FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



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




FOR QUARTER ENDED                                      COMMISSION FILE NUMBER
  JUNE 30, 2000                                                0-24630





                           MAHASKA INVESTMENT COMPANY
             (Exact Name of Registrant as Specified in its Charter)




         IOWA                                                 42-1003699
(State of Incorporation)                              (I.R.S.Identification No.)



                  222 First Avenue East, Oskaloosa, Iowa 52577

                         Telephone Number (515) 673-8448






Indicate by check mark whether the registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days.

               Yes   X                            No

As of July 31, 2000,  there were  3,939,314  shares of common stock $5 par value
outstanding.
<PAGE>
PART I -- Item 1.  Financial Statements

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION

<TABLE>
<CAPTION>
(unaudited)
(dollars in thousands, except for share amounts)
                                                        June 30,    December 31,
                                                          2000         1999
                                                       ----------   -----------
                                  ASSETS
<S>                                                    <C>            <C>
Cash and due from banks ..........................     $   9,324      $  13,354
Interest-bearing deposits in banks ...............         1,063          1,700
Federal funds sold ...............................         1,620          7,865
                                                       ----------   -----------
     Cash and cash equivalents ...................        12,007         22,919
                                                       ----------   -----------
Investment securities:
     Available for sale ..........................        63,956         60,530
     Held to maturity ............................        27,641         29,445
Loans ............................................       305,249        282,091
Allowance for loan losses ........................        (3,616)        (4,006)
                                                       ----------     ---------
     Net loans ...................................       301,633        278,085
                                                       ----------     ---------
Loan pool participations .........................        60,048         67,756
Premises and equipment, net ......................         6,875          6,795
Accrued interest receivable ......................         4,705          4,719
Goodwill and other intangible assets .............        12,287         12,850
Other assets .....................................         5,091          3,090
                                                       ---------      ---------
     Total assets ................................     $ 494,243      $ 486,189
                                                       =========      =========

                   LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
     Demand ........................................   $  21,990      $  23,197
     NOW and Super NOW .............................      42,220         42,378
     Savings .......................................      91,590         96,377
     Certificates of deposit .......................     193,297        186,720
                                                       ----------    ----------
Total deposits .....................................     349,097        348,672
Federal funds purchased ............................       7,200          2,965
Federal Home Loan Bank advances ....................      70,986         63,421
Note payable .......................................      15,100         18,000
Other liabilities ..................................       4,363          2,896
                                                       ----------    ----------
Total liabilities ..................................     446,746        435,954
                                                       ----------    ----------
Shareholders' equity:
     Common stock, $5 par value; authorized
       20,000,000 shares; 4,912,849 shares as
       of June 30, 2000 and December 31, 1999 ......      24,564         24,564
     Capital surplus ...............................      13,127         13,192
     Treasury stock at cost, 973,535 shares as
       of June 30, 2000, 577,735 shares as of
       December 31, 1999 ...........................     (11,869)        (8,525)
     Retained earnings .............................      22,371         21,511
     Accumulated other comprehensive loss ..........        (696)          (507)
                                                       -----------    ---------
Total shareholders' equity .........................      47,497         50,235
                                                       -----------    ---------
Total liabilities and shareholders' equity .........   $ 494,243      $ 486,189
                                                       ===========    =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>

(unaudited)                             Three Months Ended     Six Months Ended
(dollars in thousands, except               June 30,                June 30,
per share)                               ------------------    -----------------
                                          2000       1999       2000       1999
                                         -------   -------    --------  --------
<S>                                      <C>       <C>         <C>       <C>
Interest Income:
   Interest and fees on loans            $ 6,170   $ 3,991     $12,035   $ 7,765
   Interest and discount on loan pools     1,814     1,339       3,908     3,548
   Interest on bank deposits                  27        15          59        51
   Interest on federal funds sold             54        77         127       174
   Interest on investment securities:
     Available for sale                    1,080       427       2,108       873
     Held to maturity                        445       180         905       367
                                         -------   -------    --------  --------
      Total interest income                9,590     6,029      19,142    12,778
                                         -------   -------    --------  --------
Interest expense:
   Interest on deposits:
     NOW and Super NOW                       199       149         385       296
     Savings                                 961       650       1,884     1,212
     Certificates of deposit               2,569     1,560       5,002     3,139
   Interest on federal funds purchased        45         4          80         4
   Interest on Federal Home Loan
     Bank advances                         1,061       109       2,066       217
   Interest on note payable                  343       294         710       599
                                         -------   -------    --------  --------
      Total interest expense               5,178     2,766      10,127     5,467
                                         -------   -------    --------  --------
      Net interest income                  4,412     3,263       9,015     7,311
   Provision for loan losses                 270     1,465         421     1,632
                                         -------   -------    --------  --------
      Net interest income after
        provision for loan losses          4,142     1,798       8,594     5,679

Noninterest income:
   Service charges                           424       313         824       617
   Data processing income                     59        51         109       101
   Other operating income                    156        86         308       224
   Investment security gains (losses)        (17)        0          17         0
                                         --------  -------    --------  --------
      Total noninterest income               622       450       1,258       942
                                         --------  -------    --------  --------
Noninterest expense:
   Salaries and employee benefits expense  1,594     1,254       3,231     2,591
   Net occupancy expense                     434       342         869       699
   Professional fees                         179       339         314       425
   Other operating expense                   809       639       1,724     1,265
   Goodwill amortization                     282       139         563       288
                                         -------   -------    --------  --------
      Total noninterest expense            3,298     2,713       6,701     5,268
                                         -------   -------    --------  --------
      Income (loss) before income
         tax expense                       1,466      (465)      3,151     1,353
      Income tax expense (benefit)           495      (146)      1,067       515
                                         -------   -------    --------  --------
        Net income (loss)                $   971   $  (319)   $  2,084  $    838
                                         =======   =======    ========  ========

Earnings (loss) per common share-basic    $ 0.24   $(0.09)    $ 0.50      $ 0.23
Earnings (loss) per common share-diluted  $ 0.24   $(0.09)    $ 0.50      $ 0.22
Dividends per common share                $ 0.15   $ 0.15     $ 0.30      $ 0.30
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
(unaudited)                              Three Months Ended     Six Months Ended
(in thousands)                               June 30,               June 30,
                                         ------------------     ----------------
                                          2000       1999        2000     1999
                                         -------   -------     -------   -------
<S>                                      <C>       <C>         <C>       <C>
Net income (loss)                        $ 971     $ (319)     $ 2,084   $ 838
Other Comprehensive Income:
    Unrealized gains (losses) on
    securities available for sale:
       Unrealized holding gains (losses)
         arising during the period, net
         of tax                              0       (177)        (176)   (277)
       Less: reclassification adjustment
         for net (gains) losses included in
         net income, net of tax             11          0          (13)      0
                                         -------   -------     -------   -------
Other comprehensive income (loss),
   net of tax                               11       (177)        (189)   (277)
                                         -------   -------     -------   -------
Comprehensive income (loss)             $  982     $ (496)     $ 1,895  $  561
                                         =======   =======     =======   =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>

PART I -- Item 1. Financial Statements, Continued

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(unaudited)                                               Six Months Ended
(dollars in thousands)                                        June 30,
                                                      -------------------------
                                                          2000          1999
                                                      -----------    ----------
<S>                                                   <C>            <C>
Cash flows from operating activities:
  Net income                                          $   2,084      $      838
                                                      -----------    ----------
    Adjustments to reconcile net income to net
      cash provided by operating activities:
    Depreciation and amortization                           857             618
    Provision for loan losses                               421           1,632
    Investment securities gains                             (17)              0
    (Gain) loss on sale of premises and equipment            (4)              2
    Amortization of investment securities premiums          140              97
    Accretion of investment securities and loan discounts  (111)           (227)
    (Increase) decrease in other assets                  (1,987)            240
    Increase (decrease) in other liabilities              1,575            (375)
                                                      -----------    ----------
        Total adjustments                                   874           1,987
                                                      -----------    ----------
        Net cash provided by operating activities         2,958           2,825
                                                      -----------    ----------
Cash flows from investing activities:
  Investment securities available for sale:
    Proceeds from sales                                   4,884               0
    Proceeds from maturities                              2,867           7,262
    Purchases                                           (11,418)         (5,400)
    Investment securities held to maturity:
      Proceeds from maturities                            4,049           2,178
      Purchases                                          (2,211)         (2,024)
    Net increase in loans                               (23,924)        (12,555)
    Purchases of loan pool participations               (15,211)        (19,999)
    Principal recovery on loan pool participations       22,919          12,063
    Purchases of premises and equipment                    (486)           (207)
    Proceeds from sale of premises and equipment             17               0
                                                      -----------    ----------
        Net cash used in investing activities           (18,514)        (18,682)
                                                      -----------    ----------
Cash flows from financing activities:
  Net increase in deposits                                  473           2,415
  Net increase in federal funds purchased                 4,235           2,898
  Federal Home Loan Bank advances                        33,000               0
  Repayment of Federal Home Loan Bank advances          (25,531)            (14)
  Advances on note payable                                1,900             150
  Principal payments on note payable                     (4,800)         (2,550)
  Dividends paid                                         (1,224)         (1,094)
  Purchases of treasury stock                            (3,433)              0
  Proceeds from exercise of stock options                    24             252
                                                      -----------    ----------
        Net cash provided by financing activities         4,644           2,057
                                                      -----------    ----------
        Net decrease in cash and cash equivalents       (10,912)        (13,800)
Cash and cash equivalents at beginning of period         22,919          22,121
                                                      -----------    ----------
Cash and cash equivalents at end of period            $  12,007      $    8,321
                                                      ===========    ==========
Supplemental disclosures of cash flow information:
  Cash paid (received) during the period for:
    Interest                                          $  10,074        $  5,477
                                                      ===========    ==========
    Income taxes                                      $     298        $  1,179
                                                      ===========    ==========
</TABLE>
 See accompanying notes to consolidated financial statements.
<PAGE>
PART I -- Item 1. Financial Statements, Continued

                           MAHASKA INVESTMENT COMPANY
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

1.   Basis of Presentation

     The  accompanying  consolidated  statements of income and the  consolidated
     statements of comprehensive  income for the three and six months ended June
     30, 1999 and the  consolidated  statements  of cash flow for the six months
     ended June 30, 1999 include the accounts  and  transactions  of the Company
     and its four wholly-owned subsidiaries,  Mahaska State Bank, Central Valley
     Bank, Pella State Bank and MIC Financial,  Inc. The consolidated statements
     of condition as of June 30, 2000 and  December 31, 1999,  the  consolidated
     statement of income and the consolidated  statement of comprehensive income
     for  the  three  and  six  month  periods  ended  June  30,  2000  and  the
     consolidated  statement of cash flow for the six months ended June 30, 2000
     includes  the accounts of the Company and its  aforementioned  subsidiaries
     plus Midwest Federal Savings and Loan Association of Eastern Iowa ("Midwest
     Federal").  Midwest  Federal  was  acquired  as a result of the merger with
     Midwest Bancshares,  Inc.("Midwest"),  completed on September 30, 1999. All
     material  intercompany  balances and  transactions  have been eliminated in
     consolidation.

     The accompanying  consolidated  financial  statements have been prepared by
     the Company  pursuant to the rules and  regulations  of the  Securities and
     Exchange Commission.  Certain information and footnote disclosures normally
     included in financial  statements  prepared in  accordance  with  generally
     accepted  accounting  principles have been condensed or omitted pursuant to
     such  rules  and  regulations.   Although   management  believes  that  the
     disclosures are adequate to make the information  presented not misleading,
     it is suggested  that these interim  consolidated  financial  statements be
     read in  conjunction  with the  Company's  most  recent  audited  financial
     statements   and  notes  thereto.   In  the  opinion  of  management,   the
     accompanying  consolidated  financial  statements  contain all  adjustments
     (consisting of only normal recurring  accruals) necessary to present fairly
     the financial  position as of June 30, 2000,  and the results of operations
     for the three months and the six months  ended June 30, 2000 and 1999,  and
     cash flows for the six months ended June 30, 2000 and 1999.

     The results for the three months and the six months ended June 30, 2000 may
     not be indicative of results for the year ending  December 31, 2000, or for
     any other period.

2.   Consolidated Statements of Cash Flows

     In the  consolidated  statements of cash flows,  cash and cash  equivalents
     include cash and due from banks, interest- bearing deposits with banks, and
     federal funds sold.

3.   Income Taxes

     Federal  income  tax  expense  for the  three  months  and  the six  months
     ended June 30, 2000 and 1999 was computed using the consolidated  effective
     federal tax rate. The Company also recognized income tax expense pertaining
     to state franchise taxes payable individually by the subsidiary banks.

4.   Earnings Per Common Share

     Basic  earnings  per common  share  computations  are based on the weighted
     average  number of shares of common stock actually  outstanding  during the
     period.  The weighted average number of shares for the three-month  periods
     ended June 30, 2000 and 1999 was 4,042,690 and 3,652,376, respectively. The
     weighted average number of shares for the six-month  periods ended June 30,
     2000 and 1999 was 4,165,758 and 3,644,405,  respectively.  Diluted earnings
     per share  amounts  are  computed by  dividing  net income by the  weighted
     average  number of shares and all  dilutive  potential  shares  outstanding
     during the period. The dilutive potential shares are the dilutive effect of
     additional  potential  common  shares  issuable  under stock  options.  The
     computation of diluted earnings per share used a weighted average number of
     diluted shares  outstanding of 4,046,428 and 3,728,534 for the three months
     ended June 30, 2000 and 1999,  respectively.  For the six months ended June
     30, 2000 and 1999, the diluted earnings per share  computation was based on
     weighted  average  number of diluted  shares  outstanding  of 4,177,683 and
     3,743,010, respectively.

5.   Effect of New Financial Accounting Standards

     SFAS  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
     Activities",  was scheduled to become  effective for the Company  beginning
     January 1, 2000. SFAS No. 137 subsequently deferred  implementation of SFAS
     133 until January 1, 2001. SFAS No. 138 amends the accounting and reporting
     requirements  of SFAS No.  133.  Management  is  evaluating  the impact the
     adoption  of SFAS  No.  133 and SFAS No.  138  will  have on the  Company's
     consolidated  financial  statements  and  expects to adopt SFAS No. 133 and
     SFAS No. 138 when required.

     The  American  Institute  of  Certified  Public  Accountants  has  issued a
     proposed  Statement of Position  ("SOP") which addresses the accounting for
     differences  between  contractual  and  expected  future cash flows from an
     investor's  initital  investment in certain loans and debt  securities.  It
     includes such loans acquired in purchase  business  combinations  and would
     apply to all  enterprises.  The proposed SOP would limit the yield that may
     be accreted  (accretable yield) to the excess of the investor's estimate of
     undiscounted  expected  future  principal and interest cash flows (expected
     future cash flows) over the investor's  initial investment in the loan. The
     provisions of this proposed SOP would be effective for financial statements
     issued for fiscal years  beginning  after June 15, 2000.  Management of the
     Company does not expect the adoption of this SOP to have a material  effect
     on its financial statements.

6.   Use of Estimates in the Preparation of Financial Statements

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reported  period.  Actual  results  could  differ  from  those
     estimates.  A significant estimate that is particularly sensitive to change
     is the allowance for loan losses.

7.   Sale of MIC Financial, Inc.

     On April 23,  1999,  the  Company  announced  that it had elected to seek a
     buyer for MIC Financial,  Inc.  (formerly known as On-Site Credit Services,
     Inc.), its wholly-owned commercial finance subsidiary.  The Company has now
     sold a significant amount of the assets in several transactions. As of June
     30, 2000, MIC  Financial's  loan and lease  portfolio  totaled  $2,764,000,
     approximately 1 percent of the Company's total loans as of that date.

8.   Acquisition of Midwest Bancshares, Inc.

     The  Company  acquired  Midwest  Federal  Savings and Loan  Association  of
     Eastern Iowa ("Midwest Federal"), a community-oriented  thrift institution,
     with locations in Burlington,  West Burlington,  Fort Madison, and Wapello,
     Iowa on September 30, 1999.

     The excess of the purchase  price over the  identifiable  fair value of the
     tangible and  identifiable  intangible  assets acquired and the liabilities
     assumed of $6,234,000 was recorded as goodwill and is being  amortized over
     25 years on a straight-line basis. The acquisition has been accounted using
     the purchase method of accounting and, accordingly, the income and earnings
     results of Midwest Federal are not included with the results of the Company
     for the three months or the six month period ended June 30, 1999.

<PAGE>
PART I -- Item 2.  Management's Discussion and Analysis of Condition and Results
of Operations.

                           QUARTER ENDED JUNE 30, 2000

On September 30, 1999, the Company acquired all of the outstanding  common stock
of Midwest  Federal  Savings  and Loan  Association  of Eastern  Iowa  ("Midwest
Federal") as a result of an exchange of Company stock with the  shareholders  of
Midwest  Bancshares,  Inc.  ("MWBI"),  the thrift  holding  company  for Midwest
Federal.  A total of 1,105,348 shares of Company common stock were issued to the
former  shareholders of MWBI in a transaction  valued at $19,237,000,  including
transaction expenses. The acquisition of Midwest Federal was accounted for using
the purchase method of accounting  and,  accordingly,  the Company's  results of
operations  for the three and six months  ended June 30, 1999 do not include the
results of Midwest Federal.

The Company recorded net income of $971,000 for the quarter ended June 30, 2000,
compared with a net loss of $319,000 for the three months ended June 30, 1999, a
net change of  $1,290,000.  Basic and diluted  earnings per share for the second
quarter of 2000 were $.24 versus a loss of $.09 per share for the second quarter
of 1999. Actual weighted average shares outstanding were 4,042,690 and 3,652,376
for the second quarter of 2000 and 1999, respectively. The issuance of 1,105,348
shares on September 30, 1999, to  shareholders of MWBI as a result of the merger
into the Company increased the average shares  outstanding in the second quarter
of 2000.  The Company's  return on average assets for the quarter ended June 30,
2000 was .80  percent  compared  with a negative  return of .42  percent for the
quarter ended June 30, 1999. The Company's return on average equity increased to
7.99  percent  for the three  months  ended June 30, 2000  compared  with - 3.30
percent for the three months ended June 30, 1999.

During the second quarter of 1999,  management and the board of directors of the
Company  determined that it would seek a buyer for its  wholly-owned  commercial
finance  subsidiary MIC Financial,  Inc., then known as On-Site Credit Services,
Inc. Included in the financial results for the second quarter of 1999 were costs
and charges related to discontinuing the MIC Financial activity  consisting of a
loan loss  provision of $1,243,000,  an estimated loss on sale of $220,000,  and
severence  benefits to employees of $21,000.  These charges and costs were major
factors in the reported loss for the period.


RESULTS OF OPERATIONS

Net Interest Income

Net interest income is computed by subtracting total interest expense from total
interest income. Fluctuations in net interest income can result from the changes
in the volumes of assets and  liabilities as well as changes in interest  rates.
The  additional  earning  assets  and  interest-bearing  liabilities  of Midwest
Federal  included in the second  quarter of 2000  significantly  increased  both
interest  income on investments  and loans and interest  expense on deposits and
borrowed  funds in comparison to the second  quarter of 1999.  The Company's net
interest  income for the quarter ended June 30, 2000  increased  $1,149,000  (35
percent) to $4,412,000 from $3,263,000 for the three months ended June 30, 1999.
This increase was mainly due to increased  interest income earned on higher loan
and  investment  volumes.  Increased  interest  expense on deposits and borrowed
funds  somewhat  offset  the  higher  interest  income.  Total  interest  income
increased  $3,561,000  (59 percent) in the second  quarter of 2000 compared with
the same period in 1999. Exclusive of the additional  $3,264,000 interest income
generated  by  Midwest  Federal in the second  quarter of 2000,  total  interest
income would have increased by $297,000 in comparison to the 1999 second quarter
primarily due to increased  interest income on loans and greater interest income
and discount on loan pool  participations.  The Company's total interest expense
for the second quarter of 2000 increased  $2,412,000 (87 percent)  compared with
the same  period in 1999.  Total  interest  expense,  excluding  the  $2,059,000
related to Midwest  Federal,  increased  $353,000 in the second  quarter of 2000
compared with 1999, primarily due to higher market interest rates. The Company's
net interest margin (on a federal  tax-equivalent  basis) for the second quarter
of 2000 decreased to 4.07 percent (4.56 percent  excluding Midwest Federal) from
4.67 percent in the second quarter of 1999. Net interest  margin is a measure of
the  net  return  on  interest-  earning  assets  and is  computed  by  dividing
annualized net interest income by the average of total  interest-earning  assets
for the period.  The Company's  overall yield on earning assets was 8.65 percent
(8.98 percent without  Midwest  Federal) for the second quarter of 2000 compared
to 8.78  percent for the second  quarter of 1999.  The rate on  interest-bearing
liabilities  increased  in the  second  quarter  of 2000 to 5.03  percent  (5.00
percent without Midwest Federal) compared to 4.66 percent for the second quarter
of 1999.

Interest  income and fees on loans  (excluding  the  $1,999,000  contributed  by
Midwest  Federal)  increased  $180,000 (4 percent) in the second quarter of 2000
compared to the same  period in 1999,  mainly due to higher  loan  volumes.  The
average yield on loans exclusive of Midwest Federal declined to 8.68 percent for
the second  quarter of 2000,  compared to 9.28 percent in the second  quarter of
1999. The average yield on loans including Midwest Federal in the second quarter
of 2000 was 8.32 percent.  The yield on the Company's loan portfolio is effected
by the amount of nonaccrual  loans,  the mix of the portfolio (real estate loans
generally have a lower overall yield than  commercial and  agricultural  loans),
the effects of competition and the interest rate  environment on the amounts and
volumes of new loan originations, and the mix of variable rate versus fixed rate
loans in the  Company's  portfolio.  Recent  moves  by the  Federal  Reserve  to
increase  interest  rates may benefit the Company in future  periods as variable
rate loans tied to prime have been adjusted upward. Competition for loans in the
market areas served by the Company  remains  strong.  Average loans  outstanding
were  $298,307,000 for the second quarter of 2000 compared with $177,314,000 for
the second quarter of 1999, an increase of $120,933,000 (68 percent).  Excluding
the  increase  in average  loan  volume  attributable  to Midwest  Federal,  the
Company's  average loans outstanding were $15,974,000 (9 percent) greater in the
second quarter of 2000 than in 1999.

Overall, the Company recognized $475,000 more in interest and discount income on
loan pool  participations  in the  second  quarter of 2000  compared  with 1999,
mainly due to higher collections and the sale of some loans. Interest income and
discount  collected on the loan pool  participations  for the three months ended
June 30, 2000 was $1,814,000  compared with  $1,339,000  collected in the second
quarter of 1999. The yield on loan pool participations was 12.49 percent for the
second  quarter of 2000  compared  with 10.14 percent for the quarter ended June
30, 1999. The average loan pool participation  investment balance was $5,429,000
(10 percent)  greater in the second  quarter of 2000 than in 1999 as a result of
new  purchases of pools.  Newly  purchased  loan pools  typically do not produce
income for a period of up to 120 days from date of purchase which  significantly
impacts the yield on the investment. These loan pool participations are pools of
performing and distressed and nonperforming loans that the Company has purchased
at a discount from the aggregate  outstanding principal amount of the underlying
loans.  Income is derived from this investment in the form of interest collected
and the  repayment  of the  principal  in excess of the  purchase  cost which is
herein  referred to as  "discount  recovery."  The Company  recognizes  interest
income and discount  recovery on its loan pool  participations  on a cash basis.
The loan pool  participations  have traditionally been a high-yield activity for
the Company,  but this yield has  fluctuated  from period to period based on the
amount of cash collections,  discount recovery,  and net collection  expenses of
the  servicer  in  any  given  period.   The  income  and  yield  on  loan  pool
participations may vary in future periods due to the volume and discount rate on
loan pools purchased.

For the second  quarter,  interest  income on  investment  securities  increased
$918,000  compared with the quarter ended  June 30,  1999 due to the  additional
securities held by Midwest  Federal.  Without Midwest  Federal,  interest income
from  investment  securities was $23,000 lower in the 2000 quarter than in 1999,
generally due to decreased volume in the portfolio.

The $1,370,000 increase in interest expense on deposits in the second quarter of
2000 compared with 1999 was  attributable to the additional  deposits of Midwest
Federal,  generally  higher  market  interest  rates  and to  some  increase  in
deposits. Excluding the $1,169,000 deposit interest expense for Midwest Federal,
the Company's interest expense on deposits increased $201,000.

Average  interest-bearing  deposits  for the  first  quarter  of 2000  increased
$112,248,000  (51  percent)  from the same  period  in 1999.  Excluding  Midwest
Federal, average interest-bearing deposits were $3,504,000 greater in the second
quarter  of 2000  than in 1999.  Interest  expense  on  Federal  Home  Loan Bank
advances was $952,000  higher in the second quarter of 2000  reflecting  Midwest
Federal's  utilization of this alternative  funding method.  Interest expense on
notes  payable was up $49,000 in the second  quarter of 2000  compared with 1999
due to higher  interest  rates on the Company's  commercial  bank line of credit
reflecting the increased prime rate.


Provision for Loan Losses

The  Company  recorded a  provision  for loan  losses of  $270,000 in the second
quarter of 2000, of which $12,000 was recorded by Midwest Federal. MIC Financial
did not have any provision for loan losses in the second quarter of 2000. One of
the Company's  subsidiary  banks  increased its provision for loan losses during
the period due to continued  deterioration in the financial  position of a large
agricultural line of credit. In the second quarter of 1999, the Company recorded
a  provision  for loan  losses of  $1,465,000  ($1,243,000  for MIC  Financial).
Management  determines an appropriate  provision  based on its evaluation of the
adequacy of the allowance for loan losses in relationship to a continuing review
of problem loans,  the current economic  conditions,  actual loss experience and
industry  trends.  Management  believes  that the  allowance  for loan losses is
adequate  based on the  inherent  risk in the  portfolio  as of June  30,  2000,
however,  continued  growth in the loan  portfolio  and the  uncertainty  of the
agricultural  econcomy require that management continue to evaluate the adequacy
of the  allowance  for loan  losses  and make  additional  provisions  in future
periods as deemed necessary.


Noninterest Income

Noninterest  income  results from the charges and fees  collected by the Company
from its  customers  for various  services  performed,  data  processing  income
received  from  nonaffiliated  banks,  miscellaneous  other income and gains (or
losses) from the sale of  investment  securities  held in the available for sale
category.  Total  noninterest  income was $172,000  (38 percent)  greater in the
second quarter of 2000 compared with 1999. Excluding the contribution of Midwest
Federal of  $153,000,  most of the increase  was due to higher  service  charges
collected on nonsufficient funds checks written by bank customers.


Noninterest Expense

Total noninterest expense for the quarter ended June 30, 2000 increased $585,000
(22 percent)  compared to  noninterest  expense for the second  quarter of 1999.
Excluding  the  $875,000  expense  for the  operation  of Midwest  Federal,  the
Company's   noninterest   expense  actually  decreased  $290,000  (11  percent).
Noninterest  expense  includes  all the costs  incurred  to operate  the Company
except for interest expense, the loan loss provision and income taxes.  Salaries
and  benefits  expense for the second  quarter of 2000  increased  $340,000  (27
percent)  over 1999 as a result of  $350,000 in  additional  expense for Midwest
Federal,  which was partially offset by the reduction in staff at MIC Financial.
Net  occupancy  and  equipment  expenses  increased  $91,000 (27 percent) in the
second quarter of 2000 compared to 1999.  Excluding the $123,000 increase due to
Midwest Federal,  second quarter 2000 net occupancy  expense was down $31,000 in
comparison with 1999 mainly reflecting lower depreciation expense.  Professional
fees in the second quarter of 2000  decreased by $160,000 (47 percent)  compared
to 1999 as a result of lower  legal and annual  report  costs.  Other  operating
expense  increased  by  $170,000  (27  percent)  in the  second  quarter of 2000
compared with the three months ended June 30, 1999.  Excluding  Midwest Federal,
other operating expense  decreased  $69,000 in the 2000 period.  Included in the
other operating  expense decrease was the refund in full of the one-time $80,000
assessment  made by the Treasurer of the State of Iowa in February 2000 to cover
the losses on uninsured  public fund deposits  incurred when a bank in Carlisle,
Iowa was declared  insolvent and closed by the Iowa  Superintendent  of Banking.
This  assessment  was  returned  to the  banks  in June.  Goodwill  amortization
increased in 2000 due to the amortization of the core deposit intangible and the
goodwill attributable to the acquisition of Midwest Federal.


Income Tax Expense

The Company  incurred  income tax expense of $495,000 for the three months ended
June 30, 2000. For the three months ended June 30, 1999, the Company reported an
income tax credit of $146,000 due to the loss  incurred  during the period.  The
effective  income  tax rate as a percent  of income  before  taxes for the three
months ended June 30, 2000 was 33.8 percent.


                         SIX MONTHS ENDED JUNE 30, 2000

The Company  earned  $2,084,000  during the first half of 2000 compared with net
income of $838,000 in the same period of 1999.  Basic and diluted  earnings  per
share  were $.50 for the six  months  ended June 30,  2000  compared  with basic
earnings per share of $.23 and diluted  earnings per share of $.22 for the first
half of 1999. Actual weighted-average shares outstanding in the first six months
of 2000 were  4,165,758  compared  with  3,644,405  in the  first  half of 1999.
Weighted-average diluted shares outstanding were 4,177,683 and 3,743,010 for the
first half of 2000 and 1999, respectively.  The return on average assets for the
first half of 2000 was .86 percent compared with .56 percent in 1999.  Return on
average shareholders' equity was 8.49 percent in 2000 compared with 4.38 percent
for the first half of 1999.


RESULTS OF OPERATION

Net Interest Income

Net interest income increased $1,704,000 in the first half of 2000 compared with
the same period in 1999 reflecting the additional net interest income  generated
by Midwest  Federal in 2000.  Excluding the  $2,493,000  net interest  income of
Midwest  Federal,  the Company's net interest income for the first six months of
2000  was  down   $789,000   primarily  due  to  higher   interest   expense  on
interest-bearing  liabilities and a lower overall yield on earning  assets.  The
Company's net interest  margin for the first half of 2000 was 4.09 percent (4.72
percent  excluding Midwest Federal) compared with 5.34 percent in the first half
of 1999. The yield on earning assets for the first half of 2000 was 8.59 percent
(9.05 percent excluding Midwest Federal) compared with 9.29 percent in 1999. The
overall rate on interest-bearing  liabilities rose to 4.96 percent for the first
half of 2000 from 4.63 percent in 1999.

Interest and fees on loans  increased  $4,270,000 (55 percent) in the first half
of 2000 compared with the same period in 1999. The additional interest income on
loans  attributable  to  Midwest  Federal  was  $3,953,000,  with the  Company's
previously  exisitng  subsidiaries  having a net increase in interest  income on
loans  totaling  $317,000 (4  percent).  The net  increase was due to the higher
average volume of loans  outstanding  since the average rate earned on loans for
the first half of 2000 (8.28 percent) was lower than in 1999 (9.08 percent). The
average rate on loans  excluding  Midwest  Federal was 8.63 percent in the first
half of 2000.

The amount of interest income and discount collected on loan pool participations
increased 10 percent in the first half of 2000 to $3,908,000  from the first six
months of 1999 total of $3,548,000.  This increase was largely due to the higher
average volume of loan pool participations in 2000 compared with 1999. The yield
on loan pool  participations  decreased  to 12.86  percent for the first half of
2000 compared with 13.50 percent in 1999.

Interest income on investments  increased  $1,773,000 (143 percent) in the first
half of 2000 compared to 1999 as a result of the acquired  securities  portfolio
of Midwest  Federal.  The average  balance of  investment  securities  more than
doubled to $92,827,0000  in 2000 compared with  $44,200,000 in 1999. The average
yield on the portfolio  increased  from 6.08 percent for 1999 to 6.97 percent in
2000.  Without  the  addition  of the Midwest  Federal  securities,  the average
balance of investments would have declined in 2000 as the proceeds from maturing
securities were used to fund loan demand.

Total interest expense on paying liabilities  increased  $4,660,000 in the first
half of 2000 over 1999 due to the  liabilities  assumed with the  acquisition of
Midwest  Federal,  increases in average deposits at existing banks, and the need
to pay higher market  interest rates to retain and attract  deposits.  The rates
paid  on  borrowed  funds  such  as fed  funds  purchased,  FHLB  advances,  and
borrowings  on the  Company's  bank line of credit  all  increased  in 2000 as a
result of higher market rates,  thereby  increasing the interest  expense of the
Company  compared  to  1999.  Excluding  the  interest  expense  on  the  paying
liabilities of Midwest Federal,  the Company's total interest expense  increased
$608,000 (11 percent) in the first half of 2000 compared with 1999.


Provision for Loan Losses

The  year-to-date  2000 provision for loan losses was  $1,211,000  less than the
$1,632,000 for the first six months of 1999. The loss provision by MIC Financial
of  $1,327,000  in 1999 was not repeated in 2000.  Of the $421,000  year-to-date
provision for losses in 2000, only $27,000 was attributable to MIC Financial.


Noninterest Income

Total  noninterest  income for the first six months of 2000  increased  $316,000
over that recorded in 1999. Of that  increase,  $255,000 was due to  noninterest
income for Midwest  Federal.  The remaining  $61,000 increase was largely due to
increased  service  charges  and  gains  on the  sale of  investment  securities
classified as "available for sale" that were sold to meet liquidity needs.


Noninterest Expense

The Company's  noninterest  expense  increased  $1,433,000  during the first six
months of 2000 over 1999. The  noninterest  expense  incurred by Midwest Federal
for the first half of 2000 totaled  $1,764,000.  Excluding Midwest Federal,  the
Company's  noninterest  expense decreased $331,000 in 2000 compared to 1999 with
reductions  noted in  professional  fees (31  percent),  salaries  and  benefits
expense (4 percent), and occupancy expense (11 percent).  Much of this reduction
was due to the down-sizing of the MIC Financial operation.


Income Tax Expense

The Company's  income tax expense of  $1,067,000  for the first half of 2000 was
$552,000  greater  than the $515,000  tax expense for 1999.  Taxable  income was
substantially  higher in 2000.  The  effective  income  tax rate as a percent of
income before taxes for the six months ended June 30, 2000 was 33.8 percent.


FINANCIAL CONDITION

Total assets as of June 30, 2000 were $494,243,000, an increase of $8,054,000 (2
percent) from December 31, 1999. As of June 30, 2000, the Company had $1,620,000
in federal  funds sold and  $7,200,000  federal  funds  borrowed  compared  with
$7,865,000  sold and $2,965,000  borrowed as of December 31, 1999. The Company's
liquidity needs are usually highest during the second and third quarters of each
year due to seasonal  loan demand and minimal  deposit  growth in the first nine
months of the year.  Federal  funds are borrowed on a  short-term  basis to meet
this liquidity need.


Investment Securities

Investment  securities available for sale increased $3,426,000 from December 31,
1999 to the June 30, 2000 total of $63,956,000 as securities  were purchased for
the portfolio.  Investment securities classified as held to maturity declined to
$27,641,000 as of June 30, 2000, compared with $29,445,000 on December 31, 1999,
with the net decrease of $1,804,000 due to the maturity of securities.


Loans

Overall loan volumes  continued to  increase,  with total loans  outstanding  of
$305,249,000 on June 30, 2000, reflecting growth of $23,158,000 (8 percent) from
December 31,  1999.  As of June 30, 2000,  the  Company's  loan to deposit ratio
(excluding loan pool  investments) was 87.4 percent.  This compares with a year-
end 1999  loan to  deposit  ratio of 81.0  percent.  As of June  30,  2000,  MIC
Financial had total loans  outstanding of  $2,764,000,  mostly in the commercial
loan  category.  This  compares  with a  December  31,  1999 loan  total for MIC
Financial of $5,081,000.


Loan Pool Participations

As of June 30, 2000, the Company had loan pool participations of $60,048,000,  a
decrease of  $7,708,000  (11 percent)  from the December 31, 1999  balance.  The
reduction  in the loan pool  participations  is due to  collections  made in the
normal  course of  business  and the sale of most of the loans still held by the
Central States Resources  Corporation,  Midstates Resources  Corporation and All
States Resources Corporation servicing entities. The sale of the majority of the
assets of these  servicing  corporations  was completed in May 2000 with minimal
profits  recognized at that time.  The collection of proceeds from the remaining
assets is expected to continue through the third quarter with the recognition of
any additional  income deferred until the receipt of all remaining  settlements.
Management  of the Company and the servicer  determined  that it was in the best
interest of all parties to sell these remaining  assets in order to maximize the
potential  return on investment  and to reduce credit risk.  The assets in these
servicing  corporations  were  purchased from various  sources  between 1988 and
1997.  These remaining assets were becoming  increasingly  costly to service and
the cash flow from them was  projected  to  decline.  The assets were felt to be
subject to greater than average credit risk in the event of deterioration in the
national economy.

The Company's  involvement  in the loan pool  participations  continues  through
States Resources Corporation which was created by the servicer in 1998. All pool
purchases  since then have been through this  entity.  The loan pool  investment
balance shown as an asset on the Company's Statement of Condition represents the
discounted  purchase  cost of the loan pool  participations.  During  the second
quarter  of 2000 the  Company  was  successful  in  purchasing  three  loan pool
packages totaling $10,575,000. For the first six months of 2000, the Company has
purchased  loan pools  totaling  $15,211,000.  This compares  with  purchases of
$19,999,000  in the first  half of 1999.  The  average  loan pool  participation
balance  of  $61,136,000  for the first six  months of 2000 was  $8,132,000  (15
percent)  higher than the average  balance of $53,003,000  for the first half of
1999.


Deposits

Total deposits as of June 30, 2000 were $349,097,000  compared with $348,672,000
as of December  31,1999.  The Company  typically  experiences  minimal growth in
total deposits from December to June.  Competition for deposits has been intense
in many of the markets served by the Company with management electing not to pay
the highest rates in order to attract depositor funds.


Borrowed Funds

The Company had  $7,200,000 in Federal Funds  purchased on June 30, 2000.  There
was $2,965,000 in Federal Funds purchased on December 31, 1999. During the first
half of 2000,  the  Company  had an average  balance of Fed Funds  purchased  of
$3,159,000.  Advances from the Federal Home Loan Bank totaled  $70,986,000 as of
June 30, 2000 compared with  $63,421,000  as of December 31, 1999. The increases
in Federal  Funds  purchased  and Federal Home Loan Bank  advances  provided the
funds to meet loan demand by customers.


Note Payable

The note  payable  balance  was reduced to  $15,100,000  on June 30, 2000 from a
balance of  $18,000,000 on December 31, 1999. The Company's note matured on June
30,  2000 and was  rewritten  into a  $9,000,000  term loan with one  payment of
$900,000 due December 31, 2000, three annual payments of $1,350,000, and a final
payment of $4,050,000  due on December 31, 2004.  Under the new loan  agreement,
the Company  maintains a revolving  line of credit of up to $9,000,000 (of which
the Company had utilized  $6,100,000  as of June 30, 2000) that matures June 30,
2001.  The interest rate for both the term loan and the revolving line remain at
prime rate less .375%.


Nonperforming Assets

The Company's  nonperforming  assets totaled  $5,165,000  (1.69 percent of total
loans) as of June 30, 2000, compared to $4,965,000 (1.76 percent of total loans)
as of December  31, 1999.  All  nonperforming  asset  totals and related  ratios
exclude the loan pool  investments.  The following table presents the categories
of nonperforming assets for the bank subsidiaries and for MIC Financial, Inc. as
of June 30, 2000 compared with December 31, 1999:
<TABLE>
<CAPTION>
                              Nonperforming Assets
                             (dollars in thousands)
                                  June 30, 2000

                                       MIC
                                      Banks        Financial          Total
                                      -------       ------           -----
<S>                                   <C>          <C>               <C>
Nonaccrual                            $1,700        $1,187           $2,887
Loans 90 days past due                 1,295           414            1,709
Other real estate owned                  569             0              569
                                      -------       ------           -----
                                      $3,564        $1,601           $5,165


                                December 31, 1999

                                       MIC
                                      Banks        Financial          Total
                                      -------       ------           -----

Nonaccrual                            $1,969        $  905           $2,874
Loans 90 days past due                 1,025           401            1,426
Restructured loans                         0           515              515
Other real estate owned                  150             0              150
                                      -------       ------           -----
                                      $3,144        $1,821           $4,965

</TABLE>

From December 31, 1999 to June 30, 2000,  nonaccrual  loans  increased  $13,000.
Loans ninety days past due  increased  $283,000.  Restructured  loans  decreased
$515,000 as the performance on one MIC Financial credit  deteriorated and it was
reclassified  as nonaccrual.  Other real estate owned increased by $419,000 as a
residential  real estate loan was  foreclosed on and a hotel in which one of the
bank  subsidiaries  participated  in a loan  on was  foreclosed.  The  Company's
allowance  for loan  losses as of June 30, 2000 was  $3,616,000,  which was 1.18
percent of total loans as of that date. This compares with an allowance for loan
losses of  $4,006,000  as of December 31, 1999,  which was 1.42 percent of total
loans.  As of June 30, 2000,  the allowance for loan losses was 78.68 percent of
nonperforming  loans compared with 83.20 percent as of December 31,  1999. Based
on the inherent risk in the loan portfolio,  management believes that as of June
30, 2000, the allowance for loan losses is adequate.  For the three months ended
June 30, 2000, the Company  recognized net charge-offs of $204,000 compared with
net  charge-offs  of  $772,000  during  the  quarter  ended June 30,  1999.  Net
charge-offs   recorded  by  MIC  Financial   totaled   $69,000  while  the  bank
subsidiaries  charged off $135,000  during the quarter ended June 30, 2000.  For
the six months ended June 30, 2000, the Company  recognized  net  charge-offs of
$811,000  compared with $1,079,000 for the first half of 1999.  During the first
half of 2000, MIC Financial has $419,000  versus a net charge-off of $791,000 in
the 1999 period.


Capital Resources

As of June 30, 2000, total shareholders'  equity as a percentage of total assets
was 9.61 percent compared with 10.33 percent as of December 31, 1999. During the
second  quarter of 2000,  the Company  repurchased  a total of 77,500  shares of
stock on the open market as part of the 130,000 share  repurchase  authorized by
the  Company's  board of directors on January 21, 2000.  An  additional  250,000
shares of common stock were repurchased by the Company during the second quarter
as authorized by the board of directors on April 27, 2000. The average price per
share of all stock  repurchased  by the  Company on the open  market in 2000 was
$8.21.  Under  risk-based  capital rules, the Company's tier 1 capital ratio was
10.25 percent of risk-weighted assets as of June 30, 2000, and was 11.42 percent
of  risk-weighted  assets as of December  31,  1999,  compared to a 4.00 percent
requirement. Risk- based capital guidelines require the classification of assets
and  some  off-balance-sheet  items in terms  of  credit-risk  exposure  and the
measuring of capital as a percentage of the risk-adjusted  asset totals.  Tier 1
capital is the Company's total common  shareholders' equity reduced by goodwill.
Management  believes  that, as of June 30, 2000,  the Company and its subsidiary
banks meet all capital  adequacy  requirements to which they are subject.  As of
that date, all the bank  subsidiaries were "well  capitalized"  under regulatory
prompt corrective action provisions.


Liquidity

Liquidity  management  involves meeting the cash flow requirements of depositors
and borrowers.  The Company  conducts  liquidity  management on both a daily and
long-term  basis;  and it adjusts  its  investments  in liquid  assets  based on
expected loan demand,  projected loan  maturities  and payments,  estimated cash
flows  from  the  loan  pool  participations,  expected  deposit  flows,  yields
available   on   interest-bearing   deposits,   and   the   objectives   of  its
asset/liability management program. The Company had liquid assets (cash and cash
equivalents) of $12,007,000 as of June 30, 2000, compared with $22,919,000 as of
December 31, 1999.  Much of the decrease  during the period was utilized to fund
loan  growth  and  to  purchase  investment  securities.  Investment  securities
classified  as  available  for sale could be sold to meet  liquidity  needs,  if
necessary.  Additionally,  the bank  subsidiaries  maintain lines of credit with
correspondent  banks and the  Federal  Home Loan Bank that  would  allow them to
borrow  federal  funds on a  short-term  basis if  necessary.  The Company  also
maintains a line of credit with a major commercial bank that provides  liquidity
for the  purchase of loan pool  participation  investments  and other  corporate
needs.  Management believes that the Company has sufficient liquidity as of June
30, 2000 to meet the needs of borrowers and depositors.


Market Risk Management

Market risk is the risk of earnings volatility that results from adverse changes
in interest  rates and market  prices.  The  Company's  market risk is primarily
comprised of interest  rate risk arising  from its core  banking  activities  of
lending  and  deposit  taking.  Interest  rate risk is the risk that  changes in
market  interest rates may adversely  affect the Company's net interest  income.
Management  continually  develops and applies  strategies to mitigate this risk.
Management does not believe that the Company's primary market risk exposures and
how those  exposures  were  managed in the first six months of 2000 changed when
compared to 1999.

The Company uses a third-party  computer software simulation modeling program to
measure its exposure to potential  interest  rate changes.  For various  assumed
hypothetical  changes in market interest rates,  numerous other  assumptions are
made such as prepayment speeds on loans and securities backed by mortgages,  the
slope of the  Treasury  yield  curve,  the rates and  volumes  of the  Company's
deposits and the rates and the volumes of the  Company's  loans.  This  analysis
measures  the  estimated   change  in  net  interest  income  in  the  event  of
hypothetical  changes in interest rates. This analysis of the Company's interest
rate risk was presented in the Form 10-K filed by the Company for the year ended
December 31, 1999.


Commitments and Contingencies

In  the  ordinary  course  of  business,  the  Company  is  engaged  in  various
litigation.  Management believes that none of this litigation is material to the
Company's results of operations.


Board of Directors

R. Spencer  Howard  resigned as a director and Vice President of the Company and
President of MIC  Financial  effective  February 29,  2000.  James F. Mathew,  a
director  of the  Company  since  February  1979,  passed away on March 28, 2000
following a long illness.  Another long-term director of the Company,  Martin L.
Bernstein, passed away very unexpectedly on April 28, 2000. The vacancies on the
Company's board of directors created by these events were filled at the June 21,
2000  meeting of the board.  Elected to serve as directors  until the  Company's
annual meeting of shareholders in 2001 were James G. Wake, Michael R. Welter and
Edward C. Whitham,  Jr. These  gentelmen  are all  currently  serving as outside
directors on boards of three of the Company's subsidiary financial institutions.


ESOP Merger

The Company has  maintained an Employee  Stock  Ownership  Plan ("ESOP") for its
employees since 1984. Midwest Federal employees were also covered by an ESOP. As
part of the merger agreement with Midwest  Bancshares,  Inc., it was agreed that
the Midwest ESOP would be merged into the Company's ESOP as soon as practicable.
The Company has submitted notification to and received approval from the Federal
Reserve Bank of Chicago to merge the two ESOP's.  Upon completion of the merger,
the Company ESOP will own 575,950  shares,  or 14.62 percent of the  outstanding
shares of the Company as of July 31, 2000.

The ESOP has borrowed  funds from the Company to purchase  additional  shares of
Company  stock.  The  Company's  board  of  directors  approved  a loan of up to
$700,000 to the ESOP to purchase Company stock. This loan is at the same rate of
interest as the Company's bank line of credit (prime less .375%). As of June 30,
2000, the ESOP had borrowed $82,450 from the Company to purchase shares.


"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT

With the exception of the historical  information  contained in this report, the
matters  described herein contain  forward-looking  statements that involve risk
and  uncertainties  that  individually  or mutually  impact the  matters  herein
described,  including but not limited to financial  projections,  product demand
and  market  acceptance,  the  effect  of  economic  conditions,  the  impact of
competitive  products  and  pricing,   governmental   regulations,   results  of
litigation,  technological difficulties and/or other factors outside the control
of the  Company,  which  are  detailed  from time to time in the  Company's  SEC
reports. The Company disclaims any intent or obligation to update these forward-
looking statements.

Part II - Item 4. Submission of Matters to a Vote of Security Holders.

The Company's  annual  mmeting of  shareholders  was held on April 27, 2000. The
record date for  determination  of shareholders  entitled to vote at the meeting
was February 22, 2000. There were 4,287,014 shares  outstanding as of that date,
each such share being  entitled to one vote.  At the  shareholders'  meeting the
holders of 3,551,892  shares of stock (82.85 percent of the outstanding  shares)
were  represented  in person  or by  proxy,  which  constituted  a  quorum.  The
following proposals were voted on at the meeting:

Proposal 1 - Election of Directors:

The following  members of the Company's board of directors were elected to serve
for the  specified  term or until their  successors  shall have been elected and
qualified. Such persons received the number of votes set opposite their names:
<TABLE>
<CAPTION>

                                                                VOTE
                                       FOR                    WITHHELD
                                      -----                   --------
<S>                                 <C>                       <C>
One-year term (2001):

        Richard R. Donahue          3,402,261                  149,631

Three-year term (2003):

        Martin L. Bernstein         3,292,906                  258,986
        William D. Hassel           3,390,088                  161,804

</TABLE>

Proposal 2 - Ratification of Auditors' Appointment:

A vote was also  taken on the  ratification  of the  appointment  of KPMG LLP as
independent  auditors of the Company  for the fiscal  year ending  December  31,
2000. The results of the vote were as follows:

<TABLE>
<CAPTION>
        <S>              <S>                <S>                 <S>
                                                                 DEALER
        FOR              AGAINST            ABSTAIN             NON-VOTES
    <C>                  <C>                <C>                    <C>
     3,342,608           28,389             180,895                 0

</TABLE>

Part II -- Item 6.  Exhibits and Reports on Form 8-K.

(a)  The  following  exhibits  are filed with this  Report or, if so  indicated,
     incorporated by reference:

     Exhibits

     3.1    Articles of Incorporation of Mahaska Investment Company. (e)

     3.2    Bylaws of Mahaska Investment Company. (e)

     10.1   Mahaska Investment Company  Employee Stock Ownership Plan & Trust as
            restated and amended. (b)

     10.2.1 1993 Stock Incentive Plan. (a)

     10.2.2 1996 Stock Incentive Plan. (c)

     10.2.3 1998 Stock Incentive Plan. (d)

     10.3.1 Midstates Resources Corp. Loan Participation and Servicing Agreement
            dated  December 9, 1992 between  Midstates  Resources Corp., Mahaska
            Investment Company, and Mahaska State Bank. (a)

     10.3.2 Central States Resources Corp. Liquidation Agreement dated April 18,
            1988 between Central States  Resources  Corp.,  Mahaska  State Bank,
            National Bank & Trust Co., and Randal Vardaman. (a)

     10.3.3 All  States  Resources  Corp.  Loan   Participation  and   Servicing
            Agreement  dated  September 13,  1993  between  All States Resources
            Corp., Mahaska Investment Company, and West Gate Bank. (a)

     10.3.4 States Resources Corp. Loan  Participation  and Servicing  Agreement
            dated February 5, 1999 between  States  Resources  Corp. and Mahaska
            Investment Company. (g)

     10.5.1 Ammended and Restated Credit  Agreement dated June 30,  2000 between
            Mahaska Investment Company and Harris Trust & Savings Bank.

     10.6   Agreement  and  Plan of  Merger By  and  Between  Mahaska Investment
            Company and Midwest Bancshares, Inc. dated February 2, 1999. (f)

     11     Computation of Per Share Earnings.

     27     Financial Data Schedule.


            (a)    Incorporated by reference to the Form S-1 Registration Number
                   33-81922 of Mahaska Investment Company.

            (b)    Incorporated by reference to the Form 10-K for the year ended
                   December 31, 1994 filed by Mahaska Investment Company.

            (c)    Incorporated by reference to the Form 10-K for the year ended
                   December 31, 1996 filed by Mahaska Investment Company.

            (d)    Incorporated by reference to the Form 10-K for the year ended
                   December 31, 1997 filed by Mahaska Investment Company.

            (e)    Incorporated by reference to the Form 10-Q for the quarter
                   ended September 30, 1998 filed by Mahaska Investment Company.

            (f)    Incorporated by reference to the Ammendment No. 1 to the Form
                   S-4 Registration number 333-79291 filed by Mahaska Investment
                   Company on August 17, 1999.

            (g)    Incorporated by reference to the Form 10-K for the year ended
                   December 31, 1999 filed by Mahaska Investment Company.


(b)  Reports on Form 8-K -- The Company  filed one report on Form 8-K during the
     three  months  ended  June  30,  2000  to  report  the  election  of  three
     individuals  to fill  vacancies on its board of directors.  This report was
     filed June 28, 2000.


                                   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.


                                     MAHASKA INVESTMENT COMPANY
                                     (Registrant)



August 7, 2000                       /s/ Charles S. Howard
---------------------                ---------------------------------------
Dated                                Charles S. Howard
                                     President


August 7, 2000                       /s/ David A. Meinert
---------------------                ---------------------------------------
Dated                                David A. Meinert
                                     Executive Vice President and Chief
                                     Financial Officer (Principal Accounting
                                     Officer)
<PAGE>
<TABLE>
<CAPTION>
                                   Exhibit 11

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS


                                      Three Months Ended       Six Months Ended
                                           June 30,                June 30,
                                    --------------------      ------------------
Earnings per Share Information:       2000         1999        2000        1999
                                    --------     -------      -------    -------
<S>                                 <C>        <C>          <C>        <C>
Weighted average number of shares
  outstanding during the year       4,042,690  3,652,376    4,165,758  3,644,405

Weighted average number of shares
  outstanding during the year
  including all dilutive potential
  shares                            4,046,428  3,743,010    4,177,683  3,728,534

Net earnings                       $  971,088 $ (319,172)  $2,084,420 $  838,072

Earnings per share - basic         $     0.24 $    (0.09)  $     0.50 $     0.23

Earnings per share - diluted       $     0.24 $    (0.08)  $     0.50 $     0.22
</TABLE>