<PAGE>

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TABLE OF CONTENTS
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     President's Message                                     1
     Selected Consolidated Financial Information             2
     Management's Discussion and Analysis of Financial
       Condition and Results of Operations                   3
     Consolidated Financial Statements                      15
     Stockholder Information                                42
     Corporate Information                                  43

<PAGE>
<PAGE>

                 [MID-IOWA FINANCIAL LETTERHEAD]



December 18, 1997



Dear Stockholder:

     I am pleased to report to you that our fiscal year ended
September 30, 1997, our fifth year as a publicly held company,
was a year of record profitability.  Net income for the fiscal
year was $1.5 million, representing the highest net income in
our history.  We are also pleased with our growth during the
fiscal year as total assets increased to $128 million at
September 30, 1997 representing 10.5% growth for the Company.

     We continued our record of paying a cash dividend each
consecutive quarter since the second quarter of 1993.  Our
strong performance allows us to continue to grow as we develop
new products and services for our customers.  As planned, we
opened a new branch at 39th and Westown Parkway in West Des
Moines during the fiscal year.

     Ralph McAdoo will retire from our Board of Directors at the
conclusion of the Annual Meeting in January.  Ralph began his
employment with Mid-Iowa in 1967 and served for many years as
President of the Company.  Following his retirement in 1990,
Ralph continued to serve on our Board.  I join our Directors,
employees, stockholders and customers in thanking Ralph for 30
years of outstanding service and dedication to Mid-Iowa.  No
individual is more associated with the great traditions of
Mid-Iowa than is Ralph McAdoo.

     Your Board and Management are committed to continuing to
build value in Mid-Iowa.  Our Management and employees will
remain focused on the needs of our customers and the communities
we serve. 

     On behalf of our Board of Directors thank you for your
continued support and your investment in Mid-Iowa.

Sincerely,

/s/ Kevin D. Ulmer

Kevin D. Ulmer
President and Chief
 Executive Officer<PAGE>
<PAGE>
           SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                           June 30,
                                    -----------------------------------------------------
                                       1997       1996       1995       1994       1993
                                    -----------------------------------------------------
                                                        (In Thousands)
<S>                                 <C>        <C>        <C>        <C>        <C>
Selected Financial Condition Data:

Total assets . . . . . . . . . . .  $128,017   $115,804   $108,221   $100,562   $ 92,221
Loans receivable, net. . . . . . .    66,418     62,123     57,847     54,269     48,342
Securities available for sale. . .     4,983      4,974        837        851        969
Mortgage-backed and related
 securities held for investment. .    26,180     23,974     28,139     29,497     29,990
Investment securities. . . . . . .    21,587     20,258     16,787     11,310      6,885
Deposits . . . . . . . . . . . . .    89,378     82,872     78,671     78,883     78,899
Total borrowings . . . . . . . . .    25,000     20,500     18,000     10,750      3,000
Stockholder's equity -
 partially restricted  . . . . . .    12,061     10,601     10,261      9,770      9,167
</TABLE>
<TABLE>
<CAPTION>
                                                   Year Ended September 30,
                                    -----------------------------------------------------
                                       1997       1996       1995       1994       1993
                                    -----------------------------------------------------
                                                        (In Thousands)
<S>                                 <C>        <C>        <C>        <C>        <C>
Selected Operations Data:

Total interest income. . . . . . .  $  8,963   $  8,228   $  7,330   $  6,211   $  6,538
Total interest expense . . . . . .     5,345      4,939      4,492      3,347      3,632
                                    --------   --------   --------   --------   --------
 Net interest income . . . . . . .     3,618      3,288      2,838      2,864      2,906
Provision for losses on loans. . .        81         36         33         46         60
                                    --------   --------   --------   --------   --------
 Net interest income after 
   provision for losses on loans .     3,537      3,252      2,805      2,818      2,846
Fees and service charges . . . . .       365        325        314        428        377
Gain on loans, mortgage-backed
  and investment securities. . . .        24         33         14         25         --
Other noninterest income . . . . .     1,073        741        650        449        755
Total noninterest expense. . . . .     2,653      3,115      2,394      2,247      2,388
                                    --------   --------   --------   --------   --------
Income before taxes on income
  and cumulative effect of
  accounting changes . . . . . . .     2,341      1,236      1,389      1,473      1,590
Taxes on income. . . . . . . . . .       797        411        462        470        587
Cumulative effect of accounting
  changes  . . . . . . . . . . . .        --         --         --         64         --
                                    --------   --------   --------   --------   --------
Net income . . . . . . . . . . . .  $  1,550   $    825   $    927   $  1,067   $  1,003
                                    ========   ========   ========   ========   ========

Earnings per common share(1) . . .  $    .90   $    .47   $    .52   $    .58   $    .52
Cash dividends per common share(1)  $    .08   $    .08   $    .08   $    .07   $    .05
</TABLE>

                         1<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                                                   Year Ended September 30,
                                    -----------------------------------------------------
                                       1997       1996       1995       1994       1993
                                    -----------------------------------------------------
                                                        (In Thousands)
<S>                                 <C>        <C>        <C>        <C>        <C>
Other Data:
Average interest rate spread . . . .    2.63%      2.54%      2.32%      2.72       2.87%
Net interest margin(2) . . . . . . .    3.04       2.97       2.74       3.07       3.27
Ratio of operating expense to
 average total assets(3) . . . . . .    1.57       2.16       1.79       1.97       1.92

Average interest-earning assets
 to average interest-bearing
 liabilities . . . . . . . . . . . .  108.95     109.55     109.61     109.81     109.78

Non-performing assets to total
 assets at end of period . . . . . .     .01        .13        .13        .03        .20

Stockholder's equity to total assets
 at end of period  . . . . . . . . .    9.42       9.15       9.48       9.72       9.94
Return on assets (net income to
 average total assets) . . . . . . .    1.27        .73        .88       1.14       1.10
Return on stockholder's equity
 (net income to average
 stockholder's equity) . . . . . . .   13.70       7.79       9.25      11.38      11.35
Stockholder's equity-to-assets
 ratio (average stockholder's
 equity to average total assets) . .    9.27       9.36       9.61       9.98       9.67
Number of full-service offices . . .       7          6          6          6          6
<FN>
---------------
(1)  As adjusted for Mid-Iowa Financial Corp.'s 100% stock
     dividends paid on February 24, 1995 and January 25, 1996.
(2)  Net interest income divided by average interest-earning
     assets.
(3)  Excludes the expenses of the subsidiaries of Mid-Iowa
     Savings Bank, F.S.B.  Such ratios, including such expenses
     would be 2.18%, 2.76%, 2.30%, 2.39% and 2.61% for the years
     ended September 30, 1997, 1996, 1995, 1994, and 1993,
     respectively.
</FN>
</TABLE>

        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS
GENERAL

     Mid-Iowa Financial Corp. ("Mid-Iowa" or the "Company") was
formed in June of 1992 by Mid-Iowa Savings Bank, F.S.B. (the
"Bank") to become the thrift institution holding company of the
Bank. The acquisition of the Bank by the Company was consummated
on October 13, 1992 in connection with the Bank's conversion
from the mutual to the stock form (the "Conversion").

     The primary business of the Company has historically
consisted of attracting deposits from the general public and
providing financing for the purchase of residential properties. 
The operations of the Company are significantly affected by
prevailing economic conditions as well as by government policies
and regulations relating to monetary and fiscal affairs, housing
and financial institutions.

     The Company's net income is primarily dependent upon the
difference (or "spread") between the average yield earned on
loans, mortgage-backed and related securities and investments,
and the average rate paid on deposits and borrowings, as well as
the relative amounts of such assets and liabilities.  The
interest rate spread is affected by regulatory, economic and
competitive factors that influence interest rates, loan demand
and deposit flows.  The Company, like other thrift institutions,
is subject to interest rate risk to the degree that its
interest-bearing liabilities mature or reprice at different
times, or on a different basis, than its interest-earning
assets.
                              3<PAGE>
<PAGE>

     The Company's net income is also affected by, among other
things, gains and losses on sales of loans and foreclosed
assets, provisions for possible loan losses, service charges and
other fees, commissions received from subsidiary operations,
operating expenses and income taxes.  Mid-Iowa Security
Corporation, a wholly-owned subsidiary of the Company, generates
revenues primarily by providing real estate brokerage services. 
Center of Iowa Investments, Limited, a wholly-owned subsidiary
of the Bank, generates revenues by providing credit reporting,
collection services and by sale of insurance, annuities, mutual
fund and other investment products to its customers as well as
providing discount securities brokerage services.  The Company
also opened a new branch at 39th and Westown Parkway in West Des
Moines, Iowa during the fiscal year ended September 30, 1997.

FINANCIAL CONDITION

     Total assets increased by $12.2 million to $128.0 million
for the year ended September 30, 1997 compared to $115.8 million
for the year ended September 30, 1996.  Total loans receivable
increased to $66.4 million at September 30, 1997 from $62.1
million at September 30, 1996.  In response to customer demand,
the Company originated $21.0 million of loans during fiscal year
1997, including $16.0 million in fixed-rate mortgage loans and
$5.0 million in adjustable-rate mortgage ("ARM") loans.  The
Company's customers refinancing existing mortgage loans
accounted for approximately $3.6 million of these originations. 
Total mortgage-backed and related securities increased to $30.5
million (including mortgage-backed securities available for
sale) at September 30, 1997, from $28.3 million at September 30,
1996.  Investment securities increased $1.3 million to $22.2
million at September 30, 1997 from $20.9 million at September
30, 1996.  The increases in loans receivable and investment
securities were funded primarily by proceeds received from an
increase in deposits of $6.5 million from $82.9 million at
September 30, 1996 to $89.4 million at September 30, 1997 and by
an increase in Federal Home Loan Bank (FHLB) borrowings of $4.5
million from $20.5 million at September 30, 1996 to $25.0
million at September 30, 1997.

     Stockholders' equity increased $1.4 million to $12.0
million at September 30, 1997 from $10.6 million at September
30, 1996.

RESULTS OF OPERATIONS

     The Company's results of operations depend primarily on the
level of its net interest income and noninterest income and the
level of its operating expenses.  Net interest income depends
upon the volume of interest-earning assets and interest-bearing
liabilities and interest rates earned or paid on them.

     During the year ended September 30, 1997, the Company's
operating strategy to improve its profitability and capital
position continued to emphasize (i) maintenance of the Company's
asset quality, (ii) asset-liability management, (iii) management
of operating expenses to improve operating income, and (iv)
expanding loan originations.  

COMPARISON OF FISCAL YEARS ENDED SEPTEMBER 30, 1997 AND
SEPTEMBER 30, 1996

     General. The Company's net income increased by $725,000 to
$1.5 million in fiscal year 1997 from net income of $825,000 in
fiscal 1996.  The primary reasons for this increase were the
decrease in non-interest expense of $455,000, an increase of
$330,000 in net interest income and an increase of $360,000 in
non-interest income.  The decrease in non-interest expense was
due primarily to a one time FDIC assessment of $530,000 in the
year ended September 30, 1996 and a decrease in the FDIC
insurance rate from .23% of deposits to .06% of deposits
effective January 1, 1997.

     Interest Income.  Interest income increased $800,000 to
$9.0 million for fiscal 1997 from $8.2 million for fiscal 1996
primarily as a result of an increase in interest-earning assets
of $10.1 million at September 30, 1997.  The increase was
partially offset by a decrease in the average yield on interest
earning assets from 7.62% at September 30, 1996 to 7.52% at
September 30, 1997.

                              4<PAGE>
<PAGE>

     Interest Expense.  Interest expense increased $400,000 to
$5.3 million in fiscal 1997 from $4.9 million in fiscal 1996 due
primarily to an increase in the average balances of the
Company's deposits and FHLB borrowings and an increase in
interest rates paid on deposits to 4.89% at September 30, 1997
from 4.48% at September 30, 1996.

     Net Interest Income.  Net interest income increased
$300,000 to $3.6 million at September 30, 1997 from $3.3 million
at September 30, 1996.  The Company's average spread (the
mathematical difference between the yield on interest-earning
assets and the cost of interest-bearing liabilities) decreased
to 2.63% for the year ended September 30, 1997 from 2.64% for
the year ended September 30, 1996.  The Company's net interest
margin (net interest income divided by average interest-earning
assets) increased to 3.04% at September 30, 1997 from 3.01% at
September 30, 1996.

     While the interest rate environment of recent years has
proven beneficial to most financial institutions, including the
Company, increases in market rates of interest generally
adversely affect the net income of most financial institutions. 
Because the Company's liabilities generally reprice more quickly
than its assets, interest margins will likely decrease if
interest rates rise.
 
     Non-Performing Assets and Provision for Losses on Loans. 
Management establishes specific reserves for estimated losses on
loans when it determines that losses are anticipated on these
loans.  The Company calculates any allowance for possible loan
losses based upon its ongoing evaluation of pertinent factors
underlying the types and quality of its loans.  These factors
include but are not limited to the current and anticipated
economic conditions, including uncertainties in the national
real estate market which may affect the Company's purchased
loans, the level of classified assets, historical loan loss
experience, a detailed analysis of individual loans for which
full collectibility may not be assured, a determination of the
existence and fair value of the collateral, the ability of the
borrower to repay and the guarantees securing such loans.

     Management, as a result of this review process, recorded
provisions for losses on loans in the amount of $81,000 for the
year ended September 30, 1997 as compared to $36,000 for the
year ended September 30, 1996.  The Company's allowance for
losses on loans at September 30, 1997 was $302,000 as compared
to $274,000 at September 30, 1996.  Total nonperforming assets
at September 30, 1997 decreased to $17,000, or .1% of total
assets, from $151,000, or .13% of total assets, at September 30,
1996.

     The Company will continue to monitor and adjust its
allowance on loans as management's analysis of its loan
portfolio and economic conditions dictate.  However, although
the Company maintains its allowance for losses on loans at a
level which it considers to be adequate to provide for potential
losses, in view of the continued uncertainties in the economy
generally and the regulatory uncertainty pertaining to reserve
levels for the thrift industry generally, there can be no
assurance that such losses will not exceed the estimated amounts
or that the Company will not be required to make additional
substantial additions to its allowance for losses on loans in
the future.

     Noninterest Income.  Noninterest income, consisting
primarily of income generated from the Bank's subsidiaries,
increased $400,000 to $1.5 million for the year ended September
30, 1997 from $1.1 million for the year ended September 30,
1996.  The increase was due primarily to restitution in the
amount of $221,000 paid to the Company from certain outside
investors found by the Office of Thrift Supervision to have
violated the OTS Change in Control Laws and Regulations and from
increased commissions income of the real estate brokerage
operation conducted through a subsidiary of the Company.  Other
noninterest income generated by the subsidiaries totaled
$820,000 and $692,000 for the years ended September 30, 1997 and
1996, respectively.

     Noninterest Expenses.  Noninterest expenses decreased
$400,000 to $2.7 million for the year ended September 30, 1997
as compared to $3.1 million for the year ended September 30,
1996.  The decrease was primarily due to a one time assessment
of $530,000 by the FDIC in the year ended September 30, 1996 and
a $130,000 increase in other noninterest expense in the year
ended September 30, 1997.  The assessment was levied by the FDIC
on all institutions with deposits insured by the Savings
Association Insurance Fund (the "SAIF") in order to recapitalize
the SAIF.  The

                              5<PAGE>
<PAGE>

assessment, set by the FDIC at .65% of SAIF-insured deposits as
of March 31, 1995, was paid on November 27, 1996.  As a result
of the SAIF recapitalization legislation, the Company's deposit
insurance premiums declined from the current .23% of insured
deposits to .06% of insured deposits commencing on January 1,
1997.  Noninterest expense attributable to the Bank's
subsidiaries totaled $702,000 and $625,000 in fiscal 1997 and
1996, respectively.

     Income Taxes.  Income taxes for fiscal 1997 increased to
$791,000 due to a $1.1 million increase in taxable income.

COMPARISON OF FISCAL YEARS ENDED SEPTEMBER 30, 1996 AND
SEPTEMBER 30, 1995

     General.  The Company's net income decreased by $102,000 to
$825,000 in fiscal year 1996 from net income of $927,000 in
fiscal 1995.  The primary reasons for this decrease were the
increase in non-interest expense of $720,000 partially offset by
an increase of $447,000 in net interest income and an increase
of $121,000 in non-interest income.  The increase in
non-interest expense was due primarily to a one time FDIC
assessment of $530,000, discussed below.

     Interest Income.  Interest income increased $900,000 to
$8.2 million for fiscal 1996 from $7.3 million for fiscal 1995
primarily as a result of an increase in the average yield on
interest-earning assets of 55 basis points to 7.62% at September
30, 1996 from 7.07% at September 30, 1995, and, to a lesser
extent, the $5.6 million increase in the average balance of
interest earning assets.  The increase in the average yield was
caused primarily by the general increase in interest rates on
adjustable rate mortgage loans resulting in an increase in yield
on the Company's loans to 8.12% at September 30, 1996 from 7.43%
at September 30, 1995. 

     Interest Expense.  Interest expense increased $400,000 to
$4.9 million in fiscal 1996 from $4.5 million in fiscal 1995 due
primarily to an increase in the average balances of the
Company's FHLB borrowings and an increase in interest rates paid
on advances to 5.88% at September 30, 1996 from 5.78% at
September 30, 1995.

     Net Interest Income.  Net interest income increased
$500,000 to $3.3 million at September 30, 1996 from $2.8 million
at September 30, 1995.  The Company's average spread (the
mathematical difference between the yield on interest-earning
assets and the cost of interest-bearing liabilities) increased
to 2.64% for the year ended September 30, 1996 from 2.32% for
the year ended September 30, 1995.  The Company's net interest
margin (net interest income divided by average interest-earning
assets) increased to 3.01% at September 30, 1996 from 2.74% at
September 30, 1995.

     While the interest rate environment of recent years has
proven beneficial to most financial institutions, including the
Company, increases in market rates of interest generally
adversely affect the net income of most financial institutions. 
Because the Company's liabilities generally reprice more quickly
than its assets, interest margins will likely decrease if
interest rates rise.

     Noninterest Income.  Noninterest income, consisting
primarily of income generated from the Bank's subsidiaries,
increased $120,000 to $1.1 million for the year ended September
30, 1996 from $980,000 for the year ended September 30, 1995. 
The increase was due primarily to an increase of $91,000 in
other noninterest income, consisting primarily of commissions
from the real estate subsidiary and a gain in the sale of real
estate in the real estate subdivision of $33,000.  Other
noninterest income generated by the subsidiaries totaled
$692,000 and $611,000 for the years ended September 30, 1996 and
1995, respectively.

     Noninterest Expenses.  Noninterest expenses increased
$720,000 to $3.1 million for the year ended September 30, 1996
as compared to $2.4 million for the year ended September 30,
1995.  The increase was primarily due to a one time assessment
of $530,000 by FDIC and a $120,000 increase in other noninterest
expense.  The assessment was levied by the FDIC on all
institutions with deposits insured by the Savings Association
Insurance Fund (the "SAIF") in order to recapitalize the SAIF. 
The assessment, set by the FDIC at .65% of SAIF-insured deposits
as of March 31, 1995, was 

                              6<PAGE>
<PAGE>

paid on November 27, 1996.  Noninterest expense attributable to
the Bank's subsidiaries totaled $625,000 and $512,000 in fiscal
1996 and 1995, respectively.

     Income Taxes.  Income taxes for fiscal 1996 decreased to
$411,000 due to an $153,000 decrease in taxable income and the
use of certain capital loss carry-forwards for tax purposes in
the prior year.

ASSET LIABILITY MANAGEMENT 

     Interest Rate Gap.  The matching of assets and liabilities
may be analyzed by examining the extent to which such assets and
liabilities are "interest rate sensitive" and by monitoring an
institution's interest rate sensitivity "gap."  An asset or
liability is said to be interest rate sensitive within a
specific time period if it will mature or reprice within that
time period.  The interest rate sensitivity gap is defined as
the difference between the amount of interest-earning assets
anticipated, based upon certain assumptions, to mature or
reprice within a specific time period and the amount of
interest-bearing liabilities anticipated, based upon certain
assumptions, to mature or reprice within that time period.  A
gap is considered positive when the amount of interest rate
sensitive assets exceed the amount of interest rate sensitive
liabilities.  A gap is considered negative when the amount of
interest rate sensitive liabilities exceeds the amount of
interest rate sensitive assets.  During a period of rising
interest rates, a negative gap would tend to adversely affect
net interest income while a positive gap would tend to result in
an increase in net interest income.  During a period of falling
interest rates, a negative gap would tend to result in an
increase in net interest income while a positive gap would tend
to adversely affect net interest income.  Management believes
that the Company will experience more favorable results during
periods of declining (or low) interest rates than during periods
of rising (or high) interest rates.

     Since the mid 1980's, the Company's asset-liability
management strategy has been directed toward reducing the
Company's exposure to fluctuations in interest rates.  In order
to properly monitor interest rate risk, the Board of Directors
in 1989 created an Asset/Liability Committee composed
principally of its President and savings and finance department
officers, which meets quarterly to review the Company's interest
rate risk position.  The principal responsibilities of this
Committee are to assess the Company's asset/liability mix and
recommend strategies to the Board that will enhance income while
managing the Company's vulnerability to changes in interest
rates.

     At September 30, 1997, total interest-bearing liabilities
maturing or repricing within one year exceeded total interest-
earning assets maturing or repricing in the same period by $9.8
million, representing a negative cumulative one-year gap ratio
of 7.65% as compared to a negative cumulative gap ratio of 1.10%
and 8.09% at September 30, 1996 and 1995, respectively.

     The Company's asset liability management strategy
emphasizes the purchase of mortgage-backed and related
securities and investment securities with adjustable rates or
estimated maturities of seven years or less, and the origination
of adjustable rate loans and short- and intermediate-term
non-residential loans.  These types of loans and investment
products have shorter terms to maturity and tend to reprice more
frequently than do longer term fixed-rate mortgage loans, yet
can provide a positive margin over the Company's cost of funds.

     In the future, the Company intends, subject to market
conditions, to continue to stress the origination of
intermediate- term and ARM loans and commercial business and
consumer loans. 

     As part of its asset-liability management strategy, the
Company has also emphasized low-rate, long-term core deposits. 
Consumer passbook savings accounts, money market deposit
accounts and NOW accounts amounted to $29.4 million, or 32.3% of
the Company's total deposits, as of September 30, 1997.  Based
on its experience, the Company's certificates of deposit have
been a relatively stable source of long-term funds as such
certificates are generally renewed upon maturity since the
Company has established long-term banking relationships with its
customers.  The Company also maintains a substantial portfolio
of short-term liquid assets.  As of September 30, 1997, the
Company had $5.3 million of investment securities and
interest-bearing deposits with other financial institutions that
mature within one year.

                              7<PAGE>
<PAGE>
      In managing its asset-liability mix, Mid-Iowa may, at
times, depending on the relationship between long and short term
interest rates, market conditions and consumer preference, place
greater emphasis on maximizing its net interest margin than on
better matching the interest rate sensitivity of its assets and
liabilities in an effort to improve its spread.  Management
believes that the increased net income resulting from a mismatch
in the maturity of its asset and liability portfolios can,
during periods of declining or stable interest rates, provide
high enough returns to justify the increased vulnerability to
sudden and unexpected increases in interest rates which can
result from such a mismatch.

     The following table sets forth the repricing dates of the
Company's interest-earning assets and interest-bearing
liabilities at September 30, 1997.  The Company's interest rate
sensitivity "gap" is defined as the amount by which assets
repricing within the respective periods exceed liabilities
repricing within such periods.  One- to four-family fixed-rate
mortgage loans are assumed to prepay at an annual rate of 6% for
the first five years and from 7% to 30% per year during the
subsequent periods, depending on the stated interest rate. 
Adjustable-rate mortgage loans are assumed to prepay at a rate
of 12% per year.  Second mortgage loans and all other loans are
assumed to prepay at annual rates of 12%.  Passbook accounts are
assumed to be withdrawn at annual rates of 17%, 17%, 17% and
17%, respectively, during the period shown.  Money market
deposit accounts are assumed to decay at annual rates of 79% in
the first period shown and 31% per period during the subsequent
periods.  Finally, transaction accounts are assumed to decay at
annual rates of 37%, 32%, 17% and 17% respectively, in each of
the periods shown.
<TABLE>
<CAPTION>                                          Maturing or Repricing
                                   ------------------------------------------------------
                                                     Over 1-3  Over 3-5  Over 5
                                   Within One Year    Years     Years    Years    Total
                                   ----------------  --------  -------- -------- --------
                                    Amount    Rate    Amount    Amount   Amount   Amount
                                   --------  ------  --------  -------- -------- --------
                                                  (Dollars in Thousands)
<S>                                <C>       <C>     <C>       <C>      <C>      <C>
Fixed rate one- to four-family
 (including mortgage-backed
 and related securities), 
 commercial real estate and
 construction loans  . . . . . . . $ 3,040   8.11%  $  5,106  $  6,122  $ 8,794  $ 23,062
Adjustable rate one- to four-
 family (including mortgage-
 backed and related securities),
 mortgage-backed securities held
 for sale, commercial real estate
 and construction loans. . . . . .  55,989   7.39      4,019        --        --   60,008
Other securities . . . . . . . . .   6,155   6.20      3,235     4,304    11,602   25,296
Commercial loans . . . . . . . . .   1,612   9.40      1,989     2,020     1,143    6,764
Consumer loans . . . . . . . . . .   4,412   9.08      3,683        --        --    8,095
                                   -------   ----   --------   -------   ------- --------
   Total interest-earning assets .  71,208   7.47     18,032    12,446    21,539  123,225
                                   -------   ----   --------   -------   ------- --------

Transaction accounts . . . . . . .   2,213   0.65      5,431     1,186       550    9,380
Savings deposits . . . . . . . . .  14,315   3.51      2,226     1,378     2,600   20,519
Certificates of Deposit. . . . . .  48,479   5.48      9,433     2,056        47   60,015
Borrowings . . . . . . . . . . . .  16,000   5.70      5,000     4,000        --   25,000
                                   -------   ----   --------   -------   ------- --------
  Total interest-bearing
    liabilities  . . . . . . . . .  81,007   5.04     22,090     8,620     3,197  114,914
                                   -------   ----   --------   -------   ------- --------

Interest-earning assets less
 interest-bearing liabilities. . . $(9,799)  2.43%  $ (4,058)  $ 3,826   $18,342 $  8,311
                                   =======   ====   ========   =======   ======= ========
<PAGE>
Difference as a percent of
 interest-earning assets . . . . .  (7.95)%            (3.29)     3.10%    14.88%    6.74%
                                   =======          ========   =======   ======= ========
Cumulative interest rate
 sensitivity gap . . . . . . . . . $(9,799)         $(13,857)  $(10,031) $ 8,311 $  8,311
                                   =======          ========   =======   ======= ========
Cumulative interest rate
 sensitivity gap as a percent
 of total assets . . . . . . . . .  (7.65)%          (10.82)%    (7.84)%   6.49%    6.49%
                                   =======          ========   =======   ======= ========
</TABLE>
                                     8<PAGE>
<PAGE>

     The following table sets forth the interest rate
sensitivity of the Company's assets and liabilities, at the
periods presented on the basis of the factors and assumptions
set forth above.

<TABLE>
<CAPTION>
                                                           September 30,
                                                ----------------------------------
                                                   1997        1996        1995
                                                ----------  ----------  ----------
<S>                                             <C>         <C>         <C>
Fixed rate residential (including mortgage-
 backed and related securities), commercial
 real estate and construction loans. . . . . .  $   3,040   $   3,103   $   2,910
Adjustable rate residential (including
 mortgage-backed and related securities and
 mortgage-backed securities held for sale),
 commercial real estate and construction
 loans . . . . . . . . . . . . . . . . . . .       55,989      56,836      50,908
Commercial business loans. . . . . . . . . .        1,612         570         879
Consumer loans . . . . . . . . . . . . . . .        4,412       3,331       2,976
Investment securities and other. . . . . . .        6,155       4,930       5,135
                                                ---------   ---------   ---------
   Total interest rate sensitive assets
    repricing within one year. . . . . . . .       71,208      68,770      62,809
                                                ---------   ---------   ---------
NOW accounts . . . . . . . . . . . . . . . .        2,213       2,970       1,649
Savings deposits . . . . . . . . . . . . . .       14,315      10,522       5,077
Certificates of deposit. . . . . . . . . . .       48,479      45,049      52,833
                                                ---------   ---------   ---------
   Total deposits  . . . . . . . . . . . . .                   58,541      59,559
Borrowings . . . . . . . . . . . . . . . . .       16,000      11,500      12,000
                                                ---------   ---------   ---------
   Total interest rate sensitive
    liabilities repricing within one year. .       81,007      70,041      71,559
                                                ---------   ---------   ---------

Gap. . . . . . . . . . . . . . . . . . . . .    $  (9,799)  $  (1,271)  $  (8,750)
                                                =========   =========   =========
Interest rate sensitive assets repricing
 within one year/interest rate sensitive
 liabilities repricing within one year . . .       87.90%      98.19%      87.77%
Gap as a percent of total interest-earning
 assets  . . . . . . . . . . . . . . . . . .       (8.61)%     (1.12)%     (8.28)%
Gap as a percent of total assets . . . . . .       (7.65)%     (1.10)%     (8.09)%
</TABLE>

     Net Portfolio Value.  The Office of Thrift Supervision (the
"OTS") provides a Net Portfolio Value ("NPV") approach to the
quantification of interest rate risk.  This approach calculates
the difference between the present value of expected cash flows
from assets and the present value of expected cash flows from
liabilities, as well as cash flows from off-balance sheet
contracts.

     OTS regulations use net market value methodology to measure
the interest rate risk exposure of thrift institutions.  Under
OTS regulations, an institution's "normal" level of interest
rate risk in the event of an assumed change in interest rates is
a decrease in the institution's NPV in an amount not exceeding
2% of the present value of its assets.  Thrift institutions with
greater than "normal" interest rate exposure must take a
deduction from their total capital available to meet their
risk-based capital requirement.  The amount of that deduction is
one-half of the difference between (i) the institution's actual
calculated exposure to a 200 basis point interest rate increase
or decrease (whichever

                              9<PAGE>
<PAGE>
results in the greater pro forma decrease in NPV) and (ii) its
"normal" level of exposure which is 2% of the present value of
its assets.  Because of the Bank's asset size and level of
risk-based capital, the Bank is exempt from this requirement. 
As of September 30, 1997, a change in interest rates of positive
200 basis points would have resulted in a 20% decrease in NPV
(as a percentage of the net present value of the Bank's assets),
while a change in interest rates of negative 200 basis points
would have resulted in an 11% increase in NPV (as a percentage
of the net present value of the Bank's assets).

     Presented below, as of September 30, 1997, is an analysis
of the Bank's interest rate risk as calculated by the OTS,
measured by changes in NPV for instantaneous and sustained
parallel shifts in the yield curve, in 100 basis point
increments, up and down 400 basis points.  As illustrated in the
table, NPV is more sensitive to rising rates than declining
rates. This occurs principally because, as rates rise, the
market value of fixed-rate loans declines due to both the rate
increase and slowing prepayments.  When rates decline, the Bank
does not experience a significant rise in market value for these
loans because borrowers prepay at relatively high rates.

<TABLE>
<CAPTION>
     Change in               At September 30, 1997
   Interest Rate            -----------------------
   (Basis Points)           $ Change       % Change
   --------------           --------       --------
                    (Dollars in Thousands)
   <S>                      <C>            <C>
        +400                $(5,837)         (47)%
        +300                 (4,063)         (33)
        +200                 (2,435)         (20)
        +100                 (1,035)          (8)
           0                                     
        -100                    653            5
        -200                  1,375           11
        -300                  2,316           19
        -400                  3,554           29
</TABLE>
     Management reviews the OTS measurements on a quarterly
basis.  In addition to monitoring selected measures on NPV,
management also monitors effects on net interest income
resulting from increases or decreases in rates.  This measure is
used in conjunction with NPV measures to identify excessive
interest rate risk.

     Certain shortcomings are inherent in the method of analysis
presented in the foregoing tables.  For example, although
certain assets and liabilities may have similar maturities or
periods to repricing, they may react in different degrees to
changes in market interest rates.  Also, the interest rates on
certain types of assets and liabilities may fluctuate in advance
of changes in market interest rates, while interest rates on
other types may lag behind changes in market rates.
Additionally, certain assets, such as ARM loans, have features
which restrict changes in interest rates on a short-term basis
and over the life of the asset.  Further, in the event of a
change in interest rates, prepayment and early withdrawal levels
would likely deviate significantly from those assumed in
calculating the table.  Finally, the ability of many borrowers
to service their debt may decrease in the event of an interest
rate increase. 

     In addition, the previous tables do not necessarily
indicate the impact of general interest rate movements on the
Company's net interest income because the repricing of certain
categories of assets and liabilities is subject to competitive
and other pressures beyond the Company's control.  As a result,
certain assets and liabilities indicated as maturing or
otherwise repricing within a stated period may in fact mature or
reprice at different times and at different volumes.

                             10<PAGE>
<PAGE>

     The following table presents for the periods indicated the
total dollar amount of interest income from average interest
earning assets and the resultant yields, as well as the interest
expense on average interest bearing liabilities, expressed both
in dollars and rates.  No tax equivalent adjustments were made. 
All average balances are monthly average balances.

<TABLE>
<CAPTION>
                                                 Year Ended September 30,
                                              ------------------------------
                                                              1997
                                              ------------------------------
                               Yield/Rate at    Average    Interest   
                               September 30,  Outstanding   Earned/   Yield/
                                    1997        Balance      Paid      Rate
                               -------------  ----------   --------   ------
<S>                            <C>            <C>          <C>        <C>
Interest-earning assets:
 Loans receivable. . . . . . .      8.35%      $ 64,474    $  5,310    8.24%
 Mortgage-backed and related
  securities (including
  securities available
  for sale). . . . . . . . . .      6.89         29,628       1,967    6.64
 Investment securities . . . .      6.60         23,616       1,572    6.66
 Other interest-earning
  assets . . . . . . . . . . .      5.25          1,455         115    7.90
                                               --------    --------   -----
 Total interest-earning
  assets . . . . . . . . . . .      7.55%      $119,173    $  8,964    7.52%
                                               --------    --------   -----
Interest-bearing liabilities:
 NOW accounts. . . . . . . . .      0.66%      $  5,627    $     39    0.69%
 Savings deposits. . . . . . .      3.00         19,410         581    2.99
 Certificates of deposit . . .      5.50         59,048       3,168    5.37
                                   -----       --------    --------   -----
  Total deposits . . . . . . .      4.66         84,085       3,788    4.50
Borrowings . . . . . . . . . .      5.70         25,300       1,558    6.16
                                   -----       --------    --------   -----
Total interest-bearing
 liabilities . . . . . . . . .      4.89        109,385       5,346    4.89
                                   -----       --------    --------   -----
Net interest income;
 interest rate spread. . . . .      2.66%                  $  3,618    2.63%
                                   =====                   ========   =====
Net earning assets/net yield
 on average interest-earning
 assets. . . . . . . . . . . .                 $  9,788                3.04%
                                               ========               =====
Average interest-earning
 assets to average interest-
 bearing liabilities . . . . .                                       108.95%
                                                                     ======
<PAGE>
<CAPTION>
                                                 Year Ended September 30,
                             ------------------------------------------------------------
                                           1996                          1995
                             ------------------------------------------------------------
                               Average   Interest            Average   Interest
                             Outstanding  Earned/   Yield/ Outstanding  Earned/   Yield/
                               Balance     Paid      Rate    Balance     Paid      Rate
                              ---------  --------  --------  --------  --------  --------
<S>                            <C>       <C>       <C>       <C>       <C>
Interest-earning assets:
 Loans receivable. . . . . . . $ 60,104  $  4,880    8.12%   $ 56,092  $  4,165    7.43%
 Mortgage-backed and related
  securities (including
  securities available
  for sale). . . . . . . . . .   28,238     1,896    6.71      30,110     2,008    6.67
 Investment securities . . . .   18,747     1,195    6.37      15,266       951    6.23
 Other interest-earning
  assets . . . . . . . . . . .    2,194       256   11.67       2,225       206    9.26
                               --------  --------   -----    --------  --------   -----
 Total interest-earning
  assets . . . . . . . . . . . $109,283  $  8,227    7.53    $103,693  $  7,330    7.07
                               --------  --------   -----    --------  --------   -----
Interest-bearing liabilities:
 NOW accounts. . . . . . . . . $  4,694  $     37    0.79%   $  4,867  $     43     .88%
 Savings deposits. . . . . . .   15,112       430    2.85      12,194       296    2.43
 Certificates of deposit . . .   60,402     3,243    5.37      62,770     3,300    5.26
                               --------  --------   -----    --------  --------   -----
  Total deposits . . . . . . .   80,208     3,710    4.63      79,831     3,639    4.56
Borrowings . . . . . . . . . .   20,917     1,229    5.88      14,771       853    5.78
                               --------  --------   -----    --------  --------   -----
Total interest-bearing
 liabilities . . . . . . . . .  101,125     4,939    4.88      94,602     4,492    4.75
                               --------  --------   -----    --------  --------   -----
Net interest income;
 interest rate spread. . . . .           $  3,288    2.64%             $  2,838    2.32%
                                         ========   =====              ========   =====
Net earning assets/net
 yield on average interest
 earning assets. . . . . . . . $  8,158              3.01%   $  9,091              2.74%
                               ========             =====    ========             ===== 

Average interest-earning
 assets to average interest-
 bearing liabilities . . . . .                     108.07%                       109.61%
                                                   ======                        ======
</TABLE>
                                    11<PAGE>
<PAGE>

RATE/VOLUME ANALYSIS OF NET INTEREST INCOME

     The following schedule presents the dollar amount of
changes in interest income and interest expense for major
components of interest-earning assets and interest-bearing
liabilities.  It distinguishes between the increase related to
higher outstanding balances and that due to the levels and
volatility of interest rates.  For each category of
interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (i) changes
in volume (i.e., changes in volume multiplied by old rate) and
(ii) changes in rate (i.e., changes in rate multiplied by old
volume).  For purposes of this table, changes attributable to
both rate and volume, which cannot be segregated have been
allocated proportionately to the change due to volume and the
change due to rate.

<TABLE>
<CAPTION>
                                               Year Ended September 30,
                            ------------------------------------------------------------
                               1997      vs       1996        1996      vs       1995
                            -----------------------------  -----------------------------
                            Increase(Decrease)             Increase(Decrease)
                                  Due to         Total           Due to         Total
                            -----------------   Increase   -----------------   Increase
                              Rate    Volume   (Decrease)    Rate    Volume   (Decrease)
                             ------  --------  ----------   ------  --------  ----------
                                              (Dollars in Thousands)
<S>                          <C>      <C>        <C>        <C>      <C>        <C>
Interest-earning assets:
 Loans . . . . . . . . . .   $  191   $   75     $  265     $  316   $  398     $  714
 Mortgage-backed and related
  securities (including
  mortgage-backed securities
  available for sale). . .       86      (20)        66       (155)      43       (112)
 Investment securities . .      176       60        236        223       21        244
 Other interest earning
  assets . . . . . . . . .      (68)     (77)      (145)        39       11         50
                             ------   ------     ------     ------   ------     ------
   Total interest-earning
    assets . . . . . . . .   $  385   $   38     $  423     $  423   $  473     $  896
                             ======   ======     ======     ======   ======     ======

Interest-bearing liabilities:
 NOW accounts. . . . . . .   $    5   $   (5)    $   --    $  (32)   $   26     $   (6)
 Savings deposits. . . . .      (11)      28         17       107        27        134
 Certificates of deposit .       32       --         32       (82)       25        (57)
 Borrowings. . . . . . . .      282       57        340       334        42        376
                             ------   ------     ------    ------    ------     ------
   Total interest-bearing
    liabilities. . . . . .   $  308   $   80     $  388    $  327    $  120     $  447
                             ======   ======     ======    ======    ======     ======
Net change in interest
 income  . . . . . . . . .                       $   35                         $  449
                                                 ======                         ======
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company's sources of funds are deposits, sales of
mortgage loans, amortization and repayment of loan principal and
mortgage-backed and related securities and, to a lesser extent,
maturation of investments and funds from other operations. 
While maturing investments are predictable, deposit flows and
loan repayments are influenced by interest rates, general
economic conditions, and competition making it less predictable. 
The Company attempts to price its deposits to achieve its
asset/liability objectives discussed above, giving consideration
to local market conditions.  The Company also has the ability to
supplement deposits with longer term and/or less expensive
alternate sources of funds including FHLB advances.  In this
regard, the Company had outstanding advances from the FHLB of
Des Moines in the amount of $25.0 million at September 30, 1997
compared to $20.5 million at September 30, 1996, and had the
capacity to borrow up to an additional $25.0 million.

                             12<PAGE>
<PAGE>
     Federal regulations historically have required the Bank to
maintain minimum levels of liquid assets.  The required
percentage has varied from time to time based on economic
conditions and savings flows, and is currently 4% of net
withdrawable savings deposits and borrowings payable on demand
or in one year or less during the preceding calendar month. 
Liquid assets for purposes of this ratio include cash, certain
time deposits, U.S. government and certain corporate securities
and other obligations generally having remaining maturities of
less than five years.  The Bank has historically maintained its
liquidity ratio at levels in excess of those required.  At
September 30, 1997, the amount of the Bank's liquidity was $5.9
million, resulting in a liquidity ratio of 6.5%.  At September
30, 1996, the Bank's liquidity totaled $6.5 million, resulting
in a liquidity ratio of 6.9%.

     The primary investing activities of the Company are lending
and purchasing mortgage-backed and related securities and
investment securities.  

     Liquidity management is both a daily and long-term
responsibility of management.  The Company adjusts its
investments in liquid assets based upon management's assessment
of (i) expected loan demand, (ii) expected deposit flows, (iii)
yields available on interest-bearing deposits, and (iv) the
objectives of its asset/liability management program.  Excess
liquidity is invested generally in interest-bearing overnight
deposits and other short-term government and agency obligations. 
If the Company requires additional funds, beyond its internal
ability to generate, it has additional borrowing capacity with
the FHLB of Des Moines and collateral eligible for repurchase
agreements.

     The Company uses its liquidity resources principally to
meet on-going commitments, to fund maturing certificates of
deposit and deposit withdrawals, to invest, to fund existing and
future loan commitments, to maintain liquidity, and to meet
operating expenses.

     At September 30, 1997, the Company had $1.6 million of loan
commitments and an additional $2.6 million available to
customers under existing lines of credit. 

     Certificates of deposit scheduled to mature in one year or
less at September 30, 1997, totaled $48.4 million.  Based on
historical experience, management believes that a significant
portion of such deposits will remain with the Company, however,
there can be no assurance that the Company can retain all such
deposits.

     Management believes that loan repayments and other sources
of funds will be adequate to meet and exceed the Company's
foreseeable short- and long-term liquidity needs.
<PAGE>
     The Company's liquidity, represented by cash, is a
combination of its operating, investing, and financing
activities.  These activities are summarized below for the years
indicated.

<TABLE>  
<CAPTION>
                                                            September 30,
                                                   ------------------------------
                                                     1997       1996       1995 
                                                   --------   --------   --------
                                                  (Dollars in thousands)
<S>                                                <C>        <C>        <C>
Operating Activities:
Net Income . . . . . . . . . . . . . . . . . . . . $  1,550   $    825   $    927
Adjustment to reconcile net income to net cash
  provided by (used in) operating activities . . .     (166)       845       (362)
                                                   --------   --------   --------
Net cash provided by (used in) operating
  activities . . . . . . . . . . . . . . . . . . .    1,384      1,670        565
Net cash provided by (used in) investment
  activities . . . . . . . . . . . . . . . . . . .   (9,841)    (8,192)    (7,838)
Net cash provided by (used in) financing
  activities . . . . . . . . . . . . . . . . . . .   10,873      6,253      6,574
                                                   --------   --------   --------
Net increase (decrease) in cash and cash
  equivalents  . . . . . . . . . . . . . . . . . .    2,416       (269)      (699)
Cash at beginning of year. . . . . . . . . . . . .    1,147      1,416      2,115
                                                   --------   --------   --------
Cash at end of year. . . . . . . . . . . . . . . . $  3,563   $  1,147   $  1,416
                                                   ========   ========   ========
</TABLE>
                                    13<PAGE>
<PAGE>
     The primary investing activities of the Company include
investing in loans, investment securities and mortgage-backed
and related securities.  The purchases are funded primarily from
loan repayments, maturities of securities and deposits and
increases in customer deposit  liabilities.  During the year
ended September 30, 1997, purchases of investment securities
totaled $15.0 million, while loans receivable increased $4.3
million.  Customer deposits increased $6.5 million in fiscal
1997.  During the year ended September 30, 1996, purchases of
investment securities totaled $14.1 million, while loans
receivable increased $4.3 million.  Customer deposits increased
$4.2 million in fiscal 1996.  In the event that investment and
mortgage-backed and related securities purchases increase in the
future, the Company's net interest spread and income may be
adversely affected as these assets typically yield less than
loans receivable.

     At September 30, 1997, the Bank had tangible and core
capital of $9.8 million, or 7.8% of adjusted total assets,
respectively, which was approximately $7.9 million and $6.0
million above the minimum requirements of 1.5% and 3.0%,
respectively, of adjusted total assets in effect on that date. 
On September 30, 1997, the Bank had risk-based capital of $10.1
million (including $9.8 million in core capital), or 19.4% of
risk-weighted assets of $52.2 million.  This amount was $5.9
million above the 8% requirement in effect on that date.  The
Bank is presently in compliance with the fully phased-in capital
requirements.

     The Company paid a quarterly cash dividend of $.02 per
share in each of the quarters of fiscal year 1996.  For a
tabular presentation of the dividends declared on the Company's
common stock for the past two fiscal years, see "Price Range of
and Dividends on Common Stock" below.  To the extent future
dividends are considered by the Board of Directors, the
availability of funds to pay such dividends are subject to
regulatory and other restrictions and considerations.  In
addition, the Company acquired 7,500 shares of its common stock
in open market purchases during fiscal 1997 pursuant to its
stock repurchase program.  The Company also issued 27,208 shares
of stock to facilitate the exercise of stock options for
employees.

IMPACT OF INFLATION AND CHANGING PRICES

     The Consolidated Financial Statements and Notes thereto
presented herein have been prepared in accordance with generally
accepted accounting principles, which require the measurement of
financial position and operating results in terms of historical
dollars without considering the change in the relative
purchasing power of money over time due to inflation.  The
impact of inflation is reflected in the increased cost of the
Company's operations.  Unlike most industrial companies,
however, nearly all the assets and liabilities of the Company
are monetary in nature.  As a result, interest rates have a
greater impact on the Company's performance than do the effects
of general levels of inflation.  Interest rates do not
necessarily move in the same direction or to the same extent as
the prices of goods and services.

IMPACT OF NEW ACCOUNTING STANDARDS

     SFAS 128, "Earnings Per Share," will be effective for the
Company for the periods ending after December 15, 1997.  SFAS
128 simplifies the standards of computing earnings per share and
changes the presentation of earnings per share in the financial
statements.  The Company expects to adopt SFAS 128 when
required, and management believes the adoption will not have a
material effect on disclosures of earnings per share.

                             14<PAGE>
<PAGE>










INDEPENDENT AUDITORS' REPORT


The Board of Directors
Mid-Iowa Financial Corp.
Newton, Iowa:

We have audited the accompanying consolidated balance sheets of
Mid-Iowa Financial Corp. and subsidiaries as of September 30,
1997 and 1996, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended September 30, 1997.  These
consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.   

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Mid-Iowa Financial Corp., and subsidiaries as of
September 30, 1997 and 1996, and the results of their operations
and their cash flows for each of the years in the three-year
period ended September 30, 1997, in conformity with generally
accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Des Moines, Iowa
November 14, 1997

                           15<PAGE>
<PAGE>
             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                       September 30,
                                               -----------------------------
                                                   1997             1996
                                                 --------         --------
          ASSETS
          ------
<S>                                            <C>              <C>
Cash and cash equivalents (Note 1)             $  3,563,299     $  1,147,204
Securities available for sale (Note 2)            4,982,662        4,974,408
Securities held to maturity (fair value of
  $48,231,573 in 1997 and $44,203,941 in
  1996) (Note 3)                                 47,767,121       44,231,879
Loan receivable, net (Notes 4 and 5)             66,417,985       62,122,871
Accrued interest receivable                         867,663          829,594
Federal Home Loan Bank stock, at cost             1,650,000        1,325,000
Real estate                                         33,865           37,306
Office properties and equipment,
  net (Note 6)                                    2,587,127          967,451
Intangibles, net                                     12,978           15,085
Prepaid expenses and other assets                   134,051          153,247
                                               ------------     ------------
     Total assets                              $128,016,751     $115,804,045
                                               ============     ============
   LIABILITIES AND STOCKHOLDERS' EQUITY
   ------------------------------------

Liabilities:
   Deposits (Note 7)                           $ 89,377,718     $ 82,871,963
   Borrowed funds (Note 8)                       25,000,000       20,500,000
   Advance payments by borrowers for taxes
     and insurance                                  179,982          199,921
   Accrued interest payable                         945,890          844,457
   Accounts payable and accrued expenses
     (Note 13)                                      452,033          786,582
                                               ------------     ------------
     Total liabilities                          115,955,623      105,202,923
                                               ------------     ------------

Stockholders' equity (Note 11):
   Common stock, $1 par value; authorized
     2,000,000 shares; 1,729,880 shares
     issued and outstanding                          17,299           17,299
   Additional paid-in capital                     3,040,211        3,142,623
   Retained earnings, partially restricted        9,298,166        7,882,078
   Treasury stock, at cost (51,792 and 71,500
     shares in 1997 and 1996, respectively)        (325,600)        (448,700)
   Unrealized gain on securities available
     for sale, net                                   31,052            7,822
                                               ------------     ------------
     Total stockholders' equity                  12,061,128       10,601,122
                                               ------------     ------------
     Total liabilities and stockholders'
       equity                                  $128,016,751     $115,804,045
                                               ============     ============
</TABLE>

See accompanying notes to consolidated financial statements.

                             16<PAGE>
<PAGE>
             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                   Years Ended September 30,
                                           ----------------------------------------
                                               1997          1996          1995
                                           ------------  ------------  ------------
<S>                                        <C>           <C>           <C>
Interest income:
   Loans                                   $  5,309,865  $  4,880,247  $  4,165,512
   Securities available for sale                327,497       259,975        50,799
   Securities held to maturity                3,069,225     2,831,439     2,907,699
   Other                                        256,768       255,898       206,329
                                           ------------  ------------  ------------
        Total interest income                 8,963,355     8,227,559     7,330,339
                                           ------------  ------------  ------------

Interest expense:
   Deposits (Note 7)                          3,787,690     3,710,324     3,639,420
   Borrowed funds                             1,557,800     1,229,114       852,849
                                           ------------  ------------  ------------
        Total interest expense                5,345,490     4,939,438     4,492,269
                                           ------------  ------------  ------------
        Net interest income                   3,617,865     3,288,121     2,838,070
Provision for losses on loans (Note 5)           81,000        36,000        33,000
                                           ------------  ------------  ------------
        Net interest income after
         provision for losses on loans        3,536,865     3,252,121     2,805,070
                                           ------------  ------------  ------------

Noninterest income:
   Gain on sale of securities                        --            --        14,166
   Gain on sale of other assets                  24,233        33,227            --
   Fees and service charges                     365,413       325,193       314,127
   Commissions                                  852,247       740,527       650,078
   Other income                                 221,000            --            --
                                           ------------  ------------  ------------
        Total noninterest income              1,462,893     1,098,947       978,371
                                           ------------  ------------  ------------
Noninterest expense:
   Compensation, payroll taxes, and
    employee benefits (Note 10)               1,191,590     1,119,610     1,082,289
   Office properties and equipment              261,599       243,225       229,082
   Deposit insurance premiums                    75,724       188,325       183,945
   Special deposit insurance assessment
    (Note 13)                                        --       530,421            --
   Data processing services                     147,468       134,574       126,601
   Other real estate expense, net               (12,118)        2,340        (3,960)
   Other                                        994,860       896,799       776,934
                                           ------------  ------------  ------------
        Total noninterest expense             2,659,123     3,115,294     2,394,891
                                           ------------  ------------  ------------

        Income before taxes on income         2,340,635     1,235,774     1,388,550
Taxes on income (Note 9)                        790,800       411,200       462,000
                                           ------------  ------------  ------------
        Net income                         $  1,549,835  $    824,574  $    926,550
                                           ============  ============  ============

Earnings per common share - primary
  and fully diluted                        $        .90  $        .47  $        .52
                                           ============  ============  ============
</TABLE>

See accompanying notes to consolidated financial statements.

                             17<PAGE>
<PAGE>

       MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                   Recognition Unrealized 
                                             Additional                and       Gains
                                    Common    Paid-In    Retained   Retention  (Losses),  Treasury
                                     Stock    Capital    Earnings     Plan        Net      Stock       Total
                                   -------- ----------- ----------- ---------- --------- ---------  ------------
<S>                                <C>      <C>         <C>         <C>        <C>        <C>       <C>
Balance at September 30, 1994      $  4,419 $ 3,233,549 $ 6,570,715 $ (12,240) $(26,715) $      --  $ 9,769,728

Net Income                               --          --     926,550        --        --         --      926,550
Repurchase of common stock
  (22,092 shares)                        --          --          --        --        --   (347,468)    (347,468)
Amortization of recognition
  and retention plan                     --          --          --     8,568        --         --        8,568
Dividends paid ($.16 per share)          --          --    (131,783)       --        --         --     (131,783)
Stock dividend (100%)                 3,976    (183,915)   (167,529)       --        --    347,468           --
Change in unrealized gain on
  securities available for sale          --          --          --        --    35,388         --       35,388
                                   -------- ----------- ----------- ---------  --------  ---------  -----------  
                       
Balance as of September 30, 1995      8,395   3,049,634   7,197,953    (3,672)    8,673         --   10,260,983

Net income                               --          --     824,574        --        --         --      824,574
Repurchase of common stock
  (72,700 shares)                        --          --          --        --        --   (462,950)    (462,950)
Exercise of options
  (50,328 shares)                       503     110,240          --        --        --         --      110,743
Amortization of recognition
  and retention plan                     --          --          --     3,672        --         --        3,672
Dividends paid ($.10 per share)          --          --    (135,049)       --        --         --     (135,049)
Stock dividend (100%)                 8,401     (17,251)     (5,400)       --        --     14,250           --
Change in unrealized gain on
  securities available for sale          --          --          --        --      (851)        --         (851) 
                                   -------- ----------- ----------- ---------  --------  ---------  -----------

Balance as of September 30, 1996     17,299   3,142,623   7,882,078        --     7,822   (448,700)  10,601,122

Net income                               --          --   1,549,835        --        --         --    1,549,835
Repurchase of common stock
  (7,500 shares)                         --          --          --        --        --    (47,812)     (47,812)
Exercise of options
  (27,208 shares)                        --    (102,412)         --        --        --    170,912       68,500
Dividends paid ($.08 per share)          --          --    (133,747)       --        --         --     (133,747)
Change in unrealized gain on
  securities available for sale          --          --          --        --    23,230         --       23,230
                                   -------- ----------- ----------- ---------  --------  ---------  ----------- 

Balance as of September 30, 1997   $ 17,299 $ 3,040,211 $ 9,298,166 $      --  $ 31,052  $(325,600) $12,061,128

</TABLE>

                               18<PAGE>
<PAGE>
             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                   Years Ended September 30,
                                           ----------------------------------------
                                               1997          1996          1995
                                           ------------  ------------  ------------
<S>                                        <C>           <C>           <C>
Cash flows from operating activities:
   Net income                              $  1,549,835  $    824,574  $    926,550
   Origination of loans held for sale                --            --    (1,198,503)
   Proceeds from sale of loans held
    for sale                                         --       309,867     1,016,507
   Adjustments to reconcile net income
    to net cash provided by operating
    activities:
      Depreciation                              108,104       103,594        94,529
      Amortization of recognition and
       retention plan benefits                       --         3,672         8,568
      Amortization of premiums and 
       discounts on loans and mortgage-
       backed securities                        (67,570)      (64,019)      (43,286)
      Provision for losses on loans              81,000        36,000        33,000
      Gain on sale of real estate, net          (23,230)      (33,227)      (67,363)
      Gain on sale of securities                     --            --       (14,166)
      Increase in accrued interest
       receivable                               (38,069)      (22,861)     (241,672)
      Increase in accrued interest
       payable                                  101,433        36,267       117,316
      (Decrease) increase in current 
       taxes on income                          (50,795)       49,168       (37,705)
      Deferred taxes on income                  185,905      (153,934)       37,000
      Other, net                               (462,679)      581,330       (65,023)
                                           ------------  ------------  ------------
          Net cash provided by
           operating activities               1,383,934     1,670,431       565,752
                                           ------------  ------------  ------------
Cash flows from investing activities:
   Securities available for sale:
      Proceeds from sales                            --            --       136,164
      Purchases                                (388,439)   (2,607,612)           --
      Principal repayments of mortgage-
       backed securities                        413,544       545,044            --
   Securities held to maturity:
      Proceeds from maturities                6,538,323     7,062,151     2,250,000
      Purchases                             (13,708,139)  (12,341,227)   (8,934,343)
      Principal repayments of mortgage-
       backed securities                      3,706,386     4,025,149     2,616,336
   Net change in loans                       (4,376,114)   (4,312,278)   (3,610,665)
   Proceeds from sale of real estate             26,623        75,000       148,900
   Capitalized real estate costs                     --        (5,440)      (14,553)
   Purchase of office properties and
    equipment, net                           (1,727,780)     (208,206)     (134,019)
   Purchase of Federal Home Loan Bank
    stock                                      (325,000)     (425,000)     (296,000)
                                           ------------  ------------  ------------
          Net cash used in 
           investing activities              (9,840,596)   (8,192,419)   (7,838,180)
                                           ------------  ------------  ------------
</TABLE>
                               19<PAGE>
<PAGE>
             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
<TABLE>
<CAPTION>
                                                   Years Ended September 30,
                                           ----------------------------------------
                                               1997          1996          1995
                                           ------------  ------------  ------------
<S>                                        <C>           <C>           <C>
Cash flows from financing activities:
  Net change in deposits                   $  6,505,755  $  4,200,511  $   (212,033)
  Receipt of borrowed funds                  26,500,000    23,000,000    18,000,000
  Payments on borrowed funds                (22,000,000)  (20,500,000)  (10,750,000)
  (Decrease) increase in advance payments
    by borrowers for taxes and insurance        (19,939)       39,529        15,495
  Stock options exercised                        68,500       110,743            --
  Payments to acquire treasury stock            (47,812)     (462,950)     (347,468)
  Dividends paid                               (133,747)     (135,049)     (131,783)
                                            ------------  ------------  ------------
          Net cash provided by
           financing activities               10,872,757     6,252,784    6,574,211
                                            ------------  ------------  ------------
          Net increase (decrease) in
           cash and cash equivalents           2,416,095      (269,204)    (698,217)

Cash and cash equivalents at beginning
  of year                                      1,147,204     1,416,408    2,114,625
                                            ------------  ------------  ------------
Cash and cash equivalents at end of year    $  3,563,299  $  1,147,204  $ 1,416,408
                                            ============  ============  ============
Supplemental disclosures:
  Cash paid during the year for:
    Interest, net of interest capitalized
     of $30,872 in 1997                     $  5,213,185  $  4,903,171  $ 4,375,153
    Taxes on income                              662,243       516,527      460,866
  Noncash investing and financing activities:
    Reclassification of securities from
     held to maturity to available for sale           --     2,079,143           --
                                            ============  ============  ============
</TABLE>

See accompanying notes to consolidated financial statements.
      
                            20<PAGE>
<PAGE>
          MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                SEPTEMBER 30, 1997 AND 1996

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Description of the Business
     ---------------------------

     Mid-Iowa Financial Corp., headquartered in Newton, Iowa, is
     a savings and loan holding company comprised of a federally 
     chartered stock savings bank operating offices in Central
     Iowa; a real estate brokerage and development company; and
     a company which provides credit reporting and collection
     services, sells investment products, and provides discount
     securities brokerage.  Mid-Iowa Financial Corp. was
     organized as a Delaware Corporation in June 1992 at the
     direction of Mid-Iowa Savings Bank for the purpose of
     becoming a savings and loan holding company, as part of the
     Mid-Iowa Savings Bank conversion from a mutual to a stock
     institution.
            
     Mid-Iowa Financial Corp. is primarily a retail banking
     operation offering loans, deposits, and related financial
     services to customers in its market area.  Loans primarily
     consist of single-family residential mortgage loans,
     commercial loans, and consumer loans.
            
     Consolidation and Basis of Presentation
     --------------------------------------- 
           
     The consolidated financial statements include the accounts
     of Mid-Iowa Financial Corp. and its wholly owned
     subsidiaries, Mid-Iowa Security Corporation and Mid-Iowa
     Savings Bank (the Bank), and the Bank's wholly owned
     subsidiary, Center of Iowa Investments, Limited
     (collectively the Company).
            
     The preparation of financial statements in conformity with
     generally accepted accounting principles requires
     management to make estimates and assumptions that affect
     the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date
     of the financial statements and the reported amounts of
     revenues and expenses during the reporting period.  Actual
     results could differ from those estimates.
            
     Concentrations of Credit Risk
     -----------------------------
            
     The Company originates residential and commercial real
     estate loans primarily in its central Iowa market area.
     Although the Company has a diversified loan portfolio, a
     substantial portion of its borrowers' ability to repay
     their loans is dependent upon economic conditions in the
     Company's market areas.
            
     Earnings Per Share
     ------------------ 
           
     Earnings per share - primary is computed using the
     1,670,834 weighted-average common shares outstanding, as
     restated, and giving effect to additional shares assumed to
     be issued in relation to the Company's stock options.  Such
     additional shares are assumed to be issued after
     acquisition of shares at the average price per share for
     the period under the treasury stock method with the assumed
     proceeds from exercise of outstanding stock options and
     were 53,336 for the year ended September 30, 1997.

                           21<PAGE>
<PAGE>
             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

            
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
            
     Earnings Per Share, Continued
     -----------------------------
        
     Earnings per share - fully diluted is computed in a similar
     manner but using the ending price per share for the period. 
     Such additional shares were 66,207 for the year ended
     September 30, 1997.
            
     Prior years earnings per share computations have been
     restated to reflect the 1996 and 1995 stock splits effected
     as dividends (see note 11).
            
     The earnings per share computations for the year ended
     September 30, 1996, were determined by dividing net
     earnings by the restated weighted-average number of common
     shares outstanding during the year, which was 1,699,252.
            
     The earnings per share computations for the year ended
     September 30, 1995 were determined by dividing net earnings
     by the 1,694,654 restated weighted-average number of common
     shares outstanding during the year. 
            
     Cash and Cash Equivalents
     ------------------------- 
       
     For purposes of reporting cash flows, the Company includes
     all short-term investments with original maturities of
     three months or less at date of purchase in cash and cash
     equivalents.  Amounts of interest bearing deposits included
     as cash equivalents were $3,104,940 and $810,165 at
     September 30, 1997 and 1996, respectively.
            
     Securities Available for Sale
     ----------------------------- 
       
     Securities to be held for indefinite periods of time,
     including securities the Company intends to utilize as part
     of its asset/liability management strategy and may sell in
     response to changes in interest rates; changes in
     prepayment risk; liquidity needs; and when needed to
     increase regulatory capital or other similar factors, are
     classified as available for sale.
            
     Securities available for sale are recorded at fair value. 
     The aggregate unrealized gains or losses, net of the income
     tax effect, are recorded as a component of stockholders'
     equity.
            
     Discounts and premiums on securities available for sale are
     accreted/amortized using the interest method.  The timing
     of the accretion/amortization for mortgage-backed
     securities is adjusted for actual prepayment experience.

     Gain or loss is recognized using the specific 
     identification method, and is reflected in the statements
     of operations.

                            22<PAGE>
<PAGE>
             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
            
     Securities Held to Maturity
     ---------------------------
        
     Securities which the Company intends to hold until maturity
     are stated at cost, adjusted for accretion of discount and
     amortization of premiums computed using the interest 
     method.  The timing of the amortization and accretion for
     mortgage-backed securities are adjusted for actual
     prepayment experience.  These investments are not carried
     at the lower of cost or market, as the Company has the
     ability, and it is management's intent, to hold them to
     maturity.
            
     Loans Held for Sale
     -------------------
        
     Mortgage loans originated and intended for sale in the
     secondary market are carried at the lower of cost or
     estimated fair value in the aggregate.  Net unrealized 
     losses are recognized through a valuation allowance by
     charges to operations.
            
     Loans Receivable
     ----------------
        
     Loans are stated at the principal amounts outstanding, net
     of unearned income, deferred loan fees, and discounts. 
     Unearned income, net deferred loan fees, and discounts on
     loans which are probable of collection are amortized over
     the terms of the loans using a method that approximates
     the interest method.
            
     Interest on loans is accrued and credited to operations,
     based primarily on the principal amount outstanding.
            
     The Company did not adopt Statement of  Financial
     Accounting Standards (SFAS) No. 122, "Accounting for
     Mortgage Servicing Rights," because the adoption would not
     have a material effect on the financial position or the
     statement of operations.
            
     Allowances for Losses on Loans and Real Estate
     ----------------------------------------------
            
     The allowances for losses on loans and real estate are
     maintained at amounts considered adequate to provide for
     such losses.  The allowance for losses on loans is based on
     management's periodic evaluation of the loan portfolio and
     reflects an amount that, in management's opinion, is
     adequate to absorb losses in the existing portfolio.  In
     evaluating the portfolio, management takes into
     consideration numerous factors, including current economic
     conditions, prior loan loss experience, the composition of
     the loan portfolio, and management's  estimate of
     anticipated credit losses.
            
     Real estate, acquired through foreclosure, is carried at
     the lower of cost or fair value.  When a property is
     acquired through foreclosure or a loan is considered
     impaired, any excess of the loan balance over fair value of
     the property is charged to the allowance for losses on
     loans. Costs relating to the development and improvement of
     property are capitalized, whereas those relating to holding
     the property are charged to expense.  An allowance for
     losses on real estate is provided when it is determined
     that the investment in real estate is greater than its
     estimated fair value.  There were no provisions and no
     charge-offs for real estate in the years ended September
     30, 1997, 1996, and 1995.
                             23<PAGE>
<PAGE>
             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

            
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
            
     Allowances for Losses on Loans and Real Estate, Continued
     ---------------------------------------------------------

     The accrual of interest income on any loan is discontinued
     (generally when a loan becomes 90 days delinquent) when, in
     the opinion of management, there is reasonable doubt as to
     the timely collection of interest or principal.  When
     interest accruals are discontinued, accrued interest
     receivable is charged to income.  Subsequent interest 
     income is not recognized on such loans until collected.
            
     Loan Origination Fees and Related Costs
     ---------------------------------------
        
     Mortgage loan origination fees and certain direct loan
     origination costs, if material, are deferred, and the net
     fee or cost is recognized in operations using the interest
     method.  Direct loan origination costs for other loans are
     expensed, as such costs are not material in amount.
            
     Financial Instruments with Off Balance Sheet Risk
     ------------------------------------------------- 
       
     In the normal course of business to meet the financing
     needs of its customers, the Company is a party to financial
     instruments with off balance sheet risk, which principally
     include commitments to extend credit.  The Company's
     exposure to credit loss in the event of nonperformance by
     the other party to the commitments to extend credit is
     represented by the contractual amount of those instruments. 
     The Company uses the same credit policies in making 
     commitments as it does for on balance sheet instruments.
            
     Commitments to extend credit are agreements to lend to a
     customer as long as there is no violation of any condition
     established in the contract.  Commitments generally have
     fixed expiration dates or other termination clauses and may
     require payment of a fee.   Since many of the commitments
     are expected to expire without being drawn upon, the total
     commitment amounts do not necessarily represent future cash
     requirements (see note 4).  The Company evaluates each
     customer's creditworthiness on a case-by-case basis.  The
     amount of collateral obtained, if deemed necessary by the
     Company upon extension of credit, is based on management's
     credit evaluation of the counterparty.
            
     Carrying Costs of Real Estate Held for Development
     --------------------------------------------------
            
     Interest costs and real estate taxes applicable to real
     estate held for development are capitalized during the
     period that such real estate is in the process of
     development.  Prior to the time that development activities
     commence and after such time as the real estate is ready
     for sale, interest and real estate taxes are charged to
     operations as incurred.  There was no capitalized interest
     for the years ended September 30, 1997, 1996, and 1995.

                          24<PAGE>
<PAGE>
              MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
            
     Office Properties and Equipment
     -------------------------------
         
     Office properties and equipment are recorded at cost,
     and depreciation is provided principally using the
     straight-line method over the estimated useful lives of
     the related assets, which range from 5 to 40 years.
          
     Maintenance and repairs are charged against income.
     Expenditures for improvements are capitalized and
     subsequently depreciated.  The cost and accumulated
     depreciation of properties retired or otherwise disposed
     of are eliminated from the asset and accumulated
     depreciation accounts.  Related profit or loss from such
     transactions is credited or charged to income.
          
     During the year ended September 30, 1997, approximately
     $31,000 in interest expense related to the construction
     of a branch facility was capitalized.
            
     Taxes on Income
     ---------------

     The Company files a consolidated federal income tax
     return.  Federal income taxes are allocated based on
     taxable income or loss included in the consolidated
     return.  For state tax purposes, the Bank files a
     franchise tax return and the other entities file a
     corporate income tax return.
            
     The Company utilizes the asset and liability method for
     taxes on income, and deferred tax assets and liabilities
     are recognized for the future tax consequences
     attributable to differences between the financial
     statement carrying amounts of existing assets and
     liabilities and their respective tax bases.  Deferred
     tax assets and liabilities are measured using enacted
     tax rates expected to apply to taxable income in the
     years in which those temporary differences are expected
     to be recovered or settled.  The effect of a change in
     tax rates on deferred tax assets and liabilities is
     recognized in income in the period that includes the
     enactment date.
            
     Stock Option Plan
     -----------------
    
     On October 1, 1996, the Company adopted SFAS 123,
     "Accounting for Stock-Based Compensation," which permits
     entities to record compensation expense at the date of
     the grant if the current market price of the underlying
     stock exceeds the exercise price, or provide pro forma
     net income and pro forma earnings per share disclosures
     for employee stock option grants made in 1996 and 1997
     and future years as if the fair-value-based method,
     which recognizes as expense over the vesting period the
     fair value of stock-based awards at the date of grant,
     had been applied.  The Company has elected to provide
     pro forma net income and pro forma earnings per share
     disclosures.
            
                           25<PAGE>
<PAGE>
            MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
            
     Effect of New Accounting Standards
     ----------------------------------
    
     SFAS 128, "Earnings Per Share," will be effective for
     the Company for the periods ending after December 15,
     1997. SFAS 128 simplifies the standards of computing
     earnings per share and changes the presentation of
     earnings per share in the financial statements.  The
     Company expects to adopt SFAS 128 when required, and
     management believes the adoption will not have a
     material effect on disclosures of earnings per share.
            
     Fair Value of Financial Instruments
     ----------------------------------- 
   
     The Company's fair value estimates, methods, and
     assumptions for its financial instruments are set forth
     below:
            
     Cash and Cash Equivalents, Accrued Interest
     Receivable, Advance Payments by Borrowers for Taxes and
     Insurance, and Accrued Interest Payable
            
     The recorded amount approximates fair value due to
     the short-term nature of the instruments.
            
     Securities Available for Sale and Securities Held
     to Maturity
            
     The fair value of securities is estimated based on
     bid prices published in financial newspapers, bid
     quotations received from securities dealers, or
     quoted market prices of similar instruments, adjusted
     for differences between the quoted instruments and the
     instruments being valued.
            
     Loans
     -----
            
     Fair values are estimated for portfolios of loans
     with similar financial characteristics.  Loans are
     segregated by type, such as commercial, real estate, and
     installment.
            
     The fair value of a loan is calculated by discounting
     scheduled cash flows through the estimated maturity
     using estimated market discount rates that reflect the
     credit and interest rate risk inherent in the loan.  The
     estimate of maturity is based on the subsidiary banks'
     historical experience with repayments for each loan
     classification, modified as required by an estimate
     of the effect of current economic and lending
     conditions.  The effect of nonperforming loans is
     considered in assessing the credit risk inherent in
     the fair value estimate.
            
     Federal Home Loan Bank (FHLB) Stock
     -----------------------------------
            
     The value of FHLB stock is equivalent to its carrying
     value, as the stock is redeemable at par value.
      
                             26<PAGE>
<PAGE>

           MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
            
     Fair Value of Financial Instruments, Continued
     ----------------------------------------------
    
     Deposits
            
     The fair value of deposits with no stated maturity, such as
     noninterest-bearing demand deposits, savings, and NOW
     accounts, is equal to the amount payable on demand.  The
     fair value of certificates of deposit is based on the
     discounted value of contractual cash flows.  The discount
     rate is estimated using the rates currently offered for
     deposits of similar remaining maturities.  The fair value
     estimates do not include the benefit that results from the
     low-cost funding provided by the deposit liabilities
     compared to the cost of borrowing funds in the market.
            
     Off Balance Sheet Instruments
            
     The fair value of commitments to extend credit and
     commitments to purchase or sell loans is estimated using
     the difference between current levels of interest rates and
     committed rates. The fair value of letters of credit is
     based on fees currently charged for similar agreements. 
     Management estimates the fair value of commitments to
     purchase or sell loans approximates the carrying value, as
     applicable.
            
     Limitations
            
     Fair value estimates are made at a specific point in time,
     based on relevant market information and information about
     the financial instrument.  Because no market exists for a
     significant portion of the subsidiary bank's financial
     instruments, fair value estimates are based on judgments
     regarding future expected loss experience, current economic
     conditions, risk characteristics of various financial
     instruments, and other factors. These estimates are
     subjective in nature and involve uncertainties and matters
     of significant judgment and, therefore, cannot be 
     determined with precision.  Changes in assumptions could
     significantly affect the estimates.
            
                            27<PAGE>
<PAGE>

            MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(2)  SECURITIES AVAILABLE FOR SALE
      
     Securities available for sale at September 30, 1997 and
     1996, were as follows:

<TABLE>
<CAPTION>
                                                      Gross      Gross    Estimated
                                       Amortized   unrealized  unrealized    fair
         Description                      cost       gains       losses     value
         -----------                   ---------   ----------  ---------- ---------
<S>                                    <C>         <C>         <C>        <C>
1997:
  Mortgage-backed securities:
     Federal National Mortgage
       Association (FNMA)           $  930,039     $16,286    $    --    $  946,325
     Government National Mortgage
       Association (GNMA)            1,247,358      28,971         --     1,276,329
     Federal Home Loan Mortgage
       Corporation (FHLMC)             150,508       4,878         --       155,386
     Collateralized mortgage
       obligations                   2,007,298          --     17,538     1,989,760
  Other investment securities          600,112      14,750         --       614,862
                                    ----------     -------    -------    ----------
                                    $4,935,315      64,885     17,538     4,982,662
                                    ==========     =======    =======    ==========
1996:
  Mortgage-backed securities:
     FNMA                           $1,113,568       8,838         --     1,122,406
     GNMA                            1,051,711      11,670         --     1,063,381
     FHLMC                             189,729       4,920         --       194,649
     Collateralized mortgage
       obligations                   2,007,436          --     14,936     1,992,500
  Other investment securities          600,112       1,360         --       601,472
                                    ----------     -------    -------    ----------
                                    $4,962,556      26,788     14,936     4,974,408
                                    ==========     =======    =======    ==========
</TABLE>

     Expected maturities will differ from contractual maturities
     because borrowers may have the right to call or prepay
     obligations with or without call or prepayment penalties.

     At September 30, 1997 and 1996, the net valuation amount of
     $31,052 and $7,822, respectively, was reflected as a
     component of stockholders' equity, including the effect of
     taxes on income of $16,295 and $4,030, respectively.

                              28<PAGE>
<PAGE>

           MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(2)  SECURITIES AVAILABLE FOR SALE, CONTINUED
            
     Proceeds from the sales of marketable equity securities
     sold during 1997, 1996, and 1995, were $-0-, $-0-, and
     $136,164, respectively, resulting in gross realized gains
     of $-0-, $-0-, and $14,166, respectively.
            
     At September 30, 1997 and 1996, accrued interest receivable
     for securities available for sale totaled $17,508 and
     $16,312, respectively.
            
(3)  SECURITIES HELD TO MATURITY
            
     Securities held to maturity at September 30, 1997 and 1996,
     were as follows:
     

<TABLE>
<CAPTION>
                                                     Gross       Gross    Estimated
                                       Amortized   Unrealized  Unrealized   Fair
         Description                      Cost       Gains       Losses     Value
         -----------                   ---------   ----------  ---------- ---------
<S>                                    <C>         <C>         <C>        <C>
1997:
  U.S. agency securities              $18,359,588  105,899      62,302   18,403,185
  Mortgage-backed and related
   securities:
     FNMA                               4,414,248   69,766       6,047    4,477,967
     GNMA                              12,727,233  321,803       5,293   13,043,743
     FHLMC                              1,633,085    1,264         126    1,634,223
     Collateralized mortgage
       obligations                      7,405,811       --     111,191    7,294,620
  Taxable municipal bonds                 509,552   39,193          --      548,745
  Nontaxable municipal bonds            2,717,604  117,533       6,047    2,829,090
                                      -----------  -------     -------   ----------
                                      $47,767,121  655,458     191,006   48,231,573
                                      ===========  =======     =======   ==========
1996:
  U.S. agency securities              $17,391,640       --     162,950   17,228,690
  Mortgage-backed and related
    securities:
     FNMA                               5,137,356    3,863          --    5,141,219
     GNMA                               9,721,560  130,782          --    9,852,342
     FHLMC                                973,160       --         247      972,913
     Collateralized mortgage
       obligations                      8,141,626       --     112,394    8,029,232
  Taxable municipal bonds                 547,518   53,838          --      601,356
  Nontaxable municipal bonds            2,319,019   59,170          --    2,378,189
                                      -----------  -------     -------   ----------
                                      $44,231,879  247,653     275,591   44,203,941
                                      ===========  =======     =======   ==========
</TABLE>

                             29<PAGE>
<PAGE>
           MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(3)  SECURITIES HELD TO MATURITY, CONTINUED
            
     The amortized cost and estimated fair value of securities
     held to maturity at September 30, 1997, are shown below
     by contractual maturity.  Expected maturities will differ
     from contractual maturities because borrowers may have
     the right to call or prepay obligations with or without
     call or prepayment penalties.
<TABLE>
<CAPTION>     
                                                                   Estimated
                                                 Amortized           Fair
                                                    Cost             Value
                                                 ----------     -------------
      <S>                                        <C>            <C>
      Due in 1 year or less                      $    50,000         49,866
      Due after 1 year through 5 years            10,821,109     10,851,686
      Due after 5 years, but less than 10 years    9,733,886      9,882,587
      Due after 10 years                             981,749        996,881
      Mortgage-backed and related securities      26,180,377     26,450,553
                                                 -----------    -----------
                                                 $47,767,121     48,231,573
                                                 ===========    ===========
</TABLE>
    
     There were no sales of securities held to maturity during
     the years ended September 30, 1997, 1996, or 1995.  At
     September 30, 1997 and 1996, accrued interest receivable
     for securities held to maturity totaled $381,238 and
     $399,350, respectively.
            
(4)  LOANS RECEIVABLE
            
     Loans receivable are summarized as follows:
<TABLE>
<CAPTION>
                                                          September 30,
                                                  ----------------------------
                                                      1997           1996
                                                      ----           ----
<S>                                               <C>            <C>
Real estate loans:
  One- to four-family                             $46,107,239     45,986,195
  Commercial                                       10,150,075      7,862,669
  Construction                                      1,338,796        884,437
                                                  -----------     ----------
                                                   57,596,110     54,733,301
                                                  -----------     ----------
Other loans:
  Second mortgages                                  4,497,874      3,142,610
  Commercial business                               1,394,076      1,982,186
  Automobile                                        1,405,748      1,342,476
  Home equity                                       1,176,502        739,737
  Student                                             306,162        478,763
  Unsecured consumer                                  174,704        160,550
  Loans on deposits                                   180,639        142,137
  Other                                               352,423        297,240
                                                  -----------     ----------
                                                    9,488,228      8,285,699
                                                  -----------     ----------
                                                   67,084,338     63,019,000
Less:
  Loans in process                                    275,553        549,901
  Deferred loan fees                                   88,848         72,409
  Allowance for losses on loans                       301,952        273,819
                                                  -----------     ----------
       Total loans receivable                     $66,417,985     62,122,871
                                                  ===========     ==========
</TABLE>
                                30
<PAGE>
<PAGE>
            MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(4)  LOANS RECEIVABLE, CONTINUED
            
     At September 30, 1997 and 1996, net accrued interest on
     loans receivable totaled $473,270 and $389,669,
     respectively.
            
     At September 30, 1997, the Bank was committed to originate
     $1,626,000 of fixed rate loans at interest rates ranging
     from 7 to 9 percent.  In addition, the Bank's customers
     had unused lines of credit totaling approximately
     $2,614,000 at September 30, 1997.
            
     Loan customers of the Bank include certain executive
     officers and directors and their related interests and
     associates.  All loans to this group were made in the
     ordinary course of business at prevailing terms and
     conditions.  Such loans at September 30, 1997 and 1996,
     amounted to $258,243 and $62,631, respectively.  During
     the year ended September 30, 1997, there was one new loan
     made for $260,000. Repayments totaled $64,388 for the year.
            
     The amount of loans serviced by the Bank for the benefit of
     others was $2,401,830, $2,785,992, and $3,616,636 at
     September 30, 1997, 1996, and 1995, respectively.
             
(5)  ALLOWANCE FOR LOSSES ON LOANS
            
     A summary of the allowance for losses on loans follows:
<TABLE>
<CAPTION>
                                                             September 30,
                                                   ------------------------------- 
                                                    1997         1996        1995
                                                   ------      -------     ------- 
<S>                                                <C>         <C>         <C>
Balance at beginning of year                       $273,819    248,028     253,306
Provision for losses                                 81,000     36,000      33,000

Charge-offs                                         (54,387)   (29,599)    (44,707)
Recoveries                                            1,520     19,390       6,429
                                                   --------    -------     -------
Balance at end of year                             $301,952    273,819     248,028
                                                   ========    =======     =======
</TABLE>

     At September 30, 1997, 1996, and 1995, the Company had
     nonaccrual loans of approximately $17,092; $151,000; and
     $142,000 and restructured loans of $24,000; $54,000; and
     $56,000, respectively.  The allowance for loan losses
     related to these impaired loans was approximately $4,000;
     $7,500; and $7,900, respectively.  The average balances
     of such loans for the years ended September 30, 1997,
     1996, and 1995, were $95,500; $119,750; and $106,750,
     respectively.  For the years ended September 30, 1997,
     1996, and 1995, interest income which would have been
     recorded under the original terms of such loans was
     approximately $3,200; $10,300; and $5,200, respectively,
     with $1,900; $3,250; and $4,900, respectively, recorded.
            
     As of September 30, 1997, there were no material
     commitments to lend additional funds to customers whose
     loans were classified as nonaccrual or restructured.

                              31<PAGE>
<PAGE>
            MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6)  OFFICE PROPERTIES AND EQUIPMENT
            
     At September 30, 1997 and 1996, the cost and accumulated
     depreciation of office properties and equipment were as
     follows:
<TABLE>
<CAPTION>            
                                           1997          1996
                                           ----          ----
      <S>                               <C>          <C>
      Land                              $  442,399      242,398
      Buildings and improvements         2,708,891    1,298,072
      Furniture and fixtures               805,936      688,976
                                        ----------    ---------
                                         3,957,226    2,229,446
      Less accumulated depreciation      1,370,099    1,261,995
                                        ----------    ---------
                                        $2,587,127      967,451
                                        ==========    =========
</TABLE>

(7)  DEPOSITS
            
     A summary of deposits at September 30, 1997 and 1996, is
     as follows:
<TABLE>
<CAPTION>            
                                           1997          1996
                                           ----          ----
      <S>                               <C>          <C>
      Balance by account type:
          NOW accounts                  $ 5,992,220   4,950,632
          Passbook                        5,798,282   6,050,137
          Money market                   17,571,218  13,420,926
          Certificates of deposit        60,015,998  58,450,268
                                        -----------  ----------
                                        $89,377,718  82,871,963
                                        ===========  ==========
</TABLE>

     At September 30, 1997, the scheduled maturities of
     certificates of deposit were as follows:
       
      1998                            $48,393,623
      1999                              7,104,176
      2000                              2,414,987
      2001                              1,774,360
      2002 and thereafter                 328,852
                                      -----------
                                      $60,015,998
                                      ===========
            
     The aggregate amount of jumbo certificates of deposit with
     a minimum denomination of $100,000 was approximately
     $9,700,000 and $9,400,000 at September 30, 1997 and 1996,
     respectively.
<PAGE>
           
     Interest expense on deposits consisted of the following:
<TABLE>
<CAPTION>
                                                             September 30,
                                                   ------------------------------- 
                                                    1997         1996        1995
                                                   ------      -------     ------- 
<S>                                                <C>         <C>         <C>
NOW accounts                                       $   39,145     37,278     43,395
Savings accounts                                      580,565    429,754    296,059
Certificates of deposit                             3,176,534  3,253,557  3,316,091
                                                   ----------  ---------  ---------
                                                    3,796,244  3,720,589  3,655,545
Less penalties on early withdrawals                     8,554     10,265     16,125
                                                   ----------  ---------  ---------
  Net interest expense                             $3,787,690  3,710,324  3,639,420
                                                   ==========  =========  =========

</TABLE>


     At September 30, 1997 and 1996, accrued interest payable
     on deposits totaled $939,893 and $838,789, respectively.

                            32<PAGE>
<PAGE>
          MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7)  DEPOSITS, CONTINUED
            
     At September 30, 1997 and 1996, the Bank had mortgage-
     backed and other investment securities with a carrying
     value of approximately $24,704,278 and $17,630,000,
     respectively, pledged as collateral for deposits.
            
(8)  BORROWED FUNDS
            
     At September 30, 1997 and 1996, borrowed funds consisted of
     the following:
<TABLE>
<CAPTION>
                                       Weighted-                   Weighted-
                                        Average                     Average
                                     Interest Rate      1997     Interest Rate    1996
                                     -------------     ------    -------------   ------
<S>                                  <C>              <C>          <C>          <C>
FHLB (A):
   Maturity in fiscal year ending
   September 30:
      1997                                --  %      $        --    5.70%     $10,000,000
      1998                                5.72        16,000,000    5.70        4,000,000
      1999                                5.48         4,000,000    5.17        2,000,000
      2000                                5.83         5,000,000    5.76        3,000,000
   Amount drawn on line of credit (B)    Variable             --  Variable      1,500,000
                                                     -----------              -----------
                                                     $25,000,000              $20,500,000
                                                     ===========              ===========
</TABLE>

(A)  Advances from the FHLB are secured by stock in the FHLB.
     In addition, the Bank has agreed to maintain unencumbered
     additional security in the form of certain residential
     mortgage loans aggregating no less than 150 percent of
     outstanding advances.
            
(B)  Line of credit with the FHLB with a limit of $10,000,000,
     matures on June 19, 1998, at which time the Bank
     anticipates renewing the agreement.  The line has an
     interest rate which fluctuates daily.  During 1997, the
     interest rate ranged from 5.58 percent to 6.49 percent and
     at September 30, 1997, was 6.49 percent.  The line is
     collateralized as described in (A) above.
            
      At September 30, 1997 and 1996, accrued interest payable
      on advances from the FHLB and other borrowings totaled
      $5,997 and $5,668, respectively.

                             33 <PAGE>
<PAGE>

           MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(9)  TAXES ON INCOME
            
     Taxes on income are comprised as follows:
<TABLE>
<CAPTION>
                                             Years Ended September 30,
                -------------------------------------------------------------------------------------
                           1997                        1996                           1995 
                ------------------------    ---------------------------    --------------------------
                Federal    State   Total    Federal    State      Total    Federal    State   Total
                -------    -----   -----    -------    -----     ------    -------    -----   -----
<S>             <C>       <C>     <C>       <C>        <C>       <C>       <C>       <C>      <C>
Current         $537,800  67,000  604,800   495,000    70,200    565,200   370,000   55,000   425,000
Deferred         162,000  24,000  186,000  (134,000)  (20,000)  (154,000)   30,000    7,000    37,000
                --------  ------  -------  --------   -------   --------   -------   ------   -------
                $699,800  91,000  790,800   361,000    50,200    411,200   400,000   62,000   462,000
                ========  ======  =======   =======   =======   ========   =======   ======   =======
</TABLE>   


     Taxes on income differ from the "expected" amounts computed
     by applying the federal income tax rate of 34 percent to
     income before taxes on income for the following reasons:

<TABLE>
<CAPTION>
                                                             September 30,
                                                   ------------------------------- 
                                                    1997         1996        1995
                                                   ------      -------     ------- 
<S>                                                <C>         <C>         <C>
Computed "expected" taxes on income               $795,827     420,170     472,107
State taxes, net of federal benefit                 60,060      33,146      40,920
Tax-exempt interest                                (38,000)    (34,000)    (37,000)
Reduction of valuation allowance                   (10,000)    (17,000)    (14,000)
Other                                              (17,087)      8,884         (27)
                                                  --------     -------     -------  
                                                  $790,800     411,200     462,000
                                                  ========     =======     ======= 
</TABLE>

                              34<PAGE>
<PAGE>

           MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(9)  TAXES ON INCOME, CONTINUED
             
     The tax effects of temporary differences that give rise to
     significant portions of the deferred tax assets and
     deferred tax liabilities are presented below:
<TABLE>
<CAPTION>
                                                          September 30,
                                                     -----------------------
                                                       1997           1996           
                                                     --------       --------
<S>                                                  <C>            <C>
Deferred tax assets:
  Loan and real estate loss allowance                $136,000        118,000
  Accrued deposit insurance assessment                     --        198,000
  Net operating loss carryover                             --         10,000
                                                     --------        -------
     Total gross deferred tax assets                  136,000        326,000

  Less valuation allowance                                 --         10,000
                                                     --------        -------
     Deferred tax assets net of allowance             136,000        316,000
                                                     --------        -------
Deferred tax liabilities:
  Unrealized gain on securities held for sale          16,295          4,030
  Tax bad debt reserve                                179,000        179,000
  Other                                                 7,000          1,096
                                                     --------        -------
     Total gross deferred tax liabilities             202,295        184,126
                                                     --------        -------
     Net deferred tax (liability) asset              $(66,295)       131,874
                                                     ========        =======
</TABLE>

     Based upon the Company's level of historical taxable income
     and anticipated future taxable income over the periods
     which the deferred tax assets are deductible, management
     believes it is more likely than not the Company will
     realize the benefits of these deductible differences.
            
(10) EMPLOYEE BENEFIT PLANS

     Defined Contribution Retirement Plan
     ------------------------------------
 
     The Bank and its subsidiaries maintain two defined
     contribution retirement plans for their employees.  Under
     one plan, the Bank contributes 9 percent of the
     participants' earnings.  Under the second plan, the
     participants contribute from 0 to 12 percent and the Bank
     matches 50 percent of the contribution up to 3 percent. 
     Plan expense for the years ended September 30, 1997,
     1996, and 1995, was $112,822, $79,247, and $105,113,
     respectively.
            
                           35<PAGE>
<PAGE>

             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(10) EMPLOYEE BENEFIT PLANS, CONTINUED
            
     Management Recognition and Retention Plan
     -----------------------------------------
        
     In connection with its stock conversion, the Bank
     established a management recognition and retention plan
     as a method of providing directors and key officers of
     the Bank with a proprietary interest in the Bank in a
     manner designed to encourage such persons to remain with
     the Bank.  The Bank contributed funds to the plan to
     acquire in the aggregate up to 3 percent of the common
     stock issued in the offering.  During 1996, all rights in
     the plan became fully vested.
            
     Stock Incentive Plan
     ---------------------
      
     The Company has a stock incentive plan under which up to
     278,107 shares of common stock are reserved for issuance
     pursuant to options or other awards which may be granted
     to officers, key employees, and certain nonaffiliated
     directors of the Company.  The exercise price of each
     option equals the market price of the Company's stock on
     the date of grant.  The option's maximum term is ten
     years, with vesting occurring at the time the options are
     granted.
            
     The Company applies Accounting Principles Board Opinion No.
     25 and related interpretations in accounting for its
     plan.  Accordingly, no compensation cost has been
     recognized for its stock options in the financial
     statements.  Had compensation cost for the Company's
     stock incentive plan been determined consistent with SFAS
     123, the Company's net income and earnings per share for
     options granted in 1997 would have been reduced to the
     pro forma amounts indicated below:
            
      
        Net income:
             As reported        $   1,549,835
             Pro forma              1,177,397

        Earnings per share:
             As reported        $        .90
             Pro forma                   .68

     The fair value of each option grant has been estimated
     using the Black-Scholes option-pricing model with the
     following weighted-average assumptions used for grants in
     1997:  dividend yield of 1.00 percent; expected volatility
     of 26.00 percent; risk free interest rate of 6.10 percent;
     and expected life of 6 years.
            
                           36<PAGE>
<PAGE>

             MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(10) EMPLOYEE BENEFIT PLANS, CONTINUED
            
     Stock Incentive Plan, Continued
     -------------------------------

     A summary of the status of the Company's stock incentive
     plan as of September 30, 1997, 1996, and 1995, and the
     activity during the years ended on those dates is
     presented below:
            
<TABLE>
<CAPTION>
                                                  1997                   1996               1995
                                          --------------------   ------------------  ------------------
                                                    Weighted-             Weighted-          Weighted-
                                                     average               average            average
                                                    exercise              exercise           exercise
                                          Shares     price       Shares    price     Shares    price
                                          --------------------   ------------------  ------------------
<S>                                       <C>         <C>         <C>      <C>        <C>     <C>
Balance at beginning of year              78,964      $ 2.08      137,088  $ 2.08    137,088  $ 2.08
Granted                                  209,000        7.75            -       -          -       -
Exercised                                (27,208)      (2.52)     (53,228)  (2.08)         -       -
Repurchased and canceled                       -           -       (4,896)   2.08          -       -
                                         -------                  -------            -------  
    Outstanding at end of year           260,756        6.58       78,964    2.08    137,088    2.08
                                         =======      ======      =======   =====    =======   =====
Weighted-average fair value
  of options granted
  during the year                                     $ 2.70                $   -              $   -
                                                      ======                =====              =====
</TABLE>

(11) STOCKHOLDERS' EQUITY
             
     In order to grant a priority to eligible account holders in
     the event of future liquidation, the Bank, at the time of
     its stock conversion, established a liquidation account in
     an amount equal to the regulatory capital as of December
     31, 1991.  In the event of future liquidation of the Bank,
     eligible account holders who continue to maintain their
     deposit accounts shall be entitled to receive a
     distribution from the liquidation account. The total amount
     of the liquidation account will be decreased as the
     balances of eligible account holders are reduced subsequent
     to the conversion, based on an annual determination of such
     balances.
            
     Treasury Stock
     --------------
        
     During the year ended September 30, 1997 and 1996, the
     Company repurchased 7,500 and 72,700 shares, respectively,
     of common stock.  The Company used 1,200 shares of the
     repurchased stock in the distribution of 841,226 shares of
     common stock in a 100 percent stock split during the year 
     ended September 30, 1996. 
            
                           37<PAGE>
<PAGE>

            MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(11) STOCKHOLDERS' EQUITY, CONTINUED
             
     Regulatory Capital Requirements
     -------------------------------
        
     The Financial Institution Reform, Recovery, and Enforcement
     Act of 1989 (FIRREA) and the capital regulations of the
     Office of Thrift Supervision (OTS) promulgated thereunder
     require institutions to have a minimum regulatory tangible
     capital equal to 1.5 percent of total assets; a minimum 3
     percent core capital ratio; and, after December 31, 1992, a
     minimum 8 percent risk-based capital ratio. These capital 
     standards set forth in the capital regulations must
     generally be no less stringent than the capital standards
     applicable to national banks.  FIRREA also specifies the
     required ratio of housing-related assets in order to
     qualify as a savings institution.  The Bank met the
     regulatory capital requirements at September 30, 1997 and
     1996.
             
     The Federal Deposit Insurance Corporation Improvement Act
     of 1991 (FDICIA) established additional capital
     requirements which require regulatory action against
     depository institutions in one of the undercapitalized
     categories defined in implementing regulations.
     Institutions such as the Bank, which are defined as well
     capitalized, must generally have a leverage capital (core)
     ratio of at least 5 percent, a tier 1 risk-based capital
     ratio of at least 6 percent, and a total risk-based capital
     ratio of at least 10 percent.  FDICIA also provides for
     increased supervision by federal regulatory agencies,
     increased reporting requirements for insured depository
     institutions, and other changes in the legal and
     regulatory environment for such institutions.  The Bank
     met the regulatory capital requirements at September 30,
     1997 and 1996.
            
     The Bank's capital amounts and ratios as of September 30,
     1997, were as follows:
<TABLE>
<CAPTION>
                                                                 For capital      To be well capitalized
                                                                  adequacy      under prompt corrective
                                              Actual              purposes        action provisions
                                      --------------------   -----------------   ------------------------
                                      Amount      Ratio      Amount      Ratio    Amount        Ratio
      <S>                             <C>         <C>        <C>         <C>      <C>           <C>
      Tangible capital                $ 9,819,333  7.78%     $1,894,031  1.5%     $6,313,436    5.0%
      Core capital                      9,819,333  7.78       3,788,062  3.0       6,313,436    5.0
      Risk-based capital               10,121,285 19.38       4,178,712  8.0       5,223,390   10.0
</TABLE>

             
     At September 30, 1997 and 1996, the Bank had federal income
     tax bad debt reserves of approximately $1,785,000, which
     constitute allocations to bad debt reserves for federal
     income tax purposes for which no provision for taxes on
     income had been made.  If such allocations are charged for
     other than bad debt losses, taxable income is created to
     the extent of the charges.  The Bank's retained earnings at
     September 30, 1997 and 1996, were partially restricted
     because of the effect of these tax bad debt reserves.

                             38<PAGE>
<PAGE>
           MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(11) STOCKHOLDERS' EQUITY, CONTINUED
            
     Dividend Restrictions
     ---------------------
       
     Federal regulations impose certain limitations on the
     payment of dividends and other capital distributions by
     the Bank.  Under the regulations, a savings institution,
     such as the Bank, that will meet the fully phased-in
     capital requirements (as defined by the OTS regulations)
     subsequent to a capital distribution is generally
     permitted to make such capital distribution without OTS
     approval so long as they have not been notified of the
     need for more than normal supervision by the OTS.  The
     Bank has not been so notified and, therefore, may make
     capital distributions during a calendar year equal to net
     income plus 50 percent of the amount by which the Bank's
     capital exceeds the fully phased-in capital requirement
     as measured at the beginning of the calendar year.  A
     savings institution with total capital in excess of
     current minimum capital requirements but not in excess of
     the fully phased-in requirements is permitted by the new
     regulations to make, without OTS approval, capital
     distributions of between 25 and 75 percent of its net
     income for the previous four quarters, less dividends
     already paid for such period.  A savings institution that
     fails to meet current minimum capital requirements is
     prohibited from making any capital distributions without
     prior approval from the OTS.
            
(12) FAIR VALUE OF FINANCIAL INSTRUMENTS
            
     The estimated fair values of the Bank's financial
     instruments (as described in note 1) at September 30,
     1997, were as follows:
<TABLE>
<CAPTION>
                                        1997                    1996
                                --------------------     ------------------
                                Recorded      Fair        Recorded     Fair
                                 amount       value        amount     value
                                --------      -----      ---------    ----- 
<S>                             <C>          <C>         <C>          <C>
Financial assets:
  Cash and cash equivalents     $ 3,563,299   3,563,299   1,147,204    1,147,204
  Securities available for sale   4,982,662   4,982,662   4,974,408    4,974,408
  Securities held to maturity    47,767,121  48,231,573  44,231,879   44,203,941
  Loans, net                     66,417,985  67,619,505  62,122,871   64,939,013
  FHLB stock                      1,650,000   1,650,000   1,325,000    1,325,000
  Accrued interest receivable       867,663     867,663     829,594      829,594

Financial liabilities:
  Deposits                       89,377,718  89,234,588  82,871,963   82,683,363
  FHLB advances                  25,000,000  24,847,404  20,500,000   20,346,769
  Advance payments by borrowers                             199,921      199,921
    for taxes and insurance         179,982     179,982     844,457      844,457
  Accrued interest payable          945,890     945,890          --           --
                                 ----------  ----------  ----------   ----------
<CAPTION>
                                  Recorded      Fair      Recorded       Fair
                                   Amount       Value      Amount        Value
                                 ----------    -------   ----------     ------- 
<S>                              <C>         <C>         <C>          <C>
Off balance sheet instruments:
  Commitments to extend credit  $ 1,626,000         --      168,000          --
  Lines of credit to customers    2,614,000         --    2,473,000          --
  Line of credit unused by the
    Company                      10,000,000         --    8,500,000          --
                                -----------    -------    ---------      ------
</TABLE>

                            39<PAGE>
<PAGE>

          MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
            
(13) SPECIAL DEPOSIT INSURANCE ASSESSMENT
            
     On September 30, 1996, the Deposit Insurance Funds Act of
     1996 (the Act) was signed into law.  The Act imposed a
     one-time special assessment of 65.7 basis points of the
     deposits held as of March 31, 1995, to capitalize the
     Savings Association Insurance Fund (SAIF).  All of the
     deposits of the Bank are SAIF-insured.  The special
     assessment payable by the Bank of $530,421 is included in
     accounts payable and accrued expenses at September 30,
     1996, and is payable on November 27, 1996.  Beginning in
     1997, the premium for SAIF-insured deposits will be
     reduced from 23 basis points to 6.4 basis points, thus
     reducing deposit insurance expense for the Bank.
            
(14) CONTINGENCIES

     The Company is involved with various claims and legal
     actions arising in the ordinary course of business.  In
     the opinion of management, the ultimate disposition of
     these matters will not have a material adverse effect on
     the Company's consolidated financial statements.
            
(15) MID-IOWA FINANCIAL CORP. (PARENT COMPANY ONLY) FINANCIAL
     INFORMATION
            
     The Parent Company's principal asset is its 100 percent
     ownership of the Bank and its subsidiary.  Following are
     the condensed financial statements for the Parent
     Company:

<TABLE>
<CAPTION>
                                                          September 30,
                                                     -----------------------
          Condensed Balance Sheets                    1997           1996            
          ------------------------                  --------       --------
<S>                                                <C>             <C>
      Cash                                         $   781,075         98,138
      Securities available for sale                  1,065,257        804,919
      Securities held to maturity                      200,000        200,000
      Loan receivable                                        -        155,000
      Accrued interest receivable                       11,261         11,605
      Investment in nonbank subsidiary                 206,184        348,969
      Investment in Bank                             9,846,219      9,004,919
      Prepaid expenses and other assets                  5,218          4,265
                                                   -----------     ----------
          Total assets                             $12,115,214     10,627,815
                                                   ===========     ==========
      Accrued expenses and other liabilities       $    54,086         26,693
                                                   -----------     ----------
      Common stock                                      17,299         17,299
      Additional paid-in capital                     3,040,211      3,142,623
      Retained earnings                              9,298,166      7,882,078
      Treasury stock                                  (325,600)      (448,700)
      Unrealized gain on securities 
        available for sale, net                         31,052          7,822
                                                   -----------     ----------
           Total stockholders' equity               12,061,128     10,601,122
                                                   -----------     ----------
          Total liabilities and stockholders'
            equity                                 $12,115,214     10,627,815
                                                   ===========     ==========
</TABLE>
                            40<PAGE>
<PAGE>

           MID-IOWA FINANCIAL CORP. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(15) MID-IOWA FINANCIAL CORP. (PARENT COMPANY ONLY) FINANCIAL
     INFORMATION, CONTINUED 

<TABLE>
<CAPTION>
                                                             September 30,
                                                   ------------------------------- 
       Condensed Statements of Operations           1997         1996        1995
       ----------------------------------          ------      -------     ------- 
<S>                                                <C>         <C>         <C>
Interest income                                   $   109,130    103,040    89,291
Gain on securities available for sale                      --         --     9,688
Other income                                          221,000         --     1,478
Equity in net income of subsidiaries                1,383,352    816,027   905,701
Other expenses                                        (80,772)   (97,993)  (73,508)
                                                  -----------   --------  --------
    Income before income tax expense (benefit)      1,632,710    821,074   932,650

Income tax expense (benefit)                           82,875     (3,500)    6,100
                                                  -----------   --------  --------
    Net income                                    $ 1,549,835    824,574   926,550
                                                  ===========   ========  ========
<CAPTION>
                                                             September 30,
                                                   ------------------------------- 
       Condensed Statements of Cash Flows           1997         1996        1995
       ----------------------------------          ------      -------     ------- 
<S>                                                <C>         <C>         <C>
Operating activities:
  Net income                                      $ 1,549,835   824,574    926,550   
  Equity in net income of subsidiaries             (1,383,352) (816,027)  (905,701)
  Amortization                                            (88)     (248)    69,267
  Gain on sale of investment securities                    --        --     (9,688)
  Change in assets and liabilities:
    Decrease (increase) in accrued interest
      receivable                                          344     3,178     (6,731)
    Increase (decrease) in current taxes on
      income                                           26,766   (27,412)     1,269
    Other, net                                         (4,670)    6,642      4,626
                                                  -----------  --------   --------
    Net cash provided by (used in) operating
      activities                                      188,835    (9,293)    79,592
                                                  -----------  --------   --------
Investing activities:
  Securities available for sale:
    Proceeds from sale of securities available
      for sale                                             --        --     88,938
    Purchase of securities available for sale        (388,439) (100,000)  (262,250)
    Proceeds from maturities available for sale            --        --    200,000
    Proceeds from sale of subsidiary stock            200,000        --         --
    Principal repayments on mortgage-backed
      securities available for sale                   140,600   126,456         --
  Net change in loans                                 155,000        --   (155,000)
                                                  -----------  --------   --------
    Net cash provided by investing activities         107,161    26,456   (128,312)
                                                  -----------  --------   --------
Financing activities:
  Payments to acquire treasury stock                  (47,812) (462,950)  (347,468)
  Stock options exercised                              68,500   110,743         --
  Net dividends received                              366,253   164,951    368,217
                                                  -----------  --------   --------
    Net cash provided by (used in) financing
      activities                                      386,941  (187,256)    20,749
                                                  -----------  --------   --------
    Net increase (decrease) in cash                   682,937  (170,093)   (27,971)
Cash at beginning of year                              98,138   268,231    296,202
                                                  -----------  --------   --------
Cash at end of year                               $   781,075    98,138    268,231
                                                  ===========  ========   ========
</TABLE>
                             41<PAGE>
<PAGE>
                     MID-IOWA FINANCIAL CORP.
                     STOCKHOLDER INFORMATION

ANNUAL MEETING

The annual meeting of stockholders will be held at 5:00 p.m.,
Monday, January 19, 1998, at Mid-Iowa Savings Bank located at
123 West 2nd Street North, Newton, Iowa.

STOCK LISTING

The Company's stock is traded over the counter, on The Nasdaq
SmallCap Market under the symbol "MIFC".

PRICE RANGE OF AND DIVIDENDS ON COMMON STOCK

The table below shows the range of high and low bid prices for,
and cash dividends declared on, the Company's common stock. 
These prices do not represent actual transactions and do not
include retail markups, markdowns or commissions.

<TABLE>
<CAPTION>
                                    1997                         1996
                           -------------------------     ------------------------
                                           Dividends                    Dividends
                           High     Low     Declared     High    Low     Declared
                          ------   ------  ---------    ------  ------  ---------
<S>                       <C>      <C>       <C>        <C>     <C>       <C>
First Quarter. . . . . .  $ 6.62   $ 6.25    $  .02     $ 7.75  $ 5.50    $  .02 
Second Quarter . . . . .    8.50     6.75       .02       7.75    6.75       .02 
Third Quarter. . . . . .    9.00     7.38       .02       7.25    6.00       .02 
Fourth Quarter . . . . .   10.13     8.50       .02       6.50    6.00       .02 
</TABLE>

The Company paid 100% stock dividends on January 25, 1996 to
stockholders of record on January 8, 1996.  Dividend payment
decisions are made with consideration of a variety of factors
including earnings, financial condition, market considerations
and regulatory restrictions.  Bank restrictions on dividend
payments are described in Note 13 of the Notes to Consolidated
Financial Statements included in this report.

As of November 24, 1997, the Company had approximately 600
stockholders of record and 1,678,088 net outstanding shares of
common stock.

STOCKHOLDERS AND GENERAL          TRANSFER AGENT
      INQUIRIES

Kevin D. Ulmer, President      First Bankers Trust Company, N.A.
Mid-Iowa Financial Corp.       Broadway at 12th Street
123 West Second Street North   P.O. Box 3566
Newton, Iowa  50208            Quincy, Illinois 62305-3566
(515) 792-6236                 (217) 228-8000

ANNUAL AND OTHER REPORTS

The Company is required to file an annual report on Form 10-KSB
for its fiscal year ended September 30, 1997, with the
Securities and Exchange Commission.  Copies of the Form 10-KSB
annual report and the Company's quarterly reports may be
obtained by contacting:

     Kevin D. Ulmer, President
     Mid-Iowa Financial Corp.
     123 West Second Street North
     Newton, Iowa  50208
     (515) 792-6236

                              42<PAGE>
<PAGE>
                     MID-IOWA FINANCIAL CORP.
                      CORPORATE INFORMATION


COMPANY AND BANK ADDRESS

  123 West Second Street North       Telephone  (515) 792-6236
  Newton, Iowa  50208                Fax        (515) 792-6460

DIRECTORS OF THE BOARD

David E. Sandeen
     Chairman of the Board of Mid-Iowa Financial Corp., 
     President, Midwest Manufacturing Co., Kellogg, Iowa and
     President, CREST Engineering Co., Brookland Park, Minnesota

John W. Carl
     Vice Chairman of the Board of Mid-Iowa Financial Corp.,
     Majority owner of Central Iowa Broadcasting, Newton, Iowa

Gary R. Hill
     Executive Vice President, Secretary and Treasurer, Mid-Iowa
     Financial Corp. and Mid-Iowa Savings Bank, F.S.B., Newton,
     Iowa

Carney Loucks
     Self-employed Orthodontist, Newton, Iowa

Kevin D. Ulmer
     President and Chief Executive Officer, Mid-Iowa Financial
     Corp. and Mid-Iowa Savings Bank, F.S.B., Newton, Iowa     

Ralph W. McAdoo
     Retired President and Secretary of Mid-Iowa Savings Bank,
     F.S.B., Newton, Iowa

John Switzer
     Retired Advertising Executive, Vernon Company, Newton, Iowa

 
MID-IOWA FINANCIAL CORP. OFFICERS

Kevin D. Ulmer
     President and Chief Executive Officer

Gary R. Hill
     Executive Vice President, Secretary and Treasurer


INDEPENDENT AUDITORS

KPMG Peat Marwick LLP
2500 Ruan Center
Des Moines, Iowa  50309

CORPORATE COUNSEL

Brierly Law Office
211 First Avenue West
Newton, Iowa  50208

SPECIAL COUNSEL

Housley Kantarian & Bronstein, P.C.
1220 19th Street,  N.W.
Suite 700
Washington, D.C.  20036

                       43