UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[x] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [NO FEE REQUIRED]

For the Fiscal Year ended September 30, 1996

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [NO FEE REQUIRED]
For the transition period from ___ to ___

Commission File No. 000-23318

Mid-Central Financial Corporation
(Exact name of registrant as specified in its charter)

Minnesota 41-1765962
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

520 South Jefferson Street, Wadena, Minnesota 56482
(Address and Zip Code of principal executive offices)

Registrant's telephone number, including area code: (218) 631-1414
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.10 per share
(Title of Class)

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 12 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 90 days. Yes _X_ No ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

As of November 19, 1996 the aggregate market value of the voting stock held by
non-affiliates of the registrant, computed by reference to the average bid and
asked prices at same date ($16.50), was approximately $3,194,252 (for purposes
of this calculation, directors, executive officers and beneficial owners of more
than 10% of the registrant's outstanding voting stock are treated as
affiliates).

As of November 19, 1996 there were issued and outstanding 233,018 shares of the
registrant's common stock.

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the Annual Report to Stockholders for the Fiscal Year Ended
September 30, 1996 (the "Annual Report"). (Parts I, II and IV)

2. Portions of the Proxy Statement for the 1996 Annual Meeting of Stockholders
(the "Proxy Statement"). (Part III)

MID-CENTRAL FINANCIAL CORPORATION

FORM 10-K

FISCAL YEAR ENDED SEPTEMBER 30, 1996

Pages
PART I.

Item 1. Business................................................ 3
Item 2. Properties.............................................. 10
Item 3. Legal Proceedings ...................................... 10
Item 4. Submission of Matters to a Vote of Security Holders..... 11

PART II.

Item 5. Market for Registrants's Common Equity and
Related Stockholder Matters............................. 11
Item 6. Selected Financial Data ................................ 11
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 11
Item 8. Financial Statements and Supplementary Data............. 11
Item 9. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure ................. 11

PART III.

Item 10. Directors and Executive Officers of the Registrant ..... 12
Item 11. Executive Compensation.................................. 12
Item 12. Security ownership of Certain Beneficial Owners
and Management ......................................... 12
Item 13. Certain Relationships and Related Transactions.......... 12

PART IV.

Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K .................................... 13

Signatures................................................................ 14

Index to Exhibits......................................................... 15

PART I

ITEM 1. BUSINESS

Mid-Central Financial Corporation (the "Company") owns 100% of
Mid-Central Federal Savings Bank (the "Savings Bank"), a federal stock chartered
savings bank. The Company has not engaged in any significant activity other than
that of holding the stock of the Saving Bank and operating the business of a
savings association through the Savings Bank. Below is a discussion of the major
business activities of the Savings Bank.

ONE- TO FOUR-FAMILY RESIDENTIAL LOANS. The primary lending activity of
the Savings Bank is the origination of mortgage loans to enable borrowers to
purchase existing homes or to construct new one- to four-family homes at
purchase prices up to approximately $150,000. At September 30, 1996,
approximately $31.8 million, or 71.7% of the total loan portfolio, consisted of
loans secured by one- to four-family residential real estate, including
$203,000, or 0.5% of which are insured or guaranteed by the Veterans
Administration or the Federal Housing Administration.

The Savings Bank originates both fixed-rate mortgage loans and ARM
loans secured by single-family properties with terms of 10 to 30 years. Borrower
demand for ARM loans versus fixed-rate mortgage loans is a function of the level
of interest rates, the expectations of changes in the level of interest rates
and the difference between the initial interest rates and fees charged for each
type of loan. The relative amount of fixed-rate mortgage loans and ARM loans
that can be originated at any time is largely determined by the demand for each
in a competitive environment.

The Savings Bank began offering ARM loans in the early 1980s. The
Savings Bank currently offers a one year ARM loan and a 3/1 ARM loan which
changes to a one year ARM after an initial fixed rate for three years. At
September 30, 1996, the initial interest rate on the ARM loans ranged from 6.50%
to 7.50% per annum. The periodic interest rate cap (the maximum amount by which
the interest rate may be increased or decreased in a given period) on the ARM
loan is generally 2% per adjustment period and the lifetime interest rate cap is
generally 6% over the initial interest rate of the loan. The interest rate floor
is 6% less than the initial interest rate of the loan. The Savings Bank does not
originate negative amortization loans. The terms and conditions of the ARM loan
offered by the Savings Bank, including the index for interest rates, may vary
from time to time. However, the Savings Bank intends, subject to market
conditions, to emphasize the origination of ARM loans which adjust annually. The
Savings Bank believes that ARM loans provide adequate protection to the Savings
Bank against increases in interest rates. At September 30, 1996, ARM loans
accounted for approximately 66.5% of the total mortgage loan portfolio.

The Savings Bank qualifies the borrower based on the borrower's ability
to repay the loan using the fully-indexed interest rate on the one-year ARM
loan. As a result, management believes the potential for delinquencies and
defaults on ARM loans is lessened.

The loan fees charged, interest rates and other provisions of the ARM
loan are determined by the Savings Bank on the basis of its own pricing criteria
and competitive market conditions. At September 30, 1996, the Savings Bank
charged a 1% origination fee on its ARM loans. Interest rates and payments on
the ARM loans originated are adjusted annually to a rate equal to the one-year
National Average Contract Rate for the Purchase of Previously Occupied Homes by
Combined Lenders (National Average Contract Rate). During the fiscal year ended
September 30, 1996, the National Average Contract Rate ranged from 7.13% to
7.87%.

The retention of ARM loans in portfolio helps reduce the Savings Bank's
exposure to changes in the interest rates. There are, however, unquantifiable
credit risks resulting from the potential of increased costs due to changed
rates to be paid by the customer. It is possible that, during periods of rising
interest rates, the risk of default on ARM loans may increase as a result of
repricing and the increased costs to the borrower. Although ARM loans allow the
Savings Bank to increase the sensitivity of its asset base to changes in the
interest rates, the extent of this interest sensitivity is limited by the
periodic and lifetime interest rate adjustment limits. Because of these
considerations, the Savings Bank has no assurance that yields on ARM loans will
be sufficient to offset increases in the Savings Bank's cost of funds.

Mid-Central also originates conventional fixed-rate mortgage loans on
one- to four-family residential properties with terms of 10 or 15 years. The
Savings Bank originates and holds its fixed-rate mortgage loans as long-term
portfolio investments. Management intends to hold all loans to maturity.

The Savings Bank requires an attorney's title opinion confirming the
status of its lien on all of the real estate secured loans and also requires
that the fire and extended coverage casualty insurance (and, if appropriate,
flood insurance) be maintained in an amount at least equal to the outstanding
loan balance.

The Savings Bank's lending policies generally limit the maximum
loan-to-value ratio on mortgage loans secured by owner-occupied properties to
80% of the lesser of the appraisal value or the purchase price, with the
condition that private mortgage insurance is required on loans with
loan-to-value ratios of greater than 80%. The maximum financing on refinance
loans is limited to 80% of the appraised value and such loans require private
mortgage insurance above 80% loan to value.

At September 30, 1996, the Savings Bank had $195,000 in investments in
real estate sold on contract. These contracts represent either financing
arrangements for the sale of the Savings Bank's real estate owned or the
purchase of contracts from third party contract holders. Under the latter
arrangement, the Savings Bank purchases a real estate contract at a discount
from the seller of property. The Savings Bank holds title to the property until
the buyer fulfills the terms of the contract, at which time the Savings Bank
delivers title to the buyer.

COMMERCIAL REAL ESTATE LOANS. Mid-Central has engaged in limited
commercial real estate lending. At September 30, 1996, commercial real estate
loans totalled $738,000 with most of the properties securing these loans located
in the Savings Bank's primary market area. This lending has involved loans
secured principally by motels, nursing homes and owner occupied/rental
commercial buildings. Generally, these loans are made for a period of 20 years
or less, with a loan-to-value ratio of 75% or less, with an adjustable interest
rate.

Loans secured by commercial real estate generally are larger and
involve greater risks than one- to four- family residential mortgage loans.
Payments on loans secured by such properties are often dependent on successful
operation or management of the properties. Repayment of such loans may be
subject to a greater extent to adverse conditions in the real estate market or
the economy. The Savings Bank seeks to minimize these risks in a variety of
ways, including limiting the size of such loans and strictly scrutinizing the
financial condition of the borrower, the quality of the collateral and the
management of the property securing the loan. The Savings Bank also obtains loan
guarantees from financially capable parties. Substantially all of the properties
securing the Savings Bank's commercial and multi-family real estate loans are
inspected by the Savings Bank's lending personnel before the loan is made. The
Savings Bank also obtains appraisals on each property in accordance with
applicable regulations.

MULTI-FAMILY RESIDENTIAL LOANS. The Savings Bank also originates loans
secured by multi-family dwelling units (five or more units). At September 30,
1996, the Savings Bank had $2,081,000 of loans, or 4.7% of the total loan
portfolio, secured by multi-family dwelling units located primarily in the
Savings Bank's primary market area. Multi-family real estate loans are generally
originated at 75% of the appraised value of the property or selling price,
whichever is less, and are generally originated for 25-year terms. Loans secured
by multi-family residential real estate are generally larger and involve a
greater degree of risk than one- to four-family residential mortgage loans. The
credit risks associated with multi-family residential loans are similar to the
risks associated with commercial real estate loans. At September 30, 1996 no
multi-family residential loans were on a nonaccrual basis.

CONSUMER LOANS. Consumer lending has been an important part of
Mid-Central's business. Consumer loans generally have shorter terms to maturity
or repricing and higher interest rates than the long-term, fixed-rate mortgage
loans. The Savings Bank's consumer loans consist primarily of automobile loans,
but also include home improvement loans secured by mortgages on residences,
savings account loans, student loans, boat and mobile home loans, and unsecured
loans for any personal or household purposes. At September 30, 1996 consumer
loans totalled approximately $8.5 million, or 19.3% of the total loan portfolio.
Subject to market conditions, management expects to continue to market and
originate consumer loans as part of its strategy to provide a wide range of
personal financial services to its depository customer base and as a means to
enhance the interest rate sensitivity of the Savings Bank's interest-earning
assets and its interest rate spread.

Automobile loans are secured by both new and used cars and light trucks
and are generally limited to 85% of the "sticker price" or dealer invoice for
new cars, or 75% of the loan value as published by National Automobile Dealers
Association or National Automobile Research "Blue Book." Automobile loans are
primarily made to the borrower-owners on a direct basis. New cars are financed
for a period of up to 60 months while used cars are financed for 48 months or
less depending on the year and model. Collision and comprehensive insurance and
vendor single interest coverage is required on all automobile loans.

Consumer loans entail greater risk than do residential mortgage loans,
particularly in the case of consumer loans which are unsecured or secured by
rapidly depreciating assets such as automobiles. In such cases, any repossessed
collateral for a defaulted consumer loan may not provide an adequate source of
repayment of the outstanding loan balance as a result of the greater likelihood
of damage, loss or depreciation. The remaining deficiency often does not warrant
further substantial collection efforts against the borrower beyond obtaining a
deficiency judgment. In addition, consumer loan collections are dependent on the
borrower's continuing financial stability, and thus are more likely to be
adversely affected by job loss, divorce, illness or personal bankruptcy.
Furthermore, the application of various federal and state laws, including
federal and state bankruptcy and insolvency laws, may limit the amount which can
be recovered on such loans. At September 30, 1996 only one loan of the Savings
Bank's consumer loan portfolio was 90 days or more past due. In accordance with
OTS regulations, the Savings Bank charges off consumer loans delinquent 120 days
or more.

During the past fiscal year the Company sold $864,000 in student loans,
effectively its whole portfolio. The Company decided that due to decreasing
yields and increasing servicing expenses, it will not hold student loans in its
portfolio in the future. However, the Company will continue to originate student
loans for immediate sale.

COMMERCIAL BUSINESS LOANS. As a federally chartered savings
institution, the Savings Bank is authorized to invest up to 10% of its assets in
commercial loans not secured by real property. Mid-Central does not actively
solicit commercial loans but provides them as an accommodation to existing
customers. Commercial loans generally are secured by real estate, equipment, or
vehicles. At September 30, 1996, commercial loans amounted to $1.2 million or
2.6% of the total loan portfolio.

LOAN MATURITY AND REPRICING. The following table sets forth certain
information at September 30, 1996 regarding the dollar amount of loans maturing
based on their scheduled contractual payment to maturity, but does not include
potential prepayments. Demand loans, loans having no stated schedule of
repayments and no stated maturity, and overdrafts are reported as due in one
year or less. Mortgage loans which have adjustable rates are shown maturing
according to their scheduled contractual payments irrespective of their next
repricing date. Loan balances do not include undisbursed loan proceeds, unearned
discounts, unearned income and allowance for loan losses.

After 1 Year After 3 Years After 5 Years
Within Through Through Through Beyond
One Year 3 Years 5 Years 10 Years 10 Years Total
-------- ------- ------- -------- -------- -----
(In thousands)

Real estate mortgage...... $2,093 $3,939 $4,259 $10,973 $10,505 $31,769
Commercial real estate
and multi-family......... 85 466 539 1,435 294 2,819
Home improvement.......... 129 247 224 340 64 1,004
Commercial................ 272 576 165 134 9 1,156
Automobile................ 1,359 1,742 390 2 -- 3,493
Savings account........... 282 -- -- -- -- 282
Other..................... 880 1,345 881 637 9 3,752
------- ------ ------ ------- ------ ------
Total loans.......... $5,100 $8,315 $6,458 $13,521 $10,881 $44,275
======= ======= ====== ======= ======= =======

The following table sets forth the dollar amount of all loans due after
September 30, 1996, which have fixed interest rates and have floating or
adjustable interest rates.

Fixed Floating or
Rates Adjustable Rates
-------- ----------------
(In thousands)
Real estate mortgage...... $ 9,598 $20,078
Commercial real estate
and multi-family......... 806 1,928
Home improvement.......... 875 --
Commercial................ 884 --
Automobile................ 2,134 --
Savings account........... -- --
Other..................... 2,872 --
------- -------
Total................ $17,169 $22,006
======= =======

LOAN SOLICITATION AND PROCESSING. Loan applicants result from direct
solicitation by Savings Bank personnel, previous and present customers and
various newspaper and radio advertising promotions. Except for certain
residential mortgage and commercial real estate loans purchased before fiscal
1992, the Savings Bank does not solicit loans from brokers. All types of loans
may be originated in any office of the Savings Bank. Loan applications are
underwritten and closed based on FNMA and FHLMC documentation and guidelines.
Residential mortgage loans are required to have an attorney's title opinion, as
well as fire and extended coverage insurance. All mortgage loans require fire
and extended coverage on appurtenant structures.

Upon receipt of a loan application from a prospective borrower, a
credit report and other data are obtained by a loan officer to verify specific
information relating to the applicant's employment, income and credit standing.
An appraisal of the real estate offered as collateral is undertaken by a fee
appraiser approved by Mid-Central and licensed or certified by the State of
Minnesota.

Residential mortgage loans less than $200,000 are reviewed and approved
by the Loan Committee and ratified after closing by the Board of Directors.
Individual loan officers have approval authority over consumer loan applications
which fall within parameters of the Savings Bank's consumer loan policy.
Consumer loan applications not within the loan policy are reviewed and approved
by the Loan Committee and ratified after closing by the Board of Directors.
Commercial real estate loans in excess of $50,000 and any other real estate loan
greater than or equal to $200,000 require Board approval.

LOAN ORIGINATIONS, SALES AND PURCHASES. The Savings Bank originates
fixed and adjustable rate residential mortgage loans based on its own
underwriting guidelines. During the years ended September 30, 1996, 1995, and
1994, the Savings Bank's total mortgage loan originations were $7.4 million,
$5.4 million and $4.6 million, respectively.

During the past fiscal year the Company sold $864,000 in student loans,
effectively its whole portfolio. See "Consumer Loans" above.

The Savings Bank services its own loans from its main office in Wadena.
At September 30, 1996 and 1995, the Savings Bank serviced $0.6 million and $1.2
million loans for FNMA. These loans were originated by the Savings Bank and
sold, servicing retained, to FNMA.

The Savings Bank has purchased loans from mortgage lenders outside of
its primary market area when customer deposits exceeded the demand for loans in
its primary market area. Residential, multi-family and commercial real estate
loans were purchased from mortgage lenders in Montgomery, Alabama;
Minneapolis/St. Paul, Minnesota; Des Moines, Iowa; and Traverse City, Michigan.
The Savings Bank has also purchased whole loans and loan participation interests
secured by residential and commercial properties in and around Fargo, North
Dakota, which, because of its geographical proximity, the Savings Bank considers
a secondary market area for loans when sufficient loan demand is not present in
its primary market area.

During the year ended September 30, 1996, the Savings Bank purchased
approximately $3.1 million in single family residential mortgage loans on
properties located throughout the state of Minnesota and in and around Des
Moines, Iowa. All of the loans purchased were adjustable-rate mortgages
repricing annually.

LOAN COMMITMENTS. The Savings Bank issues commitments for fixed- and
adjustable-rate single-family residential mortgage loans conditioned upon the
occurrence of certain events. Such commitments are made in writing on specified
terms and conditions and are honored for up to 60 days from the date of
issuance. The Savings Bank had outstanding net loan commitments of approximately
$235,100 at September 30, 1996.

LOAN ORIGINATION AND OTHER FEES. The Savings Bank, in most instances,
receives loan origination fees which are a percentage of the principal amount
(generally 1%) of the mortgage loan which are charged to the borrower for
funding the loan. Current accounting standards require fees received (net of
certain loan origination costs) for originating loans to be deferred and
amortized into interest income over the contractual life of the loan. Net
deferred fees associated with loans that are prepaid are recognized as income at
the time of prepayment.

The Savings Bank also earns fees on loans it services for other
institutions.

NON-PERFORMING ASSETS AND DELINQUENCIES. When a mortgage loan borrower
fails to make a required payment when due, the Savings Bank institutes
collection procedures. The borrower is sent a late payment notice after the
fifteenth day of delinquency. After the thirtieth day of delinquency, the
borrower is sent a personal letter followed by a telephone call. After the
forty-fifth day of delinquency, the borrower receives a second telephone call
and personal letter regarding loan counseling services and outlining what legal
remedies are available to the Savings Bank if the delinquency persists. Upon
authorization by the Savings Bank's President, the delinquent borrower is sent a
notice of intent to foreclose after the sixtieth day. Foreclosure proceedings
are instituted after the loan is ninety days delinquent.

In most cases, delinquencies are cured promptly; however, if by the
ninetieth day of delinquency, or sooner if the borrower is chronically
delinquent and all reasonable means of obtaining payment on time have been
exhausted, foreclosure, according to the terms of the security instrument and
applicable law, is initiated. Interest income on loans is reduced by the full
amount of accrued and uncollected interest.

When a consumer loan borrower fails to make a required payment on a
consumer loan by the payment due date, the Savings Bank institutes collection
procedures. A late payment notice is sent to the delinquent borrower after the
tenth day of delinquency and a second notice is sent after the fifteenth day.
The borrower is contacted by telephone after the forty-fifth day to schedule a
personal interview regarding the loan status. After the sixtieth day, a letter
of intent to repossess or commence legal action is sent to the borrower.
Procedures to repossess collateral are instituted after the ninetieth day.

Depending on the type of property held as collateral, the Savings Bank
either obtains a judgment in small claims court or takes action to repossess the
collateral. The Board of Directors is informed monthly as to the status of all
mortgage and consumer loans that are delinquent 30 days or more, the status on
all loans currently in foreclosure, and the status of all foreclosed and
repossessed property owned by the Savings Bank.

REAL ESTATE OWNED. Real estate acquired as a result of foreclosure or
by deed in lieu of foreclosure is classified as real estate owned until it is
sold. When property is acquired it is recorded at the lower of fair value minus
estimated cost to sell, or cost. Subsequent to foreclosure, the property is
carried at the lower of the foreclosed amount or net realizable value. Upon
receipt of a new appraisal and market analysis, the carrying value is written
down to the anticipated sales price less selling and holding costs. At September
30, 1996, the Savings Bank had $53,477 of real estate owned, net of reserves of
$8,022, consisting of one single family condominium located outside of the
Bank's primary market area. This property was redeemed by the original owner and
the whole amount of real estate owned balance plus accrued interest was paid in
full in October.

ASSET CLASSIFICATION. The OTS has adopted various regulations regarding
problem assets of savings institutions. The regulations require that each
insured institution review and classify its assets on a regular basis. In
addition, in connection with examinations of insured institutions, OTS examiners
have authority to identify problem assets and, if appropriate, require them to
be classified. There are three classifications for problem assets: substandard,
doubtful and loss. Substandard assets must have one or more defined weaknesses
and are characterized by the distinct possibility that the insured institution
will sustain some loss if the deficiencies are not corrected. Doubtful assets
have the weaknesses of substandard assets with the additional characteristic
that the weaknesses make collection or liquidation in full on the basis of
currently existing facts, conditions and values questionable, and there is a
high possibility of loss. An asset classified loss is considered uncollectible
and of such little value that continuance as an asset of the institution is not
warranted. The regulations have also created a special mention category,
described as assets which do not currently expose an insured institution to a
sufficient degree of risk to warrant classification but do possess credit
deficiencies or potential weaknesses deserving management's close attention. If
an asset or portion thereof is classified loss, the insured institution
establishes specific allowances for loan losses for the full amount of the
portion of the asset classified loss. A portion of general loan loss allowances
established to cover possible losses related to assets classified substandard or
doubtful may be included in determining an institution's regulatory capital,
while specific valuation allowances for loan losses generally do not qualify as
regulatory capital.

The management of the Savings Bank meets monthly to review all
classified assets, to approve action plans developed to resolve the problems
associated with the assets and to review recommendations for new
classifications, any changes in classifications and recommendations for
reserves.

ALLOWANCE FOR LOAN LOSSES. The Savings Bank has established a
systematic methodology for the determination of provisions for loan losses which
takes into consideration the need for an overall general valuation allowance as
well as specific allowances that are tied to individual loans.

In originating loans, the Savings Bank recognizes that losses will be
experienced and that the risk of loss will vary with among other things, the
type of loan being made, the creditworthiness of the borrower over the term of
the loan, general economic conditions and, in the case of a secured loan, the
quality of the security for the loan. The Savings Bank increases its allowance
for loan losses by charging provisions for possible loan losses against the
Savings Bank's income.

The general valuation allowance is maintained to cover possible but
unidentified losses in the portfolio of performing loans. Management reviews the
adequacy of the allowance at least quarterly based on its knowledge of the
portfolio, including current asset classifications and inherent portfolio risks,
adverse situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral, the Savings Bank's write-off
history, and current economic conditions affecting the real estate markets and
industry standards.

Specific valuation allowances are established to absorb losses on loans
for which full collectibility may not be reasonably assured. The amount of the
allowance is based on the estimated value of the collateral securing the loan
and other analyses pertinent to each situation.

A provision for losses is charged against income on a monthly basis to
maintain the allowances. The provisions for losses charged against income for
the years ended September 30, 1996, 1995 and 1994 were $63,000, $23,000, and
$(17,000), respectively. At September 30, 1996, the Savings Bank had allowances
for loan losses of $209,000 which represented 0.48% of total loans.

Management believes that the amount maintained in the allowances will
be adequate to absorb possible losses in the portfolio. Although management
believes that it uses the best information available to make such
determinations, future adjustments to the allowance for loan losses may be
necessary and results of operations could be significantly and adversely
affected if circumstances differ substantially from the assumptions used in
making the determinations.

Charge-offs occur when loans with specific reserves are foreclosed. The
specific reserve, along with any additional amounts necessary to reduce the
carrying value to lower of fair value minus estimated cost to sell the asset, or
cost, is charged-off. The book value of the foreclosed asset is thereafter
carried at the lower of the asset's book value or its net realizable value. When
the asset is sold, any excess/(deficiency) over the book value is reflected on
the books as a gain/(loss) on the sale of real estate owned.

The Savings Bank operates in a rural area and, based on management's
observation of local home sales, real estate values have been stable to slightly
increasing over the past three years. There can be no assurance as to the future
performance of real estate markets, including those in the Savings Bank's
primarily market area. A downturn in the Minnesota real estate markets could
have a material adverse effect on the Savings Bank's operations. For example,
depressed real estate values may result in increases in non-performing assets,
hamper disposition of such non-performing assets and result in losses upon such
disposition.

As a result of the declines in real estate market values and the
significant losses experienced by many financial institutions, there has been a
greater level of scrutiny by regulatory authorities of the loan portfolios of
financial institutions nationwide, undertaken as part of the examination of the
institutions by the FDIC, OTS or other federal or state regulators. Results of
recent examinations indicate that these regulators may be applying more
conservative criteria in evaluating real estate values, requiring significantly
increased provisions for potential loan losses. While the Savings Bank believes
it has established its existing allowance for loan losses in accordance with
GAAP, there can be no assurance that regulators, in reviewing the Savings Bank's
loan portfolio, will not request the Savings Bank to increase significantly its
allowance for loan losses. In addition, because future events affecting
borrowers and collateral cannot be predicted with certainty, there can be no
assurance that the existing allowance for loan losses is adequate or that
substantial increases will not be necessary should the quality of any loans
deteriorate as a result of the factors discussed above. Any material increase in
the allowance for loan losses may adversely affect the Savings Bank's financial
condition and results of operations.

MORTGAGE-BACKED SECURITIES. To supplement lending activities in periods
of deposit growth and/or declining loan demand, the Savings Bank has invested in
residential mortgage-backed securities guaranteed by the Federal Home Loan
Mortgage Corporation ("FHLMC") and the Federal National Mortgage Association
("FNMA"). Although such securities are held for investment, they can serve as
collateral for borrowings and, through repayments, as a source of liquidity. At
September 30, 1996, the Savings Bank had FNMA and FHLMC mortgage-backed
securities with an estimated aggregate market value of $1.1 million and
aggregate amortized cost of approximately $1.1 million.

INVESTMENT ACTIVITIES. Federal savings banks have authority to invest
in various types of liquid assets, including United States Treasury obligations,
securities of various federal agencies and of state and municipal governments,
deposits at the FHLB, certificates of deposit of federally insured institutions,
certain bankers' acceptances and federal funds. Subject to various restrictions,
such savings institutions may also invest a portion of their assets in
commercial paper, corporate debt securities and ARM funds, the assets of which
conform to the investments that federally chartered savings institutions are
otherwise authorized to make directly. Savings institutions are also required to
maintain minimum levels of liquid assets which vary from time to time. The
Savings Bank may decide to increase its liquidity above the required levels
depending upon the availability of funds and comparative yields on investments
in relation to return on loans.

The balance of the Savings Bank's investments in short-term securities
in excess of regulatory requirements reflects management's response to the
significantly increasing percentage of deposits with short maturities. At
September 30, 1996, the Savings Bank's regulatory liquidity was 10.0% which is
significantly in excess of the 5% required by OTS regulations and the 5% target
level established by the Savings Bank. Management intends to hold securities
with short-term maturities in the investment portfolio in order to provide
liquidity and to match more closely the interest-rate sensitivities of its
assets and liabilities.

The executive officers of the Savings Bank determine appropriate
investments in accordance with the Board of Directors' approved investment
policies and procedures. Investments are made following certain considerations,
which include the Savings Bank's liquidity position and anticipated cash needs
and sources (which in turn include outstanding commitments, upcoming maturities,
estimated deposits, anticipated loan amortization and repayments, and
amortization of mortgage-backed securities). Further, the effect that the
proposed investment would have on the Savings Bank's "gap" position, credit and
interest rate risk, and risk-based capital is given consideration during the
evaluation. The interest rate, yield, settlement date and maturity are also
reviewed.

DEPOSIT ACCOUNTS. GENERAL. Deposits, securities maturities, and loan
repayments are the major sources of the Savings Bank's funds for lending and
investment. Scheduled loan repayments are a relatively stable source of funds,
while deposit inflows and outflows and loan prepayments are influenced
significantly by general interest rates and money market conditions. Borrowings
may be used on a short-term basis to compensate for reductions in the
availability of funds from other sources. They may also be used on a longer-term
basis for general business purposes.

Deposits are attracted from within the Savings Bank's primary market
area through the offering of a broad selection of deposit instruments, including
NOW accounts, money market deposit accounts, regular savings accounts,
certificates of deposit and retirement savings plans. Deposit account terms
vary, according to the minimum balance required, the time periods the funds must
remain on deposit and the interest rate, among other factors. In determining the
terms of its deposit accounts, the Savings Bank considers current market
interest rates, profitability to the Savings Bank, matching deposit and loan
products and its customer preferences and concerns. The Savings Bank generally
reviews its deposit mix and pricing weekly.

Other information required by this item is incorporated herein by
reference to the section captioned "The Company and the Bank" in the Annual
Report.

ITEM 2. PROPERTIES

The information required by this item is incorporated herein by
reference to the section captioned "Properties" in the Annual Report.

ITEM 3. LEGAL PROCEEDINGS

There are no material legal proceedings to which the Company or the
Bank or the Bank's subsidiary are a party to or which any of their property is
subject. From time to time, the Bank is a party to various legal proceedings
incident to its business.

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

No matters were submitted to a vote of security holders during the
fourth quarter ending September 30, 1996.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

As of November 19, 1996 there were approximately 208 holders of record
of the one class of the Company's common stock. All other information required
by this item is incorporated herein by reference to the section captioned
"Market for Registrant's Common Equity and Related Stockholder Matters" in the
Annual Report. The "bid" prices of the Company's stock referenced to in the
above mentioned section represent prices between broker-dealers and do not
include retail mark-ups and mark-downs or any commission to the broker-dealer
and do not reflect prices in actual transactions.

ITEM 6. SELECTED FINANCIAL DATA

Year Ended September 30,
1996 1995
----- -----
Cash dividends declared
per common share....................... $0.30 $0.30

Earnings per share..................... $0.91 $1.25

Dividend payout ratio.................. 32.2% 24.0%

All other information required by this item is incorporated herein by
reference to the tables captioned "Selected Consolidated Financial Condition,
Operating and Other Data" in the Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Other information required by this item is incorporated herein by
reference to the section captioned "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Annual Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated herein by
reference to the Consolidated Financial Statements together with the related
notes and independent auditors' report contained in the Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS OF THE REGISTRANT

Robert D. Iken, II Vice President and Assistant Secretary of the
Company and Executive Vice President of the Bank
since January 1995. Treasurer of the Company from its
inception to January 1995 and Vice President and
Treasurer of the Bank to January 1995. Robert D.
Iken, II is the son of Robert D. Iken, Sr., Director
and Retired President and Chief Executive Officer of
the Company and the Bank.

All other information required by this item with respect to directors
and executive officers is incorporated herein by reference to the section
captioned "Proposal 1 - Election of Directors" in the Proxy Statement. The only
other executive officer of the Company is Gary W. Sellman, President and Chief
Executive Officer, who is included in such section of the proxy statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by
reference to the section captioned "Executive Compensation" in the Proxy
Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All other information required by this item is incorporated herein by
reference to the section captioned "Security Ownership of Principal Shareholders
and Management" in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated herein by
reference to the section captioned "Certain Transactions" in the Proxy
Statement.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are part of this report and appear on the pages
indicated.

(1) The following financial statements are incorporated herein by
reference in the Annual Report on the sequentially numbered pages as
indicated below. The remaining information appearing in the Annual
Report is not deemed to be filed as part of this report, except as
expressly provided herein.

1. Report of Independent Auditors

2. Consolidated Balance Sheets as of
September 30, 1996 and 1995

3. Consolidated Statements of Income for the Years
Ended September 30, 1996, 1995 and 1994

4. Consolidated Statements of Stockholders' Equity for
the Years Ended September 30, 1996, 1995 and 1994

5. Consolidated Statements of Cash Flows for the Years
Ended September 30, 1996, 1995 and 1994

6. Notes to Consolidated Financial Statements

(2) Financial Statement Schedules

Schedules are omitted because the information is either not
required, not applicable or is incorporated by reference into
Part II, Items 6-8 of this report.

(3) Exhibits

The exhibits listed on the Index to Exhibits on page 16 of
this report are filed herewith or are incorporated by reference.

(b) No reports on Form 8-K were filed during the last quarter of the fiscal
year covered by this report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on November 19, 1996.

MID-CENTRAL FINANCIAL CORPORATION
(Registrant)

By: /s/ Gary W. Sellman
-----------------------------
Gary W. Sellman
President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on November 19, 1996.

By: /s/ Gary W. Sellman
----------------------------------------
Gary W. Sellman
President, Director and Chief Executive Officer
(Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer)

By: /s/ Alfred H. Neitzke
----------------------------------------
Alfred H. Neitzke
Chairman and Director

By: /s/ Duane J. Polman
----------------------------------------
Duane J. Polman
Director

By: /s/ Michael J. Ebner
----------------------------------------
Michael J. Ebner
Director

By: /s/ Robert D. Iken, Sr.
----------------------------------------
Robert D. Iken, Sr.
Director

MID-CENTRAL FINANCIAL CORPORATION

INDEX TO EXHIBITS
FOR FORM 10-K

Exhibit
Number Exhibit
- ------- -------

3.1 Articles of Incorporation (1)

3.2 Bylaws (1)

10.1 Executive Salary Continuation Agreement
with Robert D. Iken, Sr. (1)

10.2 Amended and Restated 1994 Stock Option Plan (subject
to shareholder approval)

10.3 Management Recognition and Development
Plan and Trust Agreement (2)

10.4 Tax Allocation Agreement (2)

10.5 Reimbursement Agreement (2)

11 Computation of Earnings per Share

13 1996 Annual Report to Stockholders

21 Principal Subsidiaries (1)

27 Financial Data Schedule

(1) Incorporated by reference to Exhibits 3.1, 3.2, 10.1, and 22,
respectively, of the Company's Registration Statement on Form S-1 dated
December 30, 1993 (Registration Number 33-73654).

(2) Incorporated by reference to Exhibits 10.3, 10.4, and 10.5,
respectively, of the Company's Form 10-K dated December 20, 1994.