<PAGE>
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D. C.  20549


                                   FORM 10-Q

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

               For the quarterly period ended September 30, 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 [            ]



                            FIRST DECATUR BANCSHARES, INC.
            (Exact name of registrant as specified in its charter)




            DELAWARE                      33-80333              37-1085161
   (State or other jurisdiction       (Commission File      (I.R.S. Employer
       of incorporation)                  Number)          Identification No.)



     130 NORTH WATER STREET, DECATUR, IL                         62523
   (Address of principal executive offices)                   (Zip Code)



Registrant's telephone number, including area code    217-424-1111


Indicate  by  check  mark  whether  the  registrant  (1)  has filed all reports
required to be filed by Section 13 or 15(d) of the Securities  Exchange  Act of
1934  during  the  preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past ninety days.

                        Yes      X      No           


2,878,487 shares of the Registrant's common stock, par value $.01 per share,
were outstanding at September 30, 1997.
<PAGE>

                        FIRST DECATUR BANCSHARES, INC.

         FORM 10-Q FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997

                                     INDEX

                                                                        PAGE

PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . .    1

      Item 1.     Condensed Consolidated Financial Statements  . . . .    1
      Item 2.     Management's Discussion and Analysis of Financial
                  Condition and Results of Operations  . . . . . . . .    6


PART II - OTHER INFORMATION  . . . . . . . . . . . . . . . . . . . . .   11

      Item 1.     Legal Proceedings  . . . . . . . . . . . . . . . . .   11
      Item 2.     Changes in Securities  . . . . . . . . . . . . . . .   11
      Item 3.     Defaults upon Senior Securities  . . . . . . . . . .   11
      Item 4.     Submission of  Matters to a Vote of Security Holders   11
      Item 5.     Other Information  . . . . . . . . . . . . . . . . .   11
      Item 6.     Exhibits and Reports on Form 8-K . . . . . . . . . .   11

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
<PAGE>
PART 1 - FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                        FIRST DECATUR BANCSHARES, INC.
                          CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           September 30,              December 31,
                                                               1997                       1996
                                                           -------------              -------------      
                                                            (Unaudited)
<S>                                                        <C>                        <C>             
Assets
     Cash and due from banks                               $      29,210              $      32,818
     Federal funds sold                                           11,475                     15,770
                                                           --------------             -------------- 
          Cash and cash equivalents                               40,685                     48,588

     Securities available for sale                                89,116                     94,352
     Securities held to maturity                                  34,244                     36,790
     Loans, net                                                  204,211                    196,514
     Premises and equipment                                        9,378                     10,166
     Other assets                                                  8,974                      7,713
                                                           --------------             --------------
               Total assets                                $     386,608              $     394,123
                                                           --------------             --------------
                                                           --------------             --------------
Liabilities
     Deposits
        Noninterest bearing                                $      49,507              $      54,673
        Interest bearing                                         263,196                    265,489
                                                           --------------             -------------- 
          Total Deposits                                         312,703                    320,162
     Federal funds purchases and securities sold under
        repurchase agreements                                     12,598                     16,969
     Federal Home Loan Bank loans                                  2,966                      2,500
     U.S. Treasury demand notes                                    3,096                      2,333
     Other liabilities                                             3,972                      3,664
                                                           --------------             --------------
               Total liabilities                                 335,335                    345,628

Stockholders' Equity
     Preferred stock, no par value.  Authorized 200,000 
        shares, none issued or outstanding
     Common stock, $.01 par value.  Authorized 5,000,000
        shares; Issued 2,909,397 shares of which 30,910 
        shares and 22,361 shares were held as treasury 
        stock                                                         29                         29
     Surplus                                                       7,858                      7,854
     Paid-in-capital - phantom stock                                 184                        146
     Retained earnings                                            43,498                     40,798
     Net unrealized gain on securities available for sale            344                        133
                                                           --------------             --------------
                                                                  51,913                     48,960
     Treasury stock, at cost                                        (640)                      (465)
                                                           --------------             --------------
               Total stockholders' equity                         51,273                     48,495
                                                           --------------             --------------
                    Total liabilities and 
                       stockholders' equity                $     386,608              $     394,123
                                                           --------------             --------------
                                                           --------------             --------------
</TABLE>
                                        Page 1
<PAGE>
                        FIRST DECATUR BANCSHARES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                     (IN THOUSANDS EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                          Three Months Ended                          Nine Months Ended
                                                  September 30          September 30          September 30         September 30
                                                      1997                  1996                  1997                 1996
                                                   (Unaudited)           (Unaudited)           (Unaudited)          (Unaudited)
                                                  ------------          ------------          ------------         ------------
<S>                                               <C>                   <C>                   <C>                  <C>
Interest Income
     Interest on loans                            $     4,461           $     4,299           $    13,287          $    12,481
     Interest on investments                            1,894                 2,027                 5,812                6,124
     Interest on federal funds sold                       112                   126                   289                  266
     Other interest income                                 30                    25                    96                   86
                                                  ------------          ------------          ------------         ------------
          Total interest income                         6,497                 6,477                19,484               18,957
                                                  ------------          ------------          ------------         ------------
Interest Expense
     Interest on deposits                               2,833                 2,836                 8,235                8,317
     Interest on borrowings                                96                   104                   319                  312
                                                  ------------          ------------          ------------         ------------
          Total interest expense                        2,929                 2,940                 8,554                8,629
                                                  ------------          ------------          ------------         ------------
Net Interest Income                                     3,568                 3,537                10,930               10,328
     Provision for loan losses                            137                    77                   369                  229
                                                  ------------          ------------          ------------         ------------
Net Interest Income After Provision for
   Loan Losses                                          3,431                 3,460                10,561               10,099
                                                  ------------          ------------
Other Income
     Trust fees                                           384                   368                 1,132                1,083
     Loan fee income                                      147                    65                   333                  224
     Remittance processing fees                         1,046                 1,355                 3,136                4,605
     Service charges on deposit accounts                  260                   287                   794                  833
     Security transactions, net                            15                    17                    43                    6
     Other                                                254                   210                   770                  594
                                                  ------------          ------------          ------------         ------------
          Total other income                            2,106                  2302                 6,208                7,345
                                                  ------------          ------------          ------------         ------------
Other Expenses
     Salaries and employee benefits                     1,997                 1,987                 6,036                6,320
     Net occupancy                                        299                   279                   847                  864
     Equipment expenses                                   524                   596                 1,718                1,891
     Professional fees                                    107                   200                   292                  625
     Data processing fees                                  60                   139                   208                  274
     Supplies                                             107                    90                   300                  361
     Service charges from corresponding banks             125                   191                   390                  635
     Other operating expenses                             510                   559                 1,574                1,612
                                                  ------------          ------------          ------------         ------------
          Total other expenses                          3,729                 4,041                11,365               12,582
                                                  ------------          ------------          ------------         ------------
Income Before Income Tax                                1,808                 1,721                 5,404                4,862
     Income tax expense                                   567                   611                 1,694                1,599
                                                  ------------          ------------          ------------         ------------
          Net Income                              $     1,241           $     1,110           $     3,710          $     3,263
                                                  ------------          ------------          ------------         ------------
                                                  ------------          ------------          ------------         ------------
Net Income Per Share                              $      0.43           $      0.38           $      1.29          $      1.12
Dividends Per Share                                      0.13                  0.11                  0.35                 0.33
Weighted Average Shares Outstanding                 2,881,265             2,902,542             2,887,315            2,902,098
</TABLE>
                                        Page 2
<PAGE>

                        FIRST DECATUR BANCSHARES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                        September 30,                September 30,
                                                                            1997                         1996
                                                                         (Unaudited)                  (Unaudited)
                                                                        -------------                -------------
<S>                                                                     <C>                          <C>
Cash flows from operating activities:
     Net cash provided by operating activities                          $      4,343                 $      4,283
Cash flows from investing activities:
     Purchases of securities available for sale                              (19,696)                     (12,535)
     Proceeds from maturities of securities available for sale                19,090                        8,166
     Proceeds from sales of securities available for sale                      5,994                        3,991
     Purchases of securities held to maturity                                 (4,343)                      (1,996)
     Proceeds from maturities of securities held to maturity                   6,443                        9,018
     Net change in loans                                                      (7,596)                     (13,913)
     Disposal of premises and equipment                                            0                        1,514
     Purchases of premises and equipment                                        (351)                        (601)
                                                                        -------------                -------------
          Net cash used by investing activities                                 (459)                      (6,356)
                                                                        -------------                -------------
Cash flows from financing activities:
     Net change in
          Noninterest-bearing, interest-bearing demand and savings
               deposits                                                        (2,211)                     (14,403)   
          Certificates of deposit                                              (5,248)                       6,209
          Federal funds purchased and securities sold under repurchase
               agreements                                                      (4,371)                       9,187
          Federal Home Loan Bank loans                                            466                        2,500
          U.S. Treasury demand notes                                              763                        2,352
     Cash dividends                                                            (1,011)                        (959)
     Net cash from (purchase) sale of treasury stock                             (175)                          30
                                                                         -------------               --------------
          Net cash provided (used) by financing activities                    (11,787)                       4,916
                                                                         -------------               --------------
Net increase (decrease) In cash and cash equivalents                           (7,903)                       2,843
Cash and cash equivalents, beginning of period                                 48,588                       38,572
                                                                         -------------               --------------
Cash and cash equivalents, end of period                                 $     40,685                $      41,415
                                                                         -------------               --------------
                                                                         -------------               --------------
Supplemental disclosures of cash flow information:
     Cash paid during the period for:
          Interest                                                       $      8,554                $       8,784
          Income taxes                                                   $      1,432                $       1,828
</TABLE>
                                        Page 3

<PAGE>
                        FIRST DECATUR BANCSHARES, INC.
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


BASIS OF PRESENTATION

     The interim financial  statements  have  been  prepared  by  First Decatur
Bancshares,  Inc. ("Bancshares") pursuant to the rules and regulations  of  the
Securities and  Exchange Commission applicable to quarterly reports on Form 10-
Q.  Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed  or  omitted pursuant to such rules and regulations.  These
financial  statements  should   be   read   in  conjunction  with  the  audited
consolidated financial statements and related  notes  and schedules included in
Bancshares' Form 10-K for 1996 filed on March 31, 1997,  registration statement
filed on Form S-4 dated February 6, 1996, and Form 8-K for  the  acquisition of
First Shelby Financial Group, Inc. filed on April 1, 1996.

     The results for the interim periods are not necessarily indicative  of the
results of operations that may be expected for the fiscal year.  In the opinion
of management, the information furnished reflects all adjustments which are  of
a  normal  recurring  nature  and  are  necessary  for  a  fair presentation of
Bancshares' financial position, results of operations and cash  flows  for  the
period presented.  Such adjustments were of a normal recurring nature.

     The  consolidated  financial statements include the accounts of Bancshares
and its wholly-owned subsidiaries.   All  significant intercompany accounts and
transactions have been eliminated.

ACQUISITION

     On April 1, 1996, Bancshares completed  the  acquisition  of  First Shelby
Financial  Group,  Inc.  ("First  Shelby"),  a bank holding company located  in
Shelbyville, Illinois, and its subsidiary bank, First Trust Bank of Shelbyville
("Shelby  Bank").  Bancshares issued 695,852 shares  of  its  common  stock  in
exchange for all of the issued and outstanding shares of First Shelby.  Cash of
$124,200 was  paid to one First Shelby dissenting shareholder for 5,481 shares.
No other cash, except for fractional shares, was paid in the transaction.

     This transaction  has  been  accounted  for  as  a pooling of interest and
accordingly, financial information preceding the date of  acquisition  has been
restated  to include the financial position and results of operations of  First
Shelby  Financial   Group,   Inc.  and  its  subsidiary  First  Trust  Bank  of
Shelbyville.

     On May 13, 1997, First Shelby  was  dissolved  and  its  subsidiary, First
Trust Bank of Shelbyville, is now a wholly owned subsidiary of Bancshares.  The
net  assets  of  First  Shelby  totaled  $11,492,000 on May 13, 1997  and  were
transferred to Bancshares.

NEW ACCOUNTING PRONOUNCEMENTS

     As of January 1, 1996, Bancshares adopted  the  provisions of Statement of
Financial  Accounting  Standards  ("SFAS")  No. 122, "Accounting  for  Mortgage
Servicing Rights".   This statement requires  the  capitalization  of  retained
mortgage  servicing  rights on originated or purchased loans by allocating  the
total cost of the mortgage  loans between the mortgage servicing 

                                        Page 4
<PAGE>
rights and the loans (without the servicing rights) based on their fair values.
SFAS No. 122 was  superseded  during 1996 by SFAS No. 125,  "Accounting  for  
Transfers and Servicing of Financial Assets and Extinquishment of Liabilities".
SFAS No. 125 (as did SFAS No. 122)  requires  the  assessment of impairment of 
capitalized mortgage servicing rights and requires that impairment be recognized
through a valuation allowance based on the fair value of those rights.   The  
adoption of SFAS No. 125 by Bancshares resulted in $101,000 of mortgage 
servicing rights being capitalized, net of amortization for the year ended 
December 31, 1996.  For the nine months ended September  30,  1997,  an  
additional $69,000, net of amortization, has been capitalized.

     The Financial Accounting Standards Board ("FASB") has issued SFAS No. 123,
"Accounting for Stock-based Compensation".  SFAS No. 123  encourages,  but does
not  require,  companies to recognize compensation expense for grants of stock,
stock options and  other  equity  instruments  based on the fair value of those
instruments.  SFAS No. 123 permits a company to  continue  the  accounting  for
stock-based  compensation prescribed in Accounting Principles Board Opinion No.
25, "Accounting  for  Stock  Issued to Employees".  If a company elects to stay
with Opinion No. 25, pro forma  disclosures  of  net income are required in the
notes to the financial statements as if the provisions of SFAS No. 123 had been
used to measure stock-based compensation.  Bancshares  has  elected to continue
to  measure compensation costs using Opinion No. 25.  There are  no  pro  forma
disclosures  required  pursuant  to  SFAS No. 123, as no awards were granted in
1996.  Also, no awards were granted in the first three quarters of 1997.

     SFAS No. 125 provides consistent standards for distinguishing transfers of
financial assets that are sales from transfers  that  are considered borrowings
as well as provides detailed measurement standards for  assets  and liabilities
included  in  these transactions. The Statement supersedes FASB Statements  No.
76, "Extinguishment  of  Debt"  and  No.  77,  "Reporting  by  Transferors  for
Transfers  of  Receivables with Recourse" and No. 122, "Accounting for Mortgage
Servicing Rights",  and  amends FASB Statement No. 115, "Accounting for Certain
Investments  in Debt and Equity  Securities",  in  addition  to  clarifying  or
amending a number  of  other  statements  and  technical  bulletins.  Except as
amended  by  Statement No. 127, this Statement is effective for  transfers  and
servicing of financial  assets  and  extinguishments  of  liabilities occurring
after  December  31,  1996  and  is  to be applied prospectively.   Earlier  or
retroactive application is not permitted.

     The FASB was made aware that the  volume  of  certain transactions and the
related  changes  to  information  systems and accounting  processes  that  are
necessary to comply with the requirements  of  Statement  No. 125 would make it
extremely difficult, if not impossible, for some affected enterprises  to apply
the   transfer  and  collateral  provisions  of  Statement  No.  125  to  those
transactions  as soon as January 1, 1997.  As a result, SFAS No. 127 defers for
one year the effective  date  (a)  of paragraph 15 of Statement No. 125 and (b)
for  repurchase  agreement,  dollar-roll,   securities   lending,  and  similar
transactions, of paragraphs 9-12 and 237(b) of Statement No. 125.

     Statement   No.  127  provides  additional  guidance  on  the   types   of
transactions for which  the  effective  date  of  Statement  No.  125  has been
deferred.   It also requires that if it is not possible to determine whether  a
transfer occurring during calendar-year 1997 is part of a repurchase agreement,
dollar-roll,  securities  lending, or similar transaction, then paragraphs 9-12
of Statement No. 125 should  be  applied  to  that transfer.  All provisions of
Statement No. 125 should continue to be applied  prospectively,  and earlier or
retroactive application is not permitted.

                                        Page 5
<PAGE>
     The  FASB has issued SFAS No. 128, "Earnings per Share".    SFAS  No.  128
requires the  disclosure  on the face of the income statement of basic earnings
per share and, for entities  with  complex capital structures, diluted earnings
per share.   The objective of this Statement  is to simplify the computation of
earnings  per  share and to make the U.S. standard  more  compatible  with  the
earnings  per  share   standards  of  other  countries  and  the  International
Accounting Standards Committee.    This  Statement  is  effective  for  periods
ending after December 15, 1997.

     The FASB has issued SFAS No. 130, "Reporting Comprehensive Income".   SFAS
No.  130  requires the reporting and display of all components of comprehensive
income.    Comprehensive   income   includes   foreign   currency   translation
adjustments,  minimum  pension  liability  adjustments and unrealized gains and
losses  on  securities  available  for sale.  The  Standard  requires  that  an
institution display comprehensive income  and  its  components  in  a financial
statement  that  is  displayed  with  the  same  prominence  as other financial
statements that constitute a full set of financial statements.  SFAS No. 130 is
effective for years beginning after December 15, 1997.

     The  FASB  has  issued  SFAS  No. 131, "Disclosures about Segments  of  an
Enterprise and Related Information".   SFAS  No.  131  defines  the appropriate
basis  for  defining  segments,  describes  which  accounting  principles   and
allocations  to be used, lists the specific items of information that should be
disclosed and  discusses the disclosures for condensed financial statements for
interim periods.  SFAS No. 131 applies only to public business enterprises with
more than one segment.   Public  business  enterprises  include those that have
debt or equity securities that are traded in a public market,  including  local
or  regional  markets,  and  those  that  provide  financial statements for the
purpose of issuing any class of securities in a public  market.  This Statement
is effective for fiscal years beginning after December 15, 1997.

COMMON SHARES

     During the third quarter of 1996, Bancshares' Board  of Directors approved
a stock repurchase program which authorizes the repurchase  of common shares to
be  used  for  the issuance of shares under Bancshares' employee  stock  option
plan.  The shares  will  be repurchased from time to time in the open market or
in private transactions.   At  September  30,  1997,  24,054  shares  had  been
repurchased.

ITEM  2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     The following discussion represents management's analysis  of  Bancshares'
results of operations for the three and nine month periods ended September  30,
1997 and 1996 and its consolidated financial condition at September 30, 1997 as
compared  to  December 31, 1996.  This discussion should be read in conjunction
with Bancshares'  unaudited  condensed  consolidated  financial  statements and
notes thereto.

     On April 1, 1996, Bancshares completed the acquisition of First Shelby and
the Shelby Bank.  As a result of the merger, First Shelby and the  Shelby  Bank
became  wholly owned subsidiaries of Bancshares.  The acquisition was accounted
for as a  pooling  of  interests  and, accordingly, the financial condition and
results of operations of Bancshares, First Shelby and the Shelby Bank have been
combined as if the combination had  been  in  effect  for  each  of the periods
presented.   Effective May 13, 1997, First Shelby was dissolved, with  the  net
assets transferred to Bancshares.

                                        Page 6
<PAGE>
RESULTS OF OPERATIONS

SUMMARY OF OPERATIONS

     Net income  in  the  third quarter of 1997 increased to $1,241,000, up 12%
from $1,110,000 earned in the same quarter of 1996.  Earnings per share for the
quarterly period increased  to  43  cents  per  share, up 13% from 38 cents per
share earned in the third quarter of 1996.  For the nine months ended September
30,  1997, net income was $3,710,000, up 14% compared  to  $3,263,000  for  the
first  three  quarters  of  1996.  Earnings per share for the nine month period
ended September 30, 1997 were  $1.29,  up  15%  compared  to  $1.12 in the same
period  in  1996.   Higher  earnings  in  both  periods were primarily  due  to
increases in net interest income offset by an increase  in  the  provision  for
loan  losses.   Also,  a  reduction  in  FirsTech  contracts  resulted in lower
remittance  processing  fees and contributed to lower salaries, lower  employee
benefits and lower correspondent bank charges.

NET INTEREST INCOME

     For  the  nine months  ended  September  30,  1997,  net  interest  income
increased $602,000  or  6% compared to 1996.  The growth in net interest income
for the nine month period ended September 30, 1997, was mainly due to increases
in the volume of average  earning  assets, primarily in the loan area.  For the
nine  months  ended  September  30,  1997,  average  earning  assets  increased
$5,168,000 or 2% compared to the same period in 1996.

ALLOWANCE AND PROVISION FOR LOAN LOSSES

     Asset quality, particularly in the loan area, continues to be an important
concern of Bancshares' management.  Both  the  Decatur Bank and the Shelby Bank
maintain a separate loan review department which  continuously  reviews problem
and  significant  loans  and  the  adequacy  of the allowance for loan  losses.
Separate loan committees of the board of directors  at  the  Decatur  Bank  and
Shelby  Bank  meet  at  least  quarterly  to  review past due loans and problem
credits,  lending  policies  and  practices  and results  of  the  loan  review
department's analyses. The allowance for loan  losses  is maintained at a level
management  believes to be adequate to provide for known  and  potential  risks
inherent in the loan portfolios.

     The provision  for  loan  losses  during  the  third  quarter  of 1997 was
$137,000  compared  to  $77,000  in  1996.   For  the  nine  month period ended
September  30,  1997, the provision for loan losses were $369,000  compared  to
$229,000 for the  same  period  in 1996.  The higher provisions for loan losses
were primarily due to higher net  chargeoffs  in  the installment loan area and
the increase in total loans outstanding.

OTHER INCOME

     Other  income  for the three months ended September  30,  1997,  decreased
$196,000 or 9% compared  to  the same period in 1996.  On a year-to-date basis,
other income decreased $1,137,000  or  15% compared to the nine month period in
1996.   For  both  the three month and nine  month  periods,  the  decrease  is
attributed to a reduction in remittance processing income generated by FirsTech
as the result of the  loss  of the Ameritech contracts offset by an increase in
loan fee income and other income.

                                       Page 7
<PAGE>
     For  the  three  and nine months  ended  September  30,  1997,  remittance
processing and collecting  income  generated  by FirsTech decreased by $309,000
(23%) and $1,469,000 (32%), respectively, compared to the same periods in 1996.
The  decrease in 1997 is the result of the loss  of  the  Ameritech  contracts.
FirsTech's contracts to process payments for Ameritech expired in 1996 and were
not renewed.

     Loan  fee  income  for  the  three  month period ended September 30, 1997,
increased $82,000 or 126% over the same period  in  1996.   On  a  year to date
basis,  loan  fee  income increased $109,000 or 49% compared to the nine  month
period in 1996.  For  the three month period, the increase is mainly attributed
to an increase in mortgage  loan  processing  and  servicing  right income as a
result  of  the sale of residential mortgage loans in the secondary  market  to
Federal National Mortgage Association ("FNMA").  For the nine month period, the
increase is attributed to an increase in fees in the commercial and real estate
loan areas as  a  result of large dollar volume loans in the first half of 1997
as well as the sale  of  residential  mortgage loans in the secondary market to
FNMA.

     For the three months ended September  30,  1997,  other  income  increased
$44,000  or  21%  compared  to the same period in 1996.  Other income increased
$176,000 or 30% for the nine  months  ended September 30, 1997, compared to the
same period in 1996.  The increase for  both  periods  is  mainly attributed to
gains on the sale of remittance processing machines by FirsTech and an increase
in  brokerage  commissions  and  ATM  fees  for the first nine months  of  1997
compared to 1996.


OTHER EXPENSES

     Other  expenses  decreased from $4,041,000  for  the  three  months  ended
September 30, 1996, to  $3,729,000  for  the  three  months ended September 30,
1997.  This represents a $312,000 (8%) decrease and was attributed to decreases
in  professional  fees, equipment expenses, data processing  fees  and  service
charges from corresponding banks. For the nine months ended September 30, 1997,
other expenses decreased $1,217,000 or 10% compared to the same period in 1996.
This decrease was attributed  to  decreases  in salaries and employee benefits,
professional  fees,  equipment expenses, data processing  fees,  supplies,  and
service charges from corresponding banks.

     Salaries and employee benefits decreased $284,000 or 4% for the first nine
months of 1997 compared  to  the  first  nine months of 1996.  This decrease is
mainly due to the reduction of staff at FirsTech  during  the  first quarter of
1996 as a result of the loss of the Ameritech contracts.  FirsTech's  contracts
to process payments for Ameritech expired in 1996 and were not renewed.

     Professional  fees decreased $93,000 or 47% for the third quarter of  1997
compared to the third quarter of 1996.  For the nine months ended September 30,
1997, professional fees  decreased  $333,000 or 53% compared to the same period
in 1996.  The decrease for both periods was attributed to the professional fees
associated with the acquisition of First  Shelby that were expensed on April 1,
1996, upon consummation of the acquisition.

     Equipment expenses decreased $72,000 or  12% for the third quarter of 1997
compared to the third quarter of 1996.  For the nine months ended September 30,
1997, equipment expenses decreased $173,000 or  9%  compared to the same period
in 1996.  The decrease in both periods is 

                                        Page 8
<PAGE>
mainly attributed to a reduction in machine maintenance costs as the result of
lower usage of equipment due to loss of the Ameritech contracts. The additional
decrease in the third  quarter of 1997 was the  result  of lower  depreciation
due to the sale of remittance processing machines by FirsTech.

     For  the  three  months  ended  September 30, 1997, data  processing  fees
decreased $79,000 or 57% compared to the  same period in 1996.  Data processing
fees decreased $66,000 or 24% for the first nine months of 1997 compared to the
first nine months of 1996.  Also, supplies  decreased  $61,000  or  17% for the
first  nine  months  of  1997  compared to the first nine months of 1996.   The
decrease  in data processing fees  and  supplies  is  attributed  to  increased
efficiencies  in  technology related to the acquisition of an in-house computer
system for the Decatur Bank and image equipment and software for FirsTech.

     For the three  months  ended September 30, 1997, service charges decreased
$66,000 or 35% compared to the  same period in 1996.  Service charges decreased
$245,000 or 39% for the first nine  months  of  1997 compared to the first nine
months of 1996.  The decrease in both periods is  attributed  to a reduction in
the  number  of  items  processed  by FirsTech as a result of the loss  of  the
Ameritech contracts.

INCOME TAXES

     Income tax expense increased $95,000  or  6%  for the first nine months of
1997, compared to the first nine months of 1996.  Higher income tax expense was
principally due to the increase in pre-tax earnings.  Bancshares' effective tax
rate  (income  tax expense divided by income before taxes)  was  31%  and  33%,
respectively, as of September 30, 1997 and 1996.

FINANCIAL CONDITION

     Bancshares' total assets decreased $7,515,000 or 2% from December 31, 1996
to September 30,  1997.   This  decrease  was  primarily  due  to  a decline in
deposits  and short term borrowings of $7,500,000 and $3,100,000, respectively,
offset by a  $2,800,000 increase in stockholders' equity due to earnings.  This
decline in funding  of  $7,800,000 and the $7,700,000 loan growth resulted in a
decrease  of  liquid assets  and  investments  of  $7,900,000  and  $7,800,000,
respectively.

CASH AND CASH EQUIVALENTS

     Cash and cash  equivalents  decreased $7,903,000 from December 31, 1996 to
September 30, 1997.  This change occurred  due  to  a  decrease in cash and due
from banks of $3,608,000 and a decrease in federal funds  sold  of  $4,295,000.
See  the  consolidated  statement  of  cash  flows  for  the  nine months ended
September  30,  1997,  in  the  interim  financial  statements for the  details
representing the decrease in cash and cash equivalents.  Federal funds sold are
of a short-term nature and provide the needed liquidity to fund loan growth.

SECURITIES

     Bancshares'  overall  investment  goal  is  to  maximize   earnings  while
maintaining liquidity in securities having minimal credit risk.   The types and
maturities  of securities purchases are primarily based on Bancshares'  current
and projected  liquidity and interest rate sensitivity positions.  The 

                                        Page 9
<PAGE>
carrying value of investment  securities  decreased by $7,782,000 from December
31, 1996 to  September  30,1997.  During the  first  nine  months  of  1997,  
Bancshares purchased $24,039,000  ($19,696,000  classified  as  available-for-
sale),  sold $5,994,000 of securities classified as available-for-sale, and had
$25,533,000 ($19,090,000   classified  as  available-for-sale)  mature.   The  
decrease in investments was  necessary  to fund loan growth for the first nine 
months ended September 30, 1997.

OTHER ASSETS

     Other assets increased $1,261,000  from December 31, 1996 to September 30,
1997 due $800,000 in accrued trust fees at  the  First National Bank of Decatur
("Decatur Bank") and $750,000 in prepaid maintenance  costs  at  FirsTech.  The
Decatur Bank accrues trust income throughout the year and offsets  the  accrued
account  when  fees  are  collected.   The majority of trust fees are collected
during the fourth quarter of each year.   During April 1997, FirsTech purchased
a  two  year maintenance agreement to cover lockbox  processing  equipment  and
personal  computer  equipment.   The  $750,000  will be amortized monthly until
April 1999.

LOANS

     Total loans increased by $7,697,000 from December  31,  1996  to September
30, 1997 due mainly to an increase in commercial loans offset by a decrease  in
consumer  loans.  Commercial loans increased by $11,821,000 due to increases in
construction  and land development and a long term commercial real estate loan.
Consumer loans  decreased  by  $3,555,000  as  the  result  of  reallocation of
resources from consumer loans to commercial loans to meet loan demand.

DEPOSITS

      Total deposits decreased $7,459,000 from December 31, 1996  to  September
30,  1997.   This  decrease  is  attributed  to  the redemption of a $4,000,000
certificate  of deposit by the Decatur School District,  the  redemption  of  a
$1,500,000 certificate  of  deposit  by  the  Village  of  Mt.  Zion,  and  the
redemption of a $2,000,000 certificate of deposit by the State of Illinois.

FEDERAL FUNDS PURCHASES AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

     Federal  funds  purchases  and securities sold under repurchase agreements
decreased  $4,371,000 from December  31,  1996  to  September  30,  1997.   The
decrease is  primarily  attributed  to  a  decrease  in  securities  sold under
repurchase  agreements  of $4,223,000, a majority of which ($3,000,000)  was  a
short term deposit by one of the local hospitals.

STOCKHOLDERS' EQUITY

     Total stockholders' equity rose $2,778,000 or 6% from December 31, 1996 to
September 30, 1997.  The  increase  is  mainly  attributed  to  net  income  of
$3,710,000 less cash dividends of $1,011,000.

     The   capital  ratios  of  Bancshares  are  presently  in  excess  of  the
requirements   necessary  to  meet  the  "well  capitalized"  capital  category
established by bank  regulators.   At  June  30, 1997, Bancshares' consolidated
Tier 1 and total risk-based capital ratios were  20.1% and 21.3%, respectively.
Bancshares' leverage ratio at June 30, 1997, was 13.0%.

                                        Page 10
<PAGE>
PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

     Bancshares is involved from time to time in routine  litigation incidental
to its business.  However, Bancshares' management believes  that  it  is  not a
party  to  any  material  pending  litigation,  which,  if decided adversely to
Bancshares, would have a significant negative impact on the  business,  income,
assets or operation of Bancshares.  Bancshares' management is not aware of  any
other material threatened litigation which might involve Bancshares.


ITEM 2.    CHANGES IN SECURITIES

     Not Applicable


ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

     Not Applicable


ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not Applicable


ITEM 5.    OTHER INFORMATION

     Not Applicable


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

     (a)   Exhibits

           Exhibit
           NUMBER          DESCRIPTION OF EXHIBIT

             11            Computation of Per Share Income - Refer to the
                           Consolidated Statements of Income in the interim
                           financial statements

             27            Financial Data Schedule

     (b)   Reports on Form 8-K

           Not applicable

                                        Page 11
<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.

FIRST DECATUR BANCSHARES, INC.


October 22, 1997           By:        /s/ John Luttrell
                                      -------------------------------------
                                      John W. Luttrell
                                      President and Chief Executive Officer



October 22, 1997           By:        /s/ Craig A. Wells
                                      -------------------------------------
                                      Craig A. Wells
                                      Principal Financial Officer