SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-KSB
                      [X] ANNUAL REPORT UNDER SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2003

                                     OR

               [  ] TRANSITION REPORT UNDER SECTION 13 OR
                 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from      to

                        Commission File Number: 333-32245

                           HEARTLAND BANCSHARES, INC.
                 (Name of small business issuer in its charter)

Indiana                                                          35-2017085
(State or other jurisdiction of incorporation             (IRS Employer Id. No.)
 or organization)

420 North Morton Street
Franklin, Indiana                                                 46131
(Address of principal executive offices)                        (Zip Code)

Issuer's telephone number, including area code:  (317) 738-3915

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.

                           Yes      X        No
                                 -----          -----

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained herein, and no disclosure will be contained, to
the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [X]
                               -----
State issuer's revenues for its most recent fiscal year: $11,452,000

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified date within the past 60 days:


<PAGE>

On March 17, 2004, the aggregate market value of the common shares of the issuer
(including  the   accompanying   preferred   share  purchase   rights)  held  by
non-affiliates  of the issuer was $15,506,109,  valuing the common shares at the
last reported trade price on that date and assuming (solely for purposes of this
calculation)  that all  directors  and  executive  officers of the issuers  were
affiliates of the issuer and that no other  shareholder  was an affiliate of the
issuer.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

As of March 29, 2004,  the latest  practicable  date,  1,394,172 of the issuer's
common shares,  no par value (including  accompanying  preferred shares purchase
rights), were issued and outstanding.


<PAGE>


DOCUMENTS INCORPORATED BY REFERENCE:
1. Portions of the Annual Report to Shareholders of Heartland  Bancshares,  Inc.
   for the year ended  December  31,  2003,  to the extent  stated  herein,  are
   incorporated by reference from Exhibit 13 into Parts I and II.
2. Portions of the Proxy Statement of Heartland Bancshares,  Inc. for the Annual
   Meeting of its  Shareholders  to be held May 17, 2004,  to the extent  stated
   herein, are incorporated by reference from Exhibit 99.1 into Part III.



<PAGE>




                          FORM 10-KSB TABLE OF CONTENTS

PART I                                                              Page

Item  1.  Description of Business                                     5
Item  2.  Description of property                                    20
Item  3.  Legal Proceedings                                          21
Item  4.  Submission of Matters to a Vote of Security Holders        21

PART II

Item  5.  Market for Common Equity and Related Stockholder Matters   22
Item  6.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                        22
Item  7.  Financial Statements                                       22
Item  8.  Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure                        22
Item  8A. Controls and Procedures                                    23

PART III

Item  9.  Directors, Executive Officers, Promoters and Control
          Persons; Compliance With Section 16(a) of the Exchange
          Act                                                        24
Item 10.  Executive Compensation                                     25
Item 11.  Security Ownership of Certain Beneficial Owners
          and Management and Related Stockholder Matters             25
Item 12.  Certain Relationships and Related Transactions             27
Item 13.  Exhibits and Reports on Form 8-K                           28
Item 14.  Principal Accountant Fees and Services                     30
Signatures                                                           31


<PAGE>



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS  (Dollar  amounts are in thousands,  except per
share data.)

GENERAL

Heartland Bancshares,  Inc. ("Heartland" or the "Company") is a one-bank holding
company  incorporated May 27, 1997.  Heartland raised  approximately  $11,731 in
equity capital through the sale of 1,394,172 shares of Heartland's  common stock
at $9.07 per share, net of underwriting  discounts and offering costs.  Proceeds
were used to  capitalize  Heartland  Community  Bank (the  "Bank"),  Heartland's
primary  asset,  a  wholly-owned   banking  subsidiary,   an   Indiana-chartered
commercial  bank. The Bank received  regulatory  approval to open in the fall of
1997 and commenced banking operation December 17, 1997.

During the three year period  ended  December  31,  2003,  Heartland's  business
focused on the  development of the business of the Bank.  Material  developments
during  this  three  year  period  included  the  opening  by the  Bank of a new
operations  center  in  Franklin  during  2001  (see  "Item  2.  Description  of
Property"),  the issuance by Heartland of trust preferred securities during 2001
(see Note 8 to the consolidated  financial statements included in Item 7 of this
Report,  which note is incorporated  herein by reference),  and the entry by the
Bank's  regulators of a cease and desist order against the Bank in May 2002 (see
the description of this Order under "Regulation and Supervision of Heartland and
the Bank," below).  Certain financial data reflecting  Heartland's  consolidated
financial   condition  as  of  December  31,  2003,  2002,  and  2001,  and  its
consolidated  results of operations  for each of the three years ended  December
31, 2003, is included under the heading "SELECTED FINANCIAL DATA" below.

The Bank operates from offices located in Franklin, Greenwood, and Bargersville,
Indiana.

The business of the Bank  consists  primarily of  attracting  deposits  from the
general public,  originating  commercial,  residential  real estate and consumer
loans  and  purchasing  and  selling  certain  investment  securities.  The Bank
operates  (through  a  division  of the Bank that does  business  under the name
"Heartland   Investment   Services"  in  a   cooperative   arrangement   with  a
non-affiliated  securities broker-dealer) a full-service brokerage department in
order to sell  mutual  funds and other  non-deposit  investment  products to the
public. The Bank also offers a certificate of deposit brokerage program.

Heartland  offers  commercial  loans to area  businesses in addition to new home
construction loans and business lines of credit.  Consumer loans include,  among
others,  new and used automobile and other secured and unsecured personal loans.
Heartland originates adjustable rate first mortgage loans, second mortgage loans
and home equity lines of credit secured by single-family homes.

As of December  31, 2003,  the Bank had 86 full time  equivalent  employees.  Of
these  employees,  8  full  time  equivalent  employees  were  employed  in  the
residential  mortgage loan  department,  2 full time  equivalent  employees were
employed in the  full-service  brokerage  department and 1 full time  equivalent
employee was employed in the  certificate  of deposit  brokerage  program  which
departments do not produce or require  significant  amounts of assets.  The Bank
utilizes a leased employee arrangement with a third party company,  Professional
Staff  Management,  Inc.,  whereby all employees are leased to the Bank from the
third party  company.  The  arrangement  allows for employees to  participate in
group  benefits  of the third  party  company.  The  third  party  company  also
administers the majority of human resource activities including payroll, payroll
taxes and policy administration. Heartland, the parent company, has no full time
employees.

                                                                              5.
<PAGE>

SERVICE AREA

The Bank's primary  service area is Johnson  County,  Indiana and the portion of
Marion County south of Southport road, Indianapolis, Indiana. Johnson County was
ranked the third  fastest  growing  County in  Indiana  since 1990 by the United
States  Census  Bureau in the 2000 census.  Census data may be obtained from the
Census  Bureau  Internet  site  WWW.Census.gov.   The  majority  of  Heartland's
customers reside in Johnson County.  The Bank has one branch in Franklin and two
in Greenwood,  which are the two largest  cities in the county,  and a branch in
Bargersville,  in  southwestern  Johnson  County.  Franklin  is  located  in the
south-central  portion of Johnson  County.  Greenwood is located on the northern
edge of Johnson  County and is  contiguous  with the  southern  border of Marion
County. Bargersville is in the southwest portion of Johnson County.

Greenwood and Franklin are rapidly  growing in  population  and have been for at
least 10 years. According to the 2000 census, Franklin's population increased by
50.8% from the 1990 census total population.  That growth rate made Franklin the
28th fastest growing city or town in Indiana.  The Greenwood  population grew by
37.2%  from 1990 to 2000  making  it the 44th  fastest  growing  city or town in
Indiana.   Both  Franklin  and  Greenwood  have  significant  levels  of  retail
businesses  and some light  manufacturing  business.  Both  cities  are  bedroom
communities to Indianapolis. Bargersville is a more rural town with more limited
population   growth  and  retail   expansion.   According  to  the  2000  census
information,  the unemployment rate for Johnson County was 2.4% compared to 3.3%
for the state of Indiana.

The growth in  Franklin  and  Greenwood  has caused the  majority of our lending
activities  to be focused in these areas.  Due to the high levels of new housing
and retail  development,  loan demand is primarily in residential and commercial
real estate related loans.


COMPETITION

Heartland and the Bank face strong  competition  for  deposits,  loans and other
financial services from numerous Indiana and out-of-state banks, thrifts, credit
unions and other financial  institutions as well as other entities which provide
financial services,  including consumer finance companies,  securities brokerage
firms,  mortgage brokers,  equipment  leasing  companies,  insurance  companies,
mutual funds and other lending sources and investment alternatives.  Some of the
financial institutions and financial services organizations with which Heartland
competes are not subject to the same degree of regulation as Heartland.  Many of
the  financial  institutions  aggressively  compete for business in  Heartland's
market areas.  Many of these  competitors  have been in business for many years,
have established  customer bases, have substantially  higher lending limits than
Heartland,  are larger and will be able to offer certain services that Heartland
does not currently offer, including international banking services. In addition,
most of these entities have greater  capital  resources than  Heartland,  which,
among  other  things,  may allow them to price  their  services  at levels  more
favorable to the customer and to provide  larger  credit  facilities  than could
Heartland.

Dollar amounts in thousands except per share data.
                                                                              6.

<PAGE>


REGULATION AND SUPERVISION OF HEARTLAND AND THE BANK

Heartland is registered as a bank holding company under the Bank Holding Company
Act of 1956,  as amended  ("BHCA"),  with the Board of  Governors of the Federal
Reserve System ("Federal Reserve") and is subject to examination, regulation and
supervision  by the  Federal  Reserve.  The Bank's  deposits  are insured to the
maximum extent  permitted by law by the Federal  Deposit  Insurance  Corporation
("FDIC").  The Bank is  subject to  comprehensive  regulation,  examination  and
supervision by the Indiana Department of Financial  Institutions ("DFI") and the
FDIC. Regulation, examination and supervision by banking regulatory agencies are
primarily for the benefit of depositors rather than shareholders.

Under the BHCA, a bank holding company is, with limited  exceptions,  prohibited
from  acquiring  direct or indirect  ownership or control of voting stock of any
company  which is not a bank,  and from  engaging  in any  activity  other  than
managing or controlling  banks. A bank holding company may, however,  own shares
of a company engaged in activities that the Federal Reserve has determined to be
so closely related to banking or managing or controlling banks as to be a proper
incident thereto. In addition,  a bank holding company meeting certain financial
and other  requirements may elect to be treated as a "financial holding company"
and  engage  in, or own  shares of  companies  that are  engaged  in,  insurance
underwriting,  securities  underwriting,  merchant banking,  and other financial
services  activities.  Heartland  has not  elected to be treated as a  financial
holding company.

The Bank may generally engage in activities that are permissible  activities for
state  chartered  banks  under  Indiana  banking  law,  without  regard  to  the
limitations that might apply to such activities under the BHCA if Heartland were
to engage directly in such activities.

Indiana law and the BHCA  restrict  certain  types of expansion by Heartland and
the Bank.  Heartland  and the Bank may be required  to apply for prior  approval
from (or give  prior  notice  and an  opportunity  for  review  to) the  Federal
Reserve,  the FDIC, the DFI,  and/or other bank  regulatory or other  regulatory
agencies,  as a condition to the acquisition or establishment of new offices, or
the  acquisition  (by merger or  consolidation,  purchase or  otherwise)  of the
stock, business or properties of other banks or other companies.

Effective May 11, 2002, with the consent of the Bank, the FDIC and DFI entered a
formal order under federal and state banking laws (as subsequently modified June
3, 2003,) (the "May 2002 Order"),  under which the Bank and its  Directors  were
required to take a number of affirmative steps to address  regulatory  concerns,
including but not limited to,  maintaining the Bank's ratio of Tier 1 capital to
assets  at 8% or  above;  committing  not to  declare  or pay  dividends  to the
Corporation  that would result in the Bank's  violation of the required  capital
ratio;  limiting  growth in total  assets to no more than  three  percent in any
three month period without advance approval by the regulators,  or more than 12%
annually;  adopting and implementing plans to resolve certain criticized assets;
eliminating  or restricting  future  lending to borrowers  whose loans have been
criticized by the regulators;  and adopting and implementing plans to reduce the
volume of the Bank's acquisition, development and construction loans, commercial
real-estate  loans and high  loan-to-value  loans, as defined by FDIC Regulation
Part 365, in relation to its capital.


Dollar amounts in thousands except per share data.
                                                                              7.

<PAGE>

On February 23, 2004, the Bank received written  notification  from the FDIC and
the DFI  indicating  that the Bank  would be  released  from the May 2002  Order
subject to the  stipulation  that the Bank continue to maintain a Tier 1 capital
to assets ratio at 8% or above;  to limit growth in total assets to no more than
three percent per quarter without regulatory approval and to maintain the levels
of acquisition,  development and  construction  loans at or below 125% of Tier 1
capital and commercial  real-estate loans at or below 250% of Tier 1 capital. As
of February 23, 2004,  the Bank's Tier 1 capital  ratio was 9.49%,  total assets
had  declined to  $166,178,  acquisition,  development  and  construction  loans
totaled  61.75% of Tier 1  capital  and  commercial  real-estate  loans  totaled
203.51% of Tier 1 capital.  On February  23, 2004 the Bank's  board of directors
adopted a resolution accepting the stipulations as presented by the FDIC and DFI
and  notified  the FDIC and DFI of the  resolution  and  intent  to abide by the
stipulations.

See Item 6 of this Report for additional  discussion of the effects that the May
2002 Order have had, and that the  stipulation  of release are expected to have,
on the  financial  condition,  results of  operations,  liquidity  and financial
resources of the Bank and of Heartland.

Heartland is a legal  entity  separate  and  distinct  from the Bank.  There are
various  legal  limitations  on the extent to which the Bank can supply funds to
Heartland.  The principal source of Heartland's funds consists of dividends from
the Bank.  State and federal laws  restrict the amount of dividends  that may be
paid by banks.  In addition,  the  stipulation  of release of the May 2002 Order
requires  the Bank to maintain a ratio of Tier 1 capital to total  assets of not
less than 8.0%.  The Bank's Tier I Capital to total assets ratio at December 31,
2003 was 9.26% (8.91% using average  assets for the quarter  ended  December 31,
2003).

In addition,  the Bank is subject to certain restrictions imposed by the Federal
Reserve on  extensions  of credit to  Heartland or any of its  subsidiaries,  or
investments in the stock or other securities as collateral for loans.

The  commercial  banking  business  is  affected  not only by  general  economic
conditions  but  also by the  monetary  policies  of the  Federal  Reserve.  The
instruments  of monetary  policy  employed by the  Federal  Reserve  include the
discount  rate on member  bank  borrowing  and  changes in reserve  requirements
against  member bank  deposits.  Federal  Reserve  monetary  policies have had a
significant  effect on the operating results of commercial banks in the past and
are expected to continue to do so in the future. In view of changing  conditions
in the  national  economy  and in the money  markets,  as well as the  effect of
actions by  monetary  fiscal  authorities,  including  the Federal  Reserve,  no
prediction can be made as to possible future changes in interest rates,  deposit
levels, loan demand or the business and earnings of Heartland and the Bank.


Forward-Looking Statements

Heartland  from  time to time  in its  oral  and  written  communications  makes
statements  relating to its  expectations  regarding the future.  These types of
statements are considered "forward-looking statements" within the meaning of the
Private  Securities   Litigation  Reform  Act  of  1995.  Such  forward  looking
statements  can include  statements  about adequacy of allowance for loan losses
and the quality of the Company's loans and other assets;  simulations of changes
in interest rates; litigation results;  dividend policy; estimated cost savings,
plans and objectives for future  operations;  and other  expectations  about the
Company's financial and business  performance and other business matters as well
as economic and market  conditions  and trends.  They often can be identified by
the use of words like  "expect,"  "may,"  "will,"  "would,"  "could,"  "should",
"intend,"   "project,"   "estimate,"   "believe"  or  "anticipate,"  or  similar
expressions.

Dollar amounts in thousands except per share data.
                                                                              8.
<PAGE>

Heartland may include forward-looking  statements in filings with the Securities
and Exchange  Commission  ("SEC"),  such as this Form 10-KSB,  in other  written
materials,  and in  oral  statements  made by  senior  management  to  analysts,
investors,  representatives  of the media, and others. It is intended that these
forward-looking  statements  speak  only  as of the  date  they  are  made,  and
Heartland  undertakes no obligation to update any  forward-looking  statement to
reflect  events or  circumstances  after  the date on which the  forward-looking
statement is made.

Readers are  cautioned  that, by their nature,  forward-looking  statements  are
based on assumptions and are subject to risks, uncertainties, and other factors.
Actual results may differ  materially from the  expectations of the Company that
are  expressed  or  implied by any  forward-looking  statement.  The  discussion
incorporated  by  reference  into  Item 7 of  this  Form  10-KSB,  "Management's
Discussion and Analysis of Financial Condition and Results of Operations," lists
some of the  factors  that  could  cause the  Company's  actual  results to vary
materially  from those expressed or implied by any  forward-looking  statements.
Other  uncertainties  that  could  cause the  Company's  actual  results to vary
materially  from those  expressed  or implied by any  forward-looking  statement
include the unknown direction, and magnitude and duration, of any future changes
in  prevailing  market  rates of  interest;  effects of  changes in  competitive
conditions;  acquisitions  of  other  businesses  by the  Company  and  costs of
integrations of such acquired businesses; the introduction,  withdrawal, success
and  timing  of  business  initiatives  and  strategies;   changes  in  customer
borrowing,  repayment,  investment  and  deposit  practices;  changes in fiscal,
monetary and tax policies;  inflation; changes in financial and capital markets;
changes  in  general  economic  conditions,  either  nationally  or  regionally,
resulting  in, among other things,  credit  quality  deterioration;  the impact,
extent and timing of technological changes;  capital management activities;  and
actions of the Federal Reserve Board and legislative and regulatory  actions and
reforms. Investors should consider these risks, uncertainties, and other factors
in addition to those  mentioned  by Heartland in its other SEC filings from time
to time when considering any forward-looking statement.


SELECTED FINANCIAL DATA

The  information  presented  below  should  be  read  in  conjunction  with  the
consolidated financial statements, which are incorporated by reference into Item
7 of this Report from Exhibit 13, and  "Management's  Discussion and Analysis of
Financial  Condition  and  Results  of  Operations,"  which is  incorporated  by
reference into Item 6 of this Report from Exhibit 13.


                                       Year Ended     Year Ended     Year Ended
                                      December 31,   December 31,   December 31,
Income Statement Data:                    2003           2002           2001
                                          ----           ----           ----

Total interest income                 $   9,230      $  10,972      $  14,409
Total interest expense                    2,758          4,207          6,789
                                      ---------      ---------      ---------
Net interest income                       6,472          6,774          7,620
Provision for loan losses                   692          3,150          2,967
Noninterest income                        2,222          1,944          1,596
Noninterest expense                       7,412          7,609          5,416
Provision for income taxes                  176           (837)           304
                                      ---------      ---------      ---------
Net income/(loss)                     $     414      $  (1,213)     $     529
                                      =========      ==========     =========
Net income per share/(loss)                 .30           (.87)  $        .38
Average shares                        1,394,172      1,394,172      1,394,172

Dollar amounts in thousands except per share data.
                                                                              9.
<PAGE>

                                       Year Ended     Year Ended
                                      December 31,   December 31,
Income Statement Data:                    2000           1999
                                          ----           ----

Total interest income                 $  12,476      $   7,478
Total interest expense                    6,347          3,612
                                      ---------      ---------
Net interest income                       6,129          3,866
Provision for loan losses                 1,744            656
Noninterest income                          767            297
Noninterest expense                       3,929          2,352
Provision for income taxes              __  472            182
                                      ---------      ---------
Net income/(loss)                     $     751      $     973
                                      =========      =========
Net income/(loss) per share           $     .54      $     .70
Average shares                        1,394,172      1,394,172


                                         At             At             At
                                     December 31,   December 31,    December 31,
                                        2003           2002            2001
                                        ----           ----            ----
Balance Sheet Data:
Total Assets                          $ 167,929      $ 176,812      $ 189,517
Loans, Net of Allowance
  for Loan Losses                       110,255        116,422        143,236
Demand & Savings Deposits                86,751         78,950         86,341
Time Deposits                            50,755         69,449         74,650
Borrowings                               16,967         15,406         14,554
Shareholders' Equity                     12,552         12,200         13,263
Book Value Per Share                  $    9.00      $    8.75      $    9.51
Equity to Asset Ratio                      7.47%          6.91%          7.00%

                                           At             At
                                      December 31,    December 31,
                                          2000           1999
                                          ----           ----

Balance Sheet Data:
Total Assets                          $ 164,916      $ 110,139
Loans, Net of Allowance
  for Loan Losses                       129,882         89,680
Demand & Savings Deposits                64,598         38,135
Time Deposits                            74,622         50,384
Borrowings                               12,273          9,519
Shareholders' Equity                     12,658         11,643
Book Value Per Share                  $    9.08      $    8.35
Equity to Asset Ratio                      7.68%         10.57%

AVERAGE  BALANCES,  INCOME,  EXPENSES AND RATES. The following tables depict for
the years ended December 31, 2003, 2002, and 2001, certain  information  related
to  Heartland's  average  balance  sheets and its  average  yields on assets and
average  costs of  liabilities.  Such yields are  derived by dividing  income or
expense by the  average  balance  of the  corresponding  assets or  liabilities.
Average  balances  have been  derived  from  daily  averages.  Non-accrual  loan
balances are included in the average balances of loans. During 2003, $0 interest
income on loans on  non-accrual  at December  31, 2003 was  included in interest
income.  During  2003,  $275 of  interest  income  would have been  recorded  on
non-accrual loans at December 31, 2003 if the loans had been current.  Yields on
non-taxable securities are not presented on a tax-equivalent basis.

Dollar amounts in thousands except per share data.
                                                                             10.
<PAGE>


                                 Year Ended                   Year Ended
                              December 31, 2003            December 31, 2002
                              -----------------            -----------------
                            Average  Income/ Yield/     Average   Income/ Yield/
                            Balance  Expense  Rate      Balance   Expense  Rate
Interest earning assets
   Short-term investments  $  9,396  $  147   1.56%    $ 12,992  $    230  1.77%
   Taxable securities        28,920     868   3.00       15,893       965  6.07
   Non-taxable securities     3,101     124   4.00        2,626       123  4.68
   Loans                    123,084   8,091   6.57      135,433     9,654  7.13
                           --------  ------            --------  --------
Total interest earning
 assets                    $164,501  $9,230   5.61     $166,944  $ 10,972  6.57
                           ========  ======            ========  ========

Interest bearing liabilities
   Interest-bearing demand,
     Money Market and
     Savings Deposits      $ 64,362  $  495   0.77%    $ 63,002  $    971  1.54%
   Time deposits             62,676   1,856   2.96       70,929     2,700  3.81
   Short-term borrowings      4,272      26   0.61        4,872        74  1.52
   Other borrowings           8,999     381   4.23        9,155       462  5.05
                           --------  ------            --------  --------
Total interest bearing
 liabilities               $140,309  $2,758   1.97     $147,958  $  4,207  2.84
                           ========  ======            ========  ========

                                                      Year Ended
                                                   December 31, 2001
                                              Average    Income/  Yield/
                                              Balance    Expense   Rate
                                              -------    -------   ----
Interest earning assets
   Short-term investments                   $   6,060    $   225    3.71%
   Taxable securities                          18,586      1,365    7.34
   Non-taxable securities                       1,489         67    4.50
   Loans                                      145,961    $12,752    8.74
                                            ---------    -------
Total interest earning assets               $ 172,096    $14,409    8.37
                                            =========    =======

Interest bearing liabilities
   Interest-bearing demand,
     Money Market and
     Savings Deposits                       $  59,639    $ 1,784    2.99%
   Time deposits                               81,071      4,531    5.59
   Short-term borrowings                        6,174        223    3.61
   Other borrowings                             4,222        251    5.95
                                            ---------    -------
Total interest bearing
   Liabilities                              $ 151,106    $ 6,789    4.49
                                            =========    =======



                                            2003     2002      2001
                                            ----     ----      ----
Average yield on interest-earning
  assets                                    5.61%    6.57%     8.37%
Average rate paid on interest
  -bearing liabilities                      1.97     2.84      4.49
Net interest spread                         3.64     3.73      3.88
Net interest margin (net interest
  income divided by average
  total interest-earning assets)            3.93     4.05      4.43
Return on average assets                    0.24     (.68)      .29
Return on average equity                    3.35    (9.26)     3.95

Dollar amounts in thousands except per share data.
                                                                             11.
<PAGE>

INTEREST INCOME AND EXPENSE ANALYSIS

The table below  describes  the extent to which  changes in  interest  rates and
changes in volume of interest-earning  assets and  interest-bearing  liabilities
have  affected  Heartland's  interest  income and  expense  during  the  periods
indicated.  For each category of  interest-earning  assets and  interest-bearing
liabilities,  information is provided on changes  attributable to (i) changes in
volume  (change in volume  multiplied by prior year rate),  (ii) changes in rate
(change in rate multiplied by prior year volume) and (iii) total changes in rate
and  volume.  The  combined  effects of changes in both  volume and rate,  which
cannot be separately  identified,  have been  allocated  proportionately  to the
change due to volume and the change due to rate.


                                              Year ended December 31,
                                              -----------------------
                                                   2003 vs. 2002
                                                   -------------
                                                Increase (Decrease)
                                                      due to
                                                      ------
                                             Volume     Rate      Total
                                             ------     ----      -----
Interest income attributable to:
  Loans                                     $  (843)     $(720) $(1,563)
  Securities                                    564       (660)     (96)
  Other interest-earning assets(1)              (58)       (25)     (83)
                                            -------    -------  -------
   Total interest-earning assets               (337)    (1,405)  (1,742)
                                            -------    -------  -------

  Money Market and Savings deposits              21       (497)    (476)
  Time deposits                                (290)      (554)    (844)
  Short-term borrowings                          (8)       (40)     (48)
  Other borrowings                               (8)       (73)     (81)
                                            -------    -------  -------
   Total interest-bearing liabilities          (285)    (1,164)  (1,449)
                                            -------    -------  -------
Increase (decrease) in net interest income  $   (52)   $  (241)  $ (293)
                                            =======    =======   ======

Dollar amounts in thousands except per share data.
                                                                             12.

<PAGE>


                                              Year ended December 31,
                                              -----------------------
                                                   2002 vs. 2001
                                                   -------------
                                                Increase (Decrease)
                                                      due to
                                                      ------
                                             Volume     Rate      Total
                                             ------     ----      -----
Interest income attributable to:
  Loans                                      $  (872)  $(2,226) $(3,098)
  Securities                                    (129)     (215)    (344)
  Other interest-earning assets(1)               165      (160)       5
                                             -------    ------   ------
   Total interest-earning assets                (836)   (2,601)  (3,437)
                                             -------   -------   ------
Interest expense attributable to:
  Money Market and Savings deposits               96      (909)    (813)
  Time deposits                                 (516)   (1,315)  (1,831)
  Short-term borrowings                          (40)     (109)    (149)
   Total interest-bearing liabilities           (206)   (2,376)  (2,582)
                                             -------   -------   ------

Increase (decrease) in net interest income   $  (630)  $  (225)  $ (855)
                                             =======   =======   ======


(1)   Includes  federal  funds  sold  and  interest-bearing  deposits  in  other
      financial institutions.

LOANS.  Heartland's gross loans, excluding those held for sale, totaled $113,556
at December  31, 2003,  $119,920 at December 31, 2002,  $146,636 at December 31,
2001, $132,549 at December 31, 2000 and $91,045 at December 31, 1999.

The  following  table sets  forth  information  concerning  the  composition  of
Heartland's  loan portfolio in dollar amounts and percentages as of December 31,
2003, 2002, 2001, 2000 and 1999:


                                     2003                 2002
                                  Percent of            Percent of
                              Amount      Loans      Amount     Loans
                              ------      -----      ------     -----
TYPE OF LOAN
Commercial loans and leases  $ 64,799      57.06%  $  66,861    55.76%
Construction                   10,748       9.47      12,489    10.41
Residential mortgages          24,668      21.72      23,952    19.97
Consumer                       13,341      11.75      16,618    13.86
                             --------   --------   ---------  -------
Gross loans                  $113,556     100.00%  $ 119,920   100.00%
                             ========   ========   =========  =======




Dollar amounts in thousands except per share data.
                                                                             13.

<PAGE>


                                     2001                  2000
                                  Percent of            Percent of
                              Amount      Loans      Amount     Loans
                              ------      -----      ------     -----
TYPE OF LOAN
Commercial loans and leases  $ 76,097      51.90%   $ 63,776    48.11%
Construction                   23,150      15.79      24,719    18.65
Residential mortgages          24,795      16.91      21,942    16.55
Consumer                       22,594      15.40      22,122    16.69
                             --------   --------    --------  -------
Gross loans                  $146,636     100.00%   $132,549   100.00%
                             ========   ========    ========  =======


                                    1999
                                 Percent of
                              Amount      Loans
                              ------      -----
TYPE OF LOAN
Commercial loans and leases   $42,778      46.99%
Construction                   17,109      18.79
Residential mortgages          15,069      16.55
Consumer                       16,089      17.67
                              -------   --------
Gross loans                   $91,045     100.00%
                              =======   ========



LOAN MATURITY  SCHEDULE.  The following table sets forth certain  information at
December 31, 2003  regarding the dollar amount of loans  maturing in Heartland's
loan  portfolio  based on the date that final payment is due. This schedule does
not reflect the effects of possible  prepayments  or  enforcement of due-on-sale
clauses.  Management  expects  prepayments  will cause actual  maturities  to be
shorter than contractual maturities. Certain mortgage loans such as construction
loans and second  mortgage loans are included in the commercial and  installment
loan totals below.

                                            Remaining  Maturities
                                            One Year   Over one to  Over five
                                 Amount      or less   five years     years
                                 ------      -------   ----------     -----
TYPE OF LOAN

  Commercial loans and leases   $ 64,799     $14,254    $ 7,829     $42,716
  Construction                    10,748       6,144      2,092       2,512
  Residential mortgages           24,668         664      1,004      23,000
  Consumer                        13,341       2,497      8,456       2,388
                                --------     -------    -------     -------
  Total                         $113,556     $23,559    $19,381     $70,616
                                ========     =======    =======     =======


Commercial  loans and leases with remaining  maturities over one year consist of
$9,858 with fixed interest rates and $40,687 with variable  interest  rates,  at
December 31, 2003.  Construction  loans with remaining  maturities over one year
consist of $2,847 with fixed  interest  rates and $1,757 with variable  interest
rates,  at  December  31,  2003.   Residential  mortgage  loans  with  remaining
maturities over one year consist of $2,317 with fixed interest rates and $21,687
with  variable  interest  rates,  at  December  31,  2003.  Consumer  loans with
remaining  maturities  over one year consist of $8,646 with fixed interest rates
and $2,198 with variable interest rates, at December 31, 2003.



Dollar amounts in thousands except per share data.
                                                                             14.

<PAGE>

Nonperforming  loans  include  non-accrual  loans and  accruing  loans  that are
contractually past due 90 days or more as to interest or principal payments. The
following  table sets forth certain  information  regarding the dollar amount of
nonperforming loans at December 31:

Nonperforming loans:       2003      2002        2001         2000      1999
                           ----      ----        ----         ----      ----

Non-accrual loans       $  3,023    $4,857     $   663     $   992    $   138
Accruing loans past
  due 90 or more days          0       776          86           0        137
                        --------    ------     -------     -------    -------
Total nonperforming
   loans                $  3,023    $5,633     $   749     $   992    $   275
                        ========    ======     =======     =======    =======

At December 31, 2003,  non-accrual loans included $68 in commercial loans, $0 in
real estate  construction loans, $2,936 in residential real estate loans and $19
in consumer loans.

ALLOWANCE  FOR LOAN LOSSES.  The Bank  maintains an allowance for loan losses to
provide for probable incurred losses in the loan portfolio.  Monthly, management
estimates the allowance  balance required using past loan loss  experience,  the
nature  and  volume  of  the  portfolio,  information  about  specific  borrower
situations  and estimated  collateral  values,  economic  conditions,  and other
factors. All loans are given a risk grade from 1 to 7, which is revised based on
changes  in  the  borrowers'  ability  to  repay,  collateral  values,  economic
conditions and other factors.

Loans with a risk grade of 6 or 7 are evaluated  individually for impairment and
allowance amounts are allocated specifically,  if necessary,  based on estimated
present  value of future  cash  flows.  The  balance  of loans  graded 6 or 7 at
December  31, 2003 was $10,269 and  related  allocated  reserve was $1,768.  All
other  loans are  evaluated  as a group by loan  type.  Allocation  factors  are
assigned  to each  risk  grade  from 1 to 5 within  each loan  type.  Allocation
factors are derived by using historical loss percentages, modified for trends in
losses,  trends in delinquency,  economic factors and other factors. At December
31,  2003,  the  balance of all loans  graded 1 to 5 was  $103,287  and  related
allocated  allowance was $1,533.  Provision for loan losses is adjusted in order
to maintain the balance in the allowance for loan losses at the level  estimated
by the calculation of allocated allowance.

The Board of Directors of the Bank, not less frequently than quarterly,  reviews
with  senior  management  its  recommended   allowance.   For  more  information
concerning the factors  considered in determining  the adequacy of the allowance
for loan and lease  losses,  see  "Nonperforming  Assets and  Allowance for Loan
Losses"  under the  section  headed  "Management's  Discussion  and  Analysis of
Financial  Condition and Results of Operations" of Heartland's Annual Report for
2003  attached  as  Exhibit  13,  which  discussion  is  incorporated  herein by
reference.  At December 31, 2003,  Heartland's allowance for loan losses totaled
$3,301.



Dollar amounts in thousands except per share data.
                                                                             15.

<PAGE>



The following table provides an allocation of Heartland's allowance for probable
loan losses as of each of the following dates:

                                                At December 31,
                                                ---------------
                                   2003     2002      2001      2000      1999
                                   ----     ----      ----      ----      ----
   Loan type
     Commercial loans and
      leases                    $ 1,624   $ 2,063   $ 1,466   $ 1,284   $  641
     Construction                   452       565       789       497      257
     Residential mortgages          836       382       679       441      226
     Consumer                       389       488       466       445      241
                                -------   -------   -------   -------   ------

                                $ 3,301   $ 3,498   $ 3,400   $ 2,667   $1,365
                                =======   =======   =======   =======   ======


The activity in the allowance  for loan losses for the years ended  December 31,
is as follows:
                               2003       2002       2001     2000       1999
                               ----       ----       ----     ----       ----

   Beginning balance         $ 3,498   $  3,400   $ 2,667   $  1,365   $   742
   Provision charged
    to operations                692      3,150     2,967      1,744       656
   Loans charged-off          (1,103)    (3,702)   (2,300)      (446)      (34)
   Recoveries on loans
    previously charged-off       214        650        66          4         1
                             -------   --------   -------   --------   -------

   Ending balance            $ 3,301   $  3,498   $ 3,400   $  2,667   $ 1,365
                             =======   ========   =======   ========   =======


The following table sets forth certain  information  regarding the dollar amount
of charge-offs and recoveries for the years ended December 31:


                               2003       2002       2001     2000       1999
                               ----       ----       ----     ----       ----
Charge-offs by loan type:
   Commercial                $   444   $  2,648   $   997   $    194   $     -
   Construction                   98        176       927          -         -
   Residential mortgages         198        424        72        147         -
   Consumer                      363        454       304        105        34
                             -------   --------   -------   --------   -------

   Total charge-offs         $ 1,103   $  3,702   $ 2,300   $    446   $    34
                             =======   ========   =======   ========   =======




                               2003       2002       2001     2000       1999
                               ----       ----       ----     ----       ----
Recoveries by loan type:
   Commercial                $    37   $     82   $    43   $      -   $     -
   Construction                    1        465         -          -         -
   Residential mortgages          56         11         -          -         -
   Consumer                      120         92        23          4         1
                             -------   --------   -------   --------   -------

   Total recoveries          $   214   $    650   $    66   $      4   $     1
                             =======   ========   =======   ========   =======



Dollar amounts in thousands except per share data.
                                                                             16.

<PAGE>



The following table sets forth certain asset quality ratios at and for the years
ended December 31:

                                 2003      2002       2001     2000      1999
                                 ----      ----       ----     ----      ----

   Allowance for loan losses
    to nonperforming loans      109.20%    62.1%     453.9%    371.0%   201.0%
   Net charge-offs to
    average loans                  .72      2.3        1.5        .3       -
   Provision to average
    loans                          .56      2.3        2.0       1.5      0.9

SECURITIES.  The following  table sets forth the carrying  value of  Heartland's
investment portfolio as of December 31:

                                                    Gross       Gross
                                        Fair     Unrealized  Unrealized
                                        Value       Gains      Losses
                                        -----       -----      ------
2003
   U.S. Government and government
    sponsored entities                 $17,417     $    93     $   (47)
   Obligations of states and
    political subdivisions               4,499         143           -
   Mortgage backed securities           12,076         148         (29)
   Corporate obligations                 1,116          84           -
                                       -------     -------     -------
                                       $35,108     $   468     $   (76)
                                       =======     =======     =======

                                                    Gross       Gross
                                        Fair     Unrealized  Unrealized
                                        Value       Gains      Losses
                                        -----       -----      ------
2002
   U.S. Government and government
    sponsored entities                 $ 7,937     $   104     $     -
   Obligations of states and
    political subdivisions               2,709         119           -
   Mortgage backed securities            7,826         212          (2)
   Corporate obligations                 1,094          54           -
                                       -------     -------     -------
                                      $ 19,566     $   489     $    (2)
                                      ========     =======     =======

The  following  table sets forth the  maturities  of  investment  securities  at
December 31, 2003 and the weighted-average  yield (on a tax equivalent basis) on
such securities.

Fair Values                                 Remaining  Maturities
                                One Year   Over one to Over five to Over ten
                                 or less   five years    ten years    years
                                 -------   ----------    ---------    -----
TYPE OF SECURITY

 U.S. Government and government
  sponsored entities            $    512     $15,893    $ 1,012     $     -
 Obligations of states and
   political subdivisions          1,510         895        893       1,201
 Corporate obligations                 -       1,116          -           -
 Mortgage-backed securities            -       1,148      3,244       7,684
                                --------     -------    -------     -------
  Total                         $  2,022     $19,052    $ 5,149     $ 8,885
                                ========     =======    =======     =======

1. Maturity for Mortgage-backed  securities was determined using the contractual
   date of final principal payment.



Dollar amounts in thousands except per share data.
                                                                             17.

<PAGE>



Weighted Average Yields                     Remaining  Maturities
                                One Year   Over one to Over five to  Over ten
                                 or less   five years   ten years     years
                                 -------   ----------   ---------     -----
TYPE OF SECURITY

 U.S. Government and government
  sponsored entities                2.09%       3.03%      4.25%          -%
 Obligations of states and
   political subdivisions           1.47        2.67       4.42        5.00
 Corporate obligations                 -        6.01          -           -
 Mortgage-backed securities            -        3.28       4.22        4.47
  Total                             1.66        3.19%      4.26%       4.54

2. Computation of yields is based on amortized cost.




Dollar amounts in thousands except per share data.
                                                                             18.

<PAGE>


The  following  table sets forth the  amounts  of  Heartland's  interest-earning
assets and interest-bearing  liabilities outstanding at December 31, 2003, which
are scheduled to reprice or mature in each of the time periods shown. The amount
of assets and  liabilities  shown which reprice or mature in a given period were
determined in accordance with the  contractual  terms of the asset or liability.
In addition,  securities  expected to be called by the issuer due to the current
rate  environment  are included in the  categories  based on the  expected  call
dates.  Loans held for sale are included in the categories based on the expected
sale  date.  This  table  does not  necessarily  indicate  the impact of general
interest rate movements on Heartland's net interest income because the repricing
of certain  categories of assets and liabilities is subject to the interest rate
environment,  competition  and other factors beyond  Heartland's  control.  As a
result,  certain  assets  and  liabilities  may in fact  mature  or  reprice  at
different times and in different volumes than indicated.


                            Within 3    4 - 12     1 - 5      Over 5
                             Months     Months     years       years       Total
                             ------     ------     -----       -----       -----
Interest-earning assets:
  Federal funds sold        $ 2,636   $     -    $     -      $     -   $  2,636
  Time deposits with other
    Financial institutions        -       500          -            -        500
  Securities                  4,526    14,881      13,830       1,871     35,108
  Loans held for sale         2,058         -           -           -      2,058
  Loans                      39,974    15,757      47,484      10,341    113,556
  FHLB stock                    638         -           -           -        638
                            -------   -------     -------     -------   --------
   Total interest-earning
      assets                 49,832    31,138      61,314      12,212    154,496
                            -------   -------     -------     -------   --------
Interest-bearing
liabilities:
  Interest bearing
   demand     and savings    67,408         -           -           -     67,408
   deposits
  Time deposits              13,145    14,670      22,940           -     50,755
  Repurchase Agreements       7,812         -           -           -      7,812
  FHLB advances                   -     3,000       1,000           -      4,000
  Subordinated debentures     5,155         -           -           -      5,155
                            -------   -------     -------     -------   --------
   Total interest-bearing
   liabilities               93,520    17,670      23,940           -    135,130
                            -------   -------     -------     -------   --------
Interest-earning assets
  less
  Interest-bearing
  liabilities              $(43,688)  $13,468    $ 37,374    $ 12,212    $19,366
                           ========   =======    ========    ========    =======

Cumulative interest-rate
sensitivity gap            $(43,688) $(30,220)   $  7,154    $ 19,366
                           ========  ========    ========    ========

Cumulative interest-rate
  gap as a percentage of
  total interest earning
  assets                     (28.28)%  (19.56)%      4.63%      12.53%



Dollar amounts in thousands except per share data.
                                                                             19.

<PAGE>


CERTIFICATES OF DEPOSIT.  The following table presents the amount of Heartland's
jumbo  certificates of deposit with principal  balances greater than $100 by the
time remaining until maturity as of December 31, 2003:

                                                 At December 31,
                                                 ---------------
               Three months or less                $    4,433
               Over 3 months to 6 months                1,834
               Over 6 months to 12 months               1,604
               Over 12 months                           6,286
                                                   ----------
                  Total                            $   14,157
                                                   ==========



REPURCHASE   AGREEMENTS.   The  following  table  presents  certain  information
pertaining to Heartland's repurchase agreements:

                                                 2003         2002
                                                 ----         ----

Balance outstanding at December 31             $ 7,812     $ 6,251

Maximum amount outstanding at any month-end    $ 7,812     $ 7,364

Average balance outstanding                    $ 4,194     $ 4,855

Weighted average rate                              .60%       1.52%



ITEM 2.  DESCRIPTION OF PROPERTY

Heartland  owns its home office at 420 North Morton Street,  Franklin,  Indiana.
The facility is used as the main banking  office and  Heartland's  headquarters.
The 5,700 square foot  building was  constructed  prior to 1970 and underwent an
extensive renovation in 1997 prior to the opening of Heartland.

The Bank leases two branch offices in Greenwood,  Indiana, and the land on which
the branch office in Bargersville, Indiana stands. The Bank also leases a 12,500
square foot facility that was constructed in 2001 in Franklin,  Indiana for loan
production and loan and deposit operations, not as a branch facility.

Heartland  and the Bank  presently  do not invest in real estate other than real
estate acquired for purposes of operations and mortgage interests in real estate
securing loans made by the Bank in the ordinary course of business. The Board of
Directors of the Bank from time to time specifies its policies as to the amounts
and types of mortgage  loans that the Bank may  originate or acquire,  and these
policies may be changed without action by Heartland shareholders. Mortgage loans
are made for interest income purposes, not for capital gain.



Dollar amounts in thousands except per share data.
                                                                             20.

<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

Other than routine litigation incidental to the business, and the May 2002 Order
that is  described  under Item 1,  "BUSINESS  --REGULATION  AND  SUPERVISION  OF
HEARTLAND AND THE BANK" (which description is incorporated herein by reference),
which the Bank believes is in the process of being  released,  Heartland and the
Bank are not involved in any legal proceedings.


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

No matter was submitted to a vote of security  holders through the  solicitation
of proxies or otherwise, during the quarter ended December 31, 2003.



                                                                             21.

<PAGE>

                                     PART II

Item 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Information  required  for this item is included in the section  headed  "COMMON
STOCK." in Exhibit 13 (the  Registrant's  Annual Report to Shareholders  for the
year  ended  December  31,  2003),  which  section  is  incorporated  herein  by
reference.  The description of legal and regulatory  restrictions that limit the
ability  of  the  Bank  to pay  dividends  to  Heartland,  and  which  therefore
indirectly limit the ability of Heartland to pay dividends to its  shareholders,
that is included in Item 1 of this report,  Description  of Business,  under the
caption  "Regulation and Supervision of Heartland and the Bank", is incorporated
herein by reference.


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

Information   required  for  this  item  is  included  in  the  section   headed
"MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS." in Exhibit 13 (the  Registrant's  Annual Report to Shareholders for
the year ended  December 31,  2003),  which  section is  incorporated  herein by
reference.


ITEM 7.  FINANCIAL STATEMENTS.

Exhibit 13 (the  Registrant's  Annual Report to Shareholders  for the year ended
December 31, 2003) includes  (following the page headed "FINANCIAL  STATEMENTS")
the following  items (each of which is  incorporated  herein by reference to the
appropriate pages of Exhibit 13):

o  Report of Independent Auditors on consolidated financial statements.

o  Consolidated Balance Sheets at December 31, 2003 and 2002.

o  Consolidated Statements of Operations for the years ended December 31, 2003
   and 2002.

o  Consolidated  Statements  of  Changes in  Shareholders'  Equity for the years
   ended December 31, 2003 and 2002.

o  Consolidated  Statements of Cash Flows for the years ended  December 31, 2003
   and 2002.

o  Notes to consolidated financial statements.


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

None



                                                                             22.

<PAGE>


ITEM 8A. CONTROLS AND PROCEDURES

As of  December  31,  2003,  Heartland  carried  out an  evaluation,  under  the
supervision and with the  participation of its principal  executive  officer and
principal financial officer, of the effectiveness of the design and operation of
its disclosure  controls and procedures.  Based on this evaluation,  Heartland's
principal  executive  officer and principal  financial  officer  concluded  that
Heartland's  disclosure controls and procedures are effective in timely alerting
them to material information required to be included in the Heartland's periodic
reports filed with the  Securities and Exchange  Commission.  It should be noted
that the  design  of any  system  of  controls  is based  in part  upon  certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future conditions.

There was no change in Heartland's  internal  control over  financial  reporting
that  occurred  during  Heartland's  fourth  fiscal  quarter  of 2003  that  has
materially affected,  or is reasonably likely to materially affect,  Heartland's
internal control over financial reporting.


                                                                             23.

<PAGE>


                                    PART III

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

Information  relating  to  directors  and  executive  officers of  Heartland  is
included in the section headed "Election of Directors" in Exhibit 99.1, the 2004
Proxy Statement of Heartland, which section is incorporated herein by reference.
Additional  information  relating to non-director  executive  officers is listed
below. The position and principal  occupation of each of such executive officers
has been the same for at least the last five years, except as indicated below.

Executive Officers:

John M. Morin
Senior Vice President, Consumer Lending, of the Bank
Age 54

R. Trent McWilliams
Vice President, Business Development of the Bank
Age 52

Jeffery D. Joyce
Vice President and Chief Financial Officer of Heartland and the Bank
Age 33

Eric Johnson1
Chief Credit Officer of the Bank
Age 54

1 Prior to becoming  Chief Credit Officer of the Bank in April 2002, Mr. Johnson
  served  in  various  positions  at  Michigan  National  Bank,  NA from 1991 to
  November 2001, most recently as Vice President and Commercial Loan officer.

Section 16(a) Compliance:

Heartland has no class of equity securities registered with the Commission under
Section 12 of the Securities Exchange Act of 1934, as amended, and Section 16(a)
is therefore inapplicable to its securities.

Code of Ethics. The Board of Directors of Heartland has adopted a Code of Ethics
that constitutes a "code of ethics" as that term is defined by SEC rules adopted
under the  Sarbanes-Oxley  Act of 2002.  Heartland  will  provide  to any person
without  charge a copy of its Code of Ethics,  if such person  submits a written
request to the attention of Jeff Joyce.

Audit  Committee  Financial  Expert.  The Board of Directors  of  Heartland  has
determined that Patrick A Sherman, a member of its Audit Committee, is an "audit
committee  financial  expert" as that term is defined by SEC rules adopted under
the  Sarbanes-Oxley Act of 2002. The Board of Directors has also determined that
Mr. Sherman  qualifies as  "independent,"  as that term is defined by applicable
SEC rules and by the  Marketplace  Rules of The NASDAQ Stock Market,  Inc.,  for
purposes of  determining  the  independence  of members of audit  committees  of
companies (unlike  Heartland) whose securities are listed on the National Market
System of NASDAQ.



                                                                             24.

<PAGE>


ITEM 10.   EXECUTIVE COMPENSATION

Information  relating to  compensation  of  Heartland's  executive  officers and
Directors is included under the captions "Executive  Compensation" and "Election
of  Directors  Compensation  of  Directors"  in  Exhibit  99.1,  the 2004  Proxy
Statement of Heartland, which sections are incorporated herein by reference.

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Information  required by this item  regarding  beneficial  ownership  of certain
persons is included under the captions  "ELECTION OF DIRECTORS" in Exhibit 99.1,
the 2004 Proxy Statement of Heartland,  which section is incorporated  herein by
reference. In tabular format, the information required by Item 403 of Regulation
S-B with  respect  to  persons  who are known  (based  solely  upon  information
publicly  filed by such  beneficial  owners  with the  Securities  and  Exchange
Commission  in  certain  documents  described  below)  to  Heartland  to be  the
beneficial  owner of more than five percent of  Heartland's  common shares is as
follows:


                      Name and                 Amount and
  Title of     Address of Beneficial      Nature of Beneficial      Percent of
    Class              Owner                    Ownership              Class

Common         Hot Creek Investors, LP            134,300              9.63%
               Hot Creek Capital, LLC
               David M. W. Harvey
               PO Box 3178
               Gardnerville, NV  89410

Common         Riggs Partners, LLC                 98,353              7.05%
               Philip Timyan
               3045 Central Avenue
               Wester Springs, IL  30538

Common         Jeffrey A. Miller                  103,381              7.42%
               Eric D. Jacobs
               P.O. Box 26039 Gallows Bay Station
               Christiansted, St. Croix, USVI 00824

Common         Tontine Financial Partners, L.P.    77,200              5.54%
               Tontine Management, L.L.C.
               Jeffrey L. Gendell
               55 Railroad Avenue, Third Floor
               Greenwich, Connecticut 06830



According  to a Schedule  13D  amendment  filed as of May 14,  2003 by Hot Creek
Investors,  LP, Hot Creek  Capital,  LLC and David M. W. Harvey,  all securities
beneficially owned by them were held by Hot Creek Investors, L.P. ("Hot Creek").
Hot Creek  Capital,  LLC and David M. W. Harvey stated that they were joining in
the Schedule 13G because they  exercised  voting and  investment  power over the
shares held by Hot Creek.

According  to a Schedule  13D  amendment  filed as of December 18, 2002 by Riggs
Partners, LLC, and Philip Timyan, all securities beneficially owned by them were
held by Riggs Partners, LLC ("Riggs").  Philip Timyan stated that he was joining
in the Schedule 13D because he exercised  voting and  investment  power over the
shares held by Riggs.

                                                                             25.

<PAGE>


According  to a  Schedule  13D  filed as of May 12,  2003 by  Tontine  Financial
Partners,  L.P.,  Tontine  Management,   L.L.C.  and  Jeffrey  L.  Gendell,  all
securities  beneficially owned by them were held by Tontine Financial  Partners,
L.P. ("Tontine").  Tontine Management, L.L.C. and Jeffrey L. Gendell stated that
they were  joining  in the  Schedule  13D  because  they  exercised  voting  and
investment power over the shares held by Tontine.

According to a Schedule 13G  amendment  filed as of February 13, 2004 by Jeffery
Miller and Eric  Jacobs,  Mr.  Miller and Mr.  Jacobs do not  directly  hold any
shares,  but did indirectly  beneficially  own 103,381 shares of Common Stock in
their capacity as (i) the sole managers and members of Miller & Jacobs  Capital,
L.L.C., a Virgin Islands limited  liability  company ("MJC"),  which in turn (a)
provides discretionary  investment management services to Acadia Fund I, L.P., a
Delaware  limited  partnership  ("Acadia LP"), (b) serves as a sub-advisor  with
discretionary  investment  advisory authority for Acadia Life  International,  a
Bermuda  corporation,  and  (c)  serves  as  a  sub-advisor  with  discretionary
investment advisory authority for Avant Garde Investment, Ltd., a British Virgin
Islands corporation;  (ii) the sole managers of Cerulean Investment  Management,
L.L.C., a Delaware limited liability company, which in turn serves as investment
manager for Cerulean  Partners,  Ltd.,  an exempt  company  incorporated  in the
Cayman Islands; and (iii) the sole members and managers of Acadia Fund I, LLC, a
Delaware limited liability company,  which in turn serves as the general partner
for Acadia  Fund I, GP,  L.P.,  a Delaware  limited  partnership,  which in turn
serves as general  partner for Acadia LP.  Jeffery Miller and Eric Jacobs stated
that they were  filing  the  Schedule  13G  because  they  exercised  voting and
investment power over the shares held by Acadia LP.


                                                                             26.

<PAGE>


Equity Compensation Plan Information

At December  31,  2003,  the Company  maintained  three stock option plans under
which it had  authorized  the  issuance of its Common  Shares to  employees  and
non-employee directors as compensation:  its 1997 employee plan (under which new
options may be granted through 2007); its 1997 non-employee director plan (under
which  no new  options  may be  granted  after  September  2002;  and  its  2003
non-employee  director  plan).  The two 1997  plans  were each  approved  by the
requisite  vote  of the  Company's  common  shareholders  in 1997  prior  to the
Company's initial public offering of its common shares.  Each of these plans was
amended  in 1999 by the Board of  Directors  to  increase  the  number of common
shares  available for issuance under those plans;  the amendment of the employee
plan was  submitted  for  approval  by  shareholders  and was so approved by the
requisite vote, and the amendment of the nonemployee  director plan also was not
submitted for approval by the shareholders.  The 2003 non-employee director plan
was not submitted for approval by the  shareholders.  At December 31, 2003,  the
Company was not a party to any individual compensation arrangement involving the
authorization for issuance of its equity securities to any single person,  other
than option agreements  granted under the terms of one of the three option plans
identified  above.  The following table sets forth  information  regarding these
plans as of December 31, 2003:

                                                                   Number of
                                                                   Securities
                                                                   Remaining
                                   Number of                     Available for
                                   Securities      Weighted     Future Issuance
                                  to be Issued      Average       under Equity
                                 upon Exercise  Exercise Price    Compensation
                                       of             of             Plans
                                  Outstanding     Outstanding      (Excluding
                                    Options,       Options,        Securities
                                  Warrants or    Warrants and     Reflected in
         Plan Category               Rights         Rights       First Column)
         -------------               ------         ------       -------------

Equity compensation plans
approved by
security holders                     168,039         $9.07           20,804
Equity compensation plans not
approved
by security holders                   50,505          9.07            8,000
                                     -------                         ------
Total                                218,544         $9.07           28,804



ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information  required  by this item is  included  under the  caption  "EXECUTIVE
COMPENSATION -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" in Exhibit 99.1,
the 2004 Proxy Statement of Heartland,  which section is incorporated  herein by
reference.



                                                                             27.

<PAGE>


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

Exhibit No.     Description

3.1   Amended and Restated  Articles of Incorporation  of Heartland  Bancshares,
      Inc.,   which  are  incorporated  by  reference  to  Exhibit  3.1  in  the
      Registration Statement Form SB-2, filed July 28, 1997, as amended,  ("Form
      SB-2").
3.2   Amended and Restated Bylaws of Heartland Bancshares, Inc.
4.1   Rights Agreement dated as of June 23, 2000 between  Heartland  Bancshares,
      Inc., and Heartland  Community  Bank, as Rights Agent,  is incorporated by
      reference to Exhibit 4.01 to Form 8-K filed June 30, 2000.
4.2   Terms of Common  Shares and  Preferred  Shares are included in the Amended
      and Restated  Articles of  Incorporation  of Heartland  Bancshares,  Inc.,
      which are  incorporated  by reference  to Exhibit 3.1 to the  Registration
      Statement on Form SB-2, filed July 28, 1997, as amended.
4.3   Terms of  Series A  Preferred  Shares  are  included  in the  Articles  of
      Amendment of Articles of Incorporation of Heartland  Bancshares,  Inc., as
      filed with the  Indiana  Secretary  of State on June 27,  2000,  which are
      incorporated by reference to Exhibit 3.01 to Form 8-K filed June 30, 2000.
10.1  1997 Stock Option Plan, as amended,  which is incorporated by reference to
      Exhibit  10.1 in the  Issuer's  Quarterly  Report on the Form  10-QSB  for
      quarter ended June 30, 1999.
10.2  1997 Stock Option Plan for Nonemployee Directors,  as amended January 1999
      and January 2003.
10.3  Deferred  Compensation  Master  Plan  Agreement  dated as of July 1, 2001,
      which is  incorporated  by reference  to Exhibit 10.3 in the  Registrant's
      Annual Report on the Form 10-KSB for year ended December 31, 2001.
10.4  Split  Dollar  Endorsement  Agreement  dated as of January 1, 2001 between
      Heartland  Community Bank and Steven L. Bechman,  which is incorporated by
      reference to Exhibit 10.4 in the  Registrant's  Annual  Report on the Form
      10-KSB for year ended December 31, 2001.
10.5  2003 Stock Option Plan for Nonemployee Directors, which is incorporated by
      reference to Exhibit 10.5 in the  Registrant's  Annual  Report on the Form
      10-KSB for year ended December 31, 2002.
10.6  Split  Dollar  Endorsement  Agreement  dated as of January 1, 2001 between
      Heartland  Community Bank and Jeffrey L. Goben,  which is  incorporated by
      reference to Exhibit 10.6 in the  Registrant's  Annual  Report on the Form
      10-KSB for year ended December 31, 2002.
10.7  Split  Dollar  Endorsement  Agreement  dated as of January 1, 2001
      between  Heartland Community Bank and John M. Morin.
10.8  Split  Dollar  Endorsement  Agreement  dated as of January 1, 2001
      between  Heartland Community Bank and Jeffery D. Joyce.
13    The Issuer's Annual Report to Shareholders for the year ended December 31,
      2003.  As  permitted  by  paragraph  (b)  under  Supplemental  Information
      requirements  applicable to Section 15(d) filers, and except to the extent
      specifically  incorporated herein by reference,  the Issuer disclaims that
      this exhibit is "filed" or subject to the liabilities of Section 18 of the
      Exchange Act or other liabilities.
21    Subsidiaries of the Issuer and names under which the Issuer is doing
      business
31.1  Section 302  Certification  for President and Chief Executive  Officer
31.2  Section  302   Certification  for  Chief  Financial  Officer
32.1  Section  906 Certification  for  President  and Chief  Executive  Officer
32.2  Section  906 Certification for Chief Financial Officer



                                                                             28.

<PAGE>



99.1  The Issuer's  2004 Proxy  Statement.  As permitted by paragraph  (b) under
      Supplemental  Information requirements applicable to Section 15(d) filers,
      and except to the extent  specifically  incorporated  herein by reference,
      the  Issuer  disclaims  that this  exhibit  is  "filed"  or subject to the
      liabilities of Section 18 of the Exchange Act or other liabilities.
99.2  Form of Proxy for 2004 Annual Meeting. As permitted by paragraph (b) under
      Supplemental  Information requirements applicable to Section 15(d) filers,
      and except to the extent  specifically  incorporated  herein by reference,
      the  Registrant  disclaims  that this exhibit is "filed" or subject to the
      liabilities of Section 18 of the Exchange Act or other liabilities.



Reports on Form 8-K

No report on Form 8-K was filed during the three months ended December 31, 2003,
other  than a report  on Form 8-K that was  furnished  on  November  6,  2003 to
provide the press  release  that  Heartland  issued to  announce  its results of
operations for the third quarter of 2003.


                                                                             29.

<PAGE>


ITEM 14.  Principal Accountant Fees and Services.

Audit  Fees.   Crowe  Chizek  and  Company  LLC  ("Crowe  Chizek")  has  audited
Heartland's  financial  statements for the calendar years 2003 and 2002 that are
included in this report as filed with the  Securities  and  Exchange  Commission
(SEC). Crowe Chizek has reviewed Heartland's unaudited financial statements that
were included in its quarterly reports on Form 10-QSB,  which reports were filed
with the SEC during the years 2003 and 2002.  Heartland  has paid, or expects to
pay, fees  (including cost  reimbursements)  to Crowe Chizek for these audit and
review services of $43,700 for 2003 and $38,950 for 2002.

Audit-Related Fees.  Heartland has paid, fees (including cost reimbursements) to
Crowe Chizek for  audit-related  services  rendered during 2003 and 2002 of $525
for 2003 and  $1,035  for 2002.  These  services  included  assistance  with SEC
matters in 2003 and assistance  provided to FDIC examiners relative to the audit
in 2002.

Tax Fees.  Heartland has paid,  fees (including  cost  reimbursements)  to Crowe
Chizek for tax  services  rendered  during  2003 and 2002 of $7,350 for 2003 and
$5,375 for 2002. For both years,  these services included tax return preparation
and assistance with estimated tax matters.

Other Fees.  Heartland has paid, fees (including cost  reimbursements)  to Crowe
Chizek for all other services  rendered  during 2003 and 2002 of $3,325 for 2003
and $6,235 for 2002. For 2003, these services included corporate structuring and
strategic  planning  consulting  services.  For 2002,  these  services  included
regulatory compliance review services.

Pre-Approval by Audit Committee of Independent  Accountant Services. As required
by SEC rules that first became  effective with respect to Heartland in May 2003,
the Audit  Committee  of the Board  (or a member of the Audit  Committee  acting
under authority delegated to him by the Audit Committee) approves in advance all
services  proposed to be  performed  for  Heartland or its  subsidiaries  by any
public  accounting firm that performs (or proposes to perform) audit,  review or
attest services for Heartland or its  subsidiaries.  Under these SEC rules,  the
requirement for advance Audit Committee  approval of services (other than audit,
review or attest services) is waived if they were not recognized to be non-audit
services at the time that the audit firm was engaged to provide those  services,
and certain  other  conditions  are  satisfied.  Since the date of adoption of a
pre-approval  requirement by the Audit Committee,  none of the services of Crowe
Chizek that were covered by the fees described above were performed  without the
prior approval of the Audit  Committee (or the prior approval of a member of the
Audit Committee  acting under delegated  authority) in reliance upon this waiver
provision of the SEC rules.



                                                                             30.

<PAGE>


SIGNATURES

In  accordance  with  Section 13 or 15(d) of the  Securities  Exchange  Act, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

HEARTLAND BANCSHARES, INC.

By:/s/ Steven L. Bechman
   ---------------------------------
Date: March 29, 3004

Steven L. Bechman,
Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated:

Signatures and Title(s) Date

By:/s/ Steven L. Bechman      March 29, 2004
- -----------------------------
Steven L. Bechman, Chief Executive Officer and President; Director
(principal executive officer)

By:/s/ Gordon Dunn            March 29, 2004
- -----------------------------
Gordon Dunn, Director

By:/s/ Sharon Acton           March 29, 2004
- -----------------------------
Sharon Acton, Director

By:/s/ Jeffrey L. Goben       March 29, 2004
- -----------------------------
Jeffrey L. Goben, Director

By:/s/ J. Michael Jarvis      March 29, 2004
- -----------------------------
J. Michael Jarvis, Director

By:/s/ John Norton            March 29, 2004
- -----------------------------
John Norton, Director

By:/s/ Robert Richardson      March 29, 2004
- -----------------------------
Robert Richardson, Director

By:/s/ Patrick A. Sherman     March 29, 2004
- -----------------------------
Patrick A. Sherman, Director

By:/s/ Jeffery D. Joyce       March 29, 2004
- -----------------------------
Jeffery D. Joyce, Chief Financial Officer
(principal financial and accounting officer)





                                                                             31.