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

                                    FORM 10-Q

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

                  For the quarterly period ended June 30, 2000



                         Commission file number 0-13393


                             AMCORE FINANCIAL, INC.


            NEVADA                                           36-3183870
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)


                  501 Seventh Street, Rockford, Illinois 61104
                         Telephone number (815) 968-2241


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 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 90 days.

Yes  X    No
    ---      ---

The number of shares outstanding of the registrant's common stock, par value
$.22 per share, at July 31, 2000 was 27,027,414 shares.



Index of Exhibits on Page 31

<PAGE>

                             AMCORE FINANCIAL, INC.

                           Form 10-Q Table of Contents


PART I                                                               Page Number
------                                                               -----------

Item 1  Financial Statements

Consolidated Balance Sheets as of June 30, 2000 and
           December 31, 1999                                                3

        Consolidated Statements of Income for the Three and Six Months
           Ended June 30, 2000 and 1999                                     4

        Consolidated Statements of Stockholders' Equity for the Six Months
           Ended June 30, 2000 and 1999                                     5

        Consolidated Statements of Cash Flows for the Six Months
           Ended June 30, 2000 and 1999                                     6

        Notes to Consolidated Financial Statements                          7

Item 2  Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                      16

Item 3  Quantitative and Qualitative Disclosures About Market Risk         30

PART II
-------

Item 1  Legal Proceedings                                                  31

Item 4  Submission of Matters to a Vote of Security Holders                31

Item 6  Exhibits and Reports on Form 10-Q                                  31



Signatures                                                                 32

<PAGE>

PART I.  ITEM 1: Financial Statements

<TABLE>
<CAPTION>
AMCORE Financial, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)

                                                                                                        June 30,    December 31,
                                                                                                          2000          1999
=================================================================================================================================
                                                                                                (in thousands, except share data)
<S>                                                                                                     <C>            <C>
   Assets      Cash and cash equivalents..........................................................      $118,956       $179,113
               Interest earning deposits in banks.................................................        40,545          6,039
               Loans and Leases held for sale.....................................................        43,420         13,974
               Securities available for sale......................................................     1,217,101      1,227,396
               Securities held to maturity (fair value of $ 11,320 in 2000; $ 13,818 in 1999).....        11,517         13,977
                                                                                                    ----------------------------
                   Total securities ..............................................................    $1,228,618     $1,241,373
               Loans and leases, net of unearned income...........................................     2,778,933      2,746,613
               Allowance for loan and lease losses................................................       (30,132)       (28,377)
                                                                                                    ----------------------------
                   Net loans and leases...........................................................    $2,748,801     $2,718,236
               Premises and equipment, net .......................................................        54,934         55,618
               Intangible assets, net.............................................................        17,732         17,102
               Foreclosed real estate.............................................................         2,256          2,675
               Other assets.......................................................................       137,114        113,491
                                                                                                    ----------------------------
                   TOTAL ASSETS...................................................................    $4,392,376     $4,347,621
                                                                                                    ============================


 Liabilities   LIABILITIES
     And       Deposits:
Stockholders'    Demand deposits..................................................................    $1,247,496     $1,202,632
   Equity        Savings deposits.................................................................       144,221        145,795
                 Other time deposits..............................................................     1,722,569      1,667,981
                                                                                                    ----------------------------
                    Total deposits................................................................    $3,114,286     $3,016,408
               Short-term borrowings..............................................................       599,385        699,398
               Long-term borrowings ..............................................................       335,734        285,270
               Other liabilities..................................................................        55,552         52,817
                                                                                                    ----------------------------
                    TOTAL LIABILITIES.............................................................    $4,104,957     $4,053,893
                                                                                                    ----------------------------


               STOCKHOLDERS' EQUITY
               Preferred stock, $1 par value:  authorized 10,000,000 shares; none issued..........    $        -     $        -
               Common stock, $.22 par value:  authorized 45,000,000 shares;
                                                                          June 30,    December 31,
                                                                            2000         1999
                                                                            ----         ----
                                                          Issued         29,676,019   29,648,571
                                                          Outstanding    27,111,549   27,949,431           6,591          6,585
               Additional paid-in capital.........................................................        74,986         74,244
               Retained earnings .................................................................       284,805        271,781
               Deferred compensation non-employee directors.......................................        (1,541)        (1,533)
               Treasury stock ....................................................................       (47,945)       (30,442)
               Accumulated other comprehensive loss...............................................       (29,477)       (26,907)
                                                                                                    ----------------------------
                    TOTAL STOCKHOLDERS' EQUITY....................................................      $287,419       $293,728
                                                                                                    ----------------------------
                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....................................    $4,392,376     $4,347,621
                                                                                                    ============================
</TABLE>

See accompanying notes to consolidated financial statements (unaudited).

<PAGE>

<TABLE>
<CAPTION>
AMCORE Financial, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

                                                                                     For the Three Months     For the Six Months
                                                                                         Ended June 30,          Ended June 30,
                                                                                        2000       1999        2000        1999
                                                                                          (in thousands, except per share data)
=================================================================================================================================
<S>                                                                                   <C>        <C>         <C>         <C>
  Interest   Interest and fees on loans and leases................................... $58,808    $52,937     $115,882    $104,374
   Income    Interest on securities:
               Taxable...............................................................  17,445     15,894       34,948      32,263
               Tax-exempt............................................................   3,771      4,332        7,567       8,635
                                                                                     --------------------------------------------
                  Total Income from Securities....................................... $21,216    $20,226      $42,515     $40,898

             Interest on federal funds sold and other short-term investments.........     $69        $39         $100         $92
             Interest and fees on loans and leases held for sale.....................     555        496          847       1,120
             Interest on deposits in banks...........................................     175        204          411         310
                                                                                     --------------------------------------------
                  Total Interest Income.............................................. $80,823    $73,902     $159,755    $146,794
                                                                                     --------------------------------------------

  Interest   Interest on deposits.................................................... $34,460    $28,497      $66,861     $57,071
   Expense   Interest on short-term borrowings.......................................   9,147      8,125       18,363      15,809
             Interest on long-term borrowings........................................   5,191      4,618        9,544       9,469
                                                                                     --------------------------------------------
                  Total Interest Expense............................................. $48,798    $41,240      $94,768     $82,349
                                                                                     --------------------------------------------

                  Net Interest Income................................................ $32,025    $32,662      $64,987     $64,445
             Provision for loan and lease losses.....................................   2,340      2,151        4,730       4,377
                                                                                     --------------------------------------------
                  Net Interest Income After Provision for Loan and Lease Losses...... $29,685    $30,511      $60,257     $60,068
                                                                                     --------------------------------------------

Non-Interest Trust and asset management income.......................................  $7,553     $7,709      $15,175     $14,296
   Income    Service charges on deposits.............................................   2,781      2,408        5,395       4,626
             Mortgage revenues.......................................................   1,179      2,110        2,120       4,694
             Other...................................................................   2,922      2,621        5,779       5,247
                                                                                     --------------------------------------------
                  Non-Interest Income, Excluding Net Realized Security Gains ........ $14,435    $14,848      $28,469     $28,863
             Net realized security gains ............................................     393        379        1,096         572
                                                                                     --------------------------------------------
                  Total Non-Interest Income.......................................... $14,828    $15,227      $29,565     $29,435

  Operating  Compensation expense.................................................... $13,557    $16,040      $26,481     $29,025
  Expenses   Employee benefits.......................................................   3,350      3,458        6,639       7,198
             Net occupancy expense...................................................   1,715      1,622        3,552       3,351
             Equipment expense.......................................................   2,181      2,463        4,464       4,568
             Data processing expense.................................................   1,446      2,813        3,038       4,414
             Professional fees.......................................................   1,061      2,307        2,069       3,438
             Advertising and business development....................................   1,159      1,017        2,142       1,763
             Amortization of intangible assets.......................................     529        498        1,057         995
             Communication expense...................................................     966      1,288        2,042       2,390
             Other...................................................................   3,916      5,135        8,066       9,303
                                                                                     --------------------------------------------
                  Total Operating Expenses........................................... $29,880    $36,641      $59,550     $66,445
                                                                                     --------------------------------------------

             Income Before Income Taxes.............................................. $14,633     $9,097      $30,272     $23,058
             Income taxes............................................................   3,952      1,971        8,504       5,896
                                                                                     --------------------------------------------
                  NET INCOME......................................................... $10,681     $7,126      $21,768     $17,162
                                                                                     ============================================

             BASIC EARNINGS PER COMMON SHARE.........................................  $ 0.39     $ 0.25       $ 0.80      $ 0.61
             DILUTED EARNINGS PER COMMON SHARE.......................................    0.39       0.25         0.79        0.60
             DIVIDENDS PER COMMON SHARE..............................................    0.16       0.14         0.32        0.28
             AVERAGE COMMON SHARES OUTSTANDING.......................................  27,101     28,252       27,289      28,363
             AVERAGE DILUTED SHARES OUTSTANDING......................................  27,421     28,659       27,625      28,800
</TABLE>

See accompanying notes to consolidated financial statements (unaudited).

<PAGE>

<TABLE>
<CAPTION>
AMCORE Financial, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)

                                                                                      Deferred
                                                               Additional           Compensation
                                                        Common  Paid-in   Retained  Non-Employee  Treasury
                                                        Stock   Capital   Earnings   Directors     Stock
                                                       -----------------------------------------------------
                                                                 (in thousands, except share data)
<S>                                                    <C>      <C>       <C>        <C>         <C>
Balance at December 31, 1998 ......................... $ 6,572  $ 75,260  $ 247,486  $  (1,706)  $  (8,263)

 Comprehensive Income:
  Net Income .........................................    --        --       17,162       --          --
   Unrealized holding losses on securities available
      for sale arising during the period .............    --        --         --         --          --
   Less reclassification adjustment for realized
      gains included in net income ...................    --        --         --         --          --
 Income tax expense related to items of other
      comprehensive income ...........................    --        --         --         --          --
                                                       -----------------------------------------------------
 Net unrealized gains (losses) on securities available
      for sale .......................................    --        --         --         --          --
                                                       -----------------------------------------------------

Comprehensive Income .................................    --        --       17,162       --          --
                                                       -----------------------------------------------------

  Cash dividends on common stock-$.28 per share ......    --        --       (7,909)      --          --
  Purchase of shares for the treasury ................    --        --         --         --       (16,875)
  Issuance of common shares for employee stock plan ..       3       207       --         --          --
  Reissuance of treasury shares for Non-Employee
    Directors stock plan .............................    --          (8)      --         (361)        369
  Deferred compensation expense ......................    --        --         --          263        --
  Reissuance of treasury shares for employee
      incentive plans ................................    --        (746)      --         --         3,665

                                                       -----------------------------------------------------
Balance at June 30, 1999 ............................. $ 6,575  $ 74,713  $ 256,739  $  (1,804)  $ (21,104)
                                                       -----------------------------------------------------

                                                       -----------------------------------------------------
Balance at December 31, 1999 ......................... $ 6,585  $ 74,244  $ 271,781  $  (1,533)  $ (30,442)
                                                       -----------------------------------------------------

 Comprehensive Income:
  Net Income .........................................    --        --       21,768       --          --
   Unrealized holding losses on securities available
      for sale arising during the period .............    --        --         --         --          --
   Less reclassification adjustment for realized
      gains included in net income ...................    --        --         --         --          --
 Income tax expense related to items of other
      comprehensive income ...........................    --        --         --         --          --
                                                       -----------------------------------------------------
 Net unrealized gains (losses) on securities available
      for sale .......................................    --        --         --         --          --
                                                       -----------------------------------------------------

Comprehensive Income .................................    --        --       21,768       --          --
                                                       -----------------------------------------------------

  Cash dividends on common stock-$.32 per share ......    --        --       (8,744)      --          --
  Purchase of shares for the treasury ................    --        --         --         --       (20,592)
  Issuance of common shares for employee stock plan ..       6       402       --         --          --
  Reissuance of treasury shares for Non-Employee
    Directors stock plan .............................    --         (11)      --         (238)        249
  Deferred compensation expense ......................    --        --         --          230        --
  Reissuance of treasury shares for employee
      incentive plans ................................    --         351       --         --         2,840

                                                       -----------------------------------------------------
Balance at June 30, 2000 ............................. $ 6,591  $ 74,986  $ 284,805  $  (1,541)  $ (47,945)
                                                       -----------------------------------------------------


                                                         Accumulated
                                                            Other        Total
                                                        Comprehensive Stockholders'
                                                           (Loss)       Equity
                                                       ----------------------------
                                                    (in thousands, except share data)
<S>                                                      <C>          <C>
Balance at December 31, 1998 .........................   $  (3,266)   $ 316,083

 Comprehensive Income:
  Net Income .........................................        --         17,162
   Unrealized holding losses on securities available
      for sale arising during the period .............     (25,764)     (25,764)
   Less reclassification adjustment for realized
      gains included in net income ...................        (572)        (572)
 Income tax expense related to items of other
      comprehensive income ...........................      13,984       13,984
                                                       ----------------------------
 Net unrealized gains (losses) on securities available
      for sale .......................................     (12,352)     (12,352)
                                                       ----------------------------

Comprehensive Income .................................     (12,352)       4,810
                                                       ----------------------------

  Cash dividends on common stock-$.28 per share ......        --         (7,909)
  Purchase of shares for the treasury ................        --        (16,875)
  Issuance of common shares for employee stock plan ..        --            210
  Reissuance of treasury shares for Non-Employee
    Directors stock plan .............................        --           --
  Deferred compensation expense ......................        --            263
  Reissuance of treasury shares for employee
      incentive plans ................................        --          2,919

                                                       ----------------------------
Balance at June 30, 1999 .............................   $ (15,618)   $ 299,501
                                                       ----------------------------

                                                       ----------------------------
Balance at December 31, 1999 .........................   $ (26,907)   $ 293,728
                                                       ----------------------------

 Comprehensive Income:
  Net Income .........................................        --         21,768
   Unrealized holding losses on securities available
      for sale arising during the period .............     (48,608)     (48,608)
   Less reclassification adjustment for realized
      gains included in net income ...................      (1,096)      (1,096)
 Income tax expense related to items of other
      comprehensive income ...........................      47,134       47,134
                                                       ----------------------------
 Net unrealized gains (losses) on securities available
      for sale .......................................      (2,570)      (2,570)
                                                       ----------------------------

Comprehensive Income .................................      (2,570)      19,198
                                                       ----------------------------

  Cash dividends on common stock-$.32 per share ......        --         (8,744)
  Purchase of shares for the treasury ................        --        (20,592)
  Issuance of common shares for employee stock plan ..        --            408
  Reissuance of treasury shares for Non-Employee
    Directors stock plan .............................        --           --
  Deferred compensation expense ......................        --            230
  Reissuance of treasury shares for employee
      incentive plans ................................        --          3,191

                                                       ----------------------------
Balance at June 30, 2000 .............................   $ (29,477)   $ 287,419
                                                       ----------------------------
</TABLE>

See accompanying notes to consolidated financial statements (unaudited).

<PAGE>

<TABLE>
<CAPTION>
AMCORE Financial, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)                                                                                               Six Months Ended
                                                                                                              June 30,
(in thousands)                                                                                           2000          1999
==============================================================================================================================

<S>                                                                                                    <C>           <C>
Cash Flows       Net income.........................................................................   $ 21,768      $ 17,162
From             Adjustments to reconcile net income to net
Operating          cash provided by operating activities:
Activities            Depreciation and amortization of premises and equipment.......................      3,598         3,582
                      Amortization and accretion of securities, net.................................      1,012         5,924
                      Provision for loan and lease losses...........................................      4,730         4,377
                      Amortization of intangible assets.............................................      1,057           995
                      Net gain on sale of securities available for sale.............................     (1,096)         (572)
                      Deferred income taxes.........................................................          1         1,190
                      Originations of loans held for sale...........................................   (118,650)     (166,573)
                      Proceeds from sales of loans held for sale....................................     89,204       194,722
                      Other, net....................................................................       (584)       (3,235)
                                                                                                     -------------------------
                         Net cash provided by operating activities..................................      1,040      $ 57,572
                                                                                                     -------------------------

Cash Flows       Proceeds from maturities of securities available for sale..........................   $ 92,911     $ 210,703
From             Proceeds from maturities of securities held to maturity............................      2,463         1,516
Investing        Proceeds from sales of securities available for sale...............................     68,557       101,667
Activities       Purchase of securities available for sale..........................................   (155,412)     (296,250)
                 Net decrease in federal funds sold and other short-term investments..........                -         6,877
                 Net increase in interest earning deposits in banks.................................    (34,506)      (16,480)
                 Proceeds from the sale of loans and leases.........................................      2,152        22,756
                 Loans and leases made to customers
                    and principal collection of loans and leases, net...............................    (38,913)     (166,518)
                 Premises and equipment expenditures, net...........................................     (2,923)       (2,269)
                 Investment in company owned life insurance.........................................    (20,000)            -
                 Proceeds from the sale of foreclosed real estate...................................      1,914           780
                                                                                                     -------------------------
                         Net cash used for investing activities.....................................  $ (83,757)   $ (137,218)
                                                                                                     -------------------------

Cash Flows       Net increase (decrease) in demand deposits and savings accounts....................   $ 43,290      ($31,713)
From             Net increase in time deposits......................................................     54,588         8,627
Financing        Net (decrease) increase in short-term borrowings...................................   (100,104)       99,775
Activities       Proceeds from long-term borrowings.................................................     65,000         1,500
                 Payment of long-term borrowings....................................................    (14,477)         (478)
                 Dividends paid.....................................................................     (8,744)       (7,909)
                 Issuance of common stock for employee benefit incentive plans......................        408           210
                 Issuance of treasury stock for employee benefit incentive plans....................      3,191         2,919
                 Purchase of treasury stock.........................................................    (20,592)      (16,875)
                                                                                                     -------------------------
                         Net cash provided by financing activities..................................   $ 22,560      $ 56,056
                                                                                                     -------------------------
                 Net change in cash and cash equivalents............................................   $(60,157)     $(23,590)
                 Cash and cash equivalents:
                   Beginning of year................................................................    179,113       144,199
                                                                                                     -------------------------
                   End of period....................................................................   $118,956      $120,609
                                                                                                     =========================

Supplemental     Cash payments for:
Disclosures of     Interest paid to depositors......................................................   $ 64,346      $ 58,605
Cash Flow          Interest paid on borrowings......................................................     27,226        25,911
Information        Income taxes paid................................................................      5,816         6,197

Non-Cash         Foreclosed real estate - acquired in settlement of loans...........................      1,545         1,577
Investing and    Transfer of long-term borrowings to short-term borrowings..........................         91        33,650
Financing        Transfer of loans and leases to loans held for sale................................     27,000             -
Activities
</TABLE>

See accompanying notes to consolidated financial statements (unaudited).


<PAGE>

                             AMCORE FINANCIAL, INC.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting and with instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, these financial statements do not include all the
information and footnotes required by generally accepted accounting principles.
These financial statements include, however, all adjustments (consisting of
normal recurring accruals), which in the opinion of management, are considered
necessary for the fair presentation of the financial position and results of
operations for the periods shown.

Operating results for the three and six month periods ended June 30, 2000 are
not necessarily indicative of the results that may be expected for the fiscal
year ending December 31, 2000. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Form
10-K Annual Report of AMCORE Financial, Inc. and Subsidiaries (the "Company")
for the year ended December 31, 1999.

New Accounting Standards

The Company will adopt FAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities", as modified by FAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities" on January 1, 2001. These
statements establish accounting and reporting standards for derivative
instruments and for hedging activities and require an entity to recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The Company has not
completed the complex analysis required to determine the impact on its financial
statements.

NOTE 2 - EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                For the Three Months            For the Six Months
Earnings per share calculations are as follows:      Ended June 30,                Ended June 30,
                                                  2000           1999           2000           1999
                                          -------------------------------------------------------------
                                                     (in thousands, except per share data)
<S>                                            <C>             <C>           <C>             <C>
Net Income                                     $  10,681       $  7,126      $  21,768       $  17,162

Basic earnings per share:
    Weighted average shares outstanding           27,101         28,252         27,289          28,363
    Shares related to IMG earned not issued           36             19             36              19
                                          -------------------------------------------------------------
    Average basic shares outstanding              27,137         28,271         27,325          28,382
                                          -------------------------------------------------------------

    Earnings per share                          $   0.39       $   0.25        $  0.80        $   0.61
                                          -------------------------------------------------------------

Diluted earnings per share:
    Weighted average shares outstanding           27,101         28,252        27,289           28,363
    Net effect of the assumed purchase
        of stock under the stock option and
        stock purchase plans - based on the
        treasury stock method using average
        market price                                 196            319            212             349
    Shares related to IMG earned not issued           36             19             36              19
    Contingently issuable shares under IMG
       purchase agreement                             88             69             88              69
                                          -------------------------------------------------------------
    Average diluted shares outstanding            27,421         28,659         27,625          28,800
                                          -------------------------------------------------------------

    Diluted Earnings per share                  $   0.39       $   0.25       $   0.79        $   0.60
                                          -------------------------------------------------------------
</TABLE>

<PAGE>

NOTE 3 - SECURITIES


A summary of securities at June 30, 2000 and December 31, 1999 were as follows:

<TABLE>
<CAPTION>
                                                              Gross       Gross
                                              Amortized    Unrealized   Unrealized       Fair
                                                 Cost         Gains       Losses         Value
                                             ----------------------------------------------------
                                                                   (in thousands)
<S>                                           <C>          <C>          <C>           <C>
At June 30, 2000
   Securities Available for Sale:
     U.S. Treasury                            $   45,245   $       46   $     (265)   $   45,026
     U.S. Government agencies                     41,285           11       (1,168)       40,128
     Agency mortgage-backed securities           763,076          699      (37,444)      726,331
     State and political subdivisions            299,642        1,379       (8,759)      292,262
     Corporate obligations and other             116,461          152       (3,259)      113,354
                                             ----------------------------------------------------
        Total Securities Available for Sale   $1,265,709   $    2,287   $  (50,895)   $1,217,101
                                             ----------------------------------------------------


   Securities Held to Maturity:
     U.S. Treasury                            $      802   $     --     $       (8)   $      794
     U.S. Government agencies                         25         --           --              25
     State and political subdivisions             10,690           33         (222)       10,501
     Corporate obligations and other                --           --           --            --
                                             ----------------------------------------------------
        Total Securities Held to Maturity     $   11,517   $       33   $     (230)   $   11,320
                                             ----------------------------------------------------
                  Total Securities            $1,277,226   $    2,320   $  (51,125)   $1,228,421
                                             ====================================================

At December 31, 1999
   Securities Available for Sale:
     U.S. Treasury                            $   61,466   $      171   $     (258)   $   61,379
     U.S. Government agencies                     32,390            3         (847)       31,546
     Agency mortgage-backed securities           746,953        1,308      (31,951)      716,310
     State and political subdivisions            299,304        1,254      (11,055)      289,503
     Corporate obligations and other             131,572           85       (2,999)      128,658
                                             ----------------------------------------------------
        Total Securities Available for Sale   $1,271,685   $    2,821   $  (47,110)   $1,227,396
                                             ----------------------------------------------------

   Securities Held to Maturity:
     U.S. Treasury                            $    1,053   $     --     $       (8)   $    1,045
     U.S. Government agencies                         25         --           --              25
     State and political subdivisions             12,898           53         (204)       12,747
     Corporate obligations and other                   1         --           --               1
                                             ----------------------------------------------------
        Total Securities Held to Maturity     $   13,977   $       53   $     (212)   $   13,818
                                             ----------------------------------------------------
                  Total Securities            $1,285,662   $    2,874   $  (47,322)   $1,241,214
                                             ===================================================
</TABLE>

Realized gross gains resulting from the sale of securities available for sale
were $394,000 and $529,000 for the three months ended June 30, 2000 and 1999,
respectively, and $1,097,000 and $835,000 for the six months ended June 30, 2000
and 1999, respectively. Realized gross losses were $1,000 and $150,000 for the
three months ended June 30, 2000 and 1999, respectively and $1,000 and $263,000
for the six months ending June 30, 2000 and 1999, respectively. At June 30, 2000
and 1999, securities with a fair value of $953.1 million and $882.7 million,
respectively, were pledged to secure public deposits, securities under
agreements to repurchase and for other purposes required by law.

<PAGE>

NOTE 4 - LOANS AND LEASES


The composition of the loan and lease portfolio at June 30, 2000 and December
31, 1999, was as follows:

<TABLE>
<CAPTION>
                                                      June 30, 2000         December 31, 1999
                                                      ---------------------------------------
                                                                   (in thousands)
<S>                                                       <C>                      <C>
Commercial, financial and agricultural...............     $699,642                 $710,302
Real estate-construction.............................      113,893                  121,216
Real estate-commercial...............................      771,634                  732,447
Real estate-residential..............................      724,283                  689,702
Installment and consumer.............................      466,550                  489,586
Direct lease financing...............................        3,049                    3,489
                                                      =======================================
     Gross loans and leases..........................   $2,779,051               $2,746,742
     Unearned income.................................         (118)                    (129)
                                                      ---------------------------------------
     Loans and leases, net of unearned income........   $2,778,933               $2,746,613
     Allowance for loan and lease losses.............      (30,132)                 (28,377)
                                                      ---------------------------------------
     NET LOANS AND LEASES............................   $2,748,801               $2,718,236
                                                      =======================================
</TABLE>



<PAGE>

NOTE 5 - Short-Term Borrowings

Short-term borrowings consisted of the following:

                                              June 30, 2000   December 31, 1999
                                              ---------------------------------
                                                      (in thousands)
Securities sold under agreements to repurchase.  $476,019         $456,227
Federal Home Loan Bank borrowings..............    66,590          114,479
Federal funds purchased........................    38,930          118,000
U.S. Treasury tax and loan note accounts.......     8,776           10,692
Commercial paper borrowings....................     9,070             --
                                               ---------------------------
   Total Short-Term Borrowings.................  $599,385         $699,398
                                               ===========================


NOTE 6 - Long-Term Borrowings


Long-term borrowings consisted of the following:

                                              June 30, 2000   December 31, 1999
                                              ---------------------------------
                                                      (in thousands)

Federal Home Loan Bank borrowings..............  $ 294,894       $ 244,018
Capital Trust preferred securities.............     40,000          40,000
Other long-term borrowings.....................        840           1,252
                                               ---------------------------
             Total Long-Term Borrowings........  $ 335,734       $ 285,270
                                               ===========================


AMCORE Bank, N.A., periodically borrows additional funds from the Federal Home
Loan Bank (FHLB) in connection with the purchase of mortgage-backed securities.
Certain Federal Home Loan Bank borrowings have prepayment penalties and call
features associated with them. The current balance of the long-term borrowings
was $295.0 million with an average maturity of 5.52 years, and a weighted
average borrowing rate of 5.70%.

Repayments of FHLB borrowings based upon call features, assuming they are called
at the earliest call date, are as follows at June 30, 2000:
                                                               Total
                                                         -----------------
                                                           (in thousands)
2000...................................................       $ 97,000
2001...................................................        150,000
2002...................................................         15,000
2003...................................................          4,000
                                                         -----------------
        Total callable FHLB borrowings.................      $ 266,000
                                                         =================


The Company has $40.0 million of capital securities outstanding through AMCORE
Capital Trust I ("Trust"), a statutory business trust. All of the common
securities of the Trust are owned by the Company. The capital securities pay
cumulative cash distributions semiannually at an annual rate of 9.35%. The
securities are redeemable from March 25, 2007 until March 25, 2017 at a
declining rate of 104.6750% to 100% of the principal amount. After March 25,
2017, they are redeemable at par until June 15, 2027 when redemption is
mandatory. Prior redemption is permitted under certain circumstances such as
changes in tax or regulatory capital rules. The proceeds of the capital
securities were invested by the Trust in junior subordinated debentures which
represents all of the assets of the Trust. The Company fully and unconditionally
guarantees the capital securities through the combined operation of the
debentures and other related documents. The Company's obligations under the
guarantee are unsecured and subordinate to senior and subordinated indebtedness
of the Company.

Other long-term borrowings include a non-interest bearing note requiring annual
payments of $444,000 through 2002. The note was recorded at its present value
using a discount rate of 8.0%.

Repayments of long-term borrowings based upon scheduled maturity dates are as
follows at June 30, 2000:

                                                               Total
                                                         -----------------
                                                           (in thousands)
2001...................................................        $ 454
2002...................................................       31,285
2003...................................................       50,092
2004...................................................       65,057
2005...................................................       15,510
Thereafter.............................................      173,336
                                                           ----------
        Total Long-term Borrowings.....................    $ 335,734
                                                           ==========

<PAGE>

NOTE 7-SEGMENT INFORMATION

The Company's operations include three business segments: Banking, Trust and
Asset Management, and Mortgage Banking. The Banking segment provides commercial
and personal banking services through its 64 banking locations in northern
Illinois and south-central Wisconsin, and the Consumer Finance subsidiary. The
services provided by this segment include lending, deposits, cash management,
safe deposit box rental, automated teller machines, and other traditional
banking services. The Trust and Asset Management segment provides trust,
investment management and brokerage services. It also acts as an advisor and
provides fund administration to the Vintage Mutual Funds. These products are
distributed nationally (i.e. Vintage Equity Fund is available through Charles
Schwab), regionally to institutional investors and corporations, and locally
through AMCORE's 64 banking locations. The Mortgage Banking segment originates
residential mortgage loans for sale to AMCORE's banking affiliate and the
secondary market, as well as providing servicing of these mortgage loans.

The Company's three reportable segments are strategic business units that are
separately managed as they offer different products and services. The Company
evaluates financial performance based on several factors, of which the primary
financial measure is segment profit before remittances to the banking
affiliate. The Company accounts for intersegment revenue, expenses and
transfers at current market prices.

<PAGE>

BUSINESS SEGMENTS

<TABLE>
<CAPTION>
                                                                          Trust and Asset         Mortgage          Total
For the three months ended June 30, 2000                   Banking           Management           Banking         Segments
                                                       --------------------------------------------------------------------
                                                                                     (in thousands)
<S>                                                       <C>                     <C>                <C>          <C>
Net interest income                                       $ 31,788                $ 100              $ 590        $ 32,478
Provision for loan and lease losses                          2,340                    -                  -           2,340
Non-interest income                                          6,499                7,991              1,793          16,283
Operating expenses                                          22,107                5,587              1,691          29,385
Income taxes                                                 3,500                1,081                276           4,857
                                                       --------------------------------------------------------------------

Segment profit                                            $ 10,340              $ 1,423              $ 416        $ 12,179

After tax restructuring reversals                             (135)                  (6)                 -            (141)
                                                       --------------------------------------------------------------------

Segment profit before restructuring reversals             $ 10,205              $ 1,417              $ 416        $ 12,038
                                                       ====================================================================

For the three months ended June 30, 1999

Net interest income                                       $ 32,656                 $ 55              $ 587        $ 33,298
Provision for loan and lease losses                          2,151                    -                  -           2,151
Non-interest income                                          5,304                8,313              2,283          15,900
Operating expenses                                          27,770                5,333              2,199          35,302
Income taxes                                                 1,435                1,298                271           3,004
                                                       --------------------------------------------------------------------

Segment profit                                             $ 6,604              $ 1,737              $ 400         $ 8,741

After tax restructuring charges                              3,767                    -                  -           3,767
                                                       --------------------------------------------------------------------

Segment profit before restructuring charges               $ 10,371              $ 1,737              $ 400        $ 12,508
                                                       ====================================================================


                                                                          Trust and Asset         Mortgage         Total
For the six months ended June 30, 2000                     Banking           Management           Banking         Segments
                                                       --------------------------------------------------------------------
                                                                                     (in thousands)

Net interest income                                       $ 64,576                $ 192            $ 1,022        $ 65,790
Provision for loan and lease losses                          4,730                    -                  -           4,730
Non-interest income                                         12,994               16,187              3,413          32,594
Operating expenses                                          44,159               11,331              3,325          58,815
Income taxes                                                 7,600                2,180                438          10,218
                                                       --------------------------------------------------------------------

Segment profit                                            $ 21,081              $ 2,868              $ 672        $ 24,621

After tax restructuring reversals                             (135)                  (6)                 -            (141)
                                                       --------------------------------------------------------------------

Segment profit before restructuring reversals             $ 20,946              $ 2,862              $ 672        $ 24,480
                                                       ====================================================================

Segment assets                                         $ 4,366,260             $ 19,653           $ 26,427     $ 4,412,340
                                                       ====================================================================

For the six months ended June 30, 1999

Net interest income                                       $ 64,222                $ 108            $ 1,246        $ 65,576
Provision for loan and lease losses                          4,377                    -                  -           4,377
Non-interest income                                         10,541               15,478              5,359          31,378
Operating expenses                                          49,522               10,607              4,789          64,918
Income taxes                                                 4,663                2,152                729           7,544
                                                       --------------------------------------------------------------------

Segment profit                                            $ 16,201              $ 2,827            $ 1,087        $ 20,115

After tax restructuring charges                              3,767                    -                  -           3,767
                                                       --------------------------------------------------------------------

Segment profit before restructuring charges               $ 19,968              $ 2,827            $ 1,087        $ 23,882
                                                       ====================================================================

Segment assets                                         $ 4,299,964             $ 18,700           $ 31,494     $ 4,350,158
                                                       ====================================================================
</TABLE>

<PAGE>

NOTE 7 - SEGMENTS (continued)

Reconcilement of Segment Information to Financial Statements

<TABLE>
<CAPTION>
Net interest income and non-interest For the three months ended June 30,   For the six months ended June 30,
income                                      2000           1999                  2000          1999
------------------------------------ -----------------------------------  ----------------------------------
                                                (in thousands)                      (in thousands)

<S>                                     <C>            <C>                   <C>            <C>
Total for segments                      $    48,761    $    49,198           $    98,384    $    96,954
Unallocated revenues:
  Holding company                              (788)         6,253                (2,383)        12,352
  Other                                           7              9                    37             25
Elimination of intersegment revenues         (1,127)        (7,571)               (1,486)       (15,451)
                                        ---------------------------          ---------------------------

Consolidated total revenues             $    46,853    $    47,889           $    94,552    $    93,880
                                        ==========================           ==========================

Profit
------

Total for segments                      $    12,179    $     8,741           $    24,621    $    20,115
Unallocated loss:
  Holding company                            (1,442)        (1,505)               (2,730)        (2,564)
  Other                                         (36)           (34)                  (63)          (197)
Elimination of intersegment gain/(loss)         (20)           (76)                  (60)          (192)
                                        ---------------------------          ---------------------------

Consolidated net income                 $    10,681    $     7,126           $    21,768    $    17,162
                                        ==========================           ==========================

Assets
------

Total for segments                      $ 4,412,340    $ 4,350,158
Unallocated assets:
  Holding company                            44,712         50,637
  Other                                      42,382         42,558
Elimination of intersegment assets         (107,058)      (234,993)
                                        ---------------------------

Consolidated assets                     $ 4,392,376    $ 4,208,360
                                        ==========================
</TABLE>

<PAGE>

NOTE 8 - RESTRUCTURING CHARGE

The components of the 1999 restructuring charge and the activity during the
second quarter and year to date for 2000 were as follows:

<TABLE>
<CAPTION>

                                           March 31, 2000   Second Quarter                      Second Quarter    June 30, 2000
                                              Balance       Cash Payments     Adjustments(1)      Reversal(2)         Balance
                                           ------------------------------------------------------------------------------------
                                                                              (in thousands)
<S>                                            <C>              <C>                 <C>             <C>                <C>
     Compensation expense.............         $ 461            $ (103)             $ -             $ (127)            $ 231
     Employee benefits................(3)         65               (81)              75                (42)               17
     Data processing expense..........(4)        239               (86)               -                (38)              115
     Professional fees................(5)        219               (80)               -                (64)               75
     Other............................(6)         73               (12)               -                (38)               23
                                           ------------------------------------------------------------------------------------

     Charge before income taxes.......         1,057              (362)              75               (309)              461
     Income taxes.....................           420              (144)              30               (123)              183
                                           ------------------------------------------------------------------------------------

      Charge after income taxes.......         $ 637            $ (218)            $ 45             $ (186)            $ 278
                                           ====================================================================================


                                         December 31, 1999  Year to Date                          Year to Date    June 30, 2000
                                              Balance       Cash Payments     Adjustments(1)      Reversal(2)         Balance
                                         --------------------------------------------------------------------------------------
                                                                              (in thousands)

     Compensation expense.............(7)      $ 972            $ (614)             $ -             $ (127)            $ 231
     Employee benefits................(3)         83               (99)              75                (42)               17
     Data processing expense..........(4)        459              (306)               -                (38)              115
     Professional fees................(5)        290              (151)               -                (64)               75
     Other............................(6)         75               (14)               -                (38)               23
                                           ------------------------------------------------------------------------------------

     Charge before income taxes......          1,879            (1,184)              75               (309)              461
     Income taxes....................            747              (471)              30               (123)              183
                                           ------------------------------------------------------------------------------------

      Charge after income taxes......        $ 1,132            $ (713)            $ 45             $ (186)            $ 278
                                           ====================================================================================
</TABLE>

(1)  Items related to restructuring that were expensed as incurred and were not
     included in the original restructuring charge.
(2)  Second quarter reversal of items included in the original charge that are
     no longer expected to be paid.
(3)  Social security and medicare taxes on severance and incentives, and
     relocation expenses.
(4)  Amounts represent costs to convert data processing records of nine separate
     banks into one.
(5)  Amounts represent legal fees for regulatory filings and advice as well as
     consulting fees for process review, systems redesign and implementation.
(6)  Amounts include outplacement services for terminated employees and customer
     notifications.
(7)  Staff reductions totaling 187 employees are planned. Through June 30, 2000,
     78 employees had been terminated and paid severance benefits. An additional
     91 employees had transferred to other open positions due to attrition, or
     had voluntarily left the Company prior to the time severance benefits
     became payable. As of June 30, 2000, 18 employees remained to be severed.

<PAGE>

NOTE 9 - CONTINGENCIES


Management believes that no litigation is threatened or pending in which AMCORE
faces potential loss or exposure which will materially affect AMCORE's financial
position or results of operations, other than noted below. Since AMCORE's
subsidiaries act as depositories of funds, trustee and escrow agents, they are
named as defendants in lawsuits involving claims to the ownership of funds in
particular accounts. This and other litigation is incidental to AMCORE's
business.

On August 26, 1999, Willie Parker and five other plaintiffs filed a civil action
in the Circuit Court of Humphreys County, Mississippi against AMCORE Consumer
Finance Company, Inc., a subsidiary of AMCORE, and other defendants containing
twelve separate counts related to the sale and financing of residential
satellite dish systems. Though the actual purchase price for each of these
systems involves a principal amount of less than $3,000, the complaint prays for
economic loss and compensatory damages in the amount of $5 million for each
plaintiff and punitive damages in the amount of $100 million for each plaintiff.
AMCORE has denied the plaintiffs' allegations and has removed the case to the
United States District Court for the Northern District of Mississippi. The
proceedings are currently stayed pending resolution of the plaintiffs' motion to
remand the case to the state court. Although at this early date the ultimate
disposition of the case cannot be predicted with certainty, based on information
currently available, AMCORE believes that the plaintiffs' damage claims are
disproportionate and that the final outcome of the case will not have a
materially adverse effect on AMCORE's consolidated financial condition, though
it could have a materially adverse affect on AMCORE's consolidated results of
operations in a given year. AMCORE has not recorded an accrual for payment of
the damages in this case because, in management's opinion, an unfavorable
outcome in this litigation is not probable.


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Management's discussion and analysis focuses on the significant factors which
affected AMCORE Financial, Inc. and subsidiaries ("AMCORE") Consolidated Balance
Sheet as of June 30, 2000 as compared to December 31, 1999 and the results of
operations for the three and six months ended June 30, 2000 as compared to the
same periods in 1999. This discussion is intended to be read in conjunction with
the consolidated financial statements and notes thereto appearing elsewhere in
this report.

This report contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 with respect to the
financial condition, results of operations, plans, objectives, future
performance and business of AMCORE. Statements that are not historical facts,
including statements about beliefs and expectations, are forward-looking
statements. These statements are based upon beliefs and assumptions of AMCORE'S
management and on information currently available to such management. The use of
the words "believe", "expect", "anticipate", "plan", "estimate", "may", "will"
or similar expressions are forward looking statements. Forward-looking
statements speak only as of the date they are made, and AMCORE undertakes no
obligation to update publicly any of them in light of new information or future
events.

Contemplated, projected, forecasted or estimated results in such forward-looking
statements involve certain inherent risks and uncertainties. A number of factors
- many of which are beyond the ability of the company to control or predict -
could cause actual results to differ materially from those in its
forward-looking statements. These factors include, among others, the following
possibilities: (I) heightened competition, including specifically the
intensification of price competition, the entry of new competitors and the
formation of new products by new and existing competitors; (II) adverse state
and federal legislation and regulation; (III) failure to obtain new customers
and retain existing customers; (IV) inability to carry out marketing and/or
expansion plans; (V) loss of key executives or personnel; (VI) changes in
interest rates including the effect of prepayment; (VII) general economic and
business conditions which are less favorable than expected; (VIII) equity and
fixed income market fluctuations; (IX) unanticipated changes in industry trends;
(X) unanticipated changes in credit quality and risk factors; (XI) success in
gaining regulatory approvals when required; (XII) changes in Federal Reserve
Board monetary policies; (XIII) inability to fully realize cost savings from the
new organizational structure within the expected time frame or additional or
unexpected costs are incurred; (XIV) unexpected outcomes on existing or new
litigation in which AMCORE, its subsidiaries, officers, directors or employees
are named defendants; (XV) technological changes; (XVI) changes in Generally
Accepted Accounting Principles: and (XVII) inability of third-party vendors to
perform critical services to the company.

OVERVIEW OF OPERATIONS

AMCORE's net income for the three months ended June 30, 2000 was $10.7 million,
an increase of $3.6 million from the $7.1 million reported in the 1999
comparable period. Net income for the six months ended June 30, 2000 was $21.8
million, an increase of $4.6 million from the $17.2 million reported in 1999.
Net income from operations, which excludes a $141,000 net after-tax reversal of
excess restructuring-related charges (the "Restructuring Reversal") in the
second quarter of 2000 and $3.8 million of after-tax restructuring-related
charges (the "Restructuring Charge") in the second quarter of 1999 was $10.5
million and $10.9 million for second quarter of 2000 and 1999, respectively.
This represents a quarter-to-quarter decrease of $353,000, or 3.2%. For the six
months ended June 30, 2000 and 1999 net income from operations was $21.6 million
and $20.9 million, respectively, for an increase of $698,000 or 3.3%.

Diluted earnings per share were $0.39 and $0.79 for the three and six months
ended June 30, 2000, respectively, compared to $0.25 and $0.60 for the same
periods in 1999. Excluding the above mentioned Restructuring Reversal and
Restructuring Charge, diluted earnings per share from operations for the
quarters ended June 30, 2000 and 1999 was flat at $0.38. For the six month
periods ended June 30, 2000 and 1999, diluted earnings per share from operations
were $0.78 and $0.73, respectively, an increase of 6.9%. The 6.9% increase on a
per share basis is more than double the 3.3% increase on a dollar basis,
reflecting a 1.2 million decrease in average diluted shares outstanding
attributable to AMCORE's previously announced stock

<PAGE>

repurchase programs.

AMCORE's annualized return on average equity for the second quarter and
year-to-date for 2000 was 15.20% and 15.41%, respectively. Annualized return on
average equity for the comparable periods in 1999 was 9.11% and 10.93%. If the
above mentioned Restructuring Reversal and Restructuring Charge are excluded,
the annualized return on average equity for the second quarter and first six
months of 2000 was 15.00% and 15.31% respectively. For the comparable periods in
1999, the annualized return on average equity was 13.92% and 13.33%.

The second quarter annualized return on average assets was 0.99% in 2000 versus
0.68% in 1999. For the first six months of 2000 and 1999 the annualized return
on average assets was 1.01% and 0.83%. Excluding the Restructuring Reversal and
Restructuring Charge, the annualized return on average assets for the second
quarter of 2000 and 1999 was 0.97% and 1.04%, respectively. Excluding these
items, year-to-date 2000 and 1999 annualized return on average assets was 1.00%
and 1.01%, respectively.

Net interest income for the second quarter of 2000 declined $637,000 or 2.0%
from the same period a year ago. Average earning assets rose 4.4%, which
combined with a 33 basis point increase in yields, to contribute to a $6.9
million or 9.4% increase in interest income. These gains were overshadowed by a
$7.6 million or 18.3% increase in interest expense as interest bearing
liabilities repriced more rapidly than earning assets in a rising rate
environment. This resulted in a 59 basis points increase in the average rate
paid on interest bearing liabilities. Overall, net interest margin declined 25
basis points to 3.31% in the second quarter of 2000, compared to 3.56% a year
ago.

Non-interest income, excluding net realized security gains, declined $413,000 or
2.8% in the second quarter of 2000 compared to the second quarter of 1999. Lower
mortgage revenues due to lower origination volume and refinancing of home
mortgages accounted for a $931,000 decline over a year ago. Trust and asset
management income was also lower by $156,000. These declines were partially
offset by increases in service charges on deposits and other non-interest income
of $373,000 and $301,000, respectively. The increase in service charges on
deposits was attributable to higher average deposit balances, revised fee
schedules and overdraft handling processes. Increased ATM related fees, higher
customer service charges and increases in net surrender values of bank-owned
life insurance largely accounted for the increase in other non-interest income.

The provision for loan and lease losses increased $189,000 or 8.8%
quarter-to-quarter. This was mainly the result of loan growth.

Second quarter 2000 operating expenses were down $6.8 million from the same
period a year ago. Excluding the Restructuring Reversal in 2000 and the
Restructuring Charge in 1999, operating expenses decreased $431,000, or 1.4%.
The primary factors contributing to the reduction in operating expenses were
cost savings resulting from AMCORE's new Customer Focused Organizational
Structure combined with reduced mortgage segment expenses associated with the
decline in origination volumes and refinancing activity.

Both AMCORE and the bank subsidiary (the "BANK") continue to exceed the minimum
capital requirements established by regulators for banks and bank holding
companies.

YEAR 2000

AMCORE has not experienced any significant disruptions to its existing or
continuing financial and operating activities caused by a failure of its
application software programs, operating systems or other systems to accommodate
the date value for the year 2000 ("Year 2000"). The Company has no information
that would indicate that any material borrower has experienced significant Year
2000 issues that would materially impact their ability to service their loan or
otherwise fulfill their borrowing agreement's terms and/or covenants. In
addition, AMCORE is not aware of any situation indicating that a significant
vendor or service provider may be unable to sell goods or provide services to
the company as the result of a Year 2000 issue.

It is not possible, however, to be sure that all aspects of the Year 2000 issue
that may affect AMCORE,

<PAGE>

including those related to the effects of customers, suppliers, or other third
parties with whom we conduct business, are fully known or that they will not
have a material impact on AMCORE's results of operation or financial condition.
AMCORE will take appropriate actions if any Year 2000 systems failure should
occur.

1999 Restructuring Charge

In the second quarter 1999, AMCORE announced a new "Customer Focused
Organizational Structure" (the "CFOS"). Events giving rise to the announcement
was a recognition by AMCORE that its corporate structure of nine separate
banking charters was perpetuating operational inefficiencies, staffing
redundancies and burdensome regulatory reporting requirements. The new CFOS is
expected to improve efficiency, enhance responsiveness to local markets and
increase shareholder value. It will increase the ability of market presidents,
directors and salespeople to focus on serving customers and their communities by
centralizing or regionalizing certain support functions.

To accomplish the new CFOS, AMCORE merged its nine banks into one charter as
AMCORE Bank, N.A. (the "BANK"). The centralization of retail operations and
corporate support functions, including the conversion of data processing records
into one bank ("Phase 1") was substantially completed by the end of the fourth
quarter of 1999. Minor centralization and conversion issues not yet completed
are expected to be completed by the end of the third quarter in 2000.

During the fourth quarter of 1999, in continuation of the CFOS restructuring
initiative, AMCORE adopted plans to centralize its commercial loan operations
and to streamline the Trust and Asset Management segment operations ("Phase 2").
AMCORE expects to complete this phase of its CFOS restructuring by the end of
2000.

AMCORE's pre-tax charges (the "Restructuring Charge") related to the CFOS
restructuring totaled $6.1 million for Phase 1 and $537,000 for Phase 2 in the
second and fourth quarters of 1999, respectively. The major components of the
Restructuring Charge included employee severance and benefits, systems and
integration costs, legal and professional fees and other related expenses.
Excess Restructuring Charges of $1.4 million pre-tax, related to Phase 1 were
reversed during the fourth quarter of 1999. An additional net pre-tax reversal
(the "Restructuring Reversal") of excess Restructuring Charges of $234,000 was
taken in the second quarter of 2000. These reversals related to lower than
expected severance and benefits due to unplanned employee attrition in positions
unaffected by the CFOS restructuring that permitted the retention of some
employees whose positions were otherwise being eliminated and by some affected
employees leaving for positions outside the company before their severance
became payable. In addition, systems integration costs were completed at a lower
cost than expected.

The amount of the Restructuring Charge relating to CFOS restructuring activities
not yet completed, or that otherwise remains unpaid, is $461,000 pre-tax as of
June 30, 2000. Of this amount, $117,000 and $344,000 relate to Phase 1 and Phase
2, respectively. See Note 8 to the Notes to Consolidated Financial Statements
for a tabular presentation of the Restructuring Charge by major component.

AMCORE expects $7.3 million in annual pre-tax savings from its new CFOS. The
primary savings are expected to come from reductions in staffing and regulatory
costs. Altogether, staff reductions of 187 employees are planned. Through June
30, 2000, 78 employees had been terminated and paid severance benefits. An
additional 91 employees had transferred to other open positions due to
attrition, or had voluntarily left the Company prior to the time severance
benefits became payable. As of June 30, 2000, 18 employees remained to be
severed. Reduced corporate support expenses are also expected due to the simpler
structure. The savings will be reflected on the income statement through reduced
compensation expense, employee benefits and professional fees. Through June 30,
2000 actual costs savings for Phase 1 plus projected cost savings for Phase 2,
on an annualized and inflation adjusted basis, are on target to meet projected
savings.

EARNINGS REVIEW BY BUSINESS SEGMENT

AMCORE's internal reporting and planning process has identified three business
segments: Banking, Trust and Asset Management, and Mortgage Banking. Note 7 to
the Notes to Consolidated Financial Statements presents

<PAGE>

a condensed income statement for each segment.

The financial results of each segment are presented as if operated on a
stand-alone basis. There are no comprehensive authorities for management
accounting equivalent to generally accepted accounting principles. Therefore,
the information provided is not necessarily comparable with similar information
from other financial institutions.

Banking Segment

The Banking segment provides commercial and personal banking services through
its 64 banking locations in northern Illinois and south-central Wisconsin, and
the Consumer Finance subsidiary. The services provided by this segment include
lending, deposits, cash management, automated teller machines, and other
traditional banking services.

The Banking segment's profit for the second quarter of 2000, excluding the
Restructuring Reversal, was $10.2 million, a decrease of $166,000 or 1.6% from
the same period in 1999, excluding the Restructuring Charge. Net interest income
was down by $868,000 or 2.7%. Operating expenses, excluding the Restructuring
Reversal and Restructuring Charge, and the provision for loan and lease losses,
increased $656,000 or 3.0% and $189,000 or 8.8%, respectively. These items were
largely offset by a $1.2 million or 22.5% increase in non-interest income.

While the Banking segment continued to experience strong loan growth as well as
improved yields on interest earning assets, these gains were more than offset by
increased interest expense as interest bearing liabilities repriced more rapidly
than earning assets. Operating expenses were negatively affected by increased
employee medical claims. Excluding medical costs, the cost savings from AMCORE's
new CFOS were nearly sufficient to offset normal merit increases, cost-of-living
adjustments and year-to-year inflation increases, holding the increase in
operating expenses to $200,000 or 0.9% over the second quarter of 1999. The
Banking segment's efficiency ratio was 54.53% for the second quarter of 2000, a
122 basis point increase from 53.31% for the second quarter of 1999. This
reflects the negative impact of the higher medical costs and the decline in net
interest income quarter-to-quarter.

Excluding the Restructuring Reversal and the Restructuring Charge, the Banking
segment represented 84.8% and 82.9% of total segment profit in the second
quarter of 2000 and 1999, respectively. Year-to-date the Banking segment
represented 85.6% and 83.6%, respectively, for 2000 and 1999.

Trust and Asset Management Segment

The Trust and Asset Management segment provides trust, investment management and
brokerage services. It also acts as an advisor and provides fund administration
to the Vintage Mutual Funds. These products are distributed nationally (i.e.
Vintage Equity Fund is available through Charles Schwab OneSource(TM)),
regionally to institutional investors and corporations, and locally through
AMCORE's banking locations.

The Trust and Asset Management segment's profit, excluding the Restructuring
Reversal, decreased $320,000 or 18.4% from the second quarter of 1999 to $1.4
million in the second quarter of 2000. Revenues decreased $277,000 or 3.3% from
the second quarter of 1999. The decrease reflects a $180,000 reduction in
insurance commissions resulting from the sale of AMCORE's insurance agency
business on August 27, 1999. In addition, the second quarter of 1999 included a
$750,000 accrual adjustment attributable to personal trust accounts to more
accurately reflect the fees earned at any given period end. Excluding these
items, the segment's revenues increased $653,000 or 8.8%. Operating expenses,
excluding Restructuring Reversals, increased $260,000 or 4.9%. The increase was
primarily attributable to increased personnel costs associated with the growth
of the business, normal merit and cost-of-living increases, start-up costs
associated with a money market mutual fund and increased advertising and
business development costs. These increases were partially offset by the
elimination of expenses associated with the operation of the insurance agency
business.

As of June 30, 2000, trust assets under management totaled $4.5 billion,
including $1.5 billion in the Vintage

<PAGE>

Mutual Fund family.  This  compares to $4.4 billion and $1.4  billion,
respectively, as of June 30, 1999. Total assets under administration at June 30,
2000, which include managed and custodial assets, totaled $5.2 billion.

Excluding the Restructuring Reversal and the Restructuring Charge, the Trust and
Asset Management segment represented 11.8% and 13.9% of total segment profit in
the second quarter of 2000 and 1999, respectively. Year-to-date the Trust and
Asset Management segment represented 11.7% and 11.8%, respectively, for 2000 and
1999.

Mortgage Banking Segment

The Mortgage Banking segment originates residential mortgage loans for sale to
the BANK and the secondary market, and provides servicing of these mortgage
loans.

The Mortgage Banking segment's profit for the second quarter of 2000 was
$416,000, an increase of $16,000 or 4.0% over the same period a year ago.
Excluding a $153,000 reversal of mortgage servicing right impairment reserves in
the second quarter of 1999 the segment's profit increased $169,000 or 68.4%.
Excluding the impairment reversal, mortgage revenues declined $334,000 from the
second quarter of 1999 as origination volume and refinancing activity were
negatively impacted by increasing interest rates. The decrease in origination
volumes and refinancing activity caused a corresponding reduction in variable
production costs. Servicing right amortization was also lower as increased
interest rates led to slower pre-payments on the existing servicing portfolio.
These factors resulted in a $508,000 decrease in operating expenses.

Excluding the Restructuring Reversal and the Restructuring Charge, the Mortgage
Banking segment represented 3.4% and 3.2% of total segment profit in the second
quarter of 2000 and 1999, respectively. Year-to-date the Mortgage Banking
segment represented 2.7% and 4.6%, respectively, for 2000 and 1999.

CONSOLIDATED EARNINGS ANALYSIS

The analysis below discusses by major components the changes in net income when
comparing the three and six-month periods ended June 30, 2000 and 1999.

Net Interest Income

Net interest income is the difference between income earned on interest-earning
assets and the interest expense incurred on interest-bearing liabilities. The
interest income on certain loans and municipal securities is not subject to
federal income tax. For analytical purposes, the interest income and rates on
these types of assets are adjusted to a "fully taxable equivalent" basis. The
fully taxable equivalent adjustment was calculated using the statutory federal
income tax rate of 35%. Adjusted interest income is as follows (in thousands):

                                    For the Three Months   For the Six Months
                                       Ended June 30,         Ended June 30,
                                      2000         1999     2000         1999
                                   ============================================
                                                  (in thousands)

Interest Income Book Basis          $80,823      $73,902  $159,755     $146,794
Taxable Equivalent Adjustment         2,261        2,543     4,537        5,054
                                   --------------------------------------------

Interest Income Taxable Equivalent   83,084       76,445   164,292      151,848
Basis
Interest Expense                     48,798       41,240    94,768       82,349
                                   --------------------------------------------

Net Interest Income Taxable
Equivalent Basis                    $34,286      $35,205   $69,524      $69,499
                                   ============================================


Net interest income on a fully taxable equivalent basis decreased $919,000 or
2.6% during the second quarter of 2000 over the same period in 1999. Average
earning assets rose 4.4%, which combined with a 33 basis

<PAGE>

point  increase in yields,  contributed  to a $6.6 million or
8.7% increase in interest income on a fully taxable equivalent basis. These
gains were overshadowed by a $7.6 million or 18.3% increase in interest expense
as interest bearing liabilities repriced more rapidly than earning assets in a
rising rate environment resulting in a 59 basis points increase in the average
rate paid on interest bearing liabilities. Overall, net interest margin declined
25 basis points to 3.31% in the second quarter of 2000, compared to 3.56% a year
ago.

The growth in average earning assets was led by a $233.9 million or 9.2%
increase in average loans, when comparing the second quarters of 2000 and 1999.
Average investment securities declined $49.5 million or 3.6%,
quarter-to-quarter. This planned reduction reflects a change in AMCORE's
investment strategy to emphasize liquidity, reduced interest rate risk and loan
growth funding as opposed to enhanced capital utilization of the investment
leveraging program.

The net interest spread is the difference between the average rates on
interest-earning assets and the average rates on interest-bearing liabilities.
The interest rate margin represents net interest income divided by average
earning assets. These ratios can also be used to analyze net interest income.
Since a significant portion of the Company's funding is derived from
interest-free sources, primarily demand deposits and stockholders' equity, the
effective rate paid for all funding sources is lower than the rate paid on
interest-bearing liabilities alone.

As the table below indicates, the net interest spread decreased 26 basis points
to 2.70% in the second quarter of 2000 when compared to the 2.96% during the
same period in 1999. The net interest margin was 3.31% during the second quarter
of 2000, a decrease of 25 basis points from 3.56% in the comparable period in
1999.

<TABLE>
<CAPTION>
                                                  Quarter Ended                        Quarter Ended
                                                  June 30, 2000                        June 30, 1999
                                       -------------------------------------  ---------------------------------
                                           Average                 Average      Average               Average
                                           Balance     Interest     Rate        Balance    Interest    Rate
                                       -------------------------------------  ---------------------------------
                                                                      (in thousands)
<S>                                     <C>          <C>            <C>       <C>         <C>            <C>
Assets
Interest-Earning Assets:
    Taxable securities                  $ 1,009,833  $    17,445    6.91%     $ 1,012,840 $    15,894    6.28%
    Tax-exempt securities (1)               301,804        5,802    7.69%         348,253       6,665    7.66%
                                       ------------------------------------------------------------------------
      Total Securities (2)                1,311,637       23,247    7.09%       1,361,093      22,559    6.63%
    Loans held for sale (3)                  18,925          407    8.60%          19,449         321    6.60%
    Loans (1) (4)                         2,790,074       59,038    8.50%       2,556,142      53,147    8.33%
    Other earning assets                     14,671          244    6.67%          23,528         243    4.14%
    Fees on loans held for sale (3)               -          148       -                -         175       -
                                       ------------------------------------------------------------------------
        Total Interest-Earning Assets   $ 4,135,307  $    83,084    8.06%     $ 3,960,222 $    76,445    7.73%

Non Interest-Earning Assets:
    Cash and due from banks                 101,920                               103,508
    Other assets                            153,156                               164,440
    Allowance for loan and lease losses     (29,739)                              (27,670)
                                       ------------                          ------------
            Total Assets                $ 4,360,644                           $ 4,200,500
                                       ============                          ============

Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
    Interest-bearing demand and
      savings deposits                  $ 1,006,361  $     9,149    3.65%     $   957,802 $     6,651    2.79%
    Time deposits                         1,733,194       25,195    5.83%       1,594,335      21,651    5.45%
                                       ------------------------------------------------------------------------
      Total interest-bearing deposits     2,739,555       34,344    5.04%       2,552,137      28,302    4.45%
    Short-term borrowings                   584,238        9,169    6.31%         615,877       8,746    5.70%
    Long-term borrowings                    336,150        5,285    6.32%         297,421       4,192    5.65%
                                       ------------------------------------------------------------------------
      Total Interest-Bearing            $ 3,659,943  $    48,798    5.36%     $ 3,465,435 $    41,240    4.77%
      Liabilities
Noninterest-Bearing Liabilities:
    Demand deposits                         362,948                               366,461
    Other liabilities                        55,077                                54,688
                                       ------------                          ------------
      Total Liabilities                 $ 4,077,968                           $ 3,886,584

<PAGE>


Stockholders' Equity                        282,676                               313,916
                                       ------------                          ------------
            Total Liabilities and
               Stockholders' Equity     $ 4,360,644                           $ 4,200,500
                                       ============                          ============

        Net Interest Income                          $    34,286                          $    35,205
                                                     ===========                          ===========

        Net Interest Spread                                         2.70%                                2.96%
                                                                    =====                                =====

        Interest Rate Margin                                        3.31%                                3.56%
                                                                    =====                                =====
</TABLE>

Notes:

The interest on tax-exempt investment securities and tax-exempt loans is
calculated on a tax equivalent basis assuming a federal tax rate of 35%.
(2) The average balances of the investments are based on amortized historical
cost.
(3) The yield-related fees recognized from the origination of loans held for
sale are in addition to the interest earned on the loans during the period in
which they are warehoused for sale as shown above.
(4) The balances of nonaccrual loans are included in average loans outstanding.
Interest on loans includes yield related loan fees.

As the table below indicates, the net interest spread decreased 15 basis points
to 2.76% for the first six months of 2000 when compared to the 2.91% during the
same period in 1999. The net interest margin was 3.37% for the first six months
of 2000, a decrease of 15 basis points from 3.52% in the comparable period in
1999.

<TABLE>
<CAPTION>
                                                 Six Months Ended                     Six Months Ended
                                                  June 30, 2000                        June 30, 1999
                                       -------------------------------------  ---------------------------------
                                           Average                 Average      Average               Average
                                           Balance      Interest    Rate        Balance    Interest    Rate
                                       -------------------------------------  ---------------------------------
                                                                   (in thousands)
<S>                                         <C>           <C>         <C>       <C>          <C>         <C>
Assets
Interest-Earning Assets:
    Taxable securities                      $1,009,408    $34,948     6.93%     $1,040,783   $32,263     6.20%
    Tax-exempt securities (1)                  302,973     11,642     7.69%        343,387    13,285     7.74%
                                       ------------------------------------------------------------------------
      Total Securities (2)                   1,312,381     46,590     7.10%      1,384,170    45,548     6.58%
    Loans held for sale (3)                     14,615        596     8.16%         25,705       743     5.78%
    Loans (1) (4)                            2,774,538    116,344     8.42%      2,519,854   104,778     8.37%
    Other earning assets                        16,868        511     6.09%         20,301       402     3.99%
    Fees on loans held for sale (3)                  -        251        -               -       377        -
                                       -------------------------------------  ---------------------------------
        Total Interest-Earning Assets       $4,118,402   $164,292     8.00%     $3,950,030  $151,848     7.72%
Non Interest-Earning Assets:
    Cash and due from banks                    103,177                             101,426
    Other assets                               148,912                             161,392
    Allowance for loan and lease              (29,342)
    losses                                                                        (27,418)
                                       ----------------                       -------------
            Total Assets                    $4,341,149                          $4,185,430
                                       ================                       =============

Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
    Interest-bearing demand and             $1,006,660    $17,883     3.56%       $955,381   $13,147     2.78%
    savings deposits
    Time deposits                            1,713,370     48,810     5.71%      1,591,700    43,523     5.51%
                                       -------------------------------------  ---------------------------------
      Total interest-bearing deposits        2,720,030     66,693     4.93%      2,547,081    56,670     4.49%
    Short-term borrowings                      601,985     18,268     6.10%        598,628    16,961     5.71%
    Long-term borrowings                       315,805      9,807     6.24%        307,769     8,718     5.71%
                                       -------------------------------------  ---------------------------------
      Total Interest-Bearing                $3,637,820    $94,768     5.24%     $3,453,478   $82,349     4.81%
      Liabilities
Noninterest-Bearing Liabilities:
    Demand deposits                            363,274                             359,514

<PAGE>

    Other liabilities                           56,053                              55,873
                                       ----------------                       -------------
      Total Liabilities                     $4,057,147                          $3,868,865
Stockholders' Equity                           284,002                             316,565
                                       ----------------                       -------------
            Total Liabilities and
               Stockholders' Equity         $4,341,149                          $4,185,430
                                       ================                       =============

        Net Interest Income                               $69,524                            $69,499
                                                       ===========                         ==========

        Net Interest Spread                                           2.76%                              2.91%
                                                                  ==========                         ==========

        Interest Rate Margin                                          3.37%                              3.52%
                                                                  ==========                         ==========
</TABLE>

Notes:
The interest on tax-exempt investment securities and tax-exempt loans is
calculated on a tax equivalent basis assuming a federal tax rate of 35%.
(2) The average balances of the investments are based on amortized historical
cost.
(3) The yield-related fees recognized from the origination of loans held for
sale are in addition to the interest earned on the loans during the period in
which they are warehoused for sale as shown above.
(4) The balances of nonaccrual loans are included in average loans outstanding.
Interest on loans includes yield related loan fees.

The level of net interest income is the result of the relationship between total
volume and mix of interest-earning assets and the rates earned and the total
volume and mix of interest-bearing liabilities and the rates paid. The rate and
volume components associated with interest-earning assets and interest-bearing
liabilities are segregated in the table above to analyze the changes in net
interest income. Changes due to rate/volume variances and changes due to the
extra day in 2000 due to leap year have been allocated between changes due to
average volume and changes due to average rate based on the absolute value of
each to the total change of both categories. Because of changes in the mix of
the components of interest-earning assets and interest-bearing liabilities, the
computations for each of the components do not equal the calculation for
interest-earning assets as a total and interest-bearing liabilities as a total.

The table below presents an analysis of the changes in net interest income for
the second quarter of 2000 compared to the second quarter of 1999.

<TABLE>
<CAPTION>
                                                          Quarter Ended
                                                  June 30, 2000 / June 30, 1999
                                                          (in thousands)
                                     ---------------------------------------------------
                                                                              Total Net
                                       Increase (Decrease) Due to Change In    Increase
                                       Average Volume          Average Rate   (Decrease)
                                     ---------------------------------------------------
<S>                                    <C>                     <C>           <C>
Interest Income:
 Taxable securities                    $       (47)            $     1,598   $   1,551
 Tax-exempt  securities (1)                   (893)                     30        (863)
                                     -----------------------------------------------------
    Total Securities (2)                      (840)                  1,528         688
 Loans held for sale (3)                        (9)                     95          86
 Loans  (1) (4)                              4,845                   1,046       5,891
 Other earning assets                         (106)                    107           1
 Fees on loans held for sale (3)                 0                     (27)        (27)
                                     -----------------------------------------------------
 Total Interest-Earning Assets         $      3,390            $     3,249    $  6,639
                                     -----------------------------------------------------

Interest Expense:
 Interest-bearing demand and
   savings deposits                    $      862              $     1,636    $   2,498
 Time deposits                              2,012                    1,532        3,544
                                     -----------------------------------------------------
   Total interest-bearing deposits          2,144                    3,898        6,042
 Short-term borrowings                       (471)                     894          423

<PAGE>

 Long-term borrowings                         572                    521        1,093
                                     -----------------------------------------------------
 Total Interest-Bearing Liabilities    $    2,369              $   5,189      $ 7,558
                                     -----------------------------------------------------

 Net Interest Margin / Net Interest
   Income (FTE)                        $    1,021              $  (1,940)     $ (919)
                                     =====================================================
</TABLE>


The above table shows the changes in interest income (tax equivalent) and
interest expense attributable to volume and rate variances. The change in
interest income (tax equivalent) due to both volume and rate has been allocated
to volume and rate changes in proportion to the relationship of the absolute
dollar amounts of the change in each.

(1) The interest on tax-exempt investment securities and tax-exempt loans is
calculated on a tax equivalent basis assuming a federal tax rate of 35%.
(2) The average balances of the investments are based on amortized historical
cost.
(3) The yield-related fees recognized from the origination of loans held for
sale are in addition to the interest earned on the loans during the period in
which they are warehoused for sale as shown above.
(4) The balances of nonaccrual loans are included in average loans outstanding.
Interest on loans includes yield related loan fees.

The decrease in net interest income, when comparing the second quarter of 2000
with the second quarter of 1999, is primarily attributable to changes in average
interest rates. The past twelve months has been a period of rising rates as the
Federal Reserve raised rates six times for a total of 150 basis points.
Quarter-to-quarter AMCORE experienced a corresponding increase of 59 basis
points in the average rate paid on deposits and borrowings, resulting in higher
funding costs. These costs were only partially offset by a 33 basis point
increase in average yields on loans and securities, which over the same period,
repriced at a slower pace than did the deposits and borrowings.

Changes in net interest income attributable to changes in average volume
increased in the second quarter of 2000, compared to the second quarter of 1999.
Average loans grew by 9.2% quarter-to-quarter, while average investment
securities declined by 3.6%. The net effect was a 4.4% increase in average
earning assets. This increase was partially offset by a 5.6% increase in average
interest-bearing deposits and borrowings needed to fund the growth in average
earning assets. The increase in net interest income attributable to changes in
average volume was insufficient, however, to offset the decline in net interest
income associated with the changes in average interest rates.

The table below presents an analysis of the changes in net interest income for
the first six months of 2000 compared to the first six months of 1999.

<TABLE>
<CAPTION>
                                                      For Six Months Ended
                                                  June 30, 2000 / June 30, 1999
                                                          (in thousands)
                                     ---------------------------------------------------
                                                                              Total Net
                                       Increase (Decrease) Due to Change In    Increase
                                       Average Volume          Average Rate   (Decrease)
                                     ---------------------------------------------------
<S>                                    <C>                     <C>           <C>
Interest Income:
 Taxable securities                    $      (995)            $      3,680  $    2,685
 Tax-exempt securities (1)                  (1,554)                     (89)     (1,643)
                                     -----------------------------------------------------
    Total Securities (2)                    (2,434)                   3,476       1,042
 Loans held for sale (3)                      (388)                     241        (147)
 Loans  (1) (4)                             10,878                      688      11,566
 Other earning assets                          (77)                     186         109
 Fees on loans held for sale (3)                 0                     (126)       (126)
                                     -----------------------------------------------------
 Total Interest-Earning Assets         $     6,724             $      5,720  $   12,444
                                     -----------------------------------------------------

Interest Expense:
 Interest-bearing demand and
    savings deposits                   $     1,963             $      2,773  $    4,736
 Time deposits                               3,665                    1,622       5,287
                                     -----------------------------------------------------
   Total interest-bearing deposits           4,078                    5,945      10,023
 Short-term borrowings                          99                    1,208       1,307
 Long-term borrowings                          238                      851       1,089
                                     -----------------------------------------------------

<PAGE>


 Total Interest-Bearing Liabilities    $     4,643             $      7,776  $   12,419
                                     -----------------------------------------------------

 Net Interest Margin / Net Interest
    Income (FTE)                       $     2,081             $     (2,056) $       25
                                     =====================================================
</TABLE>

The above table shows the changes in interest income (tax equivalent) and
interest expense attributable to volume and rate variances. The change in
interest income (tax equivalent) due to both volume and rate has been allocated
to volume and rate changes in proportion to the relationship of the absolute
dollar amounts of the change in each.

(1) The interest on tax-exempt investment securities and tax-exempt loans is
calculated on a tax equivalent basis assuming a federal tax rate of 35%.
(2) The average balances of the investments are based on amortized historical
cost.
(3) The yield-related fees recognized from the origination of loans held for
sale are in addition to the interest earned on the loans during the period in
which they are warehoused for sale as shown above.
(4) The balances of nonaccrual loans are included in average loans outstanding.
Interest on loans includes yield related loan fees.

Net interest income was essentially flat, when comparing the first six months of
2000 with the first six months of 1999. The previously noted rising rate
environment translated to a 43 basis point increase in the average rate paid on
deposits and borrowings, resulting in higher funding costs, period-to-period.
These costs were only partially offset by a 28 basis point increase in average
yields on total interest-earning assets, which over the same period, repriced at
a slower pace than did the deposits and borrowings.

Changes in net interest income attributable to changes in average volume
increased in the first six months of 2000, compared to the first six months of
1999. Average loans grew by 10.1% period-to-period, while average investment
securities decreased by 5.2%. The net effect was a 4.3% increase in average
earning assets. This increase was partially offset by a 5.3% increase in average
interest-bearing deposits and borrowings needed to fund the growth in average
earning assets. The increase in net interest income attributable to changes in
average volume was sufficient to virtually offset the decline in net interest
income associated with the changes in average interest rates.

AMCORE has implemented, or is investigating, a variety of initiatives designed
to lessen the stress on net interest margin by reducing high-cost wholesale
funding, attracting lower-cost funding, improved pricing of loan and deposit
products and decreasing certain lower-return holdings with long-term interest
rate risk. These initiatives include: continuation of the investment portfolio
run-off, noted above, to reduce or replace variable-rate wholesale funding,
implementation of a market-based fund transfer-pricing system to foster
product-pricing discipline, reduced holdings in one-to-four family low-rate
adjustable and other low spread mortgages to reduce long-term interest rate
risk, internal incentive programs that promote growth of demand deposits and the
possible securitization of a portion of AMCORE's indirect auto portfolio with
proceeds used to further reduce wholesale funding. The initial affect of these
programs, to the extent implemented, is expected during the second half of the
year.

Provision for Loan and Lease Losses

The provision for loan and lease losses is an amount added to the allowance
against which loan and lease losses are charged. Management determines an
appropriate provision for loan losses based upon historical loss experience,
regular evaluation of collectibility by lending officers, credit administration
and the corporate loan review staff, and the size and nature of the loan
portfolios. Other factors include the current economic and industry environment,
concentration characteristics of the loan portfolio and the composition and
underlying collateral of problem loans.

The provision for loan and lease losses was $2.3 million during the second
quarter of 2000, an increase of $189,000 or 8.8% from the same period in 1999.
The increase in the provision largely relates to the growth in total loans.

Annualized net charge-offs to average loans were 0.20% in the second quarter of
2000 and 0.38% during the same period of 1999. The decrease is primarily related
to the $1.2 million partial charge-off of an agricultural credit in the second
quarter of 1999.

<PAGE>

The provision for loan and lease losses for the first six months of 2000 was
$4.7 million, an increase of $353,000 or 8.1% from the same period in 1999. The
increase in the provision largely relates to the growth in total loans.

The allowance for loan and lease losses as a percent of total loans was 1.08%
and 1.03% at June 30, 2000 and December 31, 1999, respectively.

Non-Interest Income

Total non-interest income was $14.8 million in the second quarter of 2000, a
decrease of $399,000 or 2.6% from the same period in 1999.

Trust and asset management income decreased 2.0% or $156,000 to total $7.6
million for the second quarter of 2000 versus the same period in 1999. The
decrease was attributable to a $750,000 second quarter 1999 accrual adjustment
attributable to personal trust accounts to more accurately reflect the fees
earned at any given period end. Excluding this adjustment, trust and asset
management income increased $594,000 or 8.5% reflecting continue growth of the
segment. As of June 30, 2000, trust assets under management totaled $4.5
billion, including $1.5 billion in the Vintage Mutual Fund family. Total assets
under administration, which include managed and custodial assets, totaled $5.2
billion.

Service charges on deposits increased $373,000 or 15.5% from the second quarter
of 1999 to $2.8 million for the second quarter of 2000. An increase in average
deposit balances of $187.4 million or 7.3% from second quarter 1999 to second
quarter 2000, revised fee schedules and overdraft handling processes contributed
to the increase in fee income.

Mortgage revenues decreased $931,000 or 44.1% as origination volume and
refinancing activity were negatively impacted by increasing interest rates. An
additional factor leading to the decline was a reversal of $153,000 in mortgage
servicing right impairment reserves in the second quarter of 1999.

Other income increased to $2.9 million in the second quarter of 2000, a $301,000
or 11.5% increase from the $2.6 million in the same period a year ago. Increased
ATM related fees, higher customer services charges and increase in net surrender
values of bank-owned life insurance largely accounted for the increase. These
increases were partially offset by lower insurance commission income resulting
from the sale of AMCORE's insurance agency business on August 27, 1999.

Net security gains totaled $393,000 in the second quarter of 2000 as compared to
$379,000 in the second quarter of 1999. The level of security gains or losses is
dependent on the size of the available for sale portfolio, interest rate levels,
AMCORE's liquidity needs, and balance sheet risk objectives.

Operating Expenses

Operating expenses totaled $29.9 million for the second quarter of 2000, a
decrease of $6.8 million from the second quarter of 1999. The second quarter of
2000 included a $234,000 net pre-tax Restructuring Reversal, whereas the second
quarter of 1999 included a $6.1 million Restructuring Charge. Excluding these
items, operating expenses declined $431,000 or 1.4%. The decrease is primarily
related to lower personnel, loan processing and collection, equipment and
education/training expenses. These were partially offset by increased employee
medical claims, professional fees, advertising and business development and
other real estate owned expenses.

The efficiency ratio, excluding the Restructuring Reversal and the Restructuring
Charge, was 60.86% in the second quarter of 2000, a 49 basis point increase from
60.37% in the second quarter of 1999. This reflects the negative impact of lower
net interest income and non-interest income, quarter-to-quarter.

Personnel costs, which include compensation expense and employee benefits, are
the largest component of operating expenses. Excluding the Restructuring
Reversal and the Restructuring Charge, personnel costs

<PAGE>

totaled  $17.1 million in the second  quarter of 2000, a decrease of
$64,000 from the second quarter of 1999. Cost savings from AMCORE's new CFOS
structure more than offset normal merit increases and cost-of-living
adjustments, growth of the trust and asset management segment and increased
employee health benefit costs.

Equipment expense decreased $282,000 or 11.4% from the second quarter of 1999 to
total $2.2 million. The decrease is primarily attributable to lower software
maintenance and Year 2000 expenses. Equipment and software depreciation were
also lower.

Data processing expense was $1.4 million in the second quarter of 2000, compared
to $2.8 million in the second quarter of 1999, a decrease of $1.4 million. The
decrease was attributable to the second quarter 1999 Restructuring Charge.

Excluding the Restructuring Reversal and the Restructuring Charge, professional
fees increased $259,000 or 29.9%. The increase was primarily related to
non-recurring consulting expenses incurred and legal fees associated with the
start-up of a money market mutual fund. Advertising and business development
expenses increased $142,000 or 14.0% from the second quarter of 1999 to total
$1.2 million. The increase is mainly the result of timing of advertising and
promotional campaign spending year-to-year.

Excluding the Restructuring Reversal and the Restructuring Charge, other
operating expenses decreased $331,000 or 24.7% when comparing the second quarter
of 2000 with the second quarter of 1999. A $334,000 decrease in loan processing
and collection expense associated with decreased origination volumes,
refinancing activity and servicing right amortization was the primary reason for
the decline. Education and training expenses were also lower by $121,000, but
was offset by a $139,000 increased spending on foreclosed property that had been
previously deferred.

Income Taxes

Income tax expense increased $2.0 million to $4.0 million for the second quarter
of 2000. The increase was primarily due to the tax benefit associated with the
second quarter 2000 Restructuring Charge. Excluding the second quarter 2000
Restructuring Reversal and the second quarter 1999 Restructuring Charge, the
effective tax rates were 26.8% and 28.3%, respectively. The quarter-to-quarter
decrease in the effective tax rate is the result of a reduction in state income
taxes and a non-taxable increase in cash surrender value from bank-owned life
insurance. These items were partially offset by a lower proportion of tax-exempt
income from investments in municipal bonds and loans to pre-tax income
quarter-to-quarter.

Balance Sheet Review

Total assets were $4.4 billion at June 30, 2000, an increase of $44.8 million or
1.0% from December 31, 1999. Total earning assets increased $83.5 million from
December 31, 1999. The increase was partially funded by a decrease in
non-earning assets of $38.7 million over the same period. The decrease was
primarily attributable to reductions in excess cash that had been held for
potential Year 2000 related withdrawals and seasonal decreases in cash
equivalents. The remaining increase in earning assets was funded by a $97.9
million increase in deposits from December 31, 1999. The increase in deposits
also largely funded a $49.5 million reduction in borrowings and a $6.3 million
net reduction in stockholders' equity from December 31, 1999.

The decline in stockholders' equity is due principally to the acquisition of
treasury shares in connection with AMCORE's announced share repurchase program
and unrealized losses on available for sale securities net of undistributed
earnings for the first six months of 2000.

ASSET QUALITY REVIEW

Allowance for Loan and Lease Losses

<PAGE>

The allowance for loan and lease losses was $30.1 million at June 30, 2000, an
increase of $1.8 million from December 31, 1999. The allowance represented 1.08%
of total loans and 103.2% of non-performing loans at June 30, 2000. The
comparable ratios were 1.03% and 159.16% at December 31, 1999.

Net charge-offs were $1.4 million during the second quarter of 2000 versus $2.4
for the same quarter of 1999. The decrease in net charge-offs was primarily
attributable to a $1.2 million partial charge-off of an agricultural credit in
the second quarter of 1999. Excluding this item, net charge-offs increased
$140,000.

An analysis of the allowance for loan losses as of June 30, 2000 and 1999 is
presented below:

<TABLE>
<CAPTION>
                                           For the Three Months             For the Six Months
                                              Ended June 30,                  Ended June 30,
                                           2000            1999            2000            1999
                                      ===============================================================
                                                              (in thousands)
<S>                                          <C>             <C>             <C>             <C>
Balance at beginning of period               $29,166         $27,919         $28,377         $26,403

Charge-Offs:
     Commercial, financial and agricultural      440           1,508             946           1,706
     Real estate                                 309             166             826             283
     Installment and consumer                  1,058           1,210           2,207           2,009
                                      ---------------------------------------------------------------
                                               1,807           2,884           3,979           3,998

Recoveries:
     Commercial, financial and agricultural       62             165             431             238
     Real estate                                  14              38              52              48
     Installment and consumer                    357             247             521             568
                                      ---------------------------------------------------------------
                                                 433             450           1,004             854

Net Charge-Offs                                1,374           2,434           2,975           3,144

Provision charged to expense                   2,340           2,151           4,730           4,377
                                      ---------------------------------------------------------------
Balance at end of period                     $30,132         $27,636         $30,132         $27,636
                                      ===============================================================

Ratio of net charge-offs  during the
period to average loans  outstanding
during the period (1)                          0.20%           0.38%           0.22%           0.25%
                                      ===============================================================
</TABLE>
(1) On an annualized basis

Non-Performing Assets

Non-performing assets increased $11.7 million from December 31, 1999 to $33.1
million at June 30, 2000. Nearly half of the increase in non-performing assets
is concentrated in three credits, two of which are agricultural credits, placed
on non-accrual during the second quarter. Non-performing assets as of June, 2000
and December 31, 1999 are presented below.

<TABLE>
<CAPTION>
                                                      June 30, 2000        December 31,1999
                                                  --------------------------------------------
  Impaired loans:                                               (in thousands)
<S>                                                   <C>                    <C>
    Non-accrual loans and leases
      Commercial..................................    $     11,976           $      12,632
      Real estate.................................          14,827                   3,278

  Other non-performing:
      Non-accrual loans (1).......................           2,401                   1,919
                                                  --------------------------------------------
      Total non-performing loans..................    $     29,204           $      17,829
                                                  ============================================

    Foreclosed assets.............................


<PAGE>

      Real estate.................................           2,256                   2,675

      Other.......................................           1,666                     958
                                                  --------------------------------------------
      Total foreclosed assets.....................    $      3,922           $       3,633
                                                  ============================================

    Total non-performing assets...................    $     33,126           $      21,462


  Loans 90 days or more past due and still accruing   $     10,948           $      10,197
</TABLE>

(1) These loans are not considered impaired since they are part of a small
balance homogeneous portfolio.

Capital Management

Total stockholders' equity was $287.4 million at June 30, 2000, a decrease of
$6.3 million from December 31, 1999. The book value per share of AMCORE common
stock was $10.60 and $10.59 at June 30, 2000 and 1999, respectively. AMCORE paid
$.16 and $.14 per share dividends during the second quarter of 2000 and 1999,
respectively.

On November 24, 1999, AMCORE announced a stock repurchase program for up to five
percent of its common stock or 1.41 million shares. The repurchased shares will
become treasury shares and will be used for general corporate purposes,
including the issuance of shares in connection with AMCORE's stock option and
other employee benefit plans. Through June 30, 2000, 965,741 shares have been
repurchased at an average price of $20.98.

The BANK is considered a "well capitalized" institution based on regulatory
guidelines. AMCORE's leverage ratio of 7.81% at June 30, 2000 exceeds the
regulatory guidelines of 5% for well-capitalized institutions. AMCORE's ratio of
Tier I capital at 11.30% and total risk based capital of 12.31% significantly
exceed the regulatory minimums (as set forth in the table below), as of June 30,
2000.

<TABLE>
<CAPTION>
                                                 June 30, 2000                June 30, 1999
                                                 -------------                -------------
                                              Amount        Ratio          Amount        Ratio
                                              ------        -----          ------        -----
                                                            (Dollars in thousands)
<S>                                        <C>              <C>          <C>             <C>
Total Capital                              $  369,117       12.31%       $  364,530      12.85%
Total Capital Minimum                         239,978        8.00%          226,884       8.00%
                                           ----------       ------       ----------      ------
Amount in Excess of Minimum                $  129,139        4.31%       $  137,646       4.85%
                                           ==========       ======       ==========      ======

Tier I Capital (to Risk Weighted Assets)   $  338,985       11.30%       $  336,893      11.88%
Tier I Capital Minimum                        119,989        4.00%          113,442       4.00%
                                           ----------       ------       ----------      ------
Amount in Excess of Minimum                $  218,996        7.30%       $  223,451       7.88%
                                           ==========       ======       ==========      ======

Tier I Capital (to Average Assets)         $  338,985        7.81%       $  336,893       8.05%
Tier I Capital Minimum                        173,718        4.00%          167,298       4.00%
                                           ----------       ------       ----------      ------
Amount in Excess of Minimum                $  165,267        3.81%       $  169,595       4.05%
                                           ==========       ======       ==========      ======

Risk adjusted assets                       $2,999,731                    $2,836,048
                                           ==========                    ==========

Average assets                             $4,342,948                    $4,182,453
                                           ==========                    ==========
</TABLE>

<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A comprehensive qualitative and quantitative analysis regarding market risk was
disclosed in the Company's December 31, 1999 Form 10K. There have been no
material changes in the assumptions used or result obtained regarding market
risk.



<PAGE>

PART II.
--------

ITEM 1. Legal Proceedings

Management believes that no litigation is threatened or pending in which AMCORE
faces potential loss or exposure which will materially affect AMCORE's financial
position or results of operations, other than noted below. Since AMCORE's
subsidiaries act as depositories of funds, trustee and escrow agents, they are
named as defendants in lawsuits involving claims to the ownership of funds in
particular accounts. This and other litigation is incidental to AMCORE's
business.

On August 26, 1999, Willie Parker and five other plaintiffs filed a civil action
in the Circuit Court of Humphreys County, Mississippi against AMCORE Consumer
Finance Company, Inc., a subsidiary of AMCORE, and other defendants containing
twelve separate counts related to the sale and financing of residential
satellite dish systems. Though the actual purchase price for each of these
systems involves a principal amount of less than $3,000, the complaint prays for
economic loss and compensatory damages in the amount of $5 million for each
plaintiff and punitive damages in the amount of $100 million for each plaintiff.
AMCORE has denied the plaintiffs' allegations and has removed the case to the
United States District Court for the Northern District of Mississippi. The
proceedings are currently stayed pending resolution of the plaintiffs' motion to
remand the case to the state court. Although at this early date the ultimate
disposition of the case cannot be predicted with certainty, based on information
currently available, AMCORE believes that the plaintiffs' damage claims are
disproportionate and that the final outcome of the case will not have a
materially adverse effect on AMCORE's consolidated financial condition, though
it could have a materially adverse affect on AMCORE's consolidated results of
operations in a given year. AMCORE has not recorded an accrual for payment of
the damages in this case because, in management's opinion, an unfavorable
outcome in this litigation is not probable.


ITEM 4.  Submission of Matters to a Vote of Security Holders

(a)  - (d) Incorporated herein by reference to Item 4 of AMCORE's Quarterly
           Report on Form 10-Q for the quarter ended March 31, 2000.


ITEM 6.  Exhibits and Reports on Form 10-Q

      (a) 3  Amended and Restated Articles of Incorporation of AMCORE
             Financial, Inc. dated May 1, 1990 (Incorporated by reference to
             Exhibit 23 of AMCORE's Annual Report on Form 10-K for the year
             ended December 31, 1989).

        3.1  By-laws of AMCORE Financial, Inc. as amended May 9, 2000
             (Incorporated by reference to Exhibit 3.1 of AMCORE's Quarterly
             Report on Form 10-Q for the quarter ended March 31, 2000.)

          4  Rights Agreement dated February 21, 1996, between AMCORE Financial,
             Inc. and Firstar Trust Company (Incorporated by reference to
             AMCORE's Form 8-K as filed with the Commission on February 28,
             1996).

         27  Financial Data Schedule

         99  Additional exhibits - Press release dated July 19, 2000.


<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.



                                  AMCORE Financial, Inc.

                                  (Registrant)


Date: August 14, 2000

                                  /s/ John R. Hecht
                                  ------------------------------------------
                                  John R. Hecht
                                  Executive Vice President and Chief
                                  Financial Officer (Duly authorized officer
                                  of the registrant and principal financial
                                  officer)