UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20519

                                    FORM 10-Q

(Mark One)

[ X ]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended     March 31, 1997
                                   --------------
                                                        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:   0-23620
                          -------

   Mid Continent Bancshares, Inc.
--------------------------------------------------------------------------------
Exact name of registrant as specified in its charter


Kansas                                                    48-1146797
--------------------------------------------------------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
Incorporation or organization)                       Identification No.)


 124 West Central, El Dorado, Kansas                         67042
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)


                                 (316) 321-2700
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                      N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

   Indicate  by check mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or for short period that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. [ X ] Yes [ ] No

   Indicate the number of shares  outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.

                  Date:   April 30, 1997
                  Class:  $0.10 par value, common stock
                  Outstanding: 1,958,250 shares


<PAGE>


MID CONTINENT BANCSHARES, INC.

INDEX

                                                                     Page Number

PART I - CONSOLIDATED FINANCIAL INFORMATION

Consolidated Balance Sheets as of March 31, 1997 (Unaudited)
and September 30, 1996                                                     3

Consolidated Statements of Income for the Three and Six Months
Ended March 31, 1997 and 1996 (Unaudited)                                  4

Consolidated Statements of Stockholders' Equity for the Six
Months Ended March 31, 1997 (Unaudited)                                    5

Consolidated Statements of Cash Flows for the Six Months
Ended March 31, 1997 and 1996 (Unaudited)                                  6

Notes to Consolidated Financial Statements (Unaudited)                     7-11

Management's Discussion and Analysis of Financial
Condition and Results of Operations                                        12-19

PART II - OTHER INFORMATION                                                20

SIGNATURES                                                                 21

                                       2
<PAGE>


                         MID CONTINENT BANCSHARES, INC.

                                     PART I

MID CONTINENT BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                         September 30,     March 31,
                                                                                              1996            1997
                                                                                                         (Unaudited)
                                                                                        -------------- --------------
                                                                                           (Dollars in Thousands)

<S>                                                                                          <C>            <C>     
ASSETS
CASH AND CASH EQUIVALENTS:
   Cash and amounts due from depository institutions                                           $1,694         $1,957
   Interest bearing deposits in other banks                                                     3,924          6,058
                                                                                                -----          -----
      Total cash and cash equivalents                                                           5,618          8,015
INVESTMENT SECURITIES                                                                          86,235         98,741
CAPITAL STOCK OF FEDERAL HOME LOAN BANK, at Cost                                                4,327          4,759
MORTGAGE-RELATED SECURITIES                                                                    34,383         31,841
LOANS HELD FOR SALE, at lower of cost or market value                                          13,718         16,071
LOANS RECEIVABLE (Less allowance for loan losses of $421 and $378)                            171,158        185,919
PREMISES AND EQUIPMENT, Net                                                                     6,271          6,879
REAL ESTATE OWNED (Less allowance for losses of $34 and $44)                                       28            245
ACCRUED INTEREST RECEIVABLE                                                                     2,744          3,180
EXCESS OF COST OVER FAIR VALUE OF ASSETS ACQUIRED (Less accumulated
 amortization of $1,055 and $1,077)                                                                22             --
MORTGAGE SERVICING RIGHTS, Net                                                                 12,496         12,943
OTHER ASSETS                                                                                    3,186          2,576
                                                                                                -----          -----
TOTAL ASSETS                                                                                 $340,186       $371,169
                                                                                             ========       ========


LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS                                                                                     $214,493       $233,393
ADVANCE PAYMENTS BY BORROWERS FOR TAXES AND INSURANCE                                           1,805          1,358
INCOME TAXES PAYABLE, Net of deposits                                                                            265
DEFERRED INCOME TAXES                                                                             698            698
ACCRUED AND OTHER LIABILITIES                                                                   4,683          3,176
ADVANCES FROM FEDERAL HOME LOAN BANK                                                           81,700         95,000
                                                                                               ------         ------
      Total liabilities                                                                       303,379        333,890

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY:

PREFERRED STOCK, no par, 10,000,000 shares authorized, no shares issued or outstanding
COMMON STOCK, $0.10 par value, 20,000,000 shares authorized, 2,248,250 shares issued              225            225
ADDITIONAL PAID-IN CAPITAL                                                                     21,663         21,755
LESS UNEARNED COMPENSATION-EMPLOYEE STOCK OWNERSHIP PLAN                                       (1,054)          (980)
LESS UNEARNED COMPENSATION-MANAGEMENT STOCK BONUS PLAN                                           (547)          (448)
RETAINED EARNINGS, Substantially restricted                                                    20,424         22,113
                                                                                               ------         ------
      Total                                                                                    40,711         42,665
TREASURY STOCK, 231,500 and 290,000 shares, at cost                                            (3,904)        (5,386)
                                                                                              -------        -------
      Total stockholders' equity                                                               36,807         37,279
                                                                                               ------         ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                   $340,186       $371,169
                                                                                             ========       ========
</TABLE>

See notes to consolidated financial statements

                                       3
<PAGE>

MID CONTINENT BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                      THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                           March 31,                    March 31,
                                                                  ---------------------------   --------------------------
                                                                      1996           1997          1996           1997
                                                                   (Unaudited)    (Unaudited)   (Unaudited)    (Unaudited)
<S>                                                                <C>           <C>             <C>           <C>   
INTEREST INCOME:
   Loans receivable                                                $     2,706    $     3,685    $     5,500    $     7,333
   Mortgage-related securities                                             706            632          1,482          1,286
   Investment securities                                                 1,205          1,768          2,252          3,539
   Other interest-cash and cash equivalents                                 90             79            199            128
                                                                   -----------    -----------    -----------    -----------
      Total interest income                                              4,707          6,164          9,433         12,286
                                                                   -----------    -----------    -----------    -----------

INTEREST EXPENSE:
   Deposits                                                              2,323          2,816          4,584          5,471
   Advances from Federal Home Loan Bank                                    590          1,260          1,135          2,512
                                                                   -----------    -----------    -----------    -----------
      Total interest expense                                             2,913          4,076          5,719          7,983
                                                                   -----------    -----------    -----------    -----------

NET INTEREST INCOME                                                      1,794          2,088          3,714          4,303

PROVISION FOR (RECOVERY OF) LOAN LOSSES                                     (7)            --             (7)            25
                                                                   -----------    -----------    -----------    -----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                      1,801          2,088          3,721          4,278
                                                                   -----------    -----------    -----------    -----------

OTHER INCOME:
   Loan servicing fees                                                   1,193          1,193          2,406          2,400
   Amortization of mortgage servicing rights                              (458)          (441)          (860)          (862)
   Service fees and other charges to customers                             632            706          1,251          1,410
   Gain on sale of loans, net                                              409            225            743            516
   Insurance commissions                                                    44              3             47             19
   Other                                                                    --             23              3             76
                                                                   -----------    -----------    -----------    -----------
      Total other income                                                 1,820          1,709          3,590          3,559
                                                                   -----------    -----------    -----------    -----------

OTHER EXPENSE:
   Salaries and employee benefits                                        1,149          1,134          2,282          2,263
   Occupancy of premises                                                   237            291            461            582
   Office supplies and related expenses                                    188            174            327            315
   Data processing                                                         149            137            292            291
   Advertising and promotions                                              118            126            210            237
   Federal insurance premiums                                              112             35            221            131
   Professional services                                                    69             78            135            135
   Provision for losses on real estate owned                                18             10             18             10
   Amortization of excess cost over fair value of asset acquired            16             11             33             22
   Deposit account expense                                                  72             70            127            159
   Loan servicing expense                                                   78             59            156            125
   Other                                                                   130            123            255            225
                                                                   -----------    -----------    -----------    -----------
      Total other expenses                                               2,336          2,248          4,517          4,495
                                                                   -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAX EXPENSE                                         1,285          1,549          2,794          3,342

INCOME TAX EXPENSE                                                         465            581          1,023          1,276
                                                                   -----------    -----------    -----------    -----------

NET INCOME                                                         $       820    $       968    $     1,771    $     2,066
                                                                   ===========    ===========    ===========    ===========

Earnings per share                                                 $      0.42    $      0.50    $      0.89    $      1.06
                                                                   ===========    ===========    ===========    ===========
Weighted average shares outstanding                                  1,964,079      1,932,105      1,982,060      1,941,119
                                                                   ===========    ===========    ===========    ===========
</TABLE>

See notes to consolidated financial statements

                                       4
<PAGE>


================================================================================
MID CONTINENT BANCSHARES, INC.

================================================================================


CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>

                                                     Unearned                  
                                                     Compensation  Unearned                                    
                                                     - Employee    Compensation Retained
                                         Additional  Stock         Management   Earnings,                        Total
                       Common Stock      Paid-In     Ownership     Stock Bonus  Substantially  Treasury Stock    Stockholders'
                    Shares       Amount   Capital    Plan          Plan         Restricted    Shares   Amount    Equity

<S>                 <C>            <C>     <C>             <C>         <C>         <C>         <C>      <C>          <C>    
BALANCE, 
October 1, 1996     2,248,250      $225    $21,663         ($1,054)    ($547)      $20,424     231,500  ($3,904)     $36,807

Acquisition of 
Treasury Stock                                                                                  58,500   (1,482)      (1,482)

Common stock 
committed to be 
released for 
allocation 
- Employee 
Stock 
Ownership Plan                                                  74                                                        74

Increase in 
fair market 
value of 
Employee 
Stock 
Ownership 
Plan shares 
committed to 
be released 
for allocation                                  92                                                                        92


Amortization 
of unearned 
compensation 
- Management
Stock Bonus 
Plan                                                                     99                                              99

Dividends on 
common stock  
to stockholders                                                                      (377)                             (377)

Net income                                                                          2,066                             2,066
                   ============ ======== =========== ============   =========== ============= ======== ========= ===============
BALANCE, 
March 31, 1997     2,248,250      $225    $21,755          ($980)     ($448)      $22,113     290,000  ($5,386)     $37,279
                   ============ ======== =========== ============   =========== ============= ======== ========= ===============
</TABLE>

See Notes to consolidated financial statements.

                                       5
<PAGE>


MID CONTINENT BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                      SIX MONTHS ENDED
                                                                                                          MARCH 31,
                                                                                                    1996        1997
                                                                                                (Unaudited)  (Unaudited)
                                                                                                -----------  -----------
<S>                                                                                             <C>          <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                                   $   1,771    $   2,066
   Adjustments to reconcile net income to net cash provided by (used in operating activities:
   Common stock committed to be released for allocation - Employee Stock Ownership Plan                73           74
   Increase in fair market value of Employee Stock Ownership Plan shares committed to be
    realized for allocation                                                                            53           92
   Amortization of unearned compensation - Management Stock Bonus Plan                                 99           99
   Stock dividend on capital stock in Federal Home Loan Bank                                          (70)        (149)
   Amortization of premiums and discounts on mortgage-related securities and investment
    securities, net                                                                                   (74)         (53)
   Provision for (recovery of) loan losses                                                             (7)          25
   Provision for losses on real estate owned                                                           18           10
   Net loan origination fees capitalized                                                              815          566
   Amortization of net deferred loan origination fees                                                 (76)         (54)
   Amortization of mortgage servicing rights                                                          860          862
   Impairment of mortgage servicing rights                                                              9            4
   Amortization of excess of costs over fair value of asset acquired                                   33           22
   Gain on sale of real estate owned                                                                   --          (18)
   Depreciation on premises and equipment                                                             226          261
   Gain on sale of loans, net                                                                        (743)        (516)
   Origination of loans held for sale                                                             (78,848)    (106,889)
   Proceeds from sale of loans held for sale                                                       80,914      105,052
   Changes in:
      Accrued interest receivable                                                                    (247)        (436)
      Other assets                                                                                    506          153
      Income taxes payable                                                                           (613)         720
      Accrued and other liabilities                                                                 1,474       (1,501)
                                                                                                ---------    ---------
             Net cash provided by operating activities                                              6,173          390
                                                                                                ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from maturity or call of investment securities                                         17,000       11,000
   Purchases of investment securities                                                             (40,922)     (23,722)
   Principal collected on mortgage-related securities                                               3,128        2,528
   Origination of loans receivable, net of principal collection                                    (2,848)     (15,564)
   Acquisitions of mortgage servicing rights                                                       (1,231)      (1,313)
   Purchases of premises and equipment                                                               (924)        (869)
   Proceeds from sales of real estate owned                                                           148           57
                                                                                                ---------    ---------
             Net cash used in investing activities                                                (25,649)     (27,883)
                                                                                                ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Receipts for deposits, net                                                                      11,192       18,900
   Net decrease in advance payments by borrowers for taxes and insurance                           (1,172)        (446)
   Proceeds from advances from Federal Home Loan Bank                                              47,700      149,700
   Repayments on advances from Federal Home Loan Bank                                             (38,500)    (136,400)
   Cash dividend on common stock to stockholders                                                     (198)        (382)
   Acquisition of Treasury Stock                                                                   (1,905)      (1,482)
                                                                                                ---------    ---------
             Net cash provided by financing activities                                             17,117       29,890
                                                                                                ---------    ---------
DECREASE IN CASH AND CASH EQUIVALENTS                                                              (2,359)       2,397
CASH AND CASH EQUIVALENTS:
   Beginning of period                                                                              5,677        5,618
                                                                                                =========    =========
   End of period                                                                                $   3,318    $   8,015
                                                                                                =========    =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
   Income tax payments                                                                          $   1,636    $     556
                                                                                                =========    =========
   Interest payments                                                                            $   5,786    $   8,015
                                                                                                =========    =========
   Loans transferred to real estate owned                                                       $     168    $     266
                                                                                                =========    =========
   Accrued dividends on common stock                                                            $     194    $     186
                                                                                                =========    =========
</TABLE>

See notes to consolidated financial statements

                                       6
<PAGE>

                          MID CONTINENT BANCSHARES, INC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.     PRINCIPLES OF CONSOLIDATION

The  consolidated  financial  statements  include the accounts of Mid  Continent
Bancshares, Inc., (the Company), and its wholly-owned subsidiary,  Mid-Continent
Federal Savings Bank (the Bank) and its subsidiary,  Laredo Investment, Inc. All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

2.     BASIS OF PRESENTATION

The consolidated balance sheet as of March 31, 1997, the consolidated statements
of  income  for the  three  and six  months  ended  March  31,  1996  and  1997,
consolidated  stockholders'  equity for the six months  ended March 31, 1997 and
consolidated  cash flows for the six months ended March 31, 1996 and 1997,  have
been  prepared by the  Company,  without  audit,  and  therefore  do not include
information or footnotes  necessary for a complete  presentation of consolidated
financial  condition,  results of operations,  and cash flows in conformity with
generally   accepted   accounting   principles.   It  is  suggested  that  these
consolidated  financial statements be read in conjunction with the September 30,
1996 financial statements and notes thereto included in the Annual Report of the
Company.  In the opinion of  management,  all  adjustments  (consisting  of only
normal  recurring  adjustments)  necessary  for  the  fair  presentation  of the
consolidated  financial statements have been included. The results of operations
for the three and six months ended March 31, 1997 are not necessarily indicative
of the results which may be expected for the entire year.

3.    DIVIDENDS ON COMMON STOCK

On March 27,  1997 the  Company  declared  a $0.10 per share  cash  dividend  to
shareholders  of record on April 10,  1997.  The  dividend was paid on April 24,
1997.

4.    NEW STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

In March  1995,  FASB  issued SFAS No. 121,  Accounting  for the  Impairment  of
Long-Lived  Assets and for  Long-Lived  Assets to be Disposed  Of,  which became
effective for the Company beginning October 1, 1996. This Statement  establishes
accounting   standards  for  the  impairment  of  long-lived   assets,   certain
identifiable  intangibles  and  goodwill  related to those assets to be held and
used and for  long-lived  assets  and  certain  identifiable  intangibles  to be
disposed  of.  The  Statement   requires  that  long-lived  assets  and  certain
identifiable  intangibles  to be held  and used by an  entity  be  reviewed  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable. In performing the review for

                                       7
<PAGE>

recoverability,  the entity  should  estimate the future cash flows  expected to
result from the use of the asset and its eventual disposition. If the sum of the
undiscounted  cash  flows is less  than the  carrying  amount of the  asset,  an
impairment loss is recognized to reduce the carrying amount to the fair value of
the asset.  Generally,  long-lived assets and certain  identifiable  intangibles
that are to be  disposed  of should  be  reported  at the lower of the  carrying
amount or fair value less costs to sell.  The  implementation  of this Statement
did not have a material impact on the consolidated financial statements.

In October  1995,  the FASB  issued  SFAS No. 123,  Accounting  for  Stock-Based
Compensation,  which became effective for the Company beginning October 1, 1996.
SFAS No. 123 requires increased  disclosure of compensation expense arising from
both fixed and  performance  stock  compensation  plans.  Such  expense  will be
measured  as the fair  value of the  award  at the date it is  granted  using an
option-pricing  model that takes into  account the  exercise  price and expected
volatility,  expected  dividends on the stock and the expected risk-free rate of
return during the term of the option.  The compensation cost would be recognized
over the service  period,  usually the period from the grant date to the vesting
date.  SFAS No. 123 encourages,  rather than requires,  companies to adopt a new
method that accounts for stock compensation awards based on their estimated fair
value at the date they are granted.  Companies would be permitted,  however,  to
continue  accounting under  Accounting  Principles Board ("APB") Opinion No. 25.
The  Company  will  continue  to apply APB  Opinion  No.  25 in their  financial
statements  and will be required to disclose  pro forma net income and  earnings
per share in a  footnote,  determined  as if the  Company  had  applied  the new
method.

In December 1996, the FASB issued SFAS No. 127,  deferring the effective date of
certain  provisions of SFAS No. 125,  Accounting  for Transfers and Servicing of
Financial  Assets  and  Extinguishments  of  Liabilities.  SFAS No. 125 will now
become  effective  for the Company for transfers of financial  assets  occurring
after December 31, 1997 and servicing of financial assets and extinguishments of
liabilities  occurring after December 31, 1996. SFAS No. 125 supersedes SFAS No.
122,  Accounting for Mortgage  Servicing Rights.  For each servicing contract in
existence  before January 1, 1997,  previously  recognized  servicing rights and
"excess  servicing"  reeceivables  shall  be  combined,  net of  any  previously
recognized  servicing  obligations under that contract,  as a servicing asset or
liability.  The Statement  provides  that  servicing  assets and other  retained
interests in transferred  assets be measured by allocating the previous carrying
amount between the assets sold, if any, and retained interest,  if any, based on
their relative fair values at the date of the transfer, and servicing assets and
liabilities be  subsequently  measured by (1)  amortization in proportion to and
over the period of estimated net servicing  income or loss,  and (2)  assessment
for asset  impairment or increased  obligation  based on their fair values.  The
Company does not anticipate that the  implementation of this Statement will have
a material impact on the consolidated financial statements.

In February 1997, the FASB issued SFAS No. 128 Earnings per Share. The Statement
establishes  standards for computing and presenting earnings per share (EPS). It
replaces the  presentation  of primary EPS with a presentation  of basic EPS and
may require  additional  disclosure  of the EPS  computation.  The  Statement is
effective for the Company's  financial

                                       8

<PAGE>

statements as of September 30, 1998.  The Company does not  anticipate  that the
implementation of this Statement will have a material impact on the consolidated
financial statements.

In February  1997,  the FASB also issued SFAS No. 129  Disclosure of Information
about Capital  Structure.  The Statement  establishes  standards for  disclosing
information about an entity's capital structure.  The Statement is effective for
the Company's  financial  statements as of September 30, 1998.  The Company does
not anticipate  that the  implementation  of this Statement will have a material
impact on the consolidated financial statements.

                                       9
<PAGE>


5.  LOANS RECEIVABLE

<TABLE>
<CAPTION>
                                                                                September 30,            March 31,
                                                                                     1996                  1997
                                                                                                        (Unaudited)
                                                                         ----------------------- --------------------
                                                                                      (Dollars in Thousands)

<S>                                                                       <C>                    <C>     
First mortgage loans:
Residential-one-to-four units                                                          $157,494             $171,808
Secured by other properties                                                               1,013                  956
Construction loans                                                                       17,367               17,197
                                                                         ----------------------- --------------------
                                                                                        175,874              189,961
                                                                         ----------------------- --------------------
Other installment loans:
Property improvement, auto and other                                                      5,195                5,526
Mobile home                                                                                 305                  207
Deposits                                                                                    769                  723
                                                                         ----------------------- --------------------
                                                                                          6,269                6,456
                                                                         ----------------------- --------------------
Less:
   Unearned discounts and loan fees                                                         157                  (28)
   Undisbursed loan funds                                                                10,407               10,148
   Allowance for loan losses                                                                421                  378
                                                                         ======================= ====================
                                                                                       $171,158              185,919
                                                                         ======================= ====================
</TABLE>

The Bank  services  loans for others which are not included in the  accompanying
consolidated  balance sheets. The approximate unpaid principal balances of these
loans are summarized as follows:
<TABLE>
<CAPTION>

                                                                                  September 30,           March 31,
                                                                                       1996                  1997
                                                                                                        (Unaudited)
                                                                                  --------------        -------------
                                                                                       (Dollars in Thousands)

<S>                                                                                  <C>                  <C>     
Government National Mortgage Association                                               $875,381             $868,997
Federal National Mortgage Association                                                   115,492              108,603
Federal Home Loan Mortgage Corporation                                                  231,515              286,060
Other Investors                                                                           6,765                6,295
                                                                                     ----------           ----------
                                                                                     $1,229,153           $1,269,955
                                                                                     ==========           ==========
</TABLE>

 6.   MORTGAGE SERVICING RIGHTS (MSR)

Following is an analysis of the changes in mortgage servicing rights:
<TABLE>
<CAPTION>

                                                                                       Six Months Ended
                                                                                          March 31,
                                                                                         (Unaudited)
                                                                                  1996                  1997
                                                                          ---------------------- --------------------
                                                                                    (Dollars in Thousands)

<S>                                                                        <C>                   <C>    
Balance, Beginning of period                                                            $11,625              $12,496
Additions                                                                                 1,231                1,313
Amortization                                                                               (860)                (862)
                                                                          ---------------------- --------------------
                                                                                         11,996               12,947
Allowance for loss                                                                            9                    4
                                                                          ====================== ====================
Balance, End of period                                                                  $11,987              $12,943
                                                                          ====================== ====================
</TABLE>
                                       10
<PAGE>


7.   CONTINGENCIES

LEGAL PROCEEDINGS
-----------------

Supreme Court Ruling on Breach of Contract Regarding Supervisory Goodwill:
Mid-Continent Federal Savings Bank, the wholly-owned subsidiary of Mid Continent
Bancshares,  Inc.,  is pursuing  its claim  against the  federal  government  to
recover funds lost as a result of the  enactment of the  Financial  Institutions
Reform, Recovery, and Enforcement Act of 1989 ("FIRREA").  In 1986, the Bank was
encouraged by the federal  government to acquire an insolvent thrift institution
("Reserve Savings and Loan  Association").  The federal  government  allowed the
Bank to  count  the  insolvent  thrift's  losses  as  "goodwill"  assets  and to
double-count as "capital  credit" federal  government funds provided to help the
Bank take over the failing thrift. The Bank contends (among other things) in its
lawsuit that the federal  government  breached  its contract  with the Bank when
FIRREA was enacted  because FIRREA  prevented the Bank from counting such assets
toward minimum capital requirements.  As a result of FIRREA, the Bank was forced
to write off approximately  $7,500,000 in supervisory  goodwill.  This write off
reduced the Bank's regulatory capital.

On July 1, 1996, the United States Supreme Court affirmed decisions by a federal
appellate  court that the government had breached  express  contracts with three
thrifts  (U.S.  v. Winstar  Corp.  et al.) and therefore was liable for damages.
Those lawsuits stemmed from circumstances that are similar to those of the Bank;
in  order  to  persuade  those  thrifts  to  acquire  certain  insolvent  thrift
institutions,  the federal government promised  accounting  treatment similar to
that promised to the Bank.

While the Supreme  Court's  ruling in U.S. v. Winstar  Corp.  et al.,  serves to
support  the Bank's  legal  claims in its  pending  lawsuit  against the federal
government,  it is not  possible at this time to predict what effect the Supreme
Court's ruling, and subsequent rulings of a lower court concerning damages, will
have on the outcome of the Bank's lawsuit.  Notwithstanding  the Supreme Court's
ruling,  there can be no  assurance  that the Bank will be able to  recover  any
funds arising out of its claim and, if any recovery is made,  the amount of such
recovery.

                                       11
<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                           OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

GENERAL

Mid Continent  Bancshares,  Inc. is a Kansas  corporation  organized in January,
1994.  The Holding  Company is engaged in the business of directing and planning
the activities of  Mid-Continent  Federal  Savings Bank,  the holding  company's
primary asset.

Mid-Continent  Federal  Savings Bank is engaged  principally  in the business of
attracting  deposits from the general public and using such  deposits,  together
with other borrowed funds, to originate permanent and construction loans secured
by one-to-four  family  residential real estate, to make permitted  investments,
including  mortgage-backed and mortgage-related  securities,  and to acquire the
rights to perform loan servicing function for others.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Resources:

The Bank's  primary  sources of funds are  deposits,  advances from Federal Home
Loan  Bank  and  proceeds  from  principal  and  interest   payments  on  loans,
mortgage-related  securities and  investment  securities.  While  maturities and
scheduled   amortization  of  loans  and   mortgage-related   securities  are  a
predictable source of funds,  deposit flows and mortgage prepayments are greatly
influenced by general  interest  rates,  economic  conditions  and  competition.
Dependent on the current economic conditions, the Bank receives additional funds
through   unscheduled   prepayments  of  mortgage  loans  and   mortgage-related
securities.

The  Office of Thrift  Supervision  (OTS)  requires  a  savings  institution  to
maintain  an  average   daily  balance  of  liquid  assets  (cash  and  eligible
investments)  equal to at  least  5% of the  average  daily  balance  of its net
withdrawable deposits and short-term borrowings. In addition,  short-term liquid
assets  currently  must  constitute  1% of the sum of net  withdrawable  deposit
accounts plus short-term  borrowings.  The Bank's actual  liquidity  ratios were
9.1% and 11.1% as of September  30, 1996 and March 31, 1997,  respectively.  The
Bank's short-term liquidity ratio was 3.7% and 6.9%, respectively.

Managing the Bank's liquidity levels is a daily and a long-term  function of the
Bank and its Asset Liability Committee.  Cash flows are monitored by the Bank on
a regular basis.  Cash flow planning is utilized to enhance the Bank's  earnings
where possible.  Management  believes that the Bank has access to ample funds to
meet any unforeseen liquidity needs of the near future.

The Bank has acquired real estate and  construction  is in progress for a future
branch office in Derby, Kansas. Expenditures for the future office will not have
an adverse impact on liquidity.

                                       12
<PAGE>

Capital Resources:

As required under the Financial Institution Reform, Recovery and Enforcement Act
(FIRREA)  the Bank is required to maintain  specific  amounts of capital.  As of
March  31,  1997,  the  Bank  was in  compliance  with  all  regulatory  capital
requirements.  Capital includes tangible,  core and risk-based capital ratios of
9.1%, 9.1% and 24.0%, respectively.

The Bank's capital  requirements and actual capital under OTS regulations are as
follows as of March 31, 1997:

                                               AMOUNT               RATIO
                                           (in thousands)
GAAP CAPITAL                                  $33,923
                                        ==================
TANGIBLE CAPITAL:
      ACTUAL                                  $33,923                9.1%
      REQUIRED                                  5,586                1.5%
                                        ================== ==================
      EXCESS                                  $28,337                7.6%
                                        ================== ==================

CORE CAPITAL:
      ACTUAL                                  $33,923                9.1%
      REQUIRED                                 11,173                3.0%
                                        ================== ==================
      EXCESS                                  $22,750                6.1%
                                        ================== ==================

RISK-BASED CAPITAL:
      ACTUAL                                  $34,345              24.0%
      REQUIRED                                 11,423               8.0%
                                        ================== ==================
      EXCESS                                  $22,922              16.0%
                                        ================== ==================

                                       13

<PAGE>


                              RESULTS OF OPERATIONS
                   THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                             (Dollars in Thousands)

GENERAL - The Company's net income for the three months ended March 31, 1997 was
$968 compared with $820 for the three months ended March 31, 1996.

NET INTEREST INCOME - The Company's net interest  income is primarily  dependent
upon  the  difference  or  "spread"  between  the  yield  earned  on  loans  and
investments  and  the  rate  paid on  deposits  and  borrowings,  as well as the
relative  amounts of such assets and  liabilities.  The interest  rate spread is
affected by regulatory, economic and competitive factors that influence interest
rates,  loan  demand  and  deposit  flows.  The  Company,   like  other  savings
institution  holding  companies,  is subject to interest rate risk to the degree
that its interest-bearing  liabilities mature or reprice at difference times, or
on a different basis, than its interest-earning assets.

Net  interest  income for the three  months  ended  March 31,  1997 was  $2,088,
representing  a 16.4% increase from the three month period ended March 31, 1996.
Interest-bearing  assets and liabilities  increased from March 31, 1996 to March
31,  1997.  (Interest-bearing  assets  increased  by  $76,346,  or 28.6%,  while
interest-bearing  liabilities  increased  by $79,286 or 31.8%.)  Total  interest
income increased by 31.0% to $6,164,  while interest expense  increased 39.9% to
$4,076.

INTEREST  INCOME - Interest income for the three months ended March 31, 1997 was
$6,164  compared  with  $4,707  for the  three  months  ended  March  31,  1996,
representing an increase of $1,457 or 31.0%.

The Bank's interest on loans  receivable  increased $979 during the three months
ended March 31, 1997 over the same period in 1996.  This  increase  reflects the
increase in loans  receivable.  Loans held for investment  purposes at March 31,
1997 was approximately $59,174 greater than such loans at March 31, 1996.

Interest on mortgage-related  securities decreased $74. The Bank's investment in
mortgage-related securities declined in the quarter ended March 31, 1997.

Income from the  investment  portfolio and cash and cash  equivalents  increased
$552. The improvement is due to an increase in investment securities of $22,966,
from $80,534 at March 31, 1996 to $103,500 at March 31, 1997.

INTEREST  EXPENSE - Interest  expense for the three  months ended March 31, 1997
was $4,076  compared  with $2,913 for the three  months  ended  March 31,  1996,
representing an increase of $1,163, or 39.9%. The increased interest expense for
the period was the result of growth in the deposits of $26,485,  from  $206,908,
at March 31, 1996 to $233,393 at March 31, 1997, as well as an increased  amount
of borrowings of $52,800, from $42,200 at March 31, 1996 to $95,000 at March 31,
1997.

                                       14
<PAGE>

PROVISION  FOR LOAN LOSSES - The Bank  maintains  an  allowance  for loan losses
based upon management's  periodic  evaluation of known and inherent risks in the
loan portfolio,  the Bank's past loss  experience,  adverse  situations that may
affect the borrowers' ability to repay loans,  estimated value of the underlying
collateral and current and expected market  conditions.  During the three months
ended March 31, 1997 and 1996,  respectively,  the Bank recorded a provision for
(recovery of) loan losses of $ -0- and $(7).  Management  believes the allowance
for loan losses as of March 31, 1997 is  adequate to cover all  material  losses
inherent in the Bank's portfolio.

OTHER  INCOME - Other income for the three month period ended March 31, 1997 was
$1,709  compared  with  $1,820  for the  three  months  ended  March  31,  1996,
representing a decrease of $111.

At March 31, 1997, the Bank was servicing  approximately  $1,269,955 of mortgage
loans  for  others.  At March 31,  1996,  the Bank was  servicing  approximately
$1,208,007 of mortgage loans for others.  The Bank's total  servicing  portfolio
for others increased $61,948, or 5.1%.

Increases in revenue from  non-interest  sources came from loan  servicing  fees
(net of MSR amortization),  which increased $17, from $735 for the quarter ended
March 31, 1996 to $752 for the quarter  ended March 31,  1997,  and service fees
and other charges to customers  which  increased  $74, from $632 for the quarter
ended March 31, 1996 to $706 for the quarter ended March 31, 1997.

A primary  source of the increase in service  fees from  customers is the Bank's
checking  account  programs.  The number of  checking  accounts  increased  from
approximately  15,000 at March  31,  1996 to  approximately  17,200 at March 31,
1997. In addition to enhancing service fee income, the checking account programs
provide a source of low-cost deposits for the Bank.

Loans held for sale decreased  $4,714,  or 22.7%,  to $16,071 at March 31, 1997,
compared to $20,785 at March 31,  1996.  Sales of loans held for sale  increased
$20,979,  or 63.2%, from $33,176 for the quarter ended March 31, 1996 to $54,155
for the quarter ended March 31, 1997.  Gain on the sale of loans  decreased from
$409 for the quarter  ended  March 31, 1996 to $225 for the quarter  ended March
31,  1997.  Although  the Company  reduces the level of market risk by obtaining
commitments to sell loans at fixed prices, it cannot eliminate all such risks.

OTHER EXPENSE - Other expenses for the three months ended March 31, 1997 totaled
$2,248  compared  to $2,336 for the three  months  ended March 31,  1996.  Other
expenses  consisted of compensation  related expenses,  building and maintenance
expenses,  federal insurance premiums, audit and OTS examination fees, and other
general and administrative expenses.

Salaries  and  employee  benefits  decreased  from  $1,149 in the March 31, 1996
quarter to $1,134 in the March 31, 1997 quarter. Office occupancy,  supplies and
data  processing  expenses  collectively  increased  $28 in the March  31,  1997
quarter compared to the March 31, 1996 quarter. The Bank was operating two

                                       15
<PAGE>

additional  full  service  branches  in 1997,  than were  operated  in 1996.  In
addition to general  increases in costs of services,  the March 31, 1997 quarter
includes the costs of nine full service  branches in 1997,  compared to seven in
1996.

Federal insurance  premiums decreased from $112 for the three months ended March
31, 1996 to $35 for the three  months  ended  March 31,  1997.  The  decrease is
attributed  to the  premium  rate  reduction  on  FDIC  deposits  following  the
recapitalization of SAIF.

Loan servicing  expenses decreased from $78 for the quarter ended March 31, 1996
to $59 for the quarter  ended March 31, 1997.  These  expenses are for custodial
fees for loan documents,  additional loan pay off interest  associated with GNMA
pooled  mortgages and improvements in the Bank's mortgage payment and processing
systems.

INCOME  TAXES - Income tax expense for the three months ended March 31, 1997 was
$581 which represents an effective tax rate of 37.5%. Income tax expense for the
three months  ended March 31, 1996 was $465 which  represents  an effective  tax
rate of 36.2%.

                                       16
<PAGE>


                              RESULTS OF OPERATIONS
                    SIX MONTHS ENDED MARCH 31, 1997 AND 1996
                             (Dollars in Thousands)

GENERAL - The  Company's  net income for the six months ended March 31, 1997 was
$2,066 compared with $1,771 for the six months ended March 31, 1996.

NET INTEREST INCOME - The Company's net interest  income is primarily  dependent
upon  the  difference  or  "spread"  between  the  yield  earned  on  loans  and
investments  and  the  rate  paid on  deposits  and  borrowings,  as well as the
relative  amounts of such assets and  liabilities.  The interest  rate spread is
affected by regulatory, economic and competitive factors that influence interest
rates,  loan  demand  and  deposit  flows.  The  Company,   like  other  savings
institution  holding  companies,  is subject to interest rate risk to the degree
that its  interest-bearing  liabilities mature or reprice at different times, or
on a different basis, than its interest-earning assets.

Net  interest  income for the six month  period ended March 31, 1997 was $4,303,
representing  a 15.9%  increase  from the six month period ended March 31, 1996.
Interest-bearing  assets and liabilities  increased from March 31, 1996 to March
31,  1997.  (Interest-bearing  assets  increased  by  $76,346,  or 28.6%,  while
interest  bearing  liabilities  increased by $79,286,  or 31.8%.) Total interest
income increased by 30.2% to $12,286, while interest expenses increased 39.6% to
$7,983.

INTEREST  INCOME - Interest  income for the six months  ended March 31, 1997 was
$12,286  compared  with  $9,433  for  the  six  months  ended  March  31,  1996,
representing an increase of $2,853, or 30.2%.

The Bank's interest on loans  receivable  increased $1,833 during the six months
ended March 31, 1997 over the same period in 1996.  This  increase  reflects the
increase in loans  receivable.  Loans held for investment  purposes at March 31,
1997 was approximately $59,174 greater than such loans at March 31, 1996.

Interest on mortgage-related securities decreased $196. The Bank's investment in
mortgage-related securities declined in the six months ended March 31, 1997.

Income from the  investment  portfolio and cash and cash  equivalents  increased
$1,216.  The  improvement  is due to an increase  in  investment  securities  of
$22,966, from $80,534 at March 31, 1996 to $103,500 at March 31, 1997.

INTEREST  EXPENSE - Interest expense for the six months ended March 31, 1997 was
$7,983   compared  with  $5,719  for  the  six  months  ended  March  31,  1996,
representing an increase of $2,264, or 39.6%. The increased interest expense for
the period was the result of growth in the deposits of $26,485, from $206,908 at
March 31, 1996 to $233,393 at March 31, 1997, as well as an increased  amount of
borrowings  of $52,800,  from  $42,200 at March 31, 1996 to $95,000 at March 31,
1997.

                                       17
<PAGE>

PROVISION FOR LOAN LOSSES - The Bank  currently  maintains an allowance for loan
losses based upon management's  periodic  evaluation of known and inherent risks
in the loan portfolio, the Bank's past loss experience,  adverse situations that
may  affect  the  borrowers'  ability  to repay  loans,  estimated  value of the
underlying collateral and current and expected market conditions. During the six
months  ended  March  31,  1997 and  1996,  respectively,  the Bank  recorded  a
provision for (recovery of) loan losses of $25 and $(7). Management believes the
allowance for loan losses as of March 31, 1997 is adequate to cover all material
losses inherent in the Bank's portfolio.

OTHER  INCOME - Other  income for the six month  period ended March 31, 1997 was
$3,559   compared  with  $3,590  for  the  six  months  ended  March  31,  1996,
representing a decrease of $31.

At March 31, 1997, the Bank was servicing  approximately  $1,269,955 of mortgage
loans  for  others.  At March 31,  1996,  the Bank was  servicing  approximately
$1,208,007 of mortgage loans for others.  The Bank's total  servicing  portfolio
for others increased $61,948, or 5.1%.

Changes in revenue from non-interest  sources came from loan servicing fees (net
of MSR  amortization),  which decreased $8, from $1,546 for the six months ended
March 31, 1996 to $1,538 for the six months  ended March 31,  1997,  and service
fees and other charges to customers which increased $159 from $1,251 for the six
months ended March 31, 1996 to $1,410 for the six months ended March 31, 1997.

Loans held for sale increased  $4,714,  or 22.7%,  to $16,071 at March 31, 1997,
compared to $20,785 at March 31,  1996.  Sales of loans held for sale  increased
$24,138,  or 29.8%,  from  $80,914  for the six months  ended  March 31, 1996 to
$105,052  for the six months  ended  March 31,  1997.  Gain on the sale of loans
decreased  from $743 for the six months ended March 31, 1996 to $516 for the six
months  ended March 31, 1997.  Although the Company  reduces the level of market
risk by obtaining commitments to sell loans at fixed prices, it cannot eliminate
all such risks.

OTHER  EXPENSE - Other  expenses for the six months ended March 31, 1997 totaled
$4,495  compared  to $4,517  for the six  months  ended  March 31,  1996.  Other
expenses  consisted of compensation  related expenses,  building and maintenance
expenses,  federal insurance premiums, audit and OTS examination fees, and other
general and administrative expenses.

Salaries and employee  benefits  decreased  from $2,282 for the six months ended
March 31, 1996 to $2,263 for the six months ended March 31, 1997.

Office occupancy,  supplies and data processing expenses collectively  increased
$108 in the six months  ended  March 31, 1997  compared to the six months  ended
March 31, 1996. The Bank was operating two additional  full service  branches in
1997,  than were operated in 1996. In addition to general  increases in costs of
services  the six months  ended March 31, 1997  includes  the costs of nine full
service branches in 1997, compared to seven in 1996.

                                       18
<PAGE>

Federal  insurance  premiums  decreased from $221 for the six months ended March
31, 1996 to $131 for the three  months  ended March 31,  1997.  The  decrease is
attributed  to the  premium  rate  reduction  on  FDIC  deposits  following  the
recapitalization of SAIF.

Loan servicing  expenses  decreased from $156 for the six months ended March 31,
1996 to $125 for the six months  ended March 31,  1997.  These  expenses are for
custodial fees for loan documents,  additional loan pay off interest  associated
with GNMA pooled  mortgages and  improvements in the Bank's mortgage payment and
processing systems.

INCOME  TAXES - Income tax expense  for the six months  ended March 31, 1997 was
$1,276 which  represents an effective tax rate of 38.1%.  Income tax expense for
the six months ended March 31, 1996 was $1,023 which represents an effective tax
rate of 36.6%.

                                       19
<PAGE>


                         MID CONTINENT BANCSHARES, INC.
                                     PART II

Item 1. Legal Proceedings

                  The Company has no material proceedings pending against it.

Item 2.  Changes in Securities

                  None.

Item 3.  Defaults upon Senior Securities

                  None.

Item 4.  Submission of Matters to a Vote of Security Holders

                  None.

Item 5.  Other information

                  None.

Item 6.  Exhibits and Reports on Form 8-K

                  None.

                                       20
<PAGE>


                                   SIGNATURES

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

                                      Mid Continent Bancshares, Inc.
                                      ------------------------------------------



 May 2, 1997                          /s/  Richard T. Pottorff
 -----------                          ------------------------------------------
         Date                         Richard T. Pottorff
                                      President
                                      Chief Executive Officer



 May 2, 1997                          /s/ Larry R. Goddard
 -----------                          ------------------------------------------
         Date                         Larry R. Goddard
                                      Executive Vice President
                                      Chief Financial Officer