UNITED STATES
                        SECURITY AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


{X}  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended March 31, 1998

                                       or

{    }  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from______________________ to ______________________

Commission File Number:  0-27700

HBancorporation, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

37-1351506
(I.R.S. Employer identification No.)

619 12th Street, Lawrenceville, Illinois              62439
(Address of principal executive offices)           (Zip Code)

(618) 943-2515
(Registrant's telephone number, including area code)

N/A
(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

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

As of April 14, 1998, there were 390,600 shares of the Registrant's common stock
issued and outstanding.

Transitional Small Business Disclosure Format (Check One):

{  }   Yes                 {X}   No



<PAGE>


                              HBANCORPORATION, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                 PAGE
                                                                                 ----
<S>                                                                              <C>
Part I.  Financial Information

         Item 1.  Financial Statements

         Consolidated Statements of Financial Condition at March 31, 1998          1
         and June 30, 1997

         Consolidated Statements of Income for the three and nine months
         ended March 31, 1998 and 1997                                             2

         Consolidated Statement of Changes in Stockholders' Equity for the         3
         nine months ended March 31, 1998 and 1997

         Consolidated Statements of Cash Flows for the three and nine months       4
         ended March 31, 1998 and 1997

         Notes to Consolidated Financial Statements                               5-6

         Item 2.  Management's Discussion and Analysis of Financial Condition    7-11
         and Results of Operations

Part II.  Other Information

         Item 1.  Legal Proceedings                                               11

         Item 2.  Exhibits and Reports on Form 8-K                                11

         Signatures                                                               12
</TABLE>



<PAGE>

                              HBANCORPORATION, INC.
                             LAWRENCEVILLE, ILLINOIS
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                  (Unaudited)
                                                                    March 31,       June 30,
                                                                      1998            1997
                                                                  ------------    ------------
<S>                                                               <C>             <C>         
                         ASSETS
Cash and equivalents:
   Cash                                                           $     90,092    $    357,424
   Interest bearing deposits                                         1,605,313       1,292,870
                                                                  ------------    ------------
         Total cash and cash equivalents                             1,695,405       1,650,294

Certificates of deposit with other banks                                66,579         164,730
Investments available for sale at fair value                         1,716,738       1,098,227
Investments held to maturity at cost                                 1,022,753       1,024,461
Loans receivable, net                                               15,059,884      13,506,764
Federal Home Loan Bank stock at cost                                    87,500          66,000
Federal Reserve Bank stock at cost                                      67,800          67,800
Accrued interest receivable                                            168,923         167,308
Office property and equipment, net                                      44,954          39,153
Other assets                                                            10,732          17,541
                                                                  ------------    ------------
         Total Assets                                             $ 19,941,268    $ 17,802,278
                                                                  ============    ============

    LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Passbook savings                                               $  1,981,670    $  1,940,931
   Money market deposit accounts                                           -0-         384,333
   Certificates of deposit                                           7,337,518       6,282,479
   Certificates of deposit $100,000 and over                         1,590,370         635,853
                                                                  ------------    ------------
         Total Deposits                                             10,909,558       9,243,596

   Advances from FHLB                                                1,750,000             -0-

Other Liabilities:                                                     422,599         275,157
                                                                  ------------    ------------
         Total Liabilities                                          13,082,157       9,518,753
                                                                  ------------    ------------

Stockholders' Equity:
   Common stock, $.01 par value, 2 million shares authorized,
     390,600 issued and outstanding at March 31, 1998, and
     491,420 issued and outstanding at June 30, 1997                     4,933           4,933
   Additional paid in capital                                        4,534,112       4,514,279
   Retained earnings                                                 4,138,354       4,015,104
   Treasury stock at cost                                           (1,661,068)        (26,838)
   Net unrealized appreciation on available-for-sale securities
     net of tax of $111,500 at March 31, 1998 and
     $78,500 at June 30, 1997                                          158,500         111,500
   Unearned ESOP compensation                                         (315,720)       (335,453)
                                                                  ------------    ------------
         Total Stockholders' Equity                                  6,859,111       8,283,525
                                                                  ------------    ------------

         Total Liabilities and Stockholders' Equity               $ 19,941,268    $ 17,802,278
                                                                  ============    ============
</TABLE>

See notes to consolidated financial statements.

                                       -1-


<PAGE>


                              HBANCORPORATION, INC.
                             LAWRENCEVILLE, ILLINOIS
                        CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                  Three months ended         Nine months ended
                                                       March 31,                 March 31,
                                               -----------------------    -----------------------
                                                     (Unaudited)                (Unaudited)
                                                  1998         1997          1998         1997
                                               ----------   ----------    ----------   ----------
<S>                                            <C>          <C>           <C>          <C>       
INTEREST INCOME
   Loans receivable                            $  350,304   $  287,036    $1,015,832   $  814,854
   Investments                                     70,501       68,755       224,338      264,119
                                               ----------   ----------    ----------   ----------
         Total Interest Income                    420,805      355,791     1,240,170    1,078,973
                                               ----------   ----------    ----------   ----------

INTEREST EXPENSE
   Interest on deposits                           129,246      111,171       368,788      338,529
   Interest on FHLB advances                       24,183          -0-        53,562          -0-
                                               ----------   ----------    ----------   ----------
         Total Interest Expense                   153,429      111,171       422,350      338,529
                                               ----------   ----------    ----------   ----------

         Net Interest Income                      267,376      244,620       817,820      740,444
   Provision for Loan Losses                          -0-          -0-           -0-        5,000
                                               ----------   ----------    ----------   ----------
         Net interest income after provision
           for loan losses                        267,376      244,620       817,820      735,444
                                               ----------   ----------    ----------   ----------

NONINTEREST INCOME
   Customer service fees and other                  5,580        2,868        26,982        5,234
                                               ----------   ----------    ----------   ----------
         Total Noninterest Income                   5,580        2,868        26,982        5,234
                                               ----------   ----------    ----------   ----------

NONINTEREST EXPENSES
   General and administrative
     Compensation and benefits                     82,576       71,517       239,670      209,227
     Occupancy and equipment                       10,892        9,714        30,097       26,902
     Deposit insurance premium                      5,088       (1,347)       14,729       17,348
     SAIF assessment fee                              -0-          -0-           -0-       62,144
     Computer expense                               5,307        5,337        13,675       16,382
     Legal expense                                  7,603        6,000        37,290       40,785
     Other                                         27,628       32,771        78,481       82,673
                                               ----------   ----------    ----------   ----------
         Total Noninterest Expenses               139,094      123,992       413,942      455,461
                                               ----------   ----------    ----------   ----------

INCOME (LOSS) BEFORE INCOME TAX                   133,862      123,496       430,860      285,217

Income Tax Expense                                 61,250       47,950       198,950      114,777
                                               ----------   ----------    ----------   ----------

NET INCOME (LOSS)                              $   72,612   $   75,546    $  231,910   $  170,440
                                               ==========   ==========    ==========   ==========

Earnings per share:
   Primary                                     $     0.19   $     0.17    $     0.56   $     0.37
                                               ==========   ==========    ==========   ==========

   Fully Diluted                               $     0.18   $     0.17    $     0.53   $     0.37
                                               ==========   ==========    ==========   ==========
</TABLE>



See notes to consolidated financial statements.

                                                        -2-


<PAGE>




                              HBANCORPORATION, INC.
                             LAWRENCEVILLE, ILLINOIS
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                Unrealized   Unearned
                                                 Common     Paid in     Retained     Treasury   Gain (Loss)   Compen-      Total
                                                 Stock      Capital     Earnings       Stock    Securities    sation      Equity
                                               ---------  -----------  -----------  -----------  ---------  ----------  -----------
<S>           <C> <C>                          <C>        <C>          <C>          <C>          <C>        <C>         <C>        
BALANCE, June 30, 1996                         $   4,933  $ 4,505,471  $ 3,954,530  $         0  $  68,000  $ (374,918) $ 8,158,016
Net income for the nine months ended
   March 31, 1997                                      0            0      170,440            0          0           0      170,440
Cash dividends                                         0            0     (118,395)           0          0           0     (118,395)
Change in net unrealized gain on securities
   available-for-sale, net of applicable
   deferred income taxes of $57,500                    0            0            0            0     13,500           0       13,500
Effect of contribution to fund ESOP                    0            0            0            0          0      19,733       19,733
                                               ---------  -----------  -----------  -----------  ---------  ----------  -----------

BALANCE, March 31, 1997                        $   4,933  $ 4,505,471  $ 4,006,575  $         0  $  81,500  $ (355,185) $ 8,243,294
                                               =========  ===========  ===========  ===========  =========  ==========  ===========

BALANCE, June 30, 1997                         $   4,933  $ 4,514,279  $ 4,015,104  $   (26,838) $ 111,500  $ (335,453) $ 8,283,525
Net income for the nine months ended
   March 31, 1998                                      0            0      231,910            0          0           0      231,910
Cash dividends                                         0            0     (108,660)           0          0           0     (108,660)
Change in unrealized gain on securities
   available-for-sale, net of applicable
   deferred income taxes of $111,500                   0            0            0            0     47,000           0       47,000
Effect of contribution to fund ESOP                    0            0            0            0          0      19,733       19,733
Effect of contribution to fund RRP                     0       19,833            0            0          0           0       19,833
Purchase of treasury stock                             0            0            0   (1,634,230)         0           0   (1,634,230)
                                               ---------  -----------  -----------  -----------  ---------  ----------  -----------

BALANCE, March 31, 1998                        $   4,933  $ 4,534,112  $ 4,138,354  $(1,661,068) $ 158,500  $ (315,720) $ 6,859,111
                                               =========  ===========  ===========  ===========  =========  ==========  ===========
</TABLE>




See notes to consolidated financial statements.

                                       -3-


<PAGE>


                              HBANCORPORATION, INC.
                             LAWRENCEVILLE, ILLINOIS
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                        Three months ended             Nine months ended
                                                             March 31,                     March 31,
                                                     --------------------------    --------------------------
                                                            (Unaudited)                   (Unaudited)
                                                         1998           1997           1998           1997
                                                     -----------    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)                                    $    72,612    $    75,546    $   231,910    $   170,440
Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation                                          3,521          2,887          9,587          8,055
     Decrease (increase) in other assets                    (682)           844          6,809          9,204
     (Increase) in interest receivable                    (9,290)        (1,140)        (1,615)        (8,522)
     Increase in other liabilities                        52,359         52,841        147,442        186,069
     Provision for loan loss                                 -0-            -0-            -0-          5,000
                                                     -----------    -----------    -----------    -----------
Cash provided by operating activities                    118,520        130,978        394,133        370,246
                                                     -----------    -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Investments in certificates of deposit in other
     financial institutions, net decrease                    -0-            -0-         98,151        438,448
   Purchase of Federal Home Loan Bank stock                  -0-            -0-        (21,500)           -0-
   Proceeds from maturities of investments
     held to maturity                                        574            564          1,708          4,653
   Proceeds from maturities of investments
     available-for-sale                                  331,370            -0-        442,023            -0-
   Purchases of investments available-for-sale               -0-            -0-     (1,013,534)           -0-
   Purchase of fixed assets                              (10,690)          (900)       (15,388)        (7,233)
   Net (increase) decrease in loans                     (727,166)        90,585     (1,553,120)    (2,530,262)
                                                     -----------    -----------    -----------    -----------
Cash (used) by investing activities                     (405,912)        90,249     (2,061,660)    (2,094,394)
                                                     -----------    -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Advances from FHLB                                        -0-            -0-      1,750,000            -0-
   Payment of dividends                                  (32,190)       (39,465)      (108,660)      (118,395)
   Allocation of ESOP shares                                 -0-            -0-         19,733            -0-
   Allocation of RRP shares                                6,769            -0-         19,833            -0-
   Net increase (decrease) in demand deposits,
     NOW accounts, savings accounts and
     certificates of deposit                             244,007        (74,515)     1,665,962       (212,517)
   Purchases of treasury stock                          (288,000)           -0-     (1,634,230)           -0-
                                                     -----------    -----------    -----------    -----------
Cash provided (used) by financing activities             (69,414)      (113,980)     1,712,638       (330,912)
                                                     -----------    -----------    -----------    -----------

   Net increase (decrease) in cash and
     cash equivalents                                   (356,806)       107,247         45,111     (2,055,060)

Cash and Cash Equivalents at Beginning
   of Period                                           2,052,211      1,690,849      1,650,294      3,853,156
                                                     -----------    -----------    -----------    -----------

Cash and Cash Equivalents at End of Period           $ 1,695,405    $ 1,798,096    $ 1,695,405    $ 1,798,096
                                                     ===========    ===========    ===========    ===========

Cash paid for:
   Interest                                          $   169,656    $   112,893    $   415,666    $   337,277
                                                     ===========    ===========    ===========    ===========

   Income taxes                                      $    43,000    $    45,000    $   150,481    $    37,418
                                                     ===========    ===========    ===========    ===========
</TABLE>


See notes to consolidated financial statements.

                                       -4-


<PAGE>


                              HBANCORPORATION, INC.
                             LAWRENCEVILLE, ILLINOIS

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 1998 AND 1997



NOTE 1 - BASIS OF PRESENTATION

The  unaudited  information  for the  quarters  ended  March 31,  1998 and 1997,
includes the results of operations of HBancorporation,  Inc. (the "Company") and
its wholly owned subsidiary  Heritage National Bank (the "Bank"). In the opinion
of management of the Company and the Bank, the financial  statements reflect all
adjustments  (consisting  only of normal  recurring  adjustments)  necessary  to
present fairly the consolidated  financial  statements.  These interim financial
statements  should be read in conjunction  with the Company's most recent annual
financial   statements   and   footnotes   included  in  the  annual  report  of
HBancorporation,  Inc. for the fiscal year ended June 30,  1997.  The results of
the  period  presented  are not  necessarily  representative  of the  results of
operations and cash flows which may be expected for the entire year.

NOTE 2 - PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements  include the accounts of the Company and
the Bank. All  significant  inter-company  balances and  transactions  have been
eliminated in consolidation.

NOTE 3 - STOCK CONVERSION

The Company issued 493,320 shares,  $.01 par value common stock, for proceeds of
$4,510,404 net of expenses of approximately  $423,000. The Bank converted from a
mutual savings association to a stock savings association and then to a national
bank immediately following the formation of the Company and received proceeds of
$2,255,202 in exchange for all its common stock.  This transaction was accounted
for using the pooling of interests  method.  On April 1, 1996, the Company began
trading  as a public  company on the OTC  Electronic  Bulletin  Board  under the
symbol "HBIN".

Federal regulations require that, upon conversion from a mutual to stock form of
ownership,  a  "liquidation  account" be established by restricting a portion of
net worth for the benefit of eligible savings account holders who maintain their
savings  accounts  with the Bank  after  conversion.  In the  event of  complete
liquidation  (and only in such event) each savings  account holder who continues
to maintain his savings account shall be entitled to receive a distribution from
the  liquidation  account  after  payment  of  all  creditors,  but  before  any
liquidation  distribution  with respect to capital  stock.  This account will be
proportionately  reduced for any subsequent  reduction in such holders'  savings
account.  Federal regulations impose limitations on the payment of dividends and
other capital distributions,  including,  among others, that the Company may not
declare or pay a cash dividend on any of its capital stock if the effect thereof
would cause the Bank's  capital to be reduced below the amount  required for the
liquidation  account  or the  capital  requirements  imposed  by  the  Financial
Institutions Reform, Recovery, and Enforcement Act.





                                       -5-
<PAGE>

                              HBANCORPORATION, INC.
                             LAWRENCEVILLE, ILLINOIS

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 1998 AND 1997



NOTE 3 - STOCK CONVERSION,CONTINUED

Concurrent with the conversion,  the board of directors approved the adoption of
the Company's  Employee Stock  Ownership  Plan (the "ESOP").  The ESOP qualifies
under Sections  401(a) and 501(a) of the Internal  Revenue Code,  eligibility is
based on hours of service, date of hire, and age.  Contributions to the ESOP are
determined  by the  board of  directors,  in the  form of cash or the  Company's
common  stock.  No  employee  contributions  are  accepted.   Contributions  are
allocated  based  on  the  ratio  of the  participant's  compensation  to  total
compensation  of all  participants.  Participant's  account  balances  are fully
vested after five years of service.

NOTE 4 - EMPLOYEE BENEFIT AND STOCK OPTION PLANS

On  April  28,  1997,  the  stockholders'   approved  the  HBancporation,   Inc.
Recognition  and Retention Plan ("RRP").  The purpose of this plan is to provide
directors,  officers and employees with a proprietary interest in the Company in
a manner  designed to encourage such  individuals to remain with the Company and
the Bank. The terms of each RRP will be identical, only the participants and the
number of shares awarded to each participant vary. Eligible directors,  officers
and other key employees of the Company will earn (i.e., become vested in) shares
of common stock covered by the award at a rate not to exceed 20% per year,  with
the first installment vesting April 28, 1997.

On April 28, 1997,  the  stockholders  approved the  HBancorporation,  Inc. 1997
Stock Option and Incentive Plan.  Pursuant to the Stock Option Plan, the Company
will reserve for issuance  thereunder either from authorized but unissued shares
or from issued shares  reacquired and held as treasury shares,  59,198 shares of
Common Stock (12.0% of the Company's  current  shares  outstanding).  Management
currently  intends,  to the extent  practicable and feasible,  to fund the Stock
Option Plan from issued  shares  reacquired  by the Company in the open  market.
Awards under the plan may be in the form of stock  options,  stock  appreciation
rights or limited stock appreciation rights.  Awards made under the plan vest at
a rate of one-fifth of the initial  award per year,  subject to the  participant
maintaining continuous service since the date of grant.

NOTE 5 - EARNINGS PER SHARE

Primary  earnings per share amounts for the nine months ended March 31, 1998 and
1997 are  computed  based on the  weighted-average  number of shares of actually
outstanding,  410,917 in 1998 and 455,836 in 1997.  Fully  diluted  earnings per
share  amounts  are  based  on an  increased  number  of  shares  that  would be
outstanding assuming exercise of the stock options and RRP awards. The number of
shares used in the computations of fully diluted earnings per share for the nine
months ended March 31, 1998 and 1997 were 440,713 and 455,836, respectively.





                                       -6-
<PAGE>

                              HBANCORPORATION, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION



General

The  Company  is  incorporated  under  the  laws of  Delaware  and is  generally
authorized  to engage  in any  activity  that is  permitted  for a bank  holding
company under  federal  banking law. The Company owns all the stock of the Bank.
The Company had not engaged in any material  operations  at March 31, 1998,  and
had no significant  assets other than its equity investment in the Bank's stock,
cash, investments, and a loan to the Company's ESOP.

Established in 1935, the Bank (formerly named Lawrenceville  Federal Savings and
Loan  Association)  is a  community-oriented  financial  institution  offering a
variety of financial  services to meet the needs of the  communities  it serves.
The Bank's  primary  market  area covers  Lawrence  County,  Illinois,  and Knox
County,  Indiana.  The Bank attracts  deposits from the general  public and uses
such deposits,  together with  borrowings  and other funds,  to originate one to
four family residential  mortgages,  commercial business loans,  consumer loans,
and  finance  leases.  The Bank  also  invests  in U.S.  government  and  agency
obligations and may invest in other permissible investments.

The Bank's results of operations  are primarily  dependent upon its net interest
income, which is the difference between interest earned on loans and investments
and interest paid on deposits and other borrowed  funds.  Net interest income is
directly  affected  by the  relative  amounts  of  interest  earning  assets and
interest  bearing  liabilities  and the  interest  rates  earned or paid on such
amounts. The Bank's results of operations are also affected by the provision for
loan losses and the level of noninterest income and expenses. Noninterest income
consists primarily of service charges. Noninterest expense includes salaries and
employee benefits,  occupancy expenses, federal deposit insurance premiums, data
processing expenses, and other operating expenses.

The  operating  results  of the Bank  are  also  affected  by  general  economic
conditions,  the  monetary  and fiscal  policies  of federal  agencies,  and the
policies of agencies that regulate  financial  institutions.  The Bank's cost of
funds is  influenced  by interest  rates on  competing  investments  and general
market rates of interest.  Lending  activities  are influenced by the demand for
real  estate  loans and other  types of loans,  which in turn is affected by the
rates of  interest  at which  loans are  offered,  general  economic  conditions
affecting loan demand, and the availability of funds for lending activities.

Financial Condition

For  the  nine  months  ended   December  31,  1998,   total  assets   increased
approximately $2.1 million from $17.8 million to $19.9 million. Assets increased
as a result of an increase in cash, investments, and loans receivable.  Deposits
increased by approximately $1.7 million to $10.9 million at March 31, 1998, from
$9.2  million at June 30,  1997.  Management  believes  the increase in deposits
stems from the Company offering higher rates over its competitors.  For the nine
months ended March 31, 1998, total stockholders' equity decreased  approximately
$1.4 million from $8.3 million to $6.9  million.  The decrease was primarily due
to the purchase of treasury stock and payment of dividends offset by net income.



                                       -7-
<PAGE>

                              HBANCORPORATION, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION



Results of Operations:

Comparison of the three months ended March 31, 1998 and 1997.

General.  Net income  decreased  to $73,000 for the three months ended March 31,
1998,  compared  to  $76,000  for the same  period  in 1997.  The  decrease  was
primarily due to increases in interest expense and noninterest expense.

Interest Income. Total interest income increased by $65,000 or 18.3% to $421,000
for the three  months  ended  March 31,  1998,  compared to the same period last
year. Income from loans grew by $63,000 for the three months.  Investment income
increased  by $2,000 for the three  months  due  primarily  to higher  amount of
investments at a slightly higher interest rate.

Interest  Expense.  Total  interest  expense  increased by $42,000 for the three
months  ended March 31, 1998,  to $153,000  compared to $111,000 in the previous
three month period. The increase was primarily due to interest on FHLB advances.

Net  Interest  Income.  Net interest  income  before  provision  for loan losses
increased  $23,000 or 1.2% from  $244,000 to $267,000 for the recent three month
period compared to the same period a year ago, respectively.

Nonperforming  Assets and  Provisions  for Loan Losses.  The  provision for loan
losses is a result of  management's  periodic  analysis  of the  adequacy of the
Bank's allowance for loan losses. During the three month periods ended March 31,
1998 and 1997,  the Bank made no addition to the allowance for loan losses.  The
Bank  continues  to  monitor  and  adjust  its  allowance  for  loan  losses  as
management's analysis of its loan portfolio and economic conditions dictate.

Noninterest  Income.  Noninterest  income was $6,000 for the three month  period
ended  March 31,  1998,  compared  to $3,000 for the same  period in 1997.  This
increase is primarily  due to loan fees and fees for issuing  travelers'  checks
and service charges on checking accounts.

Noninterest  Expense.  For the three  months  ended  March 31,  1998,  the total
noninterest  expense was $139,000 compared to $124,000 for the same three months
in 1997. This increase is due to  contributions to the ESOP and costs associated
with the RRP offset by lower professional fees.

Income Tax  Expense.  Income tax expense  increased  to $61,000  during the most
recent three months  compared to $48,000 for the same period a year ago.  Higher
taxes  were the  result  of filing  separate  tax  returns  for the Bank and the
holding company, and preparing consolidated financial statements.

Comparison of the nine months ended March 31, 1998 and 1997.

General.  Net income  increased  to $232,000 for the nine months ended March 31,
1998,  compared  to  $170,000  for the same  period in 1997.  The  increase  was
primarily due to a $77,000  increase in net interest  income,  and lower deposit
insurance premiums, offset by contributions to the ESOP and RRP.



                                       -8-
<PAGE>

                              HBANCORPORATION, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION



Interest  Income.  Total  interest  income  increased  by  $161,000  or 14.9% to
$1,240,000 for the nine months ended March 31, 1998, compared to the same period
last  year.  Income  from  loans  increased  by  $201,000  for the nine  months.
Investment  income  decreased  by $40,000 for the nine months due  primarily  to
lower amount of investments at a slightly lower interest rate.

Interest  Expense.  Total  interest  expense  increased  by $84,000 for the nine
months  ended March 31, 1998,  to $422,000  compared to $338,000 in the previous
nine month period. The increase was primarily due to interest on FHLB advances.

Net Interest  Income.  Net interest  income  before  provisions  for loan losses
increased  $77,000 or 10.4% from  $740,000 to $818,000 for the recent nine month
period compared to the same period a year ago, respectively.

Nonperforming  Assets and  Provisions  for Loan Losses.  The  provision for loan
losses is a result of  management's  periodic  analysis  of the  adequacy of the
Bank's  allowance for loan losses.  During the nine month period ended March 31,
1998 the Bank made no addition to the allowance for loan losses,  and recorded a
provision of $5,000 for the same period in 1997.  The Bank  continues to monitor
and adjust its  allowance for loan losses as  management's  analysis of its loan
portfolio  and economic  conditions  dictate.  The Bank believes it has taken an
appropriate  approach  toward reserve  levels,  consistent  with the Bank's loan
portfolio,  the level of the Bank's  allowance for loan losses and any change in
the related ratio of the allowance  for loan losses to  nonperforming  loans are
dependent  upon the economy,  changes in real estate values and interest  rates.
Because the Bank has historically  experienced low loan losses,  management also
considers  the loss  experience  of similar  portfolios  in  comparable  lending
markets.  In addition,  federal regulators may require additional  reserves as a
result of their  examination of the Bank.  Accordingly,  the  calculation of the
adequacy of the allowance for loan losses is not based  directly on the level of
nonperforming  assets.  The  allowance  for loan losses  reflects  what the Bank
currently  believes is an adequate level of resources,  although there can be no
assurance  that future  losses will not exceed the  estimated  amounts,  thereby
adversely affecting future results of operations.  As of March 31, 1998 and June
30, 1997, the Bank's allowance for loan losses was $128,000.

The Bank had no  nonperforming  assets at March 31, 1998 or June 30, 1997. There
was no  foreclosed  real estate  owned by the Bank at March 31, 1998 or June 30,
1997.

Noninterest  Income.  Noninterest  income was $27,000 for the nine month  period
ended  March 31,  1998,  compared  to $5,000 for the same  period in 1997.  This
increase is primarily  due to loan fees and fees for issuing  traveler's  checks
and service charges on checking accounts.

Noninterest  Expense.  For the nine  months  ended  March  31,  1998,  the total
noninterest  expense was $414,000  compared to $456,000 for the same nine months
in 1997.  Compensation  and benefits have increased  approximately  $30,000 as a
result of  contributions  to the ESOP,.  costs  associated  with the RRP and the
cashout of a deceased  director's  stock  options.  Deposit  insurance  premiums
decreased  approximately  $65,000  for the nine  months  ended  March 31,  1998,
compared  with the same  period in 1997.  This  decrease is  primarily  due to a
one-time FDIC assessment fee to recapitalize the SAIF insurance fund.

Income Tax Expense.  Income tax expense  increased  to $199,000  during the most
recent nine months  compared to $115,000 for the same period a year ago.  Higher
taxes  were the  result  of filing  separate  tax  returns  for the bank and the
holding company, and preparing consolidated financial statements.

                                       -9-

<PAGE>

                              HBANCORPORATION, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION



Capital Requirements.  The Company's main sources of funds are deposits and loan
and investment repayments. Other potential sources would include borrowings from
the Federal Home Loan Bank of Chicago  (FHLB).  As a national  bank, the Bank is
not subject to any prescribed liquidity requirement.

The  Bank  uses its  capital  resources  to meet  ongoing  commitments,  to fund
maturing  certificates of deposit and deposit  withdrawals,  to invest,  to fund
existing  and  future  loan  commitments,  to  maintain  liquidity,  and to meet
operating  expenses.  The company  anticipates it will have sufficient  funds to
meet current loan  commitments.  At March 31, 1998,  the Bank had no outstanding
commitments  to extend  credit.  Management  believes loan  repayments and other
sources  of funds will be  adequate  to meet the  Bank's  foreseeable  liquidity
needs.   FHLB   advances   could  be  used  to  take   advantage  of  investment
opportunities, but are not relied upon in the regular course of business.

The Bank is required to maintain specific amounts of regulatory capital pursuant
to federal  regulations.  The table below presents the capital position at March
31, 1998 relative to the regulatory capital requirements for the Bank.


                                                                 Amount
                                                              (in thousands)
                                                              --------------
Tier 1 Capital                                                   $6,141
Tier 1 Capital Requirement                                          593
                                                                 ------
Excess                                                           $5,548
                                                                 ======

Total Risk-Based Capital                                         $6,269
Risk-Based Capital Requirement                                    1,151
                                                                 ------
Excess                                                           $5,118
                                                                 ======











                                      -10-

<PAGE>

                           PART II. OTHER INFORMATION



Item 1.         Legal Proceedings

                There are no material legal  proceedings to which the Company or
                the  Bank  is a party  or of  which  any of  their  property  is
                subject.  From  time-to-time,  the  Bank  is a  party  to  legal
                proceedings incident to its business.

Item 2.         Exhibits and Reports on Form 8-K

                None







                                      -11-
<PAGE>

                                   SIGNATURES


Pursuant  to the  requirement  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.

                                      HBANCORPORATION, INC.
                                      Registrant



Date:   April 14, 1998                /s/  Kevin J. Kavanaugh
                                      -----------------------
                                      Kevin J. Kavanaugh, President and Chief
                                      Executive Officer




Date:   April 14, 1998                /s/  Cleora Gillespie
                                      -----------------------
                                      Cleora Gillespie, Secretary and Treasurer
















                                      -12-