HEARTLAND BANCSHARES, INC.

                   NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD APRIL 19, 1999


      The Annual Meeting of Shareholders of Heartland  Bancshares,  Inc. will be
held at the Hillview Country Club, 1800 E. King Street, Franklin, Indiana 46131,
on Monday, April 19, 1999, at 6:30 p.m., local time, for the following purposes:

      1.    To elect three  Directors to hold office until the Annual Meeting of
            Shareholders in the year 2002 and until their successors are elected
            and have qualified.

      2.    To  consider  and vote  upon the  proposal  to amend  the  Heartland
            Bancshares,  Inc.  1997 Stock  Option Plan to increase the number of
            shares available for grant from 75,000 to 137,000 shares.

      3.    To  transact  such other  business as may  properly  come before the
            meeting.

      Holders of record of Common Shares of Heartland Bancshares,  Inc. at the
close of business on March 5, 1999,  are  entitled to notice of and to vote at
the Annual Meeting.


      SHAREHOLDERS   ARE   INVITED  TO  ATTEND  THE   MEETING  IN  PERSON.   ALL
SHAREHOLDERS,  EVEN IF  THEY  PLAN TO  ATTEND  THE  MEETING,  ARE  REQUESTED  TO
COMPLETE,  SIGN AND DATE THE  ACCOMPANYING  PROXY AND RETURN IT  PROMPTLY IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.


                                          By Order of the Board
                                          of Directors


                                          STEVE BECHMAN
                                          President   and   Chief    Executive
Officer
March 25, 1999
Franklin, Indiana


                            (ANNUAL REPORT ENCLOSED)


<PAGE>






                                 PROXY STATEMENT

                        ANNUAL MEETING OF SHAREHOLDERS OF
                           HEARTLAND BANCSHARES, INC.

                                 April 19, 1999


      This Proxy  Statement is being furnished to shareholders on or about March
25,  1999,  in  connection  with the  solicitation  by the Board of Directors of
Heartland  Bancshares,  Inc. (the  "Company"),  420 N. Morton Street,  Franklin,
Indiana 46131,  of proxies to be voted at the Annual Meeting of  Shareholders to
be held at 6:30 p.m., local time, on Monday, April 19, 1999, at Hillview Country
Club, 1800 E. King Street,  Franklin,  Indiana 46131.  The Company is the parent
holding  company  for  Heartland  Community  Bank,  which has its main office in
Franklin, Indiana, and a branch office in Greenwood, Indiana.

      At the close of business on March 5, 1999,  the record date for the Annual
Meeting,  there were 1,265,000 Common Shares outstanding and entitled to vote at
the Annual Meeting.  On all matters,  including the election of Directors,  each
shareholder will have one vote for each share held.

      If  the  enclosed  form  of  proxy  is  executed  and  returned,   it  may
nevertheless  be revoked at any time insofar as it has not been  exercised.  The
proxy may be revoked by either (a) filing with the  Secretary  (or other officer
or agent of the Company  authorized to tabulate votes) (i) a written  instrument
revoking the proxy or (ii) a  subsequently  dated proxy,  or (b)  attending  the
Annual Meeting and voting in person.  Unless revoked, the proxy will be voted at
the Annual Meeting in accordance  with the  instructions  of the  shareholder as
indicated on the proxy. If no instructions  are given,  the shares will be voted
as recommended by the Directors.

                                   PROPOSAL 1
                              ELECTION OF DIRECTORS

                                    Nominees

      Three  Directors  are to be elected at the  Annual  Meeting.  The Board of
Directors,  which  currently  consists of nine  members,  is divided  into three
classes of equal size with the term of one class expiring each year.  Generally,
each Director  serves until the annual meeting of the  shareholders  held in the
year that is three years after such  Director's  election and  thereafter  until
such  Director's  successor is elected and has qualified or until the earlier of
the Director's resignation, disqualification, removal or death. The terms of the
current Directors expire as follows:  1999 -- Steve Bechman,  Gordon R. Dunn and
James C. Stewart;  2000 -- Sharon Acton,  Jeffrey L. Goben and John Norton;  and
2001 -- J. Michael Jarvis, Robert Richardson and Patrick A. Sherman.


<PAGE>


      Each  Director  will be  elected by a  plurality  of the votes cast in the
election.  Shares  present  but not  voted for any  nominee  do not  affect  the
determination of whether a nominee has received a plurality of the votes cast.

      It is the intention of the persons named in the accompanying form of proxy
to vote such proxy for the election to the Board of Directors of Steve  Bechman,
Gordon  R.  Dunn and  James C.  Stewart,  each of whom is now a  Director  whose
present  term  expires this year.  Each such person has  indicated  that he will
accept  nomination and election as a Director.  If, however,  any such person is
unable or unwilling to accept nomination or election, it is the intention of the
Board of  Directors  to nominate  such other person as Director as it may in its
discretion  determine,  in which  event the shares  subject to the proxy will be
voted for that person.

THE BOARD OF DIRECTORS  RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE THREE NOMINEES
IDENTIFIED ABOVE (ITEM 1 ON THE PROXY).



<PAGE>




      The following  table  presents  certain  information  as of March 1, 1999,
regarding the current  Directors of the Company,  including  the three  nominees
proposed by the Board of Directors for election at this year's  Annual  Meeting.
All of the current  Directors  began  serving on the Board of  Directors  of the
Company during 1997.  Unless  otherwise  indicated in a footnote,  the principal
occupation  of each  Director has been the same for the last five years and such
Director  possesses sole voting and investment powers with respect to the shares
indicated as beneficially owned by such Director.  Unless specified otherwise, a
Director is deemed to share voting and investment  powers over shares  indicated
as held by a  spouse,  children  or  other  family  members  residing  with  the
Director.  None of the persons named below beneficially owns one percent or more
of the outstanding Company Common Shares,  except for Messrs.  Bechman, Dunn and
Goben, who beneficially own 3.0%, 1.5% and 2.2%, respectively.
<TABLE>
<CAPTION>

      Name,                                              Shares
      Present Principal                               Beneficially
      Occupation and Age                                 Owned
      ------------------                                 -----
      <S>                                               <C>
      Sharon Acton(1),(15)                                4,671
      Manager, Franklin/Greenwood District of
        Cinergy/PSI (energy services company)
      Age 51

      Steve Bechman*(2),(3),(16)                         37,851
      President and Chief Executive Officer of
        the Company and Bank
      Age 47

      Gordon R. Dunn*(4),(5),(15)                        18,491
        Retired
      Age 77

      Jeffrey L. Goben(6),(7),(16)                       27,991
      Executive Vice President and Chief
        Operating Officer
      Age 46

      J. Michael Jarvis(8),(15)                           8,001
      President and Part Owner, Power Investments,
        Inc. Division of Delco Remy International,
        Inc. (engine remanufacturer)
      Age 55

      John Norton(9),(15)                                 9,401
      President and Owner, Norton Farms, Inc.
      Age 50

      Robert Richardson(10),(15)                          6,001
      President and Majority Owner, MegaSys, Inc.
      (logistics company)
      Age 37

      Patrick A. Sherman(11),(15)                         9,701
      President and Part Owner, Sherman &
        Armbruster P.C. (a public accounting firm)
      Age 50

      James C. Stewart*(12),(13),(15)                    12,001
      Consultant, Bauer Built Corp.
      Age 47

      All Directors and Executive Officers
      as a group (14 persons)(14),(16)                  155,471
<FN>
*Nominee

(1)   Includes 500 shares that Ms. Acton holds jointly with her spouse and 4,000
      shares  that she has the  right to  acquire  upon  the  exercise  of stock
      options.
(2)   Mr.  Bechman  served as Regional  President  of  Citizens  Bank of Central
      Indiana  from 1993 until his  resignation  in 1997.  Mr.  Bechman was with
      Citizens Bank of Central  Indiana  beginning in 1975 and served in various
      other positions prior to 1993.
(3)   Includes 12,578 shares that Mr. Bechman holds jointly with his spouse, 700
      shares he holds for his daughter and 9,650 shares that he has the right to
      acquire upon the exercise of stock options.
(4)   Mr. Dunn is a retired  purchasing agent for L. S. Ayres department stores,
      where he was  employed  for 43 years.  Mr.  Dunn serves as Chairman of the
      Company's  Board of Directors and he previously  served as Chairman of the
      Board of Citizens Bank of Central Indiana.
(5)   Includes  1,000 shares that Mr. Dunn holds jointly with his spouse,  5,000
      shares held in a trust for which Mr. Dunn acts as trustee, 500 shares held
      jointly by Mr. Dunn's spouse and her father and 4,000 shares that Mr. Dunn
      has the right to acquire upon the exercise of stock options.
(6)   Mr.  Goben  held the  position  of  Senior  Vice  President  in  charge of
      marketing  and  community  development,   in  addition  to  various  other
      management  positions,  with Citizens Bank of Central Indiana from 1984 to
      his resignation in 1997.
(7)   Includes  8,961  shares that Mr. Goben holds  jointly with his spouse and
      sons and 7,650  shares that he has the right to acquire  upon the exercise
      of stock options.
(8)   Includes  4,000  shares  Mr. Jarvis  has the  right to  acquire  upon the
      exercise of stock options.
(9)   Includes 200 shares that Mr. Norton holds  jointly with his children,  100
      shares held by Mr.  Norton's  spouse and 4,000 shares that Mr.  Norton has
      the right to acquire upon the exercise of stock options.
(10)  Includes  4,000 shares that Mr. Richardson  has the right to acquire upon
      the exercise of stock options.
(11)  Includes  4,000 shares that Mr. Sherman has the right to acquire upon the
      exercise of stock options.
(12)  In his position as consultant,  Mr. Stewart manages Jim Stewart Truck Tire
      Company, a firm he owned for 24 years prior to its sale in October 1996 to
      Bauer Built Corp.
(13)  Includes 1,020 shares that Mr. Stewart holds jointly with his spouse,  700
      shares owned by Mr. Stewart's spouse and 4,000 shares that Mr. Stewart has
      the right to acquire upon the exercise of stock options.
(14)  Includes  56,000 shares that  Directors  and  executive  officers have the
      right to acquire upon the exercise of stock options and 33,150 shares held
      jointly with or as custodian for family members.
(15)  Does not include an additional  3,000 shares that each indicated  Director
      may acquire  under stock  options  that are not yet  exercisable  but will
      become exercisable upon continued service by such Director on the Board of
      Directors.
(16)  Does not include 18,600 shares Mr. Bechman may acquire,  15,600 shares Mr.
      Goben may acquire or 22,800  shares other  executive  officers may acquire
      under  stock  options  that  are  not  yet  exercisable  but  will  become
      exercisable upon their continued employment with the Company.
</FN>
</TABLE>

                            Committees and Attendance

      The Board of Directors of the Company  held twelve  meetings  during 1998.
The Company's Board of Directors has a Stock Option  Committee but does not have
standing audit, nominating or compensation committees.  The members of the Stock
Option  Committee  are  Directors  Dunn and  Sherman,  both of whom are  outside
Directors.  The Stock Option  Committee  administers  the  Company's  1997 Stock
Option Plan,  which  provides  for the grant of options to key  employees of the
Company and Bank,  and the  Company's  1997 Stock  Option Plan for  Non-Employee
Directors.  The  Stock  Option  Committee  did not meet  during  1998,  but,  as
discussed  below in connection  with the proposal to amend the 1997 Stock Option
Plan,  the Stock Option  Committee did meet in January 1999 to consider  options
grants based on service during 1998.

      All of the members of the Company's  Board of Directors  also serve on the
Bank's Board of Directors.  The Bank's Board of Directors has standing audit and
compensation committees. The members of the Audit Committee are Directors Acton,
Norton,  Sherman and Stewart. The Audit Committee,  which met three times during
1998, reviews with the Bank's independent  auditors the scope of the audit to be
undertaken and the results of the audit and also reviews  internal  audits.  The
members of the  Compensation  Committee  are  Directors  Dunn and  Sherman.  The
Compensation  Committee,  which met once during 1998,  sets salaries and bonuses
for the President and Chief Executive  Officer.  Except for Mr. Jarvis,  each of
the Directors  attended at least 75 percent of the aggregate  number of meetings
of the Board of Directors of the Company and Bank and the committees on which he
or she served during 1998.

                            Compensation of Directors
Options

      In 1997 members of the Company's Board of Directors who were not employees
of the  Company or Bank were  granted  stock  options  for their  service on the
Board.  Each Director was granted an option to acquire 4,000 Common Shares at an
exercise price of $10.00 per share. The options were immediately exercisable for
1,000 Common Shares and become  exercisable  (assuming  continued service on the
Board) for an additional  1,000 Common Shares at each successive  Annual Meeting
of  Shareholders,  until  exercisable  in full.  In January  1999,  the Board of
Directors  of the Company  amended the 1997 Stock  Option Plan for  Non-Employee
Directors to award  additional  options to each  non-employee  Director equal to
3,000  shares at an  exercise  price of $10.00 per  share.  The  options  vested
immediately  with  respect to 1,000  shares  and will  become  exercisable  with
respect to an  additional  1,000 shares at each Annual  Meeting of  Shareholders
beginning with the meeting in the year 2000 until exercisable in full.




<PAGE>
Cash Compensation



      During 1998,  non-employee  Directors of the Bank  received $300 per month
(the  Chairman  received  $500 per  month)  regardless  of  attendance  at Board
meetings.  Directors do not receive any additional  compensation  for serving on
the Company's Board or on Board committees of the Company or Bank.

                             EXECUTIVE COMPENSATION

      The following table sets forth information regarding  compensation paid to
the Company's Chief Executive Officer for 1998.

<TABLE>
<CAPTION>
                           Summary Compensation Table
                                                                Long Term
                                                               Compensation
                                     Annual                       Awards
                                  Compensation
                                                               Securities
          Name and                                             Underlying
     Principal Position      Year      Salary      Bonus       Options/SAR
     ------------------      ----      ------      -----       -----------
 <S>                         <C>      <C>            <C>         <C>

       Steve Bechman,        1998     $ 115,000      $0               0
       Chief Executive       1997     $  15,481(1)   $0          20,000
        Officer
<FN>

   (1) Mr.  Bechman's  compensation  was for the period  from  November  1, 1997
through December 31, 1997.
</FN>
</TABLE>


                       Aggregated Option/SAR Exercises In
                      Last Fiscal Year and Fiscal Year-End
                                Option/SAR Values

      No option grants or exercises occurred during 1998. The following table
sets forth information with respect to the value of options held by Mr. Bechman
as of December 31, 1998.
<TABLE>
<CAPTION>

                                  Number of              Value of Unexercised
                                 Unexercised          In-the-Money Options/SARs
                               Options/SARs at          at Fiscal Year-End ($)
                                     Fiscal
                                  Year-End (#)
           Name             Exercisable/Unexercisable  Exercisable/Unexercisable
           ----             -------------------------  -------------------------
<S>                             <C>   <C>                      <C> <C>
       Steve Bechman            8,000/12,000(1)                0 / 0(2)


<PAGE>

<FN>

(1)  The options were granted  pursuant to the Heartland  Bancshares,  Inc. 1997
     Stock Option Plan (the  "Employee  Option  Plan"),  which  provides for the
     grant of options  intended to qualify as incentive stock options within the
     meaning of Section 422 of the Internal  Revenue  Code of 1986,  as amended,
     and of  non-qualified  options.  The  options  granted to Mr.  Bechman  are
     intended to qualify as incentive  stock options and have an exercise  price
     of $10.00  per  share,  which was  determined  to be not less than the fair
     market value of one Common Share on the date of grant.  The options  become
     exercisable in twenty percent increments, with twenty percent of the shares
     covered  by an  option  becoming  exercisable  on the date of grant  and an
     additional  twenty percent  becoming  exercisable on each of the first four
     anniversaries of the grant date; provided, however, that the options become
     immediately  exercisable  upon the occurrence of a change in control of the
     Company.  If an optionee  tenders already owned shares in payment (in whole
     or in part) of the exercise  price of an option (the  "Exercised  Option"),
     the  Employee  Option Plan  requires the Company to use its best efforts to
     issue a  replacement  option for a number of shares  equal to the number of
     shares tendered and with the same expiration date as the Exercised  Option.
     The  exercise  price for each share  covered by the  replacement  option is
     equal to the fair market  value of one Common Share on the date of exercise
     of the Exercised Option.

(2)  The options were not "in the money" since the last per share trade price of
     the Company's Common Shares as reported on OTC on December 31, 1998 ($8.50)
     did not exceed the exercise price of the options.
</FN>
</TABLE>

                 Certain Business Relationships And Transactions

      During 1998, the Bank had, and the Bank expects to continue to have in the
future,  banking transactions in the ordinary course of business with Directors,
officers and principal  shareholders of the Company and their associates.  These
transactions have been made on substantially the same terms,  including interest
rates,  collateral  and  repayment  terms  on  extensions  of  credit,  as those
prevailing at the same time for comparable  transactions with others and did not
involve more than the normal risk of collectibility or present other unfavorable
features.

                                   PROPOSAL 2
                        APPROVAL OF THE AMENDMENT OF THE
                           HEARTLAND BANCSHARES, INC.
                             1997 STOCK OPTION PLAN

      On January 18, 1999, the Company's Board of Directors amended,  subject to
shareholder approval, the Heartland Bancshares, Inc. 1997 Stock Option Plan (the
"Option  Plan") to  increase  the  aggregate  number of shares of the  Company's
Common  Stock that may be granted  pursuant  to the Option  Plan from  75,000 to
137,000  shares.  Shareholder  approval of the  amendment  to the Option Plan is
being sought at the 1999 Annual Meeting of Shareholders.

      The Option  Plan  provides  for the grant of  incentive  stock  options or
non-qualified  stock  options to key  employees of the Company or the Bank.  The
Board of  Directors  amended  the  Option  Plan to  enable  the  Committee  that
administers the Option Plan to have sufficient  authorized  shares in the Option
Plan to make  additional  grants  in  January  1999 to the  Company's  executive
officers and to have 52,000  additional  shares  available  for future grants to
employees  under the Option Plan.  The  Company's  executive  officers  were not
granted any increase in their base salaries for 1999,  with one  exception,  and
the Board of Directors  therefore  believed  that the January 1999 grants by the
Committee to the  executives  was in the  Company's  best  interests in order to
reward the executives in noncash  remuneration  for their efforts in 1998 and to
keep their interests closely aligned to those of the Company's shareholders.

     Subsequent  to the  adoption  of the  amendment  to the  Option  Plan,  the
Committee  granted,  subject to shareholder  approval,  options to the following
executive  officers for the number of shares  indicated:  Steve  Bechman:  8,250
shares;  Jeffrey L. Goben: 8,250 shares; K. Keith Fox: 4,500 shares; John Morin:
4,500 shares; and Jeffery D. Joyce: 4,500 shares.


<PAGE>


      The  amendment  to the Option  Plan will be adopted if it is approved by a
majority of the votes cast at the Annual Meeting of Shareholders,  provided that
a majority  of  outstanding  Common  Shares is present in person or by proxy and
entitled to vote at the Annual  Meeting.  Shares voted "for" the Option Plan and
shares  represented by return proxies that do not contain  instructions  to vote
against the Option Plan or to abstain from voting will be counted as shares cast
for the approval of the Option Plan.  Abstentions and broker  non-votes will not
be treated as votes cast "for" or "against" the Option Plan but will be included
for purposes of determining whether a quorum is present.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
APPROVE THE AMENDMENT TO THE HEARTLAND BANCSHARES, INC. 1997 STOCK OPTION PLAN
(ITEM 2 ON THE PROXY).

                             APPOINTMENT OF AUDITORS

      Crowe,  Chizek and Company LLP ("Crowe Chizek") served as auditors for the
Company in 1998.  Although it is anticipated that Crowe Chizek will be selected,
the Audit Committee has not yet considered the appointment of auditors for 1999.
Representatives of Crowe Chizek will be present at the Annual Meeting, will have
the  opportunity  to  make a  statement  if  they  desire  to do so and  will be
available to respond to appropriate questions.


                        PRINCIPAL OWNERS OF COMMON SHARES

      To the knowledge of the Company's  management,  no person, or group, known
by  management  beneficially  owns  more  than  five  percent  of the  Company's
outstanding Common Shares.


                                  OTHER MATTERS

      The  Board  of  Directors  knows of no  matters,  other  than the  matters
reported  above,  that are to be brought  before the  Annual  Meeting.  If other
matters properly come before the Annual Meeting, however, it is the intention of
the persons named in the enclosed form of proxy to vote such proxy in accordance
with their judgment on such matters.


                                    EXPENSES

      All expenses in connection with this solicitation of proxies will be borne
by the Company.


                  SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

      A shareholder desiring to submit a proposal for inclusion in the Company's
proxy  statement for the 2000 Annual  Meeting of  Shareholders  must deliver the
proposal so that it is received by the Company no later than  November 26, 1999.
Proposals should be mailed to Jeffrey L. Goben, 420 N. Morton Street,  Franklin,
Indiana 46131, by certified mail, return-receipt requested.