<PAGE>

                                  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       September 30, 1997
                              ---------------------------------
                                             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 September 30, 1997, there were 464,060 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>                                                                                             <C>       
Part I.  Financial Information
         ---------------------

         Item 1.  Financial Statements

         Consolidated Statements of Financial Condition at September 30, 1997                             1
         and June 30, 1997

         Consolidated Statements of Income for the three months ended                                     2
         September 30, 1997 and 1996

         Consolidated Statement of Changes in Stockholders' Equity for the                                3
         three months ended September 30, 1997 and 1996

         Consolidated Statements of Cash Flows for the three months                                       4
         ended September 30, 1997 and 1996

         Notes to Consolidated Financial Statements                                                      5-6

         Item 2.  Management's Discussion and Analysis of Financial Condition                            7-9
         and Results of Operations

Part II. Other Information
         -----------------

         Item 1.  Legal Proceedings                                                                      10

         Item 2.  Form 8-K  - NONE                                                                       10

         Signatures                                                                                      11

</TABLE>

<PAGE>

                                               HBANCORPORATION, INC.
                                             LAWRENCEVILLE, ILLINOIS
                                  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
                                                                             (Unaudited)
                                                                             September 30,                June 30,
                                                                                1997                        1997
                                                                             ------------               ------------
                 <S>                                                             <C>                          <C>
                         ASSETS
Cash and equivalents:
   Cash                                                                      $    150,984               $    357,424
   Interest bearing deposits                                                    1,557,373                  1,292,870
                                                                             ------------               ------------
         Total cash and cash equivalents                                        1,708,357                  1,650,294

Certificates of deposit with other banks                                           64,730                    164,730
Investments available for sale at fair value                                    2,120,166                  1,098,227
Investments held to maturity at cost                                            1,023,897                  1,024,461
Loans receivable, net                                                          13,949,537                 13,506,764
Federal Home Loan Bank stock at cost                                               66,000                     66,000
Federal Reserve Bank stock at cost                                                 67,800                     67,800
Accrued interest receivable                                                       214,432                    167,308
Office property and equipment, net                                                 37,370                     39,153
Other assets                                                                       15,702                     17,541
                                                                             ------------               ------------
         Total Assets                                                        $ 19,267,991               $ 17,802,278
                                                                             ============               ============
    LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Passbook savings                                                          $  2,200,297               $  1,940,931
   Money market deposit accounts                                                  314,509                    384,333
   Certificates of deposit                                                      6,555,973                  6,282,479
   Certificates of deposit $100,000 and over                                      935,853                    635,853
                                                                             ------------               ------------
         Total Deposits                                                        10,006,632                  9,243,596

   Advances from FHLB                                                           1,000,000                        -0-

Other Liabilities:                                                                350,591                    275,157
                                                                             ------------               ------------
         Total Liabilities                                                     11,357,223                  9,518,753
                                                                             ------------               ------------
Stockholders' Equity:
   Common stock, $.01 par value, 2 million shares authorized,
     464,060 issued and outstanding at September 30, 1997, and
     491,339 issued and outstanding at June 30, 1997                                4,933                      4,933
   Additional paid in capital                                                   4,520,527                  4,514,279
   Retained earnings                                                            4,067,466                  4,015,104
   Treasury stock at cost                                                        (466,705)                   (26,838)
   Net unrealized appreciation on available-for-sale securities
     net of tax of $84,000 at September 30, 1997 and
     $78,500 at June 30, 1997                                                     120,000                    111,500
   Unearned ESOP compensation                                                    (335,453)                  (335,453)
                                                                             ------------               ------------
         Total Stockholders' Equity                                             7,910,768                  8,283,525
                                                                             ------------               ------------

         Total Liabilities and Stockholders' Equity                          $ 19,267,991               $ 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
                                                                                            September 30,
                                                                                    ----------------------------
                                                                                             (Unaudited)
                                                                                    -------------  -------------
<S>                                                                                        <C>              <C>
INTEREST INCOME
   Loans receivable                                                                 $     337,244  $     246,633
   Investments                                                                             74,292        100,531
                                                                                    -------------  -------------
         Total Interest Income                                                            411,536        347,164
                                                                                    -------------  -------------

INTEREST EXPENSE
   Interest on deposits                                                                   115,765        111,836
   Interest on FHLD advances                                                                8,100            -0-
                                                                                    -------------  -------------
         Total Interest Expense                                                           123,865        111,836
                                                                                    -------------  -------------

         Net Interest Income                                                              287,671        235,328
   Provision for Loan Losses                                                                  -0-            -0-
                                                                                    -------------  -------------
         Net interest income after provision
           for loan losses                                                                287,671        235,328
                                                                                    -------------  -------------

NONINTEREST INCOME
   Customer service fees and other                                                          5,768            642
                                                                                    -------------  -------------
         Total Noninterest Income                                                           5,768            642
                                                                                    -------------  -------------

NONINTEREST EXPENSES
   General and administrative
     Compensation and benefits                                                             78,182         63,278
     Occupancy and equipment                                                                8,943          9,798
     Deposit insurance premium                                                              4,780          9,741
     SAIF assessment fee                                                                      -0-         62,144
     Computer expense                                                                       4,033          7,055
     Other                                                                                 36,171         32,860
                                                                                    -------------  -------------
         Total Noninterest Expenses                                                       132,109        184,876
                                                                                    -------------  -------------

INCOME BEFORE INCOME TAX                                                                  161,330         51,094

Income Tax Expense                                                                         69,500         18,377
                                                                                    -------------  -------------

NET INCOME                                                                          $      91,830  $      32,717
                                                                                    =============  =============

Net income per share based on weighted average
   shares outstanding of 474,562, for 1997 and
   $493,320 for 1996                                                                $        0.19  $        0.07
                                                                                    =============  =============
</TABLE>

See notes to consolidated financial statements.

                                       -2-


<PAGE>




                                          HBANCORPORATION, INC.
                                         LAWRENCEVILLE, ILLINOIS
                      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                (Unaudited)
<TABLE>
<CAPTION>
                                                                                                                  Unrealized   
                                                       Common         Paid in       Retained        Treasury      Gain (Loss)  
                                                        Stock         Capital       Earnings          Stock       Securities   
                                                   -------------  --------------  -------------  -------------  -------------- 
<S>                                                      <C>              <C>          <C>             <C>               <C>
BALANCE, June 30, 1996                             $       4,933  $    4,505,471  $   3,954,530  $           0  $       68,000 
Net income for the quarter ended
   September 30, 1996                                          0               0         32,717              0               0 
Cash dividends                                                 0               0        (39,465)             0               0 
Change in net unrealized gain on securities
   available-for-sale, net of applicable
   deferred income taxes of $54,500                            0               0              0              0          17,500 
Effect of contribution to fund ESOP                            0               0              0              0               0 
                                                   -------------  --------------  -------------  -------------  -------------- 

BALANCE, September 30, 1996                        $       4,933  $    4,505,471  $   3,947,782  $           0  $       85,500 
                                                   =============  ==============  =============  =============  ============== 

BALANCE, June 30, 1997                             $       4,933  $    4,514,279  $   4,015,104  $     (26,838) $      111,500 
Net income for the quarter ended
   September 30, 1997                                          0               0         91,830              0               0 
Cash dividends                                                 0               0        (39,468)             0               0 
Change in unrealized gain on securities
   available-for-sale, net of applicable
   deferred income taxes of $84,000                            0               0              0              0           8,500 
Effect of contribution to fund RRP                             0           6,248              0              0               0 
Purchase of treasury stock                                     0               0              0       (439,867)              0 
                                                   -------------  --------------  -------------  -------------  -------------- 

BALANCE, September 30, 1997                        $       4,933  $    4,520,527  $   4,067,466  $    (466,705) $      120,000 
                                                   =============  ==============  =============  =============  ============== 


(continued)

                                                     Unearned                  
                                                      Compen-          Total   
                                                      sation          Equity   
                                                   -------------  -------------   
BALANCE, June 30, 1996                             $    (374,918) $   8,158,016               
Net income for the quarter ended                                                              
   September 30, 1996                                          0         32,717               
Cash dividends                                                 0        (39,465)              
Change in net unrealized gain on securities                                                    
   available-for-sale, net of applicable                                                       
   deferred income taxes of $54,500                            0         17,500               
Effect of contribution to fund ESOP                        9,920          9,920               
                                                   -------------  -------------               
                                                                                               
BALANCE, September 30, 1996                        $    (364,998) $   8,178,688               
                                                   =============  =============               
                                                                                               
BALANCE, June 30, 1997                             $    (335,453) $   8,283,525               
Net income for the quarter ended                                                               
   September 30, 1997                                          0         91,830               
Cash dividends                                                 0        (39,468)              
Change in unrealized gain on securities                                                        
   available-for-sale, net of applicable                                                       
   deferred income taxes of $84,000                            0          8,500               
Effect of contribution to fund RRP                             0          6,248               
Purchase of treasury stock                                     0       (439,867)              
                                                   -------------  -------------               
                                                                                               
BALANCE, September 30, 1997                        $    (335,453) $   7,910,768               
                                                   =============  =============               
</TABLE>

See notes to consolidated financial statements.

                                                                              
                                       -3-
<PAGE>




                                                   HBANCORPORATION, INC.
                                                  LAWRENCEVILLE, ILLINOIS
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                         Three months ended
                                                                                            September 30,
                                                                                    ----------------------------
                                                                                             (Unaudited)
                                                                                        1997            1996
                                                                                    -------------  -------------
<S>                                                                                      <C>               <C>
NET INCOME (Loss)                                                                   $      91,830  $      32,717
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation                                                                           3,039          2,444
     Decrease in other assets                                                               1,839          6,588
     (Increase) in interest receivable                                                    (47,124)       (57,778)
     Increase in other liabilities                                                         75,434         90,667
     Provision for loan loss                                                                  -0-            -0-
                                                                                    -------------  -------------
Cash provided by operating activities                                                     125,018         74,638
                                                                                    -------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Investments in certificates of deposit in other
     financial institutions, net decrease                                                 100,000        250,000
   Proceeds from maturities of investments held to maturity                                   659          1,553
   Purchase of investments available-for-sale                                          (1,013,534)           -0-
   Purchase of fixed assets                                                                (1,256)        (3,530)
   Net (increase) in loans                                                               (442,773)    (1,846,497)
                                                                                    -------------  --------------
Cash (used) by investing activities                                                    (1,356,904)    (1,598,474)
                                                                                    -------------  --------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Advances from FHLB                                                                   1,000,000            -0-
   Payment of dividends                                                                   (39,468)       (39,465)
   Allocation of ESOP shares                                                                6,248            -0-
   Net increase in demand deposits, NOW accounts,
     savings accounts and certificates of deposit                                         763,036        292,654
   Purchases of treasury stock                                                           (439,867)           -0-
                                                                                    -------------  -------------
Cash provided by financing activities                                                   1,289,949        253,189
                                                                                    -------------  -------------

         Net increase (decrease) in cash and cash equivalents                              58,063     (1,270,647)

Cash and Cash Equivalents at Beginning of Period                                        1,650,294      3,853,156
                                                                                    -------------  -------------

Cash and Cash Equivalents at End of Period                                          $   1,708,357  $   2,582,509
                                                                                    =============  =============

Cash paid for:
   Interest                                                                         $     112,262  $     115,080
                                                                                    =============  =============

   Income taxes                                                                     $      21,481  $         818
                                                                                    =============  =============
</TABLE>

See notes to consolidated financial statements.

                                       -4-
<PAGE>

                              HBANCORPORATION, INC.
                             LAWRENCEVILLE, ILLINOIS

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 1997 AND 1996



NOTE 1 - BASIS OF PRESENTATION

The unaudited information for the quarter ended September 30, 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 Company
changed its name from Heritage Financial Corporation to HBancorporation, Inc. on
October 29, 1996. 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 all caps OTC Bulletin Board and the "pink
sheets" published by the National Quotation Bureau, Inc.

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
                           SEPTEMBER 30, 1997 AND 1996



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. 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 - NET INCOME PER SHARE

Net income per share of common stock for the three months ended September 30, 
1997 has been computed on the basis of the  weighted-average  number of shares 
of common stock outstanding.





                                       -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 September 30, 1997,
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 three months ended September 30, 1997, total assets increased
approximately $1,466,000 from $17.8 million to $19.3 million. Assets increased
as a result of an increase in investments available for sale. Deposits increased
by approximately $763,000 to $10.0 million at September 30, 1997, from $9.2
million at June 30, 1997. Management believes the increase in deposits stems
from customers seeking higher yielding investment alternatives. For the three
months ended September 30, 1997, total stockholders' equity decreased
approximately $373,000 from $8.3 million to $7.9 million. The decrease was
primarily a result of the purchase of treasury stock.




                                       -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 September 30, 1997 and 1996.

General.  Net income  increased to $92,000 for the three  months ended  
September  30, 1997,  compared to $33,000 in the same period in 1996.  The 
increase was primarily related to lower FDIC assessment fees and an increase in 
net interest income of $52,000.

Interest Income. Total interest income increased by $65,000 or 18.7% to $412,000
for the three months ended September 30, 1997, compared to the same period last
year. Income from loans grew by $91,000 for the three months. Investment income
decreased by $26,000 for the three months due primarily to lower yields on
investments.

Interest Expense. Total interest expense increased by $12,000 for the three
months ended September 30, 1997, to $124,000 compared to $112,000 in the
previous three month period. Passbook savings levels remained stable for the
most recent three month period compared to the same period a year ago. The Bank
paid $8,100 interest to FHLB on advances for the three months ended September
30, 1997.

Net Interest Income.  Net interest income before  provision for loan losses  
increased  $53,000 or 22.5% for the recent three month period compared to the 
same period a year ago, from $235,000 to $288,000.

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 September
30, 1997 and 1996, no loan loss provision was recorded. 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 non-performing loans are
dependent upon the economy, changes in real estate values and interest rates.
Because the Bank has had extremely low loan losses during its history,
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 September 30, 1997 and June 30, 1997, the Bank's allowance for loan losses
was $128,000.

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

Noninterest Income. Noninterest income was $6,000 for the three month period
ended September 30, 1997, compared to $1,000 with the same period in 1996. This
increase is primarily due to loan fees and fees for issuing travelers' checks
and service charges on checking accounts.





                                       -8-

<PAGE>

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



Noninterest Expense. For the three months ended September 30, 1997, the total
noninterest expense was $132,000 compared to $185,000 for the same three months
in 1996. General and administrative costs have increased approximately $15,000
as a result of the ESOP and the adoption of the RRP. Deposit insurance premiums
decreased $67,000 for the three months ended September 30, 1997, compared with
the same period in 1996.

Income Tax Expense. Income tax expense increased to $70,000 during the most
recent three months compared to $18,000 for the same period a year ago. Higher
taxes were the result of increased income before tax of $161,000 for the most
recent three months compared to $51,000 for a year ago.

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 September 30, 1997, 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 are 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
September 30, 1997 relative to the regulatory capital requirements for the Bank.

                                                               Amount
                                                           (in thousands)
                                                          ----------------
         Tier 1 Capital                                   $          6,226
         Tier 1 Capital Requirement                                    574
                                                          ----------------
         Excess                                           $          5,652
                                                          ================

         Total Risk-Based Capital                         $          6,354
         Risk-Based Capital Requirement                              1,078
                                                          ----------------
         Excess                                           $          5,276
                                                          ================



                                       -9-



<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.         Form 8-K - NONE

                Exhibit 27 - Financial Data Schedule





                                      -10-


<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:      November 4, 1997           /s/  Kevin J. Kavanaugh
       ----------------------         -----------------------------------------
                                      Kevin J. Kavanaugh, President and Chief
                                      Executive Officer




Date:      November 4, 1997           /s/  Cleora Gillespie
       ----------------------         -----------------------------------------
                                      Cleora Gillespie, Secretary and Treasurer





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