FORM 10-KSB
U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549
ANNUAL REPORT
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended September 30, 1996
 OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition Period from __________ to __________
Commission file number        33-75594
MERIDIAN FINANCIAL CORPORATION
(Name of small business issuer in its charter)
  Indiana                               35-1894846
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)          Identification No.)

8250 Haverstick Road, Suite 110         46240-2401
Indianapolis, Indiana                   (Zip Code)

(Address of principal executive
offices)

(317) 722-2000
(Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:
NONE

Securities registered under Section 12(g) of the Exchange Act:
NONE

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past twelve 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 [  ]

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB.  Not applicable.

Issuer's revenues for the fiscal year ended September 30, 1996:  $1,334,989

Aggregate market value of the voting stock held by non-affiliates:  The
voting stock of the Company is closely held and there is no market for it.

Number of common shares, without par value, outstanding at December 20,
1996: 1,000

DOCUMENTS INCORPORATED BY REFERENCE:
NONE
Transitional Small Business Disclosure
Format: Yes [  ]  No [X]
<PAGE>
MERIDIAN FINANCIAL CORPORATION Indianapolis, Indiana Annual Report to
Securities and Exchange Commission September 30, 1996
PART I
ITEM 1.  DESCRIPTION OF BUSINESS. 

General

Meridian Financial Corporation (the "Company") is an Indiana
corporation organized in 1993 to engage primarily in the business of
commercial equipment leasing. The Company's primary niche is the
leasing of restaurant equipment to franchisees of national restaurant
chains under full-payout, triple-net leases. As of September 30, 1996,
the Company's total finance receivables were approximately $6.2
million.

To date, the Company has funded its purchases of equipment primarily
through a private placement of five-year bonds, a public offering of
five-year bonds, and private placements of common and preferred
stock. During 1994 and 1995, the Company issued and sold approximately 
$7.8 million aggregate principal amount of bonds under an indenture of trust, 
the net proceeds of which were used to fund equipment leases. The Company's 
payment obligations on the bonds are secured by security interests in the 
equipment acquired with the proceeds, collateral assignments of the related 
leases, and a debt service reserve fund on deposit with the trustee.  Also 
during 1994, the Company realized net proceeds of approximately $1.4 million 
from the issuance of preferred stock together with warrants to purchase 
common stock. These proceeds were used to fund equipment leases and a 
mortgage loan and for general corporate purposes. 

During the year ended September 30, 1996, the Company entered into an 
agreement to sell leases to a third party from time to time on a non-recourse 
basis.  This brokerage activity allows
the Company to recognize immediate income on brokered transactions and
reinvest the proceeds into new leases.  In addition, the Company has
entered into an agreement with a bank for a warehouse line of credit to
fund new transactions on an interim basis. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations-Liquidity
and Capital Resources." 

The Company currently has five full-time employees.  The Company's executive 
offices are located at 8250 Haverstick Road, Suite 110, Indianapolis, Indiana 
46240-2401, and its telephone number is (317) 722-2000.

Marketing

The marketing of the Company's leasing product is accomplished through
a variety of methods including franchisor referrals, equipment leasing
brokers, restaurant equipment dealer referrals and referrals from other
leasing companies across the country. Management of the Company also
attends food industry trade shows and conventions, providing the
Company with high visibility in the industry.

The Company's target market is seasoned, multi-site, national franchise 
restaurant operators who are adding locations under a franchise agreement
with a Company-approved franchisor group.  These franchisees typically
require leases in the $100,000 to $250,000 range.  Substantially all of the 
Company's equipment leases are for a 60 month term. These qualified 
franchisees are most likely seasoned operators who have outgrown their local
banks' credit ceilings, geographic boundaries or willingness to fund newer, 
unfamiliar (from the bank's perspective) franchise concepts. From a 
geographic standpoint, the Company's market is national.  

The Company also has opportunities to review equipment financing
transactions which are outside of the Company's target market, and which
principally arise through referrals. These nonrestaurant deals are
considered by management on a case-by-case basis. 

Leasing Activities

As of September 30, 1996, the Company had entered into or purchased the
following leases:
<TABLE>
<CAPTION>
   
    Type  of         Cost of             Type of Restaurant         Date       Term of 
    Equipment        Equipment            or Other Business         of Lease   Lease
    <S>            <C>           <C>                               <C>         <C>                
    Restaurant     $   123,871   Great Steak and Fry(1)            12/30/93    60 mos.
    Restaurant         100,000   Great Steak and Potato(1)         01/06/94    60 mos.
    Restaurant          31,666   Great Steak and Potato(1)         01/06/94    60 mos.
    Restaurant         132,610   Flamers Charbroiled Hamburgers(1) 02/08/94    60 mos.
    Restaurant          57,000   Perkins Family Restaurants(1)     03/30/94    60 mos.
    Restaurant         440,248   Boston Chicken(2)                 05/05/94    60 mos.
    Restaurant         147,500   Flamers Charbroiled Hamburgers(1) 06/24/94    60 mos.
    Water Slide        300,000   Old Indiana Family Fun Park(1)    07/08/94    60 mos.
    Restaurant         256,234   Delancey Street Deli(1)           08/31/94    52 mos.
    Restaurant          36,764   Delancey Street Deli              08/31/94    60 mos.
    Restaurant         388,794   Pretzel Time(1)                   09/07/94    36 mos.
    Restaurant         149,000   Applebee's Neighborhood Grill(2)  10/15/94    23 mos.
    Restaurant          65,000   Great Steak and Fry(1)            10/19/94    60 mos.
    Restaurant         114,445   Great Steak and Potato(1)         10/24/94    60 mos.
    Restaurant         118,771   Great Steak and Fry(1)            11/04/94    60 mos.
    Restaurant          68,503   Delancey Street Deli              11/21/94    60 mos.
    Restaurant         197,665   Krystal(2)                        11/28/94    60 mos.
    Restaurant         318,000   Great Steak and Fry(1)            02/15/95    60 mos.
   Agricultural        557,000   Agricultural business(1)          03/24/95    48 mos.
    Restaurant          78,323   Applebee's Neighborhood Grill(3)  03/29/95     9 mos.
    Restaurant          90,647   Applebee's Neighborhood Grill(3)  03/29/95    11 mos.
    Restaurant          89,186   Applebee's Neighborhood Grill(3)  03/29/95    13 mos.
   Auto Repair          35,724   T & K Front Wheel Drive(1)        03/29/95    23 mos.
    Office              33,392   Dependable Affordable(1)          03/29/95    36 mos.
    Water Park         800,000   Old Indiana Family Fun Park(4)    04/01/95    60 mos.
    Restaurant          58,341   Great Steak and Fry(1)            06/07/95    60 mos.
    Restaurant          84,884   Applebee's Neighborhood Grill(3)  07/20/95    11 mos.
    Restaurant          96,313   Applebee's Neighborhood Grill(3)  07/20/95    13 mos.
    Restaurant          55,879   Perkins Family Restaurants(1)     07/20/95    24 mos.
    Food Storage        82,714   50 Below(1)                       07/26/95    60 mos.
    Convenience Store  164,515   Marathon Convenience Store(1)     07/31/95    60 mos.
    Restaurant         223,541   Papa John's(2)                    08/29/95    60 mos.
    Convenience Store   23,905   Marathon Convenience Store(1)     09/12/95    60 mos.
    Food Storage        86,229   50 Below(1)                       09/29/95    60 mos.
    Restaurant         110,690   Great Steak and Fry(1)            08/24/95    60 mos.
    Restaurant          20,000   Great Steak and Fry(1)            10/06/95    60 mos.
    Restaurant          52,295   Great Steak and Fry(1)            10/13/95    60 mos.
    Restaurant         500,000   Burger King(5)                    12/14/95    60 mos.
    Restaurant         330,135   TGI Friday's(1)                   12/14/95    60 mos.
    Food Storage        35,372   50 Below(1)                       12/21/95    60 mos.
    Restaurant         100,000   Papa John's(2)                    12/13/95    60 mos.
    Restaurant         100,000   Papa John's(2)                    12/13/95    60 mos.
    Restaurant         188,243   Taco Bell(5)                      12/15/95    60 mos.
    Restaurant         100,000   Chuck E. Cheese's(1)              01/31/96    60 mos.
    Restaurant         241,154   Damon's Ribs(1)                   03/26/96    60 mos.
    Restaurant         200,000   Italian Oven(5)                   03/29/96    60 mos.
    Restaurant          68,900   Papa John's(1)                    06/03/96    60 mos.
    Restaurant         160,000   Chuck E. Cheese's(1)              06/04/96    60 mos.
    Restaurant         109,000   Chuck E. Cheese's(5)              06/04/96    60 mos.
    Restaurant         191,536   Italian Oven(5)                   06/23/96    60 mos.
    Restaurant          15,915   Great Steak and Fry(1)            07/12/96    60 mos.
    Restaurant         100,000   Chuck E. Cheese's(1)              07/01/96    60 mos.
    Restaurant         145,600   Hooters(1)                        07/23/96    60 mos.
    Restaurant          54,472   Papa John's(1)                    07/31/96    60 mos.
    Restaurant         238,413   Checkers(1)                       07/31/96    60 mos.
    Restaurant         272,386   Checkers(1)                       07/31/96    60 mos.
    Restaurant         119,219   Checkers(1)                       07/31/96    60 mos.
    Restaurant          31,108   Delancey Street Deli              07/31/96    60 mos.
    Restaurant         250,761   Great Steak and Fry(1)            07/31/96    60 mos.
    Restaurant         199,500   Great Steak and Fry(1)            07/31/96    60 mos.
    Restaurant         150,000   Great Steak and Fry(1)            07/31/96    60 mos.
    Restaurant          41,028   Great Steak and Fry(1)            07/31/96    60 mos. 
    Restaurant          75,514   Italian Oven(5)                   08/02/96    60 mos.
    Restaurant          33,130   Papa John's(1)                    09/16/96    60 mos.
    Restaurant         113,400   Krystal's                         09/30/96           60 mos.
<FN>

<F1>(1)  These  leases  are  pledged   as   collateral  for  the  Company's
outstanding bonds.
<F2>(2)  These  leases  were  prepaid and the Company  has  reinvested  the
proceeds into other leases.
<F3>(3)  These  were purchased leases  which  have  matured.  <F4>(4)  This
equipment financing transaction is structured as a mortgage loan because 
the Company took substantial additional collateral in the form
of real estate.  The mortgage term is 60 months, with a fifteen year 
amortization  and  a  final  balloon payment due April 1, 2000.
<F5>(5) These leases were subsequently sold to a third party  on  a non-
recourse basis. 
</TABLE>
<PAGE>
Equipment

The Company focuses on purchasing and leasing complete packages of
restaurant equipment for national restaurant franchises, including  
freezers, refrigerators, grills, broilers, fryers, signs, exterior lighting, 
point-of-sale registers, seating units and other items necessary for the 
operation of a restaurant. However, the Company may purchase and lease a wide 
variety of other types of equipment where, in the opinion of management, the
nature of the opportunity and the creditworthiness of the potential lessee 
warrant.

Purchases of equipment may  be made directly  from  manufacturers,  from
dealers, from independent third parties, or from existing users subject to
saleleasebacks. In most cases, management of the Company does not obtain 
appraisals or other  indications  of  fair  value  of  the equipment acquired  
because  all  equipment is acquired subject to full-payout 
leases, and because  most  of the equipment  is  new  and  is  purchased  
from  vendors specified by the franchisor.

Leases

Although certain minimum requirements must be met for each lease, the terms
and conditions of the  leases are determined by negotiation between the 
Company and the lessee and may vary  from  lease  to  lease.  Substantially  
all of the Company's current  leases  have  a fixed base lease rate, and it is 
anticipated  that future leases generally will also have a fixed base lease
rate.  Some future leases may provide for percentage rentals subject to a 
specified guaranteed minimum. All of the Company's leases are full-payout, 
non-cancelable leases, and most have non-renewable five-year terms.  At the
termination of each lease, the lessee is required to purchase the equipment 
subject to the lease for an amount agreed upon by the Company and the lessee.
Each of the Company's present leases is a triple-net lease, which requires the
lessee to repair and maintain the equipment, pay all taxes relating to the 
lease and the lessee's use of the equipment, and bear the entire risk of the 
equipment being lost, damaged, destroyed  or  rendered  unfit  or  
unavailable  for  use. Historically the Company has retained and serviced all
of its leases, except for those sold to a third party  on  a non-recourse 
basis,  and  it  reserves  the right to sell its interest in other leases and 
the underlying equipment.

Credit Criteria

The Company bases its credit decisions upon the ability of the potential
lessees  to  make  payments  under  the  leases. Accordingly,  the  Company
conducts a detailed credit review of potential lessees. Except to the extent 
discussed below, the Company has established and uses the following standards 
and procedures:

(a) Historical debt service from operations of at least 1.5 to 1 or pro forma 
debt service  coverage of at least 2.0 to 1, both tests inclusive of payments 
under the proposed lease. If only one of these tests  is  met, additional 
collateral of a value  at  least  equal  to  the equipment cost is required.  
If neither test is met, additional collateral of a value in excess of twice 
the equipment cost is required. Additional collateral may be in the form of 
additional  guarantees,  supporting  letters  of  credit, vendor guarantees, 
pledges of other assets or combinations thereof.
(b)  The  franchisor must be a national chain of at least 100 stores.   The
lessee must currently be a multi-site operator and must have 2 or more years in
business. Significant additional experience in the food industry is also
required.
(c)  At least  three  years  of  income  statements  and  tax  returns  are
evaluated.
(d)  Personal  credit  checks  from  commercial  credit  bureaus unless the
lessee's financial strength based upon published information is compelling 
enough to waive this requirement.
(e)  Satisfactory banking checks and verifications.
(f)  No single lessee may exceed $1.5 million.

The Company may, in its discretion, make exceptions to the  standards above
if, in  the  Company's  opinion, the overall creditworthiness of the  potential
lessee warrants special consideration. Similar investigation and evaluation are
performed with respect  to  any guarantors of the lessees' obligation under
the leases.

One of the Company's keys to  successful  credit underwriting is that prior
to approval of each lease, a senior member of the management team visits the
franchise    location,    inspects    operations   and    interviews    the
management/ownership of   the  franchise.  The  Company  utilizes   an   
internally   developed, comprehensive "Franchisee  Site  Visit  Checklist"  
which  focuses on the key operational issues confronting restaurant 
franchisees.  This site visitation is performed only after an initial review
of the lessee's financial and credit information, including a "Lessee 
Profile" which includes all of the relevant business information concerning
the potential lessee. 

The  Company  focuses  its  leasing  efforts  on the  franchise  restaurant
industry partly because national franchisors generally monitor  their 
franchisees on a regular  basis  and  insist  that  the  franchisees stay 
current  in  their obligations to  creditors.  In the event of a default,  
franchisors  can  intervene  to assist in curing the default in order to 
protect the value of the franchise.

As of December 16, 1996, the Company had declared only two lessees in the
franchise restaurant industry to be in default under their leases.  One of
those defaults was  resolved  without  loss to the Company and the other is
still in process.  In addition, at such date, two lessees outside the restaurant
industry had been declared to be in default.  See  "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Credit Risk."

Competition

The equipment leasing industry is highly competitive, and the Company faces
competition from various sources.  There are numerous other potential
competitors seeking to purchase and lease equipment,  many  of  which  have
greater financial resources than the Company and/or more experience than 
management of the Company. The Company competes in the leasing marketplace 
with various entities,   including   equipment   dealers,  brokers,  leasing  
companies, financial institutions  and  manufacturers  or  their  affiliates. 
In addition  to attractive financial terms, manufacturers may also provide 
certain ancillary services which the Company cannot offer directly, such as 
maintenance services (including  possible  equipment substitution  rights),  
warranty  services, purchase rights and trade-in privileges. The Company 
identifies potential lessees by a number of means. Management of the Company 
has relationships with various restaurant franchisors and other potential 
sources of business. Because the Company's business is concentrated in the
restaurant industry, the Company receives referrals from other leasing
companies that do not serve the restaurant industry.

ITEM 2.  DESCRIPTION OF PROPERTY

Due to the nature of the Company's business, its investment in tangible
property, other than equipment subject to leases, is not significant in
relation to its total assets. The Company leases its executive offices.

ITEM 3.  LEGAL PROCEEDINGS.

In December, 1996, the  Company  filed a complaint in the Superior Court of
Boone County, Indiana, against Old Indiana Limited Liability Company and certain
other parties as a result of defaults by Old Indiana under the
equipment lease and mortgage loan made by the Company to Old Indiana.  The
complaint seeks a money judgment against  Old  Indiana  for all amounts due
and payable to the Company under the lease and mortgage loan, together with
attorneys fees, prejudgment interest and costs of the action.  The
complaint also requests the court to enter a judgment to foreclose the
Company's security interests and mortgage lien on Old Indiana's  assets and
to approve  the disposition of those assets for the purpose of satisfying the
money judgment that  is  being sought.  See "Management's Discussion and 
Analysis of Financial Condition and Results of Operations--Credit Risk."

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Company did not submit any matters to a vote of security holders during
the fourth quarter of the 1996 fiscal year.

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

There is no public trading market for the Company's common shares.  As of
December 20, 1996, there  were  12  holders of record of the common shares.
No cash dividends were declared or paid  on  the  common shares in fiscal 1995
and 1996.

The terms of the Company's Series A and Series B  Preferred  Stocks provide
that no dividends (other than dividends paid in common shares) may be paid
or declared and set aside for payment or other distribution upon the common
shares unless full cumulative dividends on the Series A or the Series B
Preferred  Stocks,  as  the  case may be, have been paid. In addition,  the
terms of an agreement between the Company  and  a  holder  of  shares  of  
Series  B Preferred Stock  prohibit,  without such shareholder's prior written 
consent, payment of any dividend on common  shares  at  any  time  prior  to  
the exercise of a warrant to purchase common shares held by such shareholder.  
The Company's Articles of Incorporation and the Indiana Business Corporation 
Law further provide that no dividend or other distribution may be made upon any
shares if, after giving  it  effect,  the Company would be unable to pay its 
debts  as  they  become due in the usual course of business or the Company's 
total assets would be less than its total liabilities.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Overview

The Company's current  cash  in-flows  consist  primarily of the receipt of
lease payments from lessees.  The Company's current cash out-flows consist
primarily of investments in leases, debt service obligations, dividend
payments on the Company's preferred stock, and general and administrative
expenses. The profitability of the Company depends largely on the Company's
ability  to  enter  into  suitable leases, to realize  an  adequate  spread
between the interest rate paid by the Company on its borrowings and the 
implicit interest rate charged on the leases, and to avoid defaults by the 
lessees.

Liquidity and Capital Resources

As of September 30, 1996, the Company had completed two private equity
offerings, one private debt offering and one public debt offering.  All of
the offerings initiated by  the  Company  have  been  part  of  a  detailed
financial plan devised by the Company to provide funds for investment in leasing
or lending  transactions  and  for  working capital while maintaining a proper
debt to equity ratio.  As of September 30, 1996, the Company's debt to equity
ratio was 6.9 to 1, which is slightly higher than the industry average for
independent  financial  services  companies  of  approximately  6.6  to  1,
according to the 1995 Survey of Industry Activity & Business Operations 
conducted by the Equipment Leasing Association.

With the expiration of the Company's  public  offering of bonds on December
31, 1995,  the  Company  has  continued  to explore various  other  sources  of
funding.  The Company has been in discussions with numerous banking institutions
and other  commercial lenders, as well as potential  individual  investors  and
venture capital funds. The types of financing vehicles being discussed include a
traditional senior credit facility with one or more banks or commercial
lenders, additional equity and/or subordinated debt, and a warehouse credit
facility. All of the possible financing scenarios would be intended to
ultimately  reduce  the  Company's  borrowings  costs,  and  to provide the
Company with an adequate source of funding to grow the lease portfolio.

In  addition  to  the  discussions  above  regarding  additional  financing
vehicles being pursued, the Company entered into an agreement on September 
18,  1996 to sell leases to a third party from time to time on a non-recourse 
basis.  In addition to generating current income recognition, this method of 
financing transactions also allows the Company to consider deals which it 
previously might   have  rejected,  such  as  deals  too  large  that  would 
cause  a concentration issue or  deals with smaller interest spreads. For the 
year ended September 30, 1996, the Company  sold  two  separate  blocks  of 
portfolio to this third party, generating  gross  proceeds  of $1,405,000 and 
income from  this  brokerage activity totaling $149,144.  It is the Company's 
intention to continue the sale of future lease portfolio to third parties as 
part of the Company's overall financial plan.

On July 1, 1996, the Company entered into an agreement with a bank for a $1
million  warehouse  line  of credit.   The  Company  intends  to  use  this
warehouse line to fund new lease transactions  on  an  interim basis prior to 
selling the leases  to  other  financing  sources or keeping the  leases  for  
its  own portfolio. As of September 30, 1996, the Company had not commenced 
borrowing on this credit line.

Management believes that its overall  sources of liquidity will continue to
be sufficient to satisfy the foreseeable financial obligations of the Company.
Management of the Company knows of no material requirements for capital
expenditures other than to enter into leases.

Analysis of Cash Flows

Net cash flows from operating activities result primarily from net earnings
or losses, adjusted for noncash items such as depreciation and amortization of
assets and from changes in working capital.   For  the year ended September
30, 1996, the net cash inflow from operations was $41,645, compared with $2,812
of net cash inflow from operations for the prior year.  The most significant
contributor  to  operating  cash flow are the net earnings  before  noncash
charges for depreciation and amortization. Net earnings before non cash charges
improved from a net outflow of $12,842 in 1995 to an inflow of $282,668 in
1996.   This  improvement  in  income  before  non-cash  charges,  totaling
$295,510 from year to year, was positively impacted by gains from brokerage 
activity and early  terminations of leases totaling  $192,488  for  1996  
compared  with $78,716 for 1995. Brokerage activity was begun in fiscal 1996 
and included the investment of $1,256,000 into eight leases held for sale and
the receipt of $1,405,000 in proceeds from sales of the leases.

Net  cash   flows   used  in  investing  activities  consist  primarily  of
investments in leases  and  a  mortgage   loan,  which  represent  the  
Company's  primary requirement for cash, and principal payments received on 
its finance receivables, which is currently the Company's principal source of 
cash. During the year ended September 30, 1996, the Company invested $2,796,043
in twenty-four leases, compared to $3,322,060 in nineteen  leases and $935,000 
in loans receivable for fiscal 1995. Principal payments received  on  leases  
and  loans receivable totaled $1,550,935 for fiscal 1996 compared to $983,766 
for fiscal 1995. Principal payments  received in fiscal 1996 include 
approximately $754,000  from  the early termination  of  leases,  compared  to
$414,000 during 1995. Investments in leases and  principal  payments  
received on leases  and  the  mortgage  loan  are expected to continue to 
grow in future periods.

Cash inflows from financing  activities have consisted of proceeds from the
sale of equity and debt securities.  Cash  outflows consist of costs incurred in
the sale of the securities, principal payments  on  debt  securities, preferred
stock dividends, and amounts deposited in the debt service reserves and the
origination accounts. During the year ended September 30, 1996, the Company
sold $1,375,000 of bonds, compared to $3,392,000 during 1995. This decrease
during 1996 was due to the termination of the bond offering on December 31,
1995. Principal payments on bonds payable increased during 1996 to $831,381
from $519,988 during 1995, reflecting the increase in principal payments
received  on direct financing leases from year to year.   During  the  year
ended September 30, 1995, the Company collected subscriptions receivable 
relating to its Series  B  Preferred Stock and warrants totaling $1,500,000 
($1,427,060 net of a finder's fee and offering expenses). Management anticipates
that the Company's primary cash inflows from financing activities in the future
will be from borrowing arrangements  other  than  the  sale  of bonds, and that
the amount of borrowings will continue to grow as the Company's growth in 
leasing transactions continues.

Results of Operations

For  the year ended September 30, 1996, the Company incurred  an  operating
loss, before  preferred  dividend requirements, of $44,533 compared to a loss 
for the same period in 1995  of $242,938. These operating losses have 
narrowed each year as the Company has continued to experience growth in its 
lease portfolio.  Preferred dividend requirements totaled $160,000 in fiscal 
1996 and 1995. Included in operating earnings for fiscal 1996 are gains of 
$192,488 from brokerage activity and the early termination of leases, 
compared to $78,716 in gains during fiscal 1995.

Interest income from finance  receivables  and  invested funds for the year
ended September 30, 1996 was $1,142,501 and interest expense  was $898,764 in 
the same period, or a net interest spread of $243,737, compared to  a  net  
interest spread of $232,953 in fiscal 1995.  The Company considers the gains 
from brokerage activity  and  early  terminations  to  be  a  component of its 
income from leases.  Including these gains, the interest spread for fiscal 1996
increases to $436,225,  compared  to  $311,669  for  fiscal 1995.   In  
future  periods, management expects the interest spread to increase as  the 
Company continues to invest in new leases, and initiates new funding 
arrangements which will lower the Company's overall cost of funds.

Legal  and professional expenses decreased approximately  $78,000  for  the
year ended September 30, 1996 compared to fiscal 1995. As discussed in liquidity
and capital   resources,  the  Company  has  been  pursuing  other  sources  of
financing. During fiscal  1995,  the  Company  incurred  legal  and  accounting
costs totaling approximately $60,000 in connection with these activities.

Other  general  and  administrative expenses increased approximately $4,000
for the year ended September  30,  1996  compared  to  fiscal  1995. This small
increase in expenses reflects the relative fixed nature of the Company's general
and administrative  expenses.  With its management team and systems  in  place,
general and administrative costs going  forward  should  continue  to be 
relatively fixed, with the exception of a limited number of personnel additions
required by growth in the Company's lease portfolio. Therefore, the interest 
spread on finance  receivables  is  expected to grow at a much faster pace  than
the related general and administrative expenses.

Impact of Interest Rate Changes and the Restaurant Industry

The overall strength of the U.S. Economy and the general interest rate
environment have remained relatively  stable during the past few years.  To
date the Company has funded its fixed rate leases  with  fixed  rate  debt, with
similar duration,  thereby avoiding any interest rate risk.  While a dramatic  
rise in future interest  rates  would  not have a direct impact on leases booked
to date, it may have an impact on the industry's  growth  rate.   A  rising 
interest rate environment  may  also  impact  the  Company's  future  gains  on 
brokerage activities.  As the Company continues to discuss other funding 
arrangements with third parties,   it   is  management's  intention  to  
structure  future  funding arrangements so as to minimize interest rate risk.

The Company's primary focus involves the leasing of complete packages of
restaurant equipment for restaurant franchises.  The franchise restaurant
industry has experienced  rapid  growth as the number of franchise concepts
and units continues to grow. As large  metropolitan  areas  in  some geographic
areas begin to reach saturation points from the standpoint of restaurant
locations, the Company is seeing more prospective deals in more rural
locations,  which  would  tend to be the smaller type franchisee  that  the
Company targets.  In addition, the Company is seeing some consolidation in the
marketplace as franchisees purchase  other  franchisees'  operations.  While
these types  of  transactions  are  generally  larger in size than the  
Company's typical lease deal, the Company expects this consolidation to present 
opportunities to utilize the Company's third party brokerage source.

Inflation has not had a material effect on the Company's operations.

Credit Risk

Since inception of the Company through September 30, 1996, the Company had  
declared only three lessees to be in default under their leases.  The first
two defaults have been resolved and payments remain current. The third 
default is currently being addressed. Management expects the Company to 
recover in full its net investment in the lease and, therefore, no loss has 
been reflected in the Company's financial statements.

In addition, subsequent to September 30, 1996, the Company declared the
mortgage loan and a lease with the same entity, and one other  lease  to be
in default  of  its  terms.   In  addition,  one  lease  is  not performing in
accordance with  its  contractual  terms.   The  Company's  net investment 
balance  at September 30, 1996 in these assets which are not performing in 
accordance with their contractual terms is approximately $2,161,000.  
Management  of  the Company has reviewed  its collateral position on these 
credits and have consulted  with legal counsel. Based  on  this  review and 
consultation, management believes that the Company is adequately secured and 
will recover all amounts presently owed, including interest for the default 
period, selling costs and legal and professional fees. Accordingly, no loss 
has been reflected in the Company's financial statements. Management of the 
Company is actively pursuing the resolution  of these finance  receivables,
and  expects  during  the first quarter of calendar 1997 that all of the 
non-performing leases and loan will either be repaid or brought current in 
accordance with their contractual provisions. Additionally, management has 
assessed  its  cash  position  if  these non-performing leases and loan are 
not resolved within  planned  time frames.  The results of this  analysis  
demonstrate  that  the  Company's  ability   to   meet  its obligations is
not significantly affected by a more lengthy resolution time frame,  should
it be necessary.

The evaluation of a potential lessee's credit is an important part of the
Company's underwriting procedures, but it is not the only variable.  The
Company  looks  at  operations  experience,  collateral,  the  strength  of
personal guarantees and operating efficiency. By carefully analyzing each 
component, management can structure transactions which will attempt to 
strengthen the overall financing, (by obtaining substantial other collateral, 
for example) and thus  attempt  to  lower  the  credit  risk  inherent  in  
each financing.  Therefore, if a lessee  were to experience difficulty in 
meeting its payment obligations in the future, the Company can be in a position
to minimize its exposure to losses.

Forward-looking Statements

The statements  contained  in  this  filing  on  Form  10-KSB  that  are not
historical facts are forward looking statements within the meaning of the 
Private Securities Litigation Reform Act. Actual results may differ materially 
from those included in the forward-looking statements. These forward-looking
statements  involve risks and uncertainties including, but not limited  to,
the following:  changes in general economic conditions, including changes in
interest rates  and spending on food prepared outside the home; competitive
or regulatory changes  that  affect  the  cost  of or demand for the Company's
lease product; and the availability of funds or third-party financing sources to
allow the Company to purchase equipment and enter into new leases. The
Company's future results also could be adversely  affected  if it is unable
to resolve the current defaults in its portfolio without significant loss.

ITEM     7. FINANCIAL STATEMENTS.

The financial data required by this Item are set forth in the Company's
financial  statements contained in this report and are incorporated  herein
by reference.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.

The Company filed a Form 8-K dated October 25, 1996, indicating a change in
their certifying accountant from Arthur Andersen LLP to Crowe Chizek and
Company LLP. There have been no disagreements with either of the Company's
independent accountants on accounting or financial disclosures.

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

The Board of  Directors  of  the  Company  consists of Michael F. McCoy, J.
Phillip Beatty and Curtis Miller.  Mr. McCoy serves as Chairman of the Board 
and President; neither Mr. Beatty nor Mr. Miller is an officer of the Company.
William L. Wildman serves as Vice President of the Company and Gerald W.
Gerichs serves as Vice President, Secretary  and  Treasurer of the Company.
The Company has no other officers. Directors are elected for a term of one year
and until their successors are elected and have qualified. The holders of the
Series B Preferred Stock have the right to elect one  Director.   The other
two Directors  are elected by the holders of the Company's Common Stock.  There
is no family relationship  between  any  of  the  Directors  or  officers  of 
the Company.

The following are brief biographies of the Directors and officers of the
Company:

Michael  F.  McCoy.   Mr.  McCoy was President, Treasurer and a Director of
United Capital Leasing Corporation,  a  company  engaged  in  commercial 
equipment leasing ("UCL"),  from  its  inception  in  October  1990 until 
October  1993.  UCL specialized in  restaurant  equipment  leasing  and 
maintained  and  serviced  its  own portfolio.  From April 1978 to March 
1991, Mr. McCoy  was  Vice  President  of Keystone Leasing Corporation, a
company   engaged  in  the  equipment  leasing  business ("Keystone").
During this period of time, Keystone originated numerous lease transactions
for equipment  used  in  restaurant,   industrial,   office  and  manufacturing
industries. Substantially all of the leases arranged by Keystone were brokered 
for the accounts of other institutions and were full-payout, triple-net leases 
with lessees similar in credit experience to those targeted by the Company.  
Mr. McCoy also serves as Secretary of Meridian Hospitality Group, Inc. ("MHG").
The Company previously has entered into Leases with affiliates  of  MHG. During
the year  ended  September  30,  1996,  MHG  sold its interests in the entities
involved in these lease transactions to affiliates of Geneva Securities, Inc. 
See "Certain Relationships and Related Transactions."  Mr. McCoy received a
Bachelor of Science degree and a Master's degree in Business Administration
with a concentration in finance from Indiana  University.  He  is  52 years
old.  Mr. McCoy has served as a Director and officer of the Company since its
inception.

J. Phillip Beatty.  Mr. Beatty served first as Secretary and later as Vice
President  and  Secretary  of  UCL  from  its  inception in October 1990 to
October 1993.  Prior to that time, he served as Vice President and Chief 
Financial Officer of On-Line Plastics, Inc., a manufacturing company, where he 
was responsible for all financial, accounting, treasury and administrative
functions, a position that he continued  to hold for a period of time after 
joining UCL.  Mr. Beatty  currently is the Chief Financial Officer of Dealers  
Engine  Sales, Inc.  He is a Certified Public Accountant and a member of the 
Indiana CPA Society and the American  Institute  of  Certified Public 
Accountants. Mr. Beatty is 49 years old. Mr. Beatty has served as a Director of
the Company since its inception and, until December 1994, also served as Vice 
President, Secretary and Treasurer of the Company.

Curtis Miller.  Mr. Miller has been the Managing Partner of Katz, Sapper &
Miller, a public accounting firm, since 1978.  He received a Bachelor of
Science degree from Butler University  with  a  major  in  accounting.  Mr.
Miller is a Certified Public Accountant and a member of the Indiana 
Association of Certified Public Accountants and the American Institute of 
Certified Public Accountants. He is 55 years old. Mr. Miller has served as a
Director of the Company since December 1994. He was elected by the holders of 
the Series B Preferred Stock.

William  Wildman.  Mr.  Wildman  was self employed as a consultant  in  the
equipment leasing business from July 1990 until December 1993. In such 
capacity he provided marketing and other consulting  services  to  UCL and 
other firms. From  1985 until June 1990, Mr. Wildman was associated with Ag 
Services, Inc., a feed mill, originally as President and principal shareholder 
and, after the sale of the business to a third party, as an employee. Mr. 
Wildman  is  48 years old.  Mr. Wildman has served as an officer of the Company
since November 1993.

Gerald  W.  Gerichs.  Mr. Gerichs was Vice President of Financial Reporting
of Southwestern  Life  Corporation,  an  insurance holding company, from April
1990 to December 1994.  From July 1985 to March 1990, he was an Audit Manager 
with Coopers  &  Lybrand, a public accounting  firm.   Mr.  Gerichs  received  a
Bachelor of  Science degree  from  the  University  of  Kentucky  with  a  
major  in accounting. He is a Certified Public Accountant and a Certified
Management Accountant and is a member  of  the  Indiana  CPA  Society, the 
American Institute of Certified Public Accountants and the Institute of 
Management Accountants.  Mr. Gerichs is 39 years old. He has served as an 
officer of the Company since December 1994. 

Because none of the Company's securities are registered pursuant to Section
12 of the Securities Exchange Act of 1934, the reporting requirements of
Section 16(a) of such Act are not applicable.

ITEM 10.  EXECUTIVE COMPENSATION.

The following table sets forth a summary of the compensation paid by the
Company  to the Company's President for services rendered in all capacities
to the Company  during  each  of the three most recent fiscal years. No other
executive officer received in excess of $100,000 in salary and bonus in any 
of those fiscal years.

SUMMARY COMPENSATION TABLE
                                 Annual Compensation
                                                          Other Annual
Name and Principal         Year         Salary            Compensation
Position

    Michael F. McCoy,      1996              $108,000     $ 12,469 (1)
    President

                           1995              $105,000     $ 12,469 (1)

                           1994               $88,000     $ 10,166 (2)
_________________

(1)  Of the amount indicated, $9,600 represents the payment of a car
     allowance and $2,869 represents the payment of disability insurance
     premiums.
(2)  Of the amount indicated, $8,800 represents the payment of a car
     allowance and $1,366 represents the payment of disability insurance
     premiums.

Certain  officers  receive car allowances and are  reimbursed  for  certain
expenses  that they incur on behalf of the Company.  Although  the  Company
pays health insurance, life insurance and disability insurance premiums for
certain of its officers, there are presently no stock option, bonus, profit
sharing, pension or similar employee benefit plans.  The Company may  adopt
such plans in the future.

The  Company has entered into an employment agreement with Mr. McCoy  which
continues through December 31, 1997.  Under the terms of the agreement, Mr.
McCoy  receives an annual base salary of $108,000, subject  to  5%  minimum
annual  increases, plus certain other employee benefits.  Upon termination,
if  such termination is at the request of Mr. McCoy, is due to the death or
disability  of  Mr. McCoy, or is for cause, Mr. McCoy will be  entitled  to
compensation  through the date of termination.  If the  Company  terminates
Mr.  McCoy  without  cause, other than in connection with  a  sale  of  the
Company,  he  will  be entitled to receive his regular base  salary  for  a
period  of  two years.  There are currently no other employment or  similar
agreements between the Company and its officers.

Mr.  McCoy,  Mr.  Beatty  and Mr. Miller are the only  Directors  and  none
receives any additional compensation for services rendered as a Director.

ITEM     11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to
beneficial ownership  of  the Company's Common stock, Series  A  Preferred
Stock and Series B Preferred Stock as of January 6, 1997, by each person or 
group of persons who is known by  the  Company to own beneficially more than 5%
of any class of the Company's voting securities, by each of the Company's 
Directors and executive  officers who  owns  any  such  voting  securities, 
and by  all Directors and executive officers as a group. Except as otherwise 
noted, the persons named in the  table  have  sole voting and investment power 
with respect to all securities shown as beneficially  owned  by  them.   The 
Series A Preferred Stock has no voting rights with respect to the election of 
the Directors of the Company.  
<TABLE>
<CAPTION> 
                                                  Series A              Series B
                          Common Stock           Preferred Stock       Preferred Stock
                          Beneficial   Percent   Beneficial   Percent    Beneficial  Percent
     Name                 Ownership    Of Class  Ownership    Of Class   Ownership   of Class           
<S>                           <C>       <C>         <C>        <C>       <C>            <C> 
Michael F. McCoy (1)          525       52.5%         70        7.0%         0          ---   
J. Phillip Beatty (2)         ---       ---           30        3.0%         0          ---    
Curtis Miller (3)               0       ---            0         ---     1,200 (4)      80.0%
RTM Financial Services(5)      60        6.0%        200       20.0%         0          ---
MFC Investors, LLC (6)          0       ---            0         ---     1,200          80.0%
John Weyreter (7)               0       ---            0         ---       300          20.0%
William L. Wildman (8)        235       23.5%        200       20.0%         0          ---
Gerald W. Gerichs (9)          15        1.5%         50        5.0%         0          ---
All Directors and executive 
officers as a group            775       77.5%        350      35.0%      1,200 (4)     80.0%
______________
     <FN>
<F1>(1)   Mr.  McCoy's  address  is  8250  Haverstick  Road,   Suite   110,
Indianapolis, IN  46240-2401.
 <F2>(2)   Mr.  Beatty's  address is 3645 Developers Road, Indianapolis, IN
46227.
<F3>(3)  Mr. Miller's address is 11711 North Meridian Street, Suite 800, 
Carmel, Indiana 46032.
<F4>(4)  All of such shares of Series B Preferred Stock are owned
by MFC  Investors,  LLC, a limited  liability  company.   Mr.  Miller  owns  a
percentage of the total equity interest in MFC Investors, LLC,
and possesses shared  voting power and shared investment power with respect
to such shares of Series B Preferred  Stock.   None of the officers or 
directors of the Company other than Mr. Miller owns any equity  interest  in  MFC Investors,
LLC.
<F5>(5) The address for RTM Financial Services is 253 Post Road West, 
Westport, Connecticut  06880.
<F6>(6)  The address of MFC Investors, LLC is 11711 North Meridian  Street,
Suite 800, Carmel, Indiana 46032.
<F7>(7)    Mr.   Weyreter's  address is 1458 E. 19th  Street, Indianapolis, IN
46218 
<F8>(8) Mr. Wildman's address  is  8250  Haverstick Road, Suite 110,
Indianapolis, IN 46240-2401.
<F9>(9)  Mr. Gerichs' address is 8250 Haverstick Road, Suite 110, 
Indianapolis, IN  46240-2401.
</TABLE>

Because Mr. McCoy owns more than 50% of the outstanding shares of Common
Stock, he is in a position to elect a majority of the Directors and to control 
the affairs and management of the Company.

Under an agreement between the Company and MFC Investors, LLC, a holder  of
the Series B Preferred  Stock,  the  Company  is prohibited, without such 
holder's prior written consent, from paying dividends on  its  shares  of 
Common Stock, issuing or redeeming certain  types of equity securities, or 
selling substantially  all  of  the Company's assets
outside of  the ordinary course of business (other than in conjunction with
a plan of liquidation or dissolution of the Company).

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the year ended September 30, 1995, the Company purchased from United
Capital Leasing Corporation  ("UCL")  a  total  of  nine  equipment leases 
(and the underlying equipment) for an aggregate purchase price of $713,000.
In October, 1995, the Company completed  its  final purchase of one additional
equipment lease (and  the underlying equipment) from UCL  for a purchase price 
of $52,000. These leases meet the Company's credit  criteria  and  are 
otherwise   comparable,  in  the judgment  of management, to the leases the 
Company enters into directly. Prior to founding the Company, Mr. McCoy was an 
officer and director of UCL.  UCL was acquired  in  1994  by  affiliates of
Geneva Securities, Inc., the placement agent for the Company's bonds.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a)   Exhibits:   A list of exhibits required to be filed as part  of  this
report is set forth in the Index  to  Exhibits, which immediately precedes such
exhibits, and is incorporated herein by reference.

(b)  Reports on Form 8-K

No reports on Form 8-K were  filed  during  the quarter ended September 30,
1996. On October 25, 1996, the Company filed a Form 8-K indicating a change 
in its certifying accountant.

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH  REPORTS  FILED  PURSUANT  TO
SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

The Company has not sent to its security holders (i) an annual report to
security holders for the fiscal year ending September 30, 1996, or (ii) a
proxy statement, form of proxy or other proxy soliciting material with
respect to any annual or other meeting of security holders.
<PAGE>

MERIDIAN FINANCIAL CORPORATION
INDEX TO FINANCIAL STATEMENTS
                                                              Page
Report of Independent Public Accountants                       F-2 
Balance Sheets as of September 30, 1996 and 1995               F-3
Statements of Operations for the years ended 
September 30, 1996 and 1995                                    F-4
Statements  of  Shareholders' Equity for the years 
ended September 30, 1996 and 1995                              F-5
Statements of Cash Flows for the years ended 
September 30, 1996 and 1995                                    F-6
Notes to Financial Statements                                  F-7
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

Board of Directors
Meridian Financial Corporation
Indianapolis, Indiana

We have audited the accompanying balance sheet of Meridian Financial
Corporation  as of  September  30,  1996  and  the  related  statements  of
operations, shareholders'  equity,  and  cash  flows  for  the  year then ended.
These financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these financial statements based
on our  audit.   The  balance  sheet  as  of  September 30, 1995  and  related
statements of operations, shareholders' equity, and cash flows for the year 
ended September  30,  1995  were  audited by other auditors  whose  report  
dated November 10, 1995 expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit  includes  examining,  on  a  test  basis,
evidence supporting  the  amounts  and  disclosures in the financial 
statements.  An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe  that  our  audit  provides a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above  present fairly,
in all material respects, the financial position of Meridian Financial
Corporation as of September 30, 1996, and the results of its operations and
its  cash  flows  for  the  year  then  ended  in conformity with generally
accepted accounting principles.

As more fully discussed in Note 2 to the financial  statements, the Company
has approximately $1,000,000 outstanding to a borrower that has experienced
disrupted operations and legal action.  Based on the Company's collateral
position and consultation with legal counsel, management has concluded that
all amounts due will be collected and, therefore, no allowance for loss has
been  established.   Management's  conclusion  is  an  estimate   that   is
susceptible to change in the future should circumstances change or other 
information become available.


Crowe, Chizek and Company LLP


Indianapolis, Indiana
December 6, 1996
F-2
<PAGE>

<TABLE>
MERIDIAN FINANCIAL CORPORATION BALANCE SHEETS
<CAPTION>
                                                    September 30                                        
                                               1996              1995
              ASSETS
<S>                                           <C>              <C>
Finance receivables, net of unearned 
  finance charges:
  Net investment in direct financing leases   $ 5,425,285      $ 3,811,531
  Loans Receivable                                781,940          930,137
    Total Finance Receivables                   6,207,225        4,741,668

Cash                                              115,744          311,701
Cash held in origination account                    4,252        1,004,262
Debt service reserve funds                        156,789          128,640
Debt issue costs, net                             610,321          692,395
Other assets                                      268,483          249,639
    Total assets                              $ 7,362,814      $ 7,128,305

          LIABILITIES AND 
          SHAREHOLDERS' EQUITY
Bonds Payable                                $ 6,382,117       $ 5,838,498
Accounts payable and accrued expenses             59,900           164,477
   Total liabilities                           6,442,017         6,002,975

SHAREHOLDERS' EQUITY:
 Preferred stock-
  Series A, no par value, $40 per annum 
   cumulative dividend, liquidation value 
   $400 per share,  1,000 shares authorized, 
   issued and outstanding                        400,000           400,000 
  Series B, no par value, $80 per annum 
   cumulative dividend, liquidation value
   $1,000 per share, 1,500 shares authorized,
    issued and outstanding                     1,389,560         1,389,560
  Common stock, no par value, 10,000 shares 
    authorized, 1,000 shares issued and 
    outstanding                                   68,533            68,533
  Additional paid-in capital                      37,500            37,500
  Accumulated deficit                           (974,796)         (770,263) 
     Total shareholders' equity                  920,797         1,125,330
     Total liabilities and shareholders'
      equity                                 $ 7,362,814       $ 7,128,305

The accompanying notes are in integral part of these financial statements.

F-3

</TABLE>
<PAGE>
<TABLE>
MERIDIAN FINANCIAL CORPORATION
STATEMENTS OF OPERATIONS
                                          Years  Ended  September  30, 
                                              1996           1995
<S>                                        <C>          <C>
REVENUE:
   Interest income from leases and
      mortgage loan                        $ 1,043,910  $   715,750
   Gains from brokerage activities             149,144
   Gains on early termination of leases         43,344       78,716
   Investment income and other                  98,591      100,378
              Total revenue                  1,334,989      894,844

EXPENSES:
   Interest expense                            898,764      583,175
   Legal and professional                       53,104      131,473
   Other general and administrative            427,654      423,134
              Total expenses                 1,379,522    1,137,782
NET LOSS                                       (44,533)    (242,938)
   Less - Preferred stock dividends           (160,000)    (160,000)
LOSS TO COMMON SHAREHOLDERS                $  (204,533)  $ (402,938)
LOSS PER COMMON SHARE                      $   (204.53)  $  (402.94)

The accompanying notes are an integral part of these financial statements. 
F-4
</TABLE>
<PAGE>
<TABLE>
MERIDIAN FINANCIAL CORPORATION
STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years ended September 30, 1996 and 1995
      
                                            Preferred Stock            Additional
                                Common Stock   Series A and B          Paid-In     Accumulated
                              Shares    Amount    Shares    Amount     Capital     Deficit       Total
                             <S>       <C>        <C>     <C>          <C>       <C>           <C>
BALANCE, October 1, 1994     1,000     $68,533    2,500   $1,795,846   $37,500   $(367,325)    $1,534,554

  Series B Preferred Stock
   additional expenses of 
   offering                                                   (6,286)                              (6,286)
  Net Loss                                                                        (242,938)      (242,938)
  Preferred Stock Dividends                                                       (160,000)      (160.000)

BALANCE, SEPTEMBER 30, 1995  1,000     68,533    2,500     1,789,560    37,500    (770,263)     1,125,330

  Net  Loss                                                                        (44,533)       (44,533)
  Preferred stock dividends                                                       (160,000)      (160,000)

BALANCE, September 30, 1996  1,000    $68,533    2,500    $1,789,560    $37,500  $(974,796)     $  920,797



The accompanying notes are an integral part of these financial statements.
F-5
</TABLE>
<PAGE>
<TABLE>
MERIDIAN FINANCIAL CORPORATION
STATEMENTS OF CASH FLOWS

                                                 Years  Ended September 30,
                                                       1996            1995 
<S>                                                <C>              <C>          
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                         $(44,533)        $(242,938)
   Adjustments to reconcile net loss to net
     cash from operating activities-
       Depreciation and amortization                327,201           230,096
       Increase in other assets                    (179,829)          (95,968)
       Increase (decrease) in accounts payable
         and accrued expenses                       (61,194)          111,622
          Net cash provided by operating activities  41,645             2,812
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to direct financing leases           (2,796,043)       (3,322,060)
  Additions to loans receivable                                      (935,000)
  Principal payments received on direct financing 
   leases and loans receivable                    1,550,935           983,766
  Other                                            (108,247)          (76,559)

        Net cash used in investing activities    (1,353,355)       (3,349,853)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from sale of preferred stock                             1,427,060
  Proceeds from issuance of bonds payable          1,375,000        3,392,000
  Principal payments on bonds payable              (831,381)         (519,988)
  (Increase) decrease in cash held in debt service
    reserves and origination accounts               971,861           (16,827)
   Debt issue costs paid                           (181,344)         (512,650)
   Preferred stock dividends                       (160,000)         (160,000)
   Other                                           (58,383)           (13,000)

        Net cash provided by financing activities  1,115,753        3,596,595
NET CHANGE IN CASH                                 (195,957)          249,554
CASH, beginning of year                             311,701            62,147
CASH, end of year                                $  115,744       $   311,701
Supplemental disclosure of cash flow information:
     Cash paid for interest                      $  630,958       $   379,667
The accompanying notes are an integral part of these financial statements. 
F-6
</TABLE>
<PAGE>

MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

1.   Description of Business:

The Company was formed in August 1993 and is engaged in the commercial
equipment  leasing  business  and  to  date  has  funded  its purchases  of
equipment primarily  through  the sale of debt securities.  The Company  has 
issued, from time to time, 5-year bonds, bearing a fixed rate of interest.  
Payment of principal and interest on the bonds is a general obligation of the 
Company, secured by a security  interest in the equipment acquired with the 
proceeds of the bonds, collateral assignments of the leases related thereto and 
a debt service reserve fund established with respect to the bonds.

The Company may purchase  and  lease  a wide variety of types of equipment,
but a substantial  proportion  of its leases involve  restaurant  equipment.  
The terms and conditions of the leases  are  determined  by  negotiation  
between the Company and  the  lessee and vary from lease to lease.  Most of the
leases  have  a fixed base lease  rate.   Substantially  all  of  the  leases 
have a nonrenewable 5-year term.  At  the  termination  of each lease, the 
lessee  will  generally  be required to purchase the equipment for  an  
agreed  upon  amount.   Each  lease is a triple net  lease  which requires 
the lessee to repair and maintain the equipment, pay all taxes relating  to  
the lease and the lessee's use of the equipment and bear the entire risk of
the equipment being lost, damaged, destroyed or rendered unfit or 
unavailable for  use.   To  date  the  Company  has  retained  and
serviced the majority of its leases.

During the year ended September 30, 1996, the Company entered into an
agreement with a third party to sell leases from time to time on a non-
recourse basis. This brokerage activity allows the Company to recognize
immediate  income  on  brokered transactions and reinvest the proceeds into
new leases.  No leases were held for sale at September 30, 1996.

2.  Use of Estimates in Preparing Financial Statements:

The  preparation  of financial  statements  in  conformity  with  generally
accepted accounting principles requires management to make estimates and 
assumptions that affect the amounts reported and the disclosures provided.  
These estimates and assumptions may change in the future and future results 
could differ.  Estimates that are more susceptible to change in the near term
include management's evaluation of the need for an allowance for lease and
loan losses and the fair value of certain financial instruments.

F-7
<PAGE>
MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

At  September  30,  1996,  the  Company  had  a  lease  and  mortgage  loan
outstanding to Old Indiana Limited  Liability  Company, which owns and operates
a theme park (the "park") in Thorntown, Indiana, in the total amount of 
approximately $1,000,000.   During  the year, an accident  occurred  at  the 
park  which involved the death of one customer and the injury of another. This 
accident resulted in a disruption of the park's  operations  and  the  filing 
of  legal  claims against the  park. Subsequent to September  30,  1996, the
Company declared the park's lease and mortgage loan to be in default. 
Management of the Company has reviewed its collateral position on these 
credits  and  has  consulted with legal counsel and the owners of the park.  
Based on this review and consultation, management believes that the 
Company is adequately secured and will recover all amounts presently owed 
plus interest through the date of collection. Accordingly, management does 
not consider the mortgage loan to be impaired, and no allowance for loss has 
been established for the lease or loan. Collection is expected to occur 
through an orderly sale of property and collection  from  guarantors, if 
needed. Management's conclusion  regarding the collectibility of these 
credits is based on information available at the date of preparation of these
financial statements which management, in consultation with legal counsel, 
believes to be reliable; however, management's conclusion is an estimate that is
susceptible to change in the future should circumstances change or other
information become available.

3.   Summary of Significant Accounting Policies:

Revenue Recognition
     The Company's leases are all direct financing leases which provide for
the recognition of financing  revenue  over  the  life  of  the  lease at a
constant rate of return.
     Gains from brokerage activities and early termination of leases are
computed based on the net proceeds received less the net investment in the
leases.  Leases held for sale are carried at the lower of cost or market
value. There were no leases held for sale at September 30, 1996 or 1995.

Debt Issue Costs
     Costs associated with the Company's bond offerings have been deferred and
are being amortized and reflected in interest expense in the statement of
operations using the effective interest method over the life of the bonds.

F-8
<PAGE>
MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

Property and Equipment

Property and equipment are recorded at cost and included in other assets in
the balance sheet.  Depreciation is provided using the straight-line method
over the estimated service lives of the depreciable assets.

Loss per Common Share

Loss  per  common  share  is  calculated  by  subtracting  preferred  stock
dividends from net income or loss and dividing that amount by the weighted 
average shares outstanding for the period.  Weighted average shares outstanding 
for the periods ended September 30, 1996 and 1995 were 1,000.  The weighted
average shares outstanding in both periods exclude 333 shares relating to
warrants outstanding, since these warrants are antidilutive.


4.   Preferred Stock and Warrants:

On  September  30,  1994,  the  Company  issued in a private offering 1,500
shares of its Series B Preferred Stock, together with warrants to purchase, at a
nominal exercise price, a number of common shares equal in the aggregate to
25%  of  the  total  number  of  common shares that  would  be  outstanding
immediately after issuance of all such common shares. The warrants are 
exercisable only in connection with an initial public  offering  by,  or a 
merger or other sale of, the Company, or upon the adoption by the Company of 
a plan of liquidation or dissolution. The aggregate purchase price for the 
Series  B Preferred Stock and warrants was $1,500,000.  The net proceeds 
to the Company, after payment of a finder's fee and offering expenses, were
$1,427,060, of which $37,500 was allocated to the warrants and reflected 
in Additional Paid-in Capital and $1,389,560 was allocated to Preferred Stock.

Holders of the Series A and B Preferred Stock are entitled to cumulative
annual dividends of $40 and $80 per share, respectively, payable  quarterly
on the last day of the months of March, June, September and December, subject 
to the approval of the board of directors.  Unless full cumulative dividends
have been paid on the Series A and B Preferred  Stock, no dividends may be 
paid on the Common Shares and no Common Shares may be redeemed, purchased 
or otherwise acquired by the Company.

In the event of a liquidation of the Company, holders of the Series A and B
Preferred Stock will be entitled to receive the sum of $400 and $1,000 per
share, respectively, plus accumulated but unpaid dividends,
F-9
<PAGE>
MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

before any payment or other distribution is made to the holders of Common
Shares.  The shares of Series A Preferred Stock may
be redeemed in whole or in part at any time by the Company at a price equal
to $400  per  share  plus  all  accumulated  but  unpaid  dividends. Except as
required by law, the holders of the Series A Preferred Stock have no voting 
rights. The holders of Series B Preferred Stock, voting as a group,  have the
right to elect  one  director  of  the  Company,  and,  if  two  or more 
consecutive quarterly dividends on the Series B Preferred Stock are in 
arrears, such holders have the right to vote together as a single voting 
group with the common shareholders  and  to  exercise 40% of the voting power 
possessed  by  that group on all matters submitted to the vote of 
shareholders.

Under an agreement between  the  Company  and  a  holder  of  the  Series B
Preferred Stock, the Company is prohibited, without such holder's prior
written consent, from paying dividends on its common stock, issuing or
redeeming certain types of equity securities, or selling substantially  all
of the Company's assets outside of the ordinary course of business (other than
in conjunction with a plan of liquidation or dissolution of the Company).

5.   Net Investment in Direct Financing Leases:

The  components  of the Company's net investment in direct financing leases
are as follows:
                                        September 30
                                        1996           1995 
Minimum lease payments to be received   $7,524,065     $5,682,329
Less - Unearned Income                  (2,098,780)    (1,870,798)
Net Investment in direct financing
  leases                                $5,425,285     $3,811,531

As of September 30,  1996,  future  annual  minimum  lease  payments  to be
received are as follows:
     Fiscal Year                   Amount
     1997                          $2,088,094
     1998                          $1,647,649
     1999                          $1,815,720
     2000                          $1,064,764
     2001 and Thereafter           $  907,838

The Company capitalizes internal costs which are directly associated with
originating a lease, net of any reimbursements from lessees.  These costs 
include costs associated with the review of a potential lessee's financial
condition, guarantees and collateral; negotiating lease terms; preparing and 
processing lease documents; closing the transaction; and recording 
guarantees, collateral and other security arrangements. These capitalized 
costs are included in the net investment in direct financing. 
F-10
<PAGE>
MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

leases and are amortized over the life of the lease using the
effective  interest method.  Capitalized costs net of amortization  totaled
$141,724 and $105,778 as of September 30, 1996 and 1995, respectively.

In addition to the Old  Indiana  loan  and lease  discussed in Note 2, the
Company has additional leases with a net investment balance of approximately 
$1,161,000 which are not performing in accordance with their contractual
terms at September 30, 1996.  These leases include an agricultural equipment
lease with a net  investment balance of  $628,000.   Based  on the  Company's 
collateral  position, management expects no losses on these leases and no 
allowance for losses has been provided.

6.  Loans Receivable:
As discussed in Note 2, loans receivable include an 18% mortgage loan with an
initial amount of $800,000. The principal balance of the mortgage loan at 
September 30,  1996  and  1995  is $781,940 and $795,137, respectively.  The 
mortgage term is 60 months with a fifteen year  amortization  and  a  final 
balloon payment due April 1, 2000.

7.  Bonds Payable:

The Company has initiated two bond offerings.  The  Series I Offering was a
private offering of five-year bonds, with total bond sales of $565,000.  The 
Series I Offering  was  followed  with the Series II Offering, which  was  a
public offering of five-year bonds with a maximum  offering amount of 
$10,000,000.  The Series II offering terminated December 31,  1995.  
Bond sales under the Series II offering totaled  $7,242,000.   Principal  and 
interest,  on  both series, are paid quarterly.

As of September 30, 1996, bonds payable consist of the Series I and Series II
Offerings, bearing interest at rates of either 9% or 10%  ($2,932,242 at 9% and
$3,449,875  at 10%)  collateralized  by  equipment  purchased  and  leases
originated from proceeds  of  the offerings, cash held in the origination 
account,  and  by debt service reserve funds held by a trustee. The two 
series are not cross-collateralized, but are  cross-defaulted.   The   cash
held  in  the  origination  account  is restricted, and can only be used 
to fund equipment lease transactions.

Principal payments on the bonds are made in quarterly installments and vary in
amount in accordance with the amount  of principal payments received by the
Company under the leases securing the bonds, which  are  spread on a pro rata 
basis over the aggregate principal amount of bonds outstanding.   Because  
the  amount  of principal payments  on the bonds prior to maturity depends 
on the amount of principal payments received by  the  Company under those 
leases, there is no minimum amount of principal required to be paid  by  the
Company prior to maturity. However, the annual amounts of
principal payments scheduled  to be received by the Company under leases in
effect as of September 30, 1996, which amounts, if actually received, are 
required to be applied 
F-11
<PAGE>
MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

to principal payments on the bonds, are as follows:
     Fiscal Year              Amount
     1997                $  898,735 
     1998                   962,126
     1999                 1,417,961
     2000                   949,618
     2001                   839,456

The fiscal year of final maturity of the bonds outstanding at September 30,
1996 are as follows:  $2,336,815 in 1999,  $2,805,621  in  2000,  and  
$1,239,681 in 2001.

The  trust  indenture  for the Series I and Series II Offerings requires  a
debt service reserve fund for each of  the  series  representing  2%  of the 
outstanding principal balance  of  the  bonds  to be maintained and held for
the benefit  of  the bondholders of that series.

Amortization of debt issue costs for the years ended September 30, 1996 and 1995
totaled $263,418 and $193,821, respectively.

During the year ended September  30,  1996,  the  Company  entered  into an
agreement with a  bank for a $1 million warehouse line of credit.  The Company 
intends to use this warehouse line to fund new lease transactions on an 
interim basis prior to selling the leases to  other  financing  sources  or 
keeping the leases for its own portfolio.  As of September 30, 1996, the 
Company had not  commenced  borrowing on this credit line.  The interest 
rate on this warehouse line is 2% over prime, and it is secured by all leases 
of the Company, excluding those securing bonds payable.  The agreement requires
the Company to maintain a defined level of  tangible  net worth and limits the 
payments of preferred dividends to $40,000 quarterly and  common  dividends  to
no more than 5% of net income.

8.  Income Taxes:

The   Company  recognizes  income  taxes  under  the  liability  method.
The liability method measures the expected tax impact of future  taxable
income or deductions resulting from differences in the tax and financial 
reporting bases of assets or liabilities reflected in the balance sheet and the
expected tax impact of carryforwards for tax purposes.

Deferred tax assets  arise  from temporary differences and carryforwards as
of September 30,
1996 and 1995, as follows:
Net deferred tax assets:                          1996           1995
    Initial direct costs deducted for tax not 
     books                                    $  (48,000)      $  (31,000)
  US tax loss carry forwards expiring 2009
    thru 2011                                    254,000          225,000
  Other                                           (2,000)          (1,000)
  Total deferred tax assets                      204,000          193,000
  Valuation allowance                           (204,000)        (193,000)
    Net deferred taxes                         $       -      $         -
F-12
<PAGE>
MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

A reconciliation of income tax expense computed by applying the Federal
statutory income tax rate of 34% to income from operations before taxes to the
provision for Federal income taxes, is as follows:
                                             1996           1995
Computed tax expense (credit) at 34%         $(15,000)      $(83,000)
  Increase in the valuation allowance for
    deferred tax assets                        11,000         79,000
Other                                           4,000          4,000
  Income Tax Provision                       $      -      $       -

9.   Commitments:

The Company  entered  into  an  operating lease for its office space, which
expires July, 1997. Rent expense under this lease for  the  years  ended 
September 30, 1996 and 1995 was $22,327 and $22,880, respectively.  Future 
annual minimum lease payments under this lease are $19,430 in fiscal 1997.

10.  Disclosures About Fair Value of Financial Instruments:

The  carrying  value  and estimated fair values of the  Company's  financial
instruments as of September 30, 1996 are as follows:
                                               Carrying       Fair
Financial assets:                              Value          Value
     Loans receivable                        $  782,000     $  782,000
     Cash and short-term investments            116,000        116,000
     Cash origination and reserve funds         161,000        161,000
Financial Liabilities:
     Bonds payable                           $6,382,000     $6,404,000

The following methods and assumptions  were used to estimate the fair value
of each class of financial instruments:

     Loans receivable:  Loans receivable  consists  of  one  mortgage  loan
which is in  default.   Fair  value is the estimated amount expected to be 
collected from liquidation of collateral and from guarantors.

     Cash,  and  cash  origination and reserve funds: The carrying amount 
is a reasonable estimate of fair value for these short-term instruments.

     Bonds payable:  Rates currently available to the Company for debt
with similar terms and remaining maturities are used to estimate fair
value of existing debt.
F-13
<PAGE>
MERIDIAN FINANCIAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 and 1995

     Off-balance sheet items:  The estimated value of off-balance sheet
financial instruments approximates  carrying  value   (none)   and  is  not
considered significant to this presentation.

While these estimates of fair value are based on management's judgment of the
most appropriate  factors,  there is no assurance that the estimated fair values
would necessarily have been achieved  had the financial instruments been 
disposed at the balance sheet  date,  since  market  values  may   differ   
depending   on  various circumstances. In addition, other assets and 
liabilities of the Company that are not  defined as financial
instruments  are  not  included  in  the  above disclosures, such as direct
financing leases and office equipment.


F-14
<PAGE>
SIGNATURES

In accordance with Section 13 or 15(d) of the  Exchange Act, the Registrant
caused this report  to  be  signed  on  its behalf by the undersigned,  
thereunto  duly authorized, on the 8th day of January, 1997.



MERIDIAN FINANCIAL CORPORATION



By:  /s/ Michael F. McCoy
(Michael F. McCoy, President)

In accordance with the Exchange  Act,  this report has been signed below by
the following persons on behalf of the Registrant  and in the capacities and on
the dates stated.

Signature             Title                      Date
/s/ Michael F. McCoy  Chairman of the            January 8, 1997
Michael F. McCoy      Board, President and
                      Director
                      (Principal Executive
                      Officer)


/s/ Gerald W. Gerichs Vice President, Secretary   January 8, 1997
Gerald W. Gerichs     and Treasurer
                      (Principal Financial
                      Officer and
                      Principal Accounting
                      Officer)


                      Director
Curtis Miller


/s/ J. Phillip Beatty Director                   January 8, 1997
J. Phillip Beatty
<PAGE>
INDEX TO EXHIBITS
                                                                       Page No.
Exhibit                     Description                                In This
No.                                                                    Filing
3-A  (1)  Articles of Incorporation of Registrant, as amended to date

3-B  (1)  By-Laws of Registrant, as amended to date

4-A  (1)  Specimen of Five-Year Series II Bond

4-B   (1) Indenture  of  Trust,  dated  as  of December 15, 1993, between
          Registrant and Texas Commerce Bank National Association, as Trustee

4-C   (2) First Supplemental Indenture, dated as of February 15, 1994, between
          Registrant  and  Texas  Commerce  Bank  National  Association, as
          Trustee

4-D  (2)  Specimen of Five-Year Series I Bond

10-H (1)  Schedule of Restrictive Stock Transfer Agreements

10-I (1)  Form of Restrictive Stock Transfer Agreement

10-M (1)  Employment Agreement, dated as of December 15, 1994, between
          Registrant and Michael F. McCoy

10-N (1)  Agreement, dated September 30, 1994, between Registrant, MFC
          Investors, LLC and Michael F. McCoy

10-O (1)  Warrant to Purchase Common Stock, dated as of September 30, 1994,
          issued to MFC Investors, LLC

10-P (1)  Warrant to Purchase Common Stock, dated as of September 30, 1994,
          issued to Paine Webber Custodian FBO John Weyreter, IRA

10-S (1)  Loan Agreement, dated as of February 28, 1995, between Registrant
          and Old Indiana Limited Liability Company

10-T (3)  Assignment  for Purchase of Equipment and Assignment of Lease dated 
          July 20, 1995, and related Master Lease Agreement dated July 1, 1992,
          regarding purchase of Manna Group, Inc.  lease  from  United  
          Capital  Leasing Corporation
11 (4)    Statement re:  Computation of Per Share Earnings (Loss)

27 (4)   Financial Data Schedule

99 (4)   Report of Prior Independent Public Accountants for the year 
         ended September 30, 1995

(1)  The copy of this exhibit is incorporated by reference to the exhibit with 
     with the same number as part of the Registrant's Registration statement
     on Form SB-2 (File #33-75549C).

(2)  The copy of this exhibit is incorporated by reference to the exhibit 
     with the same number filed as part of the Registrant's Quarterly Report 
     on Form 10-QSB for the quarterly period ended March 31, 1994.

(3)   The copy of this exhibit is incorporated by reference to the exhibit
      with the same number filed as part of the Registrant's Quarterly 
      Report on Form 10-QSB for the quarterly period ended June 30, 1995.

(4)  Filed with this report on Form 10-KSB.