U.S. 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 JUNE 30, 2000.

[ ]      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 August 11, 2000
Common Stock, without par value                                 3,593,088 shares


<PAGE>


                             LAFAYETTE BANCORPORATION

                                      INDEX

PART I.     FINANCIAL INFORMATION

Item 1.

       Consolidated Balance Sheets  --  June 30, 2000 and December 31, 1999

       Consolidated Statements of Income and
        Comprehensive Income --  Three Months Ended June 30, 2000 and 1999

       Consolidated Statements of Income and
        Comprehensive Income --  Six Months Ended June 30, 2000 and 1999

       Consolidated Statements of Cash Flows  --  Six Months Ended
        June 30, 2000 and 1999

       Notes to Consolidated Financial Statements  --  June 30, 2000


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 4.       Submission of Matters to a Vote of Security Holders

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, except share data)
                                   (Unaudited)

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

<S>                                                                                  <C>               <C>
                                                                                    June 30,           December 31,
                                                                                     2000                  1999
                                                                                     ----                  ----
ASSETS

Cash and due from banks                                                       $       24,768      $      28,370
Federal funds sold                                                                    17,300              2,200
                                                                              --------------      -------------
    Total cash and cash equivalents                                                   42,068             30,570

Securities available-for-sale (at market)                                             79,167             79,722
Securities held-to-maturity (market value $4,500
  and $4,709)                                                                          4,484              4,712
Loans held for sale                                                                    5,415              3,174
Loans                                                                                521,732            489,070
    Less:  Allowance for loan losses                                                  (5,045)            (4,618)
                                                                              --------------      -------------
       Loans, net                                                                    516,687            484,452
Federal Home Loan Bank stock (at cost)                                                 2,200              1,897
Premises, furniture and equipment, net                                                11,173             10,583
Intangible assets                                                                     13,377             13,747
Accrued interest receivable and other assets                                          15,720             16,292
                                                                              --------------      -------------

          Total assets                                                        $      690,291      $     645,149
                                                                              ==============      =============


LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
    Noninterest-bearing deposits                                              $       67,119      $      63,206
    Interest-bearing demand and savings deposits                                     225,246            229,302
    Interest-bearing time deposits                                                   263,993            229,739
                                                                              --------------      -------------
       Total deposits                                                                556,358            522,247
    Short-term borrowings                                                             35,719             27,273
    FHLB advances                                                                     30,471             30,027
    Note payable                                                                      12,250             12,950
    Accrued interest payable and other liabilities                                     6,649              6,867
                                                                              --------------      -------------
       Total liabilities                                                             641,447            599,364

--------------------------------------------------------------------------------
                            --------------------
            See accompanying notes to consolidated financial statements

<PAGE>

Shareholders' equity

    Common stock, no par value:  20,000,000 shares authorized;
    3,592,368 and 3,586,140 shares issued and outstanding                              3,592              3,586
    Additional paid-in capital                                                        32,970             32,886
    Retained earnings                                                                 14,157             11,269
    Unrealized loss on securities available-for-sale,
     net of tax (($1,229) and ($1,283))                                               (1,875)            (1,956)
                                                                              --------------      --------------
       Total shareholders' equity                                                     48,844             45,785
                                                                              --------------      -------------

          Total liabilities and shareholders' equity                          $      690,291      $     645,149
                                                                              ==============      =============


</TABLE>

                       LAFAYETTE BANCORPORATION
        CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
          For the three  months  ended June 30, 2000  and  1999
         (Dollar   amounts  in thousands, except per share data)
                             (Unaudited)

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

<TABLE>
<S>                                                                                <C>                 <C>
                                                                                   2000                1999
                                                                                   ----                ----
Interest income
    Loans                                                                     $       11,496      $       9,647
    Taxable securities                                                                   822              1,040
    Tax exempt securities                                                                414                379
    Other                                                                                146                201
                                                                              --------------      -------------
       Total interest income                                                          12,878             11,267

Interest expense
    Deposits                                                                           5,513              4,505
    Short-term borrowings                                                                486                368
    Other borrowings                                                                     582                579
                                                                              --------------      -------------
       Total interest expense                                                          6,581              5,452
                                                                              --------------      -------------
Net interest income                                                                    6,297              5,815
Provision for loan losses                                                                300                190
                                                                              --------------      -------------
Net interest income after provision for loan losses                                    5,997              5,625

Noninterest income
    Income from fiduciary activities                                                     317                250
    Service charges on deposit accounts                                                  461                408
    Net realized gain on securities                                                        -                 12
    Net gain on loan sales                                                               159                259
    Other service charges and fees                                                       272                248
    Other operating income                                                               425                176
                                                                              --------------      -------------
       Total noninterest income                                                        1,634              1,353

                                                                              --------------      -------------
-------------------------------------------------------------------------------
                       ------------------------
        See accompanying notes to consolidated financial statements.
<PAGE>

Noninterest expense
    Salaries and employee benefits                                                     2,712              2,474
    Occupancy expenses, net                                                              301                266
    Equipment expenses                                                                   444                343
    Intangible amortization                                                              185                184
    Other operating expenses                                                           1,203              1,237
                                                                              --------------      -------------
       Total noninterest expense                                                       4,845              4,504
                                                                              --------------      -------------
Income before income taxes                                                             2,786              2,474

Income taxes                                                                             979                824
                                                                              --------------      -------------
Net income                                                                             1,807              1,650
                                                                              --------------      -------------
Other comprehensive income, net of tax:
    Change in unrealized gains / (losses) on securities                                  100             (1,347)
                                                                              --------------      --------------
Comprehensive income                                                          $        1,907      $         303
                                                                              ==============      =============

Basic earnings per share                                                      $           .50     $           .46
                                                                              =================== ===============
Diluted earnings per share                                                    $           .50     $           .45
                                                                              =================== ===============
Dividend per share                                                            $           .10     $           .09
                                                                              ================    ===============
</TABLE>


                                   LAFAYETTE BANCORPORATION
                    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                        For the six  months  ended  June 30, 2000 and 1999
                       (Dollar amounts in thousands, except per share data)
                                           (Unaudited)

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

<S>                                                                                <C>                 <C>
                                                                                   2000                1999
                                                                                   ----                ----
Interest income
    Loans                                                                     $       22,240      $      17,777
    Taxable securities                                                                 1,682              1,930
    Tax exempt securities                                                                826                740
    Other                                                                                253                303
                                                                              --------------      -------------
       Total interest income                                                          25,001             20,750

-------------------------------------------------------------------------------
                             --------------------
           See accompanying notes to consolidated financial statements
<PAGE>

Interest expense
    Deposits                                                                          10,627              8,406
    Short-term borrowings                                                                825                643
    Other borrowings                                                                   1,168                975
                                                                              --------------      -------------
       Total interest expense                                                         12,620             10,024
                                                                              --------------      -------------
Net interest income                                                                   12,381             10,726

Provision for loan losses                                                                600                370
                                                                              --------------      -------------
Net interest income after provision for loan losses                                   11,781             10,356

Noninterest income
    Income from fiduciary activities                                                     633                503
    Service charges on deposit accounts                                                  866                715
    Net realized gain on securities                                                        -                 12
    Net gain on loan sales                                                               271                567
    Other service charges and fees                                                       525                430
    Other operating income                                                               591                326
                                                                              --------------      -------------
       Total noninterest income                                                        2,886              2,553
                                                                              --------------      -------------
Noninterest expense
    Salaries and employee benefits                                                     5,030              4,640
    Occupancy expenses, net                                                              582                509
    Equipment expenses                                                                   833                629
    Intangible amortization                                                              370                239
    Other operating expenses                                                           2,333              2,148
                                                                              --------------      -------------
       Total noninterest expense                                                       9,148              8,165
                                                                              --------------      -------------
Income before income taxes                                                             5,519              4,744

Income taxes                                                                           1,914              1,575
                                                                              --------------      -------------
Net income                                                                             3,605              3,169
                                                                              --------------      -------------
Other comprehensive income, net of tax:
    Change in unrealized gains / (losses) on securities                                   81             (1,429)
                                                                              --------------      --------------
Comprehensive income                                                          $        3,686      $       1,740
                                                                              ==============      =============

Basic earnings per share                                                      $          1.00     $          .88
Diluted earnings per share                                                    $          1.00     $          .86
Dividend per share                                                            $           .20     $          .18
                                                                              ===============     ==============
</TABLE>

--------------------------------------------------------------------------------
                            ---------------------
           See accompanying notes to consolidated financial statements
<PAGE>


                                  LAFAYETTE BANCORPORATION
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                        For the six months ended June 30, 2000 and 1999
                                (Dollar amounts in thousands)
                                          (Unaudited)

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

                                                                          2000            1999
                                                                          ----            ----

Cash flows from operating activities
<S>                                                                    <C>            <C>
    Net income                                                         $     3,605    $     3,169
    Adjustments to reconcile net income to net cash
      from operating activities
       Depreciation                                                            634            414
       Net amortization                                                        366            307
       Provision for loan losses                                               600            370
       Net realized gain on securities                                           -            (12)
       Net realized (gain) loss on sale of :
          Other real estate                                                    (11)             -
       Change in assets and liabilities:
          Loans originated for sale                                        (25,171)       (43,513)
          Loans sold                                                        22,930         45,355
          Accrued interest receivable and other assets                         412         (1,687)
          Accrued interest payable and other liabilities                      (218)         1,089
                                                                       ------------   -----------
              Net cash from operating activities                             3,147          5,492


Cash flows from investing activities
    Change in interest-bearing balances with other financial institutions        -            (13)
    Purchase of securities available-for-sale                              (46,790)      (121,173)
    Proceeds from sales of securities available-for-sale                         -          5,333
    Proceeds from maturities of securities available-for-sale               47,486         94,531
    Purchase of securities held-to-maturity                                      -         (2,000)
    Proceeds from maturities of securities held-to-maturity                    228             16
    Loans made to customers, net of payments collected                     (32,835)       (45,926)
    Purchase of Federal Home Loan Bank stock                                  (303)          (358)
    Property and equipment expenditures                                     (1,224)        (1,501)
    Proceeds from sales of other real estate                                   115              -
                                                                       -----------    -----------
              Net cash from investing activities                           (33,323)       (71,091)

Cash flows from financing activities
    Net change in deposit accounts                                          34,111          2,130
    Cash received in branch acquisition for liabilities assumed, net
       of assets acquired                                                        -         45,266
    Net change in short-term borrowings                                      8,446         13,288
    Proceeds from FHLB advances                                             10,000              -
    Payments on FHLB advances                                               (9,556)          (582)
    Proceeds from note payable                                                   -         14,000
    Payments on note payable                                                  (700)          (350)
    Common stock issued                                                         90            122
    Dividends paid                                                            (717)          (668)
                                                                       ------------   ------------
              Net cash from financing activities                            41,674         73,206

Net change in cash and cash equivalents                                     11,498          7,607

Cash and cash equivalents at beginning of period                            30,570         18,768
                                                                       -----------    -----------
Cash and cash equivalents at end of period                             $    42,068    $    26,375
                                                                       ===========    ===========

Supplemental  disclosures of cash flow  information
    Cash paid during the period for:
       Interest                                                        $    12,378    $     9,298
       Income taxes                                                          1,525          1,478
Non-cash investing activity
     Loans transferred to other real estate                            $         -    $       104
</TABLE>
--------------------------------------------------------------------------------
                         ---------------------
       See accompanying notes to consolidated financial statements.

<PAGE>


                     LAFAYETTE BANCORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000
    (Dollar amounts in thousands, except share and 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.  Certain
prior period  information  has been  reclassified  to  correspond  with the 2000
presentation.



NOTE 2 - PER SHARE DATA

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 has been retroactively restated for stock dividends and
splits.
<TABLE>

                                                                   Six Months Ended
                                                                   ----------------
<S>                                                               <C>                 <C>
                                                             June 30,            June 30,
                                                               2000                1999
                                                               ----                ----
Basic earnings per share
 Net income                                                $       3,605      $        3,169
Weighted average shares outstanding                            3,588,714           3,585,692
                                                           -------------      --------------

    Basic earnings per share                               $          1.00    $           .88
                                                           ===============    ===============


Diluted earnings per share
 Net income                                                $       3,605      $        3,169
Weighted average shares outstanding                            3,588,714           3,585,692
Dilutive effect of assumed exercise
  of Stock Options                                                30,943              92,808
                                                           -------------      --------------
    Diluted average shares outstanding                          3,619,657          3,678,500
                                                           --------------     --------------

    Diluted earnings per share                             $          1.00    $           .86
                                                           ===============    ===============

</TABLE>

<PAGE>


                         LAFAYETTE BANCORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2000
      (Dollar amounts in thousands, except share and per share data)
                                (Unaudited)
-------------------------------------------------------------------------------
<TABLE>

                                                                  Three Months Ended
                                                                  ------------------
<S>                                                               <C>                 <C>
                                                             June 30,            June 30,
                                                               2000                1999
                                                               ----                ----
Basic earnings per share
 Net income                                                $       1,807      $        1,650
Weighted average shares outstanding                            3,591,170           3,585,957
                                                           -------------      --------------
    Basic earnings per share                               $          .50     $           .46
                                                           ================   ===============


Diluted earnings per share
 Net income                                                $       1,807      $        1,650
Weighted average shares outstanding                            3,591,170           3,585,957
Dilutive effect of assumed exercise
  of Stock Options                                                 6,883              93,300
                                                           -------------      --------------
    Diluted average shares outstanding                          3,598,053          3,679,257
                                                           --------------     --------------
         Diluted earnings per share                       $           .50    $            .45
                                                          ===============    ================

</TABLE>

NOTE 3 - SECURITIES

The  amortized  cost and estimated  fair values of securities  are as follows at
June 30, 2000:
<TABLE>

                                                         Amortized                     Estimated
                                                           Cost                        Fair Value
                                                           ----                        ----------
Securities Available-for-Sale
-----------------------------
<S>                                                    <C>                            <C>
U.S. Government and its agencies                       $     5,202                    $     5,027
Obligations of states and political subdivisions            30,560                         29,547
Corporate obligations                                        2,000                          1,947
Mortgage-backed and other asset-backed securities           41,945                         40,190
Other securities                                             2,564                          2,456
                                                       -----------                    -----------
                                                       $    82,271                    $    79,167
                                                       ===========                    ===========
<PAGE>

Securities Held-to-Maturity
---------------------------
Obligations of states and political subdivisions       $     4,484                    $     4,500
                                                       ===========                    ===========

The  amortized  cost and estimated  fair values of securities  are as follows at
December 31, 1999:

                                                         Amortized                     Estimated
                                                           Cost                        Fair Value
                                                           ----                        ----------
Securities Available-for-Sale
-----------------------------
U.S. Government and its agencies                       $     5,207                    $     5,005
Obligations of states and political subdivisions            28,785                         27,268
Corporate obligations                                        2,000                          1,973
Mortgage-backed and other asset-backed securities           44,402                         42,888
Other securities                                             2,567                          2,588
                                                       -----------                    -----------
                                                       $    82,961                    $    79,722
                                                       ===========                    ===========

Securities Held-to-Maturity
---------------------------
Obligations of states and political subdivisions       $     4,712                    $     4,709
                                                       ===========                    ===========

</TABLE>

                            LAFAYETTE BANCORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2000
         (Dollar amounts in thousands, except share and per share data)
                                  (Unaudited)
-------------------------------------------------------------------------------
                                 ------------

NOTE 4 - LOANS

Loans are comprised of the following:
<TABLE>
                                                                                 June 30,          December 31,
                                                                                   2000                1999
                                                                                   ----                ----
<S>                                                                          <C>                 <C>
         Commercial and agricultural loans                                   $        214,650    $       192,760
         Real estate construction loans                                                48,585             47,375
         Residential real estate loans                                                206,777            197,181
         Installment loans to individuals                                              51,720             51,754
                                                                             ----------------    ---------------

             Total loans                                                     $        521,732    $       489,070
                                                                             ================    ===============
</TABLE>

<PAGE>


NOTE 5 - ALLOWANCE FOR LOAN LOSSES

The activity in the allowance for loan losses is as follows:

<TABLE>
                                                               2000                1999
                                                               ----                ----

<S>                  <C>                                   <C>                <C>
    Balance, January 1                                     $       4,618      $        4,241
    Provision charged to operations                                  600                 370
    Loans charged-off                                               (219)               (549)
    Recoveries on loans previously charged-off                        46                  73
                                                           -------------      --------------

    Balance, June 30                                       $       5,045      $        4,135
                                                           =============      ==============

</TABLE>

NOTE 6 - SHORT-TERM BORROWINGS

Short-term borrowings are comprised of the following:
<TABLE>
                                                                                 June 30,          December 31,
                                                                                   2000                1999
                                                                                   ----                ----

<S>                                                                          <C>                 <C>
         Repurchase agreements                                               $         32,943    $        24,645
         Treasury tax and loan open-end note                                            2,776              2,628
                                                                             ----------------    ---------------

             Total short-term borrowings                                     $         35,719    $        27,273
                                                                             ================    ===============

</TABLE>


<PAGE>


                         LAFAYETTE BANCORPORATION
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2000
       (Dollar amounts in thousands, except share and per share data)
                               (Unaudited)
-------------------------------------------------------------------------------

NOTE 7 - 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.  Interest on 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.

<TABLE>

Quarter ended June 30:
---------------------

2000                                                              Mortgage                               Total
----                                               Banking        Banking            Trust             Segments
                                                   -------        -------            -----             --------

<S>                                             <C>             <C>                <C>                <C>
     Net interest income                        $     6,496     $         37       $        -         $    6,533
     Net gain on loan sales                               -              159                -                159
     Other revenue                                    1,158                -              317              1,475
     Noncash items:
         Depreciation                                   307               10               12                329
         Provision for loan loss                        300                -                -                300
     Segment profit                                   2,400               66              113              2,579
     Segment assets                                 684,125            5,546              202            689,873





1999                                                              Mortgage                               Total
----                                               Banking        Banking            Trust             Segments
                                                   -------        -------            -----             --------

<S>                                              <C>            <C>              <C>                  <C>
     Net interest income                         $     5,966    $         56     $         -          $    6,022
     Net gain on loan sales                                -              259              -                 259
     Other revenue                                       822              22             250               1,094
     Noncash items:
         Depreciation                                    202              12               6                 220
         Provision for loan loss                         190               -               -                 190
     Segment profit                                    2,445             142              87               2,674
     Segment assets                                  622,432           8,419             163             631,014

</TABLE>
<PAGE>

                              LAFAYETTE BANCORPORATION
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   June 30, 2000
           (Dollar amounts in thousands, except share and per share data)
                                    (Unaudited)
-------------------------------------------------------------------------------


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

                                              Reportable                          Consolidated
2000                                           Segments             Other            Totals
----                                           --------             -----            ------

<S>                                         <C>                <C>                <C>
     Net interest income (expense)          $         6,533    $         (236)    $        6,297
     Provision for loan loss                            300                 -                300
     Net gain on loan sales                             159                 -                159
     Other revenue                                    1,475                 -              1,475
     Profit                                           2,579              (772)             1,807
     Assets                                         689,873               418            690,291



                                              Reportable                          Consolidated
1999                                           Segments             Other            Totals
----                                           --------             -----            ------

     Net interest income                    $         6,022    $         (207)    $        5,815
     Provision for loan loss                            190                 -                190
     Net gain on loan sales                             259                 -                259
     Other revenue                                    1,094                 -              1,094
     Profit                                           2,674            (1,024)             1,650
     Assets                                         631,014               740            631,754



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

                                                                                  2000               1999
                                                                                  ----               ----

Income:
     Holding company net interest
       income (expense)                                                      $          (236)   $         (207)

Profit:
     Holding company net interest
       income (expense)                                                                 (236)             (207)
     Holding company income (expense)                                                    443                 7
     Income tax expense                                                                 (979)             (824)


Assets:
     Holding company assets                                                              418               740

</TABLE>

<PAGE>


                        LAFAYETTE BANCORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              June 30, 2000
    (Dollar amounts in thousands, except share and per share data)
                               (Unaudited)
-------------------------------------------------------------------------------

<TABLE>

Six months ended June 30:

2000                                                           Mortgage                               Total
----                                            Banking        Banking            Trust              Segments
                                                -------        -------            -----              --------
<S>                                          <C>              <C>              <C>                  <C>
     Net interest income                     $     12,767     $       70       $          -          $  12,837
     Net gain on loan sales                             -            271                  -                271
     Other revenue                                  1,976              6                633              2,615
     Noncash items:
         Depreciation                                 588             22                 24                634
         Provision for loan loss                      600              -                  -                600
     Segment profit                                 5,347            106                250              5,703
     Segment assets                               684,125          5,546                202            689,873



1999                                                             Mortgage                             Total
----                                             Banking         Banking           Trust             Segments
                                                 -------         -------           -----             --------
     Net interest income                     $     10,848     $      117       $          -          $  10,965
     Net gain on loan sales                             -            567                  -                567
     Other revenue                                  1,439             44                503              1,986
     Noncash items:
         Depreciation                                 383             19                 12                414
         Provision for loan loss                      370              -                  -                370
     Segment profit                                 4,554            355                174              5,083
     Segment assets                               622,432          8,419                163            631,014

</TABLE>

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

                                              Reportable                          Consolidated
2000                                           Segments             Other            Totals
----                                           --------             -----            ------

<S>                                         <C>                <C>                <C>
     Net interest income (expense)          $        12,837    $         (456)    $       12,381
     Provision for loan loss                            600                 -                600
     Net gain on loan sales                             271                 -                271
     Other revenue                                    2,615                 -              2,615
     Profit                                           5,703            (2,098)             3,605
     Assets                                         689,873               418            690,291

                                              Reportable                          Consolidated
1999                                           Segments             Other            Totals
----                                           --------             -----            ------

     Net interest income                    $        10,965    $         (239)    $       10,726
     Provision for loan loss                            370                 -                370
     Net gain on loan sales                             567                 -                567
     Other revenue                                    1,986                 -              1,986
     Profit                                           5,083            (1,914)             3,169
     Assets                                         631,014               740            631,754

</TABLE>

<PAGE>

                          LAFAYETTE BANCORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               June 30, 2000
         (Dollar amounts in thousands, except share and per share data)
                                (Unaudited)
--------------------------------------------------------------------------------

Amounts included in the "other" column are as follows:
<TABLE>

                                                                                  2000          1999
                                                                                  ----          ----

Income:
     Holding company net interest
<S>                                                                          <C>            <C>
       income (expense)                                                      $      (456)   $     (239)

Profit:
     Holding company net interest
       income (expense)                                                             (456)         (239)
     Holding company income (expense)                                                272          (100)
     Income tax expense                                                           (1,914)       (1,575)


Assets:
     Holding company assets                                                          418           740

</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  seventeen
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.

On March 15, 2000, the Corporation  opened a full-service  branch located in the
Super  Wal-Mart  in  Monticello,  Indiana.  Also,  on July 19,  2000,  a similar
full-service branch was opened in the Super Wal-Mart in Lafayette, Indiana. Both
of  these  locations  are open  seven  days a week to  serve  the  Corporation's
customers.

The  Corporation  established a new mortgage line of business  during the second
quarter of 2000,  which will assist  customers in securing  financing who do not
meet the  qualifications of conventional or traditional  mortgage loan programs.
The newly  created  Mortgage  Alternative  Department  will only offer  mortgage
products,  such as first and  second  mortgages  and lines of  credit,  that are
secured by real estate. Loans originated in this department are pre-approved for
sale and are sold in the secondary mortgage market with no servicing retained.



RESULTS OF OPERATIONS


Mergers and Acquisitions

On March 12,  1999,  the Bank  purchased  three Bank One,  Indiana,  branches in
Jasper  County,  Indiana,  located  in the  towns  of  DeMotte,  Remington,  and
Rensselaer.

The fair value of assets  acquired was  $71,749,  which  consisted  primarily of
commercial  loans,  the  physical   facilities,   goodwill,   and  core  deposit
intangibles. The fair value of liabilities assumed was $117,015, which consisted
primarily of customer  deposits.  Since the Bank acquired more  liabilities than
assets  in  the  transaction,  the  Bank  received  $45,266  of  cash  as of the
settlement date.

From a year-to-year  comparative standpoint,  this transaction had a significant
effect on the Corporation's results of operations, as the Corporation had use of
the earning assets and  interest-bearing  liabilities acquired during the entire
six months of 2000, and only approximately  three and one-half months during the
first six months of 1999.
<PAGE>

Net Income

The Corporation  earned $1,807, or $.50 per share (basic) for the second quarter
of 2000 compared to $1,650,  or $.46 per share (basic) for the second quarter of
1999.  Net income  increased  $436,  or 13.8% to $3,605 for the six month period
ending June 30, 2000 compared to the same 1999 time period.  Basic  earnings per
share were $1.00 and $.88 for the six month  periods  ending  June 30,  2000 and
1999,  respectively.  In general, the increase in the 2000 year-to-date earnings
was  attributable  not only to the  increase in earning  assets and  liabilities
obtained in the 1999 branch  acquisitions,  but also,  as mentioned  above,  the
length of time these assets and liabilities were on the Corporation's  books. In
addition  to  the  higher  net  interest   income,   gross   earnings  from  the
Corporation's trust department and investment center,  along with higher service
charges and ATM fees were also contributing factors in the earnings enhancement.
The increase in 2000 profits,  however,  was partially  offset by lower realized
gains on the sale of mortgage loans, in addition to higher salaries and benefits
expense, provision for loan losses, and other operational expenses incurred with
the opening of a new branch facility and the Mortgage Alternative Department.

Return on average assets (ROA) and return on average equity (ROE) are summarized
below.
<TABLE>

                                   Three Months Ending                  Six Months Ending
                                        June 30,                            June 30,
                                   2000           1999                2000           1999
                                   ----           ----                ----           ----

<S>                                 <C>            <C>                 <C>             <C>
               ROA                  1.08%          1.06%               1.10%           1.12%

               ROE                 15.08%         14.95%              15.28%          14.48%


The  increase  in ROE for the six  months  ending  June 30 was due to higher net
interest income,  primarily as a result of the Corporation's 1999 acquisition of
the Jasper County branches.
</TABLE>


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 six months ended June 30, 2000 and 1999, net interest income was $12,381 and
$10,726, respectively.  This was a $1,655, or 15.4% increase over the prior year
and was  primarily  the result of the Jasper  County  branch  acquisitions.  Net
interest  income for the second  quarter of 2000 was $482,  or 8.3%  higher than
that same three month period ending June 30, 1999.  From June 1999 to June 2000,
average loan balances  increased  $64,197,  or 14.0%,  which  contributed to the
aforementioned increases.
<PAGE>

Total  interest  income for the six month periods  ending June 30, 2000 and 1999
was $25,001 and $20,750,  respectively, an increase in 2000 of $4,251, or 20.5%.
Total  interest  income for the  second  quarter  of 2000 was  $1,611,  or 14.3%
greater  than that  same  1999  quarter.  Interest  and fees on loans  increased
$4,463, or 25.1% to $22,240 for the first six months of 2000 compared to $17,777
for the first six months of 1999. For the second  quarter of 2000,  interest and
fees on loans increased $1,849, or 19.2% compared to the second quarter of 1999.
As previously mentioned,  the Corporation's continued loan growth contributed to
the results posted.  Investment security income decreased 6.1% for the six month
period  ending June 30, 2000 and also declined  12.9% for the second  quarter of
2000 when  compared to the same 1999 time  periods.  The reduction of investment
security  income for both of these  periods  was the result of a change in asset
mix from the security  portfolio to the loan  portfolio.  From June 1999 to June
2000, average investment security balances declined $22,273, or 22.3%.

Total  interest  expense for the six month period  ending June 30, 2000 and 1999
was $12,620 and $10,024,  respectively.  For the second  quarter of 2000,  total
interest expense increased  $1,129, or 20.7%,  compared to the second quarter of
1999. From June 1999 to June 2000, total average  interest-bearing  liabilities,
including short-term and long-term borrowings, increased $39,038, or 7.4%. While
interest expense on the note payable the Corporation obtained in connection with
the Jasper County branch acquisition increased during these time periods, it was
the higher  average  balance of  interest-bearing  liabilities  coupled with the
higher  interest  rates paid for the use of these funds which led to the overall
increase in interest expense.


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>
                                       Six Months                          Change from
                                     Ended June 30,                       Prior Period

<S>                                <C>              <C>              <C>           <C>
                                   2000             1999             Amount        Percent
                                   ----             ----             ------        -------


Interest income                  $25,433           $21,145           $4,288          20.3%

Interest expense                  12,620            10,024            2,596          25.9%
                                  ------            ------           ------
     Net interest income         $12,813           $11,121          $1,692           15.2%
                                 =======           =======          =======



                                      Three Months                         Change from
                                     Ended June 30,                       Prior Period

                                   2000             1999             Amount        Percent
                                   ----             ----             ------        -------


Interest income                  $13,096           $11,471           $1,625          14.2%

Interest expense                   6,581             5,452            1,129          20.7%
                                   -----             -----            -----
     Net interest income          $6,515            $6,019           $  496           8.2%
                                  ======            ======           ======
</TABLE>
<PAGE>


The net interest  margin,  on a tax  equivalent  basis for the six months ending
June 30, 2000 and 1999 was 4.32% and 4.22%, respectively.


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
acquisitions.  The  fair  value  of  loans  acquired  was  net of a  fair  value
adjustment for credit risk of $563.  This credit risk valuation  account will be
used to absorb future charge-off's recorded on the acquired loans.

The consolidated  provision for loan losses was $600 and $370 for the six months
ending June 30, 2000 and 1999, respectively. The increase in the provision was a
result of the Corporation's continued loan growth. The allowance for loan losses
was $5,045 and $4,618 at June 30,  2000 and  December  31,  1999,  respectively.
Adding the  established  credit  valuation  account with the  allowance for loan
losses,  the  allowance as a percentage of loans was 1.07% and 1.06% at June 30,
2000 and December 31, 1999, respectively.  The provision for loan loss increased
$230,  or  62.2%  to $600  for  the  period  ending  June  30,  2000  while  net
charge-off"s  decreased  approximately  $303,  or 63.7%  during  that  same time
period.  This activity was more than offset by the Corporation's  loan growth as
the loan loss reserve ratio experienced only a slight increase.

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 indicated the composition of nonperforming loans:
<TABLE>

                                                                                 June 30,          December 31,
                                                                                   2000                1999
                                                                                   ----                ----

<S>                                                                          <C>                 <C>
         Loans past due 90 days or more                                      $            906    $           584
         Nonaccrual loans                                                                 808                622
         Restructured loans                                                                96                114
                                                                             ----------------    ---------------

             Total nonperforming loans                                       $          1,810    $         1,320
                                                                             ================    ===============
</TABLE>

<PAGE>

Management  believes overall asset quality has not declined despite the increase
in  nonperforming  loan  totals.  While  loans  past  due 90 days  or more  have
increased $322, or 55.1% since year-end, the large majority of that increase was
the  addition  of three  large  commercial  loans.  Likewise,  nonaccrual  loans
increased  $186, or 29.9% since December 31, 1999. A total of six new commercial
loans, accounting for approximately 82% of the balance increase, have been added
to nonaccrual status.


Noninterest Income and Expense

Noninterest income totaled $2,886 for the first six months of 2000,  compared to
$2,553 for the same period in 1999, an increase of $333,  or 13.0%.  Noninterest
income  for the second  quarter  of 2000  increased  $281,  or 20.8%,  to $1,634
compared to the prior year.

Income from fiduciary activities increased for the first six months and also for
the  second  quarter of 2000 when  compared  to the same 1999 time  periods.  An
increase in the base fee structure  related to trust  activities in  conjunction
with an  increase in the number of  larger-dollar  accounts  contributed  to the
higher fees recorded.

Service  charges  on  deposit  accounts   comprise  the  largest   component  of
noninterest  income.  The $151,  or 21.1%  increase in revenue for the first six
months of 2000 was  attributed to the larger deposit base being assessed fees as
a result of the March 1999 branch acquisitions.  For the second quarter of 2000,
service  charges on deposit  accounts  increased $53, or 13.0%,  compared to the
prior year.  Higher NSF volume  along with an increase in the fee  structure  in
mid-June accounted for the majority of the increase.

Net gain on loans originated and sold in the secondary mortgage market were $271
and $567 for the six  months  ending  June 30,  2000 and 1999,  respectively,  a
decrease of $296, or 52.2%.  For the second  quarter of 2000,  net gain on loans
sold in the secondary  mortgage  market was $100, or 38.6%,  lower than the 1999
time period.  The general  increase in the interest rate  environment  has had a
significant  negative impact on mortgage banking  activities,  especially in the
area of  refinancings.  Loan  fundings  for the six months  ended June 30,  2000
decreased  $22,425,  or 49.4% compared to the prior year, while fundings for the
three months ended June 30, 2000 declined $8,537, or 39.6% when compared to that
same time period one year earlier.

Other service  charges and fees were $525 and $430 for the six months ended June
30, 2000 and 1999,  respectively,  an increase of $95, or 22.1%.  For the second
quarter of 2000,  other  service  charges and fees rose $24, or 9.7% compared to
the prior year. An increase in foreign ATM transaction volumes accounted for the
majority of the increases posted in each time period.

Other  operating  income  increased  $265,  or 81.3%,  to $591 for the first six
months of 2000,  while also increasing $249, or 141.5% for the second quarter of
2000  when  compared  to  the  corresponding   prior  year  time  periods.   The
Corporation's  Investment  Center, a full service  brokerage  operation  offered
through Raymond James Financial Services,  Inc., member NASD/SIPC,  continued to
take advantage of the investing  opportunities  the stock market  offered.  As a
result,  revenues grew $313,  or 250.4% for the first six months of 2000,  while
also increasing $272, or 353.2% for the three month period ending June 20, 2000.
Slightly  offsetting  these increases in Investment  Center income was decreased
volume incentive income in the secondary mortgage market department, largely due
to the lower funding volumes already discussed.
<PAGE>

Noninterest expense totaled $9,148 for the first six months of 2000, compared to
$8,165  for that  same  1999  period,  an  increase  of $983,  or  12.0%.  Total
noninterest expense for the second quarter of 2000 was $341, or 7.6% higher than
the prior year.

Salaries and employee benefits expense was $5,030 for the six months ending June
30, 2000, an increase of $390, or 8.4% from the $4,640 recorded in the first six
months of 1999.  Total  salaries and benefits  expense for the second quarter of
2000  increased  $238,  or 9.6%, to $2,712  compared to $2,474  recorded for the
three months ending June 30, 1999. In addition to the staffing  needs of the two
new  branches  and the  start-up of the  Mortgage  Alternative  Department,  the
majority of the increase was attributable to the personnel  acquired in the 1999
Jasper County branch  acquisitions.  The Corporation  employed the Jasper County
branch  staff  during the entire six months of 2000,  compared to only three and
one-half months in 1999. The valuation of the stock appreciation  rights granted
to certain senior executives  partially offset the increases reported in each of
these periods, as a decrease of $377 and $80 was recorded for the six months and
three months ending June 30, 2000, respectively.

Occupancy and  equipment  expenses  increased  $73, or 14.3% and $204, or 32.4%,
respectively  for the six months  ending  June 30,  2000.  For the three  months
ending June 30, 2000,  occupancy and equipment  expenses increased $35, or 13.2%
and  $101,  or 29.4%,  respectively.  The  majority  of the  total  increase  in
occupancy and equipment expenses is related to higher depreciation expense. This
is a result of not only the items acquired in the branch acquisitions,  but also
the investment the Corporation is making in new technology.  A new communication
system, along with a wide- area network, teller system and proof imaging system,
has been installed to enable the  Corporation to remain  competitive  within the
market area while also improving overall operational efficiencies.

The $131, or 54.8% increase in intangible amortization is solely attributable to
the purchase of the Jasper County branches.

Other  operating  expenses  increased  $185, or 8.6% to $2,333 for the first six
months of 2000  compared  to the same  1999 time  period.  The  majority  of the
increase in this category was attributable to the ongoing  operational  expenses
of the branches  acquired for items such as telephone,  employee  education,  in
addition to increased fees  associated  with higher ATM volumes.  For the second
quarter,  other operating expenses declined $34, or 2.7%,  primarily as a result
of not  incurring  the initial  overhead  expenses in  connection  with the 1999
Jasper County branch acquisition.


Income Taxes

The Corporation's  effective tax rate for the six months ended June 30, 2000 and
1999 was 34.7% and 33.2%, respectively. For the three months ended June 30, 2000
and  1999,  the  effective  tax rate for the  Corporation  was  35.1%  and 33.3%
respectively.
<PAGE>

FINANCIAL CONDITION

Total assets were $690,291 at June 30, 2000 compared to $645,149 at December 31,
1999, an increase of $45,142.  Cash and cash equivalents increased $11,498 while
loans held for sale and net loans  increased  $2,241 and $32,235,  respectively.
Conversely, total investment securities, intangible assets, and accrued interest
receivable and other assets decreased $783, $370, and $572, respectively.

Total  deposits  increased  $34,111 to  $556,358  at June 30,  2000  compared to
$522,247 at December 31, 1999.  Short-term  borrowings,  consisting primarily of
repurchase  agreements,  and FHLB  advances  also  increased  $8,446  and  $444,
respectively. The $444 net increase in FHLB advances was a result of $10 million
in new advances obtained by the Corporation during the second quarter, offset by
$9,556  of  repayments  throughout  the  first  six  months  of 2000.  Quarterly
principal  repayments on the note payable totaled $700,  while accrued  interest
payable and other liabilities declined $218.


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 initiate  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  may be  limited,  and the  institution  may be  required  to submit a
capital restoration plan.

At June 30, 2000,  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
<PAGE>

The  Corporation's  actual  consolidated  capital  amounts are  presented in the
following table.
<TABLE>

                                                                                 June 30,          December 31,
                                                                                   2000                1999
                                                                                   ----                ----

       Tier 1 capital

<S>                                                                          <C>                 <C>
         Shareholders' equity                                                $         48,844    $        45,785
         Less:  Intangibles                                                           (13,372)           (13,737)
                  Net unrealized losses on available-for-sale
                     equity securities                                                   (108)                 -
         Add/less:  Unrealized loss/(gain) on securities                                1,875              1,956
                                                                             ----------------    ---------------

             TOTAL TIER 1 CAPITAL                                            $         37,239    $        34,004
                                                                             ================    ===============

       Total capital

         Tier 1 capital                                                      $         37,239    $        34,004
         Allowable allowance for loan losses                                            5,045              4,618
                                                                             ----------------    ---------------

             TOTAL  CAPITAL                                                  $         42,284    $        38,622
                                                                             ================    ===============

       RISK WEIGHTED ASSETS                                                  $        515,149    $       483,307
                                                                             ================    ===============

       AVERAGE ASSETS                                                        $        652,884    $       627,045
                                                                             ================    ===============
</TABLE>


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

                                   Actual ratios as of                       Minimum
<S>                             <C>            <C>                      <C>                       <C>
                                June 30,       December 31,             Capital Adequacy          Well-Capitalized
                                  2000             1999                    Requirement               Requirement
                                  ----             ----                    -----------               -----------

Tier I Capital
 (to average assets)
    Consolidated                  5.70%              5.42%                    4.00%                     5.00%
    Lafayette Bank and Trust      7.35%              7.22%                    4.00%                     5.00%


Tier I Capital
 (to risk weighted assets)
    Consolidated                  7.23%              7.04%                    4.00%                     6.00%
    Lafayette Bank and Trust      9.25%              9.38%                    4.00%                     6.00%


Total Capital
 (to risk weighted assets)
    Consolidated                   8.21%              7.99%                   8.00%                    10.00%
    Lafayette Bank and Trust      10.22%             10.33%                   8.00%                    10.00%

</TABLE>

<PAGE>

Management  believes  the Bank met all the capital  requirements  as of June 30,
2000 and  December  31,  1999,  and was  well-capitalized  under the  regulatory
framework  for  prompt  corrective   action.  The  Corporation,   however,   was
categorized as undercapitalized as of December 31, 1999 due to the Jasper County
branch  acquisitions,  with a total capital ratio of 7.99%,  slightly  below the
8.00% minimum. The Corporation  returned to adequately  capitalized status as of
March 31, 2000 and has maintained that status as of June 30, 2000.  Although the
Corporation's  capital was slightly  below the minimum at December 31, 1999,  no
corrective   regulatory   action  was   initiated  by  the  banking   regulatory
authorities,  and management anticipates  maintaining its adequately capitalized
status in the foreseeable future. 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 gave
rise to the change in the  Corporation's  cash and cash  equivalents for the six
months  ended June 30, 2000 and 1999.  Including  net income of $3,605,  the net
cash from operating activities for the first six months of 2000 generated $3,147
of  available  cash.  Net cash from  investing  activities  utilized  $33,323 of
available  cash  primarily  as a result of $32,835 of net loan  fundings  by the
Corporation.  Net cash from financing  activities generated $41,674 of available
cash as a result of an $34,111  increase in deposits  and an $8,446  increase in
short-term  borrowings,  offset by $700 of note payable principal repayments and
$717 in dividends paid.

Total cash inflows for the  six-month  period in 2000  exceeded cash outflows by
$11,498  resulting in a cash and cash equivalent  balance of $42,068 at June 30,
2000.



ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market  risk of the  Corporation  encompasses  exposure  to both  liquidity  and
interest rate risk and is reviewed  quarterly by the  Asset/Liability  Committee
and the  Board  of  Directors.  There  have  been  no  material  changes  in the
quantitative and qualitative  disclosures about market risks as of June 30, 2000
from the analysis and disclosures  provided in the  Corporation's  Form 10-K for
the year ended December 31, 1999.
<PAGE>


PART II.   OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

          (a) The Corporation's  Annual Meeting of Shareholders was held Monday,
     April 10, 2000.

          (b) The  following  member was elected to the  Corporation's  Board of
     Directors  to hold office as  indicated  by the term  expiration,  or until
     their successors are duly chosen and qualified.
<TABLE>

       Term                                                Against or                             Broker
     Expiration           Nominee               For         Withheld           Abstain           Non-Votes
     ----------           -------               ---         --------           -------           ---------
<S>    <C>                                   <C>                <C>             <C>                 <C>
       2003         Robert J. Weeder         2,581,618          0               847                 0
</TABLE>


          (c) Other  matters  voted upon at the Annual  Meeting of  Shareholders
     included an  amendment  to the  Articles of  Incorporation  to increase the
     number of shares authorized to 20,000,000.

<TABLE>
                                                          Against or                             Broker
                                                For        Withheld           Abstain           Non-Votes
                                                ---       ----------          -------           ---------
<S>                                          <C>             <C>                <C>                  <C>
                                             2,390,027       265,836            4,585                0

</TABLE>

Item 6.  Exhibits and Reports on Form 8-K

          (a) Exhibits
                27 Financial Data Schedule for June 30, 2000

          (b) Reports on Form 8-K
          No Form 8-K was filed with the SEC during the  quarter  ended June 30,
     2000.


SIGNATURES

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

Date:  August 11, 2000                             By /s/ Robert J. Weeder
                                                   ---------------------------
                                                   Robert J. Weeder
                                                   President and CEO


Date:  August 11, 2000                             By /s/ Marvin S. Veatch
                                                   ---------------------------
                                                   Marvin S. Veatch
                                                   Vice President and Controller