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    December 31, 1996
                                  -----------------

                                        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 Identification No.)
incorporation or organization)  


 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  91) 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


APPLICABLE ONLY TO CORPORATE ISSUERS:

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

            Date:          January 31, 1997
            Class:         $0.10 par value, common stock
            Outstanding:   1,984,250 shares


<PAGE>


MID CONTINENT BANCSHARES, INC.
INDEX

                                                                     Page Number

PART I - CONSOLIDATED FINANCIAL INFORMATION

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

Consolidated Statements of Income for the Three Months
Ended December 31, 1996 and 1995  (Unaudited)                                 4

Consolidated Statement of Stockholders' Equity for the
Three Months Ended December 31, 1996 (Unaudited)                              5

Consolidated Statements of Cash Flows for the Three Months
Ended December 31, 1996 and 1995 (Unaudited)                                  6

Notes to Consolidated Financial Statements (Unaudited)                   7 - 10

Management's Discussion and Analysis of Financial
Condition and Results of Operations                                     11 - 15

PART II - OTHER INFORMATION                                             16 - 17

SIGNATURES                                                                   18


<PAGE>


MID CONTINENT BANCSHARES, INC. 
PART I

MID CONTINENT BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                    September    December       
                                                                       30,          31,
                                                                      1996         1996
                                                                                 (Unaudited)
                                                                   ------------------------
                                                                   (Dollars in Thousands)
                                                                  
ASSETS                                                            
CASH AND CASH EQUIVALENTS:                                        
<S>                                                                   <C>         <C>   
   Cash and amounts due from depository institutions                    $1,694      $1,542
   Interest bearing deposits in other banks                              3,924       7,140
                                                                       -------     -------
      Total cash and cash equivalents                                    5,618       8,682
INVESTMENT SECURITIES                                                   86,235      87,268
CAPITAL STOCK OF FEDERAL HOME LOAN BANK, at Cost                         4,327       4,683
MORTGAGE-RELATED SECURITIES                                             34,383      33,305
LOANS HELD FOR SALE, at lower of cost or market value                   13,718      16,221
LOANS RECEIVABLE (Less allowance for loan losses of $421 and $415)     171,158     179,142
PREMISES AND EQUIPMENT, Net                                              6,271       6,581
REAL ESTATE OWNED (Less allowance for losses of $34 and $34)                28         139
ACCRUED INTEREST RECEIVABLE                                              2,744       3,182
EXCESS OF COST OVER FAIR VALUE OF ASSETS ACQUIRED (Less           
  accumulated amortization of $1,055 and $1,067)                            22          10
MORTGAGE SERVICING RIGHTS, Net                                          12,496      12,740
OTHER ASSETS                                                             3,186       3,572
                                                                       -------     -------
TOTAL ASSETS                                                          $340,186    $355,525
                                                                      ========    ========
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                              
DEPOSITS                                                              $214,493    $224,783
ADVANCE PAYMENTS BY BORROWERS FOR TAXES AND INSURANCE                    1,805         588
INCOME TAXES PAYABLE, Net of deposits                                                  240
DEFERRED INCOME TAXES                                                      698         698
ACCRUED AND OTHER LIABILITIES                                            4,683       3,873
ADVANCES FROM FEDERAL HOME LOAN BANK                                    81,700      87,500
                                                                       -------     -------
      Total liabilities                                                303,379     317,682
                                                                  
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                           225         225
authorized, 2,248,250 shares issued                               
ADDITIONAL PAID-IN CAPITAL                                              21,663      21,703
LESS UNEARNED COMPENSATION - EMPLOYEE STOCK OWNERSHIP PLAN              (1,054)     (1,014)
LESS UNEARNED COMPENSATION - MANAGEMENT STOCK BONUS PLAN                  (547)       (497)
RETAINED EARNINGS, Substantially restricted                             20,424      21,330
                                                                  
      Total                                                             40,711      41,747
TREASURY STOCK,  231,500 shares,  at cost                               (3,904)     (3,904)
                                                                       -------     -------
      Total stockholders' equity                                        36,807      37,843
                                                                       -------     -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $340,186    $355,525
                                                                      ========    ========
</TABLE>                                                          
                                                                  
See notes to consolidated financial statements.          

                                       3
<PAGE>


MID CONTINENT BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED                      
                                                                            DECEMBER 31,
                                                                        1995           1996
                                                                    (Unaudited)     (Unaudited)
                                                                    -----------------------------
                                                                       (Dollars in Thousands)
                                                                   
INTEREST INCOME:                                                   
<S>                                                                  <C>             <C>   
   Loans receivable                                                       $2,794          $3,648
   Mortgage-related securities                                               776             654
   Investment securities                                                   1,047           1,771
   Other interest-cash and cash equivalents                                  109              49
                                                                           -----           -----
      Total interest income                                                4,726           6,122
                                                                           -----           -----
                                                                   
INTEREST EXPENSE:                                                  
   Deposits                                                                2,261           2,655
   Advances from Federal Home Loan Bank                                      545           1,252
                                                                           -----           -----
      Total interest expense                                               2,806           3,907
                                                                           -----           -----
                                                                   
NET INTEREST INCOME                                                        1,920           2,215
                                                                   
PROVISION FOR LOAN LOSSES                                                     --              25
                                                                           -----           ----- 
                                                                   
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                        1,920           2,190
                                                                           -----           -----
                                                                   
OTHER INCOME:                                                      
   Gain on sale of loans, net                                                334             291
   Loan servicing fees                                                     1,213           1,207
   Amortization of mortgage servicing rights                                (402)           (421)
   Service fees and other charges to customers                               618             704
   Insurance commissions                                                       3              16
   Other                                                                       3              53
                                                                           -----           -----
      Total other income                                                   1,769           1,850
                                                                           -----           -----
                                                                   
OTHER EXPENSE:                                                     
   Salaries and employee benefits                                          1,133           1,129
   Federal insurance premiums                                                109              96
   Professional services                                                      66              57
   Occupancy of premises                                                     224             291
   Provision for losses on real estate owned                       
   Office supplies and related expenses                                      139             141
   Data processing                                                           143             154
   Amortization of excess cost over fair value of assets acquired             17              12
   Advertising and promotions                                                 92             111
   Deposit account expense                                                    55              89
   Loan servicing expense                                                     78              66
   Other                                                                     124             101
                                                                           -----           -----
      Total other expenses                                                 2,180           2,247
                                                                           -----           -----
                                                                   
INCOME BEFORE INCOME TAX EXPENSE                                           1,509           1,793
                                                                   
INCOME TAX EXPENSE                                                           558             695
                                                                           -----           -----
                                                                   
NET INCOME                                                                  $951          $1,098
                                                                           =====          ======
                                                                   
Earnings per share                                                         $0.48           $0.56
                                                                           =====           =====
                                                                   
Weighted average shares outstanding                                    1,999,846       1,949,911
                                                                       =========       =========
</TABLE>                                                           
                                                                   
See notes to consolidated financial statements.         

                                       4
<PAGE>


MID CONTINENT BANCSHARES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED DECEMBER 31, 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
                                                            Unearned
                                                         Compensation  Unearned
                                                          - Employee  Compensation Retained
                                Common Stock    Additional   Stock     Management  Earnings,       Treasury Stock      Total
                                ------------    Paid-In    Ownership  Stock Bonus  Substantially   --------------  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
Common stock committed
to be  released for
allocation -
Employee Stock                                                                                                             
Ownership Plan                                                   40                                                        40 

Increase in fair
market value of
Employee Stock
Ownership Plan shares                                                                                                
committed to be                                      
released for allocation                               40                                                                   40

Amortization of
unearned
compensation -                                                                                                        
Management Stock
Bonus Plan                                                                    50                                           50

Dividends on common
stock to  stockholders                                                                  (192)                            (192)

Net income                                                                             1,098                            1,098
                              -----------------------------------------------------------------------------------------------
BALANCE, December 31, 1996    2,248,250   $225   $21,703    ($1,014)       ($497)    $21,330       231,500 ($3,904)   $37,843
                              =============================================================================================== 
</TABLE>

See notes to consolidated financial statements.

                                       5
<PAGE>

MID CONTINENT BANCSHARES, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED         
                                                                                       DECEMBER 31,
                                                                                     1995        1996
                                                                                   (Unaudited) (Unaudited)
                                                                                   ----------  ---------
                                                                                   (Dollars in Thousands)
                                                                                   
CASH FLOWS FROM OPERATING ACTIVITIES:                                              
<S>                                                                                 <C>      <C>              
   Net income                                                                           $951     $1,098
   Adjustments to reconcile net income to net cash provided by                     
   (used in) operating activities:                                                 
   Common Stock committed to be released for allocation -                                 39         40
     Employee Stock Ownership Plan                                                      
   Increase in fair market value of Employee Stock Ownership                              26         40
     Plan shares committed to be released  for  allocation                              
   Amortization of unearned compensation - Management Stock Bonus Plan                    50         50
   Stock dividend on capital stock in Federal Home Loan Bank                             (36)       (73)
   Amortization of premiums and discounts on mortgage-related                   
     securities and investment securities, net                                           (33)       (26)  
   Provision for loan losses                                                                         25
   Net loan origination fees capitalized                                                 344        240
   Amortization of net deferred loan origination fees                                    (48)       (25)
   Amortization of mortgage servicing rights                                             402        421
   Mortgage servicing rights impairment                                                               1
   Amortization of excess of costs over fair value of asset acquired                      17         12
   Gain on sale of real estate owned, net                                                 (2)       (18)
   Depreciation on premises and equipment                                                110        132
   Gain on sale of loans                                                                (334)      (291)
   Origination of loans held for sale                                                (42,715)   (53,109)
   Proceeds from sale of loans held for sale                                          47,738     50,897
   Changes in:                                                                                 
   Accrued interest receivable                                                          (322)      (438)
   Other assets                                                                          203       (842)
   Income taxes payable                                                                  283        695
   Accrued and other liabilities                                                          19       (811)
                                                                                      ------    -------
      Net cash provided by (used in) operating activities                              6,692     (1,982)
                                                                                      ------    -------                    
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                         
   Proceeds from maturity or call of investment securities                             3,000     11,000
   Purchases of investment securities                                                 (9,986)   (12,283)
   Principal collected on mortgage-related securities                                  1,737      1,071
   Origination of loans receivable, net of principal collection                         (468)    (8,386)
   Acquisitions of mortgage servicing rights                                            (619)      (666)
   Purchase of premises and equipment                                                   (556)      (442)
   Proceeds from sales of real estate owned                                               79         69
                                                                                     -------    -------
      Net cash used in investing activities                                           (6,813)    (9,637)
                                                                                     -------    -------            
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                        
   Receipts (payments) for deposits, net                                                (361)    10,290
   Net decrease in advance payments by borrowers for taxes and insurance              (1,659)    (1,217)                        
   Proceeds from advance from Federal Home Loan Bank                                  18,000     89,700
   Repayments on advances from Federal Home Loan Bank                                (15,000)   (83,900)
   Acquisition of Treasury Stock                                                      (1,368)        --
   Cash dividends on common stock to stockholders                                       (204)      (190)
                                                                                      ------     ------
      Net cash provided by (used in ) financing activities                              (592)    14,683
                                                                                      ------     ------
                                                                                   
INCREASE  (DECREASE)  IN CASH AND CASH EQUIVALENTS                                      (713)     3,064
CASH AND CASH EQUIVALENTS:                                                         
   Beginning of period                                                                 5,677      5,618
                                                                                      ------     ------
   End of period                                                                      $4,964     $8,682
                                                                                      ======     ======
                                                                                   
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                                                               
   Income tax payments (refunds)                                                        $275        $ 0
                                                                                      ======     ======
   Interest payments                                                                  $2,814     $3,930
                                                                                      ======     ======
   Loans transferred to real estate owned                                               --         $162
                                                                                      ======     ======
   Accrued dividends on common stock                                                    $198       $192
                                                                                      ======     ======
</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  December  31,  1996,  the  consolidated
statements  of income for the three  months  ended  December  31, 1995 and 1996,
stockholders' equity for the three months ended December 31, 1996 and cash flows
for the three months ended December 31, 1995 and 1996, 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. These consolidated financial statements should 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 months ended  December 31, 1996 are not
necessarily indicative of the results which may be expected for the entire year.

3.    DIVIDENDS ON COMMON STOCK

On December  19, 1996 the  Company  declared a $0.10 per share cash  dividend to
shareholders  of record on January 2, 1997. The dividend was paid on January 16,
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
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

                                       7
<PAGE>

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"  receivables  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.

                                       8
<PAGE>


 5.    LOANS RECEIVABLE
<TABLE>
<CAPTION>

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

First mortgage loans:

<S>                                                       <C>               <C>     
Residential-one-to-four units                             $157,494          $166,689
Secured by other properties                                  1,013             1,000
Construction loans                                          17,367            15,635
                                                           -------           -------
                                                           175,874           183,324
                                                           -------           -------
Other installment loans:

Property improvement, auto and other                         5,195             5,304
Mobile home                                                    305               257
Deposits                                                       769               746
                                                           -------           -------
                                                             6,269             6,307
                                                           -------           -------
Less:
   Unearned discounts and loan fees                            157                28
   Undisbursed loan funds                                   10,407            10,046
   Allowance for loan losses                                   421               415
                                                           -------           -------
                                                          $171,158          $179,142
                                                          ========          ========
</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,    December 31,
                                                           1996        --------------
                                                                            1996
                                                                        (Unaudited)
                                                       --------------  --------------
                                                           (Dollars in Thousands)

<S>                                                       <C>              <C>     
Government National Mortgage Association                    $875,381         $871,767
Federal National Mortgage Association                        115,492          111,684
Federal Home Loan Mortgage Corporation                       231,515          256,942
Other Investors                                                6,765            6,525
                                                          ----------       ----------
                                                          $1,229,153       $1,246,918
                                                          ==========       ==========
</TABLE>

 6.    MORTGAGE SERVICING RIGHTS (MSR)

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

                                                             Three Months Ended
                                                                December 31,
                                                                (Unaudited)
                                                           1995             1996
                                                       --------------  ----------------
                                                           (Dollars in Thousands)

<S>                                                          <C>               <C>    
Balance, Beginning of period                                 $11,625           $12,496
Additions                                                        619               666
Amortization                                                    (402)             (421)
                                                               -----             -----
                                                              11,842            12,741
Less:  Impairment                                                 --                 1
                                                                  --                 -
Balance, End of period                                       $11,842           $12,740
                                                             =======           =======
</TABLE>
                                       9
<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.

 8.    SUBSEQUENT EVENTS

During the month of January 1997, the Company  acquired an additional  32,500 of
treasury stock, at a cost of $794,000.

                                       10


<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 functions 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 11.0% as of September 30, 1996 and December 31, 1996, respectively. The
Bank's short-term liquidity ratio was 3.7% and 5.0%, 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.

                                       11
<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
December  31,  1996,  the Bank was in  compliance  with all  regulatory  capital
requirements.  Capital includes tangible,  core and risk-based capital ratios of
9.2%, 9.2% and 24.3%, respectively.

The Bank's capital  requirements and actual capital under OTS regulations are as
follows as of December 31, 1996:

                              AMOUNT            RATIO
                           (in thousands)

GAAP CAPITAL                  $32,936
                              =======
TANGIBLE CAPITAL:
      ACTUAL                  $32,936             9.2%
      REQUIRED                  5,388             1.5%
                              -------           -----
      EXCESS                  $27,548             7.7%
                              =======           =====

CORE CAPITAL:
      ACTUAL                  $32,936             9.2%
      REQUIRED                 10,775             3.0%
                              -------           -----
      EXCESS                  $22,161             6.2%
                              =======           ======

RISK-BASED CAPITAL:
      ACTUAL                  $33,401            24.3%
      REQUIRED                 11,012             8.0%
                              -------           -----
      EXCESS                  $22,389            16.3%
                              =======           ======

                                       12



<PAGE>
                              RESULTS OF OPERATIONS
                  THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
                             (Dollars in Thousands)

GENERAL - The Company's net income for the three months ended  December 31, 1996
was $1,098 compared with $951 for the three months ended December 31, 1995.

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 three month  period  ended  December  31, 1996 was
$2,215, representing a 15.4% increase from the three month period ended December
31, 1995.  Interest-bearing  assets and liabilities  increased from December 31,
1995 to December 31, 1996.  (Interest-bearing  assets  increased by $79,750,  or
32.2%, while interest-bearing liabilities increased by $80,928, or 35.0%.) Total
interest income  increased by 29.5% to $6,122 while interest  expense  increased
39.2% to $3,907.

INTEREST  INCOME - Interest  income for the three months ended December 31, 1996
was $6,122  compared  with $4,726 for the three months ended  December 31, 1995,
representing an increase of $1,396 or 29.5%.

The Bank's interest on loans  receivable  increased $854 during the three months
ended December 31, 1996 over the same period in 1995. This increase  reflects an
increase in loans receivable. Loans held for investment purposes at December 31,
1996 were approximately $54,273 greater than at December 31, 1995.

Interest on mortgage-related securities decreased $122. The Bank's investment in
mortgage-related securities declined in the quarter ended December 31, 1996.

Income from the  investment  portfolio and cash and cash  equivalents  increased
$664. The improvement is due to an increase in investment securities of $28,434,
from $63,517 at December 31, 1995 to $91,951 at December 31, 1996.

INTEREST EXPENSE - Interest expense for the three months ended December 31, 1996
was $3,907  compared  with $2,806 for the three months ended  December 31, 1995,
representing an increase of $1,101 or 39.2%. The increased  interest expense for
the period was the result of growth in the deposits of $29,428, from $195,355 at
December  31, 1995 to $224,783 at December  31,  1996,  as well as an  increased
amount of borrowings of $51,500, from $36,000 at December 31, 1995 to $87,500 at
December 31, 1996.

                                       13
<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  December 31, 1996 and 1995,  respectively,  the Bank recorded a provision
for loan losses of $25 and $0. Management believes the allowance for loan losses
as of December 31, 1996 is adequate to cover all material losses inherent in the
Bank's portfolio.

OTHER INCOME - Other  income for the three month period ended  December 31, 1996
was $1,850  compared  with $1,769 for the three months ended  December 31, 1995,
representing  an increase of $81. At December 31, 1996,  the Bank was  servicing
approximately $1,246,918 of mortgage loans for others. At December 31, 1995, the
Bank was servicing  approximately  $1,199,763 of mortgage loans for others.  The
Bank's total servicing portfolio for others increased $47,155, or 3.9%.

Revenue from loan servicing fees (net of MSR amortization),  decreased $25, from
$811 for the quarter  ended  December  31,  1995 to $786 for the  quarter  ended
December 31, 1996.  Gross loan  servicing  fees decreased $6 from $1,213 for the
three  months  ended  December  31,  1995 to $1,207 for the three  months  ended
December 31, 1996.  Amortization of mortgage  servicing  rights increased $19 in
the 1996 quarter when compared to the same 1995 quarter.

Service fees and other  charges to customers  increased  $86,  from $618 for the
quarter ended December 31, 1995 to $704 for the quarter ended December 31, 1996.
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  14,100 at December 31, 1995 to  approximately  16,400 at December
31, 1996.  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  $1,199, or 6.9%, to $16,221 at December 31, 1996,
compared to $17,420 at December 31, 1995. Sales of loans held for sale increased
$3,159, or 6.6%, from $47,738 for the quarter ended December 31, 1995 to $50,897
for the quarter  ended  December 31, 1996.  Gain on the sale of loans  decreased
from $334 for the quarter ended  December 31, 1995 to $291 for the quarter ended
December  31,  1996.  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  December 31, 1996
totaled $2,247  compared to $2,180 for the three months ended December 31, 1995.
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 $1,133 in the December 31, 1995
quarter to $1,129 in the December 31, 1996 quarter.

Office occupancy,  supplies and data processing expenses collectively  increased
$80 in the December 

                                       14
<PAGE>

31, 1996 quarter compared to the December 31, 1995 quarter.  The Bank opened two
additional  full service  branches in 1996. In addition to general  increases in
costs of services, the December 31, 1996 quarter includes the costs of nine full
service branches in 1996, compared to seven in 1995.

Advertising and promotion and deposit account  expenses  collectively  increased
$53 in the December 31, 1996 quarter  compared to the December 31, 1995 quarter.
These expenses are primarily for the promotion and related costs associated with
opening new offices and the Bank's checking account programs.

Loan  servicing  expenses  decreased from $78 for the quarter ended December 31,
1995 to $66 for the quarter  ended  December  31, 1996.  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  December 31, 1996
was $695 which represents an effective tax rate of 38.8%. Income tax expense for
the three months ended December 31, 1995 was $558 which  represents an effective
tax rate of 37.0%.

                                       15
<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

            The 1997 Annual Meeting of Stockholders of Mid Continent Bancshares,
            Inc. was held on January 23, 1997.

            The Meeting was for the purpose of  considering  and acting upon the
            following matters.

            1.    The election of three directors of the Company.

            2.    The ratification of the appointment of Deloitte & Touche LLP 
                  as independent auditors of Mid Continent Bancshares, Inc. for
                  the fiscal year ending September 30, 1997.

            The following chart shows the voting results on the above matters.

            1.    Election of three directors

                                                Votes For   Votes Withheld
                                                ---------   --------------
                  Richard T. Pottorff           1,789,324        2,024
                  Kenneth B. Dellett            1,789,324        2,024
                  Ron J. McGraw                 1,789,124        2,224

<TABLE>
<CAPTION>

                                                Affirmative   Negative
                                                   Votes        Votes    Abstentions
                                                   -----        -----    -----------
<S>                                               <C>           <C>         <C>  
            2.    Ratification of appointment of
                  Deloitte and Touche LLP as
                  independent auditors for the
                  fiscal year ending
                  September 30, 1997              1,784,545     3,450       3,353
</TABLE>

                                       16
<PAGE>

Item 5.     Other information

            None.

Item 6.     Exhibits and Reports on Form 8-K

            None.

                                       17
<PAGE>


                                   SIGNATURES

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

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




  February 4, 1997                     /s/Richard T. Pottorff
----------------------------          ---------------------------------------
       Date                            Richard T. Pottorff
                                       President
                                       Chief Executive Officer




  February 4, 1997                    /s/Larry R. Goddard 
----------------------------          ---------------------------------------
        Date                          Larry R. Goddard
                                      Executive Vice President
                                      Chief Financial Officer

                                       18