&M has developed and adopted business resumption
plans to operate off line or without certain services to minimize disruption of
services provided to our customers. Contingency plans of F&M would include,
depending upon the magnitude of the problems actually experienced: the
processing plans discussed above; additional vault cash reserves; additional
funding lines of credit for liquidity; preparing pre 2000 documents on paper to
verify post 2000 validity of information; and paper-based systems for the
short-term until corrected. Occurrences such as area-wide utility failures may
cause businesses, including F&M, to temporarily cease operations at affected
locations until the problem is rectified.





                                      -17-

<PAGE>   18



      F&M's year 2000 compliance efforts are ongoing, and certain matters and
issues remain to be tested and/or finally implemented. However, based in part
upon information being received from the third parties providing services to
F&M, F&M currently believes that it will be year 2000 compliant in a timely
basis to avoid material operational disruptions and to comply in material
respects with the requirements of its regulators. To date, F&M has not
identified material extraordinary expenditures which will be required to become
year 2000 compliant, although further expenditures remain to be incurred and the
use of outside personnel or other factors may increase the costs of year 2000
compliance beyond F&M's current budget.

      As indicated, certain year 2000 remediation efforts remain to be
completed. Some are under F&M's control, but many efforts are those of third
parties (such as suppliers or customers), which are not under F&M's control. The
failure to successfully complete year 2000 remediation efforts by F&M, or by
third parties, could materially adversely affect F&M. While F&M has attempted to
monitor efforts by others, those efforts may not ultimately be satisfactory, and
information given to F&M may not be accurate.

      No one, including F&M, can conclusively predict exactly what year 2000
related problems will eventually occur, or the degree of their impact. However,
it is all but certain that there will be at least some year 2000 related
problems that are not solved on a timely basis, and some of these will affect
F&M. The nature and the degree of impact on F&M would, of course, vary according
to the problem or problems which develop. For example, failure of
mission-critical functions such as data processing or year 2000 failures
affecting large groups, such as utility failures or failures by others affecting
the banking industry as a whole, could cause F&M to limit (or even curtail) its
operations in affected areas until such time as the problems are cured.
Similarly, failures either particular to customers or affecting geographical
areas or business segments generally would affect customers, and the degree of
disruption would affect credit losses. F&M is unable to predict the magnitude of
any such disruptions, or the period of time during which they would affect F&M,
although it expects the effects would be most pronounced in the period of time
shortly after January 1, 2000.

      Statements which are not historical fact (including completion schedules,
expectations of future developments, results or scenarios, and cost estimates)
are forward-looking statements, and actual results may differ due to factors
including those discussed above.


OTHER

Future Accounting Changes

      In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement establishes
accounting and reporting standards for derivative instruments and for hedging
activities. This statement requires an entity to recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative
depends on the intended use of the derivative and the resulting designation. The
statement is effective for fiscal years beginning after June 15, 1999.
Management, at this time, cannot determine the effect adoption of this statement
may have on the consolidated financial statements of the Company as the
accounting for derivatives is dependent on the amount and nature of derivatives
in place at the time of adoption.





                                      -18-


<PAGE>   19


Item 3.       Quantitative and Qualitative Disclosures About Market Risk

      Interest rate risk is the most significant market risk affecting the
Company. Other types of market risk, such as foreign currency exchange rate risk
and commodity price risk do not arise in the normal course of the Company's
business activities. Managing interest rate risk is fundamental to banking.
Banking institutions manage the inherently different maturity and repricing
characteristics of the lending and deposit-taking lines of business to achieve a
desired interest rate sensitivity position and to limit their exposure to
interest rate risk, the Company manages its balance sheet to achieve maximum
shareholder value within the constraints of its interest rate risk discipline,
the maintenance of high credit quality, and sound leverage and liquidity
positions. Both the interest rate sensitivity and liquidity position of the
Company are reviewed regularly. The primary objective of interest rate
sensitivity management is to maintain net interest income growth while reducing
exposure to the risks inherent in interest rate movements.

      The Company's Asset and Liability Management Committee ("ALCO") attempts
to structure the Company's balance sheet to provide for an approximately equal
amount of rate sensitive assets and rate sensitive liabilities. In addition to
facilitating liquidity needs, this strategy assists management in maintaining
relative stability in net interest income despite unexpected fluctuations in
interest rates. The Company believes its market risk exposure, based on the
potential of near-term losses in future earnings, fair values, and cash flows
from reasonably possible near-term changes in market rates or prices is
acceptable at this time.

      The Company employs various strategies to reduce its exposure to interest
rate fluctuations. These strategies include: selling longer term maturity
mortgages to the secondary market, utilizing the Federal Home Loan Bank and
other sources to fund assets, and applying various asset positioning strategies
consistent with the overall needs of the Company at any given time. Management
has chosen to sell 15 year and 30 year mortgages to the secondary market as a
means of removing such a long original stated maturity asset off of the bank's
balance sheet and reduce the accompanying interest rate risk associated with the
assets. Instead, member banks are encouraged to retain adjustable rate mortgages
with 1-5 year rate locks on their balance sheets. Federal Home Loan Bank
membership by affiliate banks has enabled banks to diversify their funding
maturity options as well as employ match funding strategies for longer duration
assets. Depending on the interest rate risk position of the Company, the ALCO,
which meets quarterly, implements strategies to re-balance the Company to its
desired position. When the Company is overly liability sensitive,
floating/variable rate commercial loans by subsidiary banks are encouraged by
management. Furthermore, the purchase of floating/variable rate investment
securities are directly coordinated through the Company's Investment Department
when loan demand for this loan type is not present. To help offset longer
assumed maturity core deposits or to extend the duration of the Company's assets
at any given time, longer term securities are purchased directly through the
Company's Investment Department. In addition to these strategies, the Company
has chosen to offer a premium rate money market deposit product to customers
maintaining average balances exceeding $10,000. The rate on the product is tied
directly to the weekly average auction rate on the 3 month United States
Treasury Bill, which management believes positions the Company competitively in
the market.

      The method of analysis presented is "earnings at risk" ("EAR"). While the
model employed by the Company is capable of both EAR and "value at risk"
("VAR"), it has chosen to place greater emphasis on EAR because the measurement
is believed to be of greatest concern to Company shareholders, as evidenced by
the marketplace's focus on quarterly and annual earnings. Furthermore, an
immediate rate shock of up or down 100-200 basis points is likely to have a more
visible immediate impact on the Company's earnings as compared to its market
value. Nevertheless, EAR has shortcomings inherent in its analysis. First, the
whole issue as to what maturity should be assigned to the Company's core
deposits is one that can vastly impact the results that the model produces. The
model employed assumes a longer duration assignment to these liabilities based
off of historical experience. Second, the model assumes a normal bell-shaped
curve distribution, although this assumption is elusive in volatile financial
markets. Frequently, the extreme may be the reality as evidenced by the
experience seen in the early 1980s. Third, the model assumes fairly normal
correlation patterns. In reality, however, correlation structures are unstable
over time. Fourth, most EAR approaches measure risk over less than two years.
However, this is likely not enough time to detect structural relationships
between


                                      -19-


<PAGE>   20


variables. And fifth, the model assumes theoretical pricing based off of a
linear relationship between market rates and earnings. This relationship
actually has more of a curvature relationship based off of the inherent
convexity present in all fixed rate instruments having a defined maturity; in
other words, a fixed rate instrument will appreciate by a greater amount than it
will decline.

      Based on the model utilized, the interest rate risk of the Company
expressed as a percentage change in net interest income over a one-year time
horizon due to changes in interest rates, at June 30, 1999, is as follows:

<TABLE>
<CAPTION>

                                                    Basis Point Change
                                          ------------------------------------
                                          +200       +100      -100       -200
                                          ----       ----      ----       ----
<S>                                      <C>       <C>         <C>        <C>
Percentage change in net interest
income due to an immediate change
in interest over a one-year time
horizon                                  (6.39%)   (3.20%)     2.20%      3.13%

</TABLE>

         Management continues to closely monitor the company's interest rate
position by utilizing both EAR and traditional RSA/RSL measurements. Because EAR
remains a relatively new measurement for the Company, no target ranges have yet
been established.



                           PART II. OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits: See Exhibit Index, which follows the signature page hereof.

     (b) Reports on Form 8-K: In the quarter ended June 30, 1999, the Registrant
         filed a Report on Form 8-K dated April 18, 1999, reporting the
         execution of an Agreement and Plan of Merger with Citizens Banking
         Corporation.














                                      -20-


<PAGE>   21



                                   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.


                                       F & M BANCORPORATION, INC.
                                       ----------------------------------------
                                       (Registrant)


Date  August 13, 1999                   /s/ John W Johnson
     -------------------               ----------------------------------------
                                       John W Johnson
                                       President and Chief Executive Officer
                                       (Principal Executive Officer)


Date  August 13, 1999                   /s/ Daniel E. Voet
     -------------------               ----------------------------------------
                                       Daniel E. Voet
                                       Chief Financial Officer and Treasurer
                                       (Principal Financial Officer)


<PAGE>   22




                                 EXHIBIT INDEX

                           F & M BANCORPORATION, INC.

                   Form 10-Q for Quarter Ended June 30, 1999

Exhibit No.                        Description
-----------                        -----------

    2                      Agreement and Plan of Merger dated as of the 18th day
                           of April, 1999 as Amended and Restated as of July 30,
                           1999 by and among Citizens Banking Corporation,
                           Citizens Acquisition, Inc. and F&M Bancorporation,
                           Inc.

   27                      Financial Data Schedule