<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 June 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           .


2,888,562 shares of the Registrant's common stock, par value $.01 per share,
were outstanding at June 30, 1997.
<PAGE>

                        FIRST DECATUR BANCSHARES, INC.

            FORM 10-Q FOR THREE AND SIX MONTHS ENDED JUNE 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  . . . . . . . . . . . . . . . . . . . .      10

      Item 1.     Legal Proceedings  . . . . . . . . . . . . . . . .      10
      Item 2.     Changes in Securities  . . . . . . . . . . . . . .      10
      Item 3.     Defaults upon Senior Securities  . . . . . . . . .      10
      Item 4.     Submission of  Matters to a Vote of Security Holders    10
      Item 5.     Other Information  . . . . . . . . . . . . . . . .      10
      Item 6.     Exhibits and Reports on Form 8-K   . . . . . . . .      10

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      11
<PAGE>
PART 1 - FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                                        June  30,                December 31,
                                                                          1997                       1996
                                                                     _____________              _____________ 
                                                                     (Unaudited)
<S>                                                                  <C>                        <C>
Assets
     Cash and due from banks                                         $   34,421                 $   32,818
     Federal funds sold                                                     105                     15,770
          Cash and cash equivalents                                      34,526                     48,588
     Securities available for sale                                       91,121                     94,352
     Securities held to maturity                                         34,058                     36,790
     Loans, net                                                         209,853                    196,514
     Premises and equipment                                               9,661                     10,166
     Other assets                                                         8,781                      7,713
                                                                     _____________              _____________ 
               Total assets                                          $  388,000                 $  394,123
                                                                     =============              ============= 
Liabilities
     Deposits
        Noninterest bearing                                          $   53,240                 $   54,673
        Interest bearing                                                260,810                    265,489
                                                                     -------------              -------------
          Total Deposits                                                314,050                    320,162

     Federal funds purchases and securities sold under
        repurchase agreements                                            14,366                     16,969
     Federal Home Loan Bank loans                                         2,977                      2,500
     U.S. Treasury demand notes                                           3,083                      2,333
     Other liabilities                                                    3,164                      3,664
                                                                     -------------              -------------
               Total liabilities                                        337,640                    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 20,835 shares and  
        22,361 shares were held as treasury stock                            29                         29
     Surplus                                                              7,858                      7,854
     Paid-in-capital - phantom stock                                        171                        146
     Retained earnings                                                   42,631                     40,798
     Net unrealized gain on securities available for sale                   100                        133
                                                                     -------------              -------------
                                                                         50,789                     48,960
     Treasury stock, at cost                                               (429)                      (465)
                                                                     -------------              -------------
               Total stockholders' equity                                50,360                     48,495
                                                                     -------------              -------------
                    Total liabilities and stockholders' equity       $  388,000                 $  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                       Six Months Ended
                                                     June 30               June 30               June 30              June 30
                                                      1997                  1996                  1997                 1996
                                                   (Unaudited)           (Unaudited)           (Unaudited)          (Unaudited)
                                                   ___________           ___________           ___________          ___________
<S>                                                <C>                   <C>                   <C>                  <C>
Interest Income
     Interest on loans                             $    4,437            $    4,105            $   8,826            $   8,182
     Interest on investments                            1,925                 2,051                3,918                4,097
     Interest on federal funds sold                       106                    60                  177                  140
     Other interest income                                 32                    26                   67                   61
                                                   ___________           ___________           ___________          ___________
          Total interest income                         6,500                 6,242               12,988               12,480
                                                   ___________           ___________           ___________          ___________
Interest Expense
     Interest on deposits                               2,754                 2,690                5,403                5,481
     Interest on borrowings                                95                   119                  223                  208
                                                   ___________           ___________           ___________          ___________
          Total interest expense                        2,849                 2,809                5,626                5,689
                                                   ___________           ___________           ___________          ___________
Net Interest Income                                     3,651                 3,433                7,362                6,791
     Provision for loan losses                            136                    75                  232                  152
                                                   ___________           ___________           ___________          ___________
Net Interest Income After Provision for
   Loan Losses                                          3,515                 3,358                7,130                6,639
                                                   -----------           -----------           -----------          -----------
Other Income
     Trust fees                                           379                   363                  748                  715
     Loan fee income                                      108                    68                  186                  159
     Remittance processing fees                           974                 1,463                2,091                3,250
     Service charges on deposit accounts                  278                   277                  534                  546
     Security transactions, net                            14                   (11)                  29                  (11)
     Other                                                215                   192                  515                  384
                                                   -----------           -----------           -----------          -----------
          Total other income                            1,968                 2,352                4,103                5,043
                                                   -----------           -----------           -----------          -----------
Other Expenses
     Salaries and employee benefits                     2,013                 2,009                4,039                4,333
     Net occupancy                                        269                   294                  548                  585
     Equipment expenses                                   508                   667                1,194                1,295
     Professional fees                                     94                   331                  185                  425
     Data processing fees                                  88                    98                  148                  135
     Supplies                                              91                    79                  193                  271
     Service charges from corresponding banks             134                   200                  265                  444
     Other operating expenses                             540                   542                1,064                1,053
                                                   -----------           -----------           -----------          -----------
          Total other expenses                          3,737                 4,220                7,636                8,541
                                                   -----------           -----------           -----------          -----------
Income Before Income Tax                                1,746                 1,490                3,597                3,141
     Income tax expense                                   544                   469                1,128                  988
                                                   -----------           -----------           -----------          -----------
          Net Income                               $    1,202            $    1,021            $   2,469            $   2,153
                                                   ===========           ===========           ===========          ===========

Net Income Per Share                               $     0.42            $     0.35            $    0.85            $    0.74
Dividends Per Share                                      0.11                  0.11                 0.22                 0.22
Weighted Average Shares Outstanding                 2,892,943             2,902,009            2,890,390            2,901,974
</TABLE>

                                        Page 2
<PAGE>
                        FIRST DECATUR BANCSHARES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                               Six Months Ended
                                                                                  June 30,                      June 30,
                                                                                    1997                          1996
                                                                                 (Unaudited)                   (Unaudited)
                                                                                 ------------                  ------------
<S>                                                                              <C>                           <C>
Cash flows from operating activities:
     Net cash provided by operating activities                                   $    2,234                    $   2,443
Cash flows from investing activities:
     Purchases of securities available for sale                                     (13,399)                     (11,135)
     Proceeds from maturities of securities available for sale                       10,460                        5,828
     Proceeds from sales of securities available for sale                             5,994                        2,999
     Purchases of securities held to maturity                                        (2,135)                      (1,872)
     Proceeds from maturities of securities held to maturity                          4,682                        5,667
     Net change in loans                                                            (13,571)                      (6,551)
     Purchases of premises and equipment                                               (243)                        (352)
                                                                                 ------------                  ------------
          Net cash used by investing activities                                      (8,212)                      (5,416)
                                                                                 ------------                  ------------
Cash flows from financing activities:
     Net change in
          Noninterest-bearing, interest-bearing demand and savings deposits          (2,151)                      (4,117)
          Certificates of deposit                                                    (3,961)                          623
          Federal funds purchased and securities sold under repurchase
               agreements                                                            (2,603)                        3,832
          Federal Home Loan Bank loans                                                  477                        3,500
          U.S. Treasury demand notes                                                    750                        2,232
     Cash dividends                                                                    (636)                        (869)
     Net cash from sale of treasury stock                                                40                           30
                                                                                 ------------                  ------------
          Net cash used by financing activities                                      (8,084)                        5,231
                                                                                 ------------                  ------------

Net increase (decrease) In cash and cash equivalents                                (14,062)                        2,258
Cash and cash equivalents, beginning of period                                       48,588                        38,572
                                                                                 ------------                  ------------
Cash and cash equivalents, end of period                                         $   34,526                    $   40,830
                                                                                 ============                  ============
Supplemental disclosures of cash flow information:
     Cash paid during the period for:
          Interest                                                               $    5,652                    $    5,728
          Income taxes                                                           $    1,152                    $    1,128
</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  six  months ended June  30,  1997,  an  additional  $36,000,  
net  of amortization, has been capitalized.

     The  Financial  Accounting  Standards  Board  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 or second quarter of 1997.

     SFAS No. 125 provides consistent standards for distinquishing 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>
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 June 30, 1997, 13,979 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 six  month  periods ended June 30, 1997
and 1996 and its consolidated financial condition at  June 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.


RESULTS OF OPERATIONS

SUMMARY OF OPERATIONS

     Net income  in  the second quarter of 1997 increased to $1,202,000, up 18%
from $1,021,000 earned in the same quarter of 1996.  Earnings per share for the
quarterly period increased  to  42  cents  per  share, up 20% from 35 cents per
share earned in the second quarter of 1996.  For  the six months ended June 30,
1997, net income was $2,469,000, up 15% compared to  $2,153,000  for  the first
half  of  1996.  Earnings per share for the six month period were 85 cents,  up
15% compared  to  74 cents in the same period in 1996.  Higher earnings in both
periods were primarily  due  to  increases  in  net  interest  income.  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

     Second quarter net interest income was $3,651,000, an increase of $218,000
or 6% compared with the second  quarter of 1996.  For the six months ended June
30, 1997, net interest income increased  $571,000  or 8% compared to 1996.  The
growth in net interest income for both periods was mainly  due  to increases in
the volume of average earning assets, primarily in the loan area.   For the six
months ended June 30, 1997, average earning assets increased $10,684,000  or 3%
compared to the same period in 1996.

                                        Page 6
<PAGE>
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  second  quarter  of  1997  was
$136,000  compared to $75,000 in 1996.  For the six month period ended June 30,
1997, the provision  for loan losses were $232,000 compared to $152,000 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 June 30, 1997, decreased $384,000
or 16% compared to the same  period  in  1996.   On a year-to-date basis, other
income decreased $940,000 or 19% compared to the six month period in 1996.  For
the three month period, 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.  For the six
month period,  the decrease is attributed to a reduction in FirsTech remittance
processing income offset by an increase in loan fee income and other income.

     For  the three and six months ended June 30, 1997,  remittance  processing
and collecting  income  generated  by  FirsTech decreased by $489,000 (33%) and
$1,159,000 (36%), 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  June 30, 1997, increased
$40,000 or 59% over the same period in 1996.  On a year to date basis, loan fee
income increased $27,000 or 17% compared to the six month period in 1996.  This
increase is mainly 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.

     Other income increased $131,000 or 34% for the six  months  ended June 30,
1997, compared to the same period in 1996.  This increase is mainly  attributed
to  gains  on  the  sale  of remittance processing machines by FirsTech and  an
increase in brokerage commissions  for the first six months of 1997 compared to
1996.

OTHER EXPENSES

     Other expenses decreased from $4,220,000  for  the three months ended June
30,  1996,  to  $3,737,000  for  the three months ended June  30,  1997.   This
represents  a  $483,000 (11%) decrease  and  was  attributed  to  decreases  in
professional fees,  equipment  expenses  and service 

                                        Page 7
<PAGE>
charges from corresponding banks.  For  the  six  months  ended June 30, 1997,  
other  expenses  decreased $905,000  or  11% compared to the  same  period  in  
1996.  This  decrease  was attributed to decreases  in  salaries and employee 
benefits, professional fees, equipment expenses, supplies, and service charges 
from corresponding banks.

     Salaries and employee benefits  decreased $294,000 or 7% for the first six
months of 1997 compared to the first six  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 $237,000 or 72% for the second quarter of 1997
compared to the second  quarter  of  1996.   For  the six months ended June 30,
1997, professional fees decreased $240,000 or 56% 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  $159,000 or 24% for the second quarter  of
1997 compared to the second quarter of 1996.  For the six months ended June 30,
1997, equipment expenses decreased $101,000  or  8% compared to the same period
in 1996.  The decrease in both periods is 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 second  quarter  of
1997  was  the  result  of  lower  depreciation  due  to the sale of remittance
processing machines by FirsTech.

     Supplies decreased $78,000 or 29% for the first half  of  1997 compared to
the  first half of 1996.  The decrease 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  June  30,  1997, service charges decreased
$66,000 or 33% compared to the same period in 1996.   Service charges decreased
$179,000 or 40% for the first half  of 1997 compared to the first half 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 $75,000 or 16% for the second quarter of 1997
compared  to the second quarter of 1996. Income taxes increased $140,000 or 14%
for the first  six  months  of  1997, compared to the first six months of 1996.
Higher income tax expense for both  periods was principally due to the increase
in  pre-tax  earnings.  Bancshares' effective  tax  rate  (income  tax  expense
divided by income before taxes) was 31% as of June 30, 1997 and 1996.

FINANCIAL CONDITION

     Bancshares'  assets decreased $6,123,000 or 1.6% from December 31, 1996 to
June 30, 1997.  This  decrease  was primarily due to decreases in cash and cash
equivalents and securities offset  by  an increase in net loans.  The reduction
in  total  assets  was  offset by a decrease  in  deposits  and  federal  funds
purchased and securities sold under repurchase agreements.

                                        Page 8
<PAGE>
CASH AND CASH EQUIVALENTS

     Cash and cash equivalents  decreased $14,062,000 from December 31, 1996 to
June 30, 1997.  This change occurred  due  to  an increase in cash and due from
banks of $1,603,000 offset by a decrease in federal  funds sold of $15,665,000.
See the consolidated statement of cash flows for the six  months ended June 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  book
value of investment securities  decreased  by $5,963,000 from December 31, 1996
to June 30,1997.  During the first six months  of  1997,  Bancshares  purchased
$15,534,000 ($13,399,000 classified as available-for-sale), sold $5,994,000  of
securities  classified  as available-for-sale, and had $15,142,000 ($10,460,000
classified as available-for-sale)  mature.   The  decrease  in  investments was
necessary to fund loan growth for the first six months ended June 30, 1997.

LOANS

     Total loans increased by $13,339,000 from December 31, 1996  to  June  30,
1997  due  mainly  to  an  increase in commercial loans offset by a decrease in
consumer loans.  Commercial  loans increased by $14,662,000 due to increases in
construction and land development  and a long term commercial real estate loan.
Consumer loans decreased by $1,363,000.

DEPOSITS

      Total deposits decreased $6,112,000  from  December  31, 1996 to June 30,
1997.   This  decrease  is  attributed  to  the  cancellation  of a  $4,000,000
certificate of deposit by the Decatur School District and the cancellation of a
$1,500,000 certificate of deposit by the Village of Mt. Zion.

STOCKHOLDERS' EQUITY

     Total stockholders' equity rose $1,865,000 or 4% from December 31, 1996 to
June 30, 1997.  The increase is mainly attributed to net income  of  $2,469,000
less cash dividends of $636,000.

     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  March 31, 1997, Bancshares' consolidated
Tier 1 and total risk-based capital ratios  were 19.8% and 21.1%, respectively.
Bancshares' leverage ratio at March 31, 1997, was 13.1%.

                                        Page 9
<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 10

<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.


                                 
July 29, 1997              By:   /s/ John W. Luttrell
                                 --------------------------------------
                                 John W. Luttrell
                                 President and Chief Executive Officer



July 29, 1997              By:   /s/ Craig A. Wells
                                 --------------------------------------
                                 Craig A. Wells
                                 Principal Financial Officer

                                        Page 11
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