##### 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
March 31, 2003 |  | Commission File Number: 333-67107



| |                           
| | --------------------------
| | HEARTLAND BANCSHARES, INC.

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


|                                                                      |  |                                               
|--------------------------------------------------------------------- |  | ----------------------------------------------
|Florida(State or other jurisdiction of
incorporation or organization) |  | 65-0854929(I.R.S. Employer
Identification No.)

|                                                                                    |  |                
|----------------------------------------------------------------------------------- |  | ---------------
|320 U.S. Highway 27 North, Sebring, Florida(Address of principal executive offices) |  | 33870(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  o

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
Class |  | 652,030
Outstanding as of May 6, 2003





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TABLE OF CONTENTS



|                                                   |                                                                                                |  |  |  |  |  |  | 
|-------------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                     
|                                                   | Item 1. Financial Statements                                                                  
|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 SECTION 906 CERTIFICATION OF THE CEO & CFO



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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1.     Financial Statements

HEARTLAND BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                   |            |            |            | 
|------------------------------------ | ------------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------- | ------------------------------------------ | ---------- | -------------- | ----------- | ----------------- | ---------- | ---------- | ---------- | 
|                                     |                                                                                                   |                                             |                                 |                                            |            | March 31, 2003 |             | December 31, 2002
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|ASSETS                               |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|Cash and due from banks              |                                                                                                   | $                                           | 3,745,977                       |                                            |            | $              | 4,279,543   |                  
|Federal funds sold                   |                                                                                                   |                                             | 15,481,864                      |                                            |            |                | 8,708,712   |                  
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             | Total cash and cash equivalents |                                            |            | 19,227,841     |             |                   |            | 12,988,255 |           
|Securities                           |                                                                                                   |                                             | 16,299,789                      |                                            |            |                | 14,361,599  |                  
|Loans:                               |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   | Commercial, financial and agricultural      |                                 |                                            | 18,367,898 |                |             |                   | 18,071,569 |           
|                                     |                                                                                                   | Real estate  mortgage                      |                                 |                                            | 29,848,557 |                |             |                   | 27,295,228 |           
|                                     |                                                                                                   | Installment and consumer loans              |                                 |                                            | 17,189,525 |                |             |                   | 14,895,343 |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             | Total loans                     |                                            |            | 65,405,980     |             |                   |            | 60,262,140 |           
|Less: Allowance for loan losses      |                                                                                                   |                                             | (650,088                        | )                                          |            |                | (606,971    | )                
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             |                                 | Net loans                                  |            |                | 64,755,892  |                   |            |            | 59,655,169 | 
|Property and equipment               |                                                                                                   |                                             | 2,855,849                       |                                            |            |                | 2,753,980   |                  
|Other assets                         |                                                                                                   |                                             | 590,378                         |                                            |            |                | 652,720     |                  
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             |                                 | TOTAL ASSETS                               |            | $              | 103,729,749 |                   |            | $          | 90,411,723 | 
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|Liabilities                          |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     | Deposits:                                                                                         |                                             |                                 |                                            |            |                |             |                   |           
|                                     |                                                                                                   |                                             | Non-interest bearing demand     |                                            | $          | 19,862,820     |             |                   | $          | 17,366,253 |           
|                                     |                                                                                                   |                                             | Savings, NOW, and money market  |                                            |            | 46,686,832     |             |                   |            | 37,327,928 |           
|                                     |                                                                                                   |                                             | Time deposits under $100,000    |                                            |            | 18,375,999     |             |                   |            | 17,506,373 |           
|                                     |                                                                                                   |                                             | Time deposits over $100,000     |                                            |            | 11,165,036     |             |                   |            | 10,146,274 |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             |                                 | Total deposits                             |            |                | 96,090,687  |                   |            |            | 82,346,828 | 
|                                     |                                                                                                   | Securities sold under repurchase agreements |                                 |                                            | 730,247    |                |             |                   | 1,218,990  |           
|                                     | Other liabilities                                                                                 |                                             |                                 | 382,629                                    |            |                |             | 458,792           |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             |                                 | Total liabilities                          |            |                | 97,203,563  |                   |            |            | 84,024,610 | 
|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)                                                                       |                                             |                                 | (82,119                                    | )          |                |             | (255,897          | )         
|                                     | Accumulated other comprehensive income                                                            |                                             |                                 | 105,950                                    |            |                |             | 140,655           |           
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             |                                 | Total shareholders equity                 |            |                | 6,526,186   |                   |            |            | 6,387,113  | 
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  
|                                     |                                                                                                   |                                             |                                 | TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY |            | $              | 103,729,749 |                   |            | $          | 90,411,723 | 
|                                     |                                                                                                   |                                             |                                 |                                            |            |                |             |                  





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##### Table of Contents



HEARTLAND BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

|                          |                                  |                                                     |                            |               |           |                              |        |         |         |         |      | 
|------------------------- | -------------------------------- | --------------------------------------------------- | -------------------------- | ------------- | --------- | ---------------------------- | ------ | ------- | ------- | ------- | ---- | 
|                          |                                  |                                                     |                            |               |           | Three Months Ended March 31,
|                          |                                  |                                                     |                            |               |           |                             
|                          |                                  |                                                     |                            |               |           | 2003                         |        | 2002   
|                          |                                  |                                                     |                            |               |           |                              |        |        
|Interest income           |                                  |                                                     |                            |               |           |                              |       
|                          | Interest and fees on loans       |                                                     | $                          | 1,049,964     |           |                              | $      | 710,511 |        
|                          | Interest on federal funds sold   |                                                     |                            | 31,305        |           |                              |        | 29,596  |        
|                          | Interest on securities           |                                                     |                            | 117,170       |           |                              |        | 237,393 |        
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  | Total interest income                               |                            |               | 1,198,439 |                              |        |         | 977,500 |        
|Interest expense          |                                  |                                                     |                            |               |           |                              |        |        
|                          | Interest on deposits             |                                                     |                            | 282,820       |           |                              |        | 272,997 |        
|                          | Interest on borrowings           |                                                     |                            | 3,286         |           |                              |        | 4,147   |        
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  | Total interest expense                              |                            |               | 286,106   |                              |        |         | 277,144 |        
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  | Net interest income                                 |                            |               | 912,333   |                              |        |         | 700,356 |        
|Provision for loan losses |                                  |                                                     | 47,559                     |               |           |                              | 37,681 |        
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  | Net interest income
after provision for loan losses |                            |               | 864,774   |                              |        |         | 662,675 |        
|Noninterest income        |                                  |                                                     |                            |               |           |                              |        |        
|                          | Service charges and fees         |                                                     |                            | 83,812        |           |                              |        | 47,838  |        
|                          | Gain on securities sales/calls   |                                                     |                            |              |           |                              |        | 1,816   |        
|                          | Other income                     |                                                     |                            | 26,269        |           |                              |        | 14,502  |        
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  | Total noninterest income                            |                            |               | 110,081   |                              |        |         | 64,156  |        
|                          |                                  |                                                     |                            |               |           |                              | .      |        
|Noninterest expense       |                                  |                                                     |                            |               |           |                              |        |        
|                          | Salaries and employee benefits   |                                                     |                            | 377,728       |           |                              |        | 313,853 |        
|                          | Occupancy expenses               |                                                     |                            | 49,304        |           |                              |        | 48,283  |        
|                          | Furniture and equipment expenses |                                                     |                            | 55,055        |           |                              |        | 53,998  |        
|                          | Other operating expenses         |                                                     |                            | 210,539       |           |                              |        | 228,323 |        
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  |                                                     | Total noninterest expense  |               |           | 692,626                      |        |         |         | 644,457 |     
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  |                                                     | Income before income taxes |               |           | 282,229                      |        |         |         | 82,374  |     
|                          |                                  |                                                     | Income taxes               |               | $         | 108,450                      |        |         | $       | 31,075  |     
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  |                                                     | Net Income                 |               | $         | 173,779                      |        |         | $       | 51,299  |     
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  |                                                     | Net Income Per Share:      |               |           |                              |        |         |         |         |     
|                          |                                  |                                                     |                            | Basic         |           | $                            | 0.27   |         |         | $       | 0.08 | 
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  |                                                     |                            | Fully diluted |           | $                            | 0.26   |         |         | $       | 0.08 | 
|                          |                                  |                                                     |                            |               |           |                              |        |        
|                          |                                  |                                                     | Average Shares
Outstanding |               |           | 652,030                      |        |         |         | 652,030 |     
|                          |                                  |                                                     |                            |               |           |                              |        |        





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##### Table of Contents



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

|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |            |            |        |            |  
|----------------------------------------- | ------------------------------------------------------------------------------------------- | ----------------- | ----------------------------------------------------------- | --------------------------------------------------- | ---------- | ---------------------------- | ---------- | ---------- | ---------- | ------ | ---------- | -
|                                          |                                                                                             |                   |                                                             |                                                     |            | Three Months Ended March 31,
|                                          |                                                                                             |                   |                                                             |                                                     |            | 2003                         |            | 2002      
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|Operating Activities                      |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          | Net income                                                                                  |                   | $                                                           | 173,779                                             |            |                              | $          | 51,299     |           
|                                          | Adjustments to reconcile net income to net cash
provided by (used in) operating activities: |                   |                                                             |                                                     |            |                              |            |            |           
|                                          |                                                                                             |                   | Deferred income taxes                                       |                                                     |            | 15,060                       |            |            |            | 22,875 |           
|                                          |                                                                                             |                   | Provision for loan losses                                   |                                                     |            | 47,559                       |            |            |            | 37,681 |           
|                                          |                                                                                             |                   | Depreciation and amortization                               |                                                     |            | 54,783                       |            |            |            | 48,311 |           
|                                          |                                                                                             |                   | Gain on called securities                                   |                                                     |            |                             |            |            |            | (1,816 | )         
|                                          |                                                                                             |                   | Net accretion/amortization on securities available for sale |                                                     |            | 56,958                       |            |            |            | 20,809 |           
|                                          | Change in balances of:                                                                      |                   |                                                             |                                                     |            |                              |            |            |           
|                                          |                                                                                             |                   |                                                             | Other assets                                        |            |                              | 69,427     |            |            |        | (78,465    | )
|                                          |                                                                                             |                   |                                                             | Other liabilities                                   |            |                              | (76,163    | )          |            |        | (104,384   | )
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          |                                                                                             |                   |                                                             | Net cash provided by (used in) operating activities |            |                              | 341,403    |            |            |        | (3,690     | )
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|Investing Activities                      |                                                                                             |                   | (                                                           |                                                     |            |                              |            |           
|                                          | Net funding of loans                                                                        |                   |                                                             | (5,148,282                                          | )          |                              |            | (3,482,873 | )         
|                                          | Purchase of securities available for sale                                                   |                   |                                                             | (5,179,697                                          | )          |                              |            | (6,021,041 | )         
|                                          | Principal collections, maturities and calls on securities available for sale                |                   |                                                             | 3,127,697                                           |            |                              |            | 1,502,719  |           
|                                          | Acquisition of property and equipment                                                       |                   |                                                             | (156,651                                            | )          |                              |            | (846       | )         
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          |                                                                                             |                   |                                                             | Net cash used in investing activities               |            |                              | (7,356,933 | )          |            |        | (8,002,041 | )
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|Financing Activities                      |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          | Net increase in deposits                                                                    |                   |                                                             | 13,743,859                                          |            |                              |            | 6,731,191  |           
|                                          | Other borrowings                                                                            |                   |                                                             | (488,743                                            | )          |                              |            | 2,125,644  |           
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          |                                                                                             |                   |                                                             | Net cash provided by financing activities           |            |                              | 13,255,116 |            |            |        | 8,856,835  |  
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|Net increase in cash and cash equivalents |                                                                                             |                   | 6,239,586                                                   |                                                     |            |                              | 851,104    |           
|Cash and cash equivalents:                |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          |                                                                                             | Beginning of year |                                                             |                                                     | 12,988,255 |                              |            |            | 9,203,797  |       
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          |                                                                                             | End of quarter    |                                                             | $                                                   | 19,227,841 |                              |            | $          | 10,054,901 |       
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|SUPPLEMENTAL DISCLOSURE                   |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          |                                                                                             | Interest paid     |                                                             | $                                                   | 286,106    |                              |            | $          | 284,915    |       
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           
|                                          |                                                                                             | Income taxes paid |                                                             | $                                                   | 2,500      |                              |            | $          |           |       
|                                          |                                                                                             |                   |                                                             |                                                     |            |                              |            |           





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##### Table of Contents



HEARTLAND BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
Three Months Ended March 31, 2003 and 2002
(unaudited)

|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |         |         |  
|-------------------------- | ---------------------------------------------------- | ---------------------------------------------------------- | ------ | --------- |  | ---------- | --------- | --------- |  | ------------- | -------- | ------------- |  | - | ------- | ----------- | ------- | - | --------- | ------- | ------- | -
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         | Accumulated |         |   |           |        
|                           |                                                      |                                                            |        | Common    |  | Additional |           | Retained  |  | Other         |          | Total        
|                           |                                                      |                                                            |        | Stock Par |  | Paid-in    |           | Earnings  |  | Comprehensive |          | Shareholders'
|                           |                                                      |                                                            |        | Value     |  | Capital    |           | (Deficit) |  | Income (Loss) |          | Equity       
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |              
|BALANCE, December 31, 2001 |                                                      | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (690,289 | )             |  | $ | 64,939  |             |         | $ | 5,877,005 |        
|Comprehensive Income:      |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        
|                           | Net income for the three months ended
March 31, 2002 |                                                            |        |           |  |            |           |           |  |               |          | 51,299        |  |   |         |             |         |   |           | 51,299  |        
|                           | Other comprehensive income:                          |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |         |        
|                           |                                                      | Change in unrealized gain on
securities available for sale |        |           |  |            |           |           |  |               |          |               |  |   |         |             | (72,991 | ) |           |         | (72,991 | )
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        
|                           | Total comprehensive income (loss)                    |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           | (21,692 | )      
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        
|BALANCE, March 31, 2002    |                                                      | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (638,990 | )             |  | $ | (8,052  | )           |         | $ | 5,855,313 |        
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        
|BALANCE, December 31, 2002 |                                                      | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (255,897 | )             |  | $ | 140,655 |             |         | $ | 6,387,113 |        
|Comprehensive Income:      |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        
|                           | Net income for the three months ended
March 31, 2003 |                                                            |        |           |  |            |           |           |  |               |          | 173,778       |  |   |         |             |         |   |           | 173,778 |        
|                           | Other comprehensive income:                          |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |         |        
|                           |                                                      | Change in unrealized gain on
securities available for sale |        |           |  |            |           |           |  |               |          |               |  |   |         |             | (34,705 | ) |           |         | (34,705 | )
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        
|                           | Total comprehensive income                           |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           | 139,073 |        
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        
|BALANCE, March 31, 2003    |                                                      | $                                                          | 65,203 |           |  | $          | 6,437,152 |           |  | $             | (82,119  | )             |  | $ | 105,950 |             |         | $ | 6,526,186 |        
|                           |                                                      |                                                            |        |           |  |            |           |           |  |               |          |               |  |   |         |             |         |   |           |        





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##### Table of Contents



NOTES TO FINANCIAL STATEMENTS

(Unaudited)
Three Months Ended March 31, 2003

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 three months ended March 31, 2003, may not be
indicative of the results that may be expected for the year ending
December 31, 2003.

NOTE 3  EARNINGS PER SHARE



| |                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Basic earnings per share have been computed using the weighted average
number of shares during the respective periods. Fully diluted earnings
per share have been computed using the weighted average number of shares
used for basic earnings per share, adjusted for the dilutive effect of
stock options outstanding, assuming use of the treasury stock method.
These amounts are as follows:

|                                                   |  |      |         |      |  |  |         | 
|-------------------------------------------------- |  | ---- | ------- | ---- |  |  | ------- | 
|                                                   |  | 2003 |         | 2002
|                                                   |  |      |         |     
|Weighted average shares outstanding                |  |      | 652,030 |      |  |  | 652,030 | 
|Dilutive shares from effect of outstanding options |  |      | 19,033  |      |  |  | 4,806   | 
|                                                   |  |      |         |      |  |  |         | 
|Shares used for fully diluted computations         |  |      | 671,063 |      |  |  | 656,836 | 
|                                                   |  |      |         |      |  |  |         | 

NOTE 4  PRO FORMA EFFECT OF STOCK OPTIONS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As permitted by applicable accounting principles, management has elected
to disclose rather than to record the compensatory effect of stock
options granted to employees and directors. The pro forma effect has been
estimated by use of the Black  Scholes option pricing model, assuming no
volatility, no dividends and average lives and exercise probability by
option class. At March 31, 2003, there were options outstanding for
82,500 shares of common stock, compared to 72,500 as of March 31, 2002.
No options were granted, exercised or forfeited during the three months
ended March 31, 2003 or 2002. Had the effect of these options been
recorded by Heartland Bancshares, compensation and net income on a
consolidated basis would have been as follows:





---



##### Table of Contents






NOTES TO FINANCIAL STATEMENTS

(Unaudited)
Three Months Ended March 31, 2003
(continued)

|                                              |                                            |   |                              |         |      |   |         |         | 
|--------------------------------------------- | ------------------------------------------ | - | ---------------------------- | ------- | ---- | - | ------- | ------- | 
|                                              |                                            |   | Three Months Ended March 31,
|                                              |                                            |   |                             
|                                              |                                            |   | 2003                         |         | 2002
|                                              |                                            |   |                              |         |     
|Compensation, as reported                     |                                            | $ | 377,728                      |         |      | $ | 313,853 |        
|Pro forma effect of options                   |                                            |   | 16,330                       |         |      |   | 14,892  |        
|                                              |                                            |   |                              |         |      |   |         |        
|                                              | Pro forma compensation                     |   | $                            | 394,058 |      |   | $       | 328,745 | 
|                                              |                                            |   |                              |         |      |   |         |        
|Net income, as reported                       |                                            | $ | 173,779                      |         |      | $ | 51,299  |        
|Pro forma effect of options                   |                                            |   | (13,235                      | )       |      |   | (13,580 | )      
|                                              |                                            |   |                              |         |      |   |         |        
|                                              | Pro forma Net income                       |   | $                            | 160,544 |      |   | $       | 37,719  | 
|                                              |                                            |   |                              |         |      |   |         |        
|Basic earnings per share, as reported         |                                            | $ | 0.27                         |         |      | $ | 0.08    |        
|Pro forma effect of options                   |                                            |   | (0.02                        | )       |      |   | (0.02   | )      
|                                              |                                            |   |                              |         |      |   |         |        
|                                              | Pro forma basic earnings per share         |   | $                            | 0.25    |      |   | $       | 0.06    | 
|                                              |                                            |   |                              |         |      |   |         |        
|Fully diluted earnings per share, as reported |                                            | $ | 0.26                         |         |      | $ | 0.08    |        
|Pro forma effect of options                   |                                            |   | (0.02                        | )       |      |   | (0.02   | )      
|                                              |                                            |   |                              |         |      |   |         |        
|                                              | Pro forma fully diluted earnings per share |   | $                            | 0.24    |      |   | $       | 0.06    | 
|                                              |                                            |   |                              |         |      |   |         |        





---



##### 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 March 31, 2003, management had identified 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.
Below are the pertinent liquidity balances and ratios at March 31, 2003 and
December 31, 2002:

|                                          |  |                |            |                   |  |   |            |  
|----------------------------------------- |  | -------------- | ---------- | ----------------- |  | - | ---------- | -
|                                          |  | At             |            | At               
|                                          |  | March 31, 2003 |            | December 31, 2002
|                                          |  |                |            |                  
|Cash and cash equivalents                 |  | $              | 19,227,841 |                   |  | $ | 12,988,255 |  
|Securities available for sale             |  | $              | 16,299,789 |                   |  | $ | 14,361,599 |  
|CDs over $100,000 to total deposits ratio |  |                | 11.6       | %                 |  |   | 12.3       | %
|Loan to deposit ratio                     |  |                | 68.1       | %                 |  |   | 73.2       | %

Cash and cash equivalents are the primary source of liquidity. At March
31, 2003, cash and cash equivalents amounted to $19.2 million, representing
18.5% of total assets, as compared to $10.1 million, or 13.4% of total assets
at March 31, 2002. Securities available for sale provide a secondary source of
liquidity. Management believes it is likely that a substantial portion of
Heartland National Banks $3.1 million of callable U.S. Government Agency
securities as of March 31, 2003 will be called prior to their contractual
maturity dates, providing additional sources of liquidity. In addition,
Heartland National Banks ability to increase deposits and borrow funds is part
of its liquidity strategy.

At March 31, 2003, large denomination certificates accounted for 11.6% of
total deposits as compared to 12.3% as of December 31, 2002. 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 banks large denomination CDs were
obtained from Heartland National Bank customers residing in Highlands County,
Florida, the volatility of such deposits is lower than if such deposits were
obtained from





---



##### Table of Contents



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 in 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 except those with the highest regulatory rating.

The table below illustrates Heartland National Banks and Heartland
Bancshares regulatory capital ratios at March 31, 2003 and December 31, 2002:

|                                    |  |           |      |              |  |             |      |   |  |         |     |  
|----------------------------------- |  | --------- | ---- | ------------ |  | ----------- | ---- | - |  | ------- | --- | -
|                                    |  |           |      |              |  |             |      |   |  | Minimum
|                                    |  | March 31, |      | December 31, |  | regulatory 
|                                    |  | 2003      |      | 2002         |  | requirement
|                                    |  |           |      |              |  |            
|Heartland National Bank             |  |           |      |              |  |             |      |   |  |         |     |  
|Tier 1 risk-based capital ratio     |  |           | 9.4  | %            |  |             | 10.1 | % |  |         | 4.0 | %
|Total risk-based capital ratio      |  |           | 10.4 | %            |  |             | 11.0 | % |  |         | 8.0 | %
|Leverage ratio                      |  |           | 6.9  | %            |  |             | 7.6  | % |  |         | 4.0 | %
|Heartland Bancshares  Consolidated |  |           |      |              |  |             |      |   |  |         |     |  
|Tier 1 risk-based capital ratio     |  |           | 9.2  | %            |  |             | 9.9  | % |  |         | 4.0 | %
|Total risk-based capital ratio      |  |           | 10.1 | %            |  |             | 10.8 | % |  |         | 8.0 | %
|Leverage ratio                      |  |           | 6.7  | %            |  |             | 7.5  | % |  |         | 4.0 | %





---



##### Table of Contents



Results of Operations

Heartland Bancshares had net income of $173,779 in the first quarter of
2003, compared to $ 51,299 in the first quarter of 2002. 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 quarter ended
March 31, 2003, as compared to the comparable periods ended
March 31, 2002.

Three Months Ended March 31,

|                            |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  |      |      |   |  |      |      |  
|--------------------------- | ----- | ------- | ---------------------- | ------- |  | ------ | ------ | ------ |  | ---- | -------- | ----- |  | - | --- | --- |  |  | ---- | ---- | - |  | ---- | ---- | -
|                            |       |         |                        |         |  |        |        |        |  |      | Interest |       |  |   |     |     |  |  |     
|Interest Earning            |       | Average |                        | Income/ |  | Yield/
|Assets/Interest             |       | Balance |                        | Cost    |  | Cost  
|Bearing Liabilities         |       | 2003    |                        | 2002    |  | 2003   |        | 2002   |  | 2003 |          | 2002 
|                            |       |         |                        |         |  |        |        |        |  |      |          |      
|                            |       |         | (dollars in thousands) |         |  |        |        |        |  |      |         
|Federal funds sold          |       | $       | 10,972                 |         |  | $      | 7,294  |        |  | $    | 31       |       |  | $ | 30  |     |  |  | 1.16 | %    |   |  | 1.65 | %   
|Securities                  |       |         | 14,599                 |         |  |        | 19,770 |        |  |      | 117      |       |  |   | 23  |     |  |  | 3.25 | %    |   |  | 4.80 | %   
|Loans                       |       |         | 62,500                 |         |  |        | 38,504 |        |  |      | 1,050    |       |  |   | 711 |     |  |  | 6.81 | %    |   |  | 7.06 | %   
|                            |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  |      |      |   |  |      |     
|                            | Total |         | $                      | 88,071  |  |        | $      | 65,568 |  |      |          | 1,198 |  |   |     | 978 |  |  |      | 5.52 | % |  |      | 5.78 | %
|                            |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  |      |      |   |  |      |     
|Deposits                    |       | $       | 87,745                 |         |  | $      | 62,565 |        |  |      | 283      |       |  |   | 273 |     |  |  | 1.31 | %    |   |  | 1.74 | %   
|Borrowings                  |       |         | 1,146                  |         |  |        | 1,857  |        |  |      | 3        |       |  |   | 4   |     |  |  | 1.16 | %    |   |  | .89  | %   
|                            |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  |      |      |   |  |      |     
|                            | Total |         | $                      | 88,891  |  |        | $      | 64,422 |  |      |          | 286   |  |   |     | 277 |  |  |      | 1.31 | % |  |      | 1.72 | %
|                            |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  |      |      |   |  |      |     
|Net interest income/spread  |       |         |                        |         |  |        |        |        |  | $    | 912      |       |  | $ | 701 |     |  |  | 4.21 | %    |   |  | 4.06 | %   
|                            |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  |      |      |   |  |      |     
|Net yield on earning assets |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  | 3.99 | %    |   |  | 4.27 | %   
|                            |       |         |                        |         |  |        |        |        |  |      |          |       |  |   |     |     |  |  |      |      |   |  |      |     

|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) |  | At December 31, 2002, the allowance
for loan losses amounted to $606,971. During the three
months ended March 31, 2003, an additional $47,559 was
provided to the allowance for loan losses, bringing the
balance to $654,530. Net charge-offs in the first
quarter of 2003 totaled $4,442, bringing the allowance
balance to $650,088. As of March 31, 2003, 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 service fees on deposit accounts and other
miscellaneous fees, amounted to $110,081, or an
annualized 0.46% of average assets, for the three months
ended March 31, 2003 as compared to $64,156, or an
annualized 0.37% of average assets, for the quarter
ended March 31, 2002. The primary reason for this
increase is that deposit accounts have increased
significantly both in dollar amount and as a percentage
of total assets.                                                                                                                                                                   
|(d) |  | Non-interest expense for the three
months ended March 31, 2003 amounted to $692,626 as
compared to $644,457 for the same period in 2002. The
components of non-interest expense for the three months
ended March 31, 2003 and March 31, 2002 are set forth
below:                                                                                                                                                                                                                                                                                                                                                                                         





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##### Table of Contents



|                           |                            |   |                    |         |                    |   |           |         |  |   |         |        | 
|-------------------------- | -------------------------- | - | ------------------ | ------- | ------------------ | - | --------- | ------- |  | - | ------- | ------ | 
|                           |                            |   | Three Months Ended |         | Three Months Ended |   | Increase/
|                           |                            |   | March 31, 2003     |         | March 31, 2002     |   | Decrease 
|                           |                            |   |                    |         |                    |   |          
|Salaries and benefits      |                            | $ | 377,728            |         |                    | $ | 313,853   |         |  | $ | 63,875  |       
|Occupancy expenses         |                            |   | 49,304             |         |                    |   | 48,283    |         |  |   | 1,021   |       
|Equipment expenses         |                            |   | 55,055             |         |                    |   | 53,998    |         |  |   | 1,057   |       
|General operating expenses |                            |   | 210,539            |         |                    |   | 228,323   |         |  |   | (17,784 | )     
|                           |                            |   |                    |         |                    |   |           |         |  |   |         |       
|                           | Total non-interest expense |   | $                  | 692,626 |                    |   | $         | 644,457 |  |   | $       | 48,169 | 
|                           |                            |   |                    |         |                    |   |           |         |  |   |         |       

Increases in operating expenses for the three months ended March 31, 2003
as compared to March 31, 2002 can be mostly attributed to the addition of
personnel as the volume of business has increased.

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.





---



##### 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 exhibit is 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 March 31, 2003.
| | --- |  | ---------------------------------------------------------------------------------------------





---



##### 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: May 15, 2003 |  | By: /s/ James C. Clinard

James C. Clinard, President and Chief Executive Officer
(principal executive officer) 
|                   |  |                                                                                                                 
|                   |  |                                                                                                                 
|Date: May 15, 2003 |  | By: /s/ Martha J. Kelley

Martha J. Kelley, Chief Financial Officer
(principal financial and accounting officer)





---



##### 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
represent 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.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

May 15, 2003

|                                                                             |  | 
|---------------------------------------------------------------------------- |  | 
|/s/ James C. Clinard

James C. Clinard
President and Chief Executive Officer |  | 





---



##### Table of Contents






CERTIFICATION

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



|(7)  |  | I have reviewed this quarterly report on Form 10-QSB;                                                                                                                                                                                                                                                                    
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(8)  |  | 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;
|    
|(9)  |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
represent 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;            
|    
|(10) |  | 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;                                                                                                              



|(11) |  | 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                                                                                                                                        



|(12) |  | 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.
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

May 15, 2003

|                                                               |  | 
|-------------------------------------------------------------- |  | 
|/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.