UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999.

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___.

Commission file number 000-22469


                            LAFAYETTE BANCORPORATION
             (Exact name of registrant as specified in its charter)

         INDIANA                                                 35-1605492
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

                 133 North 4th Street, Lafayette, Indiana 47902
               (Address of principal executive offices)(Zip Code)

                                 (765) 423-7100
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1994 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days: Yes (x) No ( )

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

Class                                       Outstanding at November 12, 1999
Common Stock, without par value                             3,584,012 shares



<PAGE>

                            LAFAYETTE BANCORPORATION

                                      INDEX


PART I.             FINANCIAL INFORMATION

Item 1.

     Consolidated Balance Sheets -- September 30, 1999 and December 31, 1998

     Consolidated Statements of Income and
           Comprehensive Income--Three Months Ended September 30, 1999 and 1998

     Consolidated Statements of Income and
           Comprehensive Income-Nine Months Ended September 30, 1999 and 1998

     Consolidated Statements  of Cash Flows -- Nine Months Ended  September 30,
     1999 and 1998

     Notes to Consolidated Financial Statements -- September 30, 1999


Item 2.

     Management's  Discussion and Analysis of Financial Condition and Results of
     Operations


Item 3.

     Quantitative and Qualitative Disclosures About Market Risk




PART II.            OTHER INFORMATION


Item 5.       Other Events

Item 6.       Exhibits and Reports on Form 8-K

       a)     Exhibits

              27  Financial Data Schedule

       b)     Reports on Form 8-K



SIGNATURES



<PAGE>


ITEM 1.
                            LAFAYETTE BANCORPORATION
                           CONSOLIDATED BALANCE SHEETS
                          (Dollar amounts in thousands)
                                   (Unaudited)
<TABLE>
-------------------------------------------------------------------------------------------------------------------
<CAPTION>


                                                                              September 30,        December 31,
                                                                                   1999                1998
<S>                                                                          <C>                  <C>
ASSETS
Cash and due from banks                                                       $       21,264      $      17,368
Federal funds sold                                                                         -              1,400
                                                                              --------------      -------------
    Total cash and cash equivalents                                                   21,264             18,768
Interest-bearing balances with other financial institutions                              696                671
Securities available-for-sale (at market)                                             91,001             76,956
Securities held-to-maturity (market value $6,744
  and $5,063)                                                                          6,714              4,879
Loans held for sale                                                                    6,614             10,086
Loans                                                                                477,368            353,828
    Less:  Allowance for loan losses                                                  (4,354)            (4,241)
                                                                              --------------      -------------
       Loans, net                                                                    473,014            349,587
Federal Home Loan Bank stock (at cost)                                                 1,897              1,539
Premises, furniture and equipment, net                                                 9,817              7,953
Intangible assets                                                                     13,922                827
Accrued interest receivable and other assets                                          15,902             12,703
                                                                              --------------      -------------
          Total assets                                                        $      640,841      $     483,969
                                                                              ==============      =============


LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
    Noninterest-bearing deposits                                              $       57,877      $      48,657
    Interest-bearing demand and savings deposits                                     229,781            170,308
    Interest-bearing time deposits                                                   233,699            176,581
                                                                              --------------      -------------
       Total deposits                                                                521,357            395,546
    Short-term borrowings                                                             30,886             16,402
    Long-term debt                                                                    36,415             23,854
    Accrued interest payable and other liabilities                                     7,000              5,553
                                                                              --------------      -------------
       Total liabilities                                                             595,658            441,355


Shareholders' equity
    Common stock, no par value:  5,000,000 shares authorized;
    2,403,806 and 2,394,035 shares issued; and 2,385,219
    and 2,390,198 shares outstanding                                                   2,404              2,394
    Common stock to be distributed                                                     1,194                  -
    Additional paid-in capital                                                        32,849             32,620
    Retained earnings                                                                 10,469              7,747
    Unrealized gain / (loss) on securities available-for-sale,
      net of tax (($1,068) and ($27))                                                 (1,628)               (42)
    Less:  Treasury stock, at cost (13,608 shares)                                      (105)              (105)
                                                                              --------------      -------------
       Total shareholders' equity                                                     45,183             42,614
                                                                              --------------      -------------

          Total liabilities and shareholders' equity                          $      640,841      $     483,969
                                                                              ==============      =============

          See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

                            LAFAYETTE BANCORPORATION
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
             For the three months ended September 30, 1999 and 1998
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
<TABLE>

-------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                                   1999                1998
                                                                                   ----                ----
<S>                                                                          <C>                 <C>
Interest income
    Loans                                                                     $       10,216      $       7,678
    Taxable securities                                                                   980                813
    Tax exempt securities                                                                393                261
    Other                                                                                104                226
                                                                              --------------      -------------
       Total interest income                                                          11,693              8,794

Interest expense
    Deposits                                                                           4,748              3,807
    Short-term borrowings                                                                330                213
    Long-term debt                                                                       593                367
                                                                              --------------      -------------
       Total interest expense                                                          5,671              4,387
                                                                              --------------      -------------
Net interest income                                                                    6,022              4,591
Provision for loan losses                                                                270                180
                                                                              --------------      -------------
Net interest income after provision for loan losses                                    5,752              4,411
Noninterest income
    Income from fiduciary activities                                                     295                225
    Service charges on deposit accounts                                                  429                325
    Net realized gain on securities                                                        8                  -
    Net gain on loan sales                                                               200                350
    Other service charges and fees                                                       234                 70
    Other operating income                                                               193                200
                                                                              --------------      -------------
       Total noninterest income                                                        1,359              1,170
                                                                              --------------      -------------
Noninterest expense
    Salaries and employee benefits                                                     2,569              2,056
    Occupancy expenses, net                                                              281                229
    Equipment expenses                                                                   310                250
    Intangible asset amortization                                                        183                 20
    Other operating expenses                                                           1,130                802
                                                                              --------------      -------------
       Total noninterest expense                                                       4,473              3,357
                                                                              --------------      -------------
Income before income taxes                                                             2,638              2,224
Income taxes                                                                             888                758
                                                                              --------------      -------------
Net income                                                                             1,750              1,466
                                                                              --------------      -------------
Other comprehensive income, net of tax:
    Change in unrealized gains / (losses) on securities                                 (157)               347
                                                                              ---------------     -------------
Comprehensive income                                                          $        1,593      $       1,813
                                                                              ==============      =============

Basic earnings per share                                                      $         .49       $         .41
                                                                              ==============     ===============
Diluted earnings per share                                                    $         .47       $         .40
                                                                              ==============     ===============
Dividend per share                                                            $         .09       $         .08
                                                                              ==============     ===============

          See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>
                            LAFAYETTE BANCORPORATION
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
              For the nine months ended September 30, 1999 and 1998
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)

<TABLE>
-------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                                     1999                1998
                                                                                     ----                ----
<S>                                                                           <C>                 <C>
Interest income
    Loans                                                                     $       27,993      $      22,027
    Taxable securities                                                                 2,910              2,445
    Tax exempt securities                                                              1,133                672
    Other                                                                                407                576
                                                                              --------------      -------------
       Total interest income                                                          32,443             25,720
Interest expense
    Deposits                                                                          13,154             11,066
    Short-term borrowings                                                                973                545
    Long-term debt                                                                     1,568                982
                                                                              --------------      -------------
       Total interest expense                                                         15,695             12,593
                                                                              --------------      -------------
Net interest income                                                                   16,748             13,127
Provision for loan losses                                                                640                540
                                                                              --------------      -------------
Net interest income after provision for loan losses                                   16,108             12,587
Noninterest income
    Income from fiduciary activities                                                     798                677
    Service charges on deposit accounts                                                1,144                983
    Net realized gain on securities                                                       20                  -
    Net gain on loan sales                                                               767                844
    Other service charges and fees                                                       656                539
    Other operating income                                                               519                560
                                                                              --------------      -------------
       Total noninterest income                                                        3,904              3,603
                                                                              --------------      -------------
Noninterest expense
    Salaries and employee benefits                                                     7,209              5,970
    Occupancy expenses, net                                                              790                661
    Equipment expenses                                                                   939                756
    Intangible asset amortization                                                        422                 61
    Other operating expenses                                                           3,270              2,480
                                                                              --------------      -------------
       Total noninterest expense                                                      12,630              9,928
                                                                              --------------      -------------
Income before income taxes                                                             7,382              6,262
Income taxes                                                                           2,463              2,130
                                                                              --------------      -------------
Net income                                                                             4,919              4,132
                                                                              --------------      -------------
Other comprehensive income, net of tax:
    Change in unrealized gains / (losses) on securities                               (1,586)               399
                                                                              ---------------     -------------
Comprehensive income                                                          $        3,333      $       4,531
                                                                              ==============      =============
Basic earnings per share                                                      $         1.37      $        1.16
                                                                              ==============      =============
Diluted earnings per share                                                    $         1.33      $        1.13
                                                                              ==============      =============
Dividend per share                                                            $          .28      $         .24
                                                                              ==============      =============

          See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>

                            LAFAYETTE BANCORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the nine months ended September 30, 1999 and 1998
                          (Dollar amounts in thousands)
                                   (Unaudited)
<TABLE>
-------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                             1999            1998
                                                                             ----            ----

<S>                                                                    <C>            <C>
Cash flows from operating activities
    Net income                                                         $     4,919    $     4,132
    Adjustments to reconcile net income to net cash
      from operating activities
       Depreciation                                                            663            476
       Intangible asset and security amortization, net                         534            232
            of discount accretion
       Provision for loan losses                                               640            540
       Net realized gain on securities                                         (20)             -
       Net realized (gain) loss on sale of :
          Other real estate                                                      -            (43)
       Change in assets and liabilities:
          Loans originated for sale                                        (56,635)       (57,273)
          Loans sold                                                        60,107         57,321
          Accrued interest receivable and other assets                      (2,236)        (1,291)
          Accrued interest payable and other liabilities                     1,447            600
                                                                       -----------    -----------
              Net cash from operating activities                             9,419          4,694

Cash flows from investing activities
    Change in interest-bearing balances with other
       financial institutions                                                  (25)             -
    Purchase of securities available-for-sale                             (124,169)       (44,935)
    Proceeds from sales of securities available-for-sale                     7,318          3,286
    Proceeds from maturities of securities available-for-sale              100,099         29,573
    Purchase of securities held-to-maturity                                 (2,000)        (2,532)
    Proceeds from maturities of securities held-to-maturity                    158          1,908
    Loans made to customers, net of payments collected                     (65,762)       (24,520)
    Purchase of FHLB stock                                                    (358)          (297)
    Property and equipment expenditures                                     (2,527)          (665)
    Proceeds from sales of other real estate                                     -            251
                                                                       -----------    -----------
              Net cash from investing activities                           (87,266)       (37,931)

Cash flows from financing activities
    Net change in deposit accounts                                           8,796         26,746
    Cash received in branch acquisition for liabilities assumed,
       net of assets acquired                                               45,266              -
    Net change in short-term borrowings                                     14,484         (5,113)
    Proceeds from long-term debt                                            14,000          4,800
    Payments on long-term debt                                              (1,439)          (740)
    Common stock issued                                                        238             69
    Dividends paid                                                          (1,002)          (866)
    Purchase of treasury stock                                                   -             (7)
                                                                       -----------    ------------
              Net cash from financing activities                            80,343          24,889

Net change in cash and cash equivalents                                      2,496         (8,348)
Cash and cash equivalents at beginning of year                              18,768         30,901
                                                                       -----------    -----------
Cash and cash equivalents at end of period                             $    21,264    $    22,553
                                                                       ===========    ===========

Supplemental disclosures of cash flow information
   Cash paid during the period for:
       Interest                                                        $    15,155    $    12,401
       Income taxes                                                          2,081          2,081
Non-cash investing activity
    Loans transferred to other real estate                             $       104    $         -

          See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>
                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)

--------------------------------------------------------------------------------


NOTE 1 - BASIS OF PRESENTATION

The significant  accounting  policies followed by Lafayette  Bancorporation (the
"Corporation")   for  interim  financial   reporting  are  consistent  with  the
accounting  policies followed for annual financial  reporting.  The consolidated
interim  financial  statements  have been prepared in accordance  with Generally
Accepted Accounting  Principles and in accordance with instructions to Form 10-Q
and may not include all  information and footnotes  normally  disclosed for full
annual  financial  statements.  All  adjustments  which are,  in the  opinion of
management,  necessary  for a fair  presentation  of the results for the periods
reported have been included in the accompanying unaudited consolidated financial
statements and all such adjustments are of a normal recurring nature.


NOTE 2 - PER SHARE DATA

In September  1999,  the  Corporation  declared a  three-for-two  stock split to
shareholders  of record  September 30, 1999. A total of 1,194,591  common shares
were issued November 1, 1999 in connection with the three-for-two  split.  These
1,194,591  shares  are  reflected  as  common  stock  to be  distributed  in the
September 30, 1999 balance sheet.

The following  illustrates  the  computation  of basic and diluted  earnings per
share,  and includes the weighted  average  number of shares used in calculating
earnings and dividends per share amounts for the periods presented. The weighted
average number of shares have been  retroactively  restated for stock  dividends
and splits.

<TABLE>
<CAPTION>

                                                         Nine Months Ended        Nine Months Ended
                                                        September 30, 1999       September 30, 1998
<S>                                                     <C>                       <C>
Basic earnings per share
 Net income                                                $       4,919            $       4,132
Weighted average shares outstanding                            3,579,547                3,574,148
                                                           -------------            -------------

    Basic earnings per share                               $        1.37            $        1.16
                                                           =============            =============

Diluted earnings per share
 Net income                                                $       4,919            $       4,132

Weighted average shares outstanding                            3,579,547                3,574,148
Diluted effect of assumed
  exercise of Stock Options                                      111,363                   71,313
                                                           -------------            -------------
    Diluted average shares outstanding                         3,690,910                3,645,461
                                                           ---------------          -------------

    Diluted earnings per share                             $         1.33          $         1.13
                                                           ===============         ===============
</TABLE>

<PAGE>

                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                        Three Months Ended       Three Months Ended
                                                        September 30, 1999       September 30, 1998
<S>                                                     <C>                      <C>
Basic earnings per share
 Net income                                                $       1,750            $       1,466
Weighted average shares outstanding                            3,581,221                3,574,262
                                                           -------------            -------------
    Basic earnings per share                               $         .49            $         .41
                                                           =============            =============


Diluted earnings per share
 Net income                                                $       1,750            $       1,466

Weighted average shares outstanding                            3,581,221                3,574,262
Diluted effect of assumed
  exercise of Stock Options                                      109,830                   76,721
                                                           -------------            -------------
    Diluted average shares outstanding                         3,691,051                3,650,983
                                                           -------------            -------------

    Diluted earnings per share                             $         .47            $         .40
                                                           ==============          ==============
</TABLE>

NOTE 3 - SECURITIES
The amortized  cost and estimated  market values of securities are as follows at
September 30, 1999:

<TABLE>
<CAPTION>
                                                         Amortized                      Estimated
                                                           Cost                       Market Value
<S>                                                    <C>                          <C>
Securities Available-for-Sale
U.S. Government and its agencies                       $    14,218                    $    14,062
Obligations of states and political subdivisions            27,576                         26,318
Corporate obligations                                        2,513                          2,468
Mortgage-backed and other asset-backed securities           48,359                         47,157
Other securities                                             1,031                            996
                                                       -----------                    -----------
                                                       $    93,697                    $    91,001
                                                       ===========                    ===========
Securities Held-to-Maturity

Obligations of states and political subdivisions       $     6,714                    $     6,744
                                                       ===========                    ===========

The amortized  cost and estimated  market values of securities are as follows at
December 31, 1998:

                                                         Amortized                      Estimated
                                                           Cost                       Market Value
Securities Available-for-Sale
U.S. Government and its agencies                       $    14,039                    $    14,110
Obligations of states and political subdivisions            23,526                         23,637
Corporate obligations                                        2,520                          2,513
Mortgage-backed and other asset-backed securities           36,940                         36,696
                                                       -----------                    -----------
                                                       $    77,025                    $    76,956
                                                       ===========                    ===========
Securities Held-to-Maturity

Obligations of states and political subdivisions       $     4,879                    $     5,063
                                                       ===========                    ===========
</TABLE>

<PAGE>
                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
<TABLE>

-------------------------------------------------------------------------------------------------------------------
<CAPTION>

NOTE 4 - LOANS

Loans are comprised of the following:
<S>                                                                          <C>                <C>
                                                                               September 30,       December 31,
                                                                                   1999                1998

         Commercial and agricultural loans                                   $        184,794    $       115,198
         Real estate construction loans                                                44,275             28,043
         Residential real estate loans                                                188,628            160,655
         Installment loans to individuals                                              59,671             49,932
                                                                             ----------------    ---------------

             Total loans                                                     $        477,368    $       353,828
                                                                             ================    ===============

</TABLE>


NOTE 5 - ALLOWANCE FOR LOAN LOSSES

The activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>

<S>                                                                 <C>                 <C>
                                                                    1999                1998
                                                                    ----                ----

    Balance, January 1                                     $       4,241      $        3,464
    Provision charged to operations                                  640                 540
    Loans charged off                                               (658)               (267)
    Recoveries on loans previously charged off                       131                 131
                                                           -------------      --------------

    Balance, September 30                                  $       4,354      $        3,868
                                                           =============      ==============
</TABLE>



NOTE 6 - SHORT-TERM BORROWINGS

Short-term borrowings are comprised of the following:
<TABLE>
<CAPTION>
<S>                                                                         <C>                <C>
                                                                               September 30,       December 31,
                                                                                   1999                1998

         Repurchase agreements                                               $         24,086    $        15,788
         Treasury tax and loan open-end note                                            2,800                614
         Federal funds purchased                                                        4,000                  -
                                                                             ----------------    ---------------

             Total short-term borrowings                                     $         30,886    $        16,402
                                                                             ================    ===============
</TABLE>

<PAGE>

                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
--------------------------------------------------------------------------------

NOTE 7 - BRANCH ACTIVITY

On March 12, 1999 the Bank completed the acquisition of three Bank One,  Indiana
branches located in DeMotte, Remington, and Rensselaer,  Indiana. The fair value
of assets acquired was $58,584 (predominately  commercial loans and the physical
facilities),  the fair value of liabilities assumed was $117,360  (predominately
deposits),  and the Bank received  $45,266 of cash at  settlement.  Goodwill and
core deposit intangibles associated with this purchase amounted to $13,510.

The branch  acquisition  was not  considered to be an  acquisition of a business
since,  among other things,  approximately 39% of the assets acquired was in the
form of cash, loans consisted almost entirely of commercial  loans, the branches
represented a small portion of the seller's  operations in the market area,  and
the seller's products differ from the Corporation's  products. In addition,  the
future  earnings from the net assets acquired will be dependent on the effective
use of the cash and the  generation  of other  types of  loans,  including  real
estate,  home equity,  credit  cards,  and other  consumer  loans.  Accordingly,
historical operating results of the branches acquired would not be indicative of
future  results,  and only  the  above  summary  information  on the net  assets
acquired is presented.

In an unrelated  event,  the Corporation  closed the branch located in Chalmers,
Indiana on March 27, 1999.


NOTE 8 - SEGMENT INFORMATION

The Corporation's operations include three primary segments:  banking,  mortgage
banking,  and trust.  Through  its banking  subsidiary's  sixteen  locations  in
Tippecanoe,  White, and Jasper Counties,  the Corporation  provides  traditional
community banking services,  such as accepting  deposits and making  commercial,
residential  and  consumer  loans.   Mortgage  banking  activities  include  the
origination of residential mortgage loans for sale on a servicing released basis
to various investors.  The Corporation's trust department provides both personal
and corporate trust services.

The Corporation's  three reportable  segments are determined by the products and
services offered. Loans,  investments and deposits comprise the primary revenues
and expenses of the banking  operation,  net gains on loans sold account for the
revenues in the mortgage banking segment,  and trust administration fees provide
the primary revenues in the trust department.

The following segment  financial  information has been derived from the internal
profitability  reporting system utilized by management to monitor and manage the
financial  performance of the Corporation.  The accounting policies of the three
segments  are  the  same  as  those  described  in the  summary  of  significant
accounting  policies of the annual report.  The  Corporation  evaluates  segment
performance based on profit or loss before income taxes. The evaluation  process
for the mortgage banking and trust segments include only direct expenses,  while
certain  indirect  expenses,  including  goodwill,  are  absorbed by the banking
operation.

<PAGE>
                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
--------------------------------------------------------------------------------

NOTE 8 - SEGMENT INFORMATION (Continued)

Quarter ended September 30:

<TABLE>
<CAPTION>

<S>                                         <C>                <C>               <C>               <C>

1999                                                                  Mortgage                               Total
                                                    Banking            Banking            Trust            Segments

     Net interest income                    $         6,186    $           55     $            -    $         6,241
     Net gain on loan sales                               -               200                  -                200
     Other revenue                                      829                35                295              1,159
     Noncash items:
         Depreciation                                   224                11                 14                249
         Provision for loan loss                        270                 -                  -                270
     Segment profit                                   2,719                68                107              2,894
     Segment assets                                 633,388             6,777                211            640,376



1998                                                                  Mortgage                               Total
                                                    Banking            Banking            Trust            Segments

     Net interest income                    $         4,526    $           56     $            -    $         4,582
     Net gain on loan sales                               -               350                  -                350
     Other revenue                                      595                 -                225                820
     Noncash items:
         Depreciation                                   147                 7                  6                160
         Provision for loan loss                        180                 -                  -                180
     Segment profit                                   2,078               243                 28              2,349
     Segment assets                                 460,522             7,731                173            468,426

</TABLE>

<PAGE>

                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
--------------------------------------------------------------------------------

NOTE 8 - SEGMENT INFORMATION (Continued)

Significant  segment  totals  are  reconciled  to the  financial  statements  as
follows:

Quarter ended September 30:

<TABLE>
<CAPTION>
<S>                                        <C>                 <C>               <C>
                                                 Reportable                          Consolidated
1999                                              Segments             Other            Totals
----                                              --------             -----            ------

     Net interest income (expense)          $         6,241    $         (219)    $        6,022
     Provision for loan loss                            270                 -                270
     Net gain on loan sales                             200                 -                200
     Other revenue                                    1,159                 -              1,159
     Profit                                           2,894            (1,144)             1,750
     Assets                                         640,376               465            640,841



                                                 Reportable                          Consolidated
1998                                              Segments             Other            Totals
----                                              --------             -----            ------

     Net interest income                    $         4,582    $            9     $        4,591
     Provision for loan loss                            180                 -                180
     Net gain on loan sales                             350                 -                350
     Other revenue                                      820                 -                820
     Profit                                           2,349              (883)             1,466
     Assets                                         468,426               623            469,049

</TABLE>

Amounts included in the "other" column are as follows.

<TABLE>
<CAPTION>
<S>                                                                                     <C>                <C>
                                                                                        1999               1998
                                                                                        ----               ----

Income:
     Holding company net interest
       income (expense)                                                         $       (219)   $            9

Profit:
     Holding company net interest
       income (expense)                                                                 (219)                9
Holding company expenses                                                                 (37)             (134)
     Income tax expense                                                                 (888)             (758)


Assets:
     Holding company assets                                                              465               623

</TABLE>

<PAGE>
                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
--------------------------------------------------------------------------------

NOTE 8 - SEGMENT INFORMATION (Continued)

Nine months ended September 30:

<TABLE>
<CAPTION>

<S>                                        <C>                 <C>               <C>               <C>

1999                                                                 Mortgage                               Total
                                                   Banking            Banking            Trust            Segments

     Net interest income                    $        17,034    $          172     $            -    $        17,206
     Net gain on loan sales                               -               767                  -                767
     Other revenue                                    2,260                79                798              3,137
     Noncash items:
         Depreciation                                   607                30                 26                663
         Provision for loan loss                        640                 -                  -                640
     Segment profit                                   7,273               423                281              7,977
     Segment assets                                 633,388             6,777                211            640,376



1998                                                                 Mortgage                               Total
                                                   Banking            Banking            Trust            Segments

     Net interest income                    $        12,968    $          141     $            -    $        13,109
     Net gain on loan sales                               -               844                  -                844
     Other revenue                                    2,070                12                677              2,759
     Noncash items:
         Depreciation                                   438                20                 18                476
         Provision for loan loss                        540                 -                  -                540
     Segment profit                                   6,004               539                125              6,668
     Segment assets                                 460,522             7,731                173            468,426


</TABLE>

<PAGE>

                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)
--------------------------------------------------------------------------------

NOTE 8 - SEGMENT INFORMATION (Continued)

Significant  segment  totals  are  reconciled  to the  financial  statements  as
follows:

Nine months ended September 30:
<TABLE>
<CAPTION>
<S>                                         <C>                <C>               <C>
                                                  Reportable                          Consolidated
1999                                               Segments             Other            Totals
----                                               --------             -----            ------

     Net interest income (expense)          $        17,206    $         (458)    $       16,748
     Provision for loan loss                            640                 -                640
     Net gain on loan sales                             767                 -                767
     Other revenue                                    3,137                 -              3,137
     Profit                                           7,977            (3,058)             4,919
     Assets                                         640,376               465            640,841


                                                 Reportable                          Consolidated
1998                                              Segments             Other            Totals
----                                              --------             -----            ------

     Net interest income                    $        13,109    $           18     $       13,127
     Provision for loan loss                            540                 -                540
     Net gain on loan sales                             844                 -                844
     Other revenue                                    2,759                 -              2,759
     Profit                                           6,668            (2,536)             4,132
     Assets                                         468,426               623            469,049
</TABLE>


Amounts included in the "other" column are as follows.

<TABLE>
<CAPTION>
<S>                                                                                     <C>                <C>
                                                                                        1999               1998
                                                                                        ----               ----
Income:
     Holding company net interest
       income (expense)                                                      $          (458)   $           18

Profit:
     Holding company net interest
       income (expense)                                                                 (458)               18
Holding company expenses                                                                (137)             (424)
     Income tax expense                                                               (2,463)           (2,130)


Assets:
     Holding company assets                                                              465               623

</TABLE>

<PAGE>

ITEM 2.
                            LAFAYETTE BANCORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
              (Dollar amounts in thousands, except per share data)

Lafayette  Bancorporation  (the  "Corporation")  is a one-bank  holding  company
located  in  Lafayette,  Indiana.  The  Corporation's  wholly-owned  subsidiary,
Lafayette Bank and Trust Company ("Bank") conducts business from sixteen offices
in Tippecanoe,  White, and Jasper Counties,  Indiana. The Corporation provides a
wide range of commercial and personal banking  activities,  including  accepting
deposits;  making  commercial and consumer  loans;  originating  mortgage loans;
providing personal and corporate trust services;  providing  investment advisory
and brokerage  services;  and providing  auto,  homeowners,  and other insurance
products.


RESULTS OF OPERATIONS


Mergers and Acquisitions

On March 12, 1999 the  Corporation  completed the acquisition of three Bank One,
Indiana branches located in DeMotte,  Remington,  and Rensselaer,  Indiana.  The
Corporation added  approximately  $117 million in deposits and approximately $58
million  in loans as a result of this  transaction.  Goodwill  and core  deposit
intangibles  associated with this purchase was approximately $13.5 million. This
acquisition  is the  first  for the  Corporation  in this  market  and it  added
approximately 25% to the Corporation's deposit base.


Net Income

The Corporation  earned $1,750,  or $.49 per share for the third quarter of 1999
compared to $1,466,  or $.41 per share for the third quarter of 1998. Net income
increased  $787, or 19.0% to $4,919 for the nine month period  ending  September
30, 1999 compared to that same 1998 time period.  Basic  earnings per share were
$1.37 and $1.16 for the nine month period  ending  September  30, 1999 and 1998,
respectively.  Although actual loan growth of $19,785  occurred during the third
quarter of 1999, it was the  successful  deployment of deposit funds acquired in
the March 12th Bank One branch  acquisition  into loans that  contributed to the
continued increase in interest income. Higher interest expense along with higher
overhead  operating  costs  associated  with the  purchase of the Jasper  County
branches partially offset this increase in interest income.

Return on average  assets (ROA) and return on average equity (ROE) for the three
and nine months ending September 30, 1999 and 1998 are summarized below:


                              Three months ending            Nine months ending
                                 September 30,                  September 30,
                                1999       1998               1999       1998
                                ----       ----               ----       ----

              ROA               1.10%     1.27%               1.11%      1.23%

              ROE              15.68%    14.15%              14.87%     13.68%


<PAGE>

Net Interest Income

Net  interest  income is the most  significant  component  of the  Corporation's
earnings.  Net  interest  income is the  difference  between  interest  and fees
realized on earning assets, primarily loans and securities, and interest paid on
deposits and other borrowed  funds.  The net interest  margin is this difference
expressed as a percentage  of average  earning  assets.  Net interest  income is
determined  by several  factors,  including  the  volume of  earning  assets and
liabilities,  the mix of earning assets and liabilities, and interest rates. For
the nine months  ended  September  30, 1999 and 1998,  net  interest  income was
$16,748 and $13,127,  respectively.  This represents a $3,621, or 27.6% increase
over the prior  year.  Net  interest  income  for the third  quarter of 1999 was
$1,431 or 31.2%  higher than for that same three month period  ending  September
30, 1998. The Corporation's  continued loan growth during the third quarter,  in
addition to the second  quarter  deployment of the deposit funds obtained in the
Jasper County branch acquisition, accounted for the higher net interest income.

Total  interest  income for the nine month period ending  September 30, 1999 and
1998 was $32,443 and $25,720, respectively.  Total interest income for the third
quarter of 1999 was $2,899 or 33.0%  greater than for that same quarter in 1998.
Interest and fees on loans increased  $5,966, or 27.1%, to $27,993 for the first
nine months of 1999,  compared to $22,027 for the first nine months of 1998. For
the third quarter of 1999, interest and fees on loans increased $2,538, or 33.1%
compared  to the  second  quarter  of 1998.  While  investment  security  income
contributed  to  increased   earnings  during  1999  through   additional  funds
investing,  it was,  once  again,  the  Corporation's  ongoing  loan growth that
accounted for the largest portion of the total interest income  increase.  While
the loan portfolio  increased $19,785 during the third quarter of 1999,  average
loan balances,  including  loans acquired in the branch  acquisition,  increased
$141,334, or 42.5% from September 1998 to September 1999.

Total interest  expense for the nine month period ending  September 30, 1999 and
1998 was $15,695 and $12,593, respectively. For the third quarter of 1999, total
interest  expense  increased  $1,284,  or 29.3%,  compared to the same 1998 time
period.  Total average  interest-bearing  liabilities,  including short-term and
long-term  borrowings,  increased  $152,816,  or 40.0%  from  September  1998 to
September 1999. The deposits acquired in the branch acquisition,  in addition to
the long-term debt incurred by the Corporation for injection into its subsidiary
bank's capital accounted for approximately 79% of the increase.

While the  increase  in  average  interest-bearing  liabilities  gave rise to an
increase in overall interest expense, overall cost of funds continue to decline.
Although  interest rates experienced a slight upward movement during the period,
certain  interest-bearing  deposits  continued  to  reprice at a lower rate when
compared to the rates paid two and three years ago.


The following  table  summarizes  the  Corporation's  net interest  income (on a
tax-equivalent  basis) for each of the  periods  presented.  A marginal  federal
income tax rate of 34% for each period was used.


<TABLE>
<CAPTION>
                                       Nine Months                         Change from
                                   Ended September 30,                    Prior Period
                                   1999             1998             Amount        Percent
                                   ----             ----             ------        -------


<S>                              <C>               <C>               <C>             <C>
Interest income                  $33,043           $26,141           $6,902          26.4%

Interest expense                  15,695            12,593            3,102          24.6%
                                  ------            ------           ------
     Net interest income        $ 17,348          $ 13,548          $ 3,800          28.0%
                                 ========          ========          =======

</TABLE>

<PAGE>


<TABLE>
                                      Three Months                         Change from
                                   Ended September 30,                    Prior Period
                                   1999             1998             Amount        Percent
                                   ----             ----             ------        -------

<CAPTION>
<S>                             <C>               <C>              <C>            <C>
Interest income                  $11,898            $9,012           $2,886          32.0%

Interest expense                   5,671             4,387            1,284          29.3%
                                   -----             -----            -----
     Net interest income          $6,227            $4,625           $1,602          34.6%
                                  ======            ======           ======
</TABLE>

Net interest  income,  on a tax equivalent  basis,  for the first nine months of
1999 was  $3,800 or 28.0%  higher  than for that same nine month  period  ending
September 30, 1998. For the third quarter of 1999, net interest income, on a tax
equivalent basis, was $1,602 or 34.6% higher than for the same 1998 time period.
The net interest  margin,  on a tax equivalent  basis for the nine months ending
September  30,  1999 and 1998 was  4.25%  and  4.36%,  respectively.  While  the
Corporation  has benefited from the decline in the overall cost of funds, it has
also  realized  lower  yields  on  loans  it has  funded,  primarily  due to the
competitive  market in which it  operates.  Although the increase in loan volume
has  contributed  to higher net interest  income,  the lower loan yields coupled
with the loan  growth  more than  offset the  overall  lower cost of funds which
resulted in the lower net interest margin.

Provision for Loan Losses and Asset Quality

The provision for loan losses represents charges made to earnings to maintain an
adequate  allowance  for loan losses.  The  allowance is maintained at an amount
believed by management to be sufficient to absorb losses  inherent in the credit
portfolio.  Management conducts,  on a quarterly basis, a detailed evaluation of
the adequacy of the allowance.

Loans with a fair value of $56,398 were acquired in the Bank One, Indiana branch
acquisition.  The fair value of loans acquired is net of a fair value adjustment
for credit  risk of $563.  This credit risk  valuation  account  will be used to
absorb future charge-offs recorded on the acquired loans.

The consolidated  provision for loan losses was $640 and $540 for the first nine
months of 1999 and 1998, respectively.  The allowance for loan losses was $4,354
and $4,241 at  September  30, 1999 and December  31,  1998,  respectively.  When
adding the credit  valuation  account  amount with the  allowance  for loan loss
account  balance at September  30, 1999,  the allowance as a percentage of loans
was 1.03%.  This same  ratio at  December  31,  1998 was  1.20%.  Although  loan
charge-off's were significantly  lower during the third quarter when compared to
the  previous two  quarters,  the loan loss  provision  kept pace with the third
quarter  loan  growth,  and the  allowance  as a  percentage  of loans  remained
unchanged, at 1.03%, from the prior quarter-end.

Nonperforming  loans include  nonaccrual  loans,  restructured  loans, and loans
delinquent 90 days or more.  Loans are classified as nonaccrual  when management
believes that  collection of interest is doubtful,  typically  when payments are
past due 90 days,  unless  the  loans are well  secured  and in the  process  of
collection.

The following table indicates the composition of nonperforming loans:
<TABLE>
<CAPTION>

<S>                                                                          <C>                <C>
                                                                               September 30,       December 31,
                                                                                   1999                1998

         Loans past due 90 days or more                                      $          1,437    $           775
         Nonaccrual loans                                                               1,207              1,468
         Restructured loans                                                               165                197
                                                                             ----------------    ---------------

             Total nonperforming loans                                       $          2,809    $         2,440
                                                                             ================    ===============
</TABLE>


<PAGE>

Total  nonperforming loans increased during the first nine months of 1999. While
nonaccrual and restructured loans declined $261 and $32, respectively,  from the
December 31, 1998  totals,  loans past due ninety days or more  increased  $662,
primarily due to the addition of two credits.

The Corporation  continues to have approximately 17% of its outstanding loans to
agricultural-related  borrowers.  Given the ongoing price issues in both the hog
and grain markets, management is continuously monitoring these specific industry
credits.

Management believes overall credit quality remains good. Despite the increase in
net charge-off's and higher total nonperforming loans, total nonperforming loans
as a percentage of total loans declined to .59% at September 30, 1999,  compared
to .69% at December 31, 1998.


Noninterest Income and Expense

Noninterest income totaled $3,904 for the first nine months of 1999, compared to
$3,603 for that same period of 1998, an increase of $301,  or 8.4%.  Noninterest
income for the third quarter  increased $189, or 16.2% to $1,359 compared to the
prior year.

Income from  fiduciary  activities  increased for the first nine months and also
for the third quarter of 1999 when  compared to the same 1998 time periods.  The
number and size of new  accounts,  along with the increase in the fee  structure
has led to higher earnings.

Service  charges  on  deposit  accounts   comprise  the  largest   component  of
noninterest income. The number of accounts being assessed fees, primarily due to
the three branch acquisitions  earlier in the year resulted in a 16.4% and 32.0%
increase in revenue for the nine months and the three months ended September 30,
1999, respectively, when compared to that same 1998 time period.

Net gain on loans originated and sold in the secondary mortgage market were $767
and $844 for the first nine months of 1999 and 1998 respectively,  a decrease of
$77, or 9.1%.  Net gain on loans  originated  and sold for the third quarter was
$200, a $150, or 42.9% decrease from the 1998 amount posted.  Loan sales for the
nine months ended September 30, 1999 increased  $2,786,  or 4.9% compared to the
prior year,  while sales for the three months ended  September 30, 1999 declined
$6,463,  or 30.5%  when  compared  to that same time  period  one year  earlier.
Although the local  economy  continues  to remain  strong,  competitive  pricing
pressures led to lower margins realized on loans sold. Additionally, the rise in
interest rates impacted the number of fundings, especially refinancings,  during
the third quarter of 1999.

Other  service  charges and fees were $656 and $539 for the first nine months of
1999 and 1998,  respectively,  an  increase  of $117,  or  21.7%.  For the third
quarter of 1999,  other  service  charges  and fees  increased  $164,  or 234.3%
compared to the prior year. ATM and safe deposit box fees were  responsible  for
the majority of the increase, as a result of the expanded Jasper County customer
base.

Noninterest  expense totaled $12,630 for the first nine months of 1999, compared
to $9,928 for that same period of 1998, an increase of $2,702,  or 27.2%.  Total
noninterest  expense for the third  quarter of 1999 was $1,116,  or 33.2% higher
than the prior year.

Salary and  employee  benefits  expense  was $7,209 for the first nine months of
1999, an increase of $1,239, or 20.8%, from the $5,970 for the first nine months
of 1998. Total salaries and employee  benefits for the third quarter of 1999 was
$2,569,  a $513, or 24.9%  increase  from the 1998 amount.  With the addition of
approximately  fifty-six employees in connection with the branch acquisitions in
Jasper County,  total salaries and benefits,  including  health insurance costs,
were significantly higher than in previous periods.

Occupancy and equipment expenses were also affected by the branch  acquisitions,
as repairs and upgrades  continued to be made to the facilities,  in addition to
the depreciation recorded on the facilities and equipment acquired.


<PAGE>

Intangible asset amortization  increased  significantly for both the nine months
and three months ended September 30, 1999 solely as a result of the goodwill and
core  deposit  amortization  related to the  acquisition  of the  Jasper  County
branches.

Other  operating  expenses  were  $3,270 for the first nine  months of 1999,  an
increase  of $790,  or 31.9%,  compared  to $2,480 for the first nine  months of
1998. For the third quarter of 1999, other operating expenses increased $328, or
40.9% from the prior year. The majority of this increase for the nine months and
three months ended September 30, 1999 relate to increased  overhead items,  such
as  office  supplies,   telephone,  postage,  insurance,  credit  card  and  ATM
processing  fees, all of which are directly  associated with the daily operation
of the three Jasper County branches.


Income Taxes

The  Corporation's  effective tax rate for the three months ending September 30,
1999 and 1998 was 33.7%  and  34.1%,  respectively.  For the nine  months  ended
September  30, 1999 and 1998,  the effective  tax rate for the  Corporation  was
33.4% and 34.0%,  respectively.  Continued  increases in interest on  tax-exempt
securities and loans were a significant  factor in the lower  effective tax rate
realized.



FINANCIAL CONDITION

Total  assets  were  $640,841  at  September  30,  1999  compared to $483,969 at
December 31, 1998, an increase of $156,872,  or 32.4%. As previously  mentioned,
approximately   $117   million  in  deposits  and  $58  million  in  loans  were
attributable to the three Bank One,  Indiana branches  acquired in March,  1999.
Increases  of $2,496,  $15,880,  and  $123,427  were  realized  in cash and cash
equivalents,  investment securities, and net loans,  respectively,  for the nine
months ended September 30, 1999.

Total deposits  increased $125,811 to $521,357 at September 30, 1999 compared to
$395,546 at December 31, 1998.  Short-term  borrowings  increased $14,484 during
the first nine months  primarily due to increases in repurchase  agreements  and
federal funds  purchased.  Long-term debt at September 30, 1999 was $36,415,  an
increase of $12,561  when  compared  to  December  31,  1998.  Loan  proceeds of
$14,000,  of which $700 has been  repaid,  was obtained by the  Corporation  and
injected into capital of its wholly-owned  subsidiary bank. Principal repayments
of $739 to the  Federal  Home Loan  Bank of  Indianapolis  for  other  long-term
borrowing obligations accounted for the remainder of the change.

Capital

The Corporation and Bank are subject to various regulatory capital guidelines as
required by federal and state  banking  agencies.  These  guidelines  define the
various components of core capital and assign risk weights to various categories
of assets.

Tier 1 capital consists of  shareholders'  equity less goodwill and core deposit
intangibles,  as defined by bank  regulators.  The  definition of Tier 2 capital
includes the amount of allowance  for loan losses which does not exceed 1.25% of
gross  risk  weighted  assets.  Total  capital  is the sum of Tier 1 and  Tier 2
capital.

The minimum requirements under the capital guidelines are a 4.00% leverage ratio
(Tier 1 capital divided by average assets less intangible  assets and unrealized
gains/losses),  a 4.00% Tier 1 risk-based  capital ratio (Tier 1 capital divided
by risk-weighted  assets), and an 8.00% total capital ratio (Tier 1 capital plus
Tier 2 capital divided by risk-weighted assets).

The Federal  Deposit  Insurance  Corporation  Improvement  Act of 1991  (FDICIA)
requires  federal  regulatory  agencies  to define  capital  tiers.  These  are:
well-capitalized,   adequately  capitalized,   undercapitalized,   significantly
undercapitalized,  and critically  undercapitalized.  Under these regulations, a
"well-capitalized" institution must achieve a Tier 1 risk-based capital ratio of
at least 6.00%,  a total capital ratio of at least 10.00%,  and a leverage ratio
of at least 5.00% and not be under a capital  directive  order.  Failure to meet
capital  requirements can result in the initiation of regulatory  action.  If an
institution is only adequately  capitalized,  regulatory approval is required to
accept brokered deposits.  If  undercapitalized,  capital  distributions,  asset
growth, and expansion is limited,  in addition to the institution being required
to submit a capital restoration plan.


<PAGE>

At September  30, 1999 and December  31, 1998,  management  was not aware of any
current recommendations by banking regulatory authorities which, if they were to
be implemented,  would have, or are reasonably likely to have, a material effect
on the Corporation's consolidated liquidity, capital resources or operations

The  Corporation's  actual  consolidated  capital  amounts are  presented in the
following table.
<TABLE>
<CAPTION>
<S>                                                                         <C>                <C>
                                                                               September 30,       December 31,
                                                                                   1999                1998

       Tier 1 capital
         Shareholders' equity                                                $         45,183    $        42,614
         Less:  Intangibles                                                           (13,909)              (806)
         Add/less:  Unrealized loss/(gain) on securities                                1,628                 42
                                                                             ----------------    ---------------

             TOTAL TIER 1 CAPITAL                                            $         32,902    $        41,850
                                                                             ================    ===============

       Total capital
         Tier 1 capital                                                      $         32,902    $        41,850
         Allowable allowance for loan losses                                            4,354              4,241
                                                                             ----------------    ---------------

             TOTAL  CAPITAL                                                  $         37,256    $        46,091
                                                                             ================    ===============

       RISK WEIGHTED ASSETS                                                  $        477,916    $       353,215
                                                                             ================    ===============

       AVERAGE ASSETS                                                        $        621,289    $       475,438
                                                                             ================    ===============
</TABLE>


The Corporation and Bank's actual capital ratios and minimum required levels are
presented in the following table.

<TABLE>
<CAPTION>
                                   Actual ratios as of                       Minimum
                              September 30,    December 31,             Capital Adequacy          Well-Capitalized
                                  1999             1998                    Requirement               Requirement
                                  ----             ----                    -----------               -----------
<S>                           <C>               <C>                       <C>                       <C>
Tier I Capital
 (to average assets)
    Consolidated                  5.3%               8.8%                     4.0%                      5.0%
    Lafayette Bank and Trust      7.2%               8.7%                     4.0%                      5.0%


Tier I Capital
 (to risk weighted assets)
    Consolidated                  6.9%             11.9%                      4.0%                      6.0%
    Lafayette Bank and Trust      9.3%             11.8%                      4.0%                      6.0%


Total Capital
 (to risk weighted assets)
    Consolidated                   7.8%              13.1%                    8.0%                      10.0%
    Lafayette Bank and Trust      10.2%              13.0%                    8.0%                      10.0%

</TABLE>


<PAGE>

As discussed earlier,  the Corporation's  wholly-owned  subsidiary bank acquired
three branches on March 12, 1999.  Management was aware this  transaction  would
reduce  consolidated and bank-only capital levels. As a result,  the Corporation
borrowed $14 million and contributed $13 million of capital to the Bank in order
for the Bank to maintain its  well-capitalized  status. As of September 30, 1999
the Bank continued its position as well-capitalized.  Management was also aware,
however,  that the Corporation's  capital level would temporarily drop below the
minimum required level for capital adequacy purposes. Despite improvement during
the third quarter, the Corporation's  consolidated capital level as of September
30, 1999 still remained  slightly below the required level for capital  adequacy
purposes.  Management  will continue to monitor the  Corporation's  consolidated
capital level and, based on current  projections,  anticipates  meeting or being
very near the minimum required level for capital  adequacy  purposes on December
31,  1999.  The Federal  Reserve  Bank  considers  the holding  company  capital
adequacy in  connection  with any  application  activity  which  requires  their
approval.  Further,  since  the  Corporation's  capital  levels  are  below  the
well-capitalized  category, the use of expedited Federal Reserve Bank procedures
in any application  activity which requires their approval will not be available
to the  Corporation  until  it  once  again  becomes  well-capitalized.  Certain
statements  in  this  paragraph   relating  to  future  capital  levels  of  the
Corporation and Bank are forward-looking which may or may not be accurate due to
the impossibility of predicting  future economic and business events,  including
the ability of the Corporation to raise additional  capital,  if needed, as well
as other factors that are beyond the control of the Corporation.


Liquidity

The  consolidated  statement of cash flows  illustrates  the elements which give
rise to the change in the  Corporation's  cash and cash equivalents for the nine
months ended  September 30, 1999 and 1998.  Including net income of $4,919,  the
net cash from  operating  activities for the first nine months of 1999 generated
$9,419 of available cash. Net cash from investing activities utilized $87,266 of
available  cash,  primarily  as a result of $18,594 in net  investment  security
purchases,  in  addition  to $65,762 of net loan  fundings  by the  Corporation.
Proceeds  from the three  branches  acquired,  in  addition  to the  increase in
short-term  borrowings  and long-term  debt  generated  $80,343 in net cash from
financing activities.

Total cash inflows for the nine month period in 1999  exceeded  cash outflows by
$2,496  resulting in a cash and cash equivalent  balance of $21,264 at September
30, 1999.



Year 2000

The  Corporation's  Board of Directors  and  management is aware of the possible
consequences  the Y2K may pose with regard to the computer  systems  utilized to
conduct  business  on a daily  basis.  A "Year 2000  Committee",  which  reports
monthly to the Board of Directors,  has prepared a detailed plan to address this
issue.  In  addition  to  developing  contingency  plans,  the  Corporation  has
conducted internal employee training,  as well as customer awareness seminars in
an effort  to not only  communicate  the Y2K  issue,  but also to  inform  these
individuals of the Corporation's  approach to addressing this issue.  Testing of
the Corporation's core processing was completed as of April 30, 1999. Management
will  continue  to monitor the  preparedness  of the  Corporation's  systems and
contingency  plans,  as well as  those of  significant  vendors  and  customers,
through year-end.

Because the Y2K issue could affect the ability of the Corporation's customers to
conduct their business and operations in a timely and effective manner,  any Y2K
disruptions could adversely impact the Corporation. The Corporation's ability to
process  loan and  deposit  transactions  could be  affected,  which could limit
sources of revenues and funding from customers, as well as impact the quality of
the  loan  portfolio.  In order  to  assess  the  potential  credit  risk in the
Corporation's  loan  portfolio,  a  comprehensive  review of all commercial loan
customers whose aggregate borrowings were $200,000 or greater was performed.  No
borrowers were classified as having a high credit risk.

While  management  does not believe the necessary steps involved to resolve this
issue will  significantly  impair  the  organization's  ability  to operate  and
conduct  business in a normal fashion,  the Corporation  does estimate the total
cost to address this issue to be approximately $1.6 million.  Approximately $1.5
million of the estimated  $1.6 million has been incurred  through  September 30,
1999. The expenditures  related to this issue are comprised  primarily of system
upgrades,  consisting  both of hardware and  software,  in addition to dedicated
personnel costs.


<PAGE>

The above discussion of Y2K issues includes numerous forward-looking  statements
reflecting  management's  current  assessment  and estimates with respect to the
Corporation's  Y2K  compliance  efforts  and the  impact  of Y2K  issues  on the
Corporation's  business  and  operations.  Various  factors  could cause  actual
results  to  differ  materially  from  those  contemplated  by such  assessment,
estimates and forward-looking statements, including many factors that are beyond
the control of the Corporation.  These factors included, but are not limited to,
representations by vendors and customers,  technological advancements,  economic
conditions, and competitive considerations.



ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk of the Corporation  encompasses  exposure to both liquidity risk and
interest rate risk and is reviewed  quarterly by the  asset/liability  committee
("ALCO") and the Board of Directors.

The  liquidity  of the parent  company is  dependent on the receipt of dividends
from the banking subsidiary.  Certain  restrictions exist regarding the transfer
of funds from the subsidiary bank. Management expects that in the aggregate, the
banking  subsidiary will continue to have the ability to dividend adequate funds
to the parent company.  The statements in this paragraph  relating to the parent
company  receiving  dividends  from  the  subsidiary  bank  are  forward-looking
statements  which  may  or may  not be  accurate  due  to the  impossibility  of
predicting future economic and business events.

The  banking  subsidiary's  source of funding  is  predominantly  core  deposits
consisting of both commercial and individual deposits, maturities of securities,
repayments of loan principal and interest,  federal funds purchased,  securities
sold under agreements to repurchase,  and long-term  borrowings from the FHLB of
Indianapolis.  The deposit base is diversified between individual and commercial
accounts  which helps avoid  dependence on large  concentrations  of funds.  The
Corporation does not solicit certificates of deposit from brokers.

The Corporation's  interest rate risk is measured by computing estimated changes
in net interest  income and the net  portfolio  value  ("NPV") of its cash flows
from assets and liabilities in the event of adverse movements in interest rates.
Interest  rate risk  exposure is measured  using an  interest  rate  sensitivity
analysis to determine the change in NPV in the event of hypothetical  changes in
interest  rates.  Another  method also used to enhance  the  overall  process is
interest rate sensitivity gap analysis. This method is utilized to determine the
repricing characteristics of the Corporation's assets and liabilities.

NPV represents  the market value of portfolio  equity and is equal to the market
value of assets minus the market value of liabilities.  This particular analysis
assesses the risk of loss in market risk sensitive instruments in the event of a
sudden and  sustained  1% - 2% increase  and  decrease in  interest  rates.  The
Corporation's  Board of  Directors  adopted an interest  rate risk policy  which
established  a 45% minimum and maximum  increase  and decrease in the NPV in the
event of a sudden and sustained 1% - 2% increase or decrease in interest rates.

The following table represents the Corporation's projected change in NPV for the
various rate shock levels as of September 30, 1999:

September 30, 1999
<TABLE>
<CAPTION>

                         -----------------------  Net Portfolio Value --------------------

<S>                          <C>                      <C>                        <C>
      Change                     Dollar                    Dollar                  Percentage
     in Rates                    Amount                    Change                    Change

       + 200                   $ 23,002                 $ (26,514)                   (53.55) %
       + 100                     35,578                   (13,938)                   (28.15)
       Base                      49,516                         -                        -
       - 100                     64,189                    14,673                     29.63
       - 200                     75,802                    26,286                     53.09
</TABLE>

<PAGE>

The above  table  indicates  that as of  September  30,  1999 the  Corporation's
estimated NPV would be expected to decrease in the event of sudden and sustained
increases in prevailing interest rates.  Conversely,  in the event of sudden and
sustained  decreases in prevailing  interest rates, the Corporation's  estimated
NPV  would be  expected  to  increase.  In the event of a sudden  and  sustained
increase  or decrease in  interest  rates of 2% or greater as of  September  30,
1999, the  Corporation's  estimated net portfolio value ("NPV") would exceed the
policy  guidelines  established  by the  Corporation's  Board of Directors.  The
increase in mortgage loan totals during the third quarter  extended the expected
asset life, while the expected life of liabilities remained virtually unchanged.
This, along with the higher interest rate environment, caused a larger change in
values than existed at the previous  quarter-end.  Management believes since the
remaining expected life of the Corporation's  assets are over four times greater
than the expected life of the liabilities, any additional upward movement in the
interest rate environment  would result in even a larger degree of change in the
value of the assets over that of the  liabilities.  Management has reported this
policy  exception to the  Corporation's  Board of Directors and will continue to
monitor  the  results  on an  on-going  basis.  As of  December  31,  1998,  the
Corporation's  estimated  changes  in NPV were  within the  approved  guidelines
established by the Board of Directors.

Computations of prospective  effects of  hypothetical  interest rate changes are
based on a number of assumptions,  including  relative levels of market interest
rates,  loan  prepayments and deposit decay rates, and should not be relied upon
as indicative of actual  results.  These  computations  do not  contemplate  any
actions  management may undertake in response to changes in interest rates.  The
NPV  calculation  is based on the net  present  value of  discounted  cash flows
utilizing certain prepayment assumptions and market interest rates.

Certain  shortcomings are inherent in the method of computing the estimated NPV.
Actual  results may differ from that  information  presented  in the table above
should market  conditions vary from the  assumptions  used in preparation of the
table  information.  If interest rates remain or decrease below current  levels,
the proportion of adjustable  rate loans in the loan portfolio could decrease in
future  periods due to refinancing  activity.  Also, in the event of an interest
rate change,  prepayment and early  withdrawal  levels would likely be different
from those assumed in the table.  Lastly, the ability of many borrowers to repay
their   adjustable   rate  debt  may  decline  during  a  rising  interest  rate
environment.

Used in conjunction  with the NPV analysis is the interest rate  sensitivity gap
analysis.  This  analysis  monitors  the  relationship  between the maturity and
repricing of  interest-earning  assets and  interest-bearing  liabilities  while
maintaining an acceptable interest rate spread. Interest rate sensitivity gap is
defined  as the  difference  between  the amount of  maturing  or  repricing  of
interest-earning  assets and  interest-bearing  liabilities  within specific and
defined  time  frames.  A positive  gap occurs when the amount of interest  rate
sensitive  assets  exceed the amount of  interest  rate  sensitive  liabilities.
Conversely,  a gap is  considered  negative  when the  amount of  interest  rate
sensitive  liabilities  exceed the interest rate  sensitive  assets.  Generally,
during a time of rising interest  rates, a negative gap would  adversely  affect
net interest income,  while a positive gap would enhance net interest income. On
the other hand,  during a time period of falling  interest rates, a negative gap
would  increase net  interest  income,  while a positive gap would  decrease net
interest  income.  It is the ALCO's  responsibility  to  maintain  a  reasonable
balance between the exposure to interest rate fluctuations and earnings.



<PAGE>

PART II.   OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

        (a)   Exhibits

                 27   Financial Data Schedule for September 30, 1999

        (b)   Reports on Form 8-K

                      No Form 8-K was  filed  with the SEC  during  the  quarter
                      ended September 30, 1999.


SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  cause  this  report  to be  signed  on its  behalf  by the
undersigned thereunto duly authorized.


Date:  November 12, 1999                 By /s/ Robert J. Weeder
                                         ---------------------------------------
                                         Robert J. Weeder
                                         President


Date:  November 12, 1999                 By /s/ Marvin S. Veatch
                                         ---------------------------------------
                                         Marvin S. Veatch
                                         Vice President and Controller