<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, 1998

                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 15, 1998, there were 833,032 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,
                                                       1998          1997
                                                    ----------   ------------
                    ASSETS                          (Unaudited)
<S>                 ------                          <C>          <C>
Cash and cash equivalents                                  
  Interest-bearing                                   $  4,356     $  3,319
  Noninterest-bearing                                   1,380        1,651
Certificates of deposit                                    95           95
Investment securities available-for-sale at
 estimated market value                                 1,513        1,714
Investment securities held-to-maturity                  5,378        5,627
Mortgage-backed and related securities available- 
 for-sale at estimated market value                     1,148        1,249
Mortgage-backed and related securities held-to- 
 maturity                                               5,414        5,737
Loans receivable, net                                  44,456       46,307
Investments required by law                               577          577
Property, equipment, and property held 
 for investment, net                                      463          461
Accrued interest receivable                               311          292 
Prepaid expenses and other assets                          47           32
Foreclosed real estate                                    209          239
Deferred tax asset                                        174          161
                                                     --------     --------
TOTAL ASSETS                                         $ 65,521     $ 67,461
------------                                         ========     ========

      LIABILITIES AND STOCKHOLDERS' EQUITY
      ------------------------------------
Liabilities
-----------
  Deposits                                           $ 52,844     $ 54,022
  Accrued interest on deposits                             51           63
  Advances from borrowers for taxes and insurance         337          228
  Other liabilities                                       140          127
  Accrued income taxes                                     17          126
  Short-term borrowings                                     -          750
                                                     --------     --------
      Total Liabilities                              $ 53,389     $ 55,316
      -----------------                              --------     --------
Commitments and Contingencies
-----------------------------
Stockholders' Equity
--------------------
  Preferred stock, $.01 par value per share: 
   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, 1998 
   and December 31, 1997                                    9            9
  Additional paid-in capital                            8,227        8,212
  Unearned employee stock ownership plan 
   (ESOP) shares                                         (494)        (519)
  Management recognition plan shares                     (481)        (496)
  Retained earnings - substantially restricted          4,862        4,938
  Accumulated other comprehensive income:
    Unrealized gains (losses) on securities                 9            1
                                                     --------     --------
      Total Stockholders' Equity                     $ 12,132     $ 12,145
      --------------------------                     --------     --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 65,521     $ 67,461
------------------------------------------           ========     ========
</TABLE>
     See accompanying notes to consolidated financial statements.
                               1<PAGE>
<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,
                                                            1998         1997   
                                                          ----------------------
<S>                                                       <C>          <C> 
Interest Income
---------------
  Interest on first mortgage loans                        $    850     $    797
  Interest on other loans                                       52           38
  Interest on investments, securities, and
   deposits with banks                                         147          189
  Interest on mortgage backed securities                       109          150
                                                          --------     --------
      Total Interest Income                               $  1,158     $  1,174
      ---------------------
Interest Expense
----------------
  Interest on deposits                                    $    642     $    643
  Interest on borrowings                                         3           16
                                                          --------     --------
      Total Interest Expense                              $    645     $    659
      ----------------------                              --------     --------
Net Interest Income                                       $    513     $    515 
-------------------
Provision for Loan Losses                                       81           10
-------------------------                                 --------     --------
Net Interest Income After Provision
-----------------------------------
 for Loan Losses                                          $    432     $    505
 ---------------                                          --------     --------
Non-Interest Income
-------------------
  Initial service charges and other loan fees             $     12     $     13
  Gain on sale of other real estate                              8            -
  Other                                                         27           28
                                                          --------     --------
      Total Non-Interest Income                           $     47     $     41
      -------------------------                           --------     --------
Non-Interest Expense
--------------------
  Compensation to directors, officers, and 
   employees                                              $    201     $    159
  Pension expense and other employee benefits                   39           59
  Office properties and equipment expense 
   including depreciation                                       34           30
  Advertising                                                    9           13
  Federal insurance premiums                                    12            9
  Stationery, postage, and office supplies                      14           22
  Checking account expense                                      19           33
  Service bureau expense                                        43           23
  Other                                                         59           51  
  Legal and professional services                               46           33
                                                          --------     --------
      Total Non-Interest Expense                          $    476     $    432
      --------------------------                          --------     --------
Income Before Income Taxes                                $      3     $    114
--------------------------                                --------     --------
Income Tax Expense (Benefit)                                    (4)          35
                                                          --------     --------
Net Income (Loss)                                         $      7     $     79
-----------------                                         ========     ========
Earnings Per Common Share - Basic 
---------------------------------
  Net income                                              $    .01     $    .10
                                                          ========     ========
<PAGE>
Earnings Per Common Share - Assuming Dilution  
---------------------------------------------
  Net income                                              $    .01     $    .10
                                                          ========     ========
</TABLE>
     See accompanying notes to consolidated financial statements.
                              2<PAGE>
<PAGE>
                       HEARTLAND BANCSHARES, INC.
                       --------------------------
                            AND SUBSIDIARY
                            --------------
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
            -----------------------------------------------
                             (IN THOUSANDS)
                              -------------
                               (UNAUDITED)
                               -----------
<TABLE>
<CAPTION>
                                                                 Management            Accumulated
                                         Additional   Unearned   Recognition              Other
                                Common    Paid-in      ESOP       Plan       Retained  Comprehensive
                                Stock     Capital     Shares      Shares     Earnings    Income     Total
                                ------  ----------   --------    --------   ---------   ----------  -----
<S>                             <C>      <C>         <C>        <C>         <C>         <C>        <C>
Balance at December 31, 1997    $   9    $ 8,212     $ (519)     $(496)     $4,938       $ 1      $12,145
---------------------------
Comprehensive income:
  Net income                    $   -    $     -     $    -      $   -           7       $ -      $     7

  Other comprehensive income,
     net of tax:
    Unrealized gains (losses)
      securities:
    Unrealized holding gains
      (losses) arising during
      the period (net of 
      tax of $6)                    -          -          -          -           -         8            8
                                -----    -------      -----      -----      ------      ----      -------
Total comprehensive income      $   -    $     -      $   -      $   -      $    7      $  8      $    15

Cash dividends paid                 -          -          -          -         (83)        -          (83)

Amortization of management
  recognition plan expense          -          -          -         15           -         -           15

Amortization of ESOP expense        -         15         25          -           -         -           40
                                -----    -------      -----      -----      ------      ----      -------
Balance at March 31, 1998       $   9    $ 8,227      $(494)     $(481)     $4,862      $  9      $12,132
-------------------------       =====    =======      =====      =====      ======      ====      =======
</TABLE>

See accompanying notes to consolidated financial statements.
                              3<PAGE>
<PAGE>
              HEARTLAND BANCSHARES, INC. AND SUBSIDIARY
              -----------------------------------------
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                  -------------------------------------
                             (IN THOUSANDS)
                             --------------
                              (UNAUDITED)
                              -----------
<TABLE>
<CAPTION>
                                                            Three Months Ended 
                                                          ---------------------- 
                                                          March 31,    March 31,
                                                            1998         1997   
                                                          ----------------------
<S>                                                       <C>          <C> 
Cash Flows From Operating Activities
------------------------------------
  Net income                                              $      7     $     79
                                                          --------     --------
  Adjustments to reconcile net income       
  to net cash provided (used) by operating
  activities      
    Depreciation                                          $     14     $     13
    Discount accretion/premium amortization-
      securities (net)                                          (1)          (1)
    Amortization of deferred loan origination fees              (8)          (7)
    Amortization of ESOP expense                                40           27
    Amortization of MRP expense                                 15            -
    Provision for loan losses                                   81           10
    (Gain) loss on sale of other real estate                    (8)           - 
    (Increase) decrease in accrued interest receivable         (19)         (49)
    (Increase) decrease in prepaid expenses/other assets       (15)           9 
    (Increase) decrease in prepaid income taxes                  -           44
    (Increase) decrease in deferred income taxes               (19)         (10)
    Increase (decrease) in accrued interest payable            (12)          14 
    Increase (decrease) in other liabilities                    13            3 
    Increase (decrease) in income taxes payable               (109)           -
                                                          --------     --------
    Total Adjustments                                     $    (28)    $     53
    -----------------                                     --------     --------
  Net Cash Provided (Used) by Operating Activities        $    (21)    $    132
  ------------------------------------------------        --------     -------- 
Cash Flows From Investing Activities
------------------------------------
  Proceeds from maturities of investment securities
   and mortgage-backed securities                         $    450     $  1,350
  Principal payments on mortgage-backed securities             439          341
  Net (increase) decrease in loans receivable                1,726       (1,933)
  Purchases of property and equipment                          (16)         (28)
  Purchase of investment securities available-for-sale           -         (200)
  Proceeds from sale of other real estate                       90           84
                                                          --------     -------- 
  Net Cash Provided (Used) by Investing Activities        $  2,689     $   (386)
  ------------------------------------------------        --------     -------- 
Cash Flows From Financing Activities
------------------------------------
  Net increase (decrease) in deposits                     $ (1,178)    $    339 
  Net increase (decrease) in mortgage escrow funds             109          120
  Proceeds from Federal Home Loan Bank advances                  -        1,500
  Shares acquired by management recognition plan                 -         (230)
  Dividends on common stock                                    (83)         (82)
  Payments on Federal Home Loan Bank advances                 (750)           -
                                                          --------     --------
  Net Cash Provided by Financing Activities               $ (1,902)    $  1,647
  -----------------------------------------               --------     --------

Net Increase in Cash and Cash Equivalents                 $    766     $  1,393 
-----------------------------------------            
Cash and Cash Equivalents at Beginning of Period             4,970        1,872
                                                          --------     --------
Cash and Cash Equivalents at End of Period                $  5,736     $  3,265
------------------------------------------                ========     ========
<PAGE>
Supplemental Disclosures
------------------------
Cash Paid During the Period for:
  Interest                                                $    657     $    645
  Income taxes                                            $    124     $      -

Loans Transferred to Foreclosed Real Estate
 During Period                                            $    118     $      -

Proceeds from Sales of Foreclosed Real Estate 
 Financed Through Loans                                   $     19     $      -
</TABLE>

     See accompanying notes to consolidated financial
statements. 
                              4<PAGE>
<PAGE>
         HEARTLAND BANCSHARES, INC. AND SUBSIDIARY
         -----------------------------------------
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        ------------------------------------------
                     (UNAUDITED)
                     -----------
               March 31, 1998 and 1997
               -----------------------

1.   Business
     --------
     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 (through the Bank) provides a full range of
     financial services to individual and corporate customers
     from two office locations in Herrin and Carterville,
     Illinois.  The Company is subject to competition from
     other financial institutions in the area, is subject to
     the regulations of certain federal agencies, and undergoes
     periodic examinations by those regulatory authorities.

     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, 1998 and
     1997 have been recorded.  Operating results for the three
     months ended March 31, 1998 are not necessarily indicative
     of the results that may be expected for the year ending
     December 31, 1998.

     Certain reclassifications have been made for the three
     months ended March 31, 1997 to conform with the financial
     statement presentation for the three months ended March
     31, 1998.  The reclassifications had no effect on
     previously reported net income or retained earnings.

                             5<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
     ------------------
     In accordance with Statement of Financial Accounting
     Standards No. 128, "Earnings per Share" (SFAS No. 128),
     earnings per common share are being computed and presented
     on both a basic and diluted basis.  Basic earnings per
     share are computed based on the weighted average number of
     shares actually outstanding during the period in question. 
     In addition to using the weighted average number of
     outstanding shares, diluted earnings per share
     computations also consider the dilutive effect of stock
     options.  The number of shares that would be issued from
     the exercise of stock options has been reduced by the
     number of shares that could have been purchased from the
     proceeds at the average market price of the Company's
     stock.  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
     numbers of shares used for basic earnings per share for
     the three months ended March 31, 1998 and March 31, 1997
     were 816,763 and 814,614, respectively.  The weighted
     average numbers of shares used for diluted earnings per
     share for the three months ended March 31, 1998 and March
     31, 1997 were 824,260 and 819,213, respectively.   

     Earnings per share amounts for the three months ended
     March 31, 1997 have been restated to give effect to the
     application of SFAS No. 128, which was adopted by the
     Company at the end of 1997.  This restatement did not
     affect the earnings per share amounts previously presented
     for the three months ended March 31, 1997. 

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 a tax qualified employee stock
     ownership plan (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 and the shares become outstanding for
     earnings per share computations.  Dividends on allocated
     ESOP shares are recorded as a reduction of retained
     earnings; dividends on unallocated ESOP shares are
     recorded as a reduction of debt.  ESOP benefits expense
     recorded during the three months ended March 31, 1998 and
     1997 was $37,587 and $32,225, respectively.
                             6<PAGE>
<PAGE>
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.

     As of March 31, 1998, a liability of $92,170 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,
     1998 and 1997 was $9,513 and $8,307, respectively.

8.   Management Recognition Plan
     ---------------------------
     On January 28, 1997, the stockholders of the Company
     approved a management recognition plan ("MRP").  With
     funds contributed by the Company, the MRP has purchased,
     in the aggregate, 35,075 shares of the Company's common
     stock (the maximum number of shares allowed to be
     purchased).  Such shares were purchased in the open
     market.  In June, 1997, the MRP's administrative committee
     voted to grant awards of common stock totaling 21,917
     shares to certain executive officers and directors of the
     Company and the Bank.  These awards are deemed to be
     effective as of the date of stockholder approval of the
     MRP.  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 recognizes 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,
     1998, 35,075 shares had been purchased on the open market
     by the MRP to fund the plan at a total cost of
     approximately $552,000.  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.  The amount of expense
     recognized in the financial statements for the three
     months ended March 31, 1998 was $15,342.

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

                             7<PAGE>
<PAGE>
     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.  The Company applies APB Opinion 25 in accounting
     for its stock option plan.  Recognition of compensation
     expense for stock options is not required when options are
     granted at an exercise price equal to or exceeding the
     fair market value of the Company's common stock on the
     date the option is granted.  Therefore, no expense related
     to the stock option plan is reflected on the accompanying
     financial statements.

10.  Regulatory Capital
     ------------------
     The Bank is required to maintain certain levels of
     regulatory capital.  At March 31, 1998, 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.

11.  Stock Repurchase Plan
     ---------------------
     The Board of Directors of the Company has adopted a
     program to repurchase 43,843 shares, or 5% of the
     Company's outstanding common stock.  The program will be
     dependent upon market conditions, and there is no
     guarantee as to the exact number of shares which will be
     repurchased by the Company.  Management expects that the
     repurchase program will be completed within six months. 
     It is management's current intention that all repurchased
     shares will be held as treasury stock and will be used for
     general corporate purposes, including the exercise of
     stock options.  As of March 31, 1998, no shares have as
     yet been repurchased under the plan.
                               8<PAGE>
<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,
     1998 and December 31, 1997, and the results of operations
     for the three months ended March 31, 1998 and 1997.

     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.  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
     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.
                              9
<PAGE>
     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, 1998 and December 31, 1997, the consolidated amounts
     of cash and cash equivalents totaled $5.7 million and $5.0
     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 $2.7 million at March 31, 1998
     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, 1998, the Bank had no outstanding advances from the
     FHLB.

     At March 31, 1998, the Bank had $171,000 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, 1998, the Bank was in
     compliance with all regulatory capital requirements.

Financial Condition
-------------------
     Total assets decreased by $1.9 million, or 2.88%, from
     $67.5 million at December 31, 1997 to $65.5 million at
     March 31, 1998.  The decrease was due primarily to a
     decrease of $1.9 million in loans receivable.    

     The Bank's loan portfolio decreased by $1.9 million, or
     4.00%, from $46.3 million at December 31, 1997 to $44.5
     million at March 31, 1998.  The decrease in loan activity
     during the period is attributed to the level of repayments
     on existing loans exceeding new loan demand for the three
     months ended March 31, 1998. 

     The Bank's allowance for loan losses totaled $400,000 at
     March 31, 1998 and December 31, 1997.  During the three
     months ended March 31, 1998, net loan charge-offs amounted
     to $81,000.  An additional provision of $81,000 was made
     during the period.

     The Company's consolidated investment securities portfolio
     totaled $6.9 million at March 31, 1998, a decrease of
     $450,000 from $7.3 million at December 31, 1997.  This
     decrease was due to maturities and calls of investment
     securities totaling $450,000 for the three months ended
     March 31, 1998.  The Company's mortgage-backed and related
     securities portfolio totaled $6.6 million as of March 31,
     1998, a decrease of $424,000 from $7.0 million at December
     31, 1997.  This decrease was due to principal payments
     received on mortgage-backed and related securities. 
     During the three months ended March 31, 1998, the
     institution's portfolio of investment securities and
     mortgage-backed and related securities classified as
     available for sale increased capital by $8,000 (net of
     taxes) as a result of an increase in the market value of
     such securities classified as available for sale pursuant
     to Statement of Financial Accounting Standards ("SFAS")
     No. 115.
                              10
<PAGE>
<PAGE>
     Total liabilities decreased by $1.9 million, or 3.48%,
     from $55.3 million at December 31, 1997 to $53.4 million
     at March 31, 1998.  Total deposits decreased by $1.2
     million, or 2.18%, from $54.0 million at December 31, 1997
     to $52.8 million at March 31, 1998.  The decrease in total
     liabilities is primarily attributable to that decrease in
     deposits, and to the $750,000 decrease in borrowings from
     the Federal Home Loan Bank during the three months ended
     March 31, 1998.  Management attributes the decrease in
     deposits to competition from other local banks to attract
     deposit business.  The decrease has to date primarily
     affected the Bank's levels of one-year maturity
     certificates of deposit.

     Stockholders' equity decreased by $13,000 during the three
     months ended March 31, 1998.  This decrease is primarily
     due to dividends of $83,000 paid on Company stock.  These
     decreases were offset by amortization of ESOP and MRP
     expense of $55,000, $8,000 in unrealized holding gains on
     securities (net of tax), and net income of $7,000 for the
     period.

Results of Operations
---------------------
     Net Income.  Net income was $7,000 for the three months
     ended March 31, 1998, as compared to $79,000 for the three
     months ended March 31, 1997.  The decrease of $72,000 was
     primarily due to a $71,000 increase in the provision for
     loan losses during the first quarter of 1998 as compared
     to the first quarter of 1997.  Also contributing to the
     decrease was a decrease of $2,000, or 39 basis points,
     in net interest income and an increase of $44,000, or
     10.19%, in non-interest expense.  These changes were
     partially offset by an increase of $6,000, or 14.63%, in
     non-interest income, and by a decrease of $39,000 in income
     tax expense.   

     Net Interest Income.  Net interest income decreased
     $2,000, or 39 basis points, to $513,000 for the three
     months ended March 31, 1998, as compared to $515,000 for
     the three months ended March 31, 1997.  The ratio of
     average interest-earning assets to average interest-
     bearing liabilities remained steady at 119.83% for both
     the three months ended March 31, 1998 and the three months
     ended March 31, 1997, while the net interest margin
     increased from 2.39% for the three months ended March 31,
     1997 to 2.45% for the three months ended March 31, 1998. 
     The consistent level of net interest income reflects the
     relatively uniform relationship between the ratio of the
     total of average interest-earning assets to average
     interest-bearing liabilities for the three months ended
     March 31, 1998 as compared to the same period in 1997.  The
     small increase in the net interest margin was offset by the
     fact that average interest-earning assets decreased more
     than average interest-bearing liabilities for the periods
     in question.
     
     Interest Income.  Total interest income decreased by
     $16,000, or 1.36%, totaling $1.2 million both for the
     three months ended March 31, 1998 and for the three months
     ended March 31, 1997.  The decrease in interest income is
     primarily the result of a decrease of $1.7 million, or
     2.56%, in average interest-earning assets from $64.4
     million for the three months ended March 31, 1997 to $62.7
     million for the three months ended March 31, 1998.  This
     decrease was primarily due to a decrease of $4.0 million
     in the average balance of the securities and short-term
     investment portfolios during the three months ended March
     31, 1998 as compared to the three months ended March 31,
     1997, resulting from maturities and repayments on such
     assets exceeding new investments in this area.  This
     decrease was partially offset by a $2.3 million increase in
     the average balance of loans receivable for the three 
     months ended March 31, 1998 as compared with the three
     months ended March 31, 1997.  This increase reflects the
     Bank's ongoing loan origination efforts.  The decrease in
                              11<PAGE>
<PAGE>
     interest income also reflects an increase of 7 basis points
     in the average yield on interest-earning assets for the
     three months ended March 31, 1998 as compared to the three
     months ended March 31, 1997.

     Interest Expense.  Interest expense decreased by $14,000,
     or 2.12%, to $645,000 for the three months ended March 31,
     1998 as compared to $659,000 for the three months ended
     March 31, 1997.  This decrease was primarily due to a
     decrease of $1.4 million in the average balance of
     interest-bearing liabilities from $53.7 million for the
     three months ended March 31, 1997 to $52.4 million for the
     three months ended March 31, 1998.  This decrease is
     attributed to a $1.5 million decrease in the average
     balance of borrowings from the Federal Home Loan Bank,
     with no such borrowings outstanding as of March 31, 1998. 
     The decrease in the average balance of interest-bearing
     liabilities was partially offset by a 3 basis point
     increase in the average cost of interest-bearing
     liabilities, from 4.90% for the three months ended March
     31, 1997 to 4.93% for the three months ended March 31,
     1998.  

     Provision for Loan Losses.  The allowance for loan losses
     is established through a provision for loan losses based
     on management's evaluation of 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.  An $81,000 provision for
     loan losses was made during the three months ended March
     31, 1998, compared with a provision of $10,000 for the
     three months ended March 31, 1997.  The increase in the
     provision was deemed necessary due to charge-offs of
     $81,000 during the first quarter of 1998.  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 increased from
     $41,000 for the three months ended March 31, 1997 to
     $47,000 for the three months ended March 31, 1998.  The
     largest components of non-interest income for the three
     month periods ended March 31, 1998 and 1997 included
     $12,000 and $13,000, respectively, in loan and other
     service fees and $27,000 and $28,000, respectively, in
     other service charges and other miscellaneous operating
     income.  In addition, the Company recognized a gain of
     $8,000 on the sale of real estate owned during the three
     months ended March 31, 1998, with no corresponding gains
     during the three months ended March 31, 1997.  

     Non-Interest Expense.  Non-interest expense increased
     $44,000, or 10.19%, from $432,000 for the three months
     ended March 31, 1997 to $476,000 for the three months
     ended March 31, 1998.  This increase included increases of
     $22,000 in compensation and employee benefits expense,
     $13,000 in legal and professional services, and net
     increases of $9,000 in various other expense items.

                             12<PAGE>
<PAGE>
     Income Tax Expense.  Income tax expense was $(4,000) for
     the three months ended March 31, 1998 as compared with
     $35,000 for the three months ended March 31, 1997.  The
     $39,000 decrease is primarily due to the decrease in
     income before income taxes from $114,000 for the three
     months ended March 31, 1997 to $3,000 for the three months
     ended March 31, 1998.  The negative tax expense (or tax
     benefit) of $4,000 for the three months ended March 31,
     1998 arises from the effect of items such as tax-exempt
     interest income upon the Company's income tax computation. 

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 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 adopted the relevant provisions
     of the statement during 1997, and is now adopting the
     provisions of the statement which become effective in
     1998.  The provisions of the statement adopted in 1998 did
     not have a material effect on the Company's financial
     position or operating results.

     Comprehensive Income.  In June, 1997, the FASB issued SFAS
     No. 130, "Reporting Comprehensive Income".  SFAS No. 130
     establishes standards for reporting and display of
     comprehensive income and its components (revenues,
     expenses, gains, and losses) in a full set of general-
     purpose financial statements.  This statement requires
     that all items that are required to be recognized under
     accounting standards as components of comprehensive income
     be reported in a financial statement that is displayed
     with the same prominence as other financial statements.
                             13<PAGE>
<PAGE>

     This statement requires that an enterprise (a) classify
     items of other comprehensive income by their nature in a
     financial statement and (b) display the accumulated
     balance of other comprehensive income separately from
     retained earnings and additional paid-in capital in the
     equity section of a statement of financial position.  This
     statement is effective for fiscal years beginning after
     December 15, 1997.  The Company has adopted the provision
     of this statement in 1998, and has presented comprehensive
     income information in the consolidated statements of
     financial condition and statements of stockholders'
     equity.

     Disclosures about Segments of an Enterprise and Related
     Information.  In June, 1997, the FASB issued SFAS No. 131,
     "Disclosures about Segments of an Enterprise and Related
     Information".  SFAS No. 131 establishes standards for the
     way that public business enterprises report information
     about operating segments in annual financial statements
     and requires that those enterprises report selected
     information about operating segments in interim financial
     reports issued to shareholders.  It also establishes
     standards for related disclosures about products and
     services, geographic areas, and major customers.  This
     statement is effective for financial statements for
     periods beginning after December 15, 1997.  The statement
     provides that its provisions need not be applied to
     interim financial statements in the initial year of its
     application.  Therefore, the Company plans to adopt the
     appropriate provisions of the statement for its financial
     statements for the year ended December 31, 1998, and does
     not believe that the adoption of this statement will have
     a material effect on the Company's financial position or
     operating results.

     Employers' Disclosure about Pensions and Other
     Postretirement Benefits.  In February, 1998, the FASB
     issued SFAS No. 132, "Employers' Disclosures about
     Pensions and Other Postretirement Benefits".  SFAS No. 132
     standardizes the disclosure requirements for pensions and
     other postretirement benefits.  This statement is
     effective for financial statements for periods beginning
     after December 15, 1997.  The Company is adopting the
     appropriate provisions of this statement during 1998, and
     does not believe that the adoption of this statement will
     have a material effect on the Company's financial position
     or operating results. 
                              14<PAGE>
<PAGE>

                   PART II.   OTHER INFORMATION

Item 1.   Legal Proceedings

     On May 7, 1998, Barrett Rochman, a stockholder of the
Company, filed suit in the Circuit Court of the First Judicial
Circuit, Williamson County, Illinois, (Rochman v. Heartland
Bancshares, Inc., Roger O. Hileman, Charles Stevens, James C.
Walker, Randall A. Youngblood, Paul R. Calcaterra and B. D.
Cross) against Heartland Bancshares, Inc. and each of the
individual directors of the Company seeking a preliminary and
permanent injunction and damages.  Mr. Rochman alleges certain
wrongdoings in  connection with the exclusion of votes at the
Annual Meeting of Stockholders.  Mr. Rochman is seeking an
injunction prohibiting the Company from installing Messrs.
Hileman and Stevens as directors and requiring that Mr. Rochman
and Mr. Burns be installed as directors of the Company.  Mr.
Rochman is also seeking damages although no specific amount is
specified in the complaint.  

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 April 30, 1998, the Company held its Annual Meeting of
      Stockholders for the purpose of electing two directors and
      considering a stockholder proposal calling for the Board
      to engage an investment banker or consultant to advise the
      Board on strategies to enhance earnings and shareholder
      value (the "Stockholder Proposal").

(b)   Mr. Roger Hileman and Mr. Charles Stevens were elected as
      directors at the Annual Meeting.  In addition, the
      following directors had terms of office continuing after
      the Annual Meeting:  James C. Walker, Randall A.
      Youngblood, Paul R. Calcaterra and B. D. Cross.

(c)   At the Annual Meeting, stockholders voted upon the
      election of two individuals as directors and the
      consideration of the Stockholder Proposal.  The election
      of directors was contested with management soliciting
      proxies in favor of its two nominees and Barrett Rochman
      soliciting proxies in favor of himself and David Burns. 
      In accordance with Article XIV of the Company's Articles
      of Incorporation, all shares beneficially owned by any
      person (including a group acting in concert) in excess of
      10% of the issued and outstanding shares of Company common
      stock are not counted as shares outstanding for purposes
      of voting and are not entitled to vote in connection with
      any matter submitted to stockholders for a vote.  The
      Board of Directors of the Company determined that Barrett
      Rochman, together with other stockholders with whom he was
      acting in concert, had acquired in excess of 10% of the
      outstanding shares.  Accordingly, 140,999 shares were not
      counted as outstanding or entitled to vote.  The results
      of the voting at the Annual Meeting were as follows:

1.    Election of Directors

Nominee                           Votes For      Votes Withheld
-------                           ---------      --------------
Roger O. Hileman                    331,854           627
Charles Stevens                     331,854           627
Barrett Rochman                     288,976             0
David Burns                         288,976             0
                              15<PAGE>
<PAGE>
2.    Stockholder Proposal

            Votes For        Votes Against     Abstentions
            ---------        -------------     -----------
             274,063           320,628          26,767

(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 (EDGAR Only)
                           16<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 15, 1998           By: /s/ Roger O. Hileman           
                                  ------------------------
                                  Roger O. Hileman
                                  (Principal Executive,
                                   Accounting and Financial
                                   Officer)

                             17