<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, 1999

                                       OR

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

     For the transition period from __________________ to __________________

                         Commission File Number 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                                   1,100,798
            -----------------                             ------------------
                 Class                                    Shares Outstanding
                                                           as of May 4, 1999



<PAGE>


                    MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                                      INDEX

                                                                           Page
                                                                         -------
Part I.  Financial Information

Item 1   Financial Statements
           Consolidated balance sheets March 31, 1999 and
            December 31, 1998                                                  1

           Consolidated statements of operations, for the three
            months ended March 31, 1999 and 1998                               2

           Consolidated statements of comprehensive income, for
            the three months ended March 31, 1999 and 1998                     3

           Consolidated statements of cash flows, for the three
            months ended March 31, 1999 and 1998                               4

           Notes to consolidated financial statements                          5

Item 2   Management's discussion and analysis of financial
          condition and results of operations                       6 through 10


Part II.    Other Information                                                 11

Signatures                                                                    12

Exhibit 27  Financial Data Schedule



<PAGE>


                    MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                           Consolidated Balance Sheets
                                   (Unaudited)
                  (Dollars in thousands, except per share data)


                                                         March 31,  December 31,
                                                            1999        1998
                                                         --------   ------------

Assets
   Cash and cash equivalents                             $  3,673    $  4,088
   Securities available for sale                           37,185      33,843
   Securities held to maturity (estimated
     fair value of $23,591 and $22,116)                    23,366      21,827
   Loans receivable, net                                   94,492      96,348
   Real estate acquired through foreclosure                     3         192
   Federal Home Loan Bank stock, at cost                    2,200       2,200
   Office property and equipment, net                       2,420       2,444
   Accrued interest receivable                              1,312       1,237
   Other assets                                               332         139
                                                         --------    --------
Total assets                                             $164,983    $162,318
                                                         ========    ========
Liabilities
   Deposits                                              $107,534    $105,982
   Advances from Federal Home Loan Bank                    44,000      43,000
   Advances from borrowers for taxes and
     insurance                                                263         413
   Accrued interest payable                                    79          66
   Accrued expenses and other liabilities                     753         822
                                                         --------    -------- 
Total liabilities                                         152,629     150,283
                                                         --------    -------- 
Stockholders' equity
   Serial preferred stock, $.01 par value;
     authorized 500,000 shares; none issued                     -           -
   Common stock, $.01 par value; 2,000,000
    shares authorized;
      1,098,523 shares issued and outstanding in
      1999 and 1,077,738 shares issued and
      outstanding in 1998                                      11          11
   Additional paid-in capital                               1,841       1,772
   Retained earnings, substantially restricted             10,165       9,832
   Accumulated other comprehensive income                       -
      unrealized appreciation on securities available
      for sale                                                337         420
                                                         --------    --------
Total stockholders' equity                                 12,354      12,035
                                                         --------    --------
Total liabilities and stockholders' equity               $164,983    $162,318
                                                         ========    ======== 

See accompanying notes to consolidated financial statements.



<PAGE>


                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                     Consolidated Statements of Operations
                                  (Unaudited)
                     (In thousands, except per share data)

                                                               Three Months
                                                              Ended March 31,
                                                           --------------------
                                                            1999          1998
                                                           ------        ------
Interest income:
   Loans receivable                                        $1,907        $1,848
   Securities available for sale                              512           629
   Securities held to maturity                                354           280
   Deposits in other financial institutions                    50            21
   Other interest-earning assets                               34            33
                                                           ------        ------
      Total interest income                                 2,857         2,811
                                                           ------        ------
Interest expense:
   Deposits                                                 1,191         1,230
   Advances from FHLB and other borrowings                    592           541
                                                           ------        ------
      Total interest expense                                1,783         1,771
                                                           ------        ------ 
      Net interest income                                   1,074         1,040
      Provision for losses on loans                            12            12
                                                           ------        ------ 
Net interest income after provision for
 losses on loans                                            1,062         1,028
                                                           ------        ------ 
Non-interest income:
   Fees and service charges                                    99            81
   Gain on sale of securities available for sale                3            36
   Other                                                        4             7
                                                           ------        ------
      Total non-interest income                               106           124
                                                           ------        ------ 
Non-interest expense:
   Compensation and benefits                                  335           326
   Office property and equipment                               98           102
   Deposit insurance premiums                                  16            17
   Data processing                                             50            42
   Other                                                      216           205
                                                           ------        ------
      Total non-interest expense                              715           692
                                                           ------        ------ 
Earnings before taxes on income                               453           460
Taxes on income                                               118           149
                                                           ------        ------ 
Net earnings                                                 $335          $311
                                                           ======        ======

Earnings per share - basic                                  $0.31         $0.30
                                                           ======        ======
Earnings per share - diluted                                $0.30         $0.28
                                                           ======        ====== 

See accompanying notes to consolidated financial statements.

<PAGE>

                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                 Consolidated Statements of Comprehensive Income
                                  (Unaudited)
                                 (In thousands)

                                                              Three months ended
                                                                   March 31,
                                                              ------------------
                                                               1999        1998
                                                              ------     -------

Net earnings                                                  $  335     $  311
Other comprehensive income:
  Unrealized gains (losses) on securities available
   for sale:
     Unrealized holding gains (losses) arising during
      the period, net of taxes on income of ($48) in
      1999 and $13 in 1998                                       (81)        28
     Less: reclassification adjustment for gains
      included in net earnings, net of taxes on
      income of $1 in 1999 and $12 in 1998                         2         24
                                                              ------     ------ 
Other comprehensive income, net of tax:                       $  (83)    $    4
                                                              ------     ------ 
Comprehensive income                                          $  252     $  315
                                                              ======     ======













See accompanying notes to consolidated financial statements.

<PAGE>


                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                     Consolidated Statements of Cash Flows
                                  (Unaudited)
                                 (In thousands)

                                                              Three months ended
                                                                   March 31,
                                                              ------------------
                                                               1999        1998
                                                              ------     -------
Cash flows from operating activities:
   Net earnings                                               $  335     $  311
   Adjustments to reconcile net earnings to net
      cash provided by operating activities:
         Provision for losses on loans                            12         12
         Gain on sale of securities available for sale            (3)       (36)
         Depreciation                                             45         42
         Amortization of loan fees, premiums and discounts       (18)         -
         Increase in accrued interest receivable                 (75)      (162)
         Increase in other assets                               (193)       (24)
         Increase (decrease) in accrued interest payable          13         (4)
         Increase in accrued expenses and other liabilities       89        100
                                                              ------     ------
Net cash provided by operating activities                        205        239
                                                              ------     ------ 
Cash flows from investing activities:
   Purchase of securities available for sale                  (6,955)   (15,931)
   Purchase of FHLB stock                                          -       (175)
   Proceeds from maturities of securities available
    for sale                                                   1,000      2,000
   Proceeds from maturities of securities held to maturity       457          -
   Proceeds from sales of securities available for sale        2,014      2,092
   Loans purchased                                              (983)      (258)
   Purchase of mortgage-backed securities held to maturity    (2,936)         -
   Repayment of principal on mortgage-backed securities        1,416      2,422
   Decrease (increase) in loans receivable                     2,796       (349)
   Proceeds from sale of real estate owned, net                  231          -
   Purchase of office property and equipment                     (21)       (56)
                                                              ------    -------
Net cash used in investing activities                         (2,981)   (10,255)
                                                              ------    ------- 
Cash flows from financing activities:
   Increase in deposits                                        1,552        208
   Proceeds from advances from FHLB                            3,000     10,500
   Repayment of advances from FHLB                            (2,000)         -
   Exercise of stock options                                      69         17
   Payment of cash dividends                                    (110)       (62)
   Net decrease in advances from borrowers for taxes
    and insurance                                               (150)      (138)
                                                              ------     ------
Net cash provided by financing activities                      2,361     10,525
                                                              ------     ------ 
Net (decrease) increase in cash and cash equivalents            (415)       509
Cash and cash equivalents at beginning of year                 4,088      2,524
                                                              ------     ------ 
Cash and cash equivalents at end of period                    $3,673     $3,033
                                                              ======     ====== 
Supplemental disclosures:
  Cash paid during the three months for:
      Interest                                                $1,769     $1,776
      Taxes on income                                              3         21
   Transfers from loans to real estate owned                      42        356
                                                              ======     ====== 

See accompanying notes to consolidated financial statements.


<PAGE>


                   MIDWEST BANCSHARES, INC. and SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

Note 1.  Significant Accounting Policies

     The consolidated  financial statements for the three months ended March 31,
     1999,  and 1998 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 1998 Annual
     Report  to  Stockholders  on Form  10-KSB  and are  incorporated  herein by
     reference.

Note 2. Computation of Per Share Earnings

     Basic  earnings per share  amounts are computed by dividing net earnings by
     the weighted average number of common shares outstanding during the period.
     Diluted earnings per share amounts are computed by dividing net earnings by
     the weighted  average  number of shares and all dilutive  potential  shares
     outstanding  during the period.  The following  information was used in the
     computation of earnings per share on both a basic and diluted basis for the
     three months ended March 31, 1999 and 1998.

                                                             Three Months
                                                     ---------------------------
                                                        1999             1998
                                                     ---------        ---------
            Basic EPS Computation:
               Numerator - Net earnings              $ 334,788        $ 310,758
               Denominator - Weighted
                 average shares outstanding          1,095,802        1,026,573
                                                     ---------        ---------
               Basic EPS                             $    0.31        $    0.30
                                                     =========        =========
            Diluted EPS Computation:
               Numerator - Net earnings              $ 334,788        $ 310,758
                                                     ---------        ---------
               Denominator - Weighted
                 average shares outstanding          1,095,802        1,026,573
               Stock options                            15,434           75,444
                                                     ---------        ---------
                                                     1,111,236        1,102,017
                                                     ---------        ---------
               Diluted EPS                           $    0.30        $    0.28
                                                     =========        =========

Note 3. Merger Agreement

     On  February  2, 1999, the  Company  announced  the execution of definitive
     merger  agreement  with  Mahaska  Investment  Company. the  merger  will be
     accomplished  through  a  tax-free  fixed  exchange of one share of Mahaska
     Investment Company common stock for each share  of outstanding common stock
     of the Company. The transaction  is expected  to  be completed in the third
     quarter of 1999,  after customary  regulatory  and  shareholder   approvals
     have been received.



<PAGE>


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.

Year 2000 Compliance

     The Company has conducted a comprehensive review of its computer systems to
identify the systems that could be affected by the "Year 2000" problem. The Year
2000  problem is the result of computer  programs  using two digits  rather than
four to define the year.  Any of the Company's  programs that are time sensitive
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could  result in a major system  failure or  miscalculations.  The  enhancements
necessary to prepare the Company's  mission  critical  systems for the year 2000
have been substantially completed.

     The Company is also aware of the risks to third parties,  including vendors
(and to the extent  appropriate,  depositors  and  borrowers)  and the potential
adverse  impact on the  Company  resulting  from  failures  by these  parties to
adequately  address the Year 2000  problem.  The Company has been  communicating
with its outside data processing  service  bureau,  as well as other third party
service  providers,  to assess their progress in evaluating and implementing any
corrective  measures required by them to be prepared for the year 2000. To date,
the Company has not been advised by any of its primary  vendors that they do not
have plans in place to address and correct the Year 2000  problem;  however,  no
assurance can be given as to the adequacy of such plans or to the  timeliness of
their implementation.

     The Company has and will continue to incur  internal staff costs as well as
consulting and other expenses related to the  enhancements  necessary to prepare
its systems for the year 2000.  Based on the Company's  current  knowledge,  the
expense of the year 2000 project as well as the related  potential effect on the
Company's  earnings is not expected to have a material  effect on the  Company's
financial  position or results of operations.  The Company estimates that it has
spent approximately $22,000 through March 31, 1999 on the awareness, assessment,
renovation,  and  validation  phases of its year 2000  effort.  The  Company  is
nearing  completion  of the  validation  (testing)  phase with its outside  data
processing  service  bureau  with  completion  expected by the end of the second
quarter of 1999.

     The worst-case  year 2000 scenario for the Company is that major  suppliers
of electricity,  communication  links, and data processing  services may fail in
spite of their best efforts to remediate  their systems and in spite of our best
effort to test their systems.  The major risk as a result of these possibilities
would be the loss of customer  confidence.  The Company has developed a business
resumption contingency plan to address these possibilities and minimize the loss
of confidence.


<PAGE>

Results of Operations

     Midwest Bancshares,  Inc. (the "Company") had net earnings of $335,000,  or
$0.30 per share, diluted, for the three months ended March 31, 1999, compared to
net earnings of $311,000,  or $0.28 per share,  for the three months ended March
31, 1998.  The increase in net earnings for the three month period was primarily
a result of an increase in net interest income,  an increase in fees and service
charges,  and a decrease in taxes on income,  partially  offset by a decrease in
gain on sales of securities  and by an increase in  non-interest  expense.  More
detailed comparisons are discussed below.

Net Interest Income

     Net interest income increased  $34,000 for the three months ended March 31,
l999, over the comparable period in 1998. The increase in net interest income on
a tax-equivalent  basis was approximately  $79,000 due to the fact that the 1999
period  included  more interest  income on tax-exempt  securities  than the 1998
period.  (See also the discussion of "Taxes on Income" on page 8). The Company's
net  interest  rate spread was 2.56% for both the three  months  ended March 31,
1999 and 1998. The Company's net interest margin on interest-earning  assets was
2.85% for the three  months  ended  March 31,  1999,  compared  to 2.80% for the
comparable  period in 1998. The net interest rate spread and net interest margin
ratios have been calculated on a tax-equivalent basis.

     Interest  income  increased by $46,000 for the three months ended March 31,
1999, over the comparable period in 1998, or $91,000 on a tax-equivalent  basis.
Average  interest-earning assets increased by approximately $8.5 million for the
three  months  ended March 31,  1999,  compared to the same period in 1998.  The
increases in average interest-earning assets primarily consisted of increases in
loans and  securities  and were the result of a planned  growth  strategy  in an
effort to increase net interest  income.  The average yield on  interest-earning
assets,  on a  tax-equivalent  basis, was 7.43% for the three months ended March
31, 1999,  compared to 7.61% for the same period in 1998.  The Company  recorded
$158,000  ($227,000 on a tax-equivalent  basis) of interest income on tax-exempt
securities for the three months ended March 31, 1999, with an average balance of
$12.4 million in 1999 compared to $59,000 ($83,000 on a tax-equivalent basis) of
interest income on an average balance of $4.9 million for the three months ended
March 31, 1998.

     Interest expense  increased by $12,000 for the three months ended March 31,
1999, over the comparable period in 1998. Average  interest-bearing  liabilities
increased  by  approximately  $6.3  million for the three months ended March 31,
1999 over the  comparable  period  in 1998,  primarily  due to increases of $4.9
million and $1.4 million,  respectively, in average borrowings from the FHLB and
savings deposits.  Generally, the Company utilized FHLB advances to fund its new
asset growth  because the interest cost of new FHLB  advances was  substantially
less than the incremental  cost of adding new  certificate of deposit  accounts.
The average rates paid on interest-bearing  liabilities decreased eighteen basis
points to 4.87% for the three months  ended March 31,  1999,  from 5.05% for the
three months ended March 31, 1998.



<PAGE>

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,  1999 and  1998.  The  amount  of the  provision  was a result of the
determination to maintain the allowance for losses on loans at an adequate level
to absorb  potential  loan  losses.  At March 31, 1999 and 1998,  the  Company's
allowance for losses on loans totaled  $492,000 and $460,000,  respectively,  or
0.52% and 0.50% of total loans, and 339.31% and 119.79% of total  non-performing
loans.  There were no net charge-offs for the three months ended March 31, 1999,
compared to $120,000 of net charge-offs  during the three months ended March 31,
1998. The charge-offs in the three months ended March 31, 1998 were due to loans
on two  multi-family  properties  which were transferred to real estate acquired
through foreclosure resulting in charge-offs of $120,000.

     Non-interest income

     Total  non-interest  income decreased by $18,000 for the three months ended
March 31, 1999,  compared to the same period in 1998. The decrease was primarily
due to a decrease of $33,000 in gain on sales of securities, partially offset by
an $18,000  increase (a 22% increase) in fees and service charges as a result of
increased transaction account activity and increased ATM transaction volumes, in
part as a result of the new in-store branch, located in the Wal-Mart Supercenter
in West Burlington, Iowa, which opened for business on December 8, 1997.

     Non-interest expense

     Total non-interest  expense increased by $23,000 for the three months ended
March 31, 1999  compared to the same period in 1998.  The increase was primarily
due to increases of $9,000 in compensation  expense,  $8,000 in data processing,
and $11,000 in other non-interest  expense. The increase in compensation expense
was primarily due to cost of living raises.  The increase in data processing was
primarily due to increased  transaction  volumes processed and year 2000 related
expenditures.  The increase in other non-interest expense was primarily due to a
$7,000  increase in expenses  related to  disposition of real estate owned and a
$6,000 increase in professional fees.

     Taxes on Income

     Taxes on income was $31,000  less for the three months ended March 31, 1999
than the comparable period in 1998. The decrease was primarily due to the effect
of the increase in interest income from  tax-exempt securities.  The decrease in
taxes on income would have been  minimal if not for the  $158,000 of  tax-exempt
interest income on securities discussed above under "Net Interest Income".

     Financial Condition

     The  Company's  total  assets  at  March  31,  1999  were  $165.0  million,
increasing   from  $162.3   million  at  December  31,  1998.  The  increase  of
approximately   $2.7   million   was   due  to  an   intentional   increase   in
interest-earning  assets in an effort to increase  net  interest  income and was
primarily due to the purchase of $7.0 million of securities  available for sale,
the  purchase  of  $2.9  million  of  mortgage-backed  securities  to be held to
maturity, and the purchase of $1.0 million of loans, all of which are guaranteed
by the FmHA,  partially  offset by a net  decrease in loans  receivable  of $2.8
million,  principal repayments of $1.4 million from mortgage-backed  securities,
$1.5 million from matured securities, and $2.0 million proceeds from the sale of
securities  available  for sale.  The net increase in total assets was primarily
funded by  increases  of $1.6  million and $1.0 million of deposits and advances
from the FHLB, respectively.


<PAGE>

Financial Condition (continued)

     Total  stockholders'  equity  increased  $319,000  due to the  $335,000 net
earnings  for the three months and $69,000  received  from the exercise of stock
options,  partially  offset by an $83,000  decrease in net  unrealized  gains on
investments available for sale.

     Liquidity and Capital Resources

     The Company's principal sources of funds are deposits and advances from the
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 4% of net  withdrawable  savings deposits and borrowings
payable on demand or in one year or less during the preceding  calendar quarter.
For March 1999, the Association's  liquidity ratio was 9.3% compared to 8.5% for
December  1998.  The increase was  primarily  due to the purchase of  investment
securities which, because of their maturity term, qualify as liquid investments.
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  intends  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.

     The Association anticipates that it will have sufficient funds available to
meet current loan and purchase  commitments.  At March 31, 1999, the Association
had outstanding commitments to extend credit totaling $5.9 million.

<PAGE>

Liquidity and Capital Resources (continued)

     At March 31, 1999, the  Association  had tangible and core capital of $11.2
million,  or  6.82% of total  adjusted  assets  which  exceeded  the  regulatory
requirements  of 1.5% and 3.0%, by $8.7 million and $6.3 million,  respectively.
The risk-based capital  requirement is currently 8% of risk-weighted  assets. As
of March 31, 1999, the Association had risk-weighted  assets of $74.1 million, a
risk-based  requirement of $5.9 million and risk-based capital of $11.7 million,
or 15.77%,  which exceeds the  requirement  by $5.8 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             $11,201        $11,201           $11,201
     Additional capital -
      general allowances                   ---             --               492
                                       -------        -------          --------
     Regulatory capital                 11,201         11,201            11,693
     Minimum capital requirement         2,463          4,925             5,932
                                       -------        -------           -------
     Excess regulatory capital         $ 8,738        $ 6,276           $ 5,761
                                       =======        =======           =======

     The unrealized  appreciation on securities  available for sale,  which is a
component of stockholders'  equity,  is a result of the application of Statement
No. 115 of the Financial  Accounting Standards Board. At March 31, 1999, the net
unrealized gain of $337,000,  down from $420,000 at December 31, 1998, consisted
primarily  of  the  net   unrealized   market  gain,  net  of  tax,  on  certain
mortgage-backed securities and investment securities, which have been identified
as available for sale by management.

Pending Accounting Pronouncements

     The Financial Accounting  Standards Board has issued,  effective for fiscal
years beginning after June 15, 1999, Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative  Instruments and Hedging Activities".
SFAS  133  establishes   accounting  and  reporting   standards  for  derivative
instruments  and for hedging  activities.  The Company expects to adopt SFAS 133
when  required and  management  believes  the adoption  will not have a material
effect on the Company's financial statements when adopted.

<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
         None.

Item 5.  Other Information
         None.

Item 6.  Exhibits and Reports on Form 8-K
         (a)  Exhibit:
                  Exhibit 27  Financial Data Schedule

         (b) There was one report on Form 8-K filed during the quarter for which
         this  report is filed which  included a press  release  announcing  the
         agreement to merge with Mahaska Investment Co.






<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 10, 1999                       /s/  William D. Hassel
       --------------------               -------------------------------------
                                          William D. Hassel
                                          President and Chief Executive Officer
                                          (Principal Executive Officer)


Date:  May 10, 1999                       /s/  Robert D. Maschmann
       --------------------               -------------------------------------
                                          Robert D. Maschmann
                                          Executive Vice President and
                                           Chief Financial Officer
                                          (Principal Financial and
                                            Accounting Officer)







<PAGE>

                           Index to Exhibits


                                                     Sequentially
                                                     Numbered Page
Exhibit                                              Where Attached
Number                                               Exhibits are Located


27       Financial Data Schedule