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
SEPTEMBER 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 November 1, 1997, there were 2,172,456 shares of common stock $5 par value
outstanding.



<PAGE>



PART I -- Item 1. Financial Statements
<TABLE>
<CAPTION>

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION

(unaudited)
(dollars in thousands)
                                                       September 30,December 31,
                                                              1997        1996
                                                          ---------    --------
<S>                                                    <C>             <C> 
                          ASSETS
Cash and due from banks ...............................   $   8,187       9,896
Interest-bearing deposits in banks ....................       1,873       3,603
Federal funds sold ....................................           0       2,985
                                                          ---------    --------
   Cash and cash equivalents ..........................      10,060      16,484
                                                          ---------    --------
Investment securities:
   Available for sale .................................      24,938      26,483
   Held to maturity ...................................      22,320      27,705
Loans .................................................     139,403     118,045
Less:
   Unearned discount ..................................        (853)       (629)
   Allowance for loan losses ..........................      (1,740)     (1,491)
                                                          ---------    --------
      Net loans .......................................     136,810     115,925
                                                          ---------    --------
Loan pool participations ..............................      47,243      50,687
Premises and equipment, net ...........................       3,299       3,102
Accrued interest receivable ...........................       3,402       2,518
Other assets ..........................................       2,398       2,152
Goodwill ..............................................       6,320       6,795
                                                          ---------    --------
     Total assets .....................................   $ 256,790     251,851
                                                          ---------    --------
                                                          ---------    --------

   LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
   Demand .............................................   $  17,667      19,353
   NOW and Super NOW ..................................      31,517      33,124
   Savings ............................................      62,352      57,831
   Certificates of deposit ............................      93,615      96,644
                                                          ---------    --------
         Total deposits ...............................     205,151     206,952
Federal funds purchased ...............................         300           0
Note payable ..........................................      12,800       8,500
Other liabilities .....................................       3,060       2,156
                                                          ---------    --------
         Total liabilities ............................     221,311     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, 112,050 shares
         as of September 30, 1997, and 55,000
         shares as of December 31, 1996 ...............      (2,278)       (853)
   Retained earnings ..................................      18,461      15,926
Unrealized gain (loss) on investments
   available for sale .................................          86         (40)
                                                          ---------    --------
         Total shareholders' equity ...................      35,479      34,243
                                                          ---------    --------
         Total liabilities and shareholders'
            equity ....................................   $ 256,790     251,851
                                                          ---------    --------
                                                          ---------    --------
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>



PART I -- Item 1. Financial Statements, continued.
<TABLE>
<CAPTION>

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) ..................................             Nine Months Ended
(dollars in thousands)...................                     September 30,
                                                             1997       1996
                                                          --------    -------
<S>                                                       <C>         <C>  
Cash flows from operating activities:
   Net income ...........................................   $  3,851      3,369
                                                            --------    -------
   Adjustments to reconcile net income
         to net cash provided by operating
         activities:
         Depreciation and amortization .................         838        654
         Provision for loan losses ......................        313        320
         Investment securities losses ...................          8         68
         (Gain) loss on sale of bank premises
            and equipment ..............................          16          7
         Amortization of investment securities
            premiums .....................................       176        240
         Accretion of investment securities and
            loan discounts ...............................      (398)      (259)
         Decrease (increase) in other assets .............    (1,129)      (274)
         Increase in other liabilities ...................       822      1,288
                                                            --------    -------
            Total adjustments ............................       646      2,044
                                                            --------    -------
            Net cash provided by operating
                  activities .............................     4,497      5,413
                                                            --------    -------

Cash flows from investing activities: Investment securities available for sale:
         Proceeds from sales ...........................         994      5,027
         Proceeds from maturities .......................      6,755      3,135
         Purchases ......................................     (6,038)   (21,195)
   Investment securities held to maturity:
         Proceeds from maturities .......................      5,904      5,177
         Purchases ......................................       (647)    (5,599)
   Purchases of loan pool participations ................    (12,775)   (29,410)
   Principal recovery on loan pool
         participations .................................     16,218     15,479
   Net increase in loans ................................    (20,813)   (16,915)
   Purchases of bank premises and equipment ............        (583)      (560)
   Proceeds from sale of bank premises
         and equipment ....................................        7          1
   Proceeds from branch acquisition .......................        0     14,246
                                                             --------    -------
         Net cash used in investing activities               (10,978)   (30,614)

Cash flows from financing actitivies:
   Net (decrease) increase in deposits ..................     (1,801)    10,860
   Net increase in federal funds purchased .............         300          0
   Advances on note payable ...............................    8,900     11,125
   Principal payments on note payable .....................   (4,600)    (2,700)
   Dividends paid ........................................    (1,316)    (1,232)
   Purchases of treasury stock ............................   (1,610)      (622)
   Proceeds from stock issued .............................      184          0
                                                            --------    -------
         Net cash (used in) provided by
           financing activities ...........................      57     17,431
                                                            --------    -------
         Net decrease in cash and cash
           equivalents ....................................  (6,424)    (7,770)


<PAGE>



Cash and cash equivalents at beginning
   of period ..............................................  16,484     20,821
                                                           --------    -------
Cash and cash equivalents at end of
   period .............................................    $ 10,060     13,051
                                                           --------    -------
                                                           --------    -------
Supplemental disclosures of cash flow information:
   Cash paid during the period for:
         Interest .......................................  $  6,884      6,086
                                                           --------    -------
                                                           --------    -------
         Income taxes ..................................   $  1,964      1,591
                                                           --------    -------
                                                           --------    -------
</TABLE>

See accompanying notes to consolidated financial statements.



<PAGE>



PART I -- Item 1. Financial Statements, continued.
<TABLE>
<CAPTION>

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars in thousands,                   Three Months Ended  Nine Months Ended
 except per share)                          September 30,       September 30,
                                            1997      1996     1997     1996
                                            ----      ----     ----     ----
<S>                                      <C>        <C>       <C>      <C>
Interest income:
Interest and fees on loans                $ 3,195     2,759    8,913    7,428
Interest and discount on
  loan pools                                2,128     2,375    6,545    6,230
Interest on bank deposits                      22        92       78      204
Interest on federal funds sold                  2         7       63       83
Interest on investment securities:
  Available for sale                          413       377    1,310      931
  Held to maturity                            295       401      973    1,235
                                           -------   -------  -------  ------
    Total interest income                   6,055     6,011   17,882   16,111
                                           -------   -------  -------  ------

Interest expense:
Interest on deposits:
   NOW and Super NOW                          168       163      501      443
   Savings                                    574       555    1,679    1,484
   Certificates of deposit                  1,358     1,329    4,042    3,514
Interest on federal funds
   purchased                                   20        37       31       41
Interest on note payable                      219       292      587      714
                                            ------   ------  -------    -----
   Total interest expense                   2,339     2,376    6,840    6,196
                                            ------   ------  -------    -----
   Net interest income                      3,716     3,635   11,042    9,915
   Provision for loan losses                  146       208      313      320
                                            ------   ------  -------    -----
         Net interest income after
           provision for loan losses        3,570     3,427   10,729    9,595
                                            ------   ------  -------    -----

Noninterest income:
Service charges                               311       257      846      658
Data processing income                         49        57      163      173
Other operating income                        112       103      324      304
Investment security losses                      0       (56)      (8)     (68)
                                            ------    ------   ------   ------
   Total noninterest income                   472       361    1,325    1,067
                                            ------    ------   ------   ------

Noninterest expense:
Salaries and employee benefits
   expense                                  1,038       957    2,987    2,616
Net occupancy expense                         318       241      905      747
FDIC assessment                                12       237       30      281
Professional fees                             163       115      352      365
Other operating expense                       432       408    1,328    1,167
Goodwill amortization                         158       151      475      353
                                            ------   ------    ------   -----
   Total noninterest expense                2,121     2,109    6,077    5,529
                                            ------   ------    ------   -----
   Income before income tax
         expense                            1,921     1,679    5,977    5,133
Income tax expense                            675       578    2,126    1,764

         Net income                      $  1,246     1,101    3,851    3,369
                                         --------    ------    ------   -----
                                         --------    ------    ------   -----

Earnings per common share                $   0.57    0.5000     1.75   1.5000
Dividends per common share               $   0.20    0.1825     0.60   0.5475
</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.       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 September 30, 1997, and the results
         of  operations  for the three and nine months ended  September 30, 1997
         and 1996, and changes in cash flows for the nine months ended September
         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  nine  months  ended
         September  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.

4.       Earnings Per Common Share

         Earnings  per  common  share  computations  are  based on the  weighted
         average number of shares of common stock outstanding


<PAGE>



         during  the  period.  The  weighted  average  number of shares  for the
         three-month periods ended September 30, 1997 and 1996 was 2,172,572 and
         2,239,452,  respectively. The weighted average number of shares for the
         nine-month  periods ended September 30, 1997 and 1996 was 2,196,954 and
         2,252,407, respectively.



<PAGE>



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

                      THREE MONTHS ENDED SEPTEMBER 30, 1997

Net income for the Company was  $1,246,000  for the quarter ended  September 30,
1997,  which is an increase of 13% compared with $1,101,000 for the three months
ended September 30, 1996.  Earnings per share for the third quarter of 1997 were
$.57  compared  with  $.50 per share for the  third  quarter  of 1996.  Weighted
average shares outstanding were 2,172,572 and 2,239,452 for the third quarter of
1997 and 1996,  respectively.  Return on average  assets for the  quarter  ended
September  30,  1997 was 1.94%  compared  with a return of 1.72% for the quarter
ended  September 30, 1996.  The Company had a return on average equity of 13.94%
for the three months ended September 30, 1997 versus 12.84% for the three months
ended September 30, 1996.

RESULTS OF OPERATIONS

Net Interest Income

Net interest  income for the quarter ended  September  30, 1997  increased 2% to
$3,716,000  from  $3,635,000 for the three months ended September 30, 1996. This
was mainly due to increased  interest income earned on higher loan volumes which
was partially offset by a decrease in the amount of interest income and discount
recovery on loan pool  investments.  The  Company's  overall  loan  volumes were
higher in the third quarter of 1997 due to increased  loan  originations  in the
current and prior periods which  contributed to the increased  interest  income.
Total  interest  income  increased  $44,000  (1%) in the third  quarter  of 1997
compared with the same period in 1996. The Company's total interest  expense for
the quarter  decreased $37,000 (2%) compared with the same period in 1996 mainly
due to a reduced level of notes payable. The Company's net interest margin (on a
federal  tax-equivalent  basis) for the third quarter of 1997 increased to 6.36%
from 6.27% in the third quarter of 1996.  The overall yield on  interest-earning
assets  increased  slightly to 10.32% for the third  quarter of 1997 compared to
10.30% for the third quarter of 1996. The rate on  interest-bearing  liabilities
decreased  to 4.66% for the third  quarter  of 1997  versus  4.70% for the third
quarter of 1996.

Interest income and fees on loans increased  $436,000 (16%) in the third quarter
of 1997 compared to the same period in 1996 due to higher loan volumes.  Average
loans outstanding increased to $135,375,000 for the three months ended September
30, 1997 compared with  $116,052,000  for the third quarter of 1996, an increase
of $19,323,000 (17%). The majority of the average loan volume growth occurred in
agricultural  and commercial  loans at Mahaska State Bank ("MSB") and at Central
Valley Bank ("CVB").  On-Site Credit Services, Inc. ("On-Site") also experienced
an increase in lease volumes.  The average yield on loans decreased to 9.36% for
the


<PAGE>



third quarter of 1997,  down from 9.46% for the three months ended September 30,
1996.

The revenue  from loan pool  investments  declined in the third  quarter of 1997
compared to the same period in 1996.  Interest income and discount  collected on
the  loan  pools  decreased  $247,000  (10%)  in the  third  quarter  of 1997 to
$2,128,000  compared with  $2,375,000  earned in the third quarter of 1996.  The
yield on loan pool investments increased to 17.38% for the third quarter of 1997
compared  with  16.28% for the  quarter  ended  September  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 $9,443,000 (16%) lower in
the third quarter of 1997 than in the third quarter of 1996.

Interest income on investment  securities  available for sale increased  $36,000
(9%) for the third  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".  Interest  income on  investment  securities  held to
maturity has declined  $106,000  (26%) for the third quarter of 1997 compared to
the  third  quarter  of 1996 as the funds  from  maturing  securities  that were
classified as held to maturity have been primarily used to fund loan growth.

Interest  expense for the third quarter of 1997 decreased  $37,000 (2%) compared
with the  third  quarter  of 1996  mainly  as a result  of a  decrease  in total
interest-bearing  liabilities.  Average interest-bearing  deposits for the third
quarter of 1997 increased  $1,414,000 (1%) from the same period in 1996 with the
greatest  increase  occurring in the time deposit category.  Average  short-term
borrowings  decreased  during the third quarter of 1997 by  $2,969,000  compared
with the third quarter of 1996, with a resultant decrease in interest expense on
these funds. Interest rates on interest-bearing liabilities in the third quarter
of 1997  were  marginally  higher  when  compared  with the  rates for the third
quarter of 1996, with the exception of the rate on other short-term  borrowings,
which was lower.

Provision for Loan Losses

The  Company's  provision for loan loss expense in the third quarter of 1997 was
$62,000  (30%) lower than in the third  quarter of 1996.  The provision for loan
loss  expense in the third  quarter of 1996 was  substantially  greater  than in
prior  periods  of 1996 as an  additional  provision  was taken to  reserve  for
anticipated losses at On-Site Credit Services.

Other Income

Total noninterest  income increased  $111,000 (30%) in the third quarter of 1997
compared with 1996, mainly due to higher service


<PAGE>



charge and fee income at both  Mahaska  State Bank and  Central  Valley Bank (up
$53,000) and  investment  security  losses of $56,000  recorded by Mahaska State
Bank in the third quarter of 1996.

Other Expense

Total  noninterest  expense for the quarter ended  September 30, 1997  increased
$11,000  (1%)  compared to  noninterest  expense for the third  quarter of 1996.
Salaries and benefits  expense for the third quarter of 1997  increased  $82,000
(9%) over the third  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
third  quarter of 1997  increased  $76,000 in comparison to the third 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 third  quarter of 1997
decreased by $225,000  compared  with the third quarter of 1996  reflecting  the
reduced  assessment  rate paid by MSB and 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
minimally  in the third  quarter of 1997 versus 1996 due to the  constant  yield
method of amortization of goodwill.

Income Tax Expense

Income tax expense for the three months  ended  September  30,  1997,  increased
$96,000  compared to the amount for the three months ended  September  30, 1996,
primarily  due to an increase in the amount of income  before tax and a decrease
in the amount of tax-exempt income for the 1997 period. The amount of tax-exempt
municipal bond income declined $23,000 for the quarter ended September 30, 1997,
compared  with the same period in 1996 mainly due to a decrease in the volume of
municipal  bonds.  The  effective  income  tax rate rose  slightly  in the third
quarter of 1997 to 35.14% compared with 34.45% in the third quarter of 1996.

                      NINE MONTHS ENDED SEPTEMBER 30, 1997

The Company earned net income of $3,851,000 for the nine months ended  September
30, 1997.  This is an increase of $482,000  (14%)  compared with the  $3,369,000
earned by the Company  during the first nine months of 1996.  On an earnings per
share basis, the Company earned $1.75 for the first nine months of 1997 compared
with  $1.50  for  the  first  nine  months  of  1996.  Weighted  average  shares
outstanding  declined  slightly to 2,196,954  for the first nine months of 1997,
compared to an average of  2,252,407  for the nine months  ended  September  30,
1996. The return on average  assets  improved to 2.04% for the nine months ended
September 30, 1997, up from 2.00% for the nine-month  period ended September 30,
1996.  Return on average equity rose to 14.67% for the first nine months of 1997
compared with 13.66% for the same period of 1996.



<PAGE>



RESULTS OF OPERATIONS

Net Interest Income

For the nine months ended  September  30, 1997,  net interest  income  increased
$1,127,000 (11%) to $11,042,000 compared to $9,915,000 for the first nine months
of 1996.  This increase was primarily  due to  additional  interest  income from
increased loan volumes in 1997 compared to 1996, which were offset,  in part, by
higher interest  expense  resulting from an increased level of deposits in 1997.
The  Company's  net interest  margin for the first nine months of 1997  declined
slightly to 6.43% compared with 6.48% for the first nine months of 1996.

Total  interest  income on loans  increased 20% in the first nine months of 1997
compared  with the same  period  in 1996  primarily  as a result  of the  higher
average loan volumes  outstanding  during 1997. Average loans for the first nine
months of 1997 totaled  $127,776,000  compared with  $101,130,000  for the first
nine  months  of 1996.  The  average  rate on loans  for the nine  months  ended
September 30, 1997 declined to 9.33%,  down from 9.81% for the first nine months
of 1996.

Interest  income and discount  collected on the Company's loan pool  investments
increased $315,000 (5%) for the nine months of 1997 in comparison with the first
nine months of 1996. The overall yield on loan pool investments rose slightly to
17.80% for the first nine months of 1997, up from 17.16% in the 1996  comparable
period.  The loan pool investment  balance averaged  $49,166,000 during the nine
months ended September 30, 1997,  compared with  $48,484,000 for the same period
in 1996.

The interest income on securities available for sale for the nine months of 1997
increased  $379,000  (41%) compared with that earned in the first nine months of
1996 due to the increases in average volume.  Interest income on securities held
to maturity  declined $262,000 (21%) as the level of securities in this category
decreased with maturities.

Total interest expense for the Company increased by $644,000 (10%) for the first
nine months 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  decreased  to 4.63% for the 1997 period,
compared with 4.74% in the first nine months of 1996.

Other Income

Noninterest  income increased $257,000 (24%) in 1997 compared with 1996. Deposit
service charges and fees and rental income increased $187,000 (28%) in 1997 over
1996  partially  due to  growth  at CVB  and  also  due to  higher  fees at MSB.
Investment  security  losses  taken by MSB during 1997 were $60,000 less than in
the first nine months of 1996.


<PAGE>



Other Expense

For the  nine-month  period  ended  September  30,  1997,  total  other  expense
increased  by $548,000  (10%) in  comparison  with that  incurred  during  1996.
Salaries and benefits rose by $371,000 (14%) reflecting an increase in number of
employees  both as a result of the CVB  acquisition  of the Sigourney  Boatmen's
office  and as On- Site has  expanded  its  operations.  Net  occupancy  expense
increased $158,000 (21%) mainly due to the additional  Sigourney facility costs.
The FDIC  assessment  declined  $251,000 (89%) in 1997 compared with 1996 due to
the one-time  SAIF  assessment in the third quarter of 1996 and the reduction in
rates in 1997. Professional fees were reduced by $13,000 (4%) as the Company did
not incur  the legal and  accounting  costs  associated  with the CVB  Sigourney
acquisition in 1997 that were  experienced  in 1996.  Other  operating  expenses
increased  $161,000  (14%)  in  1997 as the  On-Site  and  CVB  operations  have
expanded.  Goodwill  amortization  increased  $122,000  (35%) in the first  nine
months  of 1997  compared  with  the same  period  in  1996,  all of  which  was
attributable to the bank office acquisition by CVB.

Income Tax Expense

Year-to-date  income tax expense was $362,000 (21%) higher in 1997 compared with
the first nine months of 1996 due to the overall increase in income before taxes
and also due to the reduced level of tax-exempt  interest income.  The Company's
effective  income tax rate for the nine  months  ended  September  30,  1997 was
35.57% compared with 34.37% in 1996.  Tax-exempt income in 1997 was $56,000 less
in 1997 than in 1996.

FINANCIAL CONDITION

The  Company's  total  assets as of  September  30, 1997 were  $256,790,000,  an
increase of $4,939,000  (2%) from  December 31, 1996.  Total  deposits  declined
$1,801,000  (1%) during this time period with the decreases  noted in the demand
deposit,  NOW  accounts and time  certificates  of  deposits.  Savings  accounts
(including  money market accounts)  increased  $4,701,000 (8%) from December 31,
1996. The Company had no federal funds sold on September 30, 1997, compared with
funds sold of $2,985,000 on December 31, 1996. As of September 30, 1997, federal
funds purchased were $300,000.  Total notes payable  increased to $12,800,000 on
September 30, 1997 from  $8,500,000 on December 31, 1996 as CVB and MSB borrowed
funds from the Federal Home Loan Bank and the Company borrowed  additional funds
to provide funding to On-Site for its activities.

Loan Pool Participations

As  of  September  30,  1997,   the  Company  had   investments   in  loan  pool
participations of $47,243,000,  which was down $3,443,000 (7%) from the December
31, 1996 balance of  $50,687,000.  For the nine months ended September 30, 1997,
the Company  invested  $12,775,000  in loan pool  purchases.  During the quarter
ended September 30, 1997, the


<PAGE>



Company  purchased  $4,134,000  in loan pool  participations.  Average loan pool
participation  investments declined to $48,588,000 for the third quarter of 1997
from $58,031,000 for the third quarter of 1996. The Company continued to explore
numerous loan pool  investment  opportunities  throughout  the nine months ended
September 30, 1997.  Due diligence was performed on various pools offered by the
FDIC and private  sellers.  The Company placed numerous bids during this period.
The Company intends to continue to explore purchase  opportunities  and plans to
remain an active bidder.

Loans

Loan volumes  continued to increase,  with total loans as of September  30, 1997
reflecting  growth of  $21,358,000  (18%) from  December 31, 1996.  Most of this
growth  was in the  commercial,  and  agricultural  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.  The Company's  ratio of total loans  (excluding  loan pools) to total
deposits  increased to 67.54% as of September 30, 1997,  compared with 56.74% as
of December 31, 1996.

Nonperforming Loans

The Company's  nonperforming  loans totaled $1,424,000 (1.03% of total loans) as
of  September  30,  1997,  compared to  $2,102,000  (1.79% of total loans) as of
December 31, 1996. This is a decrease of 32% from December 31, 1996 to September
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 September 30, 1997:
<TABLE>
<CAPTION>

                               Nonperforming Loans
                             (dollars in thousands)
                               September 30, 1997
     <S>                                                  <C>
     90 days past due                                     $  309
     Renegotiated                                            384
     Nonaccrual                                              719
     Other real estate owned                                  12
                                                           ------
                                                          $1,424
</TABLE>

From  December  31,  1996 to  September  30,  1997,  loans  ninety days past due
decreased  $317,000,  restructured  and  renegotiated  loans  increased  $5,000,
nonaccrual  loans  decreased  $365,000,  and other real  estate  owned  remained
unchanged.  The Company's allowance for loan losses as of September 30, 1997 was
$1,740,000,  which was 1.26% 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 September  30, 1997,  the allowance for loan losses
was 122.13% of nonperforming loans compared with 70.91% as of December 31, 1996.
Management  believes that as of September 30, 1997 the allowance for loan losses
is


<PAGE>



adequate.  For the three months ended September 30, 1997, the Company recognized
a net loan  charged-off  of $25,000  compared  with a net  charge-off of $28,000
during the quarter ended September 30, 1996. The Company  experienced a net loan
charge-off  of $63,000  for the first nine  months of 1997  compared  with a net
charge-off of loans totaling $44,000 for the first nine months of 1996.

Capital Resources

As of September 30, 1997,  total  shareholders'  equity as a percentage of total
assets was 13.82% compared with 13.60% as of December 31, 1996. The Company held
112,050  shares of treasury  stock at a cost of  $2,278,000  as of September 30,
1997.  These shares were  repurchased in order to satisfy  options granted under
the Company's Stock Incentive  Plan. The Company  repurchased  8,500 shares at a
cost of $233,750  (average cost of $27.50 per share) during the third quarter of
1997.  The  Company  reissued  1,833  shares of treasury  stock as options  were
exercised.  Under risk- based capital  rules,  the  Company's  total capital was
15.51% of  risk-weighted  assets as of  September  30,  1997,  and was 16.23% of
risk-weighted  assets as of December  31,  1996,  compared  to an 8.00%  minimum
requirement.

The Company has paid to shareholders a cash dividend of $.20 per share in March,
June and September of 1997.  This is an increase of 10% in  comparison  with the
quarterly  dividend  of $.1825 paid to  shareholders  in each of the first three
quarters  of  1996.  The  year-to-date  1997  dividend  paid of $.60  per  share
represents  34.29% of year-to-date  earnings per share.  This percentage is down
slightly from the 36.50% of net income through  September 30, 1996 that was paid
to shareholders.

On September 22, 1997, the Company's board of directors declared a 5 for 3 stock
dividend  payable on November 10, 1997, to  shareholders of record as of October
20, 1997. This will increase the number of shares outstanding to 3,620,760.

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
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
$10,060,000 as of September 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


<PAGE>



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 September 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 sometime in the fourth quarter of
1997,  subject to federal and state  regulatory  approval.  As of September  30,
1997,  the  Company had  received  approval  from the Iowa  Division of Banking.
Approval  from the Federal  Reserve  Bank of Chicago was received on October 10,
1997.  Following  receipt of approval  from the FDIC and the  completion  of its
facility, the Pella State Bank will open for business.

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.

"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.


<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
                           19, 1997. (e)

         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.

         27                Financial Data Schedule.




<PAGE>



         (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.

         (e)               Incorporated by reference to the Form 10-Q for the
                           quarter ended June 30, 1997 filed by Mahaska
                           Investment Company.

(b)      Reports on Form 8-K -- No  reports  on Form 8-K were  filed  during the
         three months ended September 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)



November 12, 1997                       /s/ Charles S. Howard
Dated                                   Charles S. Howard
                                        President



November 12, 1997                       /s/ David A. Meinert
Dated                                   David A. Meinert
                                        Executive Vice President and
                                        Chief Financial Officer
                                        (Principal Accounting Officer)




<PAGE>


                                   Exhibit 11

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

<TABLE>
<CAPTION>
                                    Three Months Ended       Nine Months Ended
                                      September 30,            September 30,
                                    1997        1996         1997        1996
<S>                              <C>          <C>          <C>        <C>
Earnings per Share
information:

Weighted average number
of shares outstanding
during period                     2,172,572   2,239,452    2,196,954  2,252,407

Net earnings                     $1,245,908   1,101,103    3,851,381  3,369,196

Earnings per share               $     0.57        0.50         1.75       1.50

</TABLE>




<PAGE>