##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

|                           |  |                        
|-------------------------- |  | -----------------------
|For Quarterly Period Ended |  | Commission File Number:
|September 30, 2002         |  | 333-67107              

HEARTLAND BANCSHARES, INC.

(Exact name of small business issuer as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 65-0854929                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|320 U.S. Highway 27 North, Sebring, Florida                    |  | 33870                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          
|                                                               |  |                                     
|Issuers telephone number: (863) 386-1300                      |  |                                     

Not Applicable

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

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

|        |  |        
|------- |  | -------
|Yes [X] |  | No [  ]



| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date:

|                              |  |  |                                    | 
|----------------------------- |  |  | ---------------------------------- | 
|Common Stock, $0.10 par value |  |  | 652,030                           
|                              |  |  |                                   
|Class                         |  |  | Outstanding as of October 31, 2002





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TABLE OF CONTENTS



|                                         |                                                                                               |                                                            |  |  |  |  |  | 
|---------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION           
|                                         | Item 1. Financial Statements                                                                 
|                                         |                                                                                               | CONSOLIDATED BALANCE SHEETS                               
|                                         |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS                     
|                                         |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS                     
|                                         |                                                                                               | CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|                                         |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS                     
|NOTES TO FINANCIAL STATEMENTS           
|                                         | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|                                         | Item 3. Controls and Procedures                                                              
|PART II. OTHER INFORMATION              
|                                         | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                              
|CERTIFICATION                           
|CERTIFICATION                           
|EXHIBIT INDEX                           
|EX-99.1 CERTIFICATION OF THE CEO AND CFO



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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements




HEARTLAND BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                   |            |            |            | 
|------------------------------------ | ------------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------- | ------------------------------------------ | ---------- | ------------------ | ---------- | ----------------- | ---------- | ---------- | ---------- | 
|                                     |                                                                                                   |                                             |                                 |                                            |            | September 30, 2002 |            | December 31, 2001
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|ASSETS                               |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|Cash and due from banks              |                                                                                                   | $                                           | 3,378,895                       |                                            |            | $                  | 2,154,809  |                  
|Federal funds sold                   |                                                                                                   |                                             | 2,326,437                       |                                            |            |                    | 7,048,988  |                  
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             | Total cash and cash equivalents |                                            |            | 5,705,332          |            |                   |            | 9,203,797  |           
|Securities                           |                                                                                                   |                                             | 20,727,444                      |                                            |            |                    | 17,282,256 |                  
|Loans:                               |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   | Commercial, financial and agricultural      |                                 |                                            | 13,711,796 |                    |            |                   | 9,717,593  |           
|                                     |                                                                                                   | Real estate  mortgage                      |                                 |                                            | 25,601,221 |                    |            |                   | 17,602,247 |           
|                                     |                                                                                                   | Installment and consumer loans              |                                 |                                            | 11,513,655 |                    |            |                   | 9,232,486  |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             | Total loans                     |                                            |            | 50,826,672         |            |                   |            | 36,552,326 |           
|Less: Allowance for loan losses      |                                                                                                   |                                             | (521,912                        | )                                          |            |                    | (393,051   | )                
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             |                                 | Net loans                                  |            |                    | 50,304,760 |                   |            |            | 36,159,275 | 
|Property and equipment               |                                                                                                   |                                             | 2,724,812                       |                                            |            |                    | 2,838,470  |                  
|Other assets                         |                                                                                                   |                                             | 557,157                         |                                            |            |                    | 772,472    |                  
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             |                                 | TOTAL ASSETS                               |            | $                  | 80,019,505 |                   |            | $          | 66,256,270 | 
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|Liabilities
Deposits:                |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             | Non-interest bearing demand     |                                            | $          | 13,805,102         |            |                   | $          | 12,199,835 |           
|                                     |                                                                                                   |                                             | Savings, NOW, and money market  |                                            |            | 33,663,487         |            |                   |            | 27,068,895 |           
|                                     |                                                                                                   |                                             | Time deposits under $100,000    |                                            |            | 15,777,522         |            |                   |            | 13,383,049 |           
|                                     |                                                                                                   |                                             | Time deposits over $100,000     |                                            |            | 9,909,523          |            |                   |            | 7,520,124  |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             |                                 | Total deposits                             |            |                    | 73,155,634 |                   |            |            | 60,171,903 | 
|                                     |                                                                                                   | Securities sold under repurchase agreements |                                 |                                            | 161,041    |                    |            |                   |           |           
|                                     |                                                                                                   | Other borrowings                            |                                 |                                            | 225,000    |                    |            |                   |           |           
|                                     |                                                                                                   | Other liabilities                           |                                 |                                            | 181,415    |                    |            |                   | 207,362    |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             |                                 | Total liabilities                          |            |                    | 73,723,090 |                   |            |            | 60,379,265 | 
|Shareholders
Equity                 |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     | Common stock, $.10 par value,
10,000,000 shares authorized, 652,030 shares issued and outstanding |                                             |                                 | 65,203                                     |            |                    |            | 65,203            |           
|                                     | Preferred stock, $.01 par value, 1,000,000 shares
authorized, no shares issued or outstanding     |                                             |                                 |                                           |            |                    |            |                  |           
|                                     | Additional paid-in capital                                                                        |                                             |                                 | 6,437,152                                  |            |                    |            | 6,437,152         |           
|                                     | Retained earnings (deficit)                                                                       |                                             |                                 | (410,810                                   | )          |                    |            | (690,289          | )         
|                                     | Accumulated other comprehensive income                                                            |                                             |                                 | 204,870                                    |            |                    |            | 64,939            |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             |                                 | Total shareholders equity                 |            |                    | 6,296,415  |                   |            |            | 5,877,005  | 
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  
|                                     |                                                                                                   |                                             |                                 | TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY |            | $                  | 80,019,505 |                   |            | $          | 66,256,270 | 
|                                     |                                                                                                   |                                             |                                 |                                            |            |                    |            |                  





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##### Table of Contents






HEARTLAND BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

|                          |                                  |                                                     |                                   |         |                             |         |         |         |         |         |  
|------------------------- | -------------------------------- | --------------------------------------------------- | --------------------------------- | ------- | --------------------------- | ------- | ------- | ------- | ------- | ------- | -
|                          |                                  |                                                     |                                   |         | Quarter Ended September 30,
|                          |                                  |                                                     |                                   |         |                            
|                          |                                  |                                                     |                                   |         | 2002                        |         | 2001   
|                          |                                  |                                                     |                                   |         |                             |         |        
|Interest income           |                                  |                                                     |                                   |         |                             |         |         |        
|                          | Interest and fees on loans       | $                                                   | 841,794                           |         |                             | $       | 610,264 |        
|                          | Interest on securities           |                                                     |                                   | 257,289 |                             |         |         | 104,336 |        
|                          | Interest on federal funds sold   |                                                     |                                   | 12,397  |                             |         |         | 212,802 |        
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  | Total interest income                               |                                   |         | 1,111,480                   |         |         |         | 927,402 |        
|Interest expense          |                                  |                                                     |                                   |         |                             |         |         |        
|                          | Interest on deposits             |                                                     | 278,062                           |         |                             |         | 395,467 |        
|                          | Interest on borrowings           |                                                     |                                   | 4,819   |                             |         |         | 3,268   |        
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  | Total interest expense                              |                                   |         | 282,881                     |         |         |         | 398,735 |        
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  | Net interest income                                 |                                   |         | 828,599                     |         |         |         | 528,667 |        
|Provision for loan losses |                                  |                                                     | 64,091                            |         |                             |         | 44,688  |        
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  | Net interest income
after provision for loan losses |                                   |         | 764,508                     |         |         |         | 483,979 |        
|Noninterest income        |                                  |                                                     |                                   |         |                             |         |         |        
|                          | Service charges and fees         |                                                     | 58,859                            |         |                             |         | 42,267  |        
|                          | Gain on securities sales/calls   |                                                     |                                   | 24,298  |                             |         |         | 7,261   |        
|                          | Other income                     |                                                     |                                   | 17,345  |                             |         |         | 13,415  |        
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  |                                                     | Total noninterest income          |         |                             | 100,501 |         |         |         | 62,943  |  
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|Noninterest expense       |                                  |                                                     |                                   |         |                             |         |         |         |        
|                          | Salaries and employee benefits   |                                                     |                                   | 328,214 |                             |         |         | 283,409 |        
|                          | Occupancy expenses               |                                                     |                                   | 46,949  |                             |         |         | 51,282  |        
|                          | Furniture and equipment expenses |                                                     |                                   | 64,428  |                             |         |         | 50,411  |        
|                          | Other operating expenses         |                                                     |                                   | 252,634 |                             |         |         | 193,825 |        
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  |                                                     | Total noninterest expense         |         |                             | 692,225 |         |         |         | 578,927 |  
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  |                                                     | Income (loss) before income taxes |         |                             | 172,784 |         |         |         | (32,005 | )
|                          |                                  |                                                     | Income tax (benefit)              |         |                             | 69,105  |         |         | $       | (9,744  | )
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  |                                                     | NET INCOME (LOSS)                 |         | $                           | 103,679 |         |         | $       | (22,261 | )
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  |                                                     | NET LOSS INCOME (PER SHARE)       |         | $                           | 0.16    |         |         | $       | (0.03   | )
|                          |                                  |                                                     |                                   |         |                             |         |         |        
|                          |                                  |                                                     | Average Shares
Outstanding        |         |                             | 652,030 |         |         |         | 652,030 |  
|                          |                                  |                                                     |                                   |         |                             |         |         |        





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##### Table of Contents






HEARTLAND BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

|                                                   |                                  |                                                     |                                   |         |                                 |           |           |         |           |           |  
|-------------------------------------------------- | -------------------------------- | --------------------------------------------------- | --------------------------------- | ------- | ------------------------------- | --------- | --------- | ------- | --------- | --------- | -
|                                                   |                                  |                                                     |                                   |         | Nine Months Ended September 30,
|                                                   |                                  |                                                     |                                   |         |                                
|                                                   |                                  |                                                     |                                   |         | 2002                            |           | 2001     
|                                                   |                                  |                                                     |                                   |         |                                 |           |          
|Interest
income
Interest and fees on loans         |                                  | $                                                   | 2,328,294                         |         |                                 | $         | 1,596,295 |        
|                                                   | Interest on securities           |                                                     |                                   | 781,233 |                                 |           |           | 404,154 |          
|                                                   | Interest on federal funds sold   |                                                     |                                   | 68,921  |                                 |           |           | 672,858 |          
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  | Total interest income                               |                                   |         | 3,178,448                       |           |           |         | 2,673,307 |          
|Interest
expense
Interest on deposits              |                                  |                                                     | 815,533                           |         |                                 |           | 1,202,899 |        
|                                                   | Interest on borrowings           |                                                     |                                   | 13,881  |                                 |           |           | 3,268   |          
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  |                                                     | Total interest expense            |         |                                 | 829,414   |           |         |           | 1,206,167 |  
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  | Net interest income                                 |                                   |         | 2,349,033                       |           |           |         | 1,467,140 |          
|Provision for loan losses                          |                                  |                                                     | 144,482                           |         |                                 |           | 114,107   |        
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  | Net interest income
after provision for loan losses |                                   |         | 2,204,551                       |           |           |         | 1,353,033 |          
|Noninterest
income
Service charges and fees        |                                  |                                                     | 165,144                           |         |                                 |           | 97,671    |        
|                                                   | Gain on securities sales/calls   |                                                     |                                   | 25,918  |                                 |           |           | 188,223 |          
|                                                   | Other income                     |                                                     |                                   | 49,352  |                                 |           |           | 33,933  |          
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  |                                                     | Total noninterest income          |         |                                 | 240,414   |           |         |           | 319,827   |  
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|Noninterest
expense
Salaries and employee benefits |                                  |                                                     | 956,591                           |         |                                 |           | 808,538   |        
|                                                   | Occupancy expenses               |                                                     |                                   | 142,385 |                                 |           |           | 136,372 |          
|                                                   | Furniture and equipment expenses |                                                     |                                   | 189,506 |                                 |           |           | 159,248 |          
|                                                   | Other operating expenses         |                                                     |                                   | 692,447 |                                 |           |           | 584,135 |          
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  |                                                     | Total noninterest expense         |         |                                 | 1,980,929 |           |         |           | 1,688,293 |  
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  |                                                     | Income (loss) before income taxes |         |                                 | 464,036   |           |         |           | (15,433   | )
|                                                   |                                  |                                                     | Income tax (benefit)              |         | $                               | 184,557   |           |         | $         | (4,457    | )
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  |                                                     | NET INCOME (LOSS)                 |         |                                 | 279,479   |           |         |           | (10,976   | )
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  |                                                     | NET INCOME (LOSS) PER SHARE       |         | $                               | 0.43      |           |         | $         | (0.02     | )
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        
|                                                   |                                  |                                                     | Average shares outstanding        |         |                                 | 652,030   |           |         |           | 652,030   |  
|                                                   |                                  |                                                     |                                   |         |                                 |           |           |        





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##### Table of Contents






HEARTLAND BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
(UNAUDITED)
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2002

|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |         |         |  
|--------------------------- | ------------------------------------------------------- | ---------------------------------------------------------- | ------ | --------- |  | ---------- | --------- | --------- |  | ------------- | -------- | ------------- | - | - | ------- | ----------- | ------- | - | --------- | ------- | ------- | -
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         | Accumulated |         |   |           |        
|                            |                                                         |                                                            |        | Common    |  | Additional |           | Retained  |  | Other         |          | Total        
|                            |                                                         |                                                            |        | Stock Par |  | Paid-in    |           | Earnings  |  | Comprehensive |          | Shareholders'
|                            |                                                         |                                                            |        | Value     |  | Capital    |           | (Deficit) |  | Income        |          | Equity       
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |              
|BALANCE, December 31, 2000  |                                                         | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (706,101 | )             |   | $ | 142,902 |             |         | $ | 5,939,156 |        
|Comprehensive Income:       |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        
|                            | Net income for the nine months ended
September 30, 2001 |                                                            |        |           |  |            |           |           |  |               |          | (10,976       | ) |   |         |             |         |   |           | (10,976 | )      
|                            | Other comprehensive income:                             |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |         |        
|                            |                                                         | Change in unrealized gain on
securities available for sale |        |           |  |            |           |           |  |               |          |               |   |   |         |             | (22,540 | ) |           |         | (22,540 | )
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        
|                            | Total comprehensive income (loss)                       |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           | (33,516 | )      
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        
|BALANCE, September 30, 2001 |                                                         | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (717,077 | )             |   | $ | 120,362 |             |         | $ | 5,905,640 |        
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        
|BALANCE, December 31, 2001  |                                                         | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (690,289 | )             |   | $ | 64,939  |             |         | $ | 5,877,005 |        
|Comprehensive Income:       |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        
|                            | Net income for the nine months ended
September 30, 2002 |                                                            |        |           |  |            |           |           |  |               |          | 279,479       |   |   |         |             |         |   |           | 279,479 |        
|                            | Other comprehensive income:                             |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |         |        
|                            |                                                         | Change in unrealized gain on
securities available for sale |        |           |  |            |           |           |  |               |          |               |   |   |         |             | 139,931 |   |           |         | 139,931 |  
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        
|                            | Total comprehensive income                              |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           | 419,410 |        
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        
|BALANCE, September 30, 2002 |                                                         | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (410,810 | )             |   | $ | 204,870 |             |         | $ | 6,296,415 |        
|                            |                                                         |                                                            |        |           |  |            |           |           |  |               |          |               |   |   |         |             |         |   |           |        





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##### Table of Contents






HEARTLAND BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |             |          |   |             |  
|--------------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------- | ----------- | ----------------------------------------- | -------- | ------------------------------- | ----------- | ----------- | -------- | - | ----------- | -
|                                              |                                                                                   |                                                             |             |                                           |          | Nine Months Ended September 30,
|                                              |                                                                                   |                                                             |             |                                           |          |                                
|                                              |                                                                                   |                                                             |             |                                           |          | 2002                            |             | 2001       
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|Operating
Activities
Net income               |                                                                                   | $                                                           | 279,479     |                                           |          | $                               | (10,976     | )          
|                                              | Adjustments
to reconcile net income to net cash
provided by operating activities: |                                                             |             |                                           |          |                                 |             |             |         
|                                              |                                                                                   | Deferred income taxes                                       |             |                                           | 184,557  |                                 |             |             | (4,457   | )
|                                              |                                                                                   | Provision for loan losses                                   |             |                                           | 144,482  |                                 |             |             | 114,107  |  
|                                              |                                                                                   | Depreciation and amortization                               |             |                                           | 169,666  |                                 |             |             | 163,385  |  
|                                              |                                                                                   | Gain on called securities                                   |             |                                           | (25,918  | )                               |             |             | (188,223 | )
|                                              |                                                                                   | Net accretion/amortization on securities available for sale |             |                                           | 69,226   |                                 |             |             | 20,648   |  
|                                              | Change in balances of:                                                            |                                                             |             |                                           |          |                                 |             |             |         
|                                              |                                                                                   | Other assets                                                |             |                                           | (151,495 | )                               |             |             | 538      |  
|                                              |                                                                                   | Other liabilities                                           |             |                                           | (25,947  | )                               |             |             | 53,214   |  
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|                                              |                                                                                   |                                                             |             | Net cash provided by operating activities |          |                                 | 644,050     |             |          |   | 148,236     |  
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|Investing
Activities
Net funding of loans     |                                                                                   |                                                             | (14,289,967 | )                                         |          |                                 | (11,848,712 | )          
|                                              | Purchase of securities available for sale                                         |                                                             |             | (14,372,034                               | )        |                                 |             | (15,827,569 | )       
|                                              | Principal collections, maturities and calls on securities available for sale      |                                                             |             | 11,104,998                                |          |                                 |             | 14,562,002  |         
|                                              | Acquisition of property and equipment                                             |                                                             |             | 44,716                                    |          |                                 |             | (216,604    | )       
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|                                              |                                                                                   |                                                             |             | Net cash used in investing activities     |          |                                 | (17,512,287 | )           |          |   | (13,330,883 | )
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|Financing
Activities
Net increase in deposits |                                                                                   |                                                             | 12,983,731  |                                           |          |                                 | 11,032,332  |            
|                                              | Other borrowings                                                                  |                                                             |             | 386,041                                   |          |                                 |             | 1,635,783   |         
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|                                              |                                                                                   |                                                             |             | Net cash provided by financing activities |          |                                 | 13,369,772  |             |          |   | 12,668,115  |  
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|Net a decrease in cash and cash equivalents   |                                                                                   |                                                             | (3,498,465  | )                                         |          |                                 | (514,532    | )          
|Cash and cash equivalents:                    |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|                                              | Beginning of year                                                                 |                                                             |             | 9,203,797                                 |          |                                 |             | 9,788,354   |         
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|                                              | End of quarter                                                                    |                                                             | $           | 5,705,332                                 |          |                                 | $           | 9,273,822   |         
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|SUPPLEMENTAL DISCLOSURE                       |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|                                              | Interest paid                                                                     |                                                             | $           | 284,915                                   |          |                                 | $           | 398,297     |         
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            
|                                              | Income taxes paid                                                                 |                                                             | $           |                                          |          |                                 | $           |            |         
|                                              |                                                                                   |                                                             |             |                                           |          |                                 |             |            





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##### Table of Contents






NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Nine Months Ended September 30, 2002

NOTE 1  ORGANIZATION



| |  |  | Heartland Bancshares, Inc. is a Florida corporation with headquarters in
Sebring, Florida. The company was formed to organize and own 100% of the
capital stock of Heartland National Bank. Heartland National Bank is a
nationally chartered full service institution with an office in Sebring,
Florida, an office in Lake Placid, Florida, and an office in Avon Park,
Florida. The Bank opened for business on September 7, 1999.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The accompanying consolidated financial statements include the accounts
of Heartland Bancshares, Inc. and Heartland National Bank. All
significant inter-company accounts and balances have been eliminated.                                                                                                                                                                                                                         

NOTE 2  BASIS OF PRESENTATION



| |  |  | The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions of Form 10-QSB.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring entries) considered necessary for a fair
presentation of the companys financial results have been made.
Operating results for the nine months and quarter ended September 30,
2002, may not be indicative of the results that may be expected for the
year ending December 31, 2002.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





---



##### Table of Contents






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

Heartland Bancshares operations are conducted through its sole
subsidiary, Heartland National Bank, which commenced operations in September
1999.

Financial Condition

Management continuously monitors the financial condition of Heartland
National Bank in order to maintain sufficient capital to support the operations
of Heartland National Bank and Heartland Bancshares and to protect the
depositors of Heartland National Bank. Significant items affecting Heartland
National Banks financial condition are discussed below.

Asset Quality

A major key to long-term earnings growth is the maintenance of a
high-quality loan portfolio. Heartland National Banks directive in this
regard is carried out through its policies and procedures for extending credit
to Heartland National Banks customers. The goal of these policies and
procedures is to provide a sound basis for new credit extensions and an early
recognition of problem assets to allow the most flexibility in their timely
disposition.

At September 30, 2002, there were no non-performing assets. Additions to
the allowance for loan losses are made periodically to maintain the allowance
at an appropriate level based upon managements analysis of potential risk in
the loan portfolio. The amount of the loan loss provision is determined by an
evaluation of the level of loans outstanding, the level of non-performing
loans, historical loan loss experience, delinquency trends, the amount of
actual losses charged to the reserve in a given period, and assessment of
present and anticipated economic conditions.

Liquidity

Liquidity represents the ability to provide steady sources of funds for
loan commitments and investment activities, as well as to maintain sufficient
funds to cover deposit withdrawals and payment of operating obligations.
Heartland National Banks liquidity position was initially established through
Heartland Bancshares purchase of $6.0 million of the common stock of Heartland
National Bank. As Heartland National Bank grows, liquidity needs are met
either by converting assets to cash or by attracting new deposits. Heartland
National Bank had deposits of $73.2 million at September 30, 2002. Below are
the pertinent liquidity balances and ratios at September 30, 2002 and December
31, 2001.

|                                          |  |                    |            |                   |  |   |            |  
|----------------------------------------- |  | ------------------ | ---------- | ----------------- |  | - | ---------- | -
|                                          |  | At                 |            | At               
|                                          |  | September 30, 2002 |            | December 31, 2001
|                                          |  |                    |            |                  
|Cash and cash equivalents                 |  | $                  | 5,705,332  |                   |  | $ | 9,203,797  |  
|Securities available for sale             |  | $                  | 20,727,444 |                   |  | $ | 17,282,256 |  
|CDs over $100,000 to total deposits ratio |  |                    | 13.5       | %                 |  |   | 12.5       | %
|Loan to deposit ratio                     |  |                    | 69.5       | %                 |  |   | 60.7       | %

Cash and cash equivalents are the primary source of liquidity. At
September 30, 2002, cash and cash equivalents amounted to $5.7 million,
representing 7% of total assets, as compared to $9.3 million, or 15.3% of total
assets at September 30, 2001. Securities available for sale provide a
secondary source of liquidity. Management believes it is likely that a
substantial amount of U. S. Government Agency securities will be called prior
to their contractual maturity dates, thus providing additional sources of
liquidity.

At September 30, 2002, large denomination certificates accounted for 13.5%
of total deposits as compared to 12.5% as of December 31, 2001. Large
denomination CDs are generally more volatile than other deposits. As a result,
management continually monitors the competitiveness of the rates it pays on its
large denomination CDs and periodically adjusts its rates in accordance with
market demands. Significant withdrawals of large denomination CDs could have a
material adverse effect on Heartland National Banks liquidity. Management
believes that since a majority of the above certificates were obtained from
Heartland National Bank customers residing in Highlands





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##### Table of Contents



County, Florida, the volatility of such deposits is lower than if such deposits
were obtained from depositors residing outside of Highlands County, as outside
depositors are generally considered to be more likely to be rate sensitive.

Management knows of no trends, demands, commitments, events or
uncertainties that should result sin or are reasonably likely to result in
Heartland Bancshares liquidity increasing or decreasing in any material way in
the foreseeable future.

Capital Adequacy

There are two primary measures of capital adequacy for banks and bank
holding companies: (i) risk-based capital guidelines and (ii) the leverage
ratio.

The risk-based guidelines measure the amount of a banks required capital
in relation to the degree of risk perceived in its assets and its off-balance
sheet items. Under the risk-based capital guidelines, capital is divided into
two tiers. Tier 1 capital consists of common shareholders equity,
non-cumulative perpetual preferred stock and any related surplus and minority
interest in the equity accounts of consolidated subsidiaries. Goodwill is
subtracted from the total. Tier 2 capital consists of the allowance for loan
losses, hybrid capital instruments, term subordinated debt and intermediate
term preferred stock. Banks are required to maintain a minimum risk-based
capital ratio of 8.0%, with at least 4.0% consisting of Tier 1 capital.

The second measure of capital adequacy is the leverage ratio, which is
computed by dividing Tier 1 capital by average total assets during the most
recent quarter. The OCC has established a 4.0% minimum leverage ratio
requirement for all banks that are not rated CAMELS 1.

The table below illustrates Heartland National Banks and Heartland
Bancshares regulatory capital ratios at September 30, 2002 and December 31,
2001:

|                                    |  |               |      |              |  |             |      |   |  |         |     |  
|----------------------------------- |  | ------------- | ---- | ------------ |  | ----------- | ---- | - |  | ------- | --- | -
|                                    |  |               |      |              |  |             |      |   |  | Minimum
|                                    |  | September 30, |      | December 31, |  | regulatory 
|                                    |  | 2002          |      | 2001         |  | requirement
|                                    |  |               |      |              |  |            
|Heartland National Bank             |  |               |      |              |  |             |      |   |  |         |     |  
|Tier 1 risk-based capital ratio     |  |               | 11.5 | %            |  |             | 13.4 | % |  |         | 4.0 | %
|Total risk-based capital ratio      |  |               | 12.4 | %            |  |             | 12.5 | % |  |         | 8.0 | %
|Leverage ratio                      |  |               | 8.0  | %            |  |             | 8.5  | % |  |         | 4.0 | %
|Heartland Bancshares  Consolidated |  |               |      |              |  |             |      |   |  |         |     |  
|Tier 1 risk-based capital ratio     |  |               | 11.2 | %            |  |             | 13.9 | % |  |         | 4.0 | %
|Total risk-based capital ratio      |  |               | 12.1 | %            |  |             | 13.0 | % |  |         | 8.0 | %
|Leverage ratio                      |  |               | 7.8  | %            |  |             | 8.8  | % |  |         | 4.0 | %





---



##### Table of Contents



Results of Operations

Heartland Bancshares had net income of $103,679 in the third quarter of
2002, compared to a loss of $22,261 in the third quarter of 2001. For the nine
months ended September 30, 2002, Heartland Bancshares had a net income of
$279,479, compared to a loss of $22,261 for the nine months ended September 30,
2001. The following is a brief discussion of the more significant components
of net income:



| |                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) Net interest income represents the difference
between interest received on interest earning assets and
interest paid on interest bearing liabilities. The following
tables set forth the main components of interest earning
assets and interest bearing liabilities for the nine months
and quarter ended September 30, 2002, as compared to the
comparable periods ended September 30, 2001.

|                                |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  |      |      |   |  |      |      |  
|------------------------------- | ----- | ------- | ------ | ------- |  | ------ | ------ | ------ |  | ---- | -------- | ----- |  | - | ----- | ----- |  |  | ---- | ---- | - |  | ---- | ---- | -
|Nine Months Ended September 30,
|                               
|                                |       |         |        |         |  |        |        |        |  |      | Interest |       |  |   |       |       |  |  |     
|Interest Earning                |       | Average |        | Income/ |  | Yield/
|Assets/Interest                 |       | Balance |        | Cost    |  | Cost  
|Bearing Liabilities             |       | 2002    |        | 2001    |  | 2002   |        | 2001   |  | 2002 |          | 2001 
|                                |       |         |        |         |  |        |        |        |  |      |          |      
|(dollars in thousands)         
|Federal funds sold              |       | $       | 5,402  |         |  | $      | 12,280 |        |  | $    | 69       |       |  | $ | 404   |       |  |  | 1.70 | %    |   |  | 4.39 | %   
|Securities                      |       |         | 21,507 |         |  |        | 14,761 |        |  |      | 781      |       |  |   | 673   |       |  |  | 4.84 | %    |   |  | 6.08 | %   
|Loans                           |       |         | 42,503 |         |  |        | 23,497 |        |  |      | 2,328    |       |  |   | 1,596 |       |  |  | 7.30 | %    |   |  | 9.06 | %   
|                                |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  |      |      |   | 
|                                | Total |         | $      | 69,412  |  |        | $      | 50,538 |  |      |          | 3,178 |  |   |       | 2,673 |  |  |      | 6.10 | % |  |      | 7.05 | %
|                                |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  |      |      |   | 
|Deposits                        |       | $       | 67,692 |         |  | $      | 49,852 |        |  | $    | 815      |       |  | $ | 1,203 |       |  |  | 1.61 | %    |   |  | 3.22 | %   
|Borrowings                      |       |         | 1,624  |         |  |        | 158    |        |  |      | 14       |       |  |   | 3     |       |  |  | 1.15 | %    |   |  | 2.53 | %   
|                                |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  |      |      |   | 
|                                | Total |         | $      | 69,316  |  |        | $      | 50,010 |  |      | $        | 829   |  |   | $     | 1,206 |  |  |      | 1.59 | % |  |      | 3.22 | %
|                                |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  |      |      |   | 
|Net interest income/spread      |       |         |        |         |  |        |        |        |  | $    | 2,349    |       |  | $ | 1,467 |       |  |  | 4.51 | %    |   |  | 3.83 | %   
|                                |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  |      |      |   |  |      |     
|Net yield on earning assets     |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  | 4.51 | %    |   |  | 3.87 | %   
|                                |       |         |        |         |  |        |        |        |  |      |          |       |  |   |       |       |  |  |      |      |   |  |      |     





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##### Table of Contents



|                                 |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  |      |      |   |  |      |      |   | 
|-------------------------------- |  | ------- | ------ | ------- |  | ------ | ------ | ---- |  | ---- | -------- | ---- |  | - | --- |  |  | ---- | ---- | - |  | ---- | ---- | - | 
|Three Months Ended September 30,
|                                
|                                 |  |         |        |         |  |        |        |      |  |      | Interest |      |  |   |     |  |  |      |     
|Interest Earning                 |  | Average |        | Income/ |  | Yield/
|Assets/Interest                  |  | Balance |        | Cost    |  | Cost  
|Bearing Liabilities              |  | 2002    |        | 2001    |  | 2002   |        | 2001 |  | 2002 |          | 2001
|                                 |  |         |        |         |  |        |        |      |  |      |          |      | 
|(dollars in thousands)          
|Federal funds sold               |  | $       | 2,728  |         |  | $      | 11,831 |      |  | $    | 12       |      |  | $ | 104 |  |  |      | 1.76 | % |  |      | 3.52 | %
|Securities                       |  |         | 22,358 |         |  |        | 15,273 |      |  |      | 257      |      |  |   | 213 |  |  |      | 4.60 | % |  |      | 5.58 | %
|Loans                            |  |         | 46,821 |         |  |        | 28,009 |      |  |      | 842      |      |  |   | 610 |  |  |      | 7.19 | % |  |      | 8.71 | %
|                                 |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  |      |      |   |  |      |      |  
|Total                            |  | $       | 71,907 |         |  | $      | 50,691 |      |  |      | 1,111    |      |  |   | 927 |  |  |      | 6.18 | % |  |      | 7.31 | %
|                                 |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  |      |      |  
|Deposits                         |  | $       | 70,552 |         |  | $      | 50,166 |      |  |      | 278      |      |  |   | 399 |  |  |      | 1.58 | % |  |      | 3.23 | %
|Borrowings                       |  |         | 950    |         |  |        | 0      |      |  |      | 5        |      |  |   | 0   |  |  |      | 2.11 | % |  |      | 0    | %
|                                 |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  |      |      |   |  |     
|Total                            |  | $       | 71,502 |         |  | $      | 50,166 |      |  |      | 283      |      |  |   | 399 |  |  |      | 1.58 | % |  |      | 3.23 | %
|                                 |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  |      |      |   |  |     
|Net interest income/spread       |  |         |        |         |  |        |        |      |  | $    | 828      |      |  | $ | 528 |  |  |      | 4.60 | % |  |      | 4.08 | %
|                                 |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  |      |      |   |  |      |      |  
|Net yield on earning assets      |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  | 4.61 | %    |   |  | 4.13 | %   
|                                 |  |         |        |         |  |        |        |      |  |      |          |      |  |   |     |  |  |      |      |   |  |      |      |  



| | (b) |  | At December 31, 2001, the allowance
for loan losses amounted to $393,051. During the nine
months ended September 30, 2002, an additional $144,482
was provided to the allowance for loan losses, bringing
the balance to $521,912. There have been net
charge-offs of $19,796 since the opening of Heartland
National Bank. As of September 30, 2002, management
considers the allowance for loan losses to be adequate
to absorb expected future losses. However, there can be
no assurance that charge-offs in future periods will not
exceed the allowance for loan losses or that additional
provisions to the allowance will not be required.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) |  | Non-interest income, which consists primarily of gain
on the sale of
securities, service fees on deposit accounts and other
miscellaneous fees, amounted to $240,414, or 0.43% of
average assets, for the nine months ended September 30,
2002 and $100,501, or 0.52% of average assets, for the
quarter ended September 30, 2002 as compared to $319,827
and $62,943, respectively for the nine months and the
quarter ended September 30, 2001. The primary reason for
the decrease in non-interest income was the realization of
gains on called securities in the first half of 2001.                                                         
|
| | (d) |  | Non-interest expense for the nine months and
quarter ended September 30,
2002 amounted to $1,980,929 and $692,225, respectively, as
compared to $1,688,293 and $578,927 for the same period in 2001. The
components of
non-interest expense for the nine months and quarter ended
September 30, 2002 and September 30, 2001 are set forth below:                                                                                                                                                                                                                                                                                                  





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##### Table of Contents



|                           |  |                    |           |                    |  |          |           |  |  |   |         | 
|-------------------------- |  | ------------------ | --------- | ------------------ |  | -------- | --------- |  |  | - | ------- | 
|                           |  | Nine Months Ended  |           | Nine Months Ended  |  |          |           | 
|                           |  | September 30, 2002 |           | September 30, 2001 |  | Increase
|                           |  |                    |           |                    |  |         
|Salaries and benefits      |  | $                  | 956,591   |                    |  | $        | 808,538   |  |  | $ | 148,053 | 
|Occupancy expenses         |  |                    | 142,385   |                    |  |          | 136,372   |  |  |   | 6,013   | 
|Equipment expenses         |  |                    | 189,506   |                    |  |          | 159,248   |  |  |   | 30,258  | 
|General operating expenses |  |                    | 692,447   |                    |  |          | 584,135   |  |  |   | 108,312 | 
|                           |  |                    |           |                    |  |          |           |  |  |   |         | 
|Total non-interest expense |  | $                  | 1,980,929 |                    |  | $        | 1,688,293 |  |  | $ | 292,636 | 
|                           |  |                    |           |                    |  |          |           |  |  |   |         | 

|                           |  |                    |         |               |  |           |         |  |  |   |         |  
|-------------------------- |  | ------------------ | ------- | ------------- |  | --------- | ------- |  |  | - | ------- | -
|                           |  | Quarter Ended      |         | Quarter Ended |  | Increase/
|September 30,
2002         |  | September 30, 2001 |         | Decrease     
|                           |  |                    |         |              
|Salaries and benefits      |  | $                  | 328,214 |               |  | $         | 283,409 |  |  | $ | 44,805  |  
|Occupancy expenses         |  |                    | 46,949  |               |  |           | 51,282  |  |  |   | (4,333  | )
|Equipment expenses         |  |                    | 64,428  |               |  |           | 50,411  |  |  |   | 14,017  |  
|General operating expenses |  |                    | 252,634 |               |  |           | 193,825 |  |  |   | 58,809  |  
|                           |  |                    |         |               |  |           |         |  |  |   |         |  
|Total non-interest expense |  | $                  | 692,225 |               |  | $         | 578,927 |  |  | $ | 113,298 |  
|                           |  |                    |         |               |  |           |         |  |  |   |         |  

Increases in operating expenses for both the nine months and three months ended
September 30, 2002 as compared to September 30, 2001 can be attributed largely
to the operation of the Avon Park office for the full period in 2002 as
compared to only a partial period in 2001, as well as expenses incurred in 2002
in connection with a data processing conversion scheduled for November 2002.

Heartland Bancshares is not aware of any current recommendation by any
regulatory authority which, if implemented, would have a material effect on
Heartland Bancshares liquidity, capital resources or results of operations.

Cautionary Note Regarding Forward-Looking Statements

Heartland Bancshares may, from time to time, make written or oral
forward-looking statements, including statements contained in Heartland
Bancshares filings with the Securities and Exchange Commission and its reports
to stockholders. Such forward-looking statements are made based on
managements belief as well as assumptions made by, and information currently
available to, management pursuant to safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Heartland Bancshares actual results
may differ materially from the results anticipated in these forward-looking
statements due to a variety of factors, including governmental monetary and
fiscal policies, deposit levels, loan demand, loan collateral values,
securities portfolio values and interest rate risk management; the effects of
competition in the banking business from other commercial banks, savings and
loan associations, mortgage banking firms, consumer finance companies, credit
unions, securities brokerage firms, insurance companies, money market mutual
funds and other financial institutions operating in Heartland Bancshares
market area and elsewhere, including institutions operating through the
Internet; changes in government regulations relating to the banking industry,
including regulations relating to branching and acquisitions; failure of
assumptions underlying the establishment of reserves for loan losses, including
the value of collateral underlying delinquent loans, and other factors.
Heartland Bancshares cautions that such factors are not exclusive. Heartland
Bancshares does not undertake to update any forward-looking statements that may
be made from time to time by, or on behalf of, Heartland Bancshares.





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##### Table of Contents






Item 3. Controls and Procedures

Heartland Bancshares Chief Executive Officer and Chief Financial Officer
have evaluated Heartland Bancshares disclosure controls and procedures as of a
date within 90 days prior to the date of this filing, and they concluded that
these controls and procedures are effective. There have been no significant
changes in internal controls or in other factors that could significantly
affect these controls subsequent to the date of this evaluation.

Disclosure controls and procedures are Heartland Bancshares controls and
other procedures that are designed to ensure that information it is required to
disclose in the reports it files under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities
and Exchange Commissions rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information Heartland Bancshares is required to disclose in the reports that it
files under the Exchange Act is accumulated and communicated to management,
including the principal executive and financial officers, as appropriate, to
allow timely decisions regarding required disclosure.




PART II. OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K



| |                                                                 
| | ----------------------------------------------------------------
| | (a) Exhibits. The following exhibits are filed with this Report:

|            |             |                                                                      |  | 
|----------- | ----------- | -------------------------------------------------------------------- |  | 
|Exhibit No. | Description |                                                                      |  | 
|            |             |                                                                     
|99.1        |             | Certification of Chief Executive Officer and Chief Financial Officer



| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | (b) Reports on Form 8-K. No report on Form 8-K was filed during
the quarter ended September 30, 2002.





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##### Table of Contents






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.

|                       |  |                                                                                                               
|---------------------- |  | --------------------------------------------------------------------------------------------------------------
|                       |  | HEARTLAND BANCSHARES, INC.                                                                                    
|                      
|                      
|                      
|                      
|Date: November 8, 2002 |  | By: /s/ James C. ClinardJames C. Clinard, President and Chief Executive Officer
(principal executive officer) 
|                      
|                      
|                      
|                      
|Date: November 8, 2002 |  | By: /s/ Martha J. KelleyMartha J. Kelley, Chief Financial Officer
(principal financial and accounting officer)





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##### Table of Contents






CERTIFICATION

I, James C. Clinard, President and Chief Executive Officer of the
registrant, certify that:



|(1) |  | I have reviewed this quarterly report on Form 10-QSB;                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which statements were made, not misleading with
respect to the period covered by this quarterly report;
|   
|(3) |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;              
|   
|(4) |  | The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:                                                                                                 



| | (a) |  | designed such disclosure controls and
procedures to ensure that material information relating
to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which the
report was being prepared;
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the
registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and                                                                                        
|
| | (c) |  | presented in this quarterly report
our conclusions about the effectiveness of the
disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                              



|(5) |  | The registrants other certifying officer and I have
disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of the registrants board of
directors (or persons performing the equivalent function):
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the
design or operation of internal controls which could
adversely affect the registrants ability to record,
process, summarize and report financial data and have
identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material,
that involves management or other employees who have a
significant role in the registrants internal controls;
and                                                                                                                                        



|(6) |  | The registrants other certifying officer and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
Evaluation Date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                          
|--------------------------------------------------------------------------
|November 8, 2002                                                          
|                                                                          
|/s/ James C. ClinardJames C. Clinard
President and Chief Executive Officer





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##### Table of Contents






CERTIFICATION

I, Martha J. Kelley, Chief Financial Officer of the registrant, certify
that:



|(1) |  | I have reviewed this quarterly report on Form 10-QSB;                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which statements were made, not misleading with
respect to the period covered by this quarterly report;
|   
|(3) |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;              
|   
|(4) |  | The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:                                                                                                 



| | (a) |  | designed such disclosure controls
and procedures to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within
those entities, particularly during the period in
which the report was being prepared;
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of
the registrants disclosure controls and procedures as
of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                        
|
| | (c) |  | presented in this quarterly
report our conclusions about the effectiveness of the
disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                              



|(5) |  | The registrants other certifying officer and I have
disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of the registrants board of
directors (or persons performing the equivalent function):
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) |  | all significant deficiencies in
the design or operation of internal controls which
could adversely affect the registrants ability to
record, process, summarize and report financial data
and have identified for the registrants auditors any
material weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (e) |  | any fraud, whether or not
material, that involves management or other employees
who have a significant role in the registrants
internal controls; and                                                                                                                                        



|(6) |  | The registrants other certifying officer and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
Evaluation Date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                             
|-------------------------------------------------------------
|November 8, 2002                                             
|                                                             
|/s/ Martha J. Kelley
Martha J. Kelley Chief Financial Officer





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##### Table of Contents






EXHIBIT INDEX



|               |  |             
|-------------- |  | ------------
|Exhibit Number |  | Exhibit Name
|               |  |             

|     |  |                                                                      
|---- |  | ---------------------------------------------------------------------
|99.1 |  | Certification of Chief Executive Officer and Chief Financial
Officer.