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, 2000                                              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 (641) 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 October 31, 2000, there were 3,939,314 shares of common stock $5 par value
outstanding.

<PAGE>
                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
(unaudited)
(dollars in thousands, except
for share amounts)                             September  30,      December 31,
                                                   2000                1999
                                              ---------------     --------------
<S>                                           <C>                 <C>
                        ASSETS

Cash and due from banks ......................       $   9,087        $  13,354
Interest-bearing deposits in banks ...........           1,899            1,700
Federal funds sold ...........................           1,260            7,865
                                                     ---------        ---------
   Cash and cash equivalents .................          12,246           22,919
                                                     ---------        ---------
Investment securities:
   Available for sale ........................          62,106           60,530
   Held to maturity ..........................          26,902           29,445
Loans ........................................         315,932          282,091
Allowance for loan losses ....................          (3,325)          (4,006)
                                                     ---------        ---------
   Net loans .................................         312,607          278,085
                                                     ---------        ---------
Loan pool participations .....................          57,769           67,756
Premises and equipment, net ..................           6,966            6,795
Accrued interest receivable ..................           5,400            4,719
Goodwill and other intangible assets .........          12,006           12,850
Other assets .................................           4,675            3,090
                                                     ---------        ---------
     Total assets ............................       $ 500,677        $ 486,189
                                                     =========        =========

      LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:
   Demand ..........................................   $  23,937    $  23,197
   NOW and Super NOW ...............................      45,222       42,378
   Savings .........................................      89,654       96,377
   Certificates of deposit .........................     200,282      186,720
                                                       ---------    ---------
     Total deposits ................................     359,095      348,672
Federal funds purchased ............................       1,900        2,965
Federal Home Loan Bank advances ....................      72,018       63,421
Note payable .......................................      14,700       18,000
Other liabilities ..................................       4,693        2,896
                                                       ---------    ---------
     Total liabilities .............................     452,406      435,954
                                                       ---------    ---------
Shareholders' equity:
   Common stock, $5 par value; authorized 20,000,000
     shares; issued 4,912,849 shares as of
     September 30, 2000 and December 31, 1999 ......      24,564       24,564
   Capital surplus .................................      13,127       13,192
   Treasury stock at cost, 973,535 shares as of
     September 30, 2000, and 577,735 shares as
     of December 31, 1999 ..........................     (11,869)      (8,525)
   Retained earnings ...............................      22,703       21,511
   Accumulated other comprehensive loss ............        (254)        (507)
                                                       ---------    ---------
     Total shareholders' equity ....................      48,271       50,235
                                                       ---------    ---------
     Total liabilities and shareholders' equity ....   $ 500,677    $ 486,189
                                                       =========    =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PART I -- Item 1. Financial Statements, Continued

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
(unaudited)                               Three Months Ended  Nine Months Ended
(dollars in thousands,                       September 30,       September 30,
except per share)                         ------------------- ------------------
                                           2000        1999     2000       1999
                                          --------   -------- --------  --------
<S>                                       <C>        <C>      <C>       <C>
Interest income:
   Interest and fees on loans            $ 6,634     $ 4,090  $18,669    $11,855
   Interest and discount on loan pools     1,704       2,162    5,612      5,710
   Interest on bank deposits                  25           2       84         53
   Interest on federal funds sold             14           4      141        178
   Interest on investment securities:
     Available for sale                    1,067         404    3,175      1,277
     Held to maturity                        441         166    1,346        533
                                          --------   -------- --------  --------
        Total interest income              9,885       6,828   29,027     19,606
                                          --------   -------- --------  --------
Interest expense:
  Interest on deposits:
     NOW and Super NOW                       194         149      579        445
     Savings                                 948         689    2,832      1,901
     Certificates of deposit               2,754       1,510    7,756      4,649
   Interest on federal funds purchased        96          57      176         61
   Interest on Federal Home Loan Bank
     advances                              1,209         134    3,275        351
   Interest on note payable                  353         295    1,063        894
                                          --------   -------- --------  --------
        Total interest expense             5,554       2,834   15,681      8,301
                                          --------   -------- --------  --------
        Net interest income                4,331       3,994   13,346     11,305
Provision for loan losses                    319         462      740      2,094
                                          --------   -------- --------  --------
        Net interest income after
          provision for loan losses        4,012       3,532   12,606      9,211
                                          --------   -------- --------  --------
Noninterest income:
   Service charges                           498         318    1,322        935
   Data processing income                     22          52      131        153
   Other operating income                     70          70      378        294
   Investment security gains                   0           0       17          0
                                          --------   -------- --------  --------
        Total noninterest income             590         440    1,848      1,382
                                          --------   -------- --------  --------
Noninterest expense:
   Salaries and employee benefits expense  1,641       1,239    4,872      3,830
   Net occupancy expense                     398         363    1,267      1,062
   Professional fees                         131          63      445        488
   Other operating expense                   810         464    2,534      1,729
   Goodwill amortization                     281         134      844        422
                                          --------   -------- --------  --------
        Total noninterest expense          3,261       2,263    9,962      7,531
                                          --------   -------- --------  --------
        Income before income tax expense   1,341       1,709    4,492      3,062
Income tax expense                           414         622    1,481      1,137
                                          --------   -------- --------  --------
        Net income                       $   927    $  1,087  $ 3,011   $  1,925
                                          ========   ======== ========  ========

Earnings per common share - basic        $  0.24    $   0.30  $  0.74   $   0.53
Earnings per common share - diluted      $  0.24    $   0.29  $  0.74   $   0.51
Dividends per common share               $  0.15    $   0.15  $  0.45   $   0.45
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>

PART I -- Item 1. Financial Statements, Continued

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
(unaudited)                         Three Months Ended        Nine Months Ended
(in thousands)                        September 30,              September 30,
                                   ---------------------   ---------------------
                                    2000          1999       2000         1999
                                   ---------  ----------   ----------  ---------
<S>                                <C>        <C>           <C>        <C>

Net income......................... $  927    $  1,087      $  3,011   $  1,925
Other Comprehensive Income:
   Unrealized gains (losses) on
      securities available for
      sale:
        Unrealized holding gains
        (losses) arising during
        the period, net of tax......   442         (64)          266       (341)

      Less: reclassification
        adjustment for net (gains)
        losses included in net
        income, net of tax.........      0           0           (13)         0
                                   ---------  ----------   ----------  ---------
Other comprehensive income
  (loss), net of tax...............    442         (64)          253       (341)
                                  ----------  ----------   ----------  ---------
Comprehensive income.............. $ 1,369    $  1,023       $ 3,264  $   1,584
                                  ==========  ==========   ==========  =========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

PART I -- Item 1. Financial Statements, Continued

                           MAHASKA INVESTMENT COMPANY
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(unaudited)                                                Nine Months Ended
(dollars in thousands)                                       September 30,
                                                      -------------------------
                                                           2000        1999
                                                      -----------   -----------
<S>                                                   <C>           <C>
Cash flows from operating activities:
   Net income .......................................   $  3,011      $   1,925
                                                      -----------   -----------
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization ..................      1,304            912
     Provision for loan losses ......................        740          2,094
     Investment securities gains ....................        (17)             0
     (Gain) loss on sale of premises and
        equipment ...................................         (8)             4
     Amortization of investment securities
        premiums ....................................        190            144
     Accretion of investment securities and loan
        discounts ...................................       (167)          (369)
     Increase in other assets .......................     (2,266)          (729)
     Increase (decrease) in other liabilities .......      1,642             (3)
                                                      -----------  ------------
        Total adjustments ...........................      1,418          2,053
                                                      -----------  ------------
        Net cash provided by operating activities ...      4,429          3,978
                                                      -----------  ------------
Cash flows from investing activities:
   Investment securities available for sale:
     Proceeds from sales ............................      8,039              0
     Proceeds from maturities .......................      3,901          9,024
     Purchases ......................................    (13,028)        (7,177)
   Investment securities held to maturity:
     Proceeds from maturities .......................      5,412          3,606
     Purchases ......................................     (2,811)        (2,221)
   Net increase in loans ............................    (35,196)       (20,924)
   Purchases of loan pool participations ............    (16,616)       (31,670)
   Principal recovery on loan pool participations ...     26,603         20,252
   Purchases of premises and equipment ..............       (805)          (318)
   Proceeds from sale of premises and equipment .....         44              0
   Proceeds from acquisition ........................          0          3,403
                                                      -----------  ------------
        Net cash used in investing activities .......    (24,457)       (26,025)
                                                      -----------  ------------
Cash flows from financing activities:
   Net increase in deposits .........................     10,495          1,846
   Net (decrease) increase in federal funds
        purchased ...................................     (1,065)         8,665
   Federal Home Loan Bank advances ..................     36,000          3,500
   Repayment of Federal Home Loan Bank advances .....    (27,547)           (24)
   Advances on note payable .........................      1,900          3,300
   Principal payments on note payable ...............     (5,200)        (4,050)
   Dividends paid ...................................     (1,819)        (1,644)
   Purchases of treasury stock ......................     (3,433)             0
   Proceeds from exercise of stock options ..........         24            373
                                                      -----------  ------------
        Net cash provided by financing activities ...      9,355         11,966
                                                      -----------  ------------
        Net decrease in cash and cash equivalents ...    (10,673)       (10,081)
Cash and cash equivalents at beginning of period ....     22,919         22,121
                                                      -----------  ------------
Cash and cash equivalents at end of period ..........   $ 12,246    $    12,040
                                                      ===========  ============
Supplemental disclosures of cash flow information:
   Cash paid during the period for:
     Interest .......................................   $ 15,348    $     8,359
                                                      ===========  ============
     Income taxes ...................................   $    719    $     1,378
                                                      ===========  ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PART I -- Item 1. Financial Statements, Continued

                           MAHASKA INVESTMENT COMPANY

                   Notes to Consolidated Financial Statements
                                  (Unaudited)

1.   Basis of Presentation

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

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

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

2.   Consolidated Statements of Cash Flows

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

3.   Income Taxes

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

4.   Earnings Per Common Share

     Basic  earnings  per common  share  computations  are based on the weighted
     average  number of shares of common stock actually  outstanding  during the
     period.  The weighted average number of shares for the three-month  periods
     ended   September  30,  2000  and  1999  was   3,936,514   and   3,679,991,
     respectively.  The  weighted  average  number of shares for the  nine-month
     periods ended  September 30,  2000 and 1999 was  4,088,756  and  3,656,397,
     respectively.  Diluted  earnings per share amounts are computed by dividing
     net  income by the  weighted  average  number of  shares  and all  dilutive
     potential shares  outstanding during the period. The computation of diluted
     earnings per share used a weighted average number of shares  outstanding of
     3,937,973 and  3,768,483 for the three months ended  September 30, 2000 and
     1999, respectively.  For the nine months ended September 30, 2000 and 1999,
     the diluted  earnings per share  computation was based on weighted  average
     number of shares outstanding of 4,094,497 and 3,751,594, respectively.

5.   Effect of New Financial Accounting Standards

     SFAS  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
     Activities,"  and SFAS No. 137, an amendment to SFAS 133, will be effective
     for the Company beginning January 1, 2001. Management believes the adoption
     of SFAS 133 and SFAS 137 will not have a material  impact on the  Company's
     consolidated  financial  statements.  The Company expects to adopt SFAS 133
     and 137 when required.

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

6.   Use of Estimates in the Preparation of Financial Statements

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

7.   Sale of MIC Financial, Inc.

     On April 23,  1999,  the  Company  announced  that it had elected to seek a
     buyer for MIC Financial,  Inc.  (formerly known as On-Site Credit Services,
     Inc.), its wholly-owned commercial finance subsidiary.  The Company has now
     sold a  significant  amount of the  assets in several  transactions.  As of
     September  30,  2000,  MIC  Financial's  loan and lease  portfolio  totaled
     $2,129,000, approximately 1 percent of the Company's total loans as of that
     date.

8.   Acquisition of Midwest Bancshares, Inc.

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

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

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

                        QUARTER ENDED SEPTEMBER 30, 2000

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

The Company  recorded net income of $927,000 for the quarter ended September 30,
2000,  compared  with net  income  of  $1,087,000  for the  three  months  ended
September 30, 1999, a net decrease of $160,000.  Basic and diluted  earnings per
share for the third quarter of 2000 were $.24 versus basic  earnings of $.30 per
share for the third quarter of 1999 and diluted earnings per share of $.29. Cash
earnings per share,  which  excludes  goodwill  amortization  (net of income tax
effect), was $.29 per share for the third quarter of 2000 compared with $.32 per
share for the third quarter of 2000. Actual weighted average shares  outstanding
were   3,936,514  and  3,679,991  for  the  third  quarter  of  2000  and  1999,
respectively.  The  issuance of  1,105,348  shares on  September  30,  1999,  to
shareholders  of MWBI as a result of the merger into the Company  increased  the
average shares outstanding in the third quarter of 2000. The Company's return on
average assets for the quarter ended September 30, 2000 was .74 percent compared
with a return of 1.41 percent for the quarter  ended  September  30,  1999.  The
Company's  return on average  equity was 7.62 percent for the three months ended
September  30,  2000  compared  with 11.24  percent for the three  months  ended
September  30, 1999.  The cash basis return on tangible  equity  (which  deducts
goodwill  and other  intangible  assets  from  shareholders'  equity)  was 12.73
percent for the third  quarter of 2000 compared with 14.00 percent for the third
quarter of 1999.


RESULTS OF OPERATIONS

Net Interest Income

Net interest income is computed by subtracting total interest expense from total
interest income. Fluctuations in net interest income can result from the changes
in the volumes of assets and  liabilities as well as changes in interest  rates.
The  additional  earning  assets  and  interest-bearing  liabilities  of Midwest
Federal  included  in the third  quarter of 2000  significantly  increased  both
interest  income on investments  and loans and interest  expense on deposits and
borrowed  funds in comparison  to the third  quarter of 1999.  The Company's net
interest income for the quarter ended  September 30, 2000 increased  $337,000 (8
percent) to $4,331,000  from $3,994,000 for the three months ended September 30,
1999. This increase was mainly due to increased interest income earned on higher
loan and investment volumes. Increased interest expense on deposits and borrowed
funds  somewhat  offset  the  higher  interest  income.  Total  interest  income
increased $3,054,000 (45 percent) in the third quarter of 2000 compared with the
same period in 1999.  Exclusive of the  additional  $3,319,000  interest  income
generated by Midwest Federal in the third quarter of 2000, total interest income
would have  decreased  by  $265,000  in  comparison  to the 1999  third  quarter
primarily  due to a  decline  in  interest  income  and  discount  on loan  pool
participations, offset by an increase in interest income on loans. The Company's
total interest  expense for the third quarter of 2000  increased  $2,716,000 (96
percent)  compared  with  the  same  period  in 1999.  Total  interest  expense,
excluding the $2,838,000  related to Midwest Federal,  increased $209,000 in the
third  quarter  of 2000  compared  with  1999,  primarily  due to higher  market
interest rates.  The Company's net interest margin (on a federal  tax-equivalent
basis) for the third  quarter of 2000  decreased to 3.89 percent  (4.28  percent
excluding  Midwest  Federal) from 5.61 percent in the third quarter of 1999. Net
interest margin is a measure of the net return on interest-earning assets and is
computed  by dividing  annualized  net  interest  income by the average of total
interest-earning  assets for the period.  The Company's overall yield on earning
assets was 8.66 percent (8.94  percent  without  Midwest  Federal) for the third
quarter of 2000 compared to 9.56 percent for the third quarter of 1999. The rate
on interest-bearing  liabilities  increased in the third quarter of 2000 to 5.25
percent  (the same  without  Midwest  Federal)  compared to 4.63 percent for the
third quarter of 1999.

Interest  income and fees on loans  (excluding  the  $2,132,000  contributed  by
Midwest  Federal)  increased  $412,000 (10 percent) in the third quarter of 2000
compared to the same  period in 1999,  mainly due to higher  loan  volumes.  The
average yield on loans exclusive of Midwest Federal declined to 8.81 percent for
the third  quarter of 2000,  compared  to 8.94  percent in the third  quarter of
1999. The average yield on loans including  Midwest Federal in the third quarter
of 2000 was 8.48 percent.  The yield on the Company's loan portfolio is effected
by the amount of nonaccrual loans (which do not earn interest  income),  the mix
of the portfolio  (real estate loans  generally  have a lower overall yield than
commercial and agricultural  loans), the effects of competition and the interest
rate  environment on the amounts and volumes of new loan  originations,  and the
mix of variable rate versus fixed rate loans in the Company's portfolio.  Recent
moves by the Federal Reserve to increase  interest rates may benefit the Company
in future  periods as  variable  rate  loans  tied to prime  have been  adjusted
upward.  Competition for loans in the market areas served by the Company remains
strong.  Average loans  outstanding  were  $311,139,000 for the third quarter of
2000  compared with  $181,547,000  for the third quarter of 1999, an increase of
$125,895,000 (73 percent).

Excluding the increase in average loan volume  attributable to Midwest  Federal,
the Company's average loans outstanding were $21,796,000 (12 percent) greater in
the third quarter of 2000 than in 1999.

Overall,  the Company  recognized  $458,000 less interest and discount income on
loan pool participations in the third quarter of 2000 compared with 1999, mainly
due to lower  collections  and a reduction in the average balance of loan pools.
Interest income and discount  collected on the loan pool  participations for the
three months ended  September 30, 2000 was $1,704,000  compared with  $2,162,000
collected in the third  quarter of 1999.  The yield on loan pool  participations
was 11.72  percent for the third quarter of 2000 compared with 13.69 percent for
the quarter  ended  September  30,  1999.  The average  loan pool  participation
investment balance was $4,814,000 (8 percent) lower in the third quarter of 2000
than in 1999 as a result of sales of assets  earlier  in the year and lower than
anticipated  purchases of new pools. Newly purchased loan pools typically do not
produce  income  for a period  of up to 120 days  from  date of  purchase  which
significantly   impacts   the  yield  on  the   investment.   These   loan  pool
participations  are pools of performing and distressed and  nonperforming  loans
that the Company has  purchased  at a discount  from the  aggregate  outstanding
principal amount of the underlying loans. Income is derived from this investment
in the form of interest  collected  and the repayment of the principal in excess
of the purchase  cost which is herein  referred to as "discount  recovery."  The
Company  recognizes  interest  income  and  discount  recovery  on its loan pool
participations on a cash basis. The loan pool  participations have traditionally
been a high-yield  activity for the Company,  but this yield has fluctuated from
period to period based on the amount of cash collections, discount recovery, and
net  collection  expenses of the  servicer in any given  period.  The income and
yield on loan pool  participations  may vary in future periods due to the volume
and discount rate on loan pools purchased.

For the  third  quarter  of  2000,  interest  income  on  investment  securities
increased $938,000 compared with the quarter ended September 30,  1999 primarily
due to the  additional  securities  held by  Midwest  Federal.  Without  Midwest
Federal,  interest income from  investment  securities was $45,000 higher in the
2000 quarter than in 1999,  generally due to increased  interest  rates on newly
acquired securities.

The $1,549,000  increase in interest expense on deposits in the third quarter of
2000 compared with 1999 was  attributable to the additional  deposits of Midwest
Federal,  generally  higher  market  interest  rates  and to  some  increase  in
deposits. Excluding the $1,201,000 deposit interest expense for Midwest Federal,
the  Company's  interest  expense  on  deposits  increased   $348,000.   Average
interest-bearing  deposits for the third quarter of 2000 increased  $113,813,000
(53 percent) from the same period in 1999.  Excluding  Midwest Federal,  average
interest-bearing  deposits were $7,015,000  greater in the third quarter of 2000
than in 1999. Interest expense on Federal Home Loan Bank advances was $1,074,000
higher in the third  quarter of 2000  compared with the same period in the prior
year  reflecting  Midwest  Federal's  utilization  of this  alternative  funding
method. Interest expense on notes payable was up $58,000 in the third quarter of
2000 compared with 1999 due to higher interest rates on the Company's commercial
bank line of credit reflecting an increased prime rate.

Provision for Loan Losses

The  Company  recorded a  provision  for loan  losses of  $320,000  in the third
quarter of 2000, of which $12,000 was recorded by Midwest Federal. MIC Financial
did not have any provision for loan losses in the third quarter of 2000.  One of
the Company's  subsidiary  banks  increased its provision for loan losses during
the period due to continued  deterioration in the financial  position of a large
agricultural  line of credit. In the third quarter of 1999, the Company recorded
a provision for loan losses of $462,000,  of which  $207,000 was recorded by MIC
Financial.   Management   determines  an  appropriate  provision  based  on  its
evaluation of the adequacy of the allowance for loan losses in relationship to a
continuing review of problem loans, the current economic conditions, actual loss
experience and industry trends.  Management believes that the allowance for loan
losses is adequate  based on the inherent  risk in the portfolio as of September
30, 2000, however, continued growth in the loan portfolio and the uncertainty of
the  agricultural  economy  require  that  management  continue to evaluate  the
adequacy of the  allowance  for loan losses and make  additional  provisions  in
future periods as deemed necessary.

Noninterest Income

Noninterest  income  results from the charges and fees  collected by the Company
from its  customers  for various  services  performed,  data  processing  income
received  from  nonaffiliated  banks,  miscellaneous  other income and gains (or
losses) from the sale of  investment  securities  held in the available for sale
category.  Total  noninterest  income was $179,000  (41 percent)  greater in the
third quarter of 2000 compared with 1999.  Excluding the contribution of Midwest
Federal of  $137,000,  most of the increase  was due to higher  service  charges
collected on nonsufficient funds checks written by bank customers.

Noninterest Expense

Total  noninterest  expense for the quarter ended  September 30, 2000  increased
$1,026,000 (45 percent) compared to noninterest expense for the third quarter of
1999.  Excluding the $980,000 expense for the operation of Midwest Federal,  the
Company's noninterest expense increased $46,000 (2 percent). Noninterest expense
includes  all the costs  incurred  to operate the  Company  except for  interest
expense, the loan loss provision and income taxes. Salaries and benefits expense
for the third  quarter of 2000  increased  $402,000 (32 percent)  over 1999 as a
result  of  $431,000  in  additional  expense  for  Midwest  Federal,  which was
partially  offset by the reduction in staff at MIC Financial.  Net occupancy and
equipment  expenses  increased $48,000 (13 percent) in the third quarter of 2000
compared to 1999. Excluding the $105,000 increase due to Midwest Federal,  third
quarter  2000 net  occupancy  expense was down $57,000 in  comparison  with 1999
mainly  reflecting lower  depreciation  expense.  Professional fees in the third
quarter of 2000 increased by $73,000 (116 percent)  compared to 1999 as a result
of increased legal and loan collection costs.  Other operating expense increased
by $319,000 (64 percent) in the third  quarter of 2000  compared  with the three
months ended  September 30, 1999.  Excluding  Midwest  Federal,  other operating
expense increased $38,000 in the 2000 period.  Goodwill  amortization  increased
$184,000 in 2000 due to the amortization of the core deposit  intangible and the
goodwill attributable to the acquisition of Midwest Federal.

Income Tax Expense

The Company  incurred  income tax expense of $414,000 for the three months ended
September 30, 2000.  For the three months ended  September 30, 1999, the Company
recorded income tax expense of $622,000  attributable  to the higher  before-tax
income.  The  effective  income tax rate as a percent of income before taxes for
the three months ended  September 30,  2000 was 31.0 percent  compared with 36.4
percent in the third quarter of 1999.  The Company's  effective  income tax rate
may vary due to the  volume  of  tax-exempt  securities  held in the  investment
portfolio.


                      NINE MONTHS ENDED SEPTEMBER 30, 2000

The Company earned $3,011,000 during the first nine months of 2000 compared with
net income of $1,925,000 in the same period of 1999. The  acquisition of Midwest
Federal was  completed on  September  30, 1999 through the issuance of 1,105,348
shares of Company stock.  In accordance with purchase  accounting  requirements,
the income and expense of Midwest is not included  with the Company for the nine
months ended September 30, 1999.  Basic and diluted earnings per share were $.74
for the nine months ended  September 30, 2000  compared with basic  earnings per
share of $.53 and diluted  earnings  per share of $.51 for the first nine months
of 1999.  Cash  earnings per share for the nine months of 2000 was $.91 compared
with $.60 for the nine months ended September 30, 1999. Actual weighted- average
shares  outstanding  in the nine  months of 2000 were  4,088,756  compared  with
3,656,397 in the 1999 period.  Weighted- average diluted shares outstanding were
4,094,497 and 3,751,594 for the nine months of 2000 and 1999, respectively.  The
return on average  assets for the nine months of 2000 was .82  percent  compared
with .85  percent  in 1999.  Return on  average  shareholders'  equity  was 8.20
percent in 2000  compared  with 6.68  percent for the nine  months of 1999.  The
Company's cash return on tangible equity for the nine months ended September 30,
2000 was 13.54 percent compared with 8.85 percent for the nine months of 1999.


RESULTS OF OPERATION

Net Interest Income

Net interest income increased  $2,042,000 in the nine months ended September 30,
2000  compared  with the same  period  in 1999  reflecting  the  additional  net
interest income  generated by Midwest Federal in 2000.  Excluding the $3,655,000
net interest  income of Midwest  Federal,  the Company's net interest income for
the nine months of 2000 was down  $1,613,000  primarily  due to higher  interest
expense on  interest-bearing  liabilities  and a lower  overall yield on earning
assets.  The Company's net interest  margin for the nine months of 2000 was 4.00
percent (4.61 percent  excluding  Midwest Federal) compared with 5.42 percent in
1999.  The yield on earning  assets for the nine months of 2000 was 8.59 percent
(9.06 percent excluding Midwest Federal) compared with 9.37 percent in 1999. The
overall rate on  interest-bearing  liabilities rose to 5.06 percent for the nine
months of 2000 from 4.63 percent in 1999.

Interest and fees on loans increased  $6,814,000 (57 percent) in the nine months
of 2000 compared with the same period in 1999. The additional interest income on
loans  attributable  to  Midwest  Federal  was  $6,085,000,  with the  Company's
previously  existing  subsidiaries  having a net increase in interest  income on
loans  totaling  $729,000 (6  percent).  The net  increase was due to the higher
average  volume of loans  outstanding  since the  average  rate of 8.35  percent
earned on loans for the nine months of 2000 was lower than the 9.55 percent rate
in 1999. The average rate on loans excluding Midwest Federal was 8.69 percent in
the nine months of 2000.

The amount of interest income and discount collected on loan pool participations
decreased  2  percent  in the nine  months of 2000 to  $5,612,000  from the nine
months of 1999 total of  $5,710,000.  This  decrease  was largely due to reduced
collections on loan pool participations in 2000 compared with 1999. The yield on
loan pool participations  decreased to 12.49 percent for the nine months of 2000
compared with 13.57 percent in 1999.

Interest  income on investments  increased  $2,711,000 (150 percent) in the nine
months of 2000 compared to 1999 as a result of the acquired securities portfolio
of Midwest  Federal.  The average  balance of  investment  securities  more than
doubled to $92,211,0000  in 2000 compared with  $42,867,000 in 1999. The average
yield on the portfolio  increased  from 5.99 percent for 1999 to 6.98 percent in
2000.  Without  the  addition  of the Midwest  Federal  securities,  the average
balance of investments would have declined in 2000 as the proceeds from maturing
securities were used to fund loan demand.

Total interest expense on liabilities increased $7,375,000 in the nine months of
2000 over 1999 due to the  liabilities  assumed with the  acquisition of Midwest
Federal,  increases in average  deposits at existing banks,  and the need to pay
higher market interest rates to retain and attract  deposits.  The rates paid on
borrowed funds such as fed funds purchased, FHLB advances, and borrowings on the
Company's bank line of credit all increased in 2000 as a result of higher market
rates,  thereby increasing the interest expense of the Company compared to 1999.
Excluding the interest  expense on the  interest-bearing  liabilities of Midwest
Federal,  the Company's total interest expense increased $1,167,000 (14 percent)
in the nine months ended September 30, 2000 compared with 1999.

Provision for Loan Losses

The year-to-date  2000 provision for loan losses of $740,000 was $1,354,000 less
than the $2,094,000 for the first nine months of 1999. The loss provision of MIC
Financial was  $1,534,000 in the first nine months of 1999. Of the  year-to-date
provision for losses in 2000, only $27,000 was attributable to MIC Financial.

Noninterest Income

Total  noninterest  income for the nine months of 2000  increased  $494,000 over
that recorded in 1999. Of that increase,  $392,000 was due to noninterest income
for  Midwest  Federal.  The  remaining  $102,000  increase  was  largely  due to
increased  service  charges  and  gains  on the  sale of  investment  securities
classified as "available for sale" that were sold to meet liquidity needs.

Noninterest Expense

The Company's  noninterest  expense  increased  $2,461,000 during the first nine
months of 2000 over 1999. The noninterest expense incurred by Midwest Federal in
2000 totaled $2,744,000.  Excluding Midwest Federal,  the Company's  noninterest
expense  decreased  $283,000 in 2000 compared to 1999 with  reductions  noted in
professional fees (15 percent), occupancy expense (13 percent), and salaries and
benefits expense (3 percent).  Much of this reduction was due to the down-sizing
of the MIC Financial operation.

Income Tax Expense

The Company's  income tax expense of $1,481,000  for the nine months of 2000 was
$344,000  greater than the $1,137,000  tax expense for 1999.  Taxable income was
greater in 2000 compared with the year- to-date 1999.


FINANCIAL CONDITION

Total  assets  as of  September  30,  2000 were  $500,677,000,  an  increase  of
$14,488,000  (3 percent) from  December 31, 1999. As of September 30, 2000,  the
Company  had  $1,260,000  in federal  funds sold and  $1,900,000  federal  funds
borrowed  compared with $7,865,000  sold and $2,965,000  borrowed as of December
31, 1999. The Company's  liquidity  needs are usually  highest during the second
and third quarters of each year due to seasonal loan demand and minimal  deposit
growth in the first nine  months of the year.  Federal  funds are  borrowed on a
short-term basis to meet this liquidity need.

Investment Securities

Investment  securities available for sale increased $1,576,000 from December 31,
1999 to the September 30, 2000 total of $62,106,000 as securities were purchased
for the portfolio. Investment securities classified as held to maturity declined
to  $26,902,000  as  of  September 30,   2000,   compared  with  $29,445,000  on
December 31,  1999,  with the net decrease of $2,543,000  due to the maturity of
securities.

Loans

Overall loan volumes  continued to  increase,  with total loans  outstanding  of
$315,933,000  on  September  30,  2000,  reflecting  growth of  $33,642,000  (12
percent) from December 31, 1999. As of September 30, 2000, the Company's loan to
deposit ratio (excluding loan pool investments) was 88.0 percent.  This compares
with a year-end 1999 loan to deposit ratio of 80.7 percent.  As of September 30,
2000, MIC Financial had total loans  outstanding  of  $2,129,000,  mostly in the
commercial loan category.  This compares with a December 31, 1999 loan total for
MIC Financial of $5,081,000.

The Company has recently  added an  experienced  commercial  loan officer to the
staff of Midwest Federal in Burlington.  This addition will allow the Company to
originate  commercial  and  agricultural  loans in the markets served by Midwest
Federal  and will in time  provide  diversification  and  expansion  in its loan
portfolio.

Loan Pool Participations

As  of  September  30,  2000,  the  Company  had  loan  pool  participations  of
$57,769,000,  a decrease of  $9,987,000  (15 percent) from the December 31, 1999
balance.  The reduction in the loan pool  participations  is due to  collections
made in the normal  course of  business  and the sale of most of the loans still
held  by  the  Central  States  Resources   Corporation,   Midstates   Resources
Corporation and All States Resources Corporation servicing entities. The sale of
the majority of the assets of these servicing  corporations was completed in May
with minimal  profits  recognized at that time.  The collection of proceeds from
the remaining assets is expected to continue through the fourth quarter with the
recognition of any additional income deferred until the receipt of all remaining
settlements.  Management of the Company and the servicer  determined that it was
in the best interest of all parties to sell these  remaining  assets in order to
maximize the  potential  return on  investment  and to reduce  credit risk.  The
assets in these  servicing  corporations  were  purchased  from various  sources
between 1988 and 1997. These remaining assets were becoming  increasingly costly
to service and the cash flow from them was projected to decline. The assets were
felt  to be  subject  to  greater  than  average  credit  risk in the  event  of
deterioration in the national economy.

The Company's  involvement  in the loan pool  participations  continues  through
States Resources Corporation which was created by the servicer in 1998. All pool
purchases  since then have been through this  entity.  The loan pool  investment
balance shown as an asset on the Company's Statement of Condition represents the
discounted  purchase  cost of the loan  pool  participations.  During  the third
quarter of 2000 the Company was  successful in purchasing two loan pool packages
totaling $1,295,000. For the nine months of 2000, the Company has purchased loan
pools totaling  $16,616,000.  This compares with purchases of $36,651,000 in the
first  nine  months of 1999.  The  average  loan pool  participation  balance of
$60,036,000  for the nine months of 2000 was $3,773,000 (7 percent)  higher than
the average balance of $56,263,000 for the first nine months of 1999. Throughout
the year 2000 the Company has remained  active in evaluating and bidding on loan
pool packages. There has been substantial competition for these assets resulting
in the number of pools acquired and the amount purchased in 2000 being less than
desired by the Company.  Subsequent to the end of the third quarter, the Company
has been successful in acquiring  additional  loan pools totaling  approximately
$9,302,000.

Deposits

Total  deposits  as of  September  30,  2000  were  $359,095,000  compared  with
$348,672,000 as of December  31,1999.  The Company  typically  experiences  some
growth in total  deposits from December to September.  Competition  for deposits
has been intense in many of the markets  served by the Company  with  management
electing not to pay the highest rates in order to attract depositor funds.

Borrowed Funds

The Company had  $1,900,000  in Federal  Funds  purchased on September 30, 2000.
There was $2,965,000 in Federal Funds purchased on December 31, 1999. During the
nine  months of 2000,  the  Company  had an average  balance  of  Federal  Funds
purchased of $3,957,000  compared with an average of $1,493,000 during the first
nine  months  of  1999.  Advances  from  the  Federal  Home  Loan  Bank  totaled
$72,018,000  as of September 30, 2000 compared with  $63,421,000  as of December
31, 1999.  The increases in Federal  Funds  purchased and Federal Home Loan Bank
advances provided the funds to meet loan demand by customers.

Notes Payable

The notes payable balance was reduced to $14,700,000 on September 30,  2000 from
a balance of  $18,000,000  on December 31, 1999. The Company's term loan balance
on September 30, 2000 was $8,600,000 with a payment of $500,000 due December 31,
2000.  The Company  maintains a revolving line of credit of up to $9,000,000 (of
which  $6,100,000  was utilized as of September  30, 2000) that matures June 30,
2001.  The interest rate for both the term loan and the revolving line remain at
prime rate less .375% (currently 9.125 percent).

Nonperforming Assets

The Company's  nonperforming  assets totaled  $4,074,000  (1.06 percent of total
loans) as of September 30, 2000,  compared to $4,965,000  (1.76 percent of total
loans) as of December  31,  1999.  All  nonperforming  asset  totals and related
ratios  exclude the loan pool  investments.  The  following  table  presents the
categories  of  nonperforming  assets  for  the  bank  subsidiaries  and for MIC
Financial, Inc. as of September 30, 2000 compared with December 31, 1999:
<TABLE>
<CAPTION>

                              Nonperforming Assets
                             (dollars in thousands)
                               September 30, 2000

                                                    MIC
                                Banks            Financial            Total
                                -----            ---------            -----
<S>                             <C>              <C>               <C>

Nonaccrual                      $1,810             $1,007            $2,817
Loans 90 days past due             494                 38               532
Other real estate owned            725                  0               725
                                ------             ------            ------
                                $3,029             $1,045            $4,074
</TABLE>

<TABLE>
<CAPTION>
                                December 31, 1999

                                                    MIC
                                Banks            Financial            Total
                                -----            ---------            -----
<S>                             <C>              <C>               <C>
Nonaccrual                      $1,969             $  905            $2,874
Loans 90 days past due           1,025                401             1,426
Restructured loans                   0                515               515
Other real estate owned            150                  0               150
                                ------             ------            ------
                                $3,144             $1,821            $4,965
</TABLE>

From  December  31, 1999 to  September  30,  2000,  nonaccrual  loans  decreased
$57,000.  Loans  ninety  days  past  due  decreased  $894,000  with  most of the
reduction  attributable to charge-off.  Restructured loans decreased $515,000 as
the performance on one MIC Financial credit deteriorated and it was reclassified
as  nonaccrual.  Other real estate  owned  increased  by $575,000 as the Company
foreclosed on a  residential  real estate loan, a hotel in which one of the bank
subsidiaries  participated was foreclosed,  and a strip mall  participation  was
also  foreclosed.  The  Company's  allowance for loan losses as of September 30,
2000 was $3,325,000, which was 1.05 percent of total loans as of that date. This
compares  with an  allowance  for loan losses of  $4,006,000  as of December 31,
1999,  which was 1.42 percent of total  loans.  As of  September  30, 2000,  the
allowance for loan losses was 99.28 percent of nonperforming loans compared with
83.20  percent as of December 31, 1999.  Based on the inherent  risk in the loan
portfolio,  management believes that as of September 30, 2000, the allowance for
loan losses is  adequate.  For the three months ended  September  30, 2000,  the
Company  recognized net charge-offs of $610,000 compared with net charge-offs of
$359,000 during the quarter ended  September 30, 1999. Net charge-offs  recorded
by MIC  Financial  totaled  $202,000  while the bank  subsidiaries  charged  off
$408,000  during the quarter ended September 30, 2000. For the nine months ended
September  30,  2000,  the Company  recognized  net charge-  offs of  $1,421,000
compared with $1,438,000 for the nine months of 1999. For the year-to-date 2000,
MIC  Financial  has  charged  off  a of  $620,000  versus  a net  charge-off  of
$1,024,000 in the comparable 1999 period.

Capital Resources

As of September 30, 2000,  total  shareholders'  equity as a percentage of total
assets was 9.64  percent  compared  with 10.33  percent as of December 31, 1999.
Tangible  shareholders' equity (adjusted for goodwill and intangible assets) was
7.42 percent of tangible  assets as of  September  30, 2000  compared  with 7.90
percent as of December 31, 2000.  Through  September  30, 2000,  the Company has
repurchased a total of 403,100  shares of its common stock on the open market at
an average price of $8.52.  No  additional  shares were  repurchased  during the
third quarter of 2000.  Under risk- based capital  rules,  the Company's  tier 1
capital  ratio was 10.68  percent of  risk-weighted  assets as of September  30,
2000,  and was 11.42  percent of  risk-weighted  assets as of December 31, 1999,
compared to a 4.00 percent  requirement.  Risk-based  capital guidelines require
the  classification  of  assets  and some off-  balance-sheet  items in terms of
credit-risk  exposure  and the  measuring  of  capital  as a  percentage  of the
risk-adjusted  asset  totals.  Tier 1  capital  is the  Company's  total  common
shareholders'  equity  reduced by  goodwill.  Management  believes  that,  as of
September  30,  2000,  the  Company  and its  subsidiary  banks meet all capital
adequacy  requirements to which they are subject.  As of that date, all the bank
subsidiaries were "well  capitalized"  under regulatory prompt corrective action
provisions.

Liquidity

Liquidity  management  involves meeting the cash flow requirements of depositors
and borrowers.  The Company  conducts  liquidity  management on both a daily and
long-term  basis;  and it adjusts  its  investments  in liquid  assets  based on
expected loan demand,  projected loan  maturities  and payments,  estimated cash
flows  from  the  loan  pool  participations,  expected  deposit  flows,  yields
available   on   interest-bearing   deposits,   and   the   objectives   of  its
asset/liability management program. The Company had liquid assets (cash and cash
equivalents) of $12,246,000 as of September 30, 2000,  compared with $22,919,000
as of December 31, 1999.  Much of the decrease during the period was utilized to
fund loan growth and to purchase investment  securities.  Investment  securities
classified  as  available  for sale could be sold to meet  liquidity  needs,  if
necessary.  Additionally,  the bank  subsidiaries  maintain lines of credit with
correspondent  banks and the  Federal  Home Loan Bank that  would  allow them to
borrow  federal  funds on a  short-term  basis if  necessary.  The Company  also
maintains a line of credit with a major commercial bank that provides  liquidity
for the  purchase of loan pool  participation  investments  and other  corporate
needs.  Management  believes  that the Company has  sufficient  liquidity  as of
September 30, 2000 to meet the needs of borrowers and depositors.

Market Risk Management

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

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

Year 2000 Compliance

A  critical  issue that  emerged in the  banking  industry  and for the  economy
overall was how  existing  computer  application  software  programs,  operating
systems and hardware  would  accommodate  the date value for the year 2000.  The
Company  established  Year 2000 Committees and Plans at its subsidiary  banks to
minimize  the risk of  potential  disruption  related  to  computers  and  other
equipment with  date-sensitive  software.  Based on the Company's  assessment of
operations  through  October  2000,  no  significant  year 2000 issues have been
experienced.   The  Company  has  surveyed  its  larger  clients,   vendors  and
significant third parties and believes they have experienced no significant year
2000 issues, which could adversely affect the Company. The Company will continue
to monitor year 2000 compliance issues.

Commitments and Contingencies

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

ESOP Merger

The Company has  maintained an Employee  Stock  Ownership  Plan ("ESOP") for its
employees since 1984. Midwest Federal employees were also covered by an ESOP. As
part of the merger agreement with Midwest  Bancshares,  Inc., it was agreed that
the Midwest ESOP would be merged into the Company's ESOP as soon as practicable.
The merger of the two ESOP's was completed as of July 31, 2000.

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

Midwest Federal Data Processing Conversion

On September 22, 2000,  the data  processing  for Midwest  Federal was converted
from an outside  service bureau to the in-house system utilized by the Company's
other  subsidiary  banks.  It is anticipated  that this  conversion will provide
Midwest  Federal the ability to offer products and services  comparable to those
provided  by the  Company's  other  subsidiaries  and will  result in an expense
savings to the Company as a whole in future periods.


"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. (e)

     3.2       Bylaws of Mahaska Investment Company. (e)

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

     10.2.1    1993 Stock Incentive Plan. (a)

     10.2.2    1996 Stock Incentive Plan. (c)

     10.2.3    1998 Stock Incentive Plan. (d)

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

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

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

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

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

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

     11        Computation of Per Share Earnings.

     27        Financial Data Schedule.

--------------

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

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

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

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

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

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

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

    (h)        Incorporated by reference to the Form 10-Q for the quarter
               ended June 30, 2000 filed by Mahaska Investment Company.

(b)  Reports on Form 8-K -- The Company did not file any report on Form 8-K
     during the three months ended September 30, 2000.

<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                        MAHASKA INVESTMENT COMPANY
                                        (Registrant)



November 10, 2000                       /s/ Charles S. Howard
-----------------------                 --------------------------------------
Dated                                   Charles S. Howard, President


November 10, 2000                       /s/ David A. Meinert
-----------------------                 --------------------------------------
Dated                                   David A. Meinert
                                        Executive Vice President and
                                        Chief Financial Officer
                                        (Principal Accounting Officer)


<PAGE>

<TABLE>
<CAPTION>
                                   Exhibit 11

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


                                       Three Months Ended     Nine Months Ended
                                          September 30,          September 30,
                                      -------------------   -------------------
                                        2000       1999       2000       1999
                                      ---------  --------   --------   --------
Earnings per Share Information:
-------------------------------
<S>                                   <C>         <C>        <C>       <C>

Weighted average number of shares
  outstanding during the year         3,936,514   3,679,991  4,088,786 3,656,397

Weighted average number of shares
  outstanding during the year
  including all dilutive potential
  shares                              3,937,973  3,768,483   4,094,497 3,751,594

Net earnings                         $  926,134  1,087,288   3,010,554 1,925,360

Earnings per share - basic           $     0.24  $     0.30  $    0.74 $    0.53

Earnings per share - duluted         $     0.24  $     0.29  $    0.74 $    0.51
</TABLE>