UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, DC  20549

                                   FORM 10-Q

               QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
               For the Quarterly Period Ended September 30, 1996
 
                        Commission File Number: 33-90342

                      CENTRAL ILLINOIS FINANCIAL CO., INC.     
             (Exact name of Registrant as specified in its charter)


        DELAWARE                                            37-1338484   
(State or other jurisdiction                    (I.R.S. Employer Identification 
of incorporation or organization)                          Number)


                100 WEST UNIVERSITY, CHAMPAIGN, ILLINOIS  61820
           (Address of principal executive offices)        (Zip Code)

                                 (217) 351-6500                  
              (Registrant's telephone number, including area code)


Indicate by "X" whether the registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
   YES   X     NO      

Indicate the number of shares outstanding of the registrant's common stock,
as of November 1, 1996:
   Central Illinois Financial Co., Inc. Common Stock                   4,930,204
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                               TABLE OF CONTENTS
                                                                     PAGE 
PART I.  FINANCIAL INFORMATION                                           

     Item 1.  Financial Statements                                      3

     Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                   9

PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings                                        18

     Item 2.  Changes in Securities                                    18

     Item 3.  Defaults Upon Senior Securities                          18

     Item 4.  Submission of Matters to a Vote of 
              Security Holders                                         18

     Item 5.  Other Information                                        18

     Item 6.  Exhibits and Reports on Form 8-K                         18

SIGNATURES                                                             19

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PART I.  FINANCIAL INFORMATION                                              
                                                                              
ITEM 1.  FINANCIAL STATEMENTS                                                 
                                                                              
CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited, dollars in thousands)

<TABLE>
<S>                                                     <C>       <C>
                                                        Sep. 30,  Dec. 31,  
ASSETS                                                     1996      1995  
Cash and due from banks                                  $23,500   $26,900 
Federal funds sold                                        17,000    53,800 
Securities available-for-sale                            112,901    73,457 
Securities held-to-maturity (approximate market value 
         of $17,595 at September 30, 1996 and 
         $21,528 at December 31, 1995)                    17,556    21,430 
Other equity securities                                    1,731     2,417 
Mortgage loans held-for-sale                               1,107     9,421 
Loans, net of allowance for loan losses of $5,588 and    284,948   311,519 
         $5,882 at September 30, 1996 and 
         December 31, 1995, respectively                                         
Premises and equipment                                    10,777    10,992 
Accrued interest receivable                                4,399     4,443 
Other assets                                               5,768     6,207 
         Total assets                                    479,687   520,586 
                                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                                             
Liabilities:                                                                     
   Deposits:                                                                     
     Demand - noninterest bearing                         53,915    66,693 
     Demand - interest bearing                           118,626   107,363 
     Savings                                              18,577    23,997 
     Time deposits $100 and over                          24,449    42,839 
     Other time                                          155,631   178,265 
       Total deposits                                    371,198   419,157 
   Federal funds purchased and securities sold under 
         repurchase agreements                            42,422    36,273 
   Federal Home Loan Bank advances                         9,000     9,000 
   Accrued interest payable                                1,404     1,964 
   Other liabilities                                       4,961     5,784 
         Total liabilities                               428,985   472,178 
                                                                                 
Stockholders' equity:                                                            
   Common stock, $0.01 par value; 6,500,000 shares authorized:   
     4,958,891 shares issued                                  50        50 
   Paid in capital                                        19,066    19,066 
   Retained earnings                                      32,490    29,180 
   Less: Treasury Stock, at cost, 28,487 shares in 1996     (378)        0 
   Unrealized holding loss on debt and equity 
         securities available-for-sale                      (526)      112 
         Total stockholders' equity                       50,702    48,408 
                                                                                 
         Total liabilities and stockholders' equity     $479,687  $520,586 
                                                                                 
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
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CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months Ended September 30, 1996 and 1995
(Unaudited, dollars in thousands, except per share data)

<TABLE>
<S>                                                    <C>       <C>
Interest income:                                           1996      1995
   Loans, including fees                                                         
      Taxable                                            $19,729   $22,322 
      Exempt from federal income tax                          18        19 
   Securities available-for-sale                           4,234     2,498 
   Securities held-to-maturity                                                    
      Taxable                                                374     1,196 
      Exempt from federal income tax                         288       376 
   Other Equity Securities                                    98       115 
   Federal funds sold                                      1,549       414 
         Total interest income                            26,290    26,940 
                                                                                 
Interest expense:                                                                
   Deposits                                               11,345    11,144 
   Federal funds purchased and securities sold under 
         repurchase agreements                             1,503     1,354 
   Federal Home Loan Bank advances                           448       447 
         Total interest expense                           13,296    12,945 
         Net interest income                              12,994    13,995 
Provision for loan losses                                    375       150 
         Net interest income after provision for loan
            losses                                        12,619    13,845 
                                                                                 
Other income:                                                                    
   Trust fees                                              1,479     1,116 
   Service charges on deposit accounts                       537       506 
   Gains on sale of debt securities                            0         3 
   Gain (Loss) on sales of mortgage loans held-for-sale, net 197       (51)
   Other                                                   1,148     1,161 
         Total other income                                3,361     2,735 
                                                                                 
Other expenses:                                                                  
   Salaries and employee benefits                          5,943     6,885 
   Net occupancy                                           1,123     1,041 
   Equipment                                                 737       884 
   Data processing                                           541       368 
   Federal deposit insurance premiums                          2       416 
   Other                                                   2,719     3,842 
         Total other expenses                             11,065    13,436 
                                                                                 
         Income from continuing operations before 
            income tax expense                             4,915     3,144 
Income tax expense                                         1,605     1,326 
         Income from continuing operations                 3,310     1,818 
Income from discontinued operations (net of tax effect 
            of $293 in 1995)                                   0       570 
         Net income                                       $3,310    $2,388 
                                                                                 
Per share data:                                                                  
   Income from continuing operations                       $0.66     $0.37 
   Income from discontinued operations                      0.00      0.11 
      Net income                                           $0.66     $0.48 
                                                                                 
   Weighted average shares outstanding                 5,019,842 4,993,717 
                                                                                 
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
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CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended September 30, 1996 and 1995
(Unaudited, dollars in thousands, except per share data)

<TABLE>
<S>                                                    <C>       <C>
Interest income:                                           1996      1995  
   Loans, including fees                                                         
      Taxable                                             $6,426    $7,696 
      Exempt from federal income tax                           6         7 
   Securities available-for-sale                           1,661       793 
   Securities held-to-maturity                                                    
      Taxable                                                143       315 
      Exempt from federal income tax                          95       129 
   Other Equity Securities                                    31        37 
   Federal funds sold                                        243       179 
         Total interest income                             8,605     9,156 
                                                                                 
Interest expense:                                                                
   Deposits                                                3,660     4,003 
   Federal funds purchased and securities sold under 
         repurchase agreements                               490       471 
   Federal Home Loan Bank advances                           150       151 
         Total interest expense                            4,300     4,625 
         Net interest income                               4,305     4,531 
Provision for loan losses                                     75        75 
         Net interest income after provision for loan
           losses                                          4,230     4,456 
                                                                                 
Other income:                                                                    
   Trust fees                                                382       349 
   Service charges on deposit accounts                       167       167 
   Gains on sale of debt securities                            0         1 
   Gains (losses) on sales of mortgage loans held-for-sale, 
         net                                                 182       (62)
   Other                                                     394       349 
         Total other income                                1,125       804 
                                                                                 
Other expenses:                                                                  
   Salaries and employee benefits                          1,963     2,615 
   Net occupancy                                             385       397 
   Equipment                                                 249       288 
   Data processing                                           180       140 
   Federal deposit insurance premiums                          1       (23)
   Other                                                     772     1,112 
         Total other expenses                              3,550     4,529 
                                                                                 
         Income from continuing operations before income 
            tax expense                                    1,805       731 
Income tax expense                                           594       253 
         Net income                                       $1,211      $478 
                                                                                 
Per share data:                                                                   
    Net income                                             $0.24     $0.10 
                                                                                 
   Weighted average shares outstanding                 5,005,686 4,998,700 
                                                                                 
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
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CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ending September 30, 1996 and 1995
(Unaudited, in thousands)
                                                                             
<TABLE>
<S>                                                      <C>       <C>
Cash flows from operating activities:                      1996      1995  
   Net income                                             $3,310    $2,388 
   Adjustments to reconcile net income to net cash 
         provided by (used in) operating activities
      Depreciation and amortization                          876       901 
      Debt and equity securities amortization, net           135        94 
      Provision for loan losses                              375       150 
      Debt and equity securities gains                         0        (3)
      (Gain) loss on sales of loans, net                    (197)       51 
      Gain on sale of subsidiary                               0      (570)
      (Gain) loss on premises and equipment, net               2        (1)
      Decrease (increase) in accrued interest receivable      44      (677)
      (Decrease) increase in accrued interest payable       (560)      349 
      Decrease  in other assets                              403     1,076 
      Decrease in other liabilities                          (76)     (672)
      Decrease (increase) in mortgage loans held-for-sale    336    (8,108)
      Stock appreciation rights                                3        88 
              Net cash provided by (used in) operating 
                 activities                                4,651    (4,934)
                                                                           
Investing activities:                                                      
      Net decrease (increase) in loans                    34,371    (7,313)
      Proceeds from maturity of investments in debt securities:            
           Held-to-maturity                               11,838    18,596 
           Available-for-sale                             23,438    17,651 
      Proceeds from sales of investments in debt and equity securities:    
           Available-for-sale                                  0     2,717 
           Other equity securities                           718         0 
      Purchases of investments in debt and equity securities:              
           Held-to-maturity                               (8,399)   (9,231)
           Available-for-sale                            (64,648)  (15,269)
           Other equity securities                           (32)        0 
      Principal paydowns from mortgage-backed and mortgage-related 
              securities  
           Held-to-maturity                                  353       509 
           Available-for-sale                                746     1,228 
      Purchases of premises and equipment                   (667)   (1,747)
      Proceeds from sale of premises and equipment             0         2 
              Net cash provided by (used in) investing 
                 activities                               (2,282)    7,143 
                                                                           
Financing activities:                                                      
         Net decrease in demand and savings deposits      (6,935)  (18,433)
         Net decrease in time deposits $100 and over     (18,390)   (3,177)
         Net (decrease) increase in other time deposits  (22,634)   18,727 
         Net increase (decrease) in federal funds purchased and  
              securities sold under repurchase agreements  6,149    (4,402)
         Dividends paid                                     (378)     (483)
         Net Treasury Stock transactions                    (378)        0 
         Net change in common stock                           (3)        3 
              Net cash used in financing activities      (42,569)   (7,765)
                                                                           
              Net decrease in cash and cash equivalents  (40,200)   (5,556)
Cash and cash equivalents at beginning of period          80,700    36,486 
              Cash and cash equivalents at end of period $40,500   $30,930 
                                                                           
Additional cash flows information:                                         
   Interest paid                                          13,856    12,598 
   Income taxes paid                                         972     1,490 
   Transfer of mortgage loans held-for-sale to loans       8,175         0 
                                                                           
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
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             CENTRAL ILLINOIS FINANCIAL CO., INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.  BASIS OF PRESENTATION

   The accompanying unaudited Condensed Consolidated Financial Statements
have been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes necessary for fair
presentation of financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles.

   In the opinion of management, the Condensed Consolidated Financial
Statements of Central Illinois Financial Co., Inc. (the "Company") and
subsidiaries as of September 30, 1996 and for the three-month and nine-month
periods ended September 30, 1996 and 1995 include all adjustments necessary
for fair presentation of the results of those periods.  All such adjustments
are of a normal recurring nature.

   Results of operations for the three-month and nine-month periods ended
September 30, 1996 are not necessarily indicative of the results which may be
expected for the year ended December 31, 1996.


NOTE 2.  BUSINESS COMBINATION

   On December 13, 1994, BankIllinois Financial Co. and Central Illinois
Financial Corporation entered into an Agreement and Plan of Merger which
provided for a "merger of equals" between the two companies, structured as a
merger of the two companies into the Company.  The merger, which was
accounted for as a pooling of interests, was completed on June 30, 1995. 
Accordingly, prior period Condensed Consolidated Financial Statements have
been restated as though the prior entities had been consolidated for all
periods presented.


NOTE 3.  STOCK DIVIDEND

   At its regular board meeting on March 12, 1996, the Board of Directors
of the Company declared a one-for-twenty, or five percent, common stock
dividend.  The record date of the stock dividend was May 1, 1996, and the
distribution date, May 15, 1996.  The accompanying unaudited Condensed
Consolidated Financial Statements have been restated to take the stock
dividend into account.

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NOTE 4.  MORTGAGE LOANS HELD-FOR-SALE

   During September 1996, the Company transferred approximately $8,175,000
of mortgage loans held-for-sale to the Company's loan portfolio with the
intent to hold until maturity.  The loans were recorded at the lower of cost
or fair market value at the date of transfer.  Unrealized holding losses of
approximately $16,000 will be accreted into earnings over the remaining life
of the mortgages as a yield adjustment.


NOTE 5.  NEW ACCOUNTING RULES AND REGULATIONS

   During June 1996, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Liabilities and
Extinguishment of Liabilities" ("SFAS 125").  SFAS 125 provides accounting
and reporting standards for transfers of financial assets and extinguishments
of liabilities.  Those standards are based on consistent application of a
financial-components approach that focuses on control.  Under that approach,
after a transfer of financial assets, an entity recognizes the financial and
servicing assets it controls and the liabilities it has incurred,
derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished.  This Statement provides
consistent standards for distinguishing transfers of financial assets that
are sales from transfers that are secured borrowings.  SFAS 125 is effective
for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996, and it is to be applied
prospectively.  Earlier or retroactive application is not permitted.  The
Company does not anticipate that the adoption of SFAS 125 will have a
significant impact on its financial statements.

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

                              FINANCIAL CONDITION

ASSETS AND LIABILITIES

   Total assets decreased $40,899,000, or 7.9%, from $520,586,000 at
December 31, 1995 to $479,687,000 at September 30, 1996.  Decreases in cash
and due from banks, federal funds sold, investments in securities held-to-
maturity, other equity securities, and loans, offset somewhat by an increase
in securities available-for-sale, resulted in the decrease in assets.

   Federal funds sold decreased $36,800,000, or 68.4%, at September 30,
1996 compared to December 31, 1995.  This decrease was a result of excess
federal funds sold being used to purchase securities available-for-sale as
well as fund the decrease in deposits.

   The decrease in cash and due from banks of $3,400,000, or 12.6%, at
September 30, 1996 compared to December 31, 1995 was attributable to a
smaller dollar amount of deposit items in the process of collection at
September 30, 1996 compared to December 31, 1995.

   Investments in equity securities decreased $686,000, or 28.4%, at
September 30, 1996 compared to December 31, 1995.  This decrease was
primarily a result of the sale of FHLB stock.  Investments in debt securities
held-to-maturity decreased $3,874,000, or 18.1%, at September 30, 1996
compared to December 31, 1995.  This decrease was a result of investments
maturing and the proceeds being reinvested in securities available-for-sale,
which increased $39,444,000, or 53.7%, from December 31, 1995 to September
30, 1996.

   Mortgage loans held-for-sale decreased $8,314,000, or 88.2%, from
December 31, 1995 to September 30, 1996.  The decrease was a direct result of
management's decision in September that all mortgage loans not committed for
sale should be held in the Company's loan portfolio.  These loans were
transferred with the intention of holding them until maturity.  Included in
the transfer were approximately $7,628,000 of adjustable-rate mortgages and
$547,000 of fixed-rate mortgages.  Management's intention is to hold few
fixed-rate mortgages in the Company's portfolio.

   Loans decreased $26,865,000, or 8.5%, from December 31, 1995 to
September 30, 1996.  Included in the decrease were a $9,769,000, or 8.1%,
decrease in commercial, financial, and agricultural loans, a $407,000, or
0.3%, decrease in real estate loans, and a $16,689,000, or 24.4%, decrease in
installment and consumer loans.  Management has expended substantial time
reviewing the Company's lending process in the months following the merger. 
Much of the decrease in loans can be attributed to management's emphasis on
appropriate loan structure and pricing as well as a competitive local lending
environment.

   Total deposits decreased $47,959,000, or 11.4%, from $419,157,000 at
December 31, 1995 to $371,198,000 at September 30, 1996.  The decrease
includes a $12,778,000, or 19.2%, decrease in noninterest bearing demand
deposits, a $5,420,000, or 22.6%, decrease in savings deposits, an
$18,390,000, or 42.9%, decrease in time deposits $100,000 and over, and a

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<PAGE>
 decrease of $22,634,000, or 12.7%, in other time deposits.  These decreases
were somewhat offset by an increase of $11,263,000, or 10.5%, in interest
bearing demand deposits.  The decrease in deposits was attributable to
management's emphasis on appropriate pricing in a competitive market as well
as some seasonal run-off.  Total deposits were $391,794,000 at September 30,
1995 compared to $371,198,000 at September 30, 1996.

CAPITAL

   Total stockholders' equity increased $2,294,000 from December 31, 1995
to September 30, 1996.  The change is summarized as follows:


                                                           (IN THOUSANDS)
Stockholders' equity, December 31, 1995                          $48,408 
Net income                                                         3,310 
Purchase of Treasury Stock                                          (378)
Purchase of fractional shares related to stock dividend               (3)
Stock appreciation rights                                              3 
Change in unrealized holding gain (loss) on
  investments in debt and equity securities
  available-for-sale                                                (638)
Stockholders' equity, September 30, 1996                         $50,702 

   BankIllinois, the Company's wholly owned subsidiary (the "Bank"), is
subject to various regulatory capital requirements administered by federal
banking agencies.  Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary actions by regulators
that, if undertaken, could have a direct material effect on the Bank's
financial statements.  Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Bank must meet specific capital
guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices.  The Bank's capital amounts and
classifications are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.

   Qualitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios (set forth
in the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined).  Management believes that the Bank,
as of September 30, 1996, meets all capital adequacy requirements to which it
is subject.

   As of September 30, 1996, the most recent notification from the Federal
Deposit Insurance Corporation categorized the Bank as well capitalized under
the regulatory framework for prompt corrective action.  To be categorized as
well capitalized, the Bank must maintain minimum total risk-based, Tier I
risk-based and Tier I leverage ratios as set forth in the table.  There are
no conditions or events since that notification that management believes have
changed the institution's category.

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   The Company's consolidated actual capital amounts and ratios are also
presented in the table below (in thousands):
<TABLE>
                                                                                  To Be Well
                                                                            Capitalized Under
                                                        For Capital         Prompt Corrective
                                        Actual        Adequacy Purposes     Action Provisions
                                  Amount    Ratio      Amount     Ratio      Amount    Ratio
<S>                              <C>        <C>     <C>          <C>      <C>        <C>
As of September 30, 1996:                                                                   
   Total capital                                                                            
      (to risk-weighted assets)  $55,070    17.6%   =>$25,026    =>8.0%   =>$31,283  =>10.0%
   Tier I capital                                                                           
      (to risk-weighted assets)   51,139    16.3%    =>12,513    =>4.0%    =>18,770   =>6.0%
   Tier I capital                                                                           
      (to average assets)         51,139    10.7%    =>19,114    =>4.0%    =>23,892   =>5.0%
As of December 31, 1995:                                                                    
   Total capital                                                                            
      (to risk-weighted assets)   52,517    15.0%    =>27,962    =>8.0%    =>34,953  =>10.0%
   Tier I capital                                                                           
      (to risk-weighted assets)   48,148    13.8%    =>13,981    =>4.0%    =>20,972   =>6.0%
   Tier I capital                                                                           
      (to average assets)         48,148     9.7%    =>19,855    =>4.0%    =>24,819   =>5.0%
</TABLE>

<TABLE>
                    RATE SENSITIVITY OF EARNING ASSETS AND INTEREST BEARING LIABILITIES
                                         As of September 30, 1996
                                              (In thousands)

                                            1-30     31-90    91-180   181-365      Over  
                                            Days      Days      Days      Days    1-year      Total 
<S>                                      <C>        <C>       <C>       <C>      <C>        <C>
Federal funds sold                        $17,000        $0        $0        $0        $0    $17,000
Debt and equity securities <F1>             3,120     7,954    18,969    17,082    85,063    132,188
Loans <F2>                                 80,750    21,152    25,485    38,948   125,308    291,643
    Total interest earning assets        $100,870   $29,106   $44,454   $56,030  $210,371   $440,831
Savings and interest bearing demand
    deposits                             $137,203        $0        $0        $0        $0   $137,203
Time deposits                              12,287    25,227    30,837    34,420    77,309    180,080
Federal funds purchased and securities
    sold under repurchase agreements       36,133     5,395       150       273       471     42,422
Federal Home Loan Bank advances                 0         0         0         0     9,000      9,000
    Total interest bearing liabilities   $185,623   $30,622   $30,987   $34,693   $86,780   $368,705
Net asset (liability) funding gap        ($84,753)  ($1,516)  $13,467   $21,337  $123,591    $72,126
Repricing gap                                0.54      0.95      1.43      1.62      2.42       1.20
Cumulative repricing gap                     0.54      0.60      0.71      0.82      1.20       1.20 
<FN>
<F1>  Debt and equity securities include securities available-for-sale.
<F2>  Loans include mortgage loans held-for-sale.
</FN>
</TABLE>
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<PAGE>
   At September 30, 1996, the Company was liability-sensitive due to the
levels of savings and interest bearing demand deposits, short-term time
deposits, federal funds purchased and securities sold under repurchase
agreements.  As such, the effect of a decrease in the interest rate for all
interest earning assets and interest bearing liabilities of 100 basis points
would increase annualized net interest income by approximately $848,000 in
the 1-30 days category and $863,000 in the 1-90 days category assuming no
management intervention.  An increase in interest rates would have the
opposite effect for the same time periods.


LIQUIDITY

   The Company was able to meet liquidity needs during the first nine
months of 1996.  A review of the Condensed Consolidated Statement of Cash
Flows included in the accompanying financial statements shows that the
Company's cash and cash equivalents decreased $40,200,000 from December 31,
1995 to September 30, 1996.  This decrease came from net cash used in
financing and investing activities offset by cash provided by operating
activities.

   Net cash provided by operating activities reflects net earnings plus or
minus certain noncash and other adjustments to arrive at net cash provided by
operating activities.  In the nine-month period ended September 30, 1996, net
cash provided by operating activities was $9,585,000 more than the net cash
provided by operating activities for the same period in 1995.  The biggest
reason for the increase in 1996 over 1995 was that mortgage loans held-for-
sale decreased by $336,000 during the first nine months of 1996 compared to
an increase of $8,108,000 during the same period during 1995, a $8,444,000
decrease.  The decrease in mortgage loans held-for-sale in 1996 is net of the
transfer during September 1996 of approximately $8,175,000 of mortgage loans
held-for-sale to the Company's loan portfolio with the intent to hold until
maturity.  Accrued interest receivable decreased $44,000 during the first
nine months of 1996, compared to an increase of $677,000 during the same
period in 1995, a $721,000 change.  In addition, other liabilities decreased
$76,000 during the first nine months of 1996 compared to a decrease of
$672,000 during the same period in 1995, a $596,000 change.  Cash provided
was also positively affected by an increase in net income of $922,000 and an
increase in provision for loan losses of $225,000 during the first nine
months of 1996 compared to the same period in 1995.  Cash provided from
operating activities in 1995 was also somewhat offset by the noncash gain on
disposal of subsidiary of $570,000 included in 1995 net income.  Cash
provided by operating activities was offset by an decrease in accrued
interest payable of $560,000 during the first nine months of 1996 compared to
an increase of $349,000 during the same period in 1995, a  change of
$909,000.  Cash provided by operating activities was also offset by a
decrease in other assets of $403,000 during the first nine months of 1996
compared to a decrease of $1,076,000 during the same period in 1995, a change
of $673,000.  Cash provided by operating activities was also offset by a gain
on sales of loans of $197,000 during the first nine months of 1996 compared
to a loss of $51,000 during the same period in 1995, a change of $248,000.

   Net cash used in investing activities was $2,282,000 in the nine-month
period ended September 30, 1996 compared to cash provided of $7,143,000 for
the same period in 1995.  This resulted from a decrease in loans for the
first nine months of 1996 of $34,371,000, a $41,684,000 change from an
increase of $7,313,000 during the same period in 1995.  This

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increase was more than offset by purchases of investment securities,
securities held-for-sale, and other equity securities of $73,079,000 in the
nine months ended September 30, 1996.  During the same time period, the
Company received proceeds from maturities of investment securities and
securities held-for-sale totaling $35,276,000.  During the first nine months
of 1995, the Company had purchases of investment securities and securities
held-for-sale of $24,500,000 and proceeds from maturity of investment
securities and securities held-for-sale totaling $36,247,000.  During the
first nine months of 1996, the Company received proceeds from the sale of
other equity securities of $718,000.  During the same time period in 1995,
the Company received proceeds from the sale of securities held-for-sale of
$2,717,000.

   Net cash used in financing activities for the first nine months of 1996
was $42,569,000 compared to cash used of $7,765,000 during the same period in
1995.  Included in the increase in cash used is a decrease in total deposits
of $47,959,000 during the first nine months of 1996 compared to a decrease of
$2,883,000 during the same period in 1995.  The decrease in deposits in 1996
was somewhat offset by an increase in federal funds purchased and securities
sold under repurchase agreements of $6,149,000 in 1996.  Federal funds
purchased and securities sold under repurchase agreements decreased
$4,402,000 during the same period in 1995.


PROVISION AND ALLOWANCE FOR LOAN LOSSES

   The provision for loan losses is based on management's evaluation of the
loan portfolio in light of national and local economic conditions, changes in
the composition and volume of the loan portfolio, changes in the volume of
past due and nonaccrual loans, and other relevant factors.  The allowance for
loan losses, which is reported as a deduction from loans, is available for
loan charge-offs.  The allowance is increased by the provision charged to
expense and is reduced by loan charge-offs net of loan recoveries.  The
balance of the allowance for loan losses was $5,588,000 at September 30, 1996
compared to $5,882,000 at December 31, 1995.  Although the allowance for loan
loss balance decreased by $294,000 since the end of 1995, a recovery of
$282,000 was received in October which increased the allowance back to the
1995 year-end level.  The allowance for loan losses as a percentage of
outstanding loans was 1.9% at both September 30, 1996 and December 31, 1995. 
Additionally, the allowance for loan losses as a percentage of nonperforming
assets was 125.4% at September 30, 1996 compared to 163.7% at December 31,
1995.  This ratio has improved with the recent recovery since the end of the
third quarter.  Management has expended substantial time on a review of the
Company's lending process in the months following the merger and believes
that the increase in nonperforming assets since December 31, 1995 is a result
of emphasis placed on early detection of problem assets and is not
necessarily an indication of deterioration in the credit quality of the
Company's loan portfolio.  Management remains confident that problem assets
have been effectively identified and that the allowance for loan losses
remains adequate to absorb possible losses in the portfolio.

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                             RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996

   Net income for the first nine months of 1996 was $3,310,000, a $922,000,
or 38.6%, increase from the first nine months of 1995.  Included in 1995
results were a $570,000 gain, net of tax, on the sale of discontinued
operations and merger and restructuring expenses, net of tax, of $1,395,000. 
Net income per share per share increased $0.18, or 37.5%, to $0.66 in the
first nine months of 1996 from $0.48 in the same period of 1995.

   Income from continuing operations for the first nine months of 1996 was
$3,310,000, a $1,492,000, or 82.1%, increase compared to the same period in
1995.  Income from continuing operations increased $0.29 per share, or 78.4%,
to $0.66 in the first nine months of 1996 from $0.37 in the same period of
1995.

   Net interest income was $1,001,000, or 7.2% less for the first nine
months of 1996 compared to 1995.  Total interest income was $650,000, or 2.4%
lower in 1996 compared to 1995, and interest expense increased $351,000, or
2.7%.  The increase in interest expense was primarily due to higher interest
rates on interest bearing liabilities.

   The decrease in total interest income included a decrease of $2,594,000,
or 11.6%, in interest income on loans.  This decrease reflects a $37,476,000,
or 11.0%, decrease in average loans outstanding during the first nine months
of 1996 compared to the same period in 1995.  The decrease in total interest
income on loans was somewhat offset by increases in interest income on
federal funds and securities available-for-sale due to increased funds being
invested in these asset categories.

   The provision for loan losses recorded was $375,000 during the first
nine months of 1996.  This was $225,000, or 150.0%, more than the amount
recorded during the first nine months of 1995.  Management has expended
considerable time since the merger in 1995 evaluating the credit quality of
the Company's loan portfolio and standardizing its credit analysis procedures
and standards.  The provision during the first nine months of 1996 was based
on management's analysis of the Bank's loan portfolio and adequacy of
allowance for loan losses.

   Other income increased $626,000, or 22.9%, during the first nine months
of 1996 compared to the first nine months of 1995.  Included in this increase
were increases of $363,000, or 32.5%, in trust fees, and $248,000, or 486.3%,
in gains on sales of mortgage loans held-for-sale.

   Total other expenses decreased $2,371,000, or 17.6%, during the first
nine months of 1996 compared to the first nine months of 1995.  Included in
the decrease were decreases in salaries and employee benefits of $942,000,
equipment of $147,000, federal deposit insurance premiums of $414,000 and
other expenses of $1,123,000.  The reduction in salary and employee benefits
reflected the restructuring the Company completed during 1995.  Included in
the reduction of equipment expense was a reduction in computer-related
equipment expenses related to a portion of the Company's computer operation
which is now being out-sourced.  The reduction in federal deposit insurance
premiums was a direct result of a reduction in premium

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 assessments.  The reduction in other includes a $914,000 decrease in merger-
related expenses which was somewhat offset by increased marketing expenses
related to an aggressive marketing campaign initiated in mid-1995.

   Somewhat offsetting these decreases were increases in occupancy of
$82,000 and data processing fees of $173,000.  Included in the increase in
net occupancy were expenses related to a branch opened in mid-1995 as well as
costs incurred as a result of operations being consolidated due to the
merger.  The data processing increase was a result of more data processing
being out-sourced in 1996 than in 1995.

   Income from discontinued operations decreased to zero due to the
conclusion of a sales agreement relating to the operations that were
discontinued.  In 1992, the Company divested its interest in a wholly owned
subsidiary, and the total sales price was based upon the annual operating
revenues of the former subsidiary for the period July 1, 1992 through June
30, 1995 up to a maximum certain dollar amount.  All remaining gains on this
sale were recognized during the first quarter of 1995.  Thus, no income from
discontinued operations was recognized for the nine months ended September
30, 1996.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996

   Net income for the third quarter of 1996 was $1,211,000, a $733,000, or
153.3%, increase compared to the same period in 1995.  Included in 1995
results were merger and restructuring expenses, net of tax, of $481,000.  Net 
income per share increased $0.14, or 140.0%, to $0.24 in 1996 from $0.10 in 
1995.

   Net interest income was $226,000, or 5.0% less for the third quarter of
1996 compared to 1995.  Total interest income was $551,000, or 6.0% lower in
the third quarter of 1996 compared to the third quarter of 1995, and interest
expense decreased $325,000, or 7.0%, during the same periods.

   The decrease in total interest income of $551,000 included a decrease of
$1,271,000, or 16.5%, in interest income on loans.  This decrease is
attributable to the decrease in average loans outstanding during the third
quarter of 1996 compared to the third quarter of 1995.  The decrease in
interest income on loans was somewhat offset by an increase in interest
income on securities available-for-sale due to increased funds being invested
in this asset category.

   The provision for loan losses recorded was $75,000 during the third
quarter of both 1996 and 1995.  The provision was based on management's
analysis of the Bank's loan portfolio and adequacy of allowance for loan
losses.  Management has expended considerable time since the merger in 1995
evaluating the credit quality of the Company's loan portfolio and
standardizing its credit analysis procedures and standards.

   Other income increased $321,000, or 39.9%, during the third quarter of
1996 compared to the third quarter of 1995.  Included in this increase was an
increase of $244,000, or 393.6%, in gains on mortgage loans held-for-sale.

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   Total other expenses decreased $979,000, or 21.6%, during the third
quarter of 1996 compared to the third quarter of 1995.  Included in the
decrease were decreases in salaries and employee benefits of $652,000,
occupancy of $12,000, equipment of $39,000, and other expenses of $340,000.  
The reduction in salary and employee benefits is attributable to the
restructuring the Company completed during 1995.  Included in the reduction
of equipment expense is a reduction in computer-related equipment expenses
related to a portion of the Company's computer operation which is now being
out-sourced.  The reduction in other is attributable to efficiencies gained
from the consolidation as well as a $112,000 decrease in merger-related
expenses included in 1995.

   Somewhat offsetting these decreases were increases in data processing
fees of $40,000 and federal deposit insurance premiums of $24,000.  The
increase in federal deposit insurance premiums was a direct result of a
refund in premium assessments in the third quarter of 1995.  The data
processing increase was a result of more data processing being out-sourced in
1996 than in 1995.


RECENT REGULATORY DEVELOPMENTS

   On September 30, 1996, President Clinton signed into law the "Economic
Growth and Regulatory Paperwork Reduction Act of 1996" (the "Regulatory
Reduction Act").  Subtitle G of the Regulatory Reduction Act consists of the
"Deposit Insurance Funds Act of 1996" (the "DIFA").  The DIFA provides for a
one-time special assessment on each depository institution holding deposits
subject to assessment by the FDIC for the Savings Association Insurance Fund
(the "SAIF") in an amount which, in the aggregate, will increase the
designated reserve ratio of the SAIF (i.e., the ratio of the insurance
reserves of the SAIF to total SAIF-insured deposits) to 1.25% on October 1,
1996.  Subject to certain exceptions, the special assessment is payable in
full on November 27, 1996.  The Bank holds no SAIF-assessable deposits and,
therefore, is not subject to the special assessment.

   Prior to the enactment of the DIFA, a substantial amount of the SAIF
assessment revenue was used to pay the interest due on bonds issued by the
FICO, the entity created in 1987 to finance the recapitalization of the
Federal Savings and Loan Insurance Corporation, the SAIF's predecessor
insurance fund.  Pursuant to the DIFA, the interest due on outstanding FICO
bonds will be covered by assessments against both SAIF and BIF member
institutions beginning January 1, 1997.  Between January 1, 1997 and December
31, 1999, FICO assessments against BIF-member institutions, such as the Bank,
cannot exceed 20% of the FICO assessments charged SAIF-member institutions. 
From January 1, 2000 until the FICO bonds mature in 2019, FICO assessments
will be shared by all FDIC-insured institutions on a pro rata basis.  The
FDIC estimates that the FICO assessments for the period January 1, 1997
through December 31, 1999 will be approximately 0.013% of deposits for BIF
members versus approximately 0.064% of deposits for SAIF members, and will be
less than 0.025% of deposits thereafter.

   The DIFA also provides for a merger of the BIF and the SAIF on January
1, 1999, provided there are no state or federally chartered, FDIC-insured
savings associations on that date.  To facilitate the merger of the BIF and
the SAIF, the DIFA directs the Treasury Departments to conduct a study on the
development of a common charter and to submit a report,

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 along with appropriate legislative recommendations, to the Congress by March
31, 1997.

   In addition to the DIFA, the Regulatory Reduction Act includes a number
of statutory changes designed to eliminate duplicative, redundant or
unnecessary regulatory requirements.  Among other things, the Regulatory
Reduction Act establishes streamlined notice procedures for the commencement
of new non-banking activities by bank holding companies, establishes time
frames within which the FDIC must act on applications by state banks to
engage in activities which, although permitted for the state bank under
applicable state law, are not permissible activities for national banks, and
excludes ATM closures and certain branch office relocations from the prior
notice requirements applicable to branch closings.  The Regulatory Reduction
Act also clarifies the liability of a financial institution, when acting as a
lender or in a fiduciary capacity, under the federal environmental clean-up
laws.  Although the full impact of the Regulatory Reduction Act on the
operations of the Company and the Bank cannot be determined at this time,
management believes that the legislation will reduce compliance costs to some
extent and allow the Company and the Bank somewhat greater operating
flexibility.

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PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The are no material pending legal proceedings to which the Company or its
subsidiaries is a party other than ordinary routine litigation incidental to
their respective businesses.


ITEM 2.  CHANGES IN SECURITIES

None


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None


ITEM 5.  OTHER INFORMATION

None


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a.  Exhibits

27.  Financial Data Schedule

b.  Reports

On August 6, 1996, a report was filed on Form 8-K, dated July 30, 1996, to
report under Item 5 regarding a change in auditors for the fiscal year ending
December 31, 1996.

On August 9, 1996, amendment no. 1 to the Form 8-K dated July 30, 1996 was
filed.  The purpose of the amendment was to correct the EDGAR coding of the
original Form 8-K.

On August 20, 1996, amendment no. 2 to the Form 8-K dated July 30, 1996 was
filed.  The purpose of the amendment was the submission of the required
letter from the Company's former auditors under Item 7 of the Form 8-K.

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                                   SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


CENTRAL ILLINOIS FINANCIAL CO., INC.


Date:November 15, 1996


By:     /s/ David B. White
   Executive Vice President 
   and Chief Financial Officer