<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington D.C. 20549
                           -------------------------
                                  FORM 10-QSB

[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 0-20620

                            MIDWEST BANCSHARES, INC.
--------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

          Delaware                                    42-1390587
-------------------------------                 ----------------------
(State or other jurisdiction of                     (IRS Employer
incorporation or organization)                  Identification Number)


3225 Division Street, Burlington, Iowa                   52601
----------------------------------------        ----------------------
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code: (319) 754-6526
                                                    --------------
        Indicate by check mark whether the issuer (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 such shorter period that the issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]


        Transitional Small Business Format:  Yes [ ]   No [X]

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

                Common Stock                 348,339
               --------------          --------------------
                   Class                Shares Outstanding
                                        as of May 7, 1997
<PAGE>

                   MIDWEST BANCSHARES, INC. AND SUBSIDIARIES

                                     INDEX
                                ---------------

<TABLE>
<CAPTION>


                                                                                  Page
                                                                                  ----
<S>                                                                       <C>
Part I. Financial Information

Item 1 Financial Statements
         Consolidated balance sheets March 31, 1997 and December 31, 1996             1

         Consolidated statements of operations, for the three
            months ended March 31, 1997 and 1996                                      2

         Consolidated statements of cash flows, for the three
            months ended March 31, 1997 and 1996                                      3

         Notes to consolidated financial statements                                   4

Item 2. Management's discussion and analysis of financial condition
          and results of operations                                         5 through 8


Part II. Other Information                                                            9

Signautres                                                                           10

Exhibit 11 Computation of per share earnings

Exhibit 27. Financial Data Schedule
</TABLE>
<PAGE>


                    MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                           Consolidated Balance Sheets
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                          March 31, 1997               December 31, 1996
                                                          --------------               -----------------
<S>                                                          <C>                           <C>
Assets
   Cash and cash equivalents                                  $1,702                          $3,998
   Securities available for sale                              27,359                          23,784
   Securities held to maturity (estimated
                 fair value of $21,441 and $21,764)           21,537                          21,811
   Loans receivable, net                                      82,603                          81,225
   Real estate owned and in judgment, net                        ---                              12
   Federal Home Loan Bank stock, at cost                       1,960                           1,960
   Office property and equipment, net                          2,414                           2,447
   Accrued interest receivable                                 1,138                           1,007
   Other assets                                                  293                             181
                                                            --------                        --------
Total assets                                                $139,006                        $136,425
                                                            ========                        ========

Liabilities
   Deposits                                                 $104,444                        $101,918
   Advances from Federal Home Loan Bank                       24,000                          24,000
   Advances from borrowers for taxes and insurance               222                             378
   Accrued interest payable                                       93                              74
   Accrued expenses and other liabilities                        605                             455
                                                            --------                        --------
Total liabilities                                           $129,364                        $126,825
                                                            --------                        --------
Stockholders' equity
   Serial preferred stock, $.01 par value,
      500,000 shares authorized, none issued               $    ---                      $    ---
   Common stock, $.01 par value, 2,000,000 shares
      authorized, 455,000 issued and outstanding                   5                               5
   Additional paid-in capital                                  4,037                           4,037
   Retained earnings, substantially restricted                 8,032                           7,837
   Treasury stock, at cost, 106,661 shares
      for 1997 and 105,621 shares for 1996                    (2,241)                         (2,211)
   Employee stock ownership plan                                (120)                           (120)
   Unrealized (loss) appreciation on securities
      available for sale, net of taxes on income                 (71)                             52
                                                            --------                        --------
Total stockholders' equity                                    $9,642                          $9,600
                                                            --------                        --------
Total liabilities and stockholders' equity                  $139,006                        $136,425
                                                            ========                        ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                     Page 1
<PAGE>

                    MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                      Consolidated Statements of Operations
                      (In thousands, except per share data)
<TABLE>
<CAPTION>

  
                                                                                   Three Months
                                                                                  Ended March 31,
                                                                           1997                    1996
                                                                          ------                  ------
<S>                                                                       <C>                      <C>
Interest income:
   Loans receivable                                                       $1,659                   $1,562
   Securities available for sale                                             489                      434
   Securities held to maturity                                               332                      461
   Deposits in other financial institutions                                   30                       15
   Other interest-earning assets                                              34                       33
                                                                          ------                   ------
      Total interest income                                                2,544                    2,505
                                                                          ------                   ------
Interest expense:
   Deposits                                                                1,216                    1,174
   Advances from FHLB and other borrowings                                   352                      346
                                                                          ------                   ------
      Total interest expense                                               1,568                    1,520
                                                                          ------                   ------
      Net interest income                                                    976                      985
      Provision for losses on loans                                           12                       12
                                                                          ------                   ------
Net interest income after provision for losses on loans                      964                      973
                                                                          ------                   ------
Non-interest income:
   Fees and service charges                                                   69                       39
   Other                                                                      18                       12
                                                                          ------                   ------
      Total non-interest income                                               87                       51
                                                                          ------                   ------
Non-interest expense:
   Compensation and benefits                                                 326                      301
   Office property and equipment                                              95                       88
   Deposit insurance premiums                                                  4                       61
   Data processing                                                            42                       41
   Other                                                                     192                      159
                                                                          ------                   ------
      Total non-interest expense                                             659                      650
                                                                          ------                   ------
Earnings before taxes on income                                              392                      374
Taxes on income                                                              145                      139
                                                                          ------                   ------
Net earnings                                                                $247                     $235
                                                                          ======                   ======

Earnings per share                                                         $0.66                    $0.61
                                                                          ======                   ======
</TABLE>
See accompanying notes to consolidated financial statements.

                                     Page 2
<PAGE>

                    MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                                 (In thousands)

<TABLE>
<CAPTION>
  
                                                                                   Three Months
                                                                                  Ended March 31,
                                                                           1997                    1996
                                                                          ------                  ------
<S>                                                                       <C>                      <C>
Cash flows from operating activities:
   Net earnings                                                             $247                     $235
   Adjustments to reconcile net earnings to net
      cash provided by operating activities:
         Provision for losses on loans                                        12                       12
         Depreciation                                                         40                       33
         Amortization of recognition and retention plan benefits          ---                           4
         ESOP expense                                                         15                       11
         Amortization of loan fees, premiums and discounts                     4                       35
         (Increase) decrease in accrued interest receivable                 (131)                    (235)
         (Increase) decrease in other assets                                 (38)                      (1)
         Increase (decrease) in accrued interest payable                      19                       18
         Increase (decrease) in accrued expenses and other liabilities       135                       19
                                                                         -------                  -------
Net cash provided by operating activities                                    303                      131
                                                                         -------                  -------
Cash flows from investing activities:
   Purchase of securities                                                 (3,962)                  (5,568)
   Proceeds from maturities of securities                                 ---                       2,543
   Loans purchased                                                        (1,989)                  (2,158)
   Purchase of mortgage-backed securities                                 (1,092)                  ---
   Repayment of principal on mortgage-backed securities                    1,552                    1,240
   Decrease (increase) in loans receivable                                   598                       53
   Proceeds from sale of real estate owned, net                               12                       27
   Purchase of office property and equipment                                  (6)                    (107)
                                                                         -------                  -------
Net cash (used in) provided by investing activities                       (4,887)                  (3,970)
                                                                         -------                  -------
Cash flows from financing activities:
   Increase (decrease) in deposits                                         2,526                    1,141
   Proceeds from advances from FHLB                                       ---                       3,300
   Treasury stock acquired                                                   (30)                    (311)
   Payment of cash dividends                                                 (52)                     (48)
   Net (decrease) increase in advances from borrowers
      for taxes and insurance                                               (156)                    (145)
                                                                         -------                  -------
Net cash provided by (used in) financing activities                        2,288                    3,937
                                                                         -------                  -------
Net (decrease) increase in cash and cash equivalents                      (2,296)                      98
Cash and cash equivalents at beginning of year                             3,998                    2,305
                                                                         -------                  -------
Cash and cash equivalents at end of period                                $1,702                   $2,403
                                                                         =======                  =======

Supplemental disclosures:
   Cash paid during the three months for:
      Interest                                                            $1,549                   $1,503
      Taxes on income                                                          0                      106
   Transfers from loans to real estate owned                                   0                      191
                                                                         =======                  =======
</TABLE>

See accompanying notes to consolidated financial statements.

                                     Page 3
<PAGE>


                    MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  Significant Accounting Policies

         The consolidated financial statements for the three months ended March
         31, 1997 and 1996 have not been audited and do not include information
         or footnotes necessary for a complete presentation of financial 
         condition, results of operations and cash flows in conformity with 
         generally accepted accounting principles. However, in the opinion of 
         management, the accompanying consolidated financial statements contain 
         all adjustments, which are of a normal recurring nature, necessary for 
         a fair presentation. The results of operations for the interim periods 
         are not necessarily indicative of the results which may be expected 
         for an entire year.

         The accounting policies followed by the Company are set forth in Note 1
         to the Company's consolidated financial statements contained in the
         1996 Annual Report to stockholders and are incorporated herein by
         reference.


Note 2.  Reclassifications
         Certain items on the consolidated financial statements as of, and for
         the three months ended March 31, 1996 have been reclassified to conform
         to the presentation as of, and for the three months ended March 31,
         l997.

                                     Page 4


<PAGE>

                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Forward-looking Statements

         When used in this Form 10-QSB, the words or phrases "will likely
result", "are expected to", "will continue", "is anticipated", "estimate",
"project", or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to certain risks and uncertainties
including changes in economic conditions in the Company's market area, changes
in policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area and competition, that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as to
the date made. The Company wishes to advise readers that the factors listed
above could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.

         The Company does not undertake, and specifically disclaims any
obligation, to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events.

Results of Operations

         Midwest Bancshares, Inc. (the "Company") had net earnings of $247,000,
or $0.66 per share, for the three months ended March 31, 1997, compared to net
earnings of $235,000, or $0.61 per share, for the same period in 1996. The
increase in net earnings for the three month period was primarily due to a
$30,000 increase in fees and service charges as a result of a revised fee
structure on certain deposit services, partially offset by a decrease in net
interest income and an increase in non-interest expenses. More detailed
comparisons are discussed below.

         Net Interest Income

         Net interest income decreased $9,000, for the three months ended March
31, l997 over the comparable period in 1996. The Company's net interest rate
spread and net interest margin on interest-earning assets were 2.60% and 2.87%,
respectively, for the three months ended March 31, 1997 compared to 2.68% and
2.97% for the comparable period in 1996.

         Interest income increased by $39,000 for the three months ended March
31, 1997 over the comparable period in 1996. Average interest-earning assets
increased by approximately $2.2 million for the three months ended March 31,
1997 compared to the same period in 1996. The increase in average
interest-earning assets was primarily due to an increase in loans outstanding
and securities available for sale. The average yield on interest-earning assets
was 7.63% for both the three months ended March 31, 1997 and 1996. Interest
income would have been approximately $13,000 higher if interest had been
collected on the three non-performing multi-family participation loans discussed
in the annual Form 10-KSB. These three loans total $874,000, and the lead lender
and the Association now have an agreement with the borrower which will bring the
loans current by September 1997 if the agreement is complied with.

         Interest expense increased by $48,000 for the three months ended March
31, 1997 over the comparable period in 1996. Average interest-bearing
liabilities increased by approximately $2.8 million for the three months over
the comparable period in 1996, due to increases of $1.8 million and $1.0 million
in average deposits and borrowings from the FHLB, respectively. The average
rates paid on interest-bearing liabilities increased 8 basis points for the
three months ended March 31, 1997 over the comparable period in 1996.

                                     Page 5

<PAGE>

                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations (continued)

         Provision for Losses on Loans

         The provision for losses on loans was $12,000 for the three months
ended March 31, 1997 and 1996. The amount of provision was a result of the
determination by management to maintain the allowance for losses on loans at an
adequate level to absorb potential loan losses. At March 31, 1997 and 1996, the
Company's allowance for losses on loans totaled $698,000 and $651,000,
respectively, or 0.84% and 0.85% of total loans, excluding mortgage-backed
securities, and 61.28% and 369.89% of total non-performing loans. The latter
ratio was impacted by an $874,000 increase in non-performing multi-family loans,
primarily due to three multi-family loan which are on non-accrual status.
Management does not anticipate a material loss on the resolution of these loan
delinquencies as there is now an agreement in place to bring these loans
current. The Company had no net charge-offs during the three months ended March
31, 1997 compared to $37,000 of net charge-offs for the three months ended March
31, 1996.

         Non-interest income

         Total non-interest income increased by $36,000 for the three months
ended March 31, 1997 compared to the same period in 1996. The increase was
primarily due to a revised fee structure on certain deposit services. Also
contributing to the increase in non-interest income was a $9,000 special
dividend received from the Association's data processor in February 1997, with
no comparable dividend in the three months ended March 31, 1996.

         Non-interest expense

         Total non-interest expense increased by $9,000 for the three months
ended March 31, 1997 compared to the same period in 1996. The increase was
primarily composed of increases of $25,000 in compensation and benefits expense,
$7,000 in office property and equipment and $33,000 in other expenses. The
increased compensation and benefit expense was a result of collecting $9,000
less loan fees to offset the cost of loan production, primarily compensation and
benefits, and due to the hiring of a regulatory compliance officer and normal
cost of living increases in compensation and benefits. The increase in office
property and equipment was primarily a result of the Company's expanded ATM
network and computer equipment. The increase in other expenses was primarily due
to increased marketing expenses related to the expanded ATM network and
introduction of a new product, the home equity line of credit, and due to a
$7,000 increase in net real estate owned expenses. Partially offsetting these
increases was a $57,000 decrease in FDIC deposit insurance premiums, as a result
of the Deposit Insurance Funds Act of 1996 which was passed on September 30,
1996.

         Taxes on Income

         Taxes on income were $6,000 more for the three months ended March 31,
1997 than the comparable period in 1996. The increase was primarily due to
increased taxable income as the effective combined federal and state tax rate
remained constant at approximately 37%.



                                     Page 6
<PAGE>

                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Condition

         The Company's total assets at March 31, 1997 were $139.0 million,
increasing from $136.4 million at December 31, 1996. The increase was due to an
intentional increase in interest-earning assets in an effort to increase net
interest income. The increase of approximately $2.6 million was primarily due to
the purchase of $4.0 million of securities available for sale, the purchase of
$1.1 million of mortgage-backed securities to be held to maturity, and the
purchase of $2.0 million in loans receivable, partially offset by principal
repayments of $1.6 million from mortgage-backed securities, a net decrease in
loans receivable, exclusive of purchased loans, of $0.6 million and a net
decrease in cash and cash equivalents of $2.3 million. The net increase in total
assets was primarily funded by an increase of $2.5 million of deposits.

         Total stockholders' equity increased $42,000 due to the $247,000 net
earnings for the three months less $52,000 in dividends declared, partially
offset by the $123,000 change in net unrealized losses on investments available
for sale (due to increased market rates of interest) and a $30,000 increase in
treasury stock.


Liquidity and Capital Resources

         The Company's principal sources of funds are deposits and advances from
FHLB, amortization and prepayment of loan principal (including mortgage-backed
securities), sales or maturities of investment securities, mortgage-backed
securities and short-term investments and operations. While scheduled loan
repayments and maturing investments are relatively predictable, deposit flows
and early loan repayments are more influenced by interest rates, general
economic conditions and competition. The Company generally manages the pricing
of its deposits to maintain a steady deposit balance, but has from time to time
decided not to pay deposit rates that are as high as those of its competitors,
and, when necessary, to supplement deposits with longer term and/or less
expensive alternative sources of funds.

         Federal regulations require the Association to maintain minimum levels
of liquid assets consisting of cash and other eligible investments. The required
percentage is currently 5% of net withdrawable savings deposits and borrowings
payable on demand or in one year or less during the preceding calendar quarter.
For March 1997, the Association's liquidity ratio was 8.4% compared to 9.8% for
December 1996. The decrease was primarily due to the purchase of investment
securities which, because of their maturity term, did not qualify as liquid
investments and due to the use of liquid assets to fund an increase in the loan
portfolio. Assuming market interest rates are stable or decrease, a high level
of liquidity may have a negative effect on the Association's interest rate
spread due to a larger amount of the Association's assets earning the
then-current lower rates of interest. However, a high level of liquidity
positions the Association to respond to possible higher interest rates by
providing the Association with the ability to deploy liquid assets into higher
yielding assets as rates increase. The Association has, and intends to continue
to deploy liquid assets by increasing its loan portfolio; however, its ability
to do so depends on the loan demand in its market areas, competition for such
loans, to the extent they meet the Association's underwriting guidelines, and
opportunities for participating in and purchasing loans in nearby markets.

         Liquidity management is both a daily and long-term responsibility of
management. The Association adjusts its investments in liquid assets based upon
management's assessment of (i) expected loan demand, (ii) expected deposit
flows, (iii) yields available on interest-bearing deposits, and (iv) the
objectives of its asset/liability management strategy. Excess liquidity is
invested generally in interest-bearing overnight deposits and other short-term
government and agency obligations. If the Association requires funds beyond its
ability to generate them internally, it has additional borrowing capacity with
the Federal Home Loan Bank.

                                     Page 7
<PAGE>

                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources (continued)

         The Association anticipates that it will have sufficient funds
available to meet current loan and purchase commitments. At March 31, 1997, the
Association had outstanding commitments to extend credit totaling $3.0 million
and commitments to purchase loans of $0.7 and investments of $2.4 million.

         At March 31, 1997, the Association had tangible and core capital of
$9.0 million, or 6.47% of total adjusted assets which exceeded the regulatory
requirements of 1.5% and 3.0%, respectively, by $6.9 million and $4.8 million,
respectively. The risk-based capital requirement is currently 8% of
risk-weighted assets. As of March 31, 1997, the Association had risk-weighted
assets of $61.3 million, a risk-based requirement of $4.9 million and risk-based
capital of $9.7 million, or 15.77%, which exceeds the requirement by $4.8
million. The Association's regulatory capital information is shown in the table
below.



         Regulatory Capital Table

                                                     (In thousands)

                                              Tangible      Core     Risk-based
                                              Capital      Capital     Capital
                                              ----------------------------------
Association's capital                         $8,961        $8,961       $8,961
Additional capital - general allowances          --           --            698
                                              ------        ------       ------
Regulatory capital                             8,961         8,961        9,659
Minimum capital requirement                    2,078         4,155        4,901
                                              ------        ------       ------
Excess regulatory capital                     $6,883        $4,806       $4,758
                                              ======        ======       ======

         The unrealized (loss) appreciation on securities available for sale,
which is a component of stockholders' equity, is a result of the implementation
of Statement No. 115 of the Financial Accounting Standards Board. At March 31,
1997, the net unrealized loss of $71,000, down from a net gain of $52,000 at
December 31, 1996, consisted primarily of the net unrealized market loss, net of
tax, due to increased market interest rates, on certain GNMA mortgage-backed
securities, U.S. Agency securities, and marketable equity securities which have
been identified as available for sale by management.



                                     Page 8


<PAGE>




                            MIDWEST BANCSHARES, INC.

                           PART II. Other Information

Item 1.  Legal Proceedings
         -----------------
         None.

Item 2.  Changes in Securities
         ---------------------
         None.

Item 3.  Defaults Upon Senior Securities
         -------------------------------
         None.

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------
         (a) Annual meeting date:  April 28, 1997
         (c) The matters approved by stockholders at the meeting and number of
         votes cast for, against or withheld (as well as the number of
         abstentious and broker non-votes) as to each matter are set forth
         below:

                  Proposal                              Number of Votes
                  --------                              ---------------
                                                                         Broker
                                                   For      Withheld    Non-vote
                                                   ---      --------    --------
         Election of the following directors 
            for three-year terms:
                  1.  Yuh-Fen (Boni) Lin          250,037     1,750         0
                  2.  James E. Witte              247,802     3,985         0

                                                                         Broker
                                             For     Against  Abstain   Non-vote
                                             ---     -------  -------   --------
         Ratification of the appointment 
         of KPMG Peat Marwick LLP as 
         auditors for fiscal year 
         ending December 31, 1997           251,637     0       150        0


Item 5.  Other Information
         -----------------
         None.

Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------
         (a)  Exhibits:
                  Exhibit 11  Computation of Per Share Earnings
                  Exhibit 27  Financial Data Schedule

         (b) There were no reports on Form 8-K filed during the quarter for
         which this report is filed.

                                     Page 9


<PAGE>



                                   Signatures


         Pursuant to the requirement 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.


                                        MIDWEST BANCSHARES, INC.
                                        Registrant



Date:  May 7, 1997                      /s/  William D. Hassel
       --------------------             ------------------------------
                                        William D. Hassel
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)


Date:  May 7, 1997                      /s/  Robert D. Maschmann
       --------------------             ------------------------------
                                        Robert D. Maschmann
                                        Executive Vice President and
                                                 Chief Financial Officer
                                        (Principal Financial and
                                                 Accounting Officer)

                                    Page 10

<PAGE>


                                Index to Exhibits


                                                         Sequentially
                                                         Numbered Page
 Exhibit                                                 Where Attached
 Number                                               Exhibits are Located
--------                                              --------------------

   11   Computation of Per Share Earnings

   27   Financial Data Schedule