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

                   For the fiscal year ended December 31, 1999

                                       OR

                 [ ] TRANSITION REPORT PURSUANT TO 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.
             (Exact name of registrant as specified 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)

Registrant'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

Indicate by check mark whether the Company (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
                                 -----  -----

Indicate by check mark if disclosure of delinquent filers pursuant to Rule
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant'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]
                               -----
Aggregate  market  value of common  stock  held by  non-affiliates  computed  by
reference  to the sale  price of such  stock as of March 22,  2000 of $7.125 per
share $8,254,028

Shares of common stock outstanding as of March 22, 2000:           1,265,000

DOCUMENTS INCORPORATED BY REFERENCE:
1. Portions of the Annual Report to Shareholders of Heartland  Bancshares,  Inc.
   for 1999, 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 April 24, 2000, 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

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

PART II

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

PART III

Item  9.  Directors Executive Officers Promoters and Control
          Persons of Heartland
Item 10.  Executive Compensation
Item 11.  Security Ownership of Certain Beneficial Owners
          and Management
Item 12.  Certain Relationships and Related Transactions

Item 13.  Exhibits and Reports on Form 8-K

Signatures



<PAGE>





                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

Heartland   Bancshares,   Inc.   (Heartland)  is  a  one-bank   holding  company
incorporated  May 27, 1997.  Heartland  raised  approximately  $11,731 in equity
capital through the sale of 1,265,000 shares of Heartland's  common stock at $10
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.

At December 31, 1999,  Heartland had approximately  $110,139 of assets, loans of
$91,045,   deposits  of  approximately   $88,519  and  shareholders'  equity  of
approximately  $11,643.  The Bank operates from offices  located in Franklin and
Greenwood,  Indiana and from its newest branch office  location in  Bargersville
Indiana  opened in January 2000.  As of December 31, 1999,  The Bank had 43 full
time equivalent employees.  The Bank utilizes a leased employee arrangement with
a third party  company,  where-by 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 has no full time employees. Heartland
is subject to regulation by the Federal Reserve Board.

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.

The business of the Bank  consists  primarily of  attracting  deposits  from the
general public,  originating  commercial,  residential  real estate and consumer
loans and purchasing  certain investment  securities.  The Bank in November 1999
opened a  full-service  brokerage  department  in order to sell mutual funds and
other non-deposit  investment  products and in January 2000 opened a certificate
of deposit brokerage program.

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.  Heartland  offers  commercial loans to area businesses in
addition to new home construction loans and business lines of credit.

Heartland also invests in various US Treasury,  federal agency, state, municipal
and other  investment  securities  permitted by applicable laws and regulations.
The  principal  sources  of funds for  Heartland's  lending  activities  include
deposits received from the general public,  amortization and repayment of loans,
and maturity of investment securities.

Heartland's  primary  sources of income are  interest on loans,  and  investment
securities.  Its principal  expenses are interest  paid on deposit  accounts and
borrowings,  salaries and employee  benefits,  premises and equipment  expenses,
data processing expenses and other overhead expenses incurred in operation.


<PAGE>


SOURCES OF FUNDS

Deposits are the primary source of Heartland's  funds for use in lending and for
other general business purposes.  Proceeds from issuance of common stock in 1997
were also used as a source  of  funding  for loan  growth.  However,  additional
issuance of common stock is not in the short-term plans for Heartland.

DEPOSIT ACTIVITIES.  Heartland offers several types of deposit programs designed
to attract both short-term and long-term  savings by providing a wide assortment
of  accounts  and rates.  Heartland  also  obtains  deposits on a bid basis from
customers or potential customers wishing to deposit amounts of at least $100.

Interest earned on statement  savings  accounts is paid from the date of deposit
to the date of withdrawal, compounded and credited quarterly. Interest earned on
money market demand  deposit  accounts is compounded and credited  monthly.  The
interest rates on these  accounts are reviewed by management of Heartland  daily
and  adjusted  as  often as  frequently  as  deemed  necessary  based on  market
conditions and other factors.

Borrowings. The Bank borrows federal funds from other commercial banks from time
to time to provide for cash flow requirements. These borrowings mature daily and
are secured by certain  investment  securities  in  Heartland's  portfolio.  The
interest rates on such borrowings may be changed daily. At December 31, 1999 and
1998, Heartland had $0 in federal funds borrowed.

The Bank also  borrows  funds from the  Federal  Home Loan Bank of  Indianapolis
(FHLBI).  The  borrowings  consist of three  advances as follows at December 31,
1999:

   Maturity Date and Interest Rate                       Balance
                                                         -------

   February 28, 2000 5.95%                              $  1,000
   June 19, 2000 5.63%                                     4,000
   July 7, 2000 Adjustable 6.03%                           1,000
                                                        --------
      Total                                             $  6,000
                                                        ========
Each advance is payable at maturity date,  generally with a prepayment  penalty.
The  advances  are  collateralized  by a blanket  pledge of  mortgage  loans and
eligible securities.  Interest is payable monthly.  There were no FHLBI advances
outstanding at December 31, 1998.

Additional   information  regarding  Heartland  and  the  Bank  is  included  in
Heartland's  Annual Report to Shareholders  for 1999,  which is filed as Exhibit
13.



<PAGE>


SERVICE AREA

Heartland's primary service area is Johnson County, Indiana.  Johnson County was
the second  fastest  growing county from 1990 through 1996 based on estimates of
the  Indiana  Business  Research  Center.  Johnson  County  was ranked the third
fastest  growing  County in Indiana by the United States Census Bureau for 1998.
Census data may be obtained from the Census Bureau Internet site WWW.Census.gov.
The majority of Heartland's customers reside in Johnson County,  particularly in
the  northern  two-thirds  of the  county,  which  accounts  for over 88% of the
county's population,  according to the 1990 U.S. Census.  Heartland has branches
in Franklin and Greenwood, which are the two largest cities in the county, and a
branch in Bargersville, in southwestern Johnson County.

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  home  electronic  banking  services,  and
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.

REGULATION AND SUPERVISION OF HEARTLAND

Heartland  is a bank  holding  company  within the  meaning of the Bank  Holding
Company Act of 1956,  as amended  ("BHCA"),  and is  registered as such with the
Board of Governors of the Federal Reserve System ("Federal Reserve").  Heartland
is examined,  regulated and supervised by the Federal Reserve and is required to
file annual reports and other information  regarding its business and operations
and the business and operations of its  subsidiaries  with the Federal  Reserve.
The Federal Reserve has the authority to issue cease and desist orders against a
bank holding company if it determines  that  activities  represent an unsafe and
unsound practice or a violation of law.

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.  Under  the  amendments  to the  BHCA  made  in  1999  by the
Gramm-Leach-Bliley  Act, 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.

<PAGE>

Acquisitions by Heartland of banks and savings  associations are also subject to
regulation. Any acquisition by Heartland of more than five percent of the voting
stock of any bank requires prior approval of the Federal Reserve.

A bank holding  company and its  subsidiaries  are  prohibited  from engaging in
certain tie-in  arrangements  in connection  with the extension of credit or the
provision of any property or service.  With certain  exceptions,  a bank holding
company, a bank, and a subsidiary or affiliate  thereof,  may not extend credit,
lease or sell property or furnish any services or fix or vary the  consideration
for the foregoing on the condition  that (I) the customer must obtain or provide
some additional  credit,  property or services from, or to, any of them, or (ii)
the  customer  may not obtain  some other  credit,  property  or service  from a
competitor, except to the extent reasonable conditions are imposed to assure the
soundness of credit extended.

REGULATION AND SUPERVISION OF THE BANK

The Bank is  supervised,  regulated  and  examined  by the DFI  and,  as a state
nonmember  bank,  by the FDIC.  A cease or desist order may be issued by the DFI
and FDIC against the Bank if the respective  agency finds that the activities of
the Bank represent an unsafe and unsound  banking  practice or violation of law.
The deposits of the Bank are insured by the FDIC.

Branching by banks in Indiana is subject to the  jurisdiction,  and requires the
prior approval of, the Bank's primary federal regulatory  authority and the DFI.
Under Indiana law, the Bank may branch anywhere in the state.

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  which may be
paid by banks. 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 the Registrant and the Bank.

CAPITAL REQUIREMENTS

The Bank must meet certain minimum capital requirements mandated by the FDIC and
the DFI. These regulatory  agencies require  financial  institutions to maintain
certain  minimum ratios of primary  capital to total assets and total capital to
total assets.



<PAGE>


Heartland is not required to comply with Federal  Reserve  capital  requirements
applicable to bank holding companies because it has consolidated  assets of less
than  $150,000.  However,  Heartland has agreed with the Federal  Reserve not to
incur debt at the holding  company level outside the ordinary course of business
prior to October 3, 2002 without Federal Reserve approval.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below)  of  total  and  Tier  I  capital  (as  defined  in the  regulations)  to
risk-weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined).  Management  believes the Bank meets all applicable capital
adequacy requirements as of December 31, 1999 and December 31, 1998.

As of December 31, 1999 and 1998, the Bank was categorized as "well capitalized"
under the regulatory  framework for prompt corrective  action. To be categorized
as well  capitalized,  the Bank must maintain minimum total  risk-based,  Tier I
risk-based, and Tier I leverage ratios as set forth in the table below.


                                                               Minimum Required
                                                                   To Be Well
                                           Minimum Required    Capitalized Under
                                              For Capital      Prompt Corrective
                              Actual      Adequacy Purposes   Action Regulations
                          Amount   Ratio   Amount    Ratio     Amount    Ratio
1999
Total capital
(to risk weighted assets) $12,589  14.1%    $7,118     8%      $8,898     10%
Tier 1 capital
(to risk weighted assets)  11,474  12.9      3,559     4        5,339      6
Tier 1 capital
(to average assets)        11,474  10.5      4,358     4        5,448      5

1998
Total capital
(to risk weighted assets) $ 8,606  17.0%    $4,056     8%      $5,070     10%
Tier 1 capital
(to risk weighted assets)   7,971  15.7      2,028     4        3,042      6
Tier 1 capital
(to average assets)         7,971  14.5      2,196     4        2,745      5

In addition, a more restrictive capital adequacy requirement  currently in place
is from  the  agreement  with  the  Federal  Deposit  Insurance  Corporation  in
conjunction  with the  approval for deposit  insurance,  which  requires  that a
minimum total  capital to total assets ratio of 8% be  maintained  for the first
three years of operation. The Bank's corresponding capital ratio at December 31,
1999 was 10.2% compared to 13.0% at December 31, 1998.



<PAGE>


Forward-Looking Statements

This Form 10-KSB and future  filings made by Heartland  with the  Securities and
Exchange Commission,  as well as other filings,  reports and press releases made
or issued by  Heartland  and the Bank,  and oral  statements  made by  executive
officers of Heartland and the Bank, include forward-looking  statements relating
to such  matters as (a)  assumptions  concerning  future  economic  and business
conditions  and their  effect on the  economy in general  and on the  markets in
which the Bank do business, (b) expectations  regarding revenues,  expenses, and
earnings  for  Heartland  and the Bank,  (c) the  impact  of  future or  pending
acquisitions,  (d) deposit and loan  volume,  and (e) new  products or services.
Such forward-looking  statements are based on assumptions rather than historical
or current facts and, therefore, are inherently uncertain and subject to risk.

To comply with the terms of a "safe harbor"  provided by the Private  Securities
Litigation  Reform Act of 1995 that protects the making of such  forward-looking
statements  from liability under certain  circumstances,  Heartland notes that a
variety  of factors  could  cause the actual  results  or  experience  to differ
materially  from the  anticipated  results or other  expectations  described  or
implied by such forward-looking  statements.  These risks and uncertainties that
may affect the operations,  performance,  development and results of Heartland's
business include, but are not limited to, the following: (a) the risk of adverse
changes in  business  and  economic  conditions  generally  and in the  specific
markets in which the Bank operate which might  adversely  affect credit  quality
and deposit and loan activity;  (b) the risk of rapid  increases or decreases in
interest rates,  which could adversely affect Heartland's net interest margin if
changes in its cost of funds do not  correspond to the changes in income yields;
(c) possible  changes in the legislative and regulatory  environment  that might
negatively impact Heartland and the Bank through increased operating expenses or
restrictions  on  authorized  activities;   (d)  the  possibility  of  increased
competition from other financial and  non-financial  institutions;  (e) the risk
that borrowers may misrepresent  information to management of the Bank,  leading
to loan losses,  which is an inherent risk of the activity of lending money; (f)
the risk that banks that  Heartland  may acquire in the future may be subject to
undisclosed   asset   quality   problems,   contingent   liabilities   or  other
unanticipated  problems;  and (g)  other  risks  detailed  from  time to time in
Heartland's filings with the Securities and Exchange  Commission.  Heartland and
the Bank do not undertake any obligation to update or revise any forward-looking
statements subsequent to the date on which they are made.



<PAGE>


Selected Financial Data

The information presented below should be read in conjunction with the
consolidated  financial  statements,  which  are  included  under  Item  8,  and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations included in Item 6.
                                                                May 27, 1997
                               Year Ended      Year Ended        (inception)
                              December 31,    December 31,         through
Income Statement Data:            1999            1998        December 31, 1997
                                  ----            ----        -----------------
Total interest income           $   7,573      $    3,140        $      165
Total interest expense              3,612           1,307                12
Net interest income                 3,961           1,833               153
Provision for loan losses             656             700                46
Noninterest income                    202              56                 -
Noninterest Expense                 2,352           1,817               347
Provision for income taxes            182               -                 -
Net income/(loss)               $     973      $     (628)       $     (240)
Net income/(loss) per share     $     .77      $    (.50)        $     (.19)
Average shares                  1,265,000       1,265,000         1,265,000

                             At December 31,   At December 31,   At December 31,
                                  1999              1998              1997
                                  ----              ----              ----
Balance Sheet Data:
Total Assets                   $  110,139        $  64,660         $   14,519
Loans, Net of Allowance
for Loan Losses                    89,680           48,700              3,912
Demand & Savings Deposits          38,135           17,738              1,591
Time Deposits                      50,384           35,016                488
Stockholders' Equity               11,643           10,916             11,504
Book Value Per Share           $     9.20        $    8.63         $     9.09
Equity to Asset Ratio               10.57%           16.88%             79.23%



<PAGE>


AVERAGE  BALANCES,  INCOME,  EXPENSES AND RATES. The following tables depict for
the years ended  December  31,  1999 and 1998,  and the period from May 27, 1997
(inception)   through  December  31,  1997,  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.

<TABLE>
<CAPTION>
                                                                       May 27, 1997
                               Year Ended          Year Ended       (inception) through
                            December 31,1999    December 31, 1998    December 31, 1997
                            ----------------    -----------------    -----------------
                           Average/   Yield/    Average/  Yield/    Average/  Yield/
                            Balance    Rate      Balance   Rate      Balance   Rate
                            -------    ----      -------   ----      -------   ----
<S>                        <C>        <C>       <C>        <C>      <C>         <C>
Interest earning assets
   Federal funds sold      $ 1,818    5.28%     $  2,581   3.83%    $   729     5.49%
   Taxable securities       12,057    6.00         8,647   6.05       1,635     6.18
   Non-taxable securities      605    3.64           152   3.71           -
   Loans                    72,340    9.31        25,047  10.03         230    10.43
                           -------    ----      --------  -----     -------    -----
Total interest earning

   assets                  $86,820    8.72      $ 36,427   8.62     $ 2,594     6.36
                           =======    ====      ========  =====     =======    =====

Interest bearing liabilities
   Interest-bearing demand,
     Money Market and
     Savings Deposits      $21,285    3.96%     $  6,718   4.01%    $    20     3.77%
   Time deposits            47,088    5.45        18,048   5.70          22     6.00
   Short-term borrowings     1,151    4.26           150   5.82         128     8.29
   Other borrowings          2,745    5.68             -                  -
                           -------    ----      --------   ----     -------    -----
Total interest bearing
   liabilities             $72,269    5.00      $ 24,916   5.25     $   170     7.47%
                           =======    ====      ========   ====     =======     ====
</TABLE>


                                                     1999      1998      1997
                                                     ----      ----      ----
Average yield on interest-earning assets             8.72%     8.62%     6.36%
Average rate paid on interest-bearing liabilities    5.00      5.25      7.47
Net interest spread                                  3.72      3.37     (1.11)
Net interest margin (net interest earnings divided
 by average total interest-earning assets)           4.56      5.03      5.90
Return on average assets                             1.09     (1.63)    (7.56)
Return on average equity                             8.54     (5.65)    (8.29)




<PAGE>



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,
                                           -----------------------
                                  1999 vs. 1998             1998 vs. 1997
                                  -------------             -------------
                              Increase (Decrease)        Increase (Decrease)
                                    due to                      due to
                                    ------                      ------
                           Volume    Rate    Total     Volume    Rate     Total
                           ------    ----    -----     ------    ----     -----
Interest income
attributable to:
  Loans ............     $ 4,414    $(194)   $ 4,220    $2,489   $ (1)   $ 2,488
  Securities .......         231      (15)       216       431     (3)       428
  Other interest-
   earning assets(1)         (34)      31         (3)       74    (15)        59
                         -------    -----    -------    ------   ----    -------

   Total interest-
     earning assets        4,611     (178)     4,433     2,994    (19)     2,975

Interest expense
  attributable to:
  Money Market and
    Savings Deposits         576       (3)       573       268     --        268
  Time deposits ....       1,584      (48)     1,536     1,027      1      1,028
  Short-term borrowings       43       (3)        40         2     (4)       (2)
  Other borrowings .         156       --        156        --     --         --
                           -----     ----      -----    ------  -----     ------

   Total interest-bearing
     liabilities           2,359      (54)     2,305     1,297     (3)     1,294
                         -------    -----    -------    ------   ----    -------

Increase (decrease) in
  net interest income    $ 2,252    $(124)   $ 2,128    $1,697   $(16)   $ 1,681
                         =======    =====    =======    ======   ====    =======


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




<PAGE>


LOANS.  Heartland's  loans,  before adjusting for the allowance for loan losses,
totaled $91,045 at December 31, 1999, $49,442 at December 31, 1998 and $3,958 at
December 31, 1997.

The following table sets forth information concerning the composition of
Heartland's  loan portfolio in dollar amounts and percentages as of December 31,
1999,1998 and 1997.
<TABLE>
<CAPTION>

                                      1999                 1998                  1997
                                       Percent of           Percent of            Percent of
                              Amount    Net Loans   Amount   Net Loans    Amount   Net Loans
                              ------    ---------   ------   ---------    ------   ---------
<S>                           <C>          <C>      <C>         <C>       <C>        <C>
TYPE OF LOAN
Commercial loans and leases   $42,778      47.70%   $26,475     54.37%    $ 2,960    75.66%
Real estate construction       17,109      19.08      7,409     15.21         136     3.48
Residential mortgages
 (1-4 family homes)            15,069      16.80      6,241     12.81         189     4.83
Consumer                       16,089      17.94      9,317     19.13         673    17.20
                              -------     ------    -------    ------     -------   ------
Gross loans                    91,045     101.52     49,442    101.52       3,958   101.17
Allowance for loan losses      (1,365)     (1.52)      (742)    (1.52)        (46)   (1.17)
                              -------     ------    -------    ------     -------   ------
Loans, net                    $89,680     100.00%   $48,700    100.00%    $ 3,912   100.00%
                              =======     ======    =======    ======     =======   ======
</TABLE>


LOAN MATURITY  SCHEDULE.  The following table sets forth certain  information at
December 31, 1999  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    $42,778     $12,121    $ 4,216     $26,441
  Real estate construction        17,109      11,993      5,116           -
  Residential mortgages
   (1-4 family homes)             15,069           -        515      14,554
  Consumer                        16,089       4,482      8,644       2,963
                                 -------     -------    -------     -------
  Total                          $91,045     $28,596    $18,491     $43,958
                                 =======     =======    =======     =======

Nonperforming  loans include accruing loans that are  contractually  past due 90
days or more as to interest or principal  payments.  Nonperforming loans totaled
$137,  $0 and $0 at December  31,  1999,  1998 and 1997.  At December  31, 1999,
nonperforming  loans included $100 in  residential  real estate loans and $37 in
consumer loans.  Non-accrual  loans include loans on which interest  recognition
has been suspended because they are 90 days past due as to interest or principal
and loans  where  there is a question  about the Bank's  ability to collect  all
principal  and interest.  Non-accrual  loans totaled $138, $0 and $0 at December
31, 1999, 1998 and 1997 and were comprised  entirely of residential  real estate
loans.




<PAGE>


ALLOWANCE FOR LOAN LOSSES.  Heartland  maintains an allowance for loan losses to
provide a  valuation  allowance  for loans  that  might  not be  repaid.  Senior
management,  with oversight  responsibility  provided by the Board of Directors,
reviews  on a monthly  basis the  allowance  for loan  losses as it relates to a
number of relevant factors,  including, but not limited to, historical trends in
the level of nonperforming  assets and classified loans, current charge-offs and
the amount of the allowance as a percent of the total loan  portfolio.  Due to a
limited   amount  of   historic   experience,   Heartland's   provisions   since
incorporation  have been influenced by national loan loss experience  applied to
the  portfolio  outstanding.  While  management  believes  that it uses the best
information  available to determine the  allowance  for loan losses,  unforeseen
market  conditions  could  result  in  adjustments,  and net  earnings  could be
significantly   affected  if  circumstances   differ   substantially   from  the
assumptions  used in making  the final  determination.  At  December  31,  1999,
Heartland's allowance for loan losses totaled $1,365.

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

                                                    At December 31,
                                              1999        1998        1997
                                              ----        ----        ----
                Loan type
                  Commercial and leases     $   641     $   397   $    34
                  Real estate construction      257         111         2
                  Residential mortgages         226          94         2
                  Consumer                      241         140         8
                                            -------     -------   -------
                    Total allowance for
                     loan losses            $ 1,365     $   742   $    46
                                            =======     =======   =======


The provision for loan losses charged to earnings was $656, $700 and $46 for the
years ended December 31, 1999, 1998 and 1997. Net  charge-offs  were $33, $4 and
$0 during the years ended December 31, 1999, 1998 and 1997. All charge-offs were
consumer loans.




<PAGE>


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

                                                 Gross       Gross
                                    Amortized  Unrealized  Unrealized   Fair
                                      Cost       Gains      Losses     Value
                                      ----       -----      ------     -----
1999
   U.S. Government and its agencies $  9,400   $     -   $   (210)  $ 9,190
   Obligations of states and
    political subdivisions               613         -        (12)      601
   Mortgage backed securities          2,705         1        (50)    2,656
   Corporates                            877         -        (47)      830
   FHLB stock                            400         -          -       400
                                    --------   -------   --------   -------
                                    $ 13,995   $     1   $   (319)  $13,677
                                    ========   =======   ========   =======

1998
   U.S. Government and its agencies $  9,577  $     71  $     (16) $  9,632
   Obligations of states and
    political subdivisions               614         1         (3)      612
   Mortgage backed securities            213         -          -       213
                                    --------   -------   --------   -------
                                    $ 10,404   $    72   $    (19)  $10,457
                                    ========   =======   ========   =======

1997

   U.S. Government and its agencies $  7,949   $    18   $     (5)  $ 7,962
   Obligations of states and
    political subdivisions                50         -          -        50
                                    --------   -------   --------   -------
                                    $  7,999    $   18   $     (5)  $ 8,012
                                    ========    ======   ========   =======


The  following  table sets forth the  maturities  of  investment  securities  at
December 31, 1999 and the weighted-average  yield (on a tax equivalent basis) on
such securities.
                                                                    Weighted
                                            Amortized     Fair       Average
                                              Cost        Value       Yield
                                              ----        -----       -----
Due in one year or less                      $  5,640   $   5,488      5.80%
Due after one year through five years           5,013       4,897      6.00
Due after five years through ten years            237         236      6.90
Due after ten years                                 -           -         -
Mortgage-backed securities                      2,705       2,656      7.12
FHLB stock                                        400         400      8.00
                                             --------    --------      ----
Total                                        $ 13,995   $  13,677      6.21%
                                             ========   =========      ====

1. Computation of yields is based on amortized cost.




<PAGE>


The  following  table sets forth the  amounts  of  Heartland's  interest-earning
assets and interest-bearing  liabilities outstanding at December 31, 1999, 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.
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.

<TABLE>
<CAPTION>
                            Within 3      4 - 12      1 through 5
                             Months       Months         years    Over 5 years     Total
                             ------       ------         -----    ------------     -----
<S>                          <C>         <C>            <C>            <C>        <C>
Interest-earning assets:
  Federal funds sold         $     75    $       0      $       0      $      0   $      75
  Securities                    4,387        1,101          4,897         3,292      13,677
  Loans                        36,057        6,530         30,573        17,885      91,045
                             --------    ---------      ---------      --------   ---------
   Total interest-earning
      assets                   40,519        7,631         35,470        21,177     104,797
                             --------    ---------      ---------      --------   ---------
Interest-bearing
liabilities:
  Interest bearing
   demand     and savings      29,428            0              0             0      29,428
   deposits
  Time deposits                16,905       13,869         19,610             0      50,384
  Federal Funds Purchased           0            0              0             0           0
  Short-term borrowings         3,519            0              0             0       3,519
  Other borrowings              2,000        4,000              0             0       6,000
                             --------    ---------      ---------     ---------   ---------
   Total interest-bearing
   liabilities                 51,852       17,869         19,610             0      89,331
                             --------    ---------      ---------      --------   ---------
Interest-earning assets
  less
  Interest-bearing
  liabilities                $(11,333)   $ (10,238)     $  15,860      $ 21,177   $  15,466
                             ========    =========      =========      ========   =========

Cumulative interest-rate
sensitivity gap              $(11,333)   $ (21,571)     $  (5,711)     $ 15,466
                             ========    =========      =========      ========
Cumulative interest-rate
  gap as a percentage of
  total interest earning
  assets                       (10.81)%     (20.58)%        (5.45)%       14.76%
                               ======       ======          =====         =====

</TABLE>


<PAGE>


CERTIFICATES OF DEPOSIT.  The following table presents the amount of Heartland's
jumbo  certificates of deposit with principal  balances greater than $100,000 by
the time remaining until maturity as of December 31, 1999:

                                               At December 31,
               Maturity                              1999
                                                     ----
               Three months or less             $   10,984
               Over 3 months to 6 months             2,406
               Over 6 months to 12 months            3,795
               Over 12 months                        5,488
                    --                          ----------
                  Total                         $   22,673
                                                ==========


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  over 25 years ago and underwent
an extensive renovation in 1997 prior to the opening of Heartland.

In  1998,  the  Bank  entered  into a lease  agreement  of a  branch  office  in
Greenwood,  Indiana.  The  lease is for  3,800  square  feet of space in a strip
center with approximately three to four other tenants.  The term of the lease is
ten years with an option to renew.

The Bank  has also  entered  into a lease of a parcel  of land in  Bargersville,
Indiana,  commencing in January 2000. The Bank is constructing a branch facility
on the land in 2000 and will own the  building.  The land  lease has a term of 5
years with options to renew.

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.


ITEM 3.  LEGAL PROCEEDINGS

Heartland  and the Bank are not  involved  in any legal  proceedings  other than
routine litigation incidental to the business.


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, 1999.





<PAGE>


                                     PART II

Item 5.  MARKET FOR REGISTRANT'S 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,  1999),  which  section  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,  1999,)  which  section is  incorporated  herein by
reference.


ITEM 7.  FINANCIAL STATEMENTS.

Information  required for this item is included in the section headed "FINANCIAL
STATEMENTS." in Exhibit 13 (The  Registrant's  Annual Report to Shareholders for
the year ended  December 31,  1999,)  which  section is  incorporated  herein by
reference.


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

None

                                    PART III

ITEM  9.  DIRECTORS  EXECUTIVE  OFFICERS,   PROMOTERS  AND  CONTROL  PERSONS  OF
          HEARTLAND; 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 2000
Proxy Statement of Heartland, which section is incorporated herein by reference.
Addition  information  relating  to  non-director  executive  officers is listed
below.

Executive Officers:

John M. Morin1
Vice President, Consumer Lending
Age 50

K. Keith Fox2
Vice President, Commercial Lending
Age 40

R. Trent McWilliams3
Vice President, Business Development
Age 48



<PAGE>


Jeff Joyce4
Vice President and Chief Financial Officer
Age 29

1 Mr. Morin served in various positions at Citizens Bank of Central Indiana from
  1985 until his  resignation in 1997, most recently as Vice President in charge
  of retail lending.
2 Mr. Fox served in various  positions at Citizens Bank of Central  Indiana from
  1985 until his resignation in 1997, most recently as Commercial Loan Officer.
3 Mr. McWilliams served in various positions at Union Federal Savings Bank until
  his  resignation  in 1997,  most  recently  as Vice  President  in  charge  of
  Marketing.
4 Mr. Joyce is a Certified  Public  Accountant who served in various  positions,
  including Staff Accountant and Senior Accountant in the Financial Institutions
  Group at Crowe,  Chizek and  Company  LLP from 1992 until his  resignation  in
  1997.

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.


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 2000  Proxy
Statement of Heartland, which sections are incorporated herein by reference.



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information  required by this item is included  under the captions  "ELECTION OF
DIRECTORS"  and  "PRINCIPAL  OWNERS OF COMMON  SHARES" in Exhibit 99.1, The 2000
Proxy Statement of Heartland, which section is incorporated herein by reference.


ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information  required  by this  item is  included  under  the  caption  "CERTAIN
RELATIONSHIPS  AND  RELATED  TRANSACTIONS"  in  Exhibit  99.1,  The  2000  Proxy
Statement of Heartland, which section is incorporated herein by reference.




<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., which
     are incorporated by reference to Exhibit 3.2 in the Form SB-2

10.1 1997 Stock Option Plan,  as amended,  which is  incorporated  by
     reference to Exhibit 10.1 in the  Regestrant'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, which is
     incorporated by reference to Exhibit 10.1 in the Regestrant's Quarterly
     Report on the Form 10-QSB for quarter ended June 30, 1999

10.3 Lease (Greenwood, Indiana property), which is incorporated by reference to
     Exhibit 10.5 in the Form SB-2

13   The  Registrant's  Annual Report to Shareholders  for the year ended
     December 31, 1999 21  Subsidiaries of the Registrant and names under which
     the Registrant is doing  business 27 Financial  Data Schedule (EDGAR filing
     only)

99.1 The  Registrant's  2000 Proxy  Statement 99.2 Form of Proxy for 2000 Annual
     Meeting


Reports on Form 8-K

No reports on Form 8-K were filed  during the three  months  ended  December 31,
1999.


<PAGE>


SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities  Exchange Act of
1934,  Heartland  has duly  caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, this 29th day of March, 2000.

HEARTLAND BANCSHARES, INC.

By:/s/ Steven L. Bechman
   ---------------------------------
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

/s/ Steven L. Bechman   March 29, 2000
- -----------------------------
Steven L. Bechman, Director
(Chief Executive Officer)

/s/ Gordon Dunn         March 29, 2000
- -----------------------------
Gordon Dunn, Chairman

/s/ Sharon Acton        March 29, 2000
- -----------------------------
Sharon Acton, Director

/s/ Jeffrey L. Goben    March 29, 2000
- -----------------------------
Jeffrey L. Goben, Director

/s/ J. Michael Jarvis   March 29, 2000
- -----------------------------
J. Michael Jarvis, Director

/s/ John Norton         March 29, 2000
- -----------------------------
John Norton, Director

/s/ Robert Richardson   March 29, 2000
- -----------------------------
Robert Richardson, Director

/s/ Patrick A. Sherman  March 29, 2000
- -----------------------------
Patrick A. Sherman, Director

/s/ James C. Stewart    March 29, 2000
- -----------------------------
James C. Stewart, Director

/s/ Jeffery D. Joyce    March 29, 2000
- -----------------------------
Jeffery D. Joyce, Chief Financial Officer
(Principal Financial and Accounting Officer)