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: June 30, 1997

                         Commission File Number: 0-8673

                  Financial Services Corporation of the Midwest
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                             36-2301786
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


224 - 18th Street, Suite 202, Rock Island, Illinois              61201-8737
---------------------------------------------------              ----------
     (Address of principal executive offices)                    (zip code)

                                 (309) 794-1120
                         -------------------------------
                         (Registrant's telephone number)


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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
Common Stock, as of the latest  practicable  date: Common Stock, $.50 Par Value,
175,405 Shares

<PAGE>


                  FINANCIAL SERVICES CORPORATION OF THE MIDWEST


                                      INDEX



Part I -- Financial Information


                                                                        Page No.

        Item 1     Unaudited Financial Statements:


                   Consolidated Balance Sheets --
                     June 30, 1997 and March 31, 1997

                   Consolidated Statements of Income --
                     Three Months Ended June 30, 1997 and 1996 

                   Consolidated Statements of Stockholders' Equity --
                     Three Months Ended June 30, 1997 and 1996 

                   Consolidated Statements of Cash Flows --
                     Three Months Ended June 30, 1997 and 1996  

                   Notes to Consolidated Financial Statements

        Item 2     Management's Discussion and Analysis of
                   the Financial Condition and Results of
                   Operations                                 


Part II-- Other Information and Signatures                    
<PAGE>


           FINANCIAL SERVICES CORPORATION OF THE MIDWEST

CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>

                                                                                                  (Unaudited)
                                                                                           ----------------------
                                                                                            June 30,   March 31,
                                                                                              1997        1996
                                                                                           ----------------------
<S>                                                                                        <C>          <C>
ASSETS
Cash and due from banks ................................................................   $  23,833    $  16,306
Interest-bearing deposits with other financial institutions ............................          66          131
Investment securities:
    Held-to-maturity (approximate market value June 30, 1997-$38,435 and
        March 31, 1997-$39,502) ........................................................      38,492       39,805
    Available-for-sale (amortized cost June 30, 1997-$80,275 and
            March 31, 1997-$83,336) ....................................................      80,121       82,475
Federal funds sold .....................................................................       9,000          800

Loans and direct financing leases ......................................................     307,036      296,470
    Less:  Allowance for possible loan and lease losses ................................      (5,817)      (5,442)
                                                                                           ----------------------
        Total loans and leases, net ....................................................     301,219      291,028

Premises, furniture and equipment, net .................................................       5,370        5,496
Accrued interest receivable ............................................................       3,224        2,969
Other real estate, net .................................................................         169          594
Other assets ...........................................................................       5,754        6,065
                                                                                           ----------------------
        Total assets ...................................................................   $ 467,248    $ 445,669
                                                                                           ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
    Noninterest-bearing demand .........................................................   $  39,555    $  36,785
    Interest-bearing:
        N.O.W. accounts ................................................................      31,720       23,575
        Savings ........................................................................      39,135       37,777
        Insured money market ...........................................................      40,415       38,862
        Other time .....................................................................     245,341      224,892
                                                                                           ----------------------
        Total deposits .................................................................     396,166      361,891

Accounts payable and accrued liabilities ...............................................       6,508        5,330
Securities sold under agreements to repurchase .........................................      22,034       38,154
Other short-term borrowings ............................................................       2,000        1,500
Notes payable ..........................................................................      10,000       10,000
Mandatory convertible debentures .......................................................       1,250        1,250
                                                                                           ----------------------
        Total liabilities ..............................................................     437,958      418,125
                                                                                           ----------------------

Stockholders' equity:
Capital stock:
    Preferred, no par value; authorized, 100,000 shares:
        Class A Preferred Stock, stated value $100 per share; authorized, 50,000 shares;
           issued and outstanding:  50,000 shares ......................................       5,000       5,000
        Class B Preferred Stock, stated value $500 per share; authorized, 1,000 shares;
           issued and outstanding:  1,000 shares .......................................         500         500
        Class C Preferred Stock, stated value $425 per share; authorized, 2,400 shares;
           issued and outstanding:  2,400 shares .......................................       1,020       1,020
    Common, par value $.50 per share; authorized, 600,000 shares;
        issued:  340,662 shares; outstanding:  177,711 shares ..........................         170         170
Capital surplus ........................................................................       2,634       2,634
Net unrealized loss on available-for-sale securities, net of taxes .....................        (102)       (568)
Retained earnings ......................................................................      25,303      24,002
Treasury stock .........................................................................      (5,235)     (5,214)
                                                                                           ---------------------
           Total stockholders' equity ..................................................      29,290      27,544
                                                                                           ---------------------
        Total liabilities and stockholder's equity .....................................   $ 467,248   $ 445,669
                                                                                           =====================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>


FINANCIAL SERVICES CORPORATION OF THE MIDWEST

CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
                                                                       (Unaudited)      
                                                                  ----------------------
                                                                    Three Months Ended                               
                                                                        June 30,
                                                                 ----------------------
                                                                    1997         1996 
                                                                 ----------------------
<S>                                                              <C>          <C>    
Interest income:
    Interest and fees on loans and leases ....................   $   7,407    $   6,585
    Interest on investment securities ........................       1,810        1,433
    Interest on federal funds sold ...........................         111           72
    Interest on interest-bearing deposits with other financial
            institutions .....................................           1           64
                                                                 ----------------------
        Total interest income ................................       9,329        8,154
                                                                 ----------------------
Interest expense:
    Interest on deposits .....................................       4,316        3,397
    Interest on securities sold under agreements to repurchase         329          625
    Interest on other short-term borrowings ..................          16           23
    Interest on notes payable ................................         200           95
    Interest on mandatory convertible debentures .............          25           24
                                                                 ----------------------
        Total interest expense ...............................       4,886        4,164
                                                                 ----------------------
        Net interest income ..................................       4,443        3,990
Provision for possible loan and lease losses .................         920          525
                                                                 ----------------------
        Net interest income after provision for possible loan
                   and lease losses ..........................       3,523        3,465
                                                                 ----------------------
Other income:
    Trust fees ...............................................         125          100
    Investment securities losses .............................         (47)        --
    Loan servicing fees ......................................         183          178
    Gain on sales of loans and leases ........................          97          112
    Service charges on deposit accounts ......................         288          274
    Insurance commissions ....................................         116           79
    Other ....................................................         310          132
                                                                 ----------------------
        Total other income ...................................       1,072          875
                                                                 ----------------------
Other expense:
    Salaries and employee benefits ...........................       1,288        1,594
    Occupancy, net ...........................................         203          205
    Insurance ................................................          36           28
    Equipment ................................................         277          238
    Data processing ..........................................         201          172
    Advertising ..............................................         128          121
    Other operating ..........................................         307          399
                                                                 ----------------------
        Total other expenses .................................       2,440        2,757
                                                                 ----------------------
        Income before income taxes ...........................       2,155        1,583
Income taxes .................................................         616          543
                                                                 ----------------------
Net income ...................................................   $   1,539    $   1,040
                                                                 ----------------------
Net income available for Common Stock ........................   $   1,309    $     891
                                                                 ======================

Earnings per common share:
    Primary ..................................................   $    7.82    $    5.04
                                                                 ======================
    Fully diluted ............................................   $    4.83    $    3.18
                                                                 ======================

Weighted average common shares outstanding ...................     177,711      176,611
                                                                 ======================
Weighted average common and contingently issuable
     common shares outstanding ...............................     322,089      332,176
                                                                 ======================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>


                  FINANCIAL SERVICES CORPORATION OF THE MIDWEST

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
                                                                                                     
                                                                                                       Net 
                                                                                                    Unrealized 
                                                                                                     Loss On
Three Months Ended                                  Preferred Stock                                 Available-
Treasury                                    ---------------------------------   Common    Capital    For-Sale    Retained   Treasury
June 30, 1997 (Unaudited)                   Class A      Class B     Class C    Stock     Surplus   Securities1  Earnings    Stock
-----------------------------------------   -------     --------    ---------  --------   --------  -----------  --------   --------
<S>                                         <C>         <C>         <C>        <C>        <C>       <C>          <C>        <C>

Balance at March 31, 1997 ...............   $  5,000    $    500    $  1,020   $    170   $  2,634   $   (568)   $ 24,002   $(5,214)
Net income ..............................       --          --          --         --         --         --         1,539       --
Change in net unrealized loss on
   available-for-sale securities1 .......       --          --          --         --         --          466        --         --
Treasury stock offering costs ...........       --          --          --         --         --
                                                                                                         --          --         (21)
Cash dividends declared:
   Class A Preferred, $2.31 per share ...       --          --          --         --         --         --          (116)      --
   Class B Preferred, $11.84 per share ..       --          --          --         --         --         --           (12)      --
   Class C Preferred, $9.03 per share ...       --          --          --         --         --         --           (21)      --
   Common, $0.50 per share ..............       --          --          --         --         --         --           (89)      --
                                            ---------------------------------------------------------------------------------------
Balance at June 30, 1997 ................   $  5,000    $    500    $  1,020   $    170   $  2,634   $   (102)   $ 25,303   $(5,235)
                                            =======================================================================================

Three Months Ended
June 30, 1996 (Unaudited)
-----------------------------------------

Balance at March 31, 1996 ...............   $  5,000    $    500    $  1,020   $    170   $  2,574   $   (422)   $ 20,694   $(5,249)
Net income ..............................       --          --          --         --         --         --         1,040       --
Change in net unrealized loss on
   available-for-sale securities1 .......       --          --          --         --         --         (600)       --         --
Cash dividends declared:
   Class A Preferred, $2.31 per share ...       --          --          --         --         --         --          (116)      --
   Class B Preferred, $11.53 per share ..       --          --          --         --         --         --           (12)      --
   Class C Preferred, $9.03 per share ...       --          --          --         --         --         --           (21)      --
   Common, $0.50 per share ..............       --          --          --         --         --         --           (88)      --
                                            ---------------------------------------------------------------------------------------
Balance at June 30, 1996 ................   $  5,000    $    500    $  1,020   $    170   $  2,574   $ (1,022)   $ 21,497   $(5,249)
                                            =======================================================================================
<FN>
1 Net of taxes
</FN>
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>



FINANCIAL SERVICES CORPORATION OF THE MIDWEST

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
                                                                                              (Unaudited)
                                                                                         --------------------
                                                                                          Three Months Ended
                                                                                                June 30,
                                                                                         --------------------
                                                                                           1997         1996
                                                                                         --------------------
<S>                                                                                      <C>          <C>   

Cash Flows From Operating Activities:
Net income ...........................................................................   $  1,539     $  1,040
Adjustments to reconcile net income to net cash provided by operating
activities:
    Depreciation and amortization ....................................................        298         296
    Provision for possible loan and lease losses .....................................        920         525
    Loss on sale of investment securities available-for-sale .........................         47          --
    Investment amortization, net .....................................................         31          75
    Loans and leases originated for sale .............................................    (14,235)    (11,548)
    Proceeds from sales of loans and leases ..........................................     13,720      19,595
    Gain on sales of loans and leases ................................................        (97)       (112)
    Increase in interest receivable ..................................................       (255)       (607)
    Increase in interest payable .....................................................        428         717
    (Increase) decrease in other assets ..............................................         76        (156)
    Increase in other liabilities ....................................................        750         540
                                                                                         --------------------
Net cash provided by operating activities ............................................      3,222      10,365
                                                                                         --------------------
Cash Flows From Investing Activities:
Net (increase) decrease in federal funds sold ........................................     (8,200)      8,200
Net (increase) decrease in interest-bearing deposits with other financial institutions         65         (29)
Purchase of investment securities held-to-maturity ...................................       (175)     (5,375)
Proceeds from maturity or call of investment securities held-to-maturity .............      5,500          --
Purchase of investment securities available-for-sale .................................    (11,072)     (8,353)
Proceeds from maturity or call of investment securities available-for-sale ...........        567       2,585
Proceeds from sales of investment securities available-for-sale ......................      9,477          --
Net increase in loans and leases .....................................................    (10,499)     (9,005)
Purchase of premises, furniture and equipment ........................................       (179)       (146)
Other investing activities, net ......................................................        425         306
                                                                                         --------------------
Net cash used in investing activities ................................................    (14,091)    (11,817)
                                                                                         --------------------
Cash Flows From Financing Activities:
Net increase in deposits .............................................................     34,275       1,628
Net increase in short-term borrowings ................................................        500       1,000
Net decrease in securities sold under agreements to repurchase .......................    (16,120)     (1,883)
Treasury Stock offering costs ........................................................        (21)         --
Cash dividends paid on Preferred Stock ...............................................       (149)       (149)
Cash dividends paid on Common Stock ..................................................        (89)        (88)
                                                                                         --------------------
Net cash provided by financing activities ............................................     18,396         508
                                                                                         --------------------
Net increase (decrease) in cash and due from banks ...................................      7,527        (944)
Cash and due from banks at the beginning of the year .................................     16,306      14,423
                                                                                         --------------------
Cash and due from banks at the end of the period .....................................   $ 23,833    $ 13,479
                                                                                         ====================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>


                  FINANCIAL SERVICES CORPORATION OF THE MIDWEST
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   Interim  Financial  Statements - The  accompanying  unaudited  consolidated
     financial  statements  have been prepared in accordance  with the rules and
     regulations of the Securities and Exchange Commission.  Certain information
     and footnote disclosures normally included in financial statements prepared
     in accordance  with  generally  accepted  accounting  principles  have been
     condensed  or  omitted  pursuant  to  such  rules  and  regulations.  These
     consolidated  financial  statements  should be read in conjunction with the
     consolidated  financial statements and notes thereto contained in Financial
     Services  Corporation  of the  Midwest's  ("FSCM") Form 10-K for the fiscal
     year  ended  March  31,  1997,  filed  with  the  Securities  and  Exchange
     Commission.  Forward-looking  information  contained  in  the  Management's
     Discussion  and  Analysis  section of this report is based on  projections.
     Actual results may differ materially from such information.

     In  the  opinion  of  management  of  FSCM,  the   accompanying   unaudited
     consolidated  financial  statements contain all adjustments  (consisting of
     only normal recurring  accruals)  necessary to present fairly the financial
     position  of FSCM,  its  results of  operations  and its cash flows for the
     interim periods presented.  Interim results are not necessarily  indicative
     of the results to be expected for the full year.


2.   Supplemental Disclosures of Cash Flow Information - Cash paid for:

                                                          Three Months Ended
       (Dollars in Thousands)                                  June  30,
                                                       -------------------------
                                                        1997               1996
                                                       -------------------------

Interest .................................             $4,458             $3,447
Income taxes .............................               --                 --

3.   Earnings Per Common Share Data - The following  information was used in the
     computation  of  earnings  per  common  share on both a  primary  and fully
     diluted basis for the respective three month periods.

<TABLE>

                                                                  Three Months Ended
        (Dollars in Thousands)                                         June 30,
         ----------------------------------------------------   ----------------------
                                                                  1997         1996
                                                                ----------------------
<S>                                                             <C>          <C> 

Net income ..................................................   $   1,539    $   1,040
Accrued preferred dividends .................................        (149)        (149)
                                                                ----------------------

Primary earnings ............................................       1,390          891
Accrued convertible preferred dividends .....................         149          149
Mandatory convertible debentures interest expense, net of tax          16           16
                                                                ----------------------

Fully diluted earnings ......................................   $   1,555    $   1,056
                                                                ======================

Weighted average common shares outstanding1,3 ...............     177,711      176,611
Weighted average common shares issuable upon conversion of:
   Class A Preferred Stock2 .................................      59,267       70,454
   Class B Preferred Stock3 .................................      11,111       11,111
   Class C Preferred Stock3 .................................      24,000       24,000
   Mandatory convertible debentures3 ........................      50,000       50,000
                                                                ----------------------
      Weighted average common and contingently issuable
         common shares outstanding ..........................     322,089      332,176
                                                                ======================
<PAGE>


<FN>
1    FSCM  extended a Common Stock tender offer in May 1997 that will  terminate
     in August 1997. Based upon preliminary  data,  management  anticipates that
     approximately  3,000 shares of Common  Stock will be  tendered.  On July 1,
     1997, FSCM granted options to acquire 800 shares of Common Stock at a price
     of $100 per share  excercisable  within the next eight years. These options
     are  currently  antidilutive  and would  have no impact on the  numbers  of
     weighted   average   common  and   contingently   issuable   common  shares
     outstanding.  

2    In July  1997,  the  Class A  Cumulative  Convertible  Preferred  Stock was
     reclassified to Class F Cumulative Convertible Preferred Stock and redeemed
     in its  entirety.  Funding  for the  redemption  was  provided  through the
     private placement of $5,000 in new Class A Cumulative Convertible Preferred
     Stock  ("Class A  Preferred  Stock").  The new Class A  Preferred  Stock is
     immediately  convertible,  at the option of the holders, into 41,666 shares
     of FSCM's Common Stock.

3    The Class B and C Preferred Stock and the mandatory convertible  debentures
     ("MCDs") are  convertible at the option of the holders.  The holders of the
     Class  B and C  Preferred  Stock  and  certain  holders  of the  MCDs  have
     consented to provide FSCM with a ninety day notice prior to the  conversion
     of  their  securities  and  allow  for  the  obtainment  of  any  necessary
     regulatory  approval  or legal  opinion.  No MCDs or  Preferred  Stock were
     converted to common shares during the periods presented.  However,  holders
     of MCDs  convertible  into  20,000  shares of Common  Stock have  expressed
     interest in a possible  Common  Stock  conversion  to take place within the
     next  fiscal  quarter.   
</FN>
</TABLE>
<PAGE>



                 FINANCIAL SERVICES CORPORATION OF THE MIDWEST
                      MANAGEMENT'S DISCUSSION AND ANALYSIS



Business Development

In May 1997,  FSCM extended a tender offer to all  shareholders of Common Stock.
Under the terms of the offer,  shareholders were asked to tender their shares of
Common  Stock of FSCM in  exchange  for $90.00  cash per  share.  The offer will
terminate on August 13. Based on preliminary data,  management  anticipates that
approximately  3,000  shares will be tendered and that cash on hand will be used
to fund the offer and associated  expenses.  In July 1997, FSCM reclassified the
Class A Cumulative Convertible Preferred Stock to Class F Cumulative Convertible
Preferred Stock ("Class F Preferred Stock"). On July 10, 1997, FSCM redeemed the
$5 million 9.25% Class F Preferred Stock at a redemption price of $100 per share
as  provided  in the  terms of the  Class F  Preferred  Stock.  Funding  for the
retirement of the Class F Preferred  Stock was provided  through the issuance of
$5 million of new 9.25% Class A Cumulative Convertible Preferred Stock ("Class A
Preferred Stock").  Each share of the Class A Preferred Stock has a stated value
of $1,000 per share and is immediately convertible, at the option of the holder,
into 8-1/3 shares of Common Stock. All of the Class A Preferred Stock was issued
to principal  shareholders of FSCM who are also executive officers and directors
of FSCM and TRIB.

Income Statement

Overview

Net income and earnings per fully diluted  common share equaled  $1.539  million
and $4.83,  respectively,  for the three months ended June 30, 1997, as compared
to $1.040 million and $3.18,  respectively,  for the three months ended June 30,
1996.  The $499  thousand,  or 47.98%,  increase in net income between the three
month  periods was the net result of changes in several areas as depicted in the
following table.

                                                                        Change
                                                                          In
        (Dollars in Thousands)                                          Income
---------------------------------------------------------------         --------

Interest income ...............................................         $ 1,175
Interest expense ..............................................            (722)
                                                                        -------
Net interest income ...........................................             453
Provision for possible loan and lease losses ..................            (395)
Other income ..................................................             197
Other expenses ................................................             317
Income taxes ..................................................             (73)
                                                                        -------
Net increase in net income ....................................         $   499
                                                                        =======

The   efficiency  and  overhead   ratios  are  two  commonly  used   performance
measurements.  Both measure the  coverage of  operating  expense by net interest
income.  In the efficiency  ratio,  other income is added to net interest income
and in the overhead  ratio other  income is netted  against  operating  expense.
Lower ratios generally  reflect better  performance and therefore are considered
more favorable.  FSCM's ratios as of June 30, 1997 and 1996 and the Peer Group's
efficiency  ratio are  presented  below.  FSCM's  Peer  Group is defined as bank
holding  companies  with  consolidated  assets  between  $300  million  and $500
million.  The Peer Group numbers presented here and throughout the report are as
of March 31, 1997-- which is the most recent data available.  The improvement in
the ratios between the three months comparative  periods primarily resulted from
the  combined  effect of  increased  net  interest  income and other  income and
decreased operating expense between periods.

                                             FSCM
                                  ---------------------------
                                   June 30,          June 30,          Peer
                                     1997             1996             Group
                                  ----------------------------------------------

       Efficiency Ratio             43.87%            56.67%           62.76%
       Overhead Ratio               29.73             47.17               N/A
<PAGE>


Net Interest Income

As depicted in the Average  Balance and Interest  Rate Analysis  table,  average
interest-earning  assets  for the  three  months  ended  June 30,  1997 and 1996
increased $63.9 million, or 17.95%, between periods to equal $419.8 million from
$355.9  million,  respectively.  The growth in assets was primarily  distributed
between  investments  (which  increased  $18.8 million) and net loans and leases
(which increased $47.3 million). Loan and lease fees included in interest income
decreased  $296  thousand  between  periods  to equal  $103  thousand  from $399
thousand for the  respective  three month  periods ended June 30, 1997 and 1996.
This decrease was primarily the result of increased  deferral of loan fees which
will be amortized over the life of the related loans. Correspondingly the yields
on net loans and leases and on total  interest-earning  assets  dropped 58 basis
points and 27 basis points, respectively,  between the 1997 and 1996 three month
periods.  The impact of the decreased fees in these yields was  approximately 39
basis points and 28 basis  points,  respectively.  Nonetheless,  FSCM's yield on
interest-earning  assets of 8.89%  compared  favorably to that of its Peer Group
whose ratio equaled 8.15%.

Total average interest-bearing liabilities between 1997's and 1996's three month
periods increased $56.2 million,  or 17.36%, to equal $379.9 million from $323.7
million,  respectively.  The increase was primarily  distributed between savings
and time deposits which increased $30.5 million and $41.8 million, respectively,
offsetting  the $21.7 million  decrease in securities  sold under  agreements to
repurchase ("repurchase agreements").  The cost of interest-bearing  liabilities
remained stable at 5.14% for both periods, but still higher than the 4.30% ratio
of FSCM's Peer Group.

The  net  interest   margin  (net  interest  income  divided  by  average  total
interest-earning  assets)  decreased  25 basis  points  between the three months
ended June 30, 1997 and 1996 to 4.23% from 4.48%,  primarily  as a result of the
decreased  yield on  interest-earning  assets.  The impact of the decreased loan
fees in the net interest  margin equaled 29 basis points which resulted in a net
interest margin of 4.52%. FSCM's Peer Group margin equaled 4.63%.

The table on Interest Variance Analysis further identifies the components of the
increase in net interest income.  The net $825 thousand positive average balance
variances was only partially  offset by the net $372 thousand  negative  average
rate  variances  and  resulted in an increase of $453  thousand in net  interest
income between 1997's and 1996's three month periods.


                   AVERAGE BALANCE AND INTEREST RATE ANALYSIS
<TABLE>

    (Dollars in Thousands)                                              Three Months Ended
    ----------------------------------------   ---------------------------------------------------------------------------
                                                       June 30, 1997                             June 30, 1996
                                               --------------------------------       -------------------------------------
                                                                       Average                                      Average
                                               Average                  Annual        Average                        Annual
                                               Balance     Interest      Rate         Balance       Interest          Rate
                                               --------------------------------       -------------------------------------
    <S>                                        <C>         <C>         <C>            <C>           <C>             <C>
                         ASSETS                 
    Interest-bearing deposits with other
        financial institutions .............   $     89    $      1       4.49%       $  4,879      $     64          5.25%
    Investment securities ..................    114,797       1,810       6.31          96,030         1,433          5.97
    Federal funds sold .....................      8,046         111       5.52           5,473            72          5.26
    Loans and leases, net1 .................    296,844       7,407       9.98         249,517         6,585         10.56
                                               ---------------------------------------------------------------------------
        Total interest-earning assets ......   $419,776       9,329       8.89        $355,899         8,154          9.16
                                               ===========================================================================

                         LIABILITIES
    Savings deposits .......................   $107,279         894       3.33        $ 76,828           485          2.53
    Time deposits ..........................    232,072       3,422       5.90         190,244         2,912          6.12
    Federal funds purchased ................        181           3       6.63             408             6          5.88
    Securities sold under agreements to
        repurchase .........................     27,719         329       4.75          49,372           625          5.06
    Other short-term borrowings ............      1,411          13       3.69           1,169            17          5.82
    Notes payable ..........................     10,000         200       8.00           4,500            95          8.44
    Mandatory convertible debentures .......      1,250          25       8.00           1,250            24          7.68
                                               ---------------------------------------------------------------------------
        Total interest-bearing liabilities .   $379,912       4,886       5.14        $323,711         4,164          5.14
                                               ========    --------                   ========      --------
    Net interest income ....................               $  4,443                                 $  3,990
                                                           ========                                 ========
    Net interest margin (net interest income
        divided by average total interest-
        earning assets) ....................                             4.23%                                       4.48%

                                                                     =========                                   =========
<PAGE>


<FN>
1    Nonaccruing loans and leases are included in the average balance.  Loan and
     lease fees of $103 and $399 for the three  months  ended June 30,  1997 and
     1996, respectively, are included in interest income on loans and leases.
</FN>
</TABLE>

                           INTEREST VARIANCE ANALYSIS
<TABLE>

                                                                        Three Months Ended
                                                                  June 30, 1997 vs. June 30, 1996
                                                                  --------------------------------
                                                                         Increase (Decrease)
                                                                         Due to Change in1
                                                                  --------------------------------
                                                                  Average     Average      Total
    (Dollars in Thousands)                                        Balance      Rate        Change
    -----------------------------------------------------------   --------------------------------
    <S>                                                           <C>        <C>          <C>   
    Interest income:
        Interest-bearing deposits with other financial 
          institution .........................................   $   (63)   $    --      $   (63)
        Investment securities .................................       280         97          377
        Federal funds sold ....................................        34          5           39
        Loans and leases ......................................     1,249       (427)         822
           Total interest income ..............................     1,500       (325)       1,175
                                                                  -------------------------------
    Interest expense:
        Savings deposits ......................................       192        217          409
        Time deposits .........................................       640       (130)         510
        Federal funds purchased ...............................        (3)        --           (3)
        Securities sold under agreements to repurchase ........      (274)       (22)        (296)
        Short-term borrowings .................................         4         (8)          (4)
        Notes payable .........................................       116        (11)         105
        Mandatory convertible debentures ......................        --          1            1
                                                                  -------------------------------
           Total interest expense .............................       675         47          722
                                                                  -------------------------------

    Change in net interest income .............................   $   825    $  (372)      $  453
                                                                  ===============================

<FN>
1    The change in interest due to the volume and rate has been allocated to the
     change in average  rate.  Nonaccruing  loans and leases are included in the
     average balance.  Loan and lease fees of $103 and $399 for the three months
     ended June 30, 1997 and 1996,  respectively,  are  included in the interest
     income on loans and leases.
</FN>
</TABLE>

Provision for Possible Loan and Lease Losses

The provision for possible loan and lease losses  totaled $920 thousand and $525
thousand for the three months ended June 30, 1997,  and 1996,  respectively,  an
increase of $395 thousand,  or 75.23%.  The amount of the provision was based on
management's  assessment  of the adequacy of the allowance for possible loan and
lease losses in relation to both non-performing loans (those past-due 90 days or
more or in a  nonaccrual  status)  and total loans and  leases.  The  allowance,
stated as a percentage of non-performing  loans and leases,  equaled 174.06% and
253.41% as of June 30,  1997 and 1996,  respectively.  FSCM's  comparative  Peer
Group ratio  equaled  316.26%.  The  allowance,  stated as a percentage of total
loans  and  leases  equaled  1.89%  and  1.88%,  at  June  30,  1997  and  1996,
respectively,  and the Peer Group ratio equaled 1.39%.  Net  charge-offs for the
1997 and 1996 three month  periods  totaled  $545  thousand  and $158  thousand,
respectively.  Net  charge-offs in 1997 included $200 thousand that related to a
construction loan, $188 thousand in leases and $180 thousand in consumer loans.

Other Income

Other income totaled $1.072 million for the three months ended June 30, 1997, an
increase of $197 thousand, or 22.5%, from the comparable 1996 three month period
which totaled $875 thousand.  Other income,  excluding the  investment  security
loss,  stated as an annualized  percentage of average  assets  equaled 1.00% and
0.92% for the 1997 and 1996 periods,  respectively,  which was comparable to the
Peer Group ratio of 0.95%.
<PAGE>


Trust income  increased $25 thousand  between  periods to total $125 thousand in
1997 from $100  thousand in 1996.  The $47  thousand  investment  security  loss
resulted from the sale of  approximately  $9.5 million in  securities  that were
sold to  provide  liquidity  and to capture  higher  reinvestment  yields.  Loan
servicing fee income, which remained relatively steady between periods,  totaled
$183  thousand and $178  thousand for the  respective  periods and was primarily
based on invested  residential  mortgage  loan  portfolios  that equaled  $188.6
million at June 30, 1997,  as compared to $176.6  million at June 30, 1996.  The
gains on sales of loan and leases  decreased  $15  thousand  between  1997's and
1996's  three month  periods to $97  thousand as compared to $112  thousand  due
primarily to a slower  residential real estate market. The $14 thousand increase
between  $288  thousand  and $274  thousand  for  respective  periods in service
charges on deposit accounts resulted primarily from increased service charges on
business accounts. Insurance commissions generated from the sales of credit life
and  accident  and health  insurance  on consumer  debt  increased  $37 thousand
between  periods to equal $116  thousand  from $79  thousand.  The $178 thousand
increase in other  miscellaneous  income,  that totaled  $310  thousand and $132
thousand for the  respective  three month  periods,  was primarily the result of
increased syndication fees on credit financing arrangements.

Other Expenses

Other expense  totaled  $2.440  million and $2.757  million for the three months
ended June 30, 1997 and 1996,  respectively.  The $317 thousand decrease between
three  month  periods was due  primarily  to  increased  deferral of direct loan
related  expenses that will be amortized over the life of the related loans. The
increased  deferrals,  between  the  comparable  three  month  periods,  reduced
salaries and employee  benefits by $430  thousand  and reduced  other  operating
expenses by $47 thousand.  Other expense,  stated as an annualized percentage of
average  assets,  of 2.17% and 2.88% for the  respective  1997 and 1996  periods
compared favorably to the Peer Group ratio of 3.24%.

Salaries and employee benefits,  which totaled $1.288 million and $1.594 million
for the 1997 and 1996 three month periods, respectively,  comprised the majority
of total other expense. The number of full-time equivalent employees totaled 191
at June 30,  1997,  as compared to 181 in the  previous  year at June 30,  1996.
Annualized  personnel expense,  stated as a percentage of average assets equaled
1.15% and 1.67% for the  respective  periods as compared to the Peer Group ratio
of 1.73%.

Occupancy  expense  remained  relatively  stable totaling $203 thousand and $205
thousand for the respective  three month periods.  The $39 thousand  increase in
equipment  expense to $277  thousand  from $238  thousand was  primarily  due to
increased  depreciation  charges. Data processing expense increased $29 thousand
to $201 thousand from $172 thousand,  for the respective periods,  due primarily
to increased number of accounts supported by the third-party vendor. Advertising
expense remained  relatively stable totaling $128 thousand and $121 thousand for
the respective  periods.  Other operating expense decreased to $307 thousand for
the three months  ended in 1997 as compared to $399  thousand in the 1996 period
primarily due to the previously discussed direct loan expense deferral.

Income Taxes

Income taxes  totaled $616 thousand and $543 thousand for the three months ended
June 30, 1997 and 1996, respectively,  or the equivalent of combined Federal and
State  effective  tax rates of 28.58%  and  34.30%.  The  reduction  in the 1997
effective  rate  primarily  resulted from a $258 thousand  overaccrual  of State
taxes that was partially  offset by a $175 thousand  deferred tax adjustment for
the fiscal March 31, 1997 year-end.

Risk Management

Risk management encompasses many different types of risk, including credit risk,
liquidity risk and interest rate risk.  Regulatory  agencies have modified their
examination  procedures  to rate the exposure of financial  institutions  to the
risk by the various  types of risk,  the  direction  of change in the risk,  and
management's ability to monitor and control each type of risk. FSCM utilizes the
expertise of both  on-staff  personnel and outside  consultants  to perform loan
reviews to monitor loan documentation;  ensure compliance with internal policies
and  governmental  regulations;  and maintain the internal  loan and lease watch
list.  Internal audit and compliance staff are also utilized to provide on-going
operational audits and review of regulatory compliance. In addition,  management
continues to cautiously  assess the risks  associated with the potential  future
impact of adverse  changes in the overall  economic  climate and more  stringent
regulatory standards and requirements. An asset/liability committee monitors the
liquidity position of FSCM in order to provide for future liquidity requirements
as well as maintain an acceptable return on assets.  Further computer simulation
modeling is used to assess the  interest  rate  sensitivity  characteristics  of
assets ad liabilities and predict  possible impacts of new marketing and product
development strategies.
<PAGE>


As depicted in FSCM's  Consolidated  Statement of Cash Flows,  the operating and
financing  activities  are  generally  net sources of  liquidity  and  investing
activities are net uses of liquidity.  For the three months ended June 30, 1997,
the  primary  sources of cash were  primarily  provided  by the net  increase in
deposits  over the reduction in  repurchase  agreements  and the primary uses of
cash were to finance the net  increase in loans and leases.  The  resulting  net
change in cash and due from banks  reflected an increase of $7.5 million for the
three  months  ended June 30, 1997 as compared to a $944  thousand  decrease the
previous  year. The large increase in the level of June 1997's cash and due from
banks primarily  resulted from courier delivery problems at the end of the month
which  also  caused an  unusually  high  balance in  noninterest-bearing  demand
deposits.

Balance Sheet

Overview

Assets increased $21.6 million,  or 4.84%,  during the three months between June
30 and March 31, 1997 to total $467.2 million from $445.7 million, respectively.
The increase was  primarily  distributed  between $10.2 million in net loans and
leases and $8.2  million  in  federal  funds  sold.  Funding  for the growth was
provided by the $34.3 million increase in deposits which was partially offset by
a $16.1 million decrease in repurchase agreements.

Investments

Investments  totaled $118.6 million at June 30, 1997, or 25.39% of total assets,
as compared to $122.3 million at March 31, 1997, or 27.44% of total assets.  The
Peer Group  comparative  ratio of  investments  as a percentage  of total assets
equaled  27.21%.  Investments  are categorized at the time of purchase as either
held-to-maturity    or    available-for-sale.    Securities    categorized    as
held-to-maturity  are  carried at  amortized  cost.  Securities  categorized  as
available-for-sale  are  carried  at  fair  market  value  with  the  net of tax
difference  between the  amortized  cost and the fair market value carried as an
unrealized  adjustment  to  stockholders'  equity.  Due  to a  decrease  in  the
investment  yield  curve,  the  net  security  loss  on  investments  classified
held-to-maturity  decreased to $57 thousand from $303  thousand  between June 30
and March 31, 1997,  respectively.  The difference between fair market value and
amortized  cost for  securities  classified  available-for-sale  also  decreased
between  periods to equal a loss of $154  thousand as compared to a loss of $861
thousand for the respective  periods thereby reducing the  stockholders'  equity
adjustment for the  unrealized  loss to $102 thousand from $568 thousand for the
respective periods.

Loans and Direct Financing Leases

Net loans increased $10.2 million to total $301.2 million from $291.0 million at
June 30 and March 31, 1997,  respectively.  The following table present the June
and March 1997 comparative distribution of loans and leases.

                           LOAN AND LEASE DISTRIBUTION


                                                          June 30,     March 31,
        (Dollars In Thousands)                              1997         1997
        ------------------------------------------        --------     ---------

        Commercial, financial and agricultural ...        $ 96,495     $ 93,502
        Direct financing leases ..................           7,058        5,612
        Real  estate:
           Residential mortgage1 .................          66,419       64,309
           Construction ..........................          26,556       29,790
           Commercial mortgage ...................          72,263       71,648
        Consumer, not secured by a real estate 
           mortgage2 .............................          38,245       31,609
                                                          ---------------------
                 Total loans and leases ..........        $307,036     $296,470
                                                          =====================

1    Includes first  mortgages  pending  conclusion of their sale to the Federal
     National Mortgage Association  ("Freddie Mac"), Fannie Mae and the Illinois
     Housing Development  Authority ("IHDA"),  home equity lines of credit, home
     improvement  loans, and consumer loans for which junior liens were taken as
     primary and secondary  sources of security.  

2    Consumer loans, both direct and indirect and credit card plans.

As depicted in the above table,  with the exception of construction  real estate
lending which  decreased  $3.2 million,  growth was  distributed  throughout the
portfolio with a  concentration  in the non-real  estate  consumer  lending area
which increased $6.6 million.  The consumer growth primarily focused in the area
of indirect  loans in which TRIB  purchased  from dealers (e.g.  auto,  boat and
recreational vehicle dealerships) rather than directly financing the consumer.
<PAGE>


Deposits,   Securities  Sold  Under  Agreements  to  Repurchase  and  Short-Term
Borrowings

As of June 30 and March 31, 1997,  deposits  equaled  $396.2  million and $361.9
million,  respectively,  repurchase  agreements  equaled $22.0 million and $38.2
million,  respectively,  and short-term  borrowings  equaled $2 million and $1.5
million, respectively.

The growth in deposits  primarily  centered in the time deposit area and was due
to targeted marketing of one year and two year certificates of deposit. The June
30  noninterest-bearing  demand  deposit  balance was unusually high due to cash
letter problems previously discussed

The decrease in repurchase  agreements  primarily  resulted from a $11.7 million
withdrawal  of funds by one  customer.  In  January  1997,  TRIB  worked  with a
customer to  temporarily  invest the customer's  funds in repurchase  agreements
with the knowledge that the funds would be withdrawn within a few months.

Notes Payable

Notes  payable  totaled  $10  million at both June 30, and March 31,  1997.  The
change between June 30, 1997 and 1996 average  balances in notes payable was due
to a redemption of the $4.5 million 8.5% notes issued in December 1992 that were
replaced by $10 million 8.0% notes issued in November 1996.

Capital Resources

As previously discussed under Business Development, FSCM extended a Common Stock
tender  offer in May 1997  that will  terminate  in  August  1997.  Costs of $21
thousand  associated with the tender offer have been capitalized  under Treasury
Stock in the financial statements.  Additionally,  also as previously discussed,
in July  1997,  the $5  million  of Class F  Preferred  Stock was  redeemed  and
replaced  with a private  placement  of $5  million  of new  Class A  Cumulative
Convertible  Preferred  Stock.  The Class F Preferred  Stock was not convertible
until on or after  December  1,  2002;  however,  the  number  of  Common  Stock
equivalent  shares  totaled  57,170  shares  at June 30,  1997 and the  weighted
average  equivalent  shares  totaled  59,267 for the three months ended June 30,
1997. The new Class A Preferred  Stock is immediately  convertible at the option
of the holder into a constant 41,666 shares of FSCM Common Stock.

On July 1, 1997 FSCM granted  options to acquire 800 shares of Common Stock at a
price of $100 per share  exercisable  within  the next  eight  years to  certain
management officials.  Further, FSCM currently  anticipates,  depending upon the
financial  performance of FSCM and TRIB,  granting  additional  stock options to
other management  officials later in the fiscal year. These options were granted
under the 1996 Combined  Incentive and  Nonstatutory  Stock Option Plan that was
ratified by FSCM's common  stockholders  at the August 1996 annual meeting which
provides  for the  issuance  of options  to acquire a total of 20,000  shares of
FSCM's Common Stock. Currently, only 800 shares of FSCM's Common Stock have been
granted under the Plan.

FSCM has paid dividends on its Common Stock at an annual rate of $2.00 per share
since December 1995. The Board of Directors currently anticipates an increase in
dividends to $2.50 per share per annum effective for the September 1997 payment.

FSCM's  capital,  as measured by standards  established  by the federal  banking
regulators,  exceeded  those defined for "well  capitalized"  institutions.  The
table below sets forth FSCM's  ratios as of June 30, and March 31, 1997, as well
as the minimum regulatory ratios and capital requirements for "well capitalized"
and "adequately capitalized" financial institutions.
<PAGE>



                                 CAPITAL RATIOS

            Financial Services Corporation of the Midwest:
<TABLE>

                                                 Minimum Capital Required To Be Categorized As:   
                                      --------------------------------------------------------------------       
                                             Actual        Adequately Capitalized      Well Capitalized
                                     --------------------  ----------------------    ---------------------
                                       Amount      Ratio       Amount       Ratio      Amount       Ratio 
                                     ---------------------------------------------------------------------
<S>                                  <C>           <C>      <C>            <C>       <C>           <C>
As of June 30, 1997:
    Total  Capital (to Risk
      Weighted Assets) ...........   $   44,323    13.34%   $   26,580      8.00%    $   33,225     10.00%
    Tier I Capital (to Risk
      Weighted Assets) ...........       28,900     8.70        13,290      4.00         19,935      6.00
    Tier I Capital (to Average
      Assets) ....................       28,900     6.44       17,955       4.00         22,444      5.00
As of March 31, 1997:
    Total  Capital (to Risk
      Weighted Assets) ...........   $   42,840    13.50%   $   25,381      8.00%    $   31,726     10.00%
        Tier I Capital (to Risk
      Weighted Assets) ...........       27,606     8.70        12,690      4.00         19,035      6.00
        Tier I Capital (to 
        Average Assets) ..........       27,606     6.79        16,258      4.00         20,322      5.00
</TABLE>
<PAGE>



                  FINANCIAL SERVICES CORPORATION OF THE MIDWEST

Part II - Other Information and Signatures



Item 6.  Exhibits and Reports on Form 8-K

        (a)  Exhibits

             None

        (b)  Reports on Form 8-K

             None

Signatures

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


                                   FINANCIAL SERVICES CORPORATION OF THE MIDWEST




Date:  August 8, 1997               By: /S/ Douglas M. Kratz
                                    -------------------------------------------
                                    Douglas M. Kratz
                                    Chairman of the Board, CEO, CFO



                                    By: /s/ Jean M. Hanson
                                    -------------------------------------------
                                    Jean M. Hanson
                                    Controller, Chief Accounting Officer