<PAGE>
<PAGE>
                          FORM 10-QSB

                  SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.


           Quarterly Report under Section 13 or 15 (d)
           of the Securities and Exchange Act of 1934

              For Quarter Ended March 31, 1997

                Commission File Number:  0-28442
                                         -------

                    Heartland Bancshares, Inc.
    -------------------------------------------------------
    (Exact name of registrant as specified in its charter)


     Illinois                                    37-1356594
------------------------                   ---------------------
(State of incorporation)                      (I.R.S. Employer
                                           Identification Number)


318 South Park Avenue, Herrin, Illinois            62948-3604
---------------------------------------           ------------
(Address of principal executive officer)           (Zip Code)


Issuer's telephone number, including area code: (618) 942-7373
                                                --------------


     Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past ninety days:  
Yes   X      No     
    ------     ------


    As of May 13, 1997, there were 876,875 shares of the
registrant's common stock, par value $0.01 per share, issued and
outstanding.


     Transitional small business disclosure format (check one):  
Yes         No   X 
    ------     -----


<PAGE>
<PAGE>
                 PART I FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                  HEARTLAND BANCSHARES, INC.
                   --------------------------
                        AND SUBSIDIARY
                        --------------
       CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
       ----------------------------------------------
                       (IN THOUSANDS)
                       -------------
<TABLE>
<CAPTION>
                                                     March 31,    December 31,
                                                       1997          1996
                                                    ----------   ------------
                                                    (Unaudited)
<S>                                                 <C>          <C>
                   ASSETS
                   ------
Cash and cash equivalents
  Interest-bearing                                   $  1,392     $    658
  Noninterest-bearing                                   1,873        1,214
Certificates of deposit                                   293          293
Investment securities available-for-sale at
 estimated market value                                 2,174        2,108
Investment securities held-to-maturity                  7,781        9,030
Mortgage-backed and related securities available-
 for-sale at estimated market value                     2,676        2,814
Mortgage-backed and related securities held-to- 
 maturity                                               6,452        6,663
Loans receivable, net                                  43,407       41,466
Investments required by law                               489          489
Property, equipment, and property held 
 for investment, net                                      493          479
Accrued interest receivable                               365          316 
Prepaid expenses and other assets                          47           56
Prepaid income taxes                                       29           73
Foreclosed real estate                                     39          133
Deferred tax asset                                         90           64
                                                     --------     --------    
TOTAL ASSETS                                         $ 67,600     $ 65,856
------------                                         ========     ========     

      LIABILITIES AND STOCKHOLDERS' EQUITY
      ------------------------------------
Liabilities
-----------
  Deposits                                           $ 53,170     $ 52,832
  Advances from Federal Home Loan Bank                  1,500            -
  Accrued interest payable                                 64           49
  Advances from borrowers for taxes and insurance         372          252
  Other liabilities                                       110          107
                                                     --------     --------    
      Total Liabilities                              $ 55,216     $ 53,240
                                                     --------     --------    
Commitments and Contingencies
-----------------------------
Stockholders' Equity
--------------------
  Preferred stock, 1,000,000 shares authorized,
     - 0 - issued                                    $      -     $      -
  Common stock, $.01 par value per share:  
     4,000,000 shares authorized; 876,875 shares 
     issued and outstanding at March 31, 1997 
     and December 31, 1996                                  9            9
  Additional paid-in capital                            8,162        8,153
  Unearned ESOP shares                                   (614)        (632)
  Management recognition plan shares                     (230)           -
  Retained earnings - substantially restricted          5,098        5,101
  Unrealized gain (loss) on securities
  available-for-sale, net of tax                          (41)         (15)
                                                     --------     --------    
      Total Stockholders' Equity                     $ 12,384     $ 12,616
                                                     --------     --------    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 67,600     $ 65,856
                                                     ========     ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
                       HEARTLAND BANCSHARES, INC.
                       --------------------------
                            AND SUBSIDIARY
                            --------------
                   CONSOLIDATED STATEMENTS OF INCOME
                   ---------------------------------

                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
                  ------------------------------------
                             (UNAUDITED)
                             -----------
<TABLE>
<CAPTION>
                                                       Three Months Ended  
                                                    -----------------------
                                                     March 31,    March 31,
                                                      1997         1996    
                                                   ----------    ---------
<S>                                                <C>           <C>
Interest Income                                     
---------------
  Interest on first mortgage loans                  $    797     $    663
  Interest on other loans                                 38           28
  Interest on investments, securities, and
   deposits with banks                                   189          199
  Interest on mortgage backed securities                 150          132
                                                    --------     --------
      Total Interest Income                         $  1,174     $  1,022
      ---------------------
Interest Expense
----------------
  Interest on deposits                                   643          698
  Interest on borrowings                                  16            -
                                                    --------     --------
      Total Interest Expense                        $    659     $    698
      ----------------------                        --------     --------
Net Interest Income                                 $    515     $    324 
-------------------
Provision for Loan Losses                                 10            -
-------------------------                           --------     --------
Net Interest Income After Provision
-----------------------------------
 for Loan Losses                                    $    505     $   324
 ---------------                                    --------     --------
Non-Interest Income
-------------------
  Initial service charges and other loan fees       $     13     $     21
  Gain on sale of investments                              -           13
  Other                                                   28           42
                                                    --------     --------
      Total Non-Interest Income                     $     41     $     76
      -------------------------                     --------     --------
Non-Interest Expense
--------------------
  Compensation to directors, officers, and 
   employees                                        $    159     $    120
  Pension expense and other employee benefits             59           20
  Office properties and equipment expense 
   including depreciation                                 30           26
  Advertising                                             13            9
  Federal insurance premiums                               9           31
  Stationery, postage, and office supplies                22           14
  Checking account expense                                33           37
  Service bureau expense                                  23           20
  Other                                                   84           38
  Loss on sale of investments                              -            3
                                                    --------     --------
      Total Non-Interest Expense                    $    432     $    318
      --------------------------                    --------     --------
Income Before Income Taxes                          $    114     $     82
Income Tax Expense                                        35           25
                                                    --------     --------
Net Income (Loss)                                   $     79     $     57
-----------------                                   ========     ========
Earnings Per Share                                  $    .10     $   N/A 
------------------                                  ========     =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
                       HEARTLAND BANCSHARES, INC.
                       --------------------------
                            AND SUBSIDIARY
                            --------------
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
            -----------------------------------------------

                             (IN THOUSANDS)
                              -------------
                               (UNAUDITED)
                               -----------


<TABLE>
<CAPTION>
                                                                                          Net
                                                                                       Unrealized
                                                                 Management             Gain (Loss)
                                         Additional   Unearned   Recognition           on Securities
                                Common    Paid-in      ESOP       Plan       Retained   Available    
                                Stock     Capital     Shares      Shares     Earnings   for Sale     Total
                                ------  ----------   --------    --------   ---------   ----------   -----
<S>                             <C>      <C>         <C>        <C>         <C>         <C>         <C>
Balance at December 31, 1996    $   9    $ 8,153     $ (632)     $   -      $5,101      $(15)      $12,616
---------------------------
Net income                          -          -          -          -          79         -            79

Cash dividends paid                 -          -          -          -         (82)        -           (82)

Purchase of shares for management 
  recognition plan                  -          -          -       (230)          -         -          (230)

Amortization of ESOP expense        -          9         18          -           -         -            27

Change in net unrealized gain 
 (loss) on securities available 
 for sale                           -          -          -          -           -       (26)          (26)
                                -----    -------      -----      -----      ------      ----      --------
Balance at March 31, 1997       $   9    $ 8,162      $(614)     $(230)     $5,098      $(41)      $12,384
-------------------------       =====    =======      =====      =====      ======      ====      ========
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
              HEARTLAND BANCSHARES, INC. AND SUBSIDIARY
              -----------------------------------------
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                  -------------------------------------
                             (IN THOUSANDS)
                              (UNAUDITED)
<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                              --------------------- 
                                                              March 31,    March 31,
                                                                1997         1996
                                                              --------     --------
<S>                                                           <C>            <C>
Cash Flows From Operating Activities
------------------------------------
  Net income                                                  $     79     $     57
                                                              --------     --------
  Adjustments to reconcile net income to net       
  cash provided (used) by operating activities      
    Depreciation                                              $     13     $     12
    Discount accretion/premium amortization-securities (net)        (1)           8
    Amortization of deferred loan origination fees                  (7)         (12)
    Amortization of ESOP expense                                    27            -
    Provision for loan losses                                       10            -
    (Gain) loss on sale of investments                               -          (10)
    (Increase) decrease in accrued interest receivable             (49)         (20)
    (Increase) decrease in prepaid expenses                          9          (40)
    (Increase) decrease in prepaid income taxes                     44           19
    (Increase) decrease in deferred income taxes                   (10)           7
    (Increase) decrease in other assets                              -         (228)
    Increase (decrease) in accrued interest payable                 14           (5)
    Increase (decrease) in other liabilities                         3          (17)
                                                              --------     --------
    Total Adjustments                                         $     53     $   (286)
    -----------------                                         --------     --------
  Net Cash Provided (Used) by Operating Activities                 132     $   (229)
  ------------------------------------------------            --------     --------
Cash Flows From Investing Activities
------------------------------------
  Net (increase) decrease in certificates of deposit          $      -     $    198
  Proceeds from maturities of investment securities
   and mortgage-backed securities                                1,350        1,750
  Principal payments on mortgage-backed securities                 341          374
  Net (increase) decrease in loans receivable                   (1,933)        (532)
  Purchases of property and equipment                              (28)           - 
  Purchase of investment securities held-to-maturity                 -       (1,250)
  Purchase of investment securities available-for-sale            (200)           -
  Purchase of mortgage-backed securities held-to-maturity            -       (1,905)
  Proceeds from sale of mortgage-backed securities
    available-for-sale                                               -        4,015
  Purchase of Federal Home Loan Bank stock                           -          (24)
  Proceeds from sale of other real estate                           84            -
                                                              --------     --------
  Net Cash Provided (Used) by Investing Activities            $   (386)    $  2,626 
  ------------------------------------------------            --------     --------
Cash Flows From Financing Activities
------------------------------------
  Net increase (decrease) in deposits                         $    339     $    763 
  Net increase (decrease) in mortgage escrow funds                 120           95
  Proceeds from Federal Home Loan Bank advances                  1,500            -
  Shares acquired by management recognition plan                  (230)           -
  Dividends on common stock                                        (82)           -
                                                              --------     --------
  Net Cash Provided by Financing Activities                   $  1,647     $    858
  -----------------------------------------                   --------     --------
Net Increase in Cash and Cash Equivalents                     $  1,393     $  3,255 
-----------------------------------------
Cash and Cash Equivalents at Beginning of Period                 1,872        4,263
                                                              --------     --------
Cash and Cash Equivalents at End of Period                    $  3,265     $  7,518
Supplemental Disclosures                                      ========     ========
Cash Paid During the Period for:
  Interest                                                    $    645     $    703
  Income taxes                                                $      -     $      -
Loans Transferred to Foreclosed Real Estate
 During Period                                                $      -     $     61
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>
<PAGE>
                       HEARTLAND BANCSHARES, INC.
                       --------------------------
                            AND SUBSIDIARY
                            --------------
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             ------------------------------------------
                            (UNAUDITED)
                            -----------

                      MARCH 31, 1997 AND 1996
                      -----------------------


1.  Stock Conversion
    ----------------
On June 28, 1996, First Federal Savings and Loan Association of
Herrin (the "Association") completed its conversion from a
federal mutual savings and loan association to a federal stock
savings and loan association, and then from a stock association
to a national bank known as Heartland National Bank (the "Bank"). 
Simultaneously, Heartland National Bank was acquired by Heartland
Bancshares, Inc. (the "Company"), which was formed to act as the
holding company of the Bank.  At the date of the conversion, the
Company completed the sale of 876,875 shares of common stock,
$.01 par value at $10.00 per share.  Net proceeds from the above
transactions, after deducting offering expenses, underwriting
fees, and amounts retained to fund the Company's employee stock
ownership plan ("ESOP") totaled approximately $7.4 million.

The Company is primarily engaged in the business of directing,
planning and coordinating the business activities of the Bank. 
These activities primarily consist of accepting deposits from the
general public and investing these funds in loans in the Bank's
market area and in investment securities and mortgage-backed
securities.  In the future, the holding company structure will
permit the Company to expand the financial services currently
offered through the Bank, although there are no definitive plans
or arrangements for such expansion at present.

2.  Basis of Presentation
    ---------------------

The accompanying unaudited consolidated financial statements were
prepared in accordance with the instructions for Form 10-QSB and,
therefore, do not include all information and footnotes necessary
for a complete presentation of financial position, results of
operations, changes in stockholders' equity, and cash flows in
conformity with generally accepted accounting principles. 
However, all adjustments which, in the opinion of management, are
necessary for a fair presentation of the unaudited consolidated
financial statements for the three months ended March 31, 1997
and 1996 have been recorded.  Operating results for the three
months ended March 31, 1997 are not necessarily indicative of the
results that may be expected for the year ending December 31,
1997.

Prior to the acquisition of the Association on June 28, 1996, and
the Association's simultaneous conversion to the Bank, the
Company had not issued any stock, had no assets or liabilities,
and had not engaged in any business activities other than that of
an organizational nature.  Accordingly, the unaudited
consolidated financial statements included herein reflect the
operations of the Association only for periods prior to June 28,
1996.

Certain reclassifications have been made for the three months
ended March 31, 1996 to conform with the financial statement
presentation for the three months ended March 31, 1997.  The
reclassifications had no effect on previously reported net income
or retained earnings.

<PAGE>
<PAGE>
3.  Principles of Consolidation
    ---------------------------
The accompanying unaudited consolidated financial statements
include the accounts of Heartland Bancshares, Inc., Heartland
National Bank, and Herrin First Service Corporation, a wholly
owned subsidiary of Heartland National Bank.  All significant
intercompany items have been eliminated.

4.   Earnings per Share
      ------------------
Earnings per share are based upon the weighted average number of
common shares outstanding during the period.  In accordance with
Statement of Position 93-6, "Employers' Accounting for Employee
Stock Ownership Plans" (SOP 93-6), only employee stock ownership
plan (ESOP) shares that have been committed to be released are
considered outstanding shares.  The weighted average number of
shares used for the three months ended March 31, 1997 was
814,614.  

The Company completed its initial stock offering on June 28,
1996.  As no common stock was outstanding during the three months
ended March 31, 1996, earnings per share information for that
period is not applicable.

5.  Dividends per Share
    -------------------
In accordance with the provisions of SOP 93-6, dividends paid on
unallocated ESOP shares are not considered dividends for
financial reporting purposes.

6.  Employee Stock Ownership Plan
    -----------------------------
The Company has established the ESOP for employees of the Company
and its subsidiary.  Employees who have attained age 21 and
completed one year of service are eligible to participate in the
plan.  On June 28, 1996, the Company loaned the ESOP $701,500 to
finance the plan's initial purchase of 70,150 shares.  The loan
is due and payable in ten (10) annual payments of principal and
interest, beginning December 31, 1996.  The principal is to be
repaid in equal installments, with interest at a variable rate of
1% above prime.  The Company intends to contribute sufficient
funds to the ESOP to enable it to repay the loan, plus such other
amounts as the Company's Board of Directors may determine in its
discretion.  The Company accounts for its ESOP in accordance with
Statement of Position 93-6, "Employers' Accounting for Employee
Stock Ownership Plans."  As shares are committed to be released
to participants, the Company reports employee benefits expense
based on the average market price of the shares during the
period.  ESOP benefits expense recorded during the three months
ended March 31, 1997 was $32,225.

7.  Director Retirement Plan
    ------------------------ 
In connection with the stock conversion of the Association to the
Bank, the Board of Directors of the Association (now the Bank)
has adopted a director retirement plan, effective December 31,
1995, for its directors who are members of the Board of Directors
at some time on or after the plan's effective date.  Under the
plan, a bookkeeping account in each participant's name is
credited with "Performance Units" according to the following
formula: (i) 70 Performance Units for each full year of service
as a director prior to 1996, plus (ii) 100 Performance Units for
each full year of service as a director after 1995, with the
value of each Performance Unit equal to the average fair market
value of one share of the Company's common stock as of December
31st of each of the three years preceding the determination date
(or such shorter period as to which trading information is
available).  Additional Performance Units are to be credited at
the end of each year after 1995, based upon the amount of
dividends paid on the Company's common stock.  A participant's
vested interest in Performance Units credited on the plan's
effective date equals 50% if the participant serves on the Board
for less than a year after 1995, 75% after the second year, and
100% after the third year.  In the event a participant's service
on the Board is terminated due to death or disability, the vested
percentage becomes 100% regardless of the number of years of
service.  Performance Units credited after the plan's effective
date are fully vested at all times.
<PAGE>
<PAGE>
As of March 31, 1997, a liability of $52,226 has been recognized
in the financial statements based on the vested value of the
interests in the director retirement plan as of that date.  The
amount of expense recognized in the financial statements for the
three months ended March 31, 1997 was $8,307.

8.  Management Recognition Plan
    ---------------------------

On January 28, 1997, the stockholders of the Company approved a
management recognition plan ("MRP").  With funds to be
contributed by the Company, the MRP intends to purchase, in the
aggregate, 35,075 shares of the Company's common stock (the
maximum number of shares allowed to be purchased).  Such shares
may be purchased in the open market or in the form of shares
newly issued by the Company.  As of the effective date of the
plan, certain executive officers and directors of the Company and
the Bank will receive an award of common stock under the MRP up
to a potential total of 26,301 shares.  Common stock granted
under the MRP vests over a five year period at twenty percent per
year.  Under current accounting standards, when MRP awards are
granted, the Company will recognize compensation expense based on
the fair market value of the common stock on the date the awards
are granted with such amount being amortized over the expected
vesting period for the award.  As of March 31, 1997, 15,600
shares had been purchased on the open market by the MRP to fund
the plan at a total cost of approximately $230,000.  This amount
has been recorded in the consolidated financial statements as an
increase in a contra equity account.  This contra equity account
will be amortized to expense in the future over the period over
which the MRP awards become vested.  As of March 31, 1997, no
actual awards have been made.  Therefore, no MRP expense is shown
for the three months ended March 31, 1997.

9.  Stock Option and Incentive Plan
    -------------------------------

Also on January 28, 1997, the stockholders of the Company
approved a stock option and incentive plan.  The option plan
provides for the granting of stock options and stock appreciation
rights to certain employees and directors of the Company and the
Bank and has a term of ten years from the effective date of the
plan after which no awards may be granted.  The plan intends to
reserve 87,687 authorized, but unissued shares (or treasury
shares) of common stock for issuance upon the future exercise of
options or stock appreciation rights.  At the effective date of
the plan, certain executive officers and directors of the Company
and the Bank will receive a grant of an option under the plan to
purchase up to 87,683 shares of common stock at an exercise price
per share equal to its fair market value on that date.  The plan
provides for one-fifth of the options granted to be exercisable
on each of the first five anniversaries of the date the option
was granted.  As of March 31, 1997, no actual options have been
granted.  Therefore, no financial effect of this plan is
reflected on the accompanying financial statements.

10.  Advances from Federal Home Loan Bank
     ------------------------------------

In January, 1997, the Bank borrowed a total of $1,500,000 from
the Federal Home Loan Bank of Chicago at interest rates ranging
from 5.69% to 5.77%.  All of these borrowings are due and payable
within six months of the borrowing date.  In April, 1997,
$500,000 of these borrowings matured and were repaid by the Bank.

11.  Regulatory Capital
     ------------------

The Bank is required to maintain certain levels of regulatory
capital.  At March 31, 1997, the Bank was in compliance with all
regulatory capital requirements.  In addition to these
requirements, the Bank must maintain sufficient capital for the
"liquidation account" for the benefit of eligible account
holders.  In the event of a complete liquidation of the Bank,
eligible depositors would have an interest in the account.






<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of
         Operations
         -----------------------------------------------
General
-------

The following discussion reviews the consolidated financial
condition of Heartland Bancshares, Inc. (the "Company"),
Heartland National Bank (the "Bank"), and Herrin First Service
Corporation, a wholly owned subsidiary of Heartland National
Bank, as of March 31, 1997 and December 31, 1996, and the results
of operations for the three months ended March 31, 1997 and 1996.

As the completion of the conversion of First Federal Savings and
Loan Association of Herrin (the "Association") to the Bank, and
the simultaneous acquisition of the institution and issuance of
stock by the Company took place on June 28, 1996, this discussion
of financial condition and results of operations will relate to
the Association (now the Bank) as pertains to operations before
that date.  

The business of the Bank has historically been to function as a
financial intermediary, accepting deposits from the general
public and investing these funds primarily in loans for one- to
four-family residences located in the Bank's market area.  To a
lesser extent, the Bank engages in various forms of consumer and
home equity lending and invests in mortgage-backed securities,
U.S. Government and federal agency securities, municipal
securities and interest-bearing deposits.

The Company is currently primarily investing the funds received
from its issuance of common stock in mortgage-backed securities,
U.S. Government and federal agency securities, municipal
securities and interest-bearing deposits.

The Bank's net income is dependent primarily on its net interest
income, which is the difference between interest income earned on
loans and investments, and the interest paid on interest-bearing
liabilities, primarily deposits.  Net interest income is
determined by (i) the difference between yields earned on
interest-earning assets and rates paid on interest-bearing
liabilities ("interest rate spread") and (ii) the relative
amounts of interest-earning assets and interest-bearing
liabilities.  The Bank's interest rate spread is affected by
regulatory, economic and competitive factors that influence
interest rates, loan demand and deposit flows.  The Bank's net
earnings are also affected by the level of non-interest income,
which primarily consists of fees and service charges, and by the
level of its operating expenses and provisions for loan losses.

The operations of the Bank are significantly affected by
prevailing economic conditions, competition and the monetary,
fiscal and regulatory policies of governmental agencies.  Lending
activities are influenced by the demand for and supply of
housing, competition among lenders, the level of interest rates
and the availability of funds.  Deposit flows and costs of funds
are influenced by prevailing market rates of interest, primarily
on competing investments, account maturities and the levels of
personal income and savings in the Bank's market area.

Liquidity and Capital Resources
-------------------------------
As a holding company, the Company conducts its business through
its subsidiary, the Bank (previously the Association).  The
Bank's primary sources of funds are deposits and proceeds from
maturing investment securities, maturing mortgage-backed and
related securities and principal and interest payments on loans,
investment securities and mortgage-backed and related securities. 
While maturities and scheduled amortization of investment
securities, mortgage-backed and related securities and loans are
a predictable source of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates,
economic conditions, competition and other factors.  The Bank
uses its liquidity resources principally to fund the origination
of loans, to purchase investment securities and mortgage-backed
and related securities, to fund deposit<PAGE>
<PAGE>
withdrawals, to maintain liquidity, and to meet operating
expenses.  Management believes that its sources of funds will be
adequate to meet the Bank's liquidity needs for the immediate
future.

A portion of the Bank's liquidity consists of cash and cash
equivalents, which include investments in highly liquid, short-
term deposits.  The levels of these assets are dependent on the
Bank's operating, financing, and investing activities during any
given period.  At March 31, 1997 and December 31, 1996, the
consolidated amounts of cash and cash equivalents totaled $3.3
million and $1.9 million, respectively.  

Liquidity management is both a daily and long-term function of
business management.  The Company has other sources of liquidity
if there is a need for funds.  The Company has a portfolio of
investment securities and mortgage-backed and related securities
with a consolidated aggregate market value of $4.9 million at
March 31, 1997 classified as available for sale.  Another source
of liquidity is the Bank's ability to obtain advances from the
Federal Home Loan Bank of Chicago ("FHLB").  At March 31, 1997,
the Bank had outstanding advances from the FHLB in the amount of
$1,500,000.

At March 31, 1997, the Bank had $1,195,000 in outstanding
commitments to extend credit.  The Bank anticipates that it will
have sufficient funds available to meet its current loan
origination commitments.

The Bank is required to maintain certain levels of regulatory
capital.  At March 31, 1997, the Bank was in compliance with all
regulatory capital requirements.

Financial Condition
-------------------
Total assets increased by $1.7 million, or 2.65%, from $65.9
million at December 31, 1996 to $67.6 million at March 31, 1997. 
The increase was due primarily to an increase of $1.9 million in
loans receivable.  

The Bank's loan portfolio increased by $1.9 million, or 4.68%,
from $41.5 million at December 31, 1996 to $43.4 million at March
31, 1997.  The increase in loan activity during the period is
attributed to increased loan marketing activities and increased
loan demand in the Company's market area. 

The Bank's allowance for loan losses totaled $300,000 at March
31, 1997 and December 31, 1996.  During the three months ended
March 31, 1997, loan charge-offs amounted to $10,000.  An
additional provision of $10,000 was made during the period.

Cash and cash equivalents totaled $3.3 million at March 31, 1997,
compared to a total of $1.9 million at December 31, 1996.  The
$1.4 million increase is primarily due to the Bank's receipt of
$1.5 million in proceeds from Federal Home Loan Bank borrowings
and $1.7 million in proceeds from principal payments and
maturities of securities, primarily offset by the $1.9 million
increase in loans mentioned above.

The Company's consolidated investment securities portfolio
totaled $10.0 million at March 31, 1997, a decrease of $1.1
million from $11.1 million at December 31, 1996.  This decrease
was primarily due to maturities of investment securities totaling
$1.4 million exceeding purchases of such securities for the three
months ended March 31, 1997.  The Company's mortgage-backed and
related securities portfolio totaled $9.1 million as of March 31,
1997, a decrease of $349,000 from $9.5 million at December 31,
1996.  This decrease was due to principal payments received on
mortgage-backed and related securities.  During the three months
ended March 31, 1997, the institution's portfolio of investment
securities and mortgage-backed and related securities classified
as available for sale decreased capital by $26,000 (net of taxes)
as a result of a decrease in the market value of such securities
classified as available for sale pursuant to Statement of
Financial Accounting Standards ("SFAS") No. 115.  

Total liabilities increased by $2.0 million, or 3.71%, from $53.2
million at December 31, 1996 to $55.2 million at March 31, 1997. 
Total deposits increased by $338,000, or 64 basis points, from
$52.8 million at December<PAGE>
31, 1996 to $53.2 million at March 31, 1997.  The
increase in total liabilities is primarily attributable to the $1.5 million
increase in borrowings from the Federal Home Loan Bank incurred
by the Bank during the three months ended March 31, 1997.

Stockholders' equity decreased by $232,000 during the three
months ended March 31, 1997.  This decrease is primarily due to
the $230,000 purchase of shares on the open market for the
Company's management recognition plan, as well as dividends of
$82,000 paid on Company stock.  These decreases were offset by
net income of $79,000 for the period.

Results of Operations
---------------------
Net Income.  Net income was $79,000 for the three months ended
March 31, 1997, as compared to $57,000 for the three months ended
March 31, 1996.  The increase of $22,000, or 38.60%, reflects an
increase of $191,000, or 58.95%, in net interest income.  The
increase in net interest income was partially offset by an
increase of $114,000, or 35.85%, in non-interest expense, by a
$10,000 increase in the provision for loan losses, by a $35,000
decrease in non-interest income, and by an increase of $10,000 in
income tax expense.  The increase in net income was primarily due
to increased loan income resulting from the Bank's increased
levels of outstanding loans, and a decrease in interest expense
on deposits attributed to a decrease in average deposit levels
for the three months ended March 31, 1997 as compared to the
corresponding period in 1996. 

Net Interest Income.  Net interest income increased $191,000, or
58.95%, to $515,000 for the three months ended March 31, 1997, as
compared to $324,000 for the three months ended March 31, 1996. 
This increase was primarily due to an increase in the ratio of
average interest-earning assets to average interest-bearing
liabilities from 104.21% for the three months ended March 31,
1996 to 119.83% for the three months ended March 31, 1997, aided
by an increase in the net interest margin from 2.03% for the
three months ended March 31, 1996 to 2.39% for the three months
ended March 31, 1997.  The increase in net interest income
reflects the increased level of interest earning assets due to
the investment of the net proceeds from the Company's initial
public stock offering.
     
Interest Income.  Total interest income increased by $152,000, or
14.87%, to $1.2 million for the three months ended March 31, 1997
as compared to $1.0 million for the three months ended March 31,
1996.  The increase in interest income is primarily the result of
an increase of $6.2 million, or 10.73%, in average interest-
earning assets from $58.2 million for the three months ended
March 31, 1996 to $64.4 million for the three months ended March
31, 1997.  This increase was primarily due to an increase of $7.4
million in the average balance of the loan portfolio during the
three months ended March 31, 1997 as compared to the three months
ended March 31, 1996 resulting from ongoing loan origination
efforts, and the increase in interest-earning assets arising from
proceeds from the stock conversion.  The increase in interest
income also reflects an increase of 26 basis points in the
average yield on interest-earning assets for the three months
ended March 31, 1997 as compared to the three months ended March
31, 1996.

Interest Expense.  Interest expense decreased by $39,000, or
5.59%, to $659,000 for the three months ended March 31, 1997 as
compared to $698,000 for the three months ended March 31, 1996. 
This decrease was primarily due to a decrease of $2.1 million in
the average balance of interest-bearing liabilities from $55.8
million for the three months ended March 31, 1996 to $53.7
million for the three months ended March 31, 1997.  This decrease
was largely attributed to decreases in deposit accounts caused by
customers using those deposit accounts to purchase the stock of
the Company in the conversion, partially offset by the $1.5
million increase in borrowings from the Federal Home Loan Bank
during the first quarter of 1997.  The decrease in the average
balance of interest-bearing liabilities was also accompanied by a
10 basis point decrease in the average cost of interest-bearing
liabilities, from 5.00% for the three months ended March 31, 1996
to 4.90% for the three months ended March 31, 1997.  

Provision for Loan Losses.  The allowance for loan losses is
established through a provision for loan losses based on
management's evaluation of<PAGE>
<PAGE>
the risk inherent in its loan portfolio and the general economy. 
Such evaluation is based on an analysis of various factors,
including the market value of the underlying collateral, growth
and composition of the loan portfolio, the relationship of the
allowance for loan losses to outstanding loans, historical loss
experience, delinquency trends and prevailing and projected
economic conditions.  A $10,000 provision for loan losses was
made during the three months ended March 31, 1997, while no
provision was made for the three months ended March 31, 1996. 
Although the Company believes that the present level of the
allowance for loan losses is adequate to reflect the risks
inherent in its loan portfolio, there can be no assurance that
the Company will not experience increases in its nonperforming
assets, that it will not increase the level of the allowance for
loan losses in the future or that significant provisions for
losses will not be required based on factors such as
deterioration in market conditions, changes in borrowers'
financial conditions, delinquencies and defaults.

Non-Interest Income.  Non-interest income decreased from $76,000
for the three months ended March 31, 1996 to $41,000 for the
three months ended March 31, 1997.  The largest components of
non-interest income for the three month periods ended March 31,
1997 and 1996 included $13,000 and $21,000, respectively, in loan
and other service fees and $28,000 and $42,000, respectively, in
other service charges and other miscellaneous operating income. 
In addition, the Company recognized $13,000 of realized gains on
the sale of investments during the three months ended March 31,
1996, with no corresponding gains during the three months ended
March 31, 1997.  

Non-Interest Expense.  Non-interest expense increased $114,000,
or 35.85%, from $318,000 for the three months ended March 31,
1996 to $432,000 for the three months ended March 31, 1997.  This
increase included an increase of $78,000 in compensation and
employee benefits expense.  This increase is primarily a result
of recognition of expense related to items which have been
incurred subsequent to the formation of the Company in June,
1996, such as the ESOP and director retirement plans, and
additional director fees paid by the Company.  Increases were
also incurred in general salary expense and employee profit
sharing expense.  The total increase in non-interest expense also
included net increases of $36,000 in various other expense items.

Income Tax Expense.  Income tax expense was $35,000 for the three
months ended March 31, 1997 as compared with $25,000 for the
three months ended March 31, 1996.  The $10,000 increase is
primarily due to the increase in income before income taxes from
$82,000 for the three months ended March 31, 1996 to $114,000 for
the three months ended March 31, 1997. 

Impact of Inflation and Changing Prices
---------------------------------------
The unaudited consolidated financial statements and related data
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 and due to inflation.  The impact of
inflation is reflected in the increased cost of the Bank's
operations.  Unlike most industrial companies, nearly all the
assets and liabilities of the Bank are monetary in nature.  As a
result, interest rates have a greater impact on the Bank'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 price of goods and services.

Impact of New Accounting Standards
----------------------------------
Accounting for Transfers and Servicing of Financial Assets.  In
June, 1996, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities."  SFAS No.
125 establishes accounting and reporting standards for transfers
and servicing of financial assets and extinguishments of
liabilities based on the consistent application of the financial
components approach.  This approach requires the recognition of
financial assets and servicing assets that are controlled by the
reporting<PAGE>
<PAGE>
entity, the derecognition of financial assets when control is
surrendered, and the derecognition of liabilities when they are
extinguished.  Specific criteria are established for determining
when control has been surrendered in the transfer of financial
assets.  SFAS No. 125 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring
after December 31, 1996.  Subsequent to the issuance of SFAS No.
125, the FASB issued SFAS No. 127, "Deferral of the Effective
Date of Certain Provisions of FASB Statement No. 125."  This
statement defers for one year the effective date of SFAS No. 125
as applies to secured borrowings and collateral and certain other
transactions.  The Company has adopted the relevant provisions of
the statement during 1997, and will adopt the provisions of the
statement which become effective in 1998 at that time.  The
provisions of the statement adopted in 1997 did not have a
material effect on the Company's financial position or operating
results, and management does not currently believe that the
future adoption of additional provisions of this statement will
have such an effect.

Accounting for Stock-Based Compensation.  SFAS No. 123,
"Accounting for Stock Based Compensation" was issued by the FASB
in October, 1995.  SFAS No. 123 establishes a fair value-based
method of accounting for stock options and other equity
instruments.  It requires the use of that method for transactions
with other than employees and encourages its use for transactions
with employees.  It permits entities to continue to use the
intrinsic value method included in Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees", but regardless of the method used to account for the
compensation cost associated with stock option and similar plans,
it requires employers to disclose information in accordance with
SFAS No. 123.  The general principle underlying SFAS No. 123 is
that equity instruments are recognized at the fair value of the
consideration received for them.  If the fair value of the
consideration received cannot be reasonably determined, the fair
value of the equity instrument itself may be used.  The fair
value method of accounting for stock options and other
instruments applies this general principle measuring compensation
cost for employers as the excess of the fair value of the equity
instrument over the amount paid by the employee.  The definition
of fair value in SFAS No. 123 is the same as that included in
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed of."

SFAS No. 123 requires significantly expanded disclosures,
including disclosure of the pro forma amount of net income (and
earnings per share for public entities) as if the fair value-
based method were used to account for stock-based compensation if
the intrinsic value method of APB-25 is retained.

The recognition requirements for transactions with other than
employees apply for transactions entered into after December 15,
1995.  The recognition alternative of the fair value-based method
for transactions with employees may be implemented immediately
upon issuance of SFAS No. 123.  The disclosure requirements,
which apply regardless of the recognition method chosen, are
applicable for financial statements for fiscal years beginning
after December 15, 1995.

With the adoption in 1997 of stock-based compensation plans, the
Company intends to follow the SFAS No. 123 guidelines as
appropriate upon the future granting of stock-based compensation
under those plans.

Earnings per Share.  In February, 1997, the FASB issued SFAS No.
128, "Earnings per Share."  SFAS No. 128 establishes standards
for computing and presenting earnings per share ("EPS") and
applies to entities with publicly held common stock or potential
common stock.  The statement simplifies the standards for
computing earnings per share previously found in APB Opinion No.
15, "Earnings per Share", and makes them comparable to inter-
national EPS standards.  It replaces the presentation of primary
EPS with a presentation of basic EPS.  It also requires dual
presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures, and
requires a reconciliation of the two computations. This statement
is effective for financial statements issued for periods ending
after December 15, 1997, with earlier application not permitted. 
The management of the Company plans to adopt the provisions of<PAGE>
<PAGE>
the statement at December 31, 1997, and does not currently
believe that the future adoption of this statement will have a
material effect on the Company's financial position or operating
results. 

<PAGE>
<PAGE>
                   PART II.  OTHER INFORMATION
                             -----------------

Item 1.  Legal Proceedings
         -----------------

From time to time, the Company and its subsidiaries may be a
party to various legal proceedings incident to its or their
business.  At March 31, 1997, there were no legal proceedings to
which the Company or any subsidiary was a party, or to which any
of their property was subject, which were expected by management
to result in a material loss.

Item 2.  Changes in Securities
         ---------------------

         None

Item 3.  Defaults Upon Senior Securities
         -------------------------------

         None

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

     (a) On January 28, 1997, the Registrant held a Special
Meeting of Stockholders for the consideration of the Heartland
Bancshares, Inc. 1996 Stock Option and Incentive Plan (the
"Option Plan")("Proposal I") and approval of the Heartland
Bancshares, Inc. Management Recognition Plan (the "MRP")("Proposal
II").

     (b) Not applicable

     (c) Proposal I called for the approval of the Option Plan. 
Pursuant to the Option Plan, awards of stock options and stock
appreciation rights may be made by a committee of the Board of
Directors to such employees as the committee shall designate. 
The Option Plan reserves 87,687 authorized but unissued shares of
common stock for issuance upon the exercise of stock options or
stock appreciation rights.  Proposal II called for the approval
of the MRP.  The MRP is administered by a committee of the Board
of Directors authorized to select and grant plan share awards to
eligible employees.  A total of 35,075 shares of the Registrant's
common stock may be purchased by the MRP Trust.  The results of
voting on these proposals was as follows:
<TABLE>
<CAPTION>
                    For       Against       Abstain
                    ---       -------       -------
<S>               <C>         <C>           <C>
Proposal I        615,841     122,894       52,383
Proposal II       611,957     126,805       52,356
</TABLE>
     (d) Not applicable

Item 5.  Other Information
         -----------------

         None

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

         None.

         The following exhibits are filed as a part of this
         report:

         Exhibit 27   Financial Data Schedule
           <PAGE>
<PAGE>
                           SIGNATURES

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


                                  HEARTLAND BANCSHARES, INC.


Date:  May 14,1997            By: /s/ Roger O. Hileman 
                              -------------------------------
                              Roger O. Hileman
                              (Principal Executive, Accounting
                              and Financial Officer)