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, 1997                                              0-24630



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



        IOWA                                            42-1003699
(State of Incorporation)                   (I.R.S. Employer 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 August 1, 1997,  there were 2,172,456  shares of common stock $5 par value
outstanding.



<PAGE>



PART 1 -- Item 1. Financial Statements

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
(unaudited)
(dollars in thousands)                            June 30,       December 31,
                                                    1997            1996
<S>                                               <C>            <C>
                                     ASSETS
Cash and due from bank                            $   9,972      9,896
Interest-bearing deposits in banks                      748      3,603
Federal funds sold                                      675      2,985
Cash and cash equivalents                            11,395     16,484
Investment securities:
   Available for sale                                27,607     26,483
Held to maturity                                     23,157     27,705
Loans                                               133,177    118,045
   Less:
   Unearned discount                                   (681)      (629)
   Allowance for loan losses                         (1,619)    (1,491)
   Net loans                                        130,877    115,925
   Loan pool participations                          47,021     50,687
   Premises and equipment, net                        3,291      3,102
   Accrued interest receivable                        2,443      2,518
   Other assets                                       2,178      2,152
   Goodwill                                           6,478      6,795
Total assets                                      $ 254,447    251,851

                       LIABILITIES AND SHAREHOLDERS'EQUITY
Deposits:
Demand                                               17,797     19,353
NOW and Super NOW                                    32,469     33,124
   Savings                                           57,564     57,831
   Certificates of deposit                           97,829     96,644
   Total deposits                                   205,659    206,952
   Note payable                                      11,350      8,500
   Other liabilities                                  2,653      2,156
   Total liabilities                                219,662    217,608
   Shareholders'equity:
   Common stock, $5 par value; authorized 
     4,000,000 shares; issued 2,284,506 shares       11,423     11,423
   Capital surplus                                    7,787      7,787
   Treasury stock at cost, 105,383 shares 
     as of June 30, 1997, and 55,000 shares 
     as of December 31, 1996                         (2,081)     (853)
   Retained earnings                                 17,649    15,926
   Unrealized gain (loss) on investments
     available for sale                                   7       (40)
   Total shareholders' equity                        34,785    34,243

Total liabilities and shareholders' equity        $ 254,447   251,851

See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>


PART I        Item 1 . Financial Statements, Continued

                             SKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                            Three Months     Six Months
(unaudited)                                 Ended June 30,   Ended June 30,
(dollars in thousands, except per share)    1997     1996    1997     1996
<S>                                         <C>      <C>     <C>      <C>
INTEREST INCOME:
Interest and fees on loans                  $2,998   2,495   5,718    4,669
Interest and discount on loan pools          1,977   1,917   4,417    3,855
Interest on bank deposits                       15      42      56      112
Interest on federal funds sold                  12      20      61       76
Interest on investment securities:
Available for sale                             460     323     897      554
Held to maturity                               329     409     678      834
     Total interest income                   5,791   5,206  11,827   10,100

INTEREST EXPENSE:
Interest on deposits:
  NOW and Super NOW                            168     139     333      280
  Savings                                      567     472   1,105      929
  Certificates of deposit                    1,358   1,105   2,684    2,185
Interest on federal funds purchased              7       4      11        4
Interest on note payable                       208     217     368      422
     Total interest expense                  2,308   1,937   4,501    3,820
     Net interest income                     3,483   3,269   7,326    6,280
Provision for loan losses                       39      47     167      112
     Net interest income after provision
        for loan losses                      3,444   3,222   7,159    6,168

NONINTEREST INCOME:
Service charges                                272     218     535      401
Data processing income                          61      59     114      116
Other operating income                          97      98     212      201
Investment security losses                      (8)     (8)     (8)     (12)
     Total noninterest income                  422     367     853      706

NONINTEREST EXPENSE:
Salaries and employee benefits expense         985     780   1,949    1,659
Net occupancy expense                          302     262     587      506
FDIC assessment                                 12      23      18       44
Professional fees                               93      99     189      250
Other operating expense                        403     402     896      759
Goodwill amortization                          159     101     317      202
     Total noninterest expense               1,954   1,667   3,956    3,420
Income before income tax expense             1,912   1,922   4,056    3,454
Income tax expense                             685     660   1,451    1,186
     NET INCOME                             $1,227   1,262   2,605    2,268

Earnings per common share                   $ 0.56    0.56    1.18     1.00
Dividends per common share                  $ 0.20    0.1825  0.40     0.365

See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>



PART 1 -- 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,
                                                    1997          1996
<S>                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                          2,605          2,268
Adjustments to reconcile net income to
 net cash provided by operating activities:
   Depreciation and amortization                      555            427
   Provision for loan losses                          167            112
Investment securities losses                            8             12
(Gain) loss on sale of bank premises and equipment     (7)             1
Amortization of investment securities premiums        123            172
Accretion of investment securities and loan 
  discounts                                          (242)          (174)
Decrease (increase) in other assets                    50            (75)
Increase in other liabilities                         465          1,494
     Total adjustments                              1,119          1,969
Net cash provided by operating activities           3,724          4,237

CASH FLOWS FROM INVESTING  ACTIVITIES:
Investment securities available for sale:
   Proceeds from sales                                994          1,988
   Proceeds from maturities                         3,468          2,026
   Purchases                                       (5,540)       (11,355)
Investment securities held to maturity:
   Proceeds from maturities                         5,008          3,826
   Purchases                                         (548)        (3,828)
   Purchases of loan pool participations           (8,641)       (22,541)
   Principal recovery on loan pool participations  12,307         12,004
Net increase in loans                             (14,886)       (13,570)
Purchases of bank premises and equipment             (428)          (366)
Proceeds from sale of bank premises and equipment       7              0
Proceeds from branch acquisition                        0         14,246
Net cash used in investing activities              (8,259)       (17,570)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposits                (1,293)         5,369
Advances on note payable                            5,600          5,500
Principal payments on note payable                 (2,750)          (750)
Dividends paid                                       (882)          (824)
Purchases of treasury stock                        (1,376)          (307)
Proceeds from stock issued                            147              0
Net cash (used in) provided by financing 
  activities                                         (554)         8,988
Net decrease in cash and cash equivalents          (5,089)        (4,345)
Cash and cash equivalents at beginning of period   16,484         20,821
     Cash and cash equivalents at end of period   $11,395         16,476

<PAGE>

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest                                      $ 4,504          3,651
    Income taxes                                  $ 1,245            770

See accompanying notes to consolidated financial statements.

</TABLE>
<PAGE>



PART I -- Item 1. Financial Statements, continued.

                           MAHASKA INVESTMENT COMPANY
                   Notes to Consolidated Financial Statements
                                  (Unaudited)

1.       Adjustments and Reclassifications

         The accompanying  consolidated financial statements (unaudited) include
         the accounts and transactions of the Company and its three wholly-owned
         subsidiaries,  Mahaska  State Bank,  Central  Valley Bank,  and On-Site
         Credit Services,  Inc.(formerly known as MIC Leasing Co.). All material
         inter-company   balances  and  transactions  have  been  eliminated  in
         consolidation.

         The accompanying  consolidated  financial  statements  (unaudited) 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  (unaudited)  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  (unaudited) contain all adjustments
         (consisting  of only normal  recurring  accruals)  necessary to present
         fairly the financial  position as of June 30, 1997,  and the results of
         operations  for the three and six months  ended June 30, 1997 and 1996,
         and  changes in cash flows for the six months  ended June 30,  1997 and
         1996.

2.       Statements of Cash Flows

         In the 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 and six months ended June 30,
         1997 and 1996 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 bank and
         thrift.



<PAGE>



4.       Earnings Per Common Share

         Earnings  per  common  share  computations  are  based on the  weighted
         average number of shares of common stock outstanding during the period.
         The weighted average number of shares for the three-month periods ended
         June 30, 1997 and 1996 was 2,190,467 and 2,256,759,  respectively.  The
         weighted average number of shares for the six-month  periods ended June
         30, 1997 and 1996 was 2,209,348 and 2,258,957, respectively.



<PAGE>



Part I -- Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.


Net income for the Company was  $1,227,000  for the quarter ended June 30, 1997,
compared with $1,262,000 for the three months ended June 30, 1996.  Earnings per
share for the  second  quarter of 1997 of $.56 were  equal to the  earnings  per
share for the second quarter of 1996.  Weighted average shares  outstanding were
2,190,467 and 2,256,759 for the second  quarter of 1997 and 1996,  respectively.
Return on average  assets for the quarter ended June 30, 1997 was 1.95% compared
with a return of 2.35% for the quarter  ended June 30,  1996.  The Company had a
return on average  equity of 14.17%  for the three  months  ended June 30,  1997
versus 15.79% for the three months ended June 30, 1996.

The Company  earned net income of  $2,605,000  for the six months ended June 30,
1997. This is an increase of $337,000 (15%) compared with the $2,268,000  earned
by the Company  during the first six months of 1996.  On an  earnings  per share
basis,  the Company  earned $1.18 for the first six months of 1997 compared with
$1.00 for the first six  months of 1996.  Weighted  average  shares  outstanding
declined slightly to 2,209,348 for the first six months of 1997,  compared to an
average of 2,258,957  for the first half of 1996.  The return on average  assets
decreased to 2.09% for the six months  ended June 30, 1997,  down from 2.16% for
the  six-month  period  ended June 30,  1996.  Return on average  equity rose to
15.05% for the first  half of 1997  compared  with  14.10% for the first half of
1996.

RESULTS OF OPERATIONS

Net Interest Income

Net  interest  income  for the  quarter  ended  June 30,  1997  increased  7% to
$3,483,000  from  $3,269,000 for the three months ended June 30, 1996.  This was
mainly due to  increased  interest  income  earned on greater  loan  volumes.  A
portion  of the  increased  interest  income  earned  on  loans  was  due to the
acquisition  by Central Valley Bank ("CVB") of a branch office on June 21, 1996.
This acquisition  resulted in increased average  outstanding loans in the second
quarter of 1997 compared with the second quarter of 1996. The Company's  overall
loan  volumes  were also higher in the second  quarter of 1997 due to  increased
loan  originations  in the current and prior  periods which  contributed  to the
increased  interest income. The increase in total interest income was offset, in
part, by additional interest expense related to increased deposit levels.  Total
interest income increased  $586,000 (11%) in the second quarter of 1997 compared
with the same  period in 1996.  The  Company's  total  interest  expense for the
quarter increased $372,000 (19%) compared with the same period in 1996 following
the increase in average deposits attributable


<PAGE>



to the branch  office  acquisition.  The  Company's  net  interest  margin (on a
federal  tax-equivalent basis) for the second quarter of 1997 decreased to 6.07%
from  6.71%  in  the  second   quarter  of  1996  as  the  composite   yield  on
interest-earning assets declined while the overall rate paid on interest-bearing
liabilities  remained  approximately  constant.  The Company's  overall yield on
earning  assets  decreased to 10.04% for the second  quarter of 1997 compared to
10.62% for the second quarter of 1996. The rate on interest-bearing  liabilities
was  essentially  unchanged in the second  quarter of 1997 at 4.66% versus 4.68%
for the second quarter of 1996.

For the six months ended June 30, 1997, net interest income increased $1,046,000
(17%) to  $7,325,000  compared to  $6,280,000  for the first half of 1996.  This
increase was primarily due to additional interest income from increased loan and
loan pool volumes in 1997  compared to 1996,  which were offset,  in part, by an
increased  level of deposits in 1997. The Company's net interest  margin for the
first  half of 1997  declined  to 6.47%  compared  with  6.61% for the first six
months of 1996.

Interest income and fees on loans increased $503,000 (20%) in the second quarter
of 1997 compared to the same period in 1996 due to higher loan volumes.  Average
loans outstanding  increased to $128,246,000 for the second three months of 1997
compared  with  $98,583,000  for the second  quarter  of 1996,  an  increase  of
$29,664,000  (30%).  Approximately  $14,218,000 of the increase in average loans
outstanding is attributable  to the Sigourney  branch of CVB, which was acquired
in June 1996. The majority of the remaining  average loan volume growth occurred
in  agricultural  and real estate  loans at Mahaska  State Bank ("MSB") and CVB.
On-Site Credit Services,  Inc. ("On-Site") also experienced an increase in lease
volumes.  The average  yield on loans  decreased  to 9.38% for the second  three
months of 1997, down from 10.18% for the three months ended June 30, 1996.

Loan pool  investments  provided the Company  with a modest  increase in revenue
during the second quarter of 1997 compared to the same period in 1996.  Interest
income  and  discount  collected  on the loan pools  increased  3% in the second
quarter of 1997 to  $1,977,000  compared  with  $1,917,000  earned in the second
quarter of 1996. The yield on loan pool  investments  declined to 15.81% for the
second quarter of 1997 compared with 17.42% for the quarter ended June 30, 1996.
Loan pool earnings may vary from period to period reflecting fluctuations in the
level  of  collections  by  the  Company's  servicer,  the  basis  (or  purchase
investment)  relative to loan  principal  collected,  and the amount of interest
collected. The average loan pool participation investment balance was $5,891,000
(13%) greater in the second quarter of 1997 than in the second quarter of 1996.

Interest income and discount collected on the Company's loan pool


<PAGE>



investments increased $562,000 (15%) for the half of 1997 in comparison with the
first six  months of 1996.  The  overall  yield on loan  pool  investments  rose
slightly  to  18.01%  for the  first  half of 1997,  up from  17.76% in the 1996
comparable period. The loan pool investment balance averaged  $49,459,000 during
the six months  ended June 30,  1997,  compared  with  $43,658,000  for the same
period in 1996.

Interest income on investment  securities  available for sale increased $136,000
(42%) for the second  quarter of 1997  compared  to the same period in the prior
year.  This increase is primarily due to the increased  level of securities held
as "available for sale" since management has elected to classify most of the new
securities  being  purchased in this  category.  Interest  income on  investment
securities held to maturity has declined $80,000 (19%) for the second quarter of
1997  compared  to the  second  quarter  of  1996  as the  funds  from  maturing
securities  have  been  reinvested  in the  available  for sale  category,  thus
reducing  the  held to  maturity  volume.  The  interest  income  on  securities
available for sale for the first half of 1997 increased  $343,000 (62%) compared
with that earned in the first half of 1996 due to the same increases in volume.

Interest expense for the first quarter of 1997 increased $371,000 (19%) compared
with the first  quarter  of 1996 as a result of an  increase  in total  deposits
(much of which  was  attributable  to the  deposits  acquired  by CVB).  Average
interest-bearing  deposits for the second quarter of 1997 increased  $33,010,000
(21%) from the same period in 1996 with the greatest  increase  occurring in the
time deposit category. Average short-term borrowings decreased during the second
quarter of 1997 by  $670,000  compared  with the  second  quarter of 1996 with a
resultant  decrease  in  interest  expense  on these  funds.  Interest  rates on
interest-bearing  liabilities  in the  second  quarter  of 1997  were  generally
consistent with those in the second quarter of 1996.

Total interest expense for the Company increased by $681,000 (18%) for the first
half of 1997 compared to 1996.  Most of this  increase  resulted from the higher
average balance of  interest-bearing  liabilities in 1997. The average rate paid
on interest-bearing liabilities declined slightly to 4.62% for the first half of
1997, compared with 4.76% in the first half of 1996.

Provision for Loan Losses

The Company's  provision for loan loss expense in the second quarter of 1997 was
$8,000 lower than in the second quarter of 1996. For the first half of 1997, the
provision  for loan loss expense was $54,000  greater than in the same period of
1996.

Other Income


<PAGE>



Total  noninterest  income increased $56,000 (15%) in the second quarter of 1997
compared with 1996,  mainly due to higher  service charge income at both Mahaska
State Bank and Central  Valley  Bank.  Noninterest  income for the first half of
1997  increased  $148,000  (21%) over the amount  recorded in the same period of
1996 mainly due to higher service charge income.

Other Expense

Total noninterest expense for the quarter ended June 30, 1997 increased $288,000
(17%) compared to noninterest  expense for the second quarter of 1996.  Salaries
and benefits  expense for the second  quarter of 1997  increased  $205,000 (26%)
over the second  quarter of 1996,  primarily  as a result of the increase in the
number of employees at CVB and at On-Site. Net occupancy expenses for the second
quarter of 1997  increased  $40,000 in comparison to the second  quarter of 1996
with most of the  increase  due to the  additional  facilities  of CVB. The FDIC
assessment  expense  incurred by the Company  during the second  quarter of 1997
decreased by $11,000  compared with the second  quarter of 1996  reflecting  the
reduced  assessment rate paid by CVB as a result of the one-time SAIF assessment
in  September  1996 which  reduced the FDIC  deposit  insurance  rate charged to
thrift  institutions.  Goodwill  amortization expense increased $57,000 (57%) in
the second quarter of 1997 versus 1996 due to the additional goodwill created by
the Sigourney branch acquisition.

For the six-month period ended June 30, 1997,  total other expense  increased by
$537,000 (16%) in comparison  with that incurred  during the first half of 1996.
Salaries and benefits rose by $289,000  (17%)  reflecting the increase in number
of  employees.  Net  occupancy  expense  increased  $81,000  (16%)  due  to  the
additional  Sigourney  facility costs.  The FDIC assessment  declined due to the
reduced SAIF assessment.  Professional fees were reduced by $61,000 (24%) as the
Company did not incur the legal and  accounting  costs  associated  with the CVB
Sigourney   acquisition  in  1997  that  were  experienced  in  1996.   Goodwill
amortization  increased  $115,000  (57%) in the first half of 1997 compared with
the same  period  in 1996,  all of which  was  attributable  to the bank  office
acquisition.

Income Tax Expense

Income tax expense for the three months ended June 30, 1997,  increased  $25,000
compared to the amount for the three months ended June 30, 1996,  primarily  due
to a  decrease  in the amount of  tax-exempt  income  for the 1997  period.  The
average volume of tax-exempt  municipal  investments declined $1,027,000 for the
quarter  ended  June  30,  1997,  compared  with the same  period  in 1996.  The
effective  income tax rate rose slightly in the second quarter of 1997 to 35.83%
compared  with  34.33% in the second  quarter of 1996.  Year-to-date  income tax
expense was $265,000 (22%)


<PAGE>



higher in 1997  compared  with the first six  months of 1996 due to the  overall
increase in income  before taxes and also due to the reduced level of tax-exempt
interest income.

FINANCIAL CONDITION

The Company's total assets as of June 30, 1997 were $254,447,000, an increase of
$2,596,000 (1%) from December 31, 1996. Total deposits declined  $1,293,000 (1%)
during this time period with the largest  decrease  noted in the demand  deposit
accounts.  Time  certificates of deposits  increased by $1,185,000 from December
31, 1996 to June 30,  1996.  The  Company had federal  funds sold of $675,000 on
June 30,  1997,  compared  with funds sold of  $2,985,000  on December 31, 1996.
Total notes payable increased to $11,350,000 on June 30, 1997 from $8,500,000 on
December 31, 1996 as CVB and MSB borrowed funds from the Federal Home Loan Bank.

Loan Pool Participations

As of June 30, 1997, the Company had investments in loan pool  participations of
$47,021,000. There were no new loan pool investments during the quarter, but the
Company was  scheduled to fund a loan pool  purchase  settlement on July 1, 1997
totaling $3,644,000.  The loan pool participation  investment as of December 31,
1996 was $50,687,000.  Average loan pool participation  investments increased to
$50,156,000 for the second three months of 1997 from  $44,265,000 for the second
quarter of 1996.

Loans

Loan  volumes  continued  to  increase,  with  total  loans as of June 30,  1997
reflecting  growth of  $15,080,000  (13%) from  December 31, 1996.  Most of this
growth was in the  commercial,  agricultural,  and real estate loan  categories,
with some increase occurring in lease financing.  The Company's subsidiary banks
have  continued  to  emphasize  and focus on loan  growth  in their own  markets
throughout the year.


Nonperforming Loans

The Company's  nonperforming  loans totaled $1,370,000 (1.03% of total loans) as
of June 30, 1997,  compared to $2,102,000  (1.79% of total loans) as of December
31, 1996. This is a decrease of 35% from December 31, 1996 to June 30, 1997. All
nonperforming  loan totals and related ratios exclude the loan pool investments.
The following  table presents the categories of  nonperforming  loans as of June
30, 1997:

<PAGE>
<TABLE>
                 <S>                              <C>
                  90 days past due                $  130
                  Renegotiated                       350
                  Nonaccrual                         878
                  Other real estate owned             12
                                                   ------
                                                  $1,370
</TABLE>

From  December 31, 1996 to June 30, 1997,  loans ninety days past due  decreased
$495,000,  restructured and  renegotiated  loans decreased  $30,000,  nonaccrual
loans decreased $207,000,  and other real estate owned remained  unchanged.  The
Company's  allowance for loan losses as of June 30, 1997 was  $1,619,000,  which
was 1.22% of total loans as of that date.  This  compares  with an allowance for
loan losses of  $1,491,000  as of December  31,  1996,  which was 1.27% of total
loans.  As of June 30,  1997,  the  allowance  for loan  losses  was  118.21% of
nonperforming  loans  compared  with 70.91% as of December 31, 1996.  Management
believes that as of June 30, 1997 the allowance for loan losses is adequate. For
the three months ended June 30, 1997, the Company recognized a recovery of loans
perviously  charged-off of $2,000 compared with a recovery of $12,000 during the
quarter ended June 30, 1996.  The Company  experienced a net loan  charge-off of
$38,000 for the first six months of 1997 compared with a net charge-off of loans
totaling $16,000 for the first half of 1996.

Capital Resources

As of June 30, 1997, total shareholders'  equity as a percentage of total assets
was 13.67%  compared  with  13.60% as of December  31,  1996.  The Company  held
105,383  shares of treasury  stock at a cost of  $2,081,000 as of June 30, 1997.
These shares were  repurchased  in order to satisfy  options  granted  under the
Company's Stock  Incentive  Plan.  During the second quarter of 1997, a total of
45,000 shares were  repurchased  at a cost of $1,074,000 in accordance  with the
authorization  from the Board of Directors to  repurchase  up to 200,000  shares
through  January  31,  1998.  Also in the second  quarter of 1997,  the  Company
reissued  5,584  shares of  treasury  stock as  options  were  exercised.  Under
risk-based   capital   rules,   the  Company's   total  capital  was  15.58%  of
risk-weighted assets as of June 30, 1997, and was 16.23% of risk-weighted assets
as of December 31, 1996, compared to an 8.00% minimum requirement.

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. It adjusts its investments in liquid assets based on expected 

<PAGE>

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 $11,395,000 as of June 30, 1997, compared with $16,484,000 as of December 31,
1996.  Most of this decrease is attributable to the increase in loans which
utilized liquid assets. 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 Harris  Trust & Savings  Bank of Chicago,  Illinois  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, 1997 to meet the needs of borrowers and depositors.

Pella, Iowa Expansion

On June 23,  1997,  the  Company  announced  that it  intends to open a de novo,
wholly-owned, subsidiary bank in Pella, Iowa. Management anticipates the opening
of the new bank sometime in the fourth  quarter of 1997,  subject to federal and
state regulatory approval. The proposed bank will be called the Pella State Bank
and will be a full-service,  state-chartered,  commercial bank. Management feels
that Pella represents a very attractive,  expanding market in south-central Iowa
that will provide the Company with growth potential for both loans and deposits.

The  Company  anticipates  that  it  will  capitalize  the  proposed  bank  with
$5,000,000 from available cash on hand and from an advance on the revolving line
of credit with Harris Trust & Savings  Bank.  This will  increase the  Company's
interest  expense on notes payable in future periods,  but this should be offset
by additional  interest income from loans and investments as the new bank grows.
Interest  expense on deposits will also increase as the bank's  deposits grow in
future  periods.  Operating  expenses  for salaries  and  benefits,  and general
operating expenses related to the operation of the new subsidiary, will increase
in future periods as the institution becomes fully operational.



<PAGE>



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


The Company's  annual  meeting of  shareholders  was held on April 30, 1997. The
record date for  determination  of shareholders  entitled to vote at the meeting
was March 7, 1997. There were 2,230,539 shares outstanding as of that date, each
such share being entitled to one vote. At the shareholders'  meeting the holders
of  1,957,654  shares of stock  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>
Three-year term (2000):
         Martin L. Bernstein      1,917,374            40,280
         R. Spencer Howard        1,939,672            17,982
</TABLE>

Proposal 2 - Ratification of Appointment of KPMG Peat Marwick LLP as independent
auditor:

A vote was also  taken  on the  ratification  of the  appointment  of KPMG  Peat
Marwick  LLP as  independent  auditors of the Company for the fiscal year ending
December 31, 1997. The results of the vote were as follows:

<TABLE>
<CAPTION>
                                                             DEALER
       FOR             AGAINST           ABSTAIN            NON-VOTES
    <C>                <C>                 <C>                 <C>
    1,944,823          12,631              200                  0

</TABLE>

PART II -- Item 5.  Other Information


On June 19, 1997,  the Board of  Directors  of MIC Leasing  Co., a  wholly-owned
subsidiary   of  the   Company,   approved  an  amendment  to  the  Articles  of
Incorporation  to authorize a change in the corporate  name of the subsidiary to
On-Site Credit Services, Inc.

On June 19, 1997, the Company and Harris Trust & Savings Bank entered
into a Second Amendment to the Revolving Loan Agreement dated January


<PAGE>



31, 1996.  This amendment to the loan agreement is included as Exhibit
10.5.2 to this 10-Q filing.


<PAGE>



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. (d)

          3.2      Bylaws of Mahaska Investment Company. (d)

         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. (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)

         10.5.1    Revolving Loan Agreement dated January 31, 1996 between
                   Mahaska Investment Company and Harris Trust & Savings
                   Bank. (c)

         10.5.2    Second  Amendment to  Revolving  Loan  Agreement  and
                   Revolving  Loan  Note  between   Mahaska   Investment
                   Company  and Harris  Trust & Savings  Bank dated June l9,
                   1997.

         10.6      Purchase and Assumption Agreement between Boatmen's Bank
                   Iowa, National Association, and Central Valley  Bank
                   dated February 15, 1996. (c)

         11        Computation of Per Share Earnings.


<PAGE>



         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 8-K filed by
                    Mahaska Investment Company on February 29, 1996.

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

(b)      Reports on Form 8-K -- No  reports  on Form 8-K were  filed  during the
         three months ended June 30, 1997.


                                                                              
                                   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 11, 1997                        /s/ Charles S. Howard
Dated                                  Charles S. Howard
                                       President


August 11, 1997                       /s/ David A. Meinert
Dated                                 David A. Meinert
                                      Executive Vice President and
                                      Chief Financial Officer
                                      (Principal Accounting Officer)


<PAGE>

                                 Exhibit 10.5.2
                           MAHASKA INVESTMENT COMPANY
                      SECOND AMENDMENT TO CREDIT AGREEMENT


Harris Trust and Savings Bank
Chicago, Illinois

Ladies and Gentlemen:

         Reference is hereby made to that certain Credit  Agreement  dated as of
January 31, 1996, as amended (the "Credit Agreement"),  between the undersigned,
Mahaska Investment Company,  an Iowa corporation (the "Borrower"),  and you (the
"Bank").  All capitalized  terms used herein without  definition  shall have the
same meanings herein as such terms have in the Credit Agreement.

         The Borrower has requested that the Bank extend the Termination Date to
June 30, 1998, and make certain other  amendments to the Credit  Agreement,  and
the Bank is  willing to do so under the terms and  conditions  set forth in this
Amendment.

1.       AMENDMENTS.

         Upon your  acceptance  hereof in the space  provided  for that  purpose
below, the Credit Agreement shall be and hereby is amended as follows:

                  (a) The interest  rate payable under Section 2.1 of the Credit
         Agreement shall be reduced and, accordingly,  Section 2.1 of the Credit
         Agreement  shall be  amended  by  deleting  the phrase "at the rate per
         annum equal to the Prime Rate as in effect from time to time" appearing
         in the third and fourth lines  thereof and inserting the phrase "at the
         rate per annum determined by subtracting (but not below zero) 1/4 of 1%
         per annum from the Prime  Rate as in effect  from time to time" in lieu
         thereof.

                  (b) The commitment fee payable under Section 2.2 of the Credit
         Agreement shall be reduced and, accordingly,  Section 2.2 of the Credit
         Agreement  shall be amended by deleting  the phrase "at the rate of 1/4
         of 1% per annum" appearing in the second and third lines thereof and

                       


<PAGE>



         inserting the phrase "at the rate of 1/8 of 1% per annum" in lieu
         thereof.

                  (c) The definition of "Termination  Date" appearing in Section
         4 of the Credit  Agreement  shall be amended by deleting the date "June
         19, 1997" and inserting the date "June 30, 1998" in lieu thereof.

                  (d)  Section 5.5 of the Credit  Agreement  shall be amended by
         deleting the date  "September 30, 1995"  appearing in the last sentence
         thereof and inserting the date "December 31, 1996" in lieu thereof.

                  (e) The  amount of  Consolidated  Net  Income  required  to be
         maintained  pursuant  to Section 7.8 of the Credit  Agreement  shall be
         amended by  deleting  the amount  "$1,650,000"  appearing  therein  and
         inserting the amount "$1,900,000" in lieu thereof.

                  (f)  Section 7 of the  Credit  Agreement  shall be  amended by
         adding an  additional  covenant at the end thereof  which shall read as
         follows:

                  "Section  7.13.  Minimum  Tangible  Net  Worth of MIC  Leasing
                  Company.  The  Borrower  shall at all times  cause MIC Leasing
                  Company to maintain  Tangible  Net Worth in an amount not less
                  than $4,500,000.  For purposes of this Section,  "Tangible Net
                  Worth" means,  at any time the same is to be  determined,  the
                  total   shareholders'   equity   (including   capital   stock,
                  additional   paid-in  capital  and  retained   earnings  after
                  deducting  treasury stock, but excluding  minority interest in
                  subsidiaries)  which would appear on the balance  sheet of MIC
                  Leasing  Company   determined  in  accordance  with  generally
                  accepted accouting principles,  less the sum (i) the aggregate
                  book  value  of  all  assets  which  would  be  classified  as
                  intangible   assets  under   generally   accepted   accounting
                  principles,  including, without limitation, goodwill, patents,
                  trademarks, trade names, copyrights,  franchises, and deferred
                  charges  (including,  without  limitation,   unamortized  debt
                  discount and expense, organization costs and deferred research
                  and  development  expense),  and  similar  assets and (ii) the
                  write-up of assets above cost".

2.       CONDITIONS PRECEDENT.

         The effectiveness of this Amendment is subject to the satisfaction of

                                
<PAGE>



all of the following conditions precedent:

       (a)      The Borrower and the Bank shall have executed and delivered
this Amendment.

       (b)      Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Bank and its counsel.

3.       REPRESENTATIONS.

         In order to induce the Bank to execute and deliver this Amendment,  the
Borrower  hereby  represents  to the  Bank  that  as of  the  date  hereof,  the
representations  and warranties  set forth in Section 5 of the Credit  Agreement
are and shall be and remain true and correct  (except  that the  representations
contained  in Section 5.5 shall be deemed to refer to the most recent  financial
statements  of the  Borrower  delivered to the Bank) and the Borrower is in full
compliance  with all of the terms and conditions of the Credit  Agreement and no
Default or Event of Default  has  occurred  and is  continuing  under the Credit
Agreement or shall result after giving effect to this Amendment.

4.       MISCELLANEOUS.

         (a) Except as specifically  amended herein,  the Credit Agreement shall
continue  in full  force  and  effect in  accordance  with its  original  terms.
Reference to this specific  Amendment need not be made in the Credit  Agreement,
the Note, or any other instrument or document executed in connection  therewith,
or in any  certificate,  letter or  communication  issued or made pursuant to or
with respect to the Credit Agreement,  any reference in any of such items to the
Credit  Agreement being  sufficient to refer to the Credit  Agreement as amended
hereby.

         (b) The  Borrower  agrees to pay on demand all costs and expenses of or
incurred by the Bank in connection with the negotiation,  preparation, execution
and delivery of this  Amendment,  including the fees and expenses of counsel for
the Bank.

         (c) This Amendment may be executed in any number of  counterparts,  and
by the different parties on different  counterpart signature pages, all of which
taken together shall  constitute one and the same agreement.  Any of the parties
hereto may execute this  Amendment by signing any such  counterpart  and each of
such counterparts shall for all purposes be deemed



<PAGE>



to be an original.  This Amendment shall be governed by the internal laws
of the State of Illinois.

         Dated as of June 19, 1997.

                                         MAHASKA INVESTMENT COMPANY


                                         By /s/ Charles S. Howard
                                         Its  President

         Accepted  and agreed to in  Chicago,  Illinois  as of the date and year
last above written.

                                         HARRIS TRUST AND SAVINGS BANK


                                         By /s/ Michael S. Cameli
                                         Its Vice President

                                                                   page 4 of 4


<PAGE>

<TABLE>

                                   EXHIBIT 11

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

<CAPTION>
                                   Three Months Ended     Six Months Ended
                                        June 30,               June 30,
                                   1997          1996     1997         1996

<S>                               <C>        <C>         <C>         <C>
Earnings per Share Information:

Weighted average number of
shares outstanding during
period                            2,190,467  2,256,759   2,209,348   2,258,957

Net earnings                    $ 1,227,241  1,262,291   2,605,473   2,268,093

Earnings per share                     0.56       0.56        1.18        1.00


</TABLE>